As filed with the Securities and Exchange Commission on February 12, 2000
Securities Act File No. 333-92405
Investment Company Act File No. 811-9719
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. 1
Post Effective Amendment No.
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 1
(Check appropriate box or boxes)
AMIVEST/NFB FUNDS TRUST
(Exact Name of Registrant as Specified in Charter)
767 Fifth Avenue
New York, NY 10153
(Address of principal executive offices, including Zip Code)
(212) 688-6667
(Registrant's Telephone Number, including Area Code)
Mr. Tyler Jenks
Amivest/NFB Funds Trust
767 Fifth Avenue
New York, NY 10153
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after the
date of effectiveness of this Registration Statement.
Title of Securities Being Registered: Shares of Beneficial Interest, $0.01 par
value.
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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PROSPECTUS SUBJECT TO COMPLETION, DATED FEBRUARY __, 2000
AMIVEST/NFB TOTAL MARKET FUND
A SERIES OF AMIVEST/NFB FUNDS TRUST
AMIVEST/NFB Total Market Fund is a mutual fund that seeks long-term capital
growth with current income as a secondary objective. The Fund will pursue these
objectives by investing exclusively in shares of other mutual funds.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is ______________, 2000
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY ANY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
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TABLE OF CONTENTS
An Overview of the Fund: Risk/Return Summary................................ 3
Performance ................................................................ 4
Fees and Expenses .......................................................... 4
Investment Objective and Principal Investment Strategies ................... 6
Principal Risks of Investing in the Fund ................................... 8
Investment Advisor ......................................................... 9
Shareholder Information .................................................... 11
Pricing of Fund Shares ..................................................... 15
Dividends and Distributions ................................................ 16
Tax Consequences ........................................................... 16
Rule 12b-1 Fees ............................................................ 16
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AN OVERVIEW OF THE FUND: RISK/RETURN SUMMARY
WHAT IS THE FUND'S INVESTMENT GOAL?
The Fund seeks long-term capital growth with current income as a secondary
objective.
WHAT ARE THE FUND'S PRIMARY INVESTMENT STRATEGIES?
The Fund seeks to achieve this objective by investing primarily in no-load and
load-waived mutual funds that invest primarily in common stocks, sometimes
referred to as the "Underlying Funds." The Fund seeks to participate in the
total stock market by investing in Underlying Funds that invest in the stocks of
large, medium and small capitalization domestic and international companies.
Further, the Underlying Funds may emphasize both value and growth styles of
investing. The Fund may purchase shares of Underlying Funds that invest in
fixed-income securities in pursuit of its secondary objective. Also, when the
Fund sees an opportunity for capital growth, it may invest in Underlying Funds
that invest in fixed-income securities, including those rated below investment
grade, sometimes known as junk bonds.
Because the Fund will bear its share of the costs of the Underlying Funds, you
will pay higher expenses than would be the case if you made a direct investment
in the Underlying Fund.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?
As with all mutual funds, there is the risk that you could lose money on your
investment in the Fund. The following risks could affect the value of your
investment:
MARKET RISK - The value of the Fund's shares will go up and down based on
the performance of the mutual funds it owns and other factors affecting the
securities market generally.
PRICE VOLATILITY - The Underlying Funds invest primarily in common stocks
and the market for these securities can be volatile. The value of the
Fund's shares may fluctuate significantly in the short term.
INTEREST RATE AND CREDIT RISK - Interest rates may go up resulting in a
decrease in the value of the securities held by the Underlying Funds. To
the extent the Underlying Funds hold fixed-income securities, longer
maturities generally involve greater risk than shorter maturities. Issuers
of fixed-income securities might be unable to make principal and interest
payments when due. The value of fixed-income securities that are rated
below investment grade are subject to additional risk factors such as
increased possibility of default, illiquidity of the security, and changes
in value based on public perception of the issuer of the security.
MANAGEMENT RISK - The risk that investment strategies employed by the
Adviser in selecting the Underlying Funds and those used by the Underlying
Funds in selecting investments -- including the ability of the investment
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advisory organizations that manage these funds to assess economic
conditions and investment opportunities -- may not result in an increase in
the value of your investment or in overall performance equal to other
investments.
FOREIGN SECURITIES RISK - Foreign investments involve additional risks,
including changing currency values, different political and regulatory
environments and other overall economic factors in the countries where the
Underlying Funds invest.
SMALL COMPANY RISK - Securities of smaller companies involve greater risk
than investing in larger companies because they can be subject to more
abrupt or erratic share price changes than larger companies.
NON-DIVERSIFICATION RISK - Underlying Funds that are non-diversified may
make larger investments in individual companies than a mutual fund that is
diversified. This may result in the Fund's share price being more volatile
than if it did not invest in non-diversified Underlying Funds.
CONCENTRATION RISK - To the extent an Underlying Fund concentrates its
investments in a particular industry sector, the Fund's shares may be more
volatile and fluctuate more than shares of a fund investing in a broader
range of securities.
PORTFOLIO TURNOVER RISK - A high portfolio turnover rate may result in the
Fund distributing higher capital gains. This may mean that you would have a
higher tax liability. A high portfolio turnover rate also leads to higher
transactions costs, which could negatively affect the Fund's performance.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF THE BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
WHO MAY WANT TO INVEST IN THE FUND?
The Fund may be appropriate for long term investors who can accept the risks of
investing in a portfolio that is largely dependent on the value of common stock
holdings. The Fund may NOT be appropriate for investors need regular income or
stability of principal or are pursuing a short-term goal.
PERFORMANCE
Because the Fund has been in operation for less than a full calendar year, its
total return bar chart and performance table have not been included.
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FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) ................................. None
Maximum deferred sales charge (load)
(as a percentage of the lower of original purchase
price or redemption proceeds) ...................................... 5.00%
ANNUAL FUND OPERATING EXPENSES(1)(2)
(expenses that are deducted from Fund assets)
Management Fees ....................................................... 0.50%
Distribution (12b-1) Fees ............................................. 0.75%
Shareholder Service Fees .............................................. 0.25%
Other Expenses ........................................................ %
----
Total Annual Fund Operating Expenses .................................. %
Fee Reduction and/or Expense Reimbursement ............................ ( )%
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Net Expenses .......................................................... 2.00%
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(1) Other Expenses are estimated for the first fiscal year of the Fund. The
Advisor has contractually agreed to reduce its fees and/or pay expenses of
the Fund for an indefinite period to ensure that Total Fund Operating
Expenses will not exceed the net expense amount shown. The Advisor may be
reimbursed for any waiver of its fees or expenses paid on behalf of the
Fund if the Fund's expenses are less than the limited agreed to by the
Fund. The Trustees may terminate this expense reimbursement arrangement at
any time.
(2) To the extent that the Fund invests in other mutual funds, the Fund will
indirectly bear its proportionate share of any fees and expenses paid by
such funds in addition to the fees and expenses payable directly by the
Fund. Therefore, to the extent that the Fund invests in other mutual funds,
the Fund will incur higher expenses, many of which may be duplicative. The
Fund may invest in mutual funds that have 12b-1 plans or shareholder
servicing plans which permit the funds to pay certain distributions and
other expenses that will add to the overall expenses of the Fund.
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EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year, dividends
and distributions are reinvested and the Fund's operating expenses remain the
same. Due to the Advisor's contractual waiver arrangement, the expenses below
have been calculated using net expenses. Although your actual costs may be
higher or lower, under the assumptions, your costs would be:
One Year Three Years
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$_____ $______
You would pay the following expenses if you did not redeem your shares:
One Year Three Years
-------- -----------
$_____ $______
INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES
The Fund seeks long-term capital growth with current income as a secondary
objective.
The Fund pursues its objective by investing primarily in no-load and load-waived
mutual funds specializing in common stocks. At times the Fund may invest in bond
funds with varying maturities and credit qualities. Investment in bond funds is
intended to reduce the risk and potential volatility of the underlying stocks
held by common stock funds which the Fund will hold, although there can be no
assurance that bond fund holdings will be able to moderate risk in this manner.
The Fund will invest only in other mutual funds that have an investment
objective similar to the Fund's, or that otherwise are permitted investments
under the Fund's investment policies described herein. Nevertheless, the mutual
funds purchased by Fund likely will have certain investment policies, and use
certain investment practices that are different from those of the Fund and not
described herein. These other policies and practices may subject the other
funds' assets to varying or greater degrees of risk.
The Adviser selects common stock mutual funds which the Adviser believes offer
above-average prospects for capital growth. The Fund believes that investing in
other mutual funds will provide the Fund with opportunities to achieve greater
diversification of portfolio securities and investment techniques than the Fund
could achieve by investing in individual securities.
The Fund will invest in Underlying Funds across the range of the total market,
including funds with large, medium and small average capitalizations,
emphasizing both value and growth styles of investing. The Advisor considers
Underlying Funds whose holdings have an average market capitalization of over
$7.5 billion to be large capitalization, $2.5 billion to $7.5 billion to be
medium capitalization, and $2.5 billion or less to be small capitalization.
Although not a principal investment focus, the Fund also may purchase of
international funds that invest in securities of companies in developed nations.
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In selecting investments for the Fund's portfolio, the Advisor employs a
top-down analysis to identify attractive areas of the market and to determine
the policy weighting of each sector of the market. This analysis is implemented
in order to control risk in the Fund's portfolio through diversification across
market sectors. The Advisor also uses quantitative screening to determine the
optimal sector and asset class mix. The Advisor reviews timely information from
mutual funds in order to make an investment decision.
The Advisor will sell an Underlying Fund that is no longer consistent with its
market segment analysis. Although a change in the portfolio manager of an
Underlying Fund will not necessarily mean the Fund will sell that holding, that
Underlying Fund is red-flagged and monitored closely.
Up to 25% of the Fund's assets may be invested in shares of a single mutual
fund. The Fund may invest in mutual funds that are permitted to invest more than
25% of their assets in a single industry and may also invest in mutual funds
that are themselves non-diversified.
When several funds qualify for purchase, the Advisor screens those funds to
eliminate high expense ratios, relatively new portfolio management, inconsistent
recent performance or difficult administrative and operations procedures. The
Fund will normally invest only in other mutual funds that do not impose up-front
sales loads or deferred sales loads or redemption fees. If the Fund invests in a
mutual fund that normally charges a sales load, it will use available sales load
waivers and quantity discounts to eliminate the sales load.
The Fund is independent from any of the Underlying Funds in which it invests and
has little voice in or control over the investment practices, policies or
decisions of those funds. If the Fund disagrees with those practices, policies
or decisions, it may have no choice other than to liquidate its investment in
that fund, which can entail further losses. Some of the Underlying Funds may
limit the ability of the Fund to sell its investments in those funds at certain
times. In these cases, such investments will be considered illiquid and subject
to the overall limit on illiquid securities. However, a mutual fund is not
required to redeem any of its shares owned by another mutual fund in an amount
exceeding 1% of the Underlying Fund's shares during any period of less that 30
days. As a result, to the extent that the Fund owns more than 1% of another
mutual fund's shares, the Fund may not be able to liquidate those shares in the
event of adverse market conditions or other considerations. Also, the investment
advisers of the mutual funds in which a Fund invests may simultaneously pursue
inconsistent or contradictory courses of action. For example, one fund may be
purchasing securities of the same issuer whose securities are being sold by
another fund, with the result that the Fund would incur an indirect expense
without any corresponding investment or economic benefit.
For temporary defensive purposes under abnormal market or economic conditions,
the Fund may hold all or a portion of its assets in money market instruments,
money market funds or U.S. Government repurchase agreements. The Fund may also
invest in such instruments at any time to maintain liquidity or pending
selection of investments in accordance with its policies. This may result in the
Fund not achieving its investment objective.
As all investments in securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, the Fund cannot give any assurance that its investment objective
will be achieved.
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PRIMARY RISKS OF INVESTING IN THE FUND
MARKET RISK. The Fund's assets will be invested primarily in mutual funds that
themselves invest primarily in equity securities. The value of your investment
in the Fund depends on the value of the mutual funds it owns. In turn, the value
of each of the Underlying Funds depends on the market value of the equity
securities in which an Underlying Fund has invested. Fluctuations in the value
of equity securities will occur based on the earnings of the issuing company and
on general industry and market conditions. Equity markets can be volatile.
SMALL COMPANY RISK. To the extent that an Underlying Fund invests in small cap
companies, your investment in the Fund will also be subject to small company
risk- the risk that, due to limited product lines, markets or financial
resources, a dependence on a relatively small management group or other factors,
small companies may be more vulnerable to adverse business or economic
developments. Securities of small companies may be less liquid and more volatile
than securities of larger companies or the market averages in general. In
addition, small companies may not as be well-known to the investing public as
large companies, may not have institutional ownership and may have only
cyclical, static or moderate growth prospects. In addition, the performance of
the Fund may be adversely affected during periods when the smaller
capitalization stocks are out-of- favor with investors, who may prefer to hold
securities of large capitalization companies. The value of equity securities
fluctuates in response to various market factors and the equity markets can be
volatile.
INTEREST AND CREDIT RISK. To the extent that the Underlying Funds hold bonds and
other fixed- income securities, the Fund may be subject to interest and credit
risk. Underlying Funds of this type invest a portion of their assets in bonds,
notes and other fixed income and convertible securities, and preferred stock.
Generally, the value of a fixed income portfolio will decrease when interest
rates rise. Under these circumstances, an Underlying Fund's net asset value may
also decrease. Also, fixed income securities with longer maturities generally
involve greater risk than those with shorter maturities. In addition to interest
rate risk, changes in the creditworthiness of an issuer of fixed income
securities and the market's perception of that issuer's ability to repay
principal and interest when due can also affect the value of fixed income
securities held by an Underlying Fund.
FOREIGN SECURITIES RISK. To the extent that the Underlying Fund invest in
securities of foreign companies, your investment in the Fund is subject to
foreign securities risks . These include risks relating to political, social and
economic developments abroad and differences between U.S. and foreign regulatory
requirements and market practices. Securities that are denominated in foreign
currencies are subject to the further risk that the value of the foreign
currency will fall in relation to the U.S. dollar and/or will be affected by
volatile currency markets, or actions of U.S. and foreign governments or central
banks.
DERIVATIVE RISK. The use by Underlying Funds of derivative instruments - so
called because their value derives from the value of an underlying asset,
currency or index - carries with it derivative risk - the risk that the value of
derivatives may rise of fall more rapidly than other investments, and the risk
that an Underlying Fund may lose more than the amount invested in the derivative
instrument in the first place. Derivative instruments also involve the risk that
other parties to the derivative contract may fail to meet their obligations,
which could cause losses.
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YEAR 2000 RISK. As the year 2000 began, the Advisor and the Fund's service
providers did not experience any notable problems arising from the inability of
their computer systems properly process and calculate information related to
dates beginning January 1, 2000. This is commonly known as the "Year 2000
Issue." There can be no assurance that some computer systems will not
malfunction in the future as a result of the Year 2000 Issue. Although the
Advisor does not anticipate that its services or the services of the Fund's
other service providers will be adversely affected as a result of the Year 2000
Issue, it will continue to monitor the situation. If malfunctions related to the
Year 2000 Issue do arise, the Fund and its investments could be adversely
affected, as well as companies in which the Fund invests. This is "Year 200
Readiness Disclosure" within the meaning of the "Year 2000 Readiness Disclosure
Act."
INVESTMENT ADVISOR
Amivest Capital Management, the Fund's investment advisor, is located at 767
Fifth Avenue, New York, NY 10153. The Advisor has been providing investment
advisory services to individual and institutional investors since 1975. The
Advisor presently has assets under management of approximately $500 million. The
Advisor is a wholly-owned subsidiary of North Fork Bancorporation, Inc. The
Advisor supervises the Fund's investment activities and determines which
investments are purchased and sold by the Fund. The Advisor also furnishes the
Fund with office space and certain administrative services and provides most of
the personnel needed by the Fund.
For its services, the Fund pays the Advisor a monthly management fee which is
calculated at the annual rate of 0.50% of the Fund's average daily net assets.
PORTFOLIO MANAGER
Tyler Jenks, Chief Investment Officer of the Advisor, is responsible for the for
the day-to-day management of the Fund. Mr. Jenks joined the Advisor in 1991 as
Senior Portfolio Manager and has been a portfolio manager since 1986. In his
capacity as Senior Portfolio Manager, Mr. Jenks has managed individual,
institutional and retirement plan accounts in mutual funds with equity, fixed
income and balanced objectives, using both domestic and international funds.
FUND EXPENSES
The Fund is responsible for its own operating expenses. The Advisor has
contractually agreed to reduce its fees and/or pay expenses of the Fund for an
indefinite period to ensure that Total Fund Operating Expenses will not exceed
2.00% of average daily net asset annually. Any reduction in advisory fees or
payment of expenses made by the Advisor are subject to reimbursement by the Fund
if the Advisor if requested by the Advisor in subsequent fiscal years. Under the
expense limitation agreement, the Advisor may recoup reimbursement made in the
Fund's first fiscal year in any of the five succeeding fiscal years,
reimbursements made in the Fund's second fiscal year in any of the four
succeeding fiscal years and any reimbursement in years subsequent to fiscal year
two, over the subsequent three fiscal years after the reimbursement made. Any
such reimbursement will be reviewed by the Trustees. The Fund must pay its
current ordinary operating expenses before the Advisor is entitled to any
reimbursement of fees and/or expenses.
