Filed with the Securities and Exchange Commission on April 5, 2000
1933 Act Registration File No. 333-_____
1940 Act File No. 811-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No. |_|
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Post-Effective Amendment No. |_|
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and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. |_|
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KIT COLE INVESTMENT TRUST
-------------------------
(Exact Name of Registrant as Specified in Charter)
851 Irwin Street
San Rafael, CA 94901
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 980-0700
Jeff Tappan
851 Irwin Street
San Rafael, CA 94901
(Name and Address of Agent for Service)
Copies of all communications to:
Elaine E. Richards, Esq.
Firstar Mutual Fund Services, LLC
615 East Michigan Street, 2nd Floor
Milwaukee, WI 53202
Julie Allecta, Esq.
Paul, Hastings, Janofsky & Walker LLP
345 California Street.
San Francisco, CA 94104
Approximate Date of Proposed Public Offering: As soon as practical after the
effective date of this Registration Statement.
It is proposed that this filing will become effective (check appropriate box)
_____ immediately upon filing pursuant to paragraph (b)
_____ on ____________ pursuant to paragraph (b)
_____ 60 days after filing pursuant to paragraph (a)(1)
_____ on ____________ pursuant to paragraph (a)(1)
_____ 75 days after filing pursuant to paragraph (a)(2)
_____ on ____________ pursuant to paragraph (a)(2) of Rule 485.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
Title of securities being registered: Kit Cole Strategic Growth Fund
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
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KITCOLE STRATEGIC GROWTH FUND
A SERIES OF KIT COLE INVESTMENT TRUST
PROSPECTUS
__________, 2000
MANAGED BY:
KIT COLE INVESTMENT ADVISORY SERVICES
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
Overview of the Fund..........................................................3
Performance Summary...........................................................5
Fee and Expenses..............................................................5
Management....................................................................6
Distribution of Shares........................................................7
Pricing of Shares.............................................................8
How to Purchase Shares........................................................8
How to Sell Shares............................................................10
Distributions and Taxes.......................................................11
Shareholder Reports and Confirmations.........................................11
Financial Highlights..........................................................11
OVERVIEW OF THE FUND
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INVESTMENT OBJECTIVE
The investment objective for the KitCole Strategic Growth Fund (the "Fund") is
the long term growth of your investment capital.
PRINCIPAL INVESTMENT STRATEGY
Kit Cole Investment Advisory Services (the "Advisor") invests the Fund's
portfolio primarily in the common stock of companies with capital growth
potential. Normally, the companies in which the Fund invests will have a minimum
market capitalization of $10 billion. The Advisor seeks to identify large,
well-managed, well-financed domestic or multi-national companies where revenues
and earnings are expected to accelerate. The Advisor also looks for companies
that exhibit one- to five-year projected growth rates above that of the general
market. The Advisor believes that the stock prices of companies that grow their
revenue and profitability will increase over time. The Advisor's goal is to
minimize financial risk to the Fund by focusing on companies whose operations
will continue to be solvent and profitable even if there is a recession or stock
market decline. In selecting the investments, the Advisor focuses on successful
companies with:
|X| Exceptional potential earnings growth
|X| Strong management
|X| Industry leadership
The Advisor develops a general overview about future economic and earnings
growth of both domestic and global economies. The Advisor takes into
consideration the health of global economies, demographic trends, direction of
interest rates, prospects and level of inflation or deflation, corporate
earnings trends, stock market and individual share valuations and current
investor psychology. The Advisor then identifies a group of companies that the
Advisor feels will most likely benefit from the overall trends and conditions of
the current environment. The Advisor looks for companies whose management teams
have demonstrated effective leadership and that are perceived as leaders in
their respective industries. The Advisor uses a screening process to select
investments; this process considers, but is not limited to, the following
criteria:
|X| Past and future revenue growth trends
|X| Earnings momentum and performance relative to expectations
|X| Profitability trends
|X| Growth record versus industry or peer group
|X| Management's leadership ability
|X| Stock price performance
A key philosophy of the Advisor is to continue to hold companies whose share
prices are rising and whose fundamentals remain intact. At the same time, the
Advisor intends to be rigorous about selling shares of those companies incurring
an adverse change in fundamentals or whose shares under-perform the rest of the
portfolio holdings. The Advisor believes that while the additional turnover
increases transaction costs, the process of eliminating the weakest stocks will
enhance the overall performance of the Fund.