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ADVISOR'S PRIOR INVESTMENT RETURNS
Set forth in the table below are certain performance data provided by the
Advisor relating to an individually managed account with assets of approximately
$50 million. This account had substantially the same investment objective as the
Fund, had the same portfolio manager, and was managed using substantially
similar investment strategies and techniques as those that will be used in
managing the Fund. This performance data is not that of the Fund and is not
indicative of the Fund's future performance.
The results shown will differ from those the Fund could have obtained because of
differences in account expenses, including investment advisory fees (which
expenses and fees may be higher for the Fund than for the account), the size of
positions taken in relation to account size, diversification of securities,
timing of purchases and sales, timing of cash additions and withdrawals, the
private character of the account compared with the public character of the Fund,
and the tax-exempt status of the account holder compared with shareholders in
the Fund. This account also is not subject to certain investment limitations,
diversification requirements and other restrictions imposed by the Investment
Company Act of 1940 and the Internal Revenue Code, which, if they applied, may
have adversely affected the results shown. Investors should be aware that the
use of different methods of determining performance could result in different
performance results. Investors should not rely on the following performance data
as an indication of future performance of the Advisor or of the Fund.
AVERAGE ANNUAL TOTAL RETURNS
(for period ended December 31, 1999)
One Year 19.69%
Three Years 19.82%
Since Inception (5/12/95) 19.61%
1. Amivest Capital Management has prepared and presented the above report in
compliance with the Performance Presentation Standards of the Association for
Investment Management and Research (AIMR-PPS(TM)). AIMR has not been involved
with the preparation or review of this report. AIMR is a non-profit membership
and education organization with more than 60,000 members worldwide that, among
other things, has formulated a set of performance presentation standards for
investment advisers. These AIMR performance presentation standards are intended
to (i) promote full and fair presentations by investment advisers of their
performance results, and (ii) ensure uniformity in reporting so that performance
results of investment advisers are directly comparable.
2. Results were calculated on a total return basis. Returns are presented after
the deduction of investment advisory fees and expenses applicable to the
Advisor's account. Use of the Fund's expense structure would have lowered the
performance results in the Average Annual Total Returns in the table above.
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3. Investors should note that the Fund will compute and disclose its average
annual total return using the standard formula set forth in SEC rules, which is
different from the AIMR method noted above. Unlike the AIMR performance
presentation standards that link quarterly rates of return, the SEC total return
calculation method calls for computation and disclosure of an average annual
compounded rate of return for one, five and ten year periods or shorter periods
from inception. The calculation provides a rate of return that equates a
hypothetical investment of $1,000 to an ending redeemable value.
4. The Advisor's account shown above constitutes all accounts managed by the
Advisor that meet the criteria for inclusion for each period presented.
SHAREHOLDER INFORMATION
HOW TO BUY SHARES
You may open a Fund account with $1,000 and add to your account at any time with
$250 or more. The Fund may waive minimum investment requirements from time to
time.
You may purchase shares of the Fund by check or wire. All purchases by check
must be in U.S. dollars. Third party checks and cash will not be accepted. A
charge may be imposed if your check does not clear. The Fund is not required to
issue share certificates. The Fund reserves the right to reject any purchase in
whole or in part.
BY CHECK
If you are making your first investment in the Fund, simply complete the
Application Form included with this Prospectus and mail it with a check (made
payable to "AMIVEST/NFB Total Market Fund") to:
AMIVEST/NFB Total Market Fund
P.O. Box ____________
_____________________
If you wish to send your Application Form and check via an overnight delivery
service (such as FedEx), delivery cannot be made to a post office box. In that
case, you should use the following address:
AMIVEST/NFB Total Market Fund
P.O. Box ____________
_____________________
If you are making a subsequent purchase, a stub is attached to the account
statement you will receive after each transaction. Detach the stub from the
statement and mail it together with a check made payable to "AMIVEST/NFB Total
Market Fund" to the Fund in the envelope provided with your statement or to the
P.O. Box above. You should write your account number on the check.
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BY WIRE
If you are making your first investment in the Fund, before you wire funds you
should call the Transfer Agent at (800) _______ between 9:00 a.m. and 4:00 p.m.,
Eastern time, on a day when the New York Stock Exchange ("NYSE") is open for
trading to advise them that you are making an investment by wire. The Transfer
Agent will ask for your name and the dollar amount you are investing. You will
then receive your account number and an order confirmation number. You should
then complete the Account Application included with this Prospectus. Include the
date and the order confirmation number on the Account Application and mail the
completed Account Application to the address at the top of the Account
Application. Your bank should transmit immediately available funds by wire in
your name to:
________________________
ABA Routing #___________
Attn: AMIVEST/NFB Total Market Fund
DDA #___________
Account name (shareholder name)
Shareholder account number
If you are making a subsequent purchase, your bank should wire funds as
indicated above. Before each wire purchase, you should be sure to notify the
Transfer Agent. IT IS ESSENTIAL THAT YOUR BANK INCLUDE COMPLETE INFORMATION
ABOUT YOUR ACCOUNT IN ALL WIRE INSTRUCTIONS. If you have questions about how to
invest by wire, you may call the Transfer Agent. Your bank may charge you a fee
for sending a wire to the Fund.
You may buy, sell and exchange shares of the Fund through certain brokers (and
their agents) that have made arrangements with the Fund to sell its shares. When
you place your order with such a broker or its authorized agent, your order is
treated as if you had placed it directly with the Fund's Transfer Agent, and you
will pay or receive the next price calculated by the Fund. The broker (or agent)
holds your shares in an omnibus account in the broker's (or agent's) name, and
the broker (or agent) maintains your individual ownership records. The Fund may
pay the broker (or its agent) for maintaining these records as well as providing
other shareholder services. The broker (or its agent) may charge you a fee for
handling your order. The broker (or agent) is responsible for processing your
order correctly and promptly, keeping you advised regarding the status of your
individual account, confirming your transactions and ensuring that you receive
copies of the Fund's prospectus.
AUTOMATIC INVESTMENT PLAN
For your convenience, the Fund offers an Automatic Investment Plan. Under this
Plan, after your initial investment, you authorize the Fund to withdraw from
your personal checking account each month an amount that you wish to invest,
which must be at least $50. If you wish to enroll in this Plan, complete the
appropriate section in the Account Application. The Fund may terminate or modify
this privilege at any time. You may terminate your participation in the Plan at
any time by notifying the Transfer Agent in writing.
RETIREMENT PLANS
The Fund offers an Individual Retirement Account ("IRA") plan. You may obtain
information about opening an IRA account by calling (800) ________. If you wish
to open a Keogh, Section 403(b) or other retirement plan, please contact
______________.
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HOW TO EXCHANGE SHARES
You may exchange your shares of the Fund for shares of the _________ Fund and
the _______ Fund on any day the Fund and the NYSE is open for business. Before
making an exchange, you should obtain and carefully read the prospectus for the
other fund.
You may exchange your shares by simply sending a written request to the Fund's
Transfer Agent. You should give the name of the Fund, your name and account
number and the number of shares or dollar amount to be exchanged. The letter
should be signed by all of the shareholders whose names appear on the account
registration.
If your account has telephone privileges, you may also exchange shares by
calling the Transfer Agent at (800) _________ between the hours of 9:00 a.m. and
4:00 p.m., Eastern Time, on a day when the NYSE is open for normal trading. If
you are exchanging shares by telephone, you will be subject to certain
identification procedures which are listed below under "How to Sell Shares."
The Fund reserves the right on notice to shareholders to limit the number of
exchanges you may make in any year to avoid excess Fund expenses. The Fund may
modify, restrict or terminate the exchange privilege at any time upon prior
notice to shareholders.
HOW TO SELL SHARES
You may sell (redeem) your Fund shares on any day the Fund and the NYSE are open
for business.
The price you will pay to buy Fund shares is the Fund's net asset value. You may
be charged a contingent deferred sales charge ("CDSC") when you sell your shares
within a certain time after you purchased them. The CDSC is based on the
original cost of your shares or the market value of them when you sell,
whichever is less. The CDSC declines the longer you hold your shares, as
illustrated below:
Years after Contingent Deferred
Purchase Sales Charge
-------- ------------
1 5.00%
2 4.00%
3 3.00%
4 2.00%
5 1.00%
After the sixth year None
There is no CDSC on shares which you acquire by reinvesting your dividends or
distributions. For purposes of determining the CDSC, all purchases made during a
calendar month are counted as having been made on the first day of that month at
the average cost of all purchases made during that month.
13
<PAGE>
To keep your deferred sales charge as low as possible, each time you place a
request to sell shares, the Fund will first sell any shares in your account
which are not subject to a CDSC. Next the Fund will sell shares subject to the
lowest CDSC.
After six years, your shares automatically will convert to a class of shares to
be established with the same investment objective and policies as the Fund. The
new class of shares will have lower distribution fees. This will mean that your
Fund account will be subject to lower overall charges.
The conversion will be a non-taxable event for you.
The CDSC may be reduced or waived under certain circumstances and for certain
groups. Call ________ for details.
You may redeem your shares by simply sending a written request to the Transfer
Agent. You should give your account number and state whether you want all or
some of your shares redeemed. The letter should be signed by all of the
shareholders whose names appear on the account registration.
You should send your redemption request to:
AMIVEST/NFB Total Market Fund
P.O. Box ____________
_____________________
To protect the Fund and its shareholders, a signature guarantee is required for
all written redemption requests. Signature(s) on the redemption request must be
guaranteed by an "eligible guarantor institution." These include banks,
broker-dealers, credit unions and savings institutions. A broker- dealer
guaranteeing signatures must be a member of a clearing corporation or maintain
net capital of at least $100,000. Credit unions must be authorized to issue
signature guarantees. Signature guarantees will be accepted from any eligible
guarantor institution which participates in a signature guarantee program. A
notary public is not an acceptable guarantor.
If you complete the Redemption by Telephone portion of the Account Application,
you may redeem all or some of your shares by calling the Transfer Agent at (800)
_______ between the hours of 9:00 a.m. and 4:00 p.m., Eastern time. Redemption
proceeds will be mailed on the next business day to the address that appears on
the Transfer Agent's records. If you request, redemption proceeds will be wired
on the next business day to the bank account you designated on the Account
Application. The minimum amount that may be wired is $1,000. Wire charges, if
any, will be deducted from your redemption proceeds. Telephone redemptions
cannot be made if you notify the Transfer Agent of a change of address within 30
days before the redemption request. If you have a retirement account, you may
not redeem shares by telephone.
When you establish telephone privileges, you are authorizing the Fund and its
Transfer Agent to act upon the telephone instructions of the person or persons
you have designated on your Account Application. Redemption proceeds will be
transferred to the bank account you have designated on your Account Application.
14
<PAGE>
Before acting on instructions received by telephone, the Fund and the Transfer
Agent will use reasonable procedures to confirm that the telephone instructions
are genuine. These procedures will include recording the telephone call and
asking the caller for a form of personal identification. If the Fund and the
Transfer Agent follow these reasonable procedures, they will not be liable for
any loss, expense, or cost arising out of any telephone transaction request that
is reasonably believed to be genuine. This includes any fraudulent or
unauthorized request. The Fund may change, modify or terminate these privileges
at any time upon at least 60 days' notice to shareholders.
You may request telephone transaction privileges after your account is opened by
calling the Transfer Agent at (800) _____ for instructions.
You may have difficulties in making a telephone transaction during periods of
abnormal market activity. If this occurs, you may make your transaction request
in writing.
Payment of your redemption proceeds will be made promptly, but not later than
seven days after the receipt of your written request in proper form as discussed
in this Prospectus. If you made your first investment by wire, payment of your
redemption proceeds for those shares will not be made until one business day
after your completed Account Application is received by the Fund. If you did not
purchase your shares with a certified check or wire, the Fund may delay payment
of your redemption proceeds for up to 15 days from date of purchase or until
your check has cleared, whichever occurs first.
The Fund may redeem the shares in your account if the value of your account is
less than $1,000 as a result of redemptions you have made. This does not apply
to retirement plan or Uniform Gifts or Transfers to Minors Act accounts. You
will be notified that the value of your account is less than $1,000 before the
Fund makes an involuntary redemption. You will then have 30 days in which to
make an additional investment to bring the value of your account to at least
$1,000 before the Fund takes any action. The contingent deferred sales charge
will not be imposed on shares which are automatically redeemed.
The Fund has the right to pay redemption proceeds to you in whole or in part by
a distribution of securities from the Fund's portfolio. It is not expected that
the Fund would do so except in unusual circumstances. If the Fund pays your
redemption proceeds by a distribution of securities, you could incur brokerage
or other charges in converting the securities to cash.
PRICING OF FUND SHARES
The price of the Fund's shares is based on the Fund's net asset value. This is
done by dividing the Fund's assets, minus its liabilities, by the number of
shares outstanding. The Fund's assets are the market value of securities held in
its portfolio, plus any cash and other assets. The Fund's liabilities are fees
and expenses owed by the Fund. The number of Fund shares outstanding is the
amount of shares which have been issued to shareholders. The price you will pay
to buy Fund shares or the amount you will receive when you sell your Fund shares
is based on the net asset value next calculated after your order is received by
the Transfer Agent with complete information and meeting all the requirements
discussed in this Prospectus.
The net asset value of the Fund's shares is determined as of the close of
regular trading on the NYSE. This is normally 4:00 p.m., Eastern time. Fund
shares will not be priced on days that the NYSE is closed for trading (including
certain U.S. holidays).
15
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
The Fund will make distributions of dividends and capital gains, if any, at
least annually, typically in December. The Fund may make another distribution of
any additional undistributed capital gains earned during the 12-month period
ended October 31.
All distributions will be reinvested in Fund shares unless you choose one of the
following options: (1) receive dividends in cash, while reinvesting capital gain
distributions in additional Fund shares; or (2) receive all distributions in
cash. If you wish to change your distribution option, write to the Transfer
Agent in advance of the payment date of the distribution.
TAX CONSEQUENCES
The Fund intends to make distributions of dividends and capital gains. Dividends
are taxable to you as ordinary income. The rate you pay on capital gain
distributions will depend on how long the Fund held the securities that
generated the gains, not on how long you owned your Fund shares. You will be
taxed in the same manner whether you receive your dividends and capital gain
distributions in cash or reinvest them in additional Fund shares.
If you sell your Fund shares, it is considered a taxable event for you.
Depending on the purchase price and the sale price of the shares you sell, you
may have a gain or a loss on the transaction. You are responsible for any tax
liabilities generated by your transaction.
RULE 12b-1 FEES
The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940. This rule allows the Fund to pay distribution
fees for the sale and distribution of its shares and for services provided to
its shareholders. The Plan provides for the payment of a distribution fee at the
annual rate of 0.75% of the Fund's average daily net assets and a service fee at
the annual rate of 0.25% of the Fund's average daily net assets. The fees are
payable to the Distributor. Because these fees are paid out of the Fund's assets
on an on-going basis, over time these fees will increase the cost of your
investment in Fund shares and may cost you more than paying other types of sales
charges.
16
<PAGE>
AMIVEST/NFB TOTAL MARKET FUND
A SERIES OF AMIVEST/NFB FUNDS TRUST (THE "TRUST")
For investors who want more information about the Fund, the following document
is available free upon request:
STATEMENT OF ADDITIONAL INFORMATION (SAI): The SAI provides more detailed
information about the Fund and is incorporated by reference into this
Prospectus.
You can get free copies of the SAI, request other information and discuss your
questions about the Fund by contacting the Fund at:
_______________________
_______________________
_______________________
Telephone: 1-800-_________________
You can review and copy information including the Fund's SAI at the Public
Reference Room of the Securities and Exchange Commission in Washington, D.C. You
can obtain information on the operation of the Public Reference Room by calling
1-202-942-8090. Reports and other information about the Fund are also available:
* Free of charge from the Commission's EDGAR Database on the Commission's
Internet website at http://www.sec.gov., or
* For a fee, by writing to the Public Reference Room of the Commission,
Washington, DC 20549-0102, or
* For a fee, by electronic request at the following e-mail address:
[email protected].
(The Trust's SEC Investment Company Act
file number is 811-09719)
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION SUBJECT TO COMPLETION,
DATED FEBRUARY __, 2000
STATEMENT OF ADDITIONAL INFORMATION
_____________, 2000
AMIVEST/NFB TOTAL MARKET FUND,
A SERIES OF AMIVEST/NFB FUNDS TRUST
767 FIFTH AVENUE
NEW YORK, NY 10153
(800) XXX-XXXX
This Statement of Additional Information ("SAI") is not a prospectus and it
should be read in conjunction with the Prospectus dated , 2000, as may be
revised, of the Amivest/NFB Total Market Fund (the "Fund"), a series of
Amivest/NFB Funds Trust (the "Trust"). Amivest Capital Management, Inc., (the
"Advisor") is the investment advisor to the Fund. A copy of the Fund's
Prospectus is available by calling the telephone number listed above.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY ANY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE
OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY STATE.