In general, most of the Fund's assets are invested in companies that meet the
Fund's investment criteria. However, the Fund is legally permitted to invest up
to 35% of its portfolio in other types of securities and may do so in certain
market conditions. In addition, the Fund generally maintains a cash position of
3% to 5% and may have an even larger cash position during periods of significant
shareholder purchase and redemption activity.
PRINCIPAL RISKS
Investing in the Fund involves certain risks that could cause you to lose money.
The following risks could affect the value of your investment:
STOCK MARKET RISKS: Like all mutual funds that invest in stocks, the Fund is
subject to stock market risks and significant fluctuations in value. If the
stock market declines in value, the Fund is likely to decline in value.
STOCK SELECTION RISKS: The stocks selected by the Advisor may decline in value
or not increase in value when the stock market in general is rising.
Furthermore, stocks may fail to meet the Fund's objective or they may not
achieve the earnings anticipated by the Advisor.
FOREIGN SECURITIES RISKS: The Fund can invest in foreign securities, which
involve more risks than those associated with domestic investments. Additional
risks include currency fluctuations, political and economic instability,
differences in financial reporting standards, and less stringent regulation of
stock markets.
LIQUIDITY RISKS: Liquidity risk is the risk that certain stocks may be difficult
or impossible to sell at the time and price that the Advisor would like to sell.
The Advisor may have to sell the stocks at a price lower than it believes
reasonable, or may have to sell other stocks instead, or forego an investment
opportunity, any of which could have a negative effect on Fund management or
performance.
NON-DIVERSIFICATION RISKS: The Fund is a non-diversified Fund. As such, the Fund
has added risk because it may invest a greater percentage of assets in a more
limited number of issuers compared to other mutual funds.
WHO MAY WANT TO INVEST
This Fund may be appropriate for investors who:
|X| are looking for capital gain potential,
|X| have a long-term investment horizon,
|X| want a Fund that can be a core portfolio holding and a complement to other
types of investments, and
|X| are willing to accept higher short-term risk for longer-term growth of
capital.
This Fund may not be appropriate for investors who:
|X| are looking for a Fund that produces interest or dividend income, or
|X| have a short-term investment horizon.
PERFORMANCE SUMMARY
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There is no operating performance information available for the Fund at this
time because the Fund has no operating history. For additional information refer
to "Historical Performance of the Advisor's Private Accounts."
FEE AND EXPENSES
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As an investor, you may pay certain fees and expenses if you buy and hold shares
of the Fund. These fees are described in the tables below and further explained
in the example that follows.
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SHAREHOLDER FEES1
(fees paid directly from your investment)
- ------------------------------------------------- -------------
Maximum Sales Charge (Load) Imposed on None
Purchases (as a percentage of offering price)
Maximum Deferred Sales Charge (Load) None
(as percentage of offering price)
Maximum Sales Charge (Load) Imposed on None
Reinvested Dividends
Redemption Fee None
Exchange Fee None
- ------------------------------------------------- -------------
1 Although no sales loads or transaction fees are charged, you will be assessed
fees for outgoing wire transfers and returned checks.
- --------------------------------------------------- -----------
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
- --------------------------------------------------- -----------
Management Fees 1.00%
Distribution and Service (12b-1) Fees 0.25%
Other Expenses 1.09%
Total Annual Operating Expenses 2.34%
=====
Less Expense Reimbursement2 -0.34%
Net Annual Operating Expenses 2.00%
=====
- --------------------------------------------------- -----------
2 The Advisor has contractually agreed to absorb expenses of the Fund and/or
waive fees due to the Advisor in order to ensure that total Fund operating
expenses on an annual basis do not exceed 2.00%. This contract may be terminated
only by the Board of Trustees. The Advisor may recapture some or all of the
amounts it waives or absorbs on behalf of the Fund if it is able to do so within
a reasonable amount of time and without causing Fund operating expenses to
exceed the applicable cap.
EXAMPLE This example is intended to help compare the cost of investing in this
Fund with the cost of investing in other mutual Funds. This example assumes
that:
(1) you invest $10,000 in the Fund for the time period indicated and then
redeem all of your shares at the end of those periods,
(2) your investment has a 5% return each year,
(3) all dividends and distributions have been reinvested, and
(4) the Fund operating expenses remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
- ----------- ----------
1 YEAR 3 YEARS
- ----------- ----------
$203 $627
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MANAGEMENT
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INVESTMENT ADVISOR
Kit Cole Investment Advisory Services, Inc. ("Advisor"), 851 Irwin Street, San
Rafael, California, 94901, is the investment advisor for the Fund. The Advisor
has been retained under an Investment Advisory Agreement with Kit Cole
Investment Trust to act as the Fund's investment advisor subject to the
authority of the Board of Trustees. (The Statement of Additional Information
contains more information regarding the Board of Trustees). Under the Investment
Advisory Agreement, the Advisor receives a monthly fee computed at an annual
rate of 1.00% of average daily net assets. The Advisor has signed an Expense
Reimbursement and Fee Waiver Agreement which contractually requires the Adviser
to either waive fees due to it or subsidize various operating expenses of the
Fund so that the total annual Fund operating expenses do not exceed 2.00% of
average daily net assets. The Agreement may be terminated or amended only by
vote of a majority of the Board of Trustees. The Agreement permits the Advisor
to recapture any waivers or subsidies it makes only if the amounts can be
recaptured within a reasonable time and without causing the Fund's total annual
operating expenses to exceed the applicable cap. The Board of Trustees must also
approve any recapture.
The Advisor furnishes the Fund with investment advice and, in general,
supervises the management of the Fund. The Advisor provides all necessary
administrative services, office space, equipment, clerical personnel for
servicing the investments of the Fund, investment advisory facilities, executive
and supervisory personnel for managing the investments and effecting the
securities transactions of the Fund. In addition, the Advisor pays the salaries
and fees of all officers and trustees of Kit Cole Investment Trust who are
affiliated persons of the Advisor. The Advisor has over $180 million of assets
under management, which include privately managed accounts.
PORTFOLIO MANAGER
Kit M. Cole is the portfolio manager of the Fund and is the primary person
responsible for the day-to-day management. Prior to becoming the Fund's
portfolio manager, Kit M. Cole managed private investment portfolios since 1978.
Kit M. Cole has over 30 years of investment experience. Kit M. Cole holds a
Master's degree from University of California , Berkeley in Finance and a
Bachelor's degree from Long Beach State University.
FUND ADMINISTRATION, FUND ACCOUNTING, TRANSFER AGENT CUSTODY, AUDIT AND LEGAL
SERVICES
Firstar Mutual Fund Services, LLC serves as the Fund's administrator, transfer
agent and Fund accountant. As such, Firstar Mutual Fund Services, LLC provides
all necessary record-keeping services and share transfer services for the Fund.
Firstar Bank, N.A. serves as the Fund's custodian. ________ serves as the
independent public accountant for purposes of auditing the Fund. Paul, Hastings,
Janofsky & Walker LLP serves as the Fund's legal counsel.
HISTORICAL INVESTMENT RESULTS OF THE ADVISOR'S PRIVATE ACCOUNTS
The table below shows certain performance data provided by the Advisor relating
to investment results of a composite of the Advisor's private client accounts
(the "Accounts"). (Private accounts with less than $60,000 in assets are not
included in the performance calculations.) The Accounts constitute portfolios
managed by the Advisor during the five-year period ended December 31, 1999 using
the same investment objective and substantially similar investment strategies
and techniques as those specified for the Fund. The Accounts meet certain basic
criteria as to minimum account value, discretionary status, taxable status and
period of management of more than one month. The Accounts are not subject to the
same types of expenses to which the Fund is subject, nor to the diversification
requirements, specific tax restrictions and investment limitations imposed on
the Fund by the Investment Company Act of 1940, or the Internal Revenue Code of
1986. The performance of the Accounts may have been adversely affected had they
been subject to the same expenses, restrictions and limitations. The Adviser
believes that any adverse effect would not have been significant. The results
presented are not intended to predict or suggest the return to be experienced by
the Fund or the return one might achieve by investing in the Fund. One should
not rely on the following data as an indication of future performance of the
Adviser or of the Fund.