B-1
<PAGE>
TABLE OF CONTENTS
The Trust ................................................................ B-3
Investment Objective and Policies ........................................ B-3
Investment Restrictions .................................................. B-9
Distributions and Tax Information ........................................ B-10
Trustees and Executive Officers .......................................... B-11
The Fund's Investment Advisor ............................................ B-13
The Fund's Administrator ................................................. B-14
The Fund's Distributor ................................................... B-14
Portfolio Turnover ....................................................... B-15
Additional Purchase and Redemption Information ........................... B-15
Determination of Share Price ............................................. B-17
Performance Information .................................................. B-18
General Information ...................................................... B-19
Appendix A ............................................................... B-20
B-2
<PAGE>
THE TRUST
Amivest/NFB Funds Trust (the "Trust") is an open-end management investment
company organized as a Delaware business trust. The Trust may consist of various
series which represent separate investment portfolios. This SAI relates only to
the Fund. The Fund is diversified, which under the Investment Company Act of
1940 ("1940 Act") means that as to 75% of its total assets, no more than 5% may
be invested in the securities of a single issuer and that it may hold no more
than 10% of the voting securities of a single issuer.
The Trust is registered with the SEC as a management investment company.
Such a registration does not involve supervision of the management or policies
of the Fund. The Prospectus of the Fund and this SAI omit certain of the
information contained in the Registration Statement filed with the SEC. Copies
of such information may be obtained from the SEC upon payment of the prescribed
fee.
INVESTMENT OBJECTIVE AND POLICIES
The Fund has an investment objective of long-term capital appreciation with
income as a secondary objective. The following discussion supplements the
discussion of the Fund's investment objectives and policies as set forth in the
Prospectus. There can be no assurance that the objective of the Fund will be
attained.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements in order to earn income on
available cash, or as a defensive investment in which the purchaser (i.e., the
Fund) acquires ownership of a U.S. Government security (which may be of any
maturity) and the seller agrees to repurchase the obligation at a future time at
a set price, thereby determining the yield during the purchaser's holding period
(usually not more than seven days from the date of purchase). Any repurchase
transaction in which the Fund engages will require full collateralization of the
seller's obligation during the entire term of the repurchase agreement. In the
event of a bankruptcy or other default of the seller, the Fund could experience
both delays in liquidating the underlying security and losses in value. However,
the Fund intends to enter into repurchase agreements only with banks with assets
of $500 million or more that are insured by the Federal Deposit Insurance
Corporation and with the most credit worthy registered securities dealers with
all such transactions governed by procedures adopted by the Advisor. The Advisor
monitors the creditworthiness of the banks and securities dealers with whom the
Fund engages in repurchase transactions.
If the market value of the U.S. Government security subject to the
repurchase agreement becomes less than the repurchase price (including
interest), the Funds will direct the seller of the U.S. Government security to
deliver additional securities so that the market value of all securities subject
to the repurchase agreement will equal or exceed the repurchase price. It is
possible that the Fund might be unsuccessful in seeking to impose on the seller
a contractual obligation to deliver additional securities.
B-3
<PAGE>
Underlying Funds may also make use of repurchase agreements. Repurchase
agreements involve certain risks, such as default by or insolvency of the other
party to the agreement. An Underlying Fund's right to liquidate its collateral
in the event of a default could involve certain costs, losses or delays. To the
extent that proceeds from any sale upon default of the obligation to repurchase
are less than the repurchase price, the Fund or an Underlying Fund could suffer
a loss.
LEVERAGE THROUGH BORROWING
The Fund, and the Underlying Funds, may borrow money for leveraging
purposes. Leveraging creates an opportunity for increased net income but, at the
same time, creates special risk considerations. For example, leveraging may
exaggerate changes in the net asset value of shares of an Underlying Fund or the
Fund and in the yield on the Underlying Fund's portfolio. Although the principal
of such borrowings will be fixed, the assets of an Underlying Fund or of the
Fund may change in value during the time the borrowing is outstanding.
Leveraging will create interest expenses for an Underlying Fund or the Fund
which can exceed the income from the assets retained. To the extent the income
derived from securities purchased with borrowed funds exceeds the interest an
Underlying Fund or the Fund will have to pay, such fund's net income will be
greater than if leveraging were not used. Conversely, if the income from the
assets retained with borrowed funds is not sufficient to cover the cost of
leveraging, the net income of an Underlying Fund or the Fund will be less than
if leveraging were not used, and therefore the amount available for distribution
to stockholders as dividends will be reduced.
WHEN-ISSUED SECURITIES
An Underlying Fund may from time to time purchase securities on a
"when-issued" basis. The price of such securities, which may be expressed in
yield terms, is fixed at the time the commitment to purchase is made, but
delivery and payment for the when-issued securities take place at a later date.
Normally, the settlement date occurs within one month of the purchase; during
the period between purchase and settlement, no payment is made by the Underlying
Fund to the issuer and no interest accrues to that fund. To the extent that
assets of the Underlying Fund are held in cash pending the settlement of a
purchase of securities, the Underlying Fund would earn no income. While
when-issued securities may be sold prior to the settlement date, the Underlying
Fund intends to purchase such securities with the purpose of actually acquiring
them unless a sale appears desirable for investment reasons. At the time an
Underlying Fund makes the commitment to purchase a security on a when-issued
basis, it will record the transaction and reflect the value of the security in
determining its net asset value. The market value of the when-issued securities
may be more or less than the purchase price. The Advisor does not believe that
an Underlying Fund's net asset value or income will be adversely affected by the
purchase of securities on a when-issued basis. Underlying Funds normally
segregate liquid assets equal in value to commitments for when-issued
securities, which reduces but does not eliminate leverage.
OPTIONS AND FUTURES
Underlying Funds may purchase and write call and put options on securities,
securities indexes, and foreign currencies, and enter into futures contracts and
B-4
<PAGE>
use options on futures contracts. Underlying Funds may use these techniques to
hedge against changes in securities prices, foreign currency exchange rates or
as part of its overall investment strategy. Underlying Funds normally segregate
liquid assets to cover obligations under options and futures contracts to reduce
leveraging.
Underlying Funds may buy or sell interest rate futures contracts and
options on interest rate futures contracts for the purpose of hedging against
changes in the value of securities owned.
There are risks involved in the use of options and futures, including the
risk that the prices of the hedging vehicles may not correlate perfectly with
the securities held by the Underlying Funds. This may cause the futures or
options to react differently from the Underlying Funds' securities to market
changes. In addition, the investment advisers to the Underlying Funds could be
incorrect in their expectations for the direction or extent of market movements.
In these events, Underlying Funds could lose money on the options of futures
contracts. It is also not certain that a secondary market for positions in
options or futures contracts will exist at all times.
FORWARD CURRENCY CONTRACTS
An Underlying Fund may enter into forward currency contracts in
anticipation of changes in currency exchange rates. A forward currency contract
is an obligation to purchase or sell a specific currency at a future date, which
may be any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. For example, an Underlying
Fund might purchase a particular currency or enter into a forward currency
contract to preserve the U.S. dollar price of securities it intends to or has
contracted to purchase. Alternatively, it might sell a particular currency on
either a spot or forward basis to hedge against an anticipated decline in the
dollar value of securities it intends to or has contracted to sell. Although
this strategy could minimize the risk of loss due to a decline in the value of
the hedged currency, it could also limit any potential gain from an increase in
the value of the currency.
ILLIQUID SECURITIES
Typically, an Underlying Fund may invest up to 15% of its net assets in
illiquid securities, including (I) securities for which there is no readily
available market; (ii) securities the disposition of which would be subject to
legal restrictions (so called "restricted securities"); and (iii) repurchase
agreements having more than seven days to maturity. A considerable period of
time may elapse between an Underlying Fund's decision to dispose of such
securities and the time when that fund is able to dispose of them, during which
time the value of the securities could decline.
Restricted securities issued pursuant to Rule 144A under the Securities Act
of 1933 that have a readily available market usually are not deemed illiquid for
purposes of this limitation by Underlying Funds. Investing in Rule 144A
securities could result in increasing the level of an Underlying Fund's
illiquidity if qualified institutional buyers become, for a time, uninterested
in purchasing these securities.
B-5
<PAGE>
The Investment Company Act of 1940 provides that a mutual fund whose shares
are purchased by the Fund is obliged to redeem shares held by the Fund only in
an amount up to 1% of the Underlying Fund's outstanding securities during any
period of less than 30 days. Thus, shares held by the Fund in excess of 1% of an
underlying mutual fund's outstanding securities will be considered not readily
marketable securities, that together with such other such securities, may not
exceed 15% of the Fund's net assets. However, because the Fund has elected to
reserve the right to pay redemption requests by a distribution of securities
from the Fund's portfolio, instead of in cash, these holdings may be treated as
liquid. In some cases, an Underlying Fund may make payment of a redemption by
the Fund by distributing securities from its portfolio instead of cash. Thus it
is possible that the Fund could hold securities distributed by an Underlying
Fund until such time as the Advisor determines it is appropriate to dispose of
such securities. Disposing of such securities could cause the Fund to incur
additional costs.
SECURITIES LENDING
An Underlying Fund may lend its portfolio securities in order to generate
additional income. Securities may be loaned to broker-dealers, major banks or
other recognized domestic institutional borrowers of securities. Generally,
borrowers must deliver to an Underlying Fund collateral equal in value to at
least 100% of the loaned securities at all times during the loan, marked to
market daily. During the loan period, the borrower pays the Underlying Fund
interest on such securities, and that fund may invest the cash collateral and
earn additional income. Loans are usually subject to termination at the option
of a fund or the borrower at any time. Lending portfolio securities involves
risk of delay in recovery of the loaned securities and in some cases the loss of
rights in the collateral if the borrower fails.
SHORT SALES
An Underlying Fund may seek to hedge investments or realize additional
gains through short sales. In a short sale, the Underlying Fund sells a security
it does not own, in anticipation of a decline in the market value of the
security. To complete the transaction, an Underlying Fund must borrow the
security to make delivery to the buyer. The Underlying Fund is then obligated to
replace the security borrowed by purchasing it at the market priced at or prior
to the time of replacement. The price at such time may be more or less than the
price at which the security was sold by an Underlying Fund. An Underlying Fund
will incur a loss on a short sale if the price of the security increases between
the date of the short sale and the date on which that fund replaces the borrowed
security. An Underlying Fund will realize a gain if the security declines in
price between those dates. The amount of any gain will be decreased, and the
amount of any loss increased by the amount of the premium, dividends, interest
or expenses the Underlying Fund may be required to pay in connection with the
short sale.
Typically an Underlying Fund will segregate liquid assets, which are marked
to market daily, equal to the difference between the market value of the
securities sold short at the time they were sold short and any assets required
to be deposited with the broker in connection with the short sale (not including
the proceeds from the short sale).
B-6
<PAGE>
DEPOSITARY RECEIPTS
An Underlying Fund may invest in securities of foreign issuers in the form
of American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"),
Global Depositary Receipts ("GDRs") or other securities convertible into
securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities for which they may be
exchanged. The Underlying Funds may also hold American Depository Shares
("ADSs"), which are similar to ADRs. ADRs and ADSs are typically issued by an
American bank or trust company and evidence ownership of underlying securities
issued by a foreign corporation. EDRs, which are sometimes referred to as
Continental Depository Receipts ("CDRs"), are receipts issued in Europe,
typically by foreign banks and trust companies that evidence ownership of either
foreign or domestic securities. Generally, ADRs in registered form are designed
for use in U.S. securities markets. For purposes of the Fund's investment
policies, investments in ADRs, ADSs, EDRs, GDRs and CDRs will be deemed to be
investments in the equity securities representing securities of foreign issuers
into which they may be converted.
RISKS OF INVESTING IN FOREIGN SECURITIES. Investments in foreign securities
involve certain inherent risks, including the following:
POLITICAL AND ECONOMIC FACTORS. Individual foreign economies of certain
countries may differ favorably or unfavorably from the U.S. economy in such
respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency, and diversification and balance of
payments position. The internal politics of some foreign countries may not be as
stable as those of the United States. Governments in some foreign countries also
continue to participate to a significant degree, through ownership interest or
regulation, in their respective economies. Action by these governments could
include restrictions on foreign investment, nationalization, expropriation of
goods or imposition of taxes, and could have a significant effect on market
prices of securities and payment of interest. The economies of many foreign
countries are heavily dependent upon international trade and are affected by the
trade policies and economic conditions of their trading partners. If these
trading partners enacted protectionist trade legislation, it could have a
significant adverse effect upon the securities markets of such countries.
CURRENCY FLUCTUATIONS. An Underlying Fund may invest in securities
denominated in foreign currencies. A change in the value of any such currency
against the U.S. dollar will result in a corresponding change in the U.S. dollar
value of the Underlying Fund's assets denominated in that currency. Such changes
will also affect the Underlying Fund's income. The value of the Underlying
Fund's assets may also be affected significantly by currency restrictions and
exchange control regulations enacted from time to time.
EURO CONVERSION. Several European countries adopted a single uniform
currency known as the "euro," effective January 1, 1999. The euro conversion,
that will take place over a several-year period, could have potential adverse
effects on an Underlying Fund's ability to value its portfolio holdings in
foreign securities, and could increase the costs associated with the Underlying
Fund's operations.
B-7
<PAGE>
MARKET CHARACTERISTICS. Many foreign securities in which an Underlying Fund
invests will be purchased in over-the-counter markets or on exchanges located in
the countries in which the principal offices of the issuers of the various
securities are located, if that is the best available market. Foreign exchanges
and markets may be more volatile than those in the United States. While growing,
they usually have substantially less volume than U.S. markets, and the
Underlying Fund's foreign securities may be less liquid and more volatile than
U.S. securities. Also, settlement practices for transactions in foreign markets
may differ from those in United States markets, and may include delays beyond
periods customary in the United States. Foreign security trading practices,
including those involving securities settlement where Underlying Fund assets may
be released prior to receipt of payment or securities, may expose the Underlying
Fund to increased risk in the event of a failed trade or the insolvency of a
foreign broker-dealer.
LEGAL AND REGULATORY MATTERS. Certain foreign countries may have less
supervision of securities markets, brokers and issuers of securities, and less
financial information available to issuers, than is available in the United
States.
TAXES. The interest and dividends payable on some of an Underlying Fund's
foreign portfolio securities may be subject to foreign withholding taxes, thus
reducing the net amount of income available for distribution to Underlying Fund
shareholders.
COSTS. To the extent that an Underlying Fund invests in foreign securities,
its expense ratio is likely to be higher than those of investment companies
investing only in domestic securities, since the cost of maintaining the custody
of foreign securities is higher.
CORPORATE DEBT SECURITIES
The Fund may invest in Underlying Funds that invest in debt securities,
including debt securities rated below investment grade. Bonds rated below BBB by
Standard & Poor's Rating Service ("S&P") or Baa by Moody's Investors Service,
Inc. ("Moody's), commonly referred to "junk bonds," typically carry higher
coupon rates than investment grade bonds, but also are described as speculative
by both S&P and Moody's and may be subject to greater market price fluctuations,
less liquidity and greater risk of income or principal including greater
possibility of default and bankruptcy of the issuer of such securities than more
highly rated bonds. Lower rated bonds also are more likely to be sensitive to
adverse economic or company developments and more subject to price fluctuations
in response to changes in interest rates. The market for lower-rated debt issues
generally is thinner and less active than that for higher quality securities,
which may limit the Underlying Fund's ability to sell such securities at fair
value in response to changes in the economy or financial markets. During periods
of economic downturn or rising interest rates, highly leveraged issuers of lower
rated securities may experience financial stress which could adversely affect
their ability to make payments of interest and principal and increase the
possibility of default.
Ratings of debt securities represent the rating agencies' opinions
regarding their quality, are not a guarantee of quality and may be reduced after
an Underlying Fund has acquired the security. Credit ratings attempt to evaluate
the safety of principal and interest payments and do not evaluate the risks of
fluctuations in market value. Also, rating agencies may fail to make timely
B-8
<PAGE>
changes in credit ratings in response to subsequent events, so that an issuer's
current financial conditions may be better or worse than the rating indicates.
The ratings for corporate debt securities are described in Appendix A.
MONEY MARKET INSTRUMENTS
The Fund may invest in any of the following securities and instruments:
CERTIFICATES OF DEPOSIT, BANKERS' ACCEPTANCES AND TIME DEPOSITS. The Fund
may hold certificates of deposit, bankers' acceptances and time deposits.