<TABLE>
<CAPTION>
- ---------------------------- ----------------- ----------- ---------------------- ------------------
Returns as of 12/31/99 Total Account Equities Russell Growth Index2 S&P 500 Index3
(net of fees)1
- ---------------------------- ----------------- ----------- ---------------------- ------------------
<S> <C> <C> <C> <C>
FOURTH QUARTER 1999 27.7% 30.1% 25.0% 14.9%
1-YEAR 32.7% 37.2% 32.3% 21.0%
3-YEAR 37.4% 42.2% 32.8% 27.6%
5-YEAR 29.0% 33.5% 30.9% 28.6%
- ---------------------------- ----------------- ----------- ---------------------- ------------------
</TABLE>
Please read the following important notes concerning the Accounts:
1. The results for the Accounts reflect either income and capital
appreciation or depreciation (total return). Dividends and other items
of income are accounted for on a cash basis. Returns are time weighted
and represent the dollar-weighted average of the Accounts. Net return
figures are net of applicable fees and expenses (other than separate
custodial fees).
2. The Russell 1000 Growth Index measures the growth-oriented half of the
largest 1000 companies by market capitalization included in the New
York Stock Exchange, American Stock Exchange, and the NASDAQ.
3. The S&P 500 Index consists of 500 stocks chosen by Standard and Poor's
for market size, liquidity and industry group representation. It is a
market-valued weighted unmanaged index (stock price times number of
shares outstanding) with each stock's weight in the S&P Index
proportionate to its market value.
SPECIAL NOTE CONCERNING ADVISOR INVESTMENT RETURNS: You should note that the
Fund will compute and disclose its average annual compounded rate of return
using the standard formula set forth in rules promulgated by the Securities and
Exchange Commission ("SEC"), which differs in certain respects form the methods
used to compute the returns for the Accounts noted above. The SEC total return
calculation method calls for the computation and disclosure of an average annual
compounded rate of return for one, three, five and ten year periods or shorter
periods from inception. The SEC formula provides a rate of return that equates a
hypothetical initial investment of $10,000 to an ending redeemable value. The
returns shown for the Accounts are reduced to reflect the deduction of advisory
fees in accordance with the SEC calculation formula, which requires that returns
shown for a Fund be net of advisory fees as well as all other applicable Fund
operating expenses. Performance was calculated on a trade date basis.
DISTRIBUTION OF SHARES
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DISTRIBUTOR
__________________, ("Distributor") serves as distributor and principal
underwriter for the shares of Kit Cole Investment Trust pursuant to a
Distribution Agreement and a Rule 12b-1 Plan.
RULE 12B-1 PLAN AND DISTRIBUTION AGREEMENT
Kit Cole Investment Trust adopted a Plan of Distribution under Rule 12b-1 of the
Investment Company Act of 1940 ("Rule 12b-1 Plan"). Under the Rule 12b-1 Plan,
the Fund may pay up to an annual rate of 0.25% of the average daily net asset
value of shares to the Distributor. The Distributor uses this fee to finance
activities that promote the sale of Fund shares. Such activities include, but
are not necessarily limited to, advertising, printing and mailing prospectus to
persons other than current shareholders, printing and mailing sales literature,
and compensating broker-dealers, financial consultants, and sales personnel.
Rule 12b-1 fees are paid to the Distributor out of Fund assets on an on-going
basis. Over time, these fees will increase the cost of your investment and may
cost you more than paying other types of sales charges.
PRICING OF SHARES
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Shares of the Fund are sold at their net asset value (NAV). The NAV for all
shares of the Fund is determined as of the close of regular trading on the New
York Stock Exchange ("NYSE") (normally 4:00 p.m., Eastern time) on every
business day. The NAV for the Fund is calculated by dividing the sum of the
value of the securities held plus cash or other assets minus all liabilities by
the total number of shares outstanding of the Fund.
The Fund's investments are valued according to market value. When a market quote
is not readily available, the security's value is based on "fair value" as
determined by the Advisor under supervision of the Fund's Board of Trustees.
If your purchase order is in "good order" (see "How to Purchase Shares") and
delivered to the Fund before the close of the regular trading session of the
NYSE on any business day, your order will receive the share price determined for
the Fund as of that day. If your order is received after the close of the
regular trading session of the NYSE, it will receive the price determined on the
next business day.
HOW TO PURCHASE SHARES
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To open an account, you must invest at least the minimum amount.
MINIMUM INVESTMENTS TO OPEN TO ADD TO
YOUR ACCOUNT YOUR ACCOUNT
Regular accounts $1,000 $100
IRA accounts. pension
plans, 401ks, UTMAs, etc. $ 100 $ 50
GOOD ORDER PURCHASE REQUESTS
When making a purchase request, make sure your request is in good order. "Good
order" means your purchase request includes:
|X| the NAME of the Fund
|X| the DOLLAR amount of shares to be purchased
|X| account application form or investment stub
|X| check payable to the "KitCole Strategic Growth Fund"
<TABLE>
<CAPTION>
METHODS OF BUYING
<S> <C>
THROUGH A You can purchase shares of the Fund through any broker-dealer organization that agreed to
BROKER/DEALER offer the Fund. The broker-dealer organization is responsible for sending your purchase
ORGANIZATION order to the Fund. Please keep in mind that your broker-dealer may charge additional fees
for its services.
BY MAIL You can purchase shares of the Fund directly from the Fund's transfer agent, Firstar Mutual
Fund Services, LLC. To open an account, complete an account application form and send it
together with your check to the address below. To make additional investments once you have
opened your account, send your check together with the detachable form that's included with
your Fund account statement or confirmation. You may also send a letter stating the amount
of your investment with your name, the name of the Fund and your account number together
with a check to the address below. Checks should be made payable to "KitCole Strategic
Growth Fund." No third party checks will be accepted. If your check is returned for any
reason, a $25 fee will be assessed against your account.
REGULAR MAIL OVERNIGHT DELIVERY
------------ ------------------
KitCole Strategic Growth Fund KitCole Strategic Growth Fund
c/o Firstar Mutual Fund Services, LLC c/o Firstar Mutual Fund Services, LLC
P.O. Box 701 615 E. Michigan Street, Third Floor
Milwaukee, Wisconsin 53201-0701 Milwaukee, Wisconsin 53202
NOTE: The Fund does not consider the U.S. Postal Service or other independent delivery services
to be its agents. Therefore, when you deposit your account application form or redemption request
in the mail or use other delivery services, or if your documents are simply in the transfer
agent's post office box, that does not mean that the transfer agent or the Fund actually RECEIVED
those documents.
BY TELEPHONE To make additional investments by telephone, you must check the appropriate box on your account
application form authorizing telephone purchases. If you have given authorization for telephone
transactions and your account has been open for at least 15 days, call the Fund toll free
at 1-800-__________ and you will be allowed to move money from your bank account to your Fund account
upon request. Only bank accounts held at domestic institutions that are Automated Clearing House
(ACH) members may be used for telephone transactions. For security reasons, requests by
telephone will be recorded.
BY WIRE To open an account or to make additional investments by wire, call 1-800-______ to notify the Fund
of the incoming wire using the wiring instructions below:
Firstar Bank, N.A.
Milwaukee, WI 53202
ABA #: 075000022
Credit: Firstar Mutual Fund Services, LLC
Account #: 112-952-137
Further Credit: Kit Cole Investment Trust, KitCole Strategic Growth Fund
(your name or the title on the account)
(your account #)
THROUGH AN Once your account has been opened, you may purchase shares of the Fund through an Automatic
AUTOMATIC Investment Plan ("AIP"). You can have money automatically transferred from your checking or
INVESTMENT savings account on a weekly, bi-weekly, monthly, bi-monthly or quarterly basis. To be
PLAN eligible for this plan, your bank must be a domestic institution that is an ACH member. The
Fund may modify or terminate the AIP at any time. The first AIP purchase will take place no
earlier than 15 days after the Transfer Agent has received your request. To make
additional purchases through your broker, you should follow your broker's procedures.
</TABLE>
HOW TO SELL SHARES
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<TABLE>
<CAPTION>
METHODS OF SELLING
<S> <C>
THROUGH A If you purchased your shares through a broker-dealer or other financial organization, your
BROKER/DEALER OR redemption order should be placed through the same organization. Your broker or financial
FINANCIAL consultant is responsible for sending your redemption order to the Fund on a timely basis.
CONSULTANT Please keep in mind that your broker or financial consultant may charge additional fees for its
services.