Certificates of deposit are negotiable certificates issued against funds
deposited in a commercial bank for a definite period of time and earning a
specified return. Bankers' acceptances are negotiable drafts or bills of
exchange, normally drawn by an importer or exporter to pay for specific
merchandise, which are "accepted" by a bank, meaning in effect that the bank
unconditionally agrees to pay the face value of the instrument on maturity.
Certificates of deposit and bankers' acceptances acquired by the Fund will be
dollar- denominated obligations of domestic banks, savings and loan associations
or financial institutions which, at the time of purchase, have capital, surplus
and undivided profits in excess of $100 million (including assets of both
domestic and foreign branches), based on latest published reports, or less than
$100 million if the principal amount of such bank obligations are fully insured
by the U.S. Government.
In addition to buying certificates of deposit and bankers' acceptances, the
Fund also may make interest-bearing time or other interest-bearing deposits in
commercial or savings banks. Time deposits are non-negotiable deposits
maintained at a banking institution for a specified period of time at a
specified interest rate.
COMMERCIAL PAPER AND SHORT-TERM NOTES. The Fund may invest a portion of its
assets in commercial paper and short-term notes. Commercial paper consists of
unsecured promissory notes issued by corporations. Commercial paper and
short-term notes will normally have maturities of less than nine months and
fixed rates of return, although such instruments may have maturities of up to
one year.
Commercial paper and short-term notes will consist of issues rated at the
time of purchase "A-2" or higher by S&P, "Prime-1" or "Prime-2" by Moody's, or
similarly rated by another nationally recognized statistical rating organization
or, if unrated, will be determined by the Adviser to be of comparable quality.
These rating symbols are described in Appendix B.
INVESTMENT RESTRICTIONS
The following policies and investment restrictions have been adopted by the
Fund and (unless otherwise noted) are fundamental and cannot be changed without
the affirmative vote of a majority of the Fund's outstanding voting securities
as defined in the 1940 Act. The Fund may not:
B-9
<PAGE>
1. Make loans to others, except to the extent the entry into a repurchase
agreement is deemed to be a loan.
2. (a) Borrow money, unless immediately thereafter there is an asset
coverage of at least 300% of all borrowings.
(b) Mortgage, pledge or hypothecate any of its assets except in
connection with any such borrowings.
3. Purchase securities on margin, participate on a joint or joint and
several basis in any securities trading account, or underwrite securities,
except that this restriction does not preclude the Fund from obtaining such
short-term credit as may be necessary for the clearance of purchases and sales
of its portfolio securities.
4. Purchase or sell real estate, or commodities or commodity contracts,
except that Underlying Funds may purchase futures contracts, and related
options.
5. Invest 25% or more of the market value of its assets in the securities
of investment companies which concentrate although the Fund will itself
concentrate its investments in investment companies.
6. Issue senior securities, as defined in the 1940 Act except that this
restriction shall not be deemed to prohibit the Fund from (a) making any
permitted borrowings, mortgages or pledges, (b) entering into repurchase
transactions, or (c) engaging in options or futures transactions.
The Fund observes the following policies, which are not deemed fundamental
and which may be changed without shareholder vote. The Fund may not:
7. Invest, in the aggregate, more than 15% of its net assets in securities
with legal or contractual restrictions on resale, securities which are not
readily marketable, and repurchase agreements with more than seven days to
maturity.
If a percentage restriction set forth in the prospectus or in this SAI is
adhered to at the time of investment, a subsequent increase or decrease in a
percentage resulting from a change in the values of assets will not constitute a
violation of that restriction, except with respect to borrowing and illiquid
securities, or as otherwise specifically noted.
DISTRIBUTIONS AND TAX INFORMATION
DISTRIBUTIONS
Dividends from net investment income and distributions from net profits
from the sale of securities are generally made annually. Also, the Fund expects
to distribute any undistributed net investment income on or about December 31 of
B-10
<PAGE>
each year. Any net capital gains realized through the one-year period ended
October 31 of each year will also be distributed by December 31 of each year.
Each distribution by the Fund is accompanied by a brief explanation of the
form and character of the distribution. In January of each year the Fund will
issue to each shareholder a statement of the federal income tax status of all
distributions made during the preceding calendar year.
TAX INFORMATION
The Fund expects to qualify to be treated as a regulated investment company
under Subchapter M of the Internal Revenue Code (the "Code"), provided that it
complies with all applicable requirements regarding the source of its income,
diversification of its assets and timing of distributions. The Fund's policy is
to distribute to its shareholders all of its investment company taxable income
and any net realized long-term and mid-term capital gains for each fiscal year
in a manner that complies with the distribution requirements of the Code, so
that the Fund will not be subject to any federal income tax or excise taxes
based on net income. To avoid the excise tax, the Fund must also distribute (or
be deemed to have distributed) by December 31 of each calendar year (I) at least
98% of its ordinary income for such year, (ii) at least 98% of the excess of its
realized capital gains over its realized capital losses for the one-year period
ending on October 31 during such year and (iii) any amounts from the prior
calendar year that were not distributed and on which the Fund paid no federal
excise tax.
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<PAGE>
Net investment income consists of interest and dividend income, less
expenses. Net realized capital gains for a fiscal period are computed by taking
into account any capital loss carry forward of the Fund.
Distributions of net investment income and net short-term capital gains are
taxable to shareholders as ordinary income. In the case of corporate
shareholders, a portion of the distributions may qualify for the intercorporate
dividends-received deduction to the extent the Fund designates the amount
distributed as a qualifying dividend. The aggregate amount so designated cannot,
however, exceed the aggregate amount of qualifying dividends received by the
Fund for its taxable year. The deduction, if any, may be reduced or eliminated
if Fund shares held by a corporate investor are treated as debt-financed or are
held for fewer than 46 days.
Any long-term capital gain distributions are taxable to shareholders as
long-term capital gains, respectively, regardless of the length of time they
have held their shares. Capital gain distributions are not eligible for the
dividends-received deduction referred to in the previous paragraph.
Distributions of any net investment income and net realized capital gains will
be taxable as described above, whether received in shares or in cash.
Shareholders electing to receive distributions in the form of additional shares
will have a cost basis for federal income tax purposes in each share so received
equal to the net asset value of a share on the reinvestment date. Distributions
are generally taxable when received. However, distributions declared in October,
November or December to shareholders of record on a date in such a month and
paid the following January are taxable as if received on December 31.
Distributions are includable in alternative minimum taxable income in computing
a shareholder's liability for the alternative minimum tax.
Under the Code, the Fund will be required to report to the Internal Revenue
Service all distributions of taxable income and capital gains as well as gross
proceeds from the redemption or exchange of Fund shares, except in the case of
exempt shareholders, which includes most corporations. Pursuant to the backup
withholding provisions of the Code, distributions of any taxable income and
capital gains and proceeds from the redemption of the Fund's shares may be
subject to withholding of federal income tax at the current maximum Federal tax
rate of 31 percent in the case of non-exempt shareholders who fail to furnish
the Fund with their taxpayer identification numbers and with required
certifications regarding their status under the federal income tax law. If the
backup withholding provisions are applicable, any such distributions and
proceeds, whether taken in cash or reinvested in additional shares, will be
reduced by the amounts required to be withheld. Corporate and other exempt
shareholders should provide the Fund with their taxpayer identification numbers
or certify their exempt status in order to avoid possible erroneous application
of backup withholding. The Fund reserves the right to refuse to open an account
for any person failing to certify the person's taxpayer identification number.
The Fund will not be subject to tax in the State of Delaware as long as it
qualifies as a regulated investment company for federal income tax purposes.
Distributions and the transactions referred to in the preceding paragraphs may
be subject to state and local income taxes, and the tax treatment thereof may
differ from the federal income tax treatment.
The foregoing discussion of U.S. federal income tax law relates solely to
the application of that law to U.S. citizens or residents and U.S. domestic
corporations, partnerships, trusts, and estates. Each shareholder who is not a
U.S. person should consider the U.S. and foreign tax consequences of ownership
of shares of the Funds, including the possibility that such a shareholder may be
subject to a U.S. withholding tax at a rate of 30 percent (or at a lower rate
under an applicable income tax treaty) on amounts constituting ordinary income.
B-12
<PAGE>
TRUSTEES AND EXECUTIVE OFFICERS
The Trustees of the Trust, who were elected for an indefinite term by the
initial shareholders of the Trust, are responsible for the overall management of
the Trust, including general supervision and review of the investment activities
of the Fund. The Trustees, in turn, elect the officers of the Trust, who are
responsible for administering the day-to-day operations of the Trust and its
separate series. The current Trustees and officers, their ages and affiliations
and principal occupations for the past five years are set forth below.
[Information to be supplied by amendment]
Set forth below is the annual compensation rate payable to the
Disinterested Trustees. Disinterested Trustees will receive an annual retainer
of $X,XXX and a fee of $XXX for each regularly scheduled meeting. Disinterested
Trustees are also reimbursed for expenses in connection with each Board meeting
attended. No other compensation or retirement benefits are received by any
Trustee or officer from the Funds or any other Funds of the Trust.
NAME OF TRUSTEE TOTAL COMPENSATION
- --------------- ------------------
[Information to be supplied by Amendment]
THE INVESTMENT ADVISOR
As stated in the Prospectus, investment advisory services are provided to
the Fund by Amivest Capital Management, Inc., pursuant to an Investment Advisory
Agreement.
The Advisor is a wholly-owned subsidiary of North Fork Bancorporation,
Inc., a New York Stock Exchange listed bank holding company headquartered in
Melville, NY. Its principal subsidiary is North Fork Bank, which operates from
approximately 150 branch locations in the New York metropolitan area and
Connecticut. North Fork has assets of approximately $__ billion and provides a
variety of banking and financial services to middle market and small business
organizations, local government units and retail customers in the New York
metropolitan area.
The Investment Advisory Agreement continues in effect after its initial two
year term from year to year so long as such continuation is approved at least
annually by (1) the Board of Trustees of the Trust or the vote of a majority of
the outstanding shares of the Fund, and (2) a majority of the Trustees who are
not interested persons of any party to the Agreement, in each case cast in
person at a meeting called for the purpose of voting on such approval. The
Agreement may be terminated at any time, without penalty, by either the Fund or
the Advisor upon sixty days' written notice and is automatically terminated in
the event of its assignment as defined in the 1940 Act.
THE ADMINISTRATOR
The Fund has entered into an Administration Agreement with Investment
Company Administration, LLC (the "Administrator"). The Administration Agreement
B-13
<PAGE>
provides that the Administrator will prepare and coordinate reports and other
materials supplied to the Trustees; prepare and/or supervise the preparation and
filing of all securities filings, periodic financial reports, prospectuses,
statements of additional information, tax returns, shareholder reports and other
regulatory reports or filings required of the Fund; prepare all required notice
filings necessary to maintain the Fund's ability to sell shares in all states
where the Fund currently does or intends to do business; coordinate the
preparation, printing and mailing of all materials (e.g., Annual Reports)
required to be sent to shareholders; coordinate the preparation and payment of
Fund-related expenses; monitor and oversee the activities of the Fund's
servicing agents (e.g., transfer agent, custodian, fund accountants, etc.);
review and adjust as necessary the Fund's daily expense accruals; and perform
such additional services as may be agreed upon by the Fund and the
Administrator. For its services, the Administrator receives a monthly fee from
the Fund at the annual rate of 0.10% of average daily net assets with a minimum
annual fee of $40,000.
THE DISTRIBUTOR
Compass Investment Services Corp. acts as the Fund's principal underwriter
in a continuous public offering of the Fund's shares. The Distribution Agreement
between the Fund and the Distributor continues in effect from year to year if
approved at least annually by (i) the Board of Trustees or the vote of a
majority of the outstanding shares of the Fund (as defined in the 1940 Act) and
(ii) a majority of the Trustees who are not interested persons of any such
party, in each case cast in person at a meeting called for the purpose of voting
on such approval. The Distribution Agreement may be terminated without penalty
by the parties thereto upon sixty days, written notice, and is automatically
terminated in the event of its assignment as defined in the 1940 Act.
Pursuant to a plan of distribution adopted by the Trust, on behalf of the
Fund, pursuant to Rule 12b-1 under the 1940 Act (the "Plan"), the Fund will pay
a distribution fee at an annual rate of 0.75% of its average daily net assets to
the Distributor. The Plan provides for the compensation to the Distributor
regardless of the Fund's distribution expenses.
The Plan allows excess distribution expenses to be carried forward by the
Distributor and resubmitted in a subsequent fiscal year, provided that (i)
distribution expenses cannot be carried forward for more than three years
following initial submission; (ii) the Trustees have made a determination at the
time of initial submission that the distribution expenses are appropriate to be
carried forward and (iii) the Trustees make a further determination, at the time
any distribution expenses which have been carried forward are submitted for
payment, that payment at the time is appropriate, consistent with the objectives
of the Plan and in the current best interests of shareholders.
Under the Plan, the Trustees will be furnished quarterly with information
detailing the amount of expenses paid under the Plan and the purposes for which
payments were made. The Plan may be terminated at any time by vote of a majority
of the Trustees of the Trust who are not interested persons. Continuation of the
Plan is considered by such Trustees no less frequently than annually.
B-14
<PAGE>
The Fund also has a Shareholder Servicing Agreement with the Distributor
pursuant to which payments or reimbursements of payments may be made to selected
brokers, dealers or administrators which have entered into agreements for
services provided to shareholders of the Fund. Under the Agreement, the Fund is
authorized to pay the Distributor a maximum fee in the amount of 0.25% of the
Fund's average daily net assets annually. Payment to the Distributor under the
Agreement reimburses the Distributor for payments it makes to selected brokers,
dealers and administrators who have entered into Service Agreements for services
provided to shareholders of the Fund.
PORTFOLIO TURNOVER
Although the Fund generally will not invest for short-term trading
purposes, portfolio securities may be sold without regard to the length of time
they have been held when, in the opinion of the Advisor, investment
considerations warrant such action. Portfolio turnover rate is calculated by
dividing (1) the lesser of purchases or sales of portfolio securities for the
fiscal year by (2) the monthly average of the value of portfolio securities
owned during the fiscal year. A 100% turnover rate would occur if all the
securities in the Fund's portfolio, with the exception of securities whose
maturities at the time of acquisition were one year or less, were sold and
either repurchased or replaced within one year. A high rate of portfolio
turnover (100% or more) generally leads to transaction costs and may result in a
greater number of taxable transactions.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
The information provided below supplements the information contained in the
Fund's Prospectus regarding the purchase and redemption of Fund shares.
HOW TO BUY SHARES. The public offering price of Fund shares is the net
asset value. The Fund receives the net asset value. Shares are purchased at the
public offering price next determined after the Transfer Agent receives your
order in proper form. In most cases, in order to receive that day's public
offering price, the Transfer Agent must receive your order in proper form before
the close of regular trading on the New York Stock Exchange ("NYSE"), normally
4:00 p.m., Eastern time.
The NYSE annually announces the days on which it will not be open for
trading. The most recent announcement indicates that it will not be open on the
following days: New Year's Day, Martin Luther King Jr. Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. However, the NYSE may close on days not included in that
announcement.
The Trust reserves the right in its sole discretion (i) to suspend the
continued offering of the Fund's shares, (ii) to reject purchase orders in whole
or in part when in the judgment of the Advisor or the Distributor such rejection
is in the best interest of the Fund, and (iii) to reduce or waive the minimum
for initial and subsequent investments for certain fiduciary accounts or under
circumstances where certain economies can be achieved in sales of the Fund's
shares.
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<PAGE>
HOW TO SELL SHARES. You can sell your Fund shares any day the NYSE is open
for regular trading. The Fund may require documentation for the sale of shares
by a corporation, partnership, agent or fiduciary, or a surviving joint owner.
Contact the Transfer Agent for details.
CONTINGENT DEFERRED SALES CHARGE. The contingent deferred sales charge
imposed on Fund shares does not apply to (a) any redemption pursuant to a
tax-free return of an excess contribution to an individual retirement account or
other qualified retirement plan if the Fund is notified at the time of such
request; (b) any redemption of a lump-sum or other distribution from qualified
retirement plans or accounts provided the shareholder has attained the minimum
age of 70 1/2 years and has held the Fund shares for a minimum period of three
years; (c) any redemption by advisory accounts managed by the Advisor or its
affiliates; (d) any redemption made by employees, officers or directors of the
Advisor or its affiliates; (e) any redemption by a tax-exempt employee benefit
plan if continuation of the investment would be improper under applicable laws
or regulations; and (f) any redemption or transfer of ownership of shares
following the death or disability, as defined in Section 72(m)(7) of the Code,
of a shareholder if the Fund is provided with proof of death or disability and
with all documents required by the Transfer Agent within one year after the
death or disability.