BY MAIL DIRECTLY If you purchased your shares directly from the Fund, you should send your written redemption
TO FUND request to the address below. Your request should contain the Fund's name, your account number
and the number of shares or the dollar amount of shares to be redeemed. Be sure to have all
account holders sign the letter. Additional documents are required for shareholders
that are corporations, partnerships, executors, trustees, administrators, or guardians
(i.e., corporate resolutions or trust documents indicating proper authorization). Please see
the Statement of Additional Information for more information.
REGULAR MAIL OVERNIGHT DELIVERY
------------ ------------------
Kit ColeStrategic Growth Fund KitCole Strategic Growth Fund
c/o Firstar Mutual Fund Services, LLC c/o Firstar Mutual Fund Services, LLC
P.O. Box 701 615 E. Michigan Street, Third Floor
Milwaukee, Wisconsin 53201-0701 Milwaukee, Wisconsin 53202
The Fund's transfer agent may require a SIGNATURE GUARANTEE for certain redemption requests
such as redemption requests from IRA accounts, or redemption requests made payable to a
person or an address not on record with the Fund. A signature guarantee assures that your
signature is genuine and protects you from unauthorized account transfers. You may obtain
signature guarantees from most trust companies, commercial banks or other eligible guarantor
INSTITUTIONS. A NOTARY PUBLIC CANNOT GUARANTEE SIGNATURES.
BY TELEPHONE If you are authorized to perform telephone transactions (either through your account application form
or by subsequent arrangement in writing with the Fund) you may redeem shares in any amount, but not
less than $100, by calling 1-800_________. A signature guarantee is required of all shareholders to
change or add telephone redemption privileges. For security reasons, requests by telephone will
be recorded.
BY WIRE To redeem shares by wire, call the Fund at 1-800-________ and specify the amount of money you wish to
be wired. Your bank may charge a fee to receive wired Funds. The transfer agent charges a $12
outgoing wire fee.
THROUGH A If you own shares with a value of $10,000 or more, you may participate in the systematic
SYSTEMATIC withdrawal plan. The systematic withdrawal plan allows you to make automatic withdrawals from
WITHDRAWAL PLAN your Fund account at regular intervals. Money will be transferred from your Fund account to the
account you choose on your account application form. If you expect to purchase additional shares
of the Fund, it may not be to your advantage to participate in the systematic withdrawal plan because
of the possible adverse tax consequences of making contemporaneous purchases and redemptions.
</TABLE>
WHEN REDEMPTION PROCEEDS ARE SENT TO YOU
Your shares will be redeemed at the NAV next determined after the Fund receives
your redemption request in good order. Your redemption request cannot be
processed on days the NYSE is closed.
All requests received in good order by the Fund before the close of the regular
trading session of the NYSE (normally 4:00 p.m. Eastern time) will normally be
wired to the bank you indicate or mailed on the following day to the address of
record. In no event will proceeds be wired or a check mailed more than 7
calendar days after the Fund receives your redemption request.
If you purchase shares using a check and soon after request a redemption, the
Fund will honor the redemption request, but will not mail the proceeds until
your purchase check has cleared (usually within 12 days).
REDEMPTION REQUESTS IN GOOD ORDER
When making a redemption request, make sure your request is in good order. "Good
order" means your letter of instruction includes:
|X| the NAME of the Fund
|X| the DOLLAR AMOUNT or the NUMBER of shares to be redeemed
|X| SIGNATURES of all registered shareholders exactly as the shares are
registered
|X| the ACCOUNT number
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
mail you a notice if your account falls below $500 requesting that you bring the
account back up to $500 or close it out. If you do not respond to the request
within 30 days, the Fund may close the account on your behalf and send you the
proceeds.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and net
capital gains that it has realized in the sale of securities. These income and
gains distributions will generally be paid once each year, on or before December
31. Distributions will automatically be reinvested in additional shares of the
Fund, unless you elect to have the distributions paid to you in cash.
In general, Fund distributions are taxable to you as either ordinary income or
capital gains. This is true whether you reinvest your distributions in
additional Fund shares or receive them in cash. Any long-term capital gains the
Fund distributes are taxable to you as long-term capital gains no matter how
long you have owned your shares. If the Fund distributes realized gains soon
after you purchase shares, a portion of your investment may be returned as a
taxable distribution.
When you sell your shares of the Fund, you may have a capital gain or loss. The
individual tax rate on any gain from the sale of your shares depends on your
marginal tax rate and on how long you have held your shares.