DELIVERY OF REDEMPTION PROCEEDS. Payments to shareholders for shares of the
Fund redeemed directly from the Fund will be made as promptly as possible but no
later than seven days after receipt by the Fund's Transfer Agent of the written
request in proper form, with the appropriate documentation as stated in the
Prospectus, except that the Fund may suspend the right of redemption or postpone
the date of payment during any period when (a) trading on the NYSE is restricted
as determined by the SEC or the NYSE is closed for other than weekends and
holidays; (b) an emergency exists as determined by the SEC making disposal of
portfolio securities or valuation of net assets of the Fund not reasonably
practicable; or (c) for such other period as the SEC may permit for the
protection of the Fund's shareholders. Under unusual circumstances, the Fund may
suspend redemptions, or postpone payment for more than seven days, but only as
authorized by SEC rules.
The value of shares on redemption or repurchase may be more or less than
the investor's cost, depending upon the market value of the Fund's portfolio
securities at the time of redemption or repurchase.
TELEPHONE REDEMPTIONS. Shareholders must have selected telephone
transactions privileges on the Account Application when opening a Fund account.
Upon receipt of any instructions or inquiries by telephone from a shareholder
or, if held in a joint account, from either party, or from any person claiming
to be the shareholder, the Fund or its agent is authorized, without notifying
the shareholder or joint account parties, to carry out the instructions or to
respond to the inquiries, consistent with the service options chosen by the
shareholder or joint shareholders in his or their latest Account Application or
other written request for services, including purchasing or redeeming shares of
the Fund and depositing and withdrawing monies from the bank account specified
in the Bank Account Registration section of the shareholder's latest Account
Application or as otherwise properly specified to the Fund in writing.
B-16
<PAGE>
The Transfer Agent will employ these and other reasonable procedures to
confirm that instructions communicated by telephone are genuine; if it fails to
employ reasonable procedures, the Fund and the Transfer Agent may be liable for
any losses due to unauthorized or fraudulent instructions. If these procedures
are followed, an investor agrees, however, that to the extent permitted by
applicable law, neither the Fund nor its agents will be liable for any loss,
liability, cost or expense arising out of any redemption request, including any
fraudulent or unauthorized request. For information, consult the Transfer Agent.
During periods of unusual market changes and shareholder activity, you may
experience delays in contacting the Transfer Agent by telephone. In this event,
you may wish to submit a written redemption request, as described in the
Prospectus. The Telephone Redemption Privilege may be modified or terminated
without notice.
REDEMPTIONS-IN-KIND. The Fund has reserved the right to pay the redemption
price of its shares, either totally or partially, by a distribution in kind of
portfolio securities (instead of cash). The securities so distributed would be
valued at the same amount as that assigned to them in calculating the net asset
value for the shares being sold. If a shareholder receives a distribution in
kind, the shareholder could incur brokerage or other charges in converting the
securities to cash. The Trust has filed an election under SEC Rule 18f-1
committing to pay in cash all redemptions by a shareholder of record up to
amounts specified by the rule (approximately $250,000).
AUTOMATIC INVESTMENT PLAN. As discussed in the Prospectus, the Fund
provides an Automatic Investment Plan for the convenience of investors who wish
to purchase shares of the Fund on a regular basis. All record keeping and
custodial costs of the Automatic Investment Plan are paid by the Fund. The
market value of the Fund's shares is subject to fluctuation, so before
undertaking any plan for systematic investment, the investor should keep in mind
that this plan does not assure a profit nor protect against depreciation in
declining markets.
DETERMINATION OF SHARE PRICE
As noted in the Prospectus, the net asset value and offering price of
shares of the Fund will be determined once daily as of the close of public
trading on the NYSE (normally 4:00 p.m., Eastern time) on each day that the NYSE
is open for trading. The Fund does not expect to determine the net asset value
of its shares on any day when the NYSE is not open for trading even if there is
sufficient trading in its portfolio securities on such days to materially affect
the net asset value per share. However, the net asset value of the Fund's shares
may be determined on days the NYSE is closed or at times other than 4:00 p.m. if
the Board of Trustees decides it is necessary. It is expected that the NYSE will
be closed on Saturdays and Sundays and on New Year's Day, Martin Luther King Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
The net asset value per share of the Fund is calculated as follows: all
liabilities incurred or accrued are deducted from the valuation of total assets
which includes accrued but undistributed income; the resulting net assets are
divided by the number of shares of the Fund outstanding at the time of the
valuation and the result (adjusted to the nearest cent) is the net asset value
per share.
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<PAGE>
Trading in foreign securities markets is normally completed well before the
close of the NYSE. In addition, foreign securities trading may not take place on
all days on which the NYSE is open for trading, and may occur in certain foreign
markets on days on which the Fund's net asset value is not calculated. The Fund
does not anticipate having a material portion of its assets invested in
Underlying Funds that have foreign securities that may trade on days when the
Fund does not price its shares.
PERFORMANCE INFORMATION
From time to time, the Fund may state its total return in advertisements
and investor communications. Total return may be stated for any relevant period
as specified in the advertisement or communication. Any statements of total
return will be accompanied by information on the Fund's average annual
compounded rates of return over the most recent year and the period from the
Fund's inception of operations. The Fund may also advertise aggregate and
average total return information over different periods of time. The Fund's
average annual compounded rate of return is determined by reference to a
hypothetical $1,000 investment that includes capital appreciation and
depreciation for the stated periods, according to the following formula:
n
P(1+T) = ERV
Where: P = a hypothetical initial purchase order of $1,000 from which the
maximum sales load is deducted
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1,000 purchase at the
end of the period
Aggregate total return is calculated in a similar manner, except that the
results are not annualized. Each calculation assumes that all dividends and
distributions are reinvested at net asset value on the reinvestment dates during
the period.
The Fund's total returns may be compared to relevant domestic and foreign
indices, including those published by Lipper Analytical Services, Inc. From time
to time, evaluations of the Fund's performance by independent sources may also
be used in advertisements and in information furnished to present or prospective
investors in the Fund.
Investors should note that the investment results of the Fund will
fluctuate over time, and any presentation of the Fund's total returns for any
period should not be considered as a representation of what an investment may
earn or what an investor's total return may be in any future period.
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<PAGE>
GENERAL INFORMATION
Investors in the Fund will be informed of the Fund's progress through
periodic reports. Financial statements certified by independent public
accountants will be submitted to shareholders at least annually.
______________________________, are legal counsel to the Fund.
________________acts as Custodian of the securities and other assets of the
Fund.___________________acts as the Funds' transfer and shareholder service
agent.
The Fund has applied for an exemption from the SEC to the extent necessary
to permit it to operate as a fund of funds in the manner described in the
Prospectus and this SAI. Among other things, this relief permits the Fund,
subject to certain conditions: (i) to acquire shares of Underlying Funds and the
Underlying Funds to sell such shares to the Fund; (ii) to offer shares to the
public with a contingent deferred sales charge of 5%; and (iii) to purchase and
redeem shares of the Underlying Funds and the Underlying Funds to sell and
redeem their shares in transactions with the Fund. The Fund has adopted
procedures reasonably designed to implement the relief sought in the SEC
exemption.
The Trust was organized as a Delaware business trust on September 9, 1999.
The Agreement and Declaration of Trust permits the Board of Trustees to issue an
limited number of full and fractional shares of beneficial interest, without par
value, which may be issued in any number of series. The Board of Trustees may
from time to time issue other series, the assets and liabilities of which will
be separate and distinct from any other series.
Shares issued by the Fund have no preemptive, conversion, or subscription
rights. Shareholders have equal and exclusive rights as to dividends and
distributions as declared by the Fund and to the net assets of the Fund upon
liquidation or dissolution. The Fund, as a separate series of the Trust, votes
separately on matters affecting only the Fund (e.g., approval of the Advisory
Agreement); all series of the Trust vote as a single class on matters affecting
all series jointly or the Trust as a whole (e.g., election or removal of
Trustees). Voting rights are not cumulative, so that the holders of more than
50% of the shares voting in any election of Trustees can, if they so choose,
elect all of the Trustees. While the Trust is not required and does not intend
to hold annual meetings of shareholders, such meetings may be called by the
Trustees in their discretion, or upon demand by the holders of 10% or more of
the outstanding shares of the Trust, for the purpose of electing or removing
Trustees.
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APPENDIX A
CORPORATE BOND RATINGS
MOODY'S INVESTORS SERVICE, INC.
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuations or
protective elements may be of greater amplitude or there may be other elements
present which make long-term risks appear somewhat larger than in Aaa
securities.
A: Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues
so rated can be regarded as having extremely poor prospectus of ever attaining
any real investment standing.
Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modified 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
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STANDARD & POOR'S RATINGS GROUP
AAA: Bonds rated AAA are highest grade debt obligations. This rating
indicates an extremely strong capacity to pay principal and interest.
AA: Bonds rated AA also qualify as high-quality debt obligations. Capacity
to pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and interest,
although they are more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.
BB, B, CCC, CC, C: Bonds rated BB, B, CCC, CC and C are regarded on balance
as predominantly speculative with respect to capacity to pay interest and repay
principal BB indicates the least degree of speculation and C the highest. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposure to adverse
conditions.
BB: Bonds rated BB have less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.
B: Bonds rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
BB or BB- rating.
CCC: Bonds rated CCC have a currently identifiable vulnerability to default
and are dependent upon favorable business, financial, and economic conditions to
meet timely payment of interest and repayment of principal. In the event of
adverse business, financial, or economic conditions, it is not likely to have
the capacity to pay interest and repay principal. The CCC rating category is
also used for debt subordinated to senior debt that is assigned an actual or
implied B or B- rating.
CC: The rating CC typically is applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating. The C rating may be
used to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued.
CI: The rating CI is reserved for income bonds on which no interest is
being paid.
D: Bonds rated D are in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
are jeopardized.
Plus (+) or Minus (-): The ratings from AA to CCC may be modified by the
additional of a plus or minus sign to show relative standing with the major
categories.
B-21
<PAGE>
APPENDIX B
COMMERCIAL PAPER RATINGS
MOODY'S INVESTORS SERVICE, INC.
Prime-1--Issuers (or related supporting institutions) rated "Prime-1" have
a superior ability for repayment of senior short-term debt obligations.
"Prime-1" repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries, high
rates of return on funds employed, conservative capitalization structures with
moderate reliance on debt and ample asset protection, broad margins in earnings
coverage of fixed financial charges and high internal cash generation, and
well-established access to a range of financial markets and assured sources of
alternate liquidity.
Prime-2--Issuers (or related supporting institutions) rated "Prime-2" have
a strong ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, will be more subject
to variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternative liquidity is maintained.
STANDARD & POOR'S RATINGS GROUP
A-1--This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) sign designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1".
B-22
<PAGE>
AMIVEST/NFB FUNDS TRUST
PART C
Item 23. Exhibits.
(1) (a) Agreement and Declaration of Trust(1)
(b) Amended and Restated Agreement and Declaration of Trust
(2) By-Laws(1)
(3) Specimen Share Certificate (2)
(4) Form of Investment Advisory Agreement (2)
(5) Form of Distribution Agreement (2)
(6) Not applicable
(7) Form of Custodian Agreement (2)
(8) (a) Form of Administration Agreement (2)
(b) Fund Accounting Service Agreement (2)
(c) Transfer Agency and Service Agreement (2)
(9) Opinion of Counsel (2)
(10) Not applicable
(11) Not applicable
(12) Initial capital agreement (2)
(13) Form of 12b-1 Plan (2)
(14) Not applicable
(15) Not applicable
- ----------
(1) Incorporated by reference from Registrant's initial Registration Statement
on Form N-1A (File No. 333-92405) filed on December 9, 1999.
(2) To be filed by amendment.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
ITEM 25. INDEMNIFICATION
Article VI of Registrant's By-Laws states as follows:
Section 1. AGENTS, PROCEEDINGS AND EXPENSES. For the purpose of this
Article, "agent" means any person who is or was a Trustee, officer, employee or
other agent of this Trust or is or was serving at the request of this Trust as a
Trustee, director, officer, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise or was a
Trustee, director, officer, employee or agent of a foreign or domestic
corporation which was a predecessor of another enterprise at the request of such
predecessor entity; "proceeding" means any threatened, pending or completed
action or proceeding, whether civil, criminal, administrative or investigative;
and "expenses" includes without limitation attorney's fees and any expenses of
establishing a right to indemnification under this Article.
<PAGE>
Section 2. ACTIONS OTHER THAN BY TRUST. This Trust shall indemnify any
person who was or is a party or is threatened to be made a party to any
proceeding (other than an action by or in the right of this Trust) by reason of
the fact that such person is or was an agent of this Trust, against expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with such proceeding, if it is determined that person acted in
good faith and reasonably believed:
(a) in the case of conduct in his official capacity as a Trustee of the
Trust, that his conduct was in the Trust's best interests, and
(b) in all other cases, that his conduct was at least not opposed to the
Trust's best interests, and
(c) in the case of a criminal proceeding, that he had no reasonable cause
to believe the conduct of that person was unlawful.
The termination of any proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent shall not of
itself create a presumption that the person did not act in good faith and in a
manner which the person reasonably believed to be in the best interests of this
Trust or that the person had reasonable cause to believe that the person's
conduct was unlawful.
Section 3. ACTIONS BY THE TRUST. This Trust shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action by or in the right of this Trust to procure a judgment in
its favor by reason of the fact that that person is or was an agent of this
Trust, against expenses actually and reasonably incurred by that person in
connection with the defense or settlement of that action if that person acted in
good faith, in a manner that person believed to be in the best interests of this
Trust and with such care, including reasonable inquiry, as an ordinarily prudent
person in a like position would use under similar circumstances.
Section 4. EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision to
the contrary contained herein, there shall be no right to indemnification for
any liability arising by reason of willful misfeasance, bad faith, gross
negligence, or the reckless disregard of the duties involved in the conduct of
the agent's office with this Trust.
No indemnification shall be made under Sections 2 or 3 of this Article:
(a) In respect of any claim, issue, or matter as to which that person
shall have been adjudged to be liable on the basis that personal
benefit was improperly received by him, whether or not the benefit
resulted from an action taken in the person's official capacity; or
<PAGE>
(b) In respect of any claim, issue or matter as to which that person shall
have been adjudged to be liable in the performance of that person's
duty to this Trust, unless and only to the extent that the court in
which that action was brought shall determine upon application that in
view of all the circumstances of the case, that person was not liable
by reason of the disabling conduct set forth in the preceding
paragraph and is fairly and reasonably entitled to indemnity for the
expenses which the court shall determine; or
(c) of amounts paid in settling or otherwise disposing of a threatened or
pending action, with or without court approval, or of expenses
incurred in defending a threatened or pending action which is settled
or otherwise disposed of without court approval, unless the required
approval set forth in Section 6 of this Article is obtained.
Section 5. SUCCESSFUL DEFENSE BY AGENT. To the extent that an agent of this
Trust has been successful on the merits in defense of any proceeding referred to
in Sections 2 or 3 of this Article or in defense of any claim, issue or matter
therein, before the court or other body before whom the proceeding was brought,
the agent shall be indemnified against expenses actually and reasonably incurred
by the agent in connection therewith, provided that the Board of Trustees,
including a majority who are disinterested, non-party Trustees, also determines
that based upon a review of the facts, the agent was not liable by reason of the
disabling conduct referred to in Section 4 of this Article.
Section 6. REQUIRED APPROVAL. Except as provided in Section 5 of this
Article, any indemnification under this Article shall be made by this Trust only
if authorized in the specific case on a determination that indemnification of
the agent is proper in the circumstances because the agent has met the
applicable standard of conduct set forth in Sections 2 or 3 of this Article and
is not prohibited from indemnification because of the disabling conduct set
forth in Section 4 of this Article, by:
(a) A majority vote of a quorum consisting of Trustees who are not parties
to the proceeding and are not interested persons of the Trust (as
defined in the Investment Company Act of 1940); or
(b) A written opinion by an independent legal counsel.
Section 7. ADVANCE OF EXPENSES. Expenses incurred in defending any
proceeding may be advanced by this Trust before the final disposition of the
proceeding upon a written undertaking by or on behalf of the agent, to repay the
amount of the advance if it is ultimately determined that he or she is not
entitled to indemnification, together with at least one of the following as a
condition to the advance: (i)security for the undertaking; or (ii) the existence
of insurance protecting the Trust against losses arising by reason of any lawful
advances; or (iii) a determination by a majority of a quorum of Trustees who are
not parties to the proceeding and are not interested persons of the Trust, or by
an independent legal counsel in a written opinion, based on a review of readily
available facts that there is reason to believe that the agent ultimately will
be found entitled to indemnification. Determinations and authorizations of
payments under this Section must be made in the manner specified in Section 6 of
this Article for determining that the indemnification is permissible.
<PAGE>
Section 8. OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article
shall affect any right to indemnification to which persons other than Trustees
and officers of this Trust or any subsidiary hereof may be entitled by contract
or otherwise.
Section 9. LIMITATIONS. No indemnification or advance shall be made under
this Article, except as provided in Sections 5 or 6 in any circumstances where
it appears:
(a) that it would be inconsistent with a provision of the Agreement and
Declaration of Trust of the Trust, a resolution of the shareholders,
or an agreement in effect at the time of accrual of the alleged cause
of action asserted in the proceeding in which the expenses were
incurred or other amounts were paid which prohibits or otherwise
limits indemnification; or
(b) that it would be inconsistent with any condition expressly imposed by
a court in approving a settlement.
Section 10. INSURANCE. Upon and in the event of a determination by the
Board of Trustees of this Trust to purchase such insurance, this Trust shall
purchase and maintain insurance on behalf of any agent of this Trust against any
liability asserted against or incurred by the agent in such capacity or arising
out of the agent's status as such, but only to the extent that this Trust would
have the power to indemnify the agent against that liability under the
provisions of this Article and the Agreement and Declaration of Trust of the
Trust.
Section 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article does not
apply to any proceeding against any Trustee, investment manager or other
fiduciary of an employee benefit plan in that person's capacity as such, even
though that person may also be an agent of this Trust as defined in Section 1 of
this Article. Nothing contained in this Article shall limit any right to
indemnification to which such a Trustee, investment manager, or other fiduciary
may be entitled by contract or otherwise which shall be enforceable to the
extent permitted by applicable law other than this Article.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 ("Securities Act") may be permitted to trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable. In the event
that a claim for indemnification against such liabilities (other than payment by
the Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in connection with the successful defense of any
action, suit or proceeding) is asserted against the Registrant by such director,
officer or controlling person in connection with the shares being registered,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
<PAGE>
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
With respect to the Investment Adviser, the response to this item is
incorporated by reference to the Adviser's Form ADV, as amended, File No.
801-7465.
ITEM 27. PRINCIPAL UNDERWRITERS.
(a) The Registrant's principal underwriter also acts as principal
underwriter for the following investment companies: To be supplied by amendment
(b) The following information is furnished with respect to the officers
and directors of Compass Investment Service Corp.:
Position and Offices Position and
Name and Principal with Principal Offices with
Business Address Underwriter Registrant
- ---------------- ----------- ----------
To be supplied by amendment.
(c) Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
the rules promulgated thereunder are in the possession the Registrant's
custodian and transfer agent, except those records relating to portfolio
transactions and the basic organizational and Trust documents of the Registrant
(see Subsections (2) (iii). (4), (5), (6), (7), (9), (10) and (11) of Rule
31a-1(b)), which, with respect to portfolio transactions are kept by the Fund's
Advisor at its address set forth in the prospectus and statement of additional
information and with respect to trust documents by its administrator at 2020 E.
Financial Way, Suite 100, Glendora, CA 91741.
ITEM 29. MANAGEMENT SERVICES.
There are no management-related service contracts not discussed in Parts A
and B.
ITEM 30. UNDERTAKINGS
The registrant undertakes:
(a) To furnish each person to whom a Prospectus is delivered a copy of
Registrant's latest annual report to shareholders, upon request and
without charge.
(b) If requested to do so by the holders of at least 10% of the Trust's
outstanding shares, to call a meeting of shareholders for the purposes
of voting upon the question of removal of a director and assist in
communications with other shareholders.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant has duly caused this Pre-Effective
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Phoenix in the State of
Arizona on February 10, 2000.
AMIVEST/NFB FUNDS TRUST
By: /s/ Robert H. Wadsworth
------------------------------
Robert H. Wadsworth
President
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the dates indicated.
/s/Robert H. Wadsworth Trustee February 10, 2000
- -------------------------
Robert H. Wadsworth
/s/Chris O. Moser Trustee February 10, 2000
- -------------------------
Chris O. Moser
/s/Janet S. Kaiser Trustee February 10, 2000
- -------------------------
Janet S. Kaiser
/s/Robert H. Wadsworth Principal Financial February 10, 2000
- ------------------------- Officer
Robert H. Wadsworth
<PAGE>
EXHIBITS
Exhibit No. Description
- ----------- -----------
99B.1.B Amended and Restated Agreement and Declaration of Trust
AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
of
AMIVEST/NFB FUNDS TRUST
a Delaware Business Trust
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I Name and Definitions
1. Name ........................................................... 1
2. Definitions .................................................... 1
(a) Trust ..................................................... 1
(b) Trust Property ............................................ 1
(c) Trustees .................................................. 1
(d) Shares .................................................... 2
(e) Shareholder ............................................... 2
(f) Person .................................................... 2
(g) 1940 Act .................................................. 2
(h) Commission and Principal Underwriter ...................... 2
(i) Declaration of Trust ...................................... 2
(j) By-Laws ................................................... 2
(k) Interested Person ......................................... 2
(l) Investment Manager ........................................ 2
(m) Series .................................................... 2
ARTICLE II Purpose of Trust .......................................... 2
ARTICLE III Shares
1. Division of Beneficial Interest ........................... 3
2. Ownership of Shares ....................................... 4
3. Investments in the Trust .................................. 4
4. Status of Shares and Limitation of Personal Liability ..... 4
5. Power of Board of Trustees to Change
Provisions Relating to Shares ........................... 4
6. Establishment and Designation of Series ................... 5
(a) Assets With Respect to a Particular Series ........... 5
(b) Liabilities Held With Respect to a
Particular Series .................................. 6
(c) Dividends, Distributions, Redemptions,
and Repurchases .................................... 6
(d) Voting ............................................... 7
(e) Equality ............................................. 7
(f) Fractions ............................................ 7
(g) Exchange Privilege ................................... 7
(h) Combination of Series ................................ 7
(i) Elimination of Series ................................ 8
7. Indemnification of Shareholders ........................... 9
i
<PAGE>
Page
----
ARTICLE IV The Board of Trustees
1. Number, Election and Tenure ............................... 8
2. Resignation and Removal ................................... 9
3. Meetings .................................................. 9
4. Effect of Death, Resignation, etc. of a Trustee ........... 10
5. Powers .................................................... 11
6. Payment of Expenses by the Trust .......................... 14
7. Payment of Expenses by Shareholders ....................... 14
8. Ownership of Assets of the Trust .......................... 14
9. Service Contracts ......................................... 15
ARTICLE V Shareholders' Voting Powers and Meetings
1. Voting Powers ............................................. 16
2. Voting Power and Meetings ................................. 17
3. Quorum and Required Vote .................................. 17
4. Action by Written Consent ................................. 18
5. Record Dates .............................................. 18
6. Additional Provisions ..................................... 18
ARTICLE VI Net Asset Value, Distributions, and Redemptions
1. Determination of Net Asset Value, Net
Income and Distributions ................................ 19
2. Redemptions and Repurchases ............................... 19
3. Redemptions at the Option of the Trust .................... 20
ARTICLE VII Compensation and Limitation of Liability of Trustees
1. Compensation .............................................. 20
2. Indemnification and Limitation of Liability ............... 20
3. Trustee's Good Faith Action, Expert
Advice, No Bond or Surety ............................... 21
4. Insurance ................................................. 21
ARTICLE VIII Miscellaneous
1. Liability of Third Persons Dealing with Trustees .......... 21
2. Termination of Trust or Series ............................ 21
3. Merger and Consolidation .................................. 22
4. Amendments ................................................ 22
5. Filing of Copies, References, Headings .................... 23
ii
<PAGE>
6. Applicable Law ............................................ 23
7. Provisions in Conflict with Law or Regulations ............ 23
8. Business Trust Only ....................................... 24
9. Counterparts .............................................. 24
iii
<PAGE>
AGREEMENT AND DECLARATION OF TRUST
OF
AMIVEST/NFB FUNDS TRUST
WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST is made and entered into
as of the date set forth below by the Trustees named hereunder for the purpose
of forming a Delaware business trust in accordance with the provisions
hereinafter set forth.
NOW, THEREFORE, the Trustees hereby direct that a Certificate of Trust be
filed with the Office of the Secretary of State of the State of Delaware and do
hereby declare that the Trustees will hold IN TRUST all cash, securities and
other assets which the Trust now possesses or may hereafter acquire from time to
time in any manner and manage and dispose of the same upon the following terms
and conditions for the pro rata benefit of the holders of Shares in this Trust.
ARTICLE I
Name and Definitions
Section 1. Name. This Trust shall be known as AMIVEST/NFB FUNDS TRUST and
the Trustees shall conduct the business of the Trust under that name or any
other name as they may from time to time determine.
Section 2. Definitions. Whenever used herein, unless otherwise required by
the context or specifically provided:
(a) The "Trust" refers to the Delaware business trust established by this
Agreement and Declaration of Trust, as amended from time to time;
(b) The "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust;
(c) "Trustees" refers to the persons who have signed this Agreement and
Declaration of Trust, so long as they continue in office in accordance with the
terms hereof, and all other persons who may from time to time be duly elected or
appointed to serve on the Board of Trustees in accordance with the provisions
1
<PAGE>
hereof, and reference herein to a Trustee or the Trustees shall refer to such
person or persons in their capacity as trustees hereunder;
(d) "Shares" means the shares of beneficial interest into which the
beneficial interest in the Trust shall be divided from time to time and includes
fractions of Shares as well as whole Shares;
(e) "Shareholder" means a record owner of outstanding Shares;
(f) "Person" means and includes individuals, corporations, partnerships,
trusts, associations, joint ventures, estates and other entities, whether or not
legal entities, and governments and agencies and political subdivisions thereof,
whether domestic or foreign;
(g) The "1940 Act" refers to the Investment Company Act of 1940 and the
Rules and Regulations thereunder, all as amended from time to time;
(h) The terms "Commission" and "Principal Underwriter" shall have the
meanings given them in the 1940 Act;
(i) "Declaration of Trust" shall mean this Agreement and Declaration of
Trust, as amended or restated from time to time;
(j) "By-Laws" shall mean the By-Laws of the Trust as amended from time to
time and incorporated herein by reference;
(k) The term "Interested Person" has the meaning given it in Section
2(a)(19) of the 1940 Act;
(l) "Investment Manager" or "Manager" means a party furnishing services to
the Trust pursuant to any contract described in Article IV, Section 7(a) hereof;
(m) "Series" refers to each Series of Shares established and designated
under or in accordance with the provisions of Article III.
ARTICLE II
Purpose of Trust
The purpose of the Trust is to conduct, operate and carry on the business
2
<PAGE>
of an investment management company registered under the 1940 Act through one or
more Series investing primarily in securities and any activity incidental or
related thereto.
ARTICLE III
Shares
Section 1. Division of Beneficial Interest. The beneficial interest in the
Trust shall at all times be divided into an unlimited number of Shares, with a
par value of $.01 per Share. All Shares issued in accordance with the terms
hereof, including, without limitation, Shares issued in connection with a
dividend in Shares or a split of Shares, shall be fully paid and nonassessable
when the consideration determined by the Trustees (if any) therefor shall have
been received by the Trust. The Trustees may authorize the division of Shares
into separate Series and the division of Series into separate classes of Shares.
The different Series shall be established and designated, and the variations in
the relative rights and preferences as between the different Series shall be
fixed and determined, by the Trustees. If only one or no Series (or classes)
shall be established, the Shares shall have the rights and preferences provided
for herein and in Article III, Section 6 hereof to the extent relevant and not
otherwise provided for herein, and all references to Series (and classes) shall
be construed (as the context may require) to refer to the Trust.
Subject to the provisions of Section 6 of this Article III, each Share
shall have voting rights as provided in Article V hereof, and holders of the
Shares of any Series shall be entitled to receive dividends, when, if and as
declared with respect thereto in the manner provided in Article VI, Section 1
hereof. No Shares shall have any priority or preference over any other Share of
the same Series with respect to dividends or distributions upon termination of
the Trust or of such Series made pursuant to Article VIII, Section 4 hereof. All
dividends and distributions shall be made ratably among all Shareholders of a
particular Series (or class thereof) from the assets held with respect to such
Series according to the number of Shares of such Series (or class) held of
record by such Shareholder on the record date for any dividend or distribution
or on the date of termination, as the case may be. Shareholders shall have no
preemptive or other right to subscribe to any additional Shares or other
securities issued by the Trust or any Series. The Trustees may from time to time
divide or combine the Shares of any particular Series into a greater or lesser
number of Shares of that Series without thereby materially changing the
proportionate beneficial interest of the Shares of that Series in the assets
held with respect to that Series or materially affecting the rights of Shares of
any other Series.
3
<PAGE>
Section 2. Ownership of Shares. The ownership of Shares shall be recorded
on the books of the Trust or a transfer or similar agent for the Trust, which
books shall be maintained separately for the Shares of each Series (or class).
No certificates certifying the ownership of Shares shall be issued except as the
Board of Trustees may otherwise determine from time to time. The Trustees may
make such rules as they consider appropriate for the transfer of Shares of each
Series (or class) and similar matters. The record books of the Trust as kept by
the Trust or any transfer or similar agent, as the case may be, shall be
conclusive as to who are the Shareholders of each Series (or class) and as to
the number of Shares of each Series (or class) held from time to time by each.
Section 3. Investments in the Trust. Investments may be accepted by the
Trust from such Persons, at such times, on such terms, and for such
consideration as the Trustees from time to time may authorize.
Section 4. Status of Shares and Limitation of Personal Liability. Shares
shall be deemed to be personal property giving only the rights provided in this
Declaration of Trust. Every Shareholder by virtue of having become a Shareholder
shall be deemed to have expressly assented and agreed to the terms hereof and to
have become a party hereto. The death of a Shareholder during the existence of
the Trust shall not operate to terminate the Trust, nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but entitles
such representative only to the rights of said deceased Shareholder under this
Trust. Ownership of Shares shall not entitle the Shareholder to any title in or
to the whole or any part of the Trust Property or right to call for a partition
or division of the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders as partners. Neither the Trust nor the Trustees, nor
any officer, employee or agent of the Trust shall have any power to bind
personally any Shareholders, nor, except as specifically provided herein, to
call upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay.
Section 5. Power of Board of Trustees to Change Provisions Relating to
Shares. Notwithstanding any other provision of this Declaration of Trust and
without limiting the power of the Board of Trustees to amend this Declaration of
Trust as provided elsewhere herein, the Board of Trustees shall have the power
4
<PAGE>
to amend this Declaration of Trust, at any time and from time to time, in such
manner as the Board of Trustees may determine in their sole discretion, without
the need for Shareholder action, so as to add to, delete, replace or otherwise
modify any provisions relating to the Shares contained in this Declaration of
Trust, provided that before adopting any such amendment without Shareholder
approval the Board of Trustees shall determine that it is consistent with the
fair and equitable treatment of all Shareholders or that Shareholder approval is
not otherwise required by the 1940 Act or other applicable law. If Shares have
been issued, Shareholder approval shall be required to adopt any amendments to
this Declaration of Trust which would adversely affect to a material degree the
rights and preferences of the Shares of any Series (or class) or to increase or
decrease the par value of the Shares of any Series (or class).
Subject to the foregoing Paragraph, the Board of Trustees may amend the
Declaration of Trust to amend any of the provisions set forth in paragraphs (a)
through (i) of Section 6 of this Article III.
Section 6. Establishment and Designation of Series. The establishment and
designation of any Series (or class) of Shares shall be effective upon the
resolution by a majority of the then Trustees, adopting a resolution which sets
forth such establishment and designation and the relative rights and preferences
of such Series (or class). Each such resolution shall be incorporated herein by
reference upon adoption.
Shares of each Series (or class) established pursuant to this Section 6,
unless otherwise provided in the resolution establishing such Series, shall have
the following relative rights and preferences:
(a) Assets Held With Respect to a Particular Series. All consideration
received by the Trust for the issue or sale of Shares of a particular Series,
together with all assets in which such consideration is invested or reinvested,
all income, earnings, profits, and proceeds thereof from whatever source
derived, including, without limitation, any proceeds derived from the sale,
exchange or liquidation of such assets, and any funds or payments derived from
any reinvestment of such proceeds in whatever form the same may be, shall
irrevocably be held with respect to that Series for all purposes, subject only
to the rights of creditors, and shall be so recorded upon the books of account
of the Trust. Such consideration, assets, income, earnings, profits and proceeds
thereof, from whatever source derived, including, without limitation, any
5
<PAGE>
proceeds derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds, in whatever
form the same may be, are herein referred to as "assets held with respect to"
that Series. In the event that there are any assets, income, earnings, profits
and proceeds thereof, funds or payments which are not readily identifiable as
assets held with respect to any particular Series (collectively, "General
Assets"), the Trustees shall allocate such General Assets to, between or among
any one or more of the Series in such manner and on such basis as the Trustees,
in their sole discretion, deem fair and equitable, and any General Asset so
allocated to a particular Series shall be held with respect to that Series. Each
such allocation by the Trustees shall be conclusive and binding upon the
Shareholders of all Series for all purposes.
(b) Liabilities Held With Respect to a Particular Series. The assets of the
Trust held with respect to each particular Series shall be charged against the
liabilities of the Trust held with respect to that Series and all expenses,
costs, charges and reserves attributable to that Series, and any general
liabilities of the Trust which are not readily identifiable as being held with
respect to any particular Series shall be allocated and charged by the Trustees
to and among any one or more of the Series 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 so charged to a Series are herein
referred to as "liabilities held with respect to" that Series. Each allocation
of liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the holders of all Series for all purposes. All
Persons who have extended credit which has been allocated to a particular
Series, or who have a claim or contract which has been allocated to any
particular Series, shall look to the assets of that particular Series for
payment of such credit, claim, or contract.
(c) Dividends, Distributions, Redemptions, and Repurchases. Notwithstanding
any other provisions of this Declaration of Trust, including, without
limitation, Article VI, no dividend or distribution, including, without
limitation, any distribution paid upon termination of the Trust or of any Series
(or class) with respect to, nor any redemption or repurchase of, the Shares of
any Series (or class) shall be effected by the Trust other than from the assets
held with respect to such Series. In addition, except as specifically provided
in Section 7 of this Article III, no Shareholder of any particular Series shall
otherwise have any right or claim against the assets held with respect to any
other Series except to the extent that such Shareholder has such a right or
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claim hereunder as a Shareholder of such other Series. 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.
(d) Voting. All Shares of the Trust entitled to vote on a matter shall vote
separately by Series (and, if applicable, by class). Therefore, the Shareholders
of each Series (or class) shall have the right to approve or disapprove matters
affecting the Trust and each respective Series (or class) as if the Series (or
classes) were separate companies. There are, however, two exceptions to the
entitlement to vote by separate Series (or classes). First, if the 1940 Act
requires all Shares of the Trust to be voted in the aggregate without
differentiation between the separate Series (or classes), then all the Trust's
Shares shall be entitled to vote on a one-vote-per-Share basis. Second, if the
Trustees determine, their sole discretion, that a particular matter affects only
the interests of some but not all Series (or classes), then only the
Shareholders of such affected Series (or classes) shall be entitled to vote on
the matter.
(e) Equality. All the Shares of each particular Series shall represent an
equal proportionate interest in the assets held with respect to that Series
(subject to the liabilities held with respect to that Series and such rights and
preferences as may have been established and designated with respect to classes
of Shares within such Series), and each Share of any particular Series shall be
equal to each other Share of that Series.
(f) Fractions. Any fractional Share of a Series shall carry proportionately
all the rights and obligations of a whole Share of that Series, including rights
with respect to voting, receipt of dividends and distributions, redemption of
Shares and termination of the Trust.
(g) Exchange Privilege. The Trustees shall have the authority to provide
that the holders of Shares of any Series shall have the right to exchange said
Shares for Shares of one or more other Series of Shares in accordance with such
requirements and procedures as may be established by the Trustees.
(h) Combination of Series. The Trustees shall have the authority, without
the approval of the Shareholders of any Series unless otherwise required by
applicable law, to combine the assets and liabilities held with respect to any
two or more Series into assets and liabilities held with respect to a single
Series.
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(i) Elimination of Series. At any time that there are no Shares outstanding
of any particular Series (or class) previously established and designated, the
Trustees may by resolution of a majority of the then Trustees abolish that
Series (or class) and rescind the establishment and designation thereof.
Section 7. Indemnification of Shareholders. If any Shareholder or former
Shareholder shall be exposed to liability by reason of a claim or demand
relating to his being or having been a Shareholder, and not because of his acts
or omissions, the Shareholder or former Shareholder (or his heirs, executors,
administrators, or other legal representatives or in the case of a corporation
or other entity, its corporate or other general successor) shall be entitled to
be held harmless from and indemnified out of the assets of the Trust against all
loss and expense arising from such claim or demand.
ARTICLE IV
The Board of Trustees
Section 1. Number, Election and Tenure. The number of Trustees constituting
the Board of Trustees shall be fixed from time to time by a written instrument
signed, or by resolution approved at a duly constituted meeting, by a majority
of the Board of Trustees, provided, however, that the number of Trustees shall
in no event be less than three (3) nor more than fifteen (15). The Board of
Trustees, by action of a majority of the then Trustees at a duly constituted
meeting, may fill vacancies in the Board of Trustees or remove Trustees with or
without cause. Each Trustee shall serve during the continued lifetime of the
Trust until he dies, resigns, is declared bankrupt or incompetent by a court of
appropriate jurisdiction, or is removed, or, if sooner, until the next meeting
of Shareholders called for the purpose of electing Trustees and until the
election and qualification of his successor. Any Trustee may resign at any time
by written instrument signed by him and delivered to any officer of the Trust or
to a meeting of the Trustees. Such resignation shall be effective upon receipt
unless specified to be effective at some other time. Except to the extent
expressly provided in a written agreement with the Trust, no Trustee resigning
and no Trustee removed shall have any right to any compensation for any period
following his resignation or removal, or any right to damages on account of such
removal. The Shareholders may fix the number of Trustees and elect Trustees at
any meeting of Shareholders called by the Trustees for that purpose. Any Trustee
may be removed at any meeting of Shareholders by a vote of two-thirds of the
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outstanding Shares of the Trust. A meeting of Shareholders for the purpose of
electing or removing one or more Trustees may be called (i) by the Trustees upon
their own vote, or (ii) upon the demand of Shareholders owning 10% or more of
the Shares of the Trust in the aggregate.
Section 2. Resignation and Removal. Any Trustee may resign his trust
(without need for prior or subsequent accounting) by an instrument in writing
signed by him and delivered or mailed to the other then Trustees and such
resignation shall be effective upon such delivery, or at a later date according
to the terms of the instrument. Any Trustee may be removed (provided the
aggregate number of Trustees after such removal shall not be less than the
number required by Article IV, Section 1 hereof) for cause at any time by
written instrument, signed by two-thirds of the remaining Trustees specifying
the date when such removal shall become effective. Any Trustee may be removed
(provided the aggregate number of Trustees after such removal shall not be less
than the minimum number required by Article IV, Section 1 hereof) without cause
at any time by a written instrument, signed or adopted by two-thirds of the
remaining Trustees or by vote of Shares having not less than two-thirds of the
aggregate number of Shares entitled to vote in the election of such Trustee,
specifying the date when such removal shall become effective. Upon the
resignation re removal of a Trustee, or such persons otherwise ceasing to be a
Trustee, such persons shall execute and deliver such documents as the remaining
Trustees shall require for the purpose of conveying to the Trust or the
remaining Trustees any Trust Property held in the name of the resigning or
removed Trustee. Upon the incapacity or death of any Trustee, such Trustee's
legal representative shall execute and deliver on such Trustee's behalf such
documents as the remaining Trustees shall require as provided in the preceding
sentence.
Section 3. Meetings. Meetings of the Trustees shall be held from time to
time upon the call of a majority of the then Trustees. Regular meetings of the
Trustees may be held without call or notice at a time and place fixed by the
By-Laws or by the Trustees. Notice of any other meeting shall be mailed not less
than 48 hours before the meeting or otherwise actually delivered orally or in
writing not less than 24 hours before the meeting, but may be waived in writing
by any Trustee either before or after such meeting. The attendance of a Trustee
at a meeting shall constitute a waiver or notice of such meeting except where a
Trustee attends a meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting has not been lawfully
called or convened. The Trustees may act with or without a meeting. A quorum for
all meetings of the Trustees shall be one-third of the Trustees. Unless
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provided otherwise in this Declaration of Trust, any action of the Trustees may
be taken at a meeting by vote of a majority of the Trustees present (a quorum
being present) or without a meeting by written consent of a majority of the
Trustees or such other proportion as shall be specified herein for action at a
meeting at which all Trustees then in office are present.
Any committee of the Trustees, including an executive committee, if any,
may act with or without a meeting. A quorum for all meetings of any such
committee shall be a majority of the members thereof. Unless provided otherwise
in this Declaration of Trust, any action or any such committee may be taken at a
meeting by vote of a majority of the members present (a quorum being present) or
without a meeting by written consent of a majority of the members or such other
proportion as shall be specified herein for action at a meeting at which all
committee members are present.
With respect to actions of the Trustees and any committee of the Trustees,
Trustees who are interested persons in any action to be taken may be counted for
quorum purposes under this Section and shall be entitled to vote to the extent
not prohibited by the 1940 Act.
All or any one or more Trustees may participate in a meeting of the
Trustees or any committee thereof by means of a conference telephone, internet
connection or similar communications equipment by means of which all persons
participating in the meeting can hear or otherwise communicate with each other;
participation in a meeting pursuant to any such communications system shall
constitute presence in person at such meeting except as otherwise provided by
the 1940 Act.
Section 4. Effect of Death, Resignation, etc. of a Trustee. The death,
resignation, retirement, removal, or incapacity of one or more Trustees, or all
of them, shall not operate to annul the Trust or to revoke any existing agency
created pursuant to the terms of this Declaration of Trust. Whenever a vacancy
in the Board of Trustees shall occur, until such vacancy is filled as provided
in Article IV, Section 1, the Trustees in office, regardless of their number,
shall have all the powers granted to the Trustees and shall discharge all the
duties imposed upon the Trustees by this Declaration of Trust. As conclusive
evidence of such vacancy, a written instrument certifying the existence of such
vacancy may be executed by an officer of the Trust or by a majority of the Board
of Trustees. In the event of the death, resignation, retirement, removal, or
incapacity of all the then Trustees within a short period of time and without
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the opportunity for at least one Trustee being able to appoint additional
Trustees to fill vacancies, the Trust's Investment Manager(s) are empowered to
appoint new Trustees subject to the provisions of Section 16(a) of the 1940 Act.
Section 5. Powers. Subject to the provisions of this Declaration of Trust,
the business of the Trust shall be managed by the Board of Trustees, and such
Board shall have all powers necessary or convenient to carry out that
responsibility including the power to engage in securities transactions of all
kinds on behalf of the Trust. Without limiting the foregoing, the Trustees may:
adopt By-Laws not inconsistent with this Declaration of Trust providing for the
regulation and management of the affairs of the Trust and may amend and repeal
them to the extent that such By-Laws do not reserve that right to the
Shareholders; fill vacancies in or remove from their number, and may elect and
remove such officers and appoint and terminate such agents as they consider
appropriate; appoint from their own number and establish and terminate one or
more committees consisting of two or more Trustees which may exercise the powers
and authority of the Board of Trustees to the extent that the Trustees
determine; employ one or more custodians of the assets of the Trust and may
authorize such custodians to employ subcustodians and to deposit all or any part
of such assets in a system or systems for the central handling of securities or
with a Federal Reserve Bank, retain a transfer agent or a Shareholder servicing
agent, or both; provide for the issuance and distribution of Shares by the Trust
directly or through one or more Principal Underwriters or otherwise; redeem,
repurchase and transfer Shares pursuant to applicable law; set record dates for
the determination of Shareholders with respect to various matters; declare and
pay dividends and distributions to Shareholders of each Series from the assets
of such Series; and in general delegate such authority as they consider
desirable to any officer of the Trust, to any committee of the Trustees and to
any agent or employee of the Trust or to any such custodian, transfer or
Shareholder servicing agent, or Principal Underwriter. Any determination as to
what is in the interests of the Trust made by the Trustees in good faith shall
be conclusive. In construing the provisions of this Declaration of Trust, the
presumption shall be in favor of a grant of power to the Trustees. Unless
otherwise specified or required by law, any action by the Board of Trustees
shall be deemed effective if approved or taken by a majority of the Trustees
then in office.
Without limiting the foregoing, the Trust shall have power and authority:
(a) To invest and reinvest cash, to hold cash uninvested, and to subscribe
for, invest in, reinvest in, purchase or otherwise acquire, own, hold, pledge,
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sell, assign, transfer, exchange, distribute, write options on, lend or
otherwise deal in or dispose of contracts for the future acquisition or delivery
of fixed income or other securities, and securities of every nature and kind,
including, without limitation, all types of bonds, debentures, stocks,
negotiable or non-negotiable instruments, obligations, evidences of
indebtedness, certificates of deposit or indebtedness, commercial paper,
repurchase agreements, bankers' acceptances, and other securities of any kind,
issued, created, guaranteed, or sponsored by any and all Persons, including,
without limitation, states, territories, and possessions of the United States
and the District of Columbia and any political subdivision, agency, or
instrumentality thereof, any foreign government or any political subdivision of
the U.S. Government or any foreign government, or any international
instrumentality, or by any bank or savings institution, or by any corporation or
organization organized under the laws of the United States or of any state,
territory, or possession thereof, or by any corporation or organization
organized under any foreign law, or in "when issued" contracts for any such
securities, to change the investments of the assets of the Trust; and to
exercise any and all rights, powers, and privileges of ownership or interest in
respect of any and all such investments of every kind and description,
including, without limitation, the right to consent and otherwise act with
respect thereto, with power to designate one or more Persons, to exercise any of
said rights, powers, and privileges in respect of any of said instruments;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, lease, or write
options with respect to or otherwise deal in any property rights relating to any
or all of the assets of the Trust or any Series;
(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property, and to execute and deliver
proxies or powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion with
relation to securities or property as the Trustees shall deem proper;
(d) To exercise powers and right of subscription or otherwise which in any
manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form, or in its own name or
in the name of a custodian or subcustodian or a nominee or nominees or
otherwise;
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(f) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security which is
held in the Trust; to consent to any contract, lease, mortgage, purchase or sale
of property by such corporation or issuer; and to pay calls or subscriptions
with respect to any security held in the Trust;
(g) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Trustees shall deem
proper;
(h) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not limited to
claims for taxes;
(i) To enter into joint ventures, general or limited partnerships and any
other combination or associations;
(j) To borrow funds or other property in the name of the Trust exclusively
for Trust purposes;
(k) To endorse or guarantee the payment of any notes or other obligations
of any Person; to make contracts of guaranty or suretyship, or otherwise assume
liability for payment thereof;
(l) To purchase and pay for entirely out of Trust Property such insurance
as the Trustees may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the assets
of the Trust or payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers, principal underwriters, or
independent contractors of the Trust, individually against all claims and
liabilities of every nature arising by reason of holding Shares, holding, being
or having held any such office or position, or by reason of any action alleged
to have been taken or omitted by any such Person as Trustee, officer, employee,
agent, investment adviser, principal underwriter, or independent contractor,
including any action taken or omitted that may be determined to constitute
negligence, whether or not the Trust would have the power to indemnify such
Person against liability; and
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(m) 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.
The Trust shall not be limited to investing in obligations maturing before
the possible termination of the Trust or one or more of its Series. The Trust
shall not in any way be bound or limited by any present or future law or custom
in regard to investment by fiduciaries. The Trust shall not be required to
obtain any court order to deal with any assets of the Trust or take any other
action hereunder.
Section 6. Payment of Expenses by the Trust. The Trustees are authorized to
pay or cause to be paid out of the principal or income of the Trust, or partly
out of the principal and partly out of income, as they deem fair, all expenses,
fees, charges, taxes and liabilities incurred or arising in connection with the
Trust, or in connection with the management thereof, including, but not limited
to, the Trustees' compensation and such expenses and charges for the services of
the Trust's officers, employees, investment adviser or manager, principal
underwriter, auditors, counsel, custodian, transfer agent, Shareholder servicing
agent, and such other agents or independent contractors and such other expenses
and charges as the Trustees may deem necessary or proper to incur.
Section 7. Payment of Expenses by Shareholders. The Trustees shall have the
power, as frequently as they may determine, to cause each Shareholder, or each
Shareholder of any particular Series, to pay directly, in advance or arrears,
for charges of the Trust's custodian or transfer, Shareholder servicing or
similar agent, an amount fixed from time to time by the Trustees, by setting off
such charges due from such Shareholder from declared but unpaid dividends owed
such Shareholder and/or by reducing the number of shares in the account of such
Shareholder by that number of full and/or fractional Shares which represents the
outstanding amount of such charges due from such Shareholder.
Section 8. Ownership of Assets of the Trust. Title to all of the assets of
the Trust shall at all times be considered as vested in the Trust, except that
the Trustees shall have power to cause legal title to any Trust Property to be
held by or in the name of one or more of the Trustees, or in the name of the
Trust, or in the name of any other Person as nominee, on such terms as the
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Trustees may determine. The right, title and interest of the Trustees in the
Trust Property shall vest automatically in each Person who may hereafter become
a Trustee. Upon the resignation, removal or death of a Trustee he shall
automatically cease to have any right, title or interest in any of the Trust
Property, and the right, title and interest of such Trustee in the Trust
Property shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.
Section 9. Service Contracts.
(a) Subject to such requirements and restrictions as may be set forth in
the By-Laws, the Trustees may, at any time and from time to time, contract for
exclusive or nonexclusive advisory, management and/or administrative services
for the Trust or for any Series with any corporation, trust, association or
other organization; and any such contract may contain such other terms as the
Trustees may determine, including without limitation, authority for the
Investment Manager or administrator to determine from time to time without prior
consultation with the Trustees what investments shall be purchased, held, sold
or exchanged and what portion, if any, of the assets of the Trust shall be held
uninvested and to make changes in the Trust's investments, or such other
activities as may specifically be delegated to such party.
(b) The Trustees may also, at any time and from time to time, contract with
any corporation, trust, association or other organization, appointing it
exclusive or nonexclusive distributor or Principal Underwriter for the Shares of
one or more of the Series (or classes) or other securities to be issued by the
Trust. Every such contract shall comply with such requirements and restrictions
as may be set forth in the By-Laws; and any such contract may contain such other
terms as the Trustees may determine.
(c) The Trustees are also empowered, at any time and from time to time, to
contract with any corporations, trusts, associations or other organizations,
appointing it or them the custodian, transfer agent and/or Shareholder servicing
agent for the Trust or one or more of its Series. Every such contract shall
comply with such requirements and restrictions as may be set forth in the
By-Laws or stipulated by resolution of the Trustees.
(d) The Trustees are further empowered, at any time and from time to time,
to contract with any entity to provide such other services to the Trust or one
or more of the Series, as the Trustees determine to be in the best interests of
the Trust and the applicable Series.
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(e) 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, distributor, or affiliate or agent of or
for any corporation, trust, association, or other organization, or for any
parent or affiliate of any organization with which an advisory, management
or administration contract, or principal underwriter's or distributor's
contract, or transfer, Shareholder servicing or other type of service
contract may have been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a Shareholder or has
an interest in the Trust, or that
(ii) any corporation, trust, association or other organization with
which an advisory, management or administration contract or principal
underwriter's or distributor's contract, or transfer, Shareholder servicing
or other type of service contract may have been or may hereafter be made
also has an advisory, management or administration contract, or principal
underwriter's or distributor's contract, or transfer, shareholder servicing
or other service contract with one or more other corporations, trust,
associations, or other organizations, or has other business or interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same, or create any liability or accountability to the Trust or its
Shareholders, provided approval of each such contract is made pursuant to the
requirements of the 1940 Act.
ARTICLE V
Shareholders' Voting Powers and Meetings
Section 1. Voting Powers. Subject to the provisions of Article III, Section
6(d), the Shareholders shall have power to vote only (i) for the election or
removal of Trustees as provided in Article IV, Section 1, and (ii) with respect
to such additional matters relating to the Trust as may be required by this
Declaration of Trust, the By-Laws or any registration of the Trust with the
Commission (or any successor agency) or any state, or as the Trustees may
consider necessary or desirable. Each whole Share shall be entitled to one vote
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as to any matter on which it is entitled to vote and each fractional Share shall
be entitled to a proportionate fractional vote. There shall be no cumulative
voting in the election of Trustees. Shares may be voted in person or by proxy. A
proxy with respect to Shares held in the name of two or more persons shall be
valid if executed by any one of them unless at or prior to exercise of the proxy
the Trust receives a specific written notice to the contrary from any one of
them. A proxy purporting to be executed by or on behalf of a Shareholder shall
be deemed valid unless challenged at or prior to its exercise and the burden of
proving invalidity shall rest on the challenger.
Section 2. Voting Power and Meetings. Meetings of the Shareholders may be
called by the Trustees for the purpose of electing Trustees as provided in
Article IV, Section 1 and for such other purposes as may be prescribed by law,
by this Declaration of Trust or by the By-Laws. Meetings of the Shareholders may
also be called by the Trustees from time to time for the purpose of taking
action upon any other matter deemed by the Trustees to be necessary or
desirable. Meetings of the Shareholders shall be called by any Trustee upon
written request of Shareholders holding, in the aggregate, not less than 10% of
the Shares, such request specifying the purpose or purposes for which such
meeting is to be called. A meeting of Shareholders may be held at any place
designated by the Trustees. Written notice of any meeting of Shareholders shall
be given or caused to be given by the Trustees by mailing such notice at least
seven (7) days before such meeting, postage prepaid, stating the time and place
of the meeting, to each Shareholder at the Shareholder's address as it appears
on the records of the Trust. Whenever notice of a meeting is required to be
given to a Shareholder under this Declaration of Trust or the By-Laws, a written
waiver thereof, executed before or after the meeting by such Shareholder or his
attorney thereunto authorized and filed with the records of the meeting, shall
be deemed equivalent to such notice.
Section 3. Quorum and Required Vote. Except when a larger quorum is
required by applicable law, by the By-Laws or by this Declaration of Trust,
forty percent (40%) of the Shares entitled to vote shall constitute a quorum at
a Shareholders' meeting. When any one or more Series (or classes) is to vote as
a single class separate from any other Shares, forty percent (40%) of the Shares
of each such Series (or classes) entitled to vote shall constitute a quorum at a
Shareholders's meeting of that Series. Any meeting of Shareholders may be
adjourned from time to time by a majority of the votes properly cast upon the
question of adjourning a meeting to another date and time, whether or not a
quorum is present, and the meeting may be held as adjourned within a reasonable
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time after the date set for the original meeting without further notice. Subject
to the provisions of Article III, Section 6(d), when a quorum is present at any
meeting, a majority of the Shares voted shall decide any questions and a
plurality shall elect a Trustee, except when a larger vote is required by any
provision of this Declaration of Trust or the By-Laws or by applicable law.
Section 4. Action by Written Consent. Any action taken by Shareholders may
be taken without a meeting if Shareholders holding a majority of the Shares
entitled to vote on the matter (or such larger proportion thereof as shall be
required by any express provision of this Declaration of Trust or by the
By-Laws) and holding a majority (or such larger proportion as aforesaid) of the
Shares of any Series (or class) entitled to vote separately on the matter
consent to the action in writing and such written consents are filed with the
records of the meetings of Shareholders. Such consent shall be treated for all
purposes as a vote taken at a meeting of Shareholders.
Section 5. Record Dates. For the purpose of determining the Shareholders of
any Series (or class) who are entitled to vote or act at any meeting or any
adjournment thereof, the Trustees may from time to time fix a time, which shall
be not more than ninety (90) days before the date of any meeting of
Shareholders, as the record date for determining the Shareholders of such Series
(or class) having the right to notice of and to vote at such meeting and any
adjournment thereof, and in such case only Shareholders of record on such record
date shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date. For the purpose of determining the
Shareholders of any Series (or class) who are entitled to receive payment of any
dividend or of any other distribution, the Trustees may from time to time fix a
date, which shall be before the date for the payment of such dividend or such
other payment, as the record date for determining the Shareholders of such
Series (or class) having the right to receive such dividend or distribution.
Without fixing a record date the Trustees may for voting and/or distribution
purposes close the register or transfer books for one or more Series for all or
any part of the period between a record date and a meeting of Shareholders or
the payment of a distribution. Nothing in this Section shall be construed as
precluding the Trustees from setting different record dates for different Series
(or classes).
Section 6. Additional Provisions. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.
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ARTICLE VI
Net Asset Value, Distributions, and Redemptions
Section 1. Determination of Net Asset Value, Net Income, and Distributions.
Subject to Article III, Section 6 hereof, the Trustees, in their absolute
discretion, may prescribe and shall set forth in the By-Laws or in a duly
adopted vote of the Trustees such bases and time for determining the per Share
or net asset value of the Shares of any Series or net income attributable to the
Shares of any Series, or the declaration and payment of dividends and
distributions on the Shares of any Series, as they may deem necessary or
desirable. All dividends and distributions on each Class of a Series shall be
distributed pro rata to the holders of Shares of that Class in proportion to the
number of Shares of that Class held by such holders at the date and time of
record established for the payment of such dividends or distributions, and such
dividends and distributions need not be pro rata with respect to dividends and
distributions paid to Shares of any other Class of such Series. Dividends and
distributions shall be paid with respect to Shares of a given Class only out of
lawfully available assets attributable to such Class.
Section 2. Redemptions and Repurchases. The Trust shall purchase such
Shares as are offered by any Shareholder for redemption, upon the presentation
of a proper instrument of transfer together with a request directed to the Trust
or a Person designated by the Trust that the Trust purchase such Shares or in
accordance with such other procedures for redemption as the Trustees may from
time to time authorize; and the Trust will pay therefor the net asset value
thereof, in accordance with the By- Laws and applicable law. Payment for said
Shares shall be made by the Trust to the Shareholder within seven days after the
date on which the request is made in proper form. The obligation set forth in
this Section 2 is subject to the provision that in the event that any time the
New York Stock Exchange (the "Exchange") is closed for other than weekends or
holidays, or if permitted by the Rules of the Commission during periods when
trading on the Exchange is restricted or during any emergency which makes it
impracticable for the Trust to dispose of the investments of the applicable
Series or to determine fairly the value of the net assets held with respect to
such Series or during any other period permitted by order of the Commission for
the protection of investors, such obligations may be suspended or postponed by
the Trustees.
The redemption price may in any case or cases be paid wholly or partly in
kind if the Trustees determine that such payment is advisable in the interest of
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the remaining Shareholders of the Series for which the Shares are being
redeemed. Subject to the foregoing, the fair value, selection and quantity of
securities or other property so paid or delivered as all or part of the
redemption price may be determined by or under authority of the Trustees. In no
case shall the Trust be liable for any delay of any corporation or other Person
in transferring securities selected for delivery as all or part of any payment
in kind.
Section 3. Redemptions at the Option of the Trust. The Trust shall have the
right at its option and at any time to redeem Shares of any Shareholder at the
net asset value thereof as described in Section 1 of this Article VI: (i) if at
such time such Shareholder owns Shares of any Series having an aggregate net
asset value of less than an amount determined from time to time by the Trustees
prior to the acquisition of said Shares; or (ii) to the extent that such
Shareholder owns Shares of a particular Series equal to or in excess of a
percentage of the outstanding Shares of that Series determined from time to time
by the Trustees; or (iii) to the extent that such Shareholder owns Shares equal
to or in excess of a percentage, determined from time to time by the Trustees,
of the outstanding Shares of the Trust or of any Series.
ARTICLE VII
Compensation and Limitation of Liability of Trustees
Section 1. Compensation. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and they may fix the amount of such
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
Section 2. Indemnification and Limitation of Liability. The Trustees shall
not be responsible or liable in any event for any neglect or wrong-doing of any
officer, agent, employee, Manager or Principal Underwriter of the Trust, nor
shall any Trustee be responsible for the act or omission of any other Trustee,
and the Trust out of its assets shall indemnify and hold harmless each and every
Trustee from and against any and all claims and demands whatsoever arising out
of or related to each Trustee's performance of his duties as a Trustee of the
Trust; provided that nothing herein contained shall indemnify, hold harmless or
protect any Trustee from or against any liability to the Trust or any
Shareholder to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
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Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever issued, executed or done by or on behalf of
the Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been issued, executed or done only in or with
respect to their or his capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.
Section 3. Trustee's Good Faith Action, Expert Advice, No Bond or Surety.
The exercise by the Trustees of their powers and discretions hereunder shall be
binding upon everyone interested. A Trustee shall be liable to the Trust and to
any Shareholder solely for his own willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
office of Trustee, and shall not be liable for errors of judgment or mistakes of
fact or law. The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust, and shall be
under no liability for any act or omission in accordance with such advice nor
for failing to follow such advice. The Trustees shall not be required to give
any bond as such, nor any surety if a bond is required.
Section 4. Insurance. The Trustees shall be entitled and empowered to the
fullest extent permitted by law to purchase with Trust assets insurance for
liability and for all expenses reasonably incurred or paid or expected to be
paid by a Trustee or officer in connection with any claim, action, suit or
proceeding in which he becomes involved by virtue of his capacity or former
capacity with the Trust.
ARTICLE VIII
Miscellaneous
Section 1. Liability of Third Persons Dealing with Trustees. No Person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
Section 2. Termination of Trust or Series. Unless terminated as provided
herein, the Trust shall continue without limitation of time. The Trust may be
terminated at any time by vote of a majority of the Shares of each Series
entitled to vote, voting separately by Series, or by the Trustees by written
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notice to the Shareholders. Any Series may be terminated at any time by vote of
a majority of the Shares of that Series or by the Trustees by written notice to
the Shareholders of that Series.
Upon termination of the Trust (or any Series, as the case may be), after
paying or otherwise providing for all charges, taxes, expenses and liabilities
held, severally, with respect to each Series (or the applicable Series, as the
case may be), whether due or accrued or anticipated as may be determined by the
Trustees, the Trust shall, in accordance with such procedures as the Trustees
consider appropriate, reduce the remaining assets held, severally, with respect
to each Series (or the applicable Series, as the case may be), to distributable
form in cash or shares or other securities, or any combination thereof, and
distribute the proceeds held with respect to each Series (or the applicable
Series, as the case may be), to the Shareholders of that Series, as a Series,
ratably according to the number of Shares of that Series held by the several
Shareholders on the date of termination.
Section 3. Merger and Consolidation. the Trustees may cause (i) the Trust
or one or more of its Series to the extent consistent with applicable law to be
merged into or consolidated with another Trust or company, (ii) the Shares of
the Trust or any Series to be converted into beneficial interests in another
business trust (or series thereof) created pursuant to this Section 3 of Article
VIII, or (iii) the Shares to be exchanged under or pursuant to any state or
federal statute to the extent permitted by law. Such merger or consolidation,
Share conversion or Share exchange must be authorized by vote of a majority of
the outstanding Shares of the Trust, as a whole, or any affected Series, as may
be applicable; provided that in all respects not governed by statute or
applicable law, the Trustees shall have power to prescribe the procedure
necessary or appropriate to accomplish a sale of assets, merger or consolidation
including the power to create one or more separate business trusts to which all
or any part of the assets, liabilities, profits or losses of the Trust may be
transferred and to provide for the conversion of Shares of the Trust or any
Series into beneficial interests in such separate business trust or trusts (or
series thereof).
Section 4. Amendments. This Declaration of Trust may be restated and/or
amended at any time by an instrument in writing signed by a majority of the then
Trustees and, if required, by approval of such amendment by Shareholders in
accordance with Article V, Section 3 hereof. Any such restatement and/or
amendment hereto shall be effective immediately upon execution and approval. The
Certificate of Trust of the Trust may be restated and/or amended by a similar
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procedure, and any such restatement and/or amendment shall be effective
immediately upon filing with the Office of the Secretary of State of the State
of Delaware or upon such future date as may be stated therein.
Section 5. Filing of Copies, References, Headings. The original or a copy
of this instrument and of each restatement and/or 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 restatements and/or amendments have been made and as
to any matters in connection with the Trust hereunder; and, with the same effect
as if it were the original, may rely on a copy certified by an officer of the
Trust to be a copy of this instrument or of any such restatements and/or
amendments. In this instrument and in any such restatements and/or amendment,
references to this instrument, and all expressions like "herein", "hereof" and
"hereunder", shall be deemed to refer to this instrument as amended or affected
by any such restatements and/or 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. Whenever the
singular number is used herein, the same shall include the plural; and the
neuter, masculine and feminine genders shall include each other, as applicable.
This instrument may be executed in any number of counterparts each of which
shall be deemed an original.
Section 6. Applicable Law. This Agreement and Declaration of Trust is
created under and is to be governed by and construed and administered according
to the laws of the State of Delaware and the Delaware Business Trust Act, as
amended from time to time (the "Act"). The Trust shall be a Delaware business
trust pursuant to such Act, and without limiting the provisions hereof, the
Trust may exercise all powers which are ordinarily exercised by such a business
trust.
Section 7. Provisions in Conflict with Law or Regulations.
(a) The provisions of the Declaration of Trust are severable, and if the
Trustees shall determine, with the advice of counsel, that any of such
provisions is in conflict with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of the Declaration of Trust; provided, however, that such determination
shall not affect any of the remaining provisions of the Declaration of Trust or
render invalid or improper any action taken or omitted prior to such
determination.
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(b) If any provision of the Declaration of Trust shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of the
Declaration of Trust in any jurisdiction.
Section 8. Business Trust Only. It is the intention of the Trustees to
create a business trust pursuant to the Act, and thereby to create only the
relationship of trustee and beneficial owners within the meaning of such Act
between the Trustees and each Shareholder. It is not the intention of the
Trustees to create a general partnership, limited partnership, joint stock
association, corporation, bailment, or any form of legal relationship other than
a business trust pursuant to such Act. Nothing in this Declaration of Trust
shall be construed to make the Shareholders, either by themselves or with the
Trustees, partners or members of a joint stock association.
Section 9. Counterparts. This Declaration of Trust may be simultaneously
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts, together, shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
IN WITNESS WHEREOF, the Trustees named below do hereby make and enter into
this Amended and Restated Declaration of Trust as of the ___ day of
___________,1999.
-----------------------------------------
Robert H. Wadsworth
4455 E. Camelback Rd., Suite 261E
Phoenix, Arizona 85018
-----------------------------------------
Chris O. Moser
4455 E. Camelback Rd., Suite 261E
Phoenix, Arizona 85018
-----------------------------------------
Janet S. Kaiser
4455 E. Camelback Rd., Suite 261E
Phoenix, Arizona 85018
THE PRINCIPAL PLACE OF BUSINESS OF THE TRUST IS
767 Fifth Avenue, 50th Floor
New York, New York 10153
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