Fund distributions and gains from the sale of your shares generally will be
subject to state and local income tax. Non-U.S. investors may be subject to U.S.
withholding and estate tax. You should consult your tax advisor about the
federal, state, local or foreign tax consequences of your investment in the
Fund.
SHAREHOLDER REPORTS AND CONFIRMATIONS
- --------------------------------------------------------------------------------
As a shareholder, you will be provided annual and semi-annual reports showing
the Fund's portfolio investments and financial information. You will also
receive confirmations of your purchases into, and redemptions out of, the Fund.
Account statements will be mailed to you on an annual basis.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The Fund has not commenced operations to date therefore no financial highlights
are available for the Fund.
INVESTMENT ADVISOR
KIT COLE INVESTMENT ADVISORY SERVICES
SAN RAFAEL, CALIFORNIA
DISTRIBUTOR
________________, INC.
MILWAUKEE, WISCONSIN
INDEPENDENT AUDITORS
_____________ LLP
__________, _________
LEGAL COUNSEL
PAUL, HASTINGS, JANOFSKY & WALKER LLP
SAN FRANCISCO, CALIFORNIA
ADMINISTRATOR, TRANSFER AGENT,
AND FUND ACCOUNTANT
FIRSTAR MUTUAL FUND SERVICES, LLC
MILWAUKEE, WISCONSIN
CUSTODIAN
FIRSTAR BANK, N.A.
CINCINNATI, OHIO
WHERE TO FIND MORE INFORMATION:
You can find more information about the Kit Cole Strategic Growth Fund in the
following documents:
STATEMENT OF ADDITIONAL INFORMATION DATED __________, 2000
The Statement of Additional Information for the Fund provides more details about
the Fund's policies and management. The Fund's Statement of Additional
Information is incorporated by reference into this Prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
After the Fund has been operating for the appropriate time, annual and
semi-annual reports will be made available. The Fund's annual and semi-annual
reports provide the most recent financial reports and portfolio listings. The
annual report contains a discussion of the market conditions and investment
strategies that affected the Fund's performance during the last fiscal year.
You can obtain a free copy of these documents or request other information about
the Fund by calling the Fund at 1-800-__________ or by writing to:
KITCOLE STRATEGIC GROWTH FUND
C/O FIRSTAR MUTUAL FUND SERVICES, LLC
P.O. BOX 701
MILWAUKEE, WI 53201-0701
You may write to the Securities and Exchange Commission (SEC) Public Reference
Room at the regular mailing address or the e-mail address below and ask them to
mail you information about the Fund, including the SAI. They will charge you a
fee for this duplicating service. You can also visit the SEC Public Reference
Room and copy documents while you are there. For more information about the
operation of the Public Reference Room, call the SEC at the telephone number
below.
PUBLIC REFERENCE SECTION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0102
[email protected]
1-202-942-8090
Reports and other information about the Fund are available on the EDGAR Database
on the SEC's Internet site at HTTP://WWW.SEC.GOV.
1940 Act File No. 811-________
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THE INFORMATION IN THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT COMPLETE AND
MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
- --------------------------------------------------------------------------------
KITCOLE STRATEGIC GROWTH FUND
A SERIES OF KIT COLE INVESTMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
__________, 2000
This Statement of Additional Information is not a prospectus. This Statement of
Additional Information relates to the Prospectus of the KitCole Strategic Growth
Fund dated _________, 2000, and should be read together with that Prospectus. To
receive a copy of the Prospectus, write to Kit Cole Investment Trust or call the
nationwide toll free number 1-800-________.
KIT COLE INVESTMENT TRUST
C/O FIRSTAR MUTUAL FUND SERVICES, LLC
P.O. BOX 701
MILWAUKEE, WISCONSIN 53201-0701
TABLE OF CONTENTS
General Information about Kit Cole Investment Trust............................2
Description of the KitCole Strategic Growth Fund...............................2
Investment Restrictions........................................................3
Investments and Risks..........................................................4
Management of the Fund.........................................................8
Control Person and Principal Holders of Securities.............................9
Investment Advisor.............................................................9
Code of Ethics................................................................10
Fund Administration...........................................................10
Custodian.....................................................................10
Legal Counsel.................................................................10
Distributor...................................................................11
Distribution Plan.............................................................11
Portfolio Transactions and Brokerage Allocations..............................12
Purchase of Shares............................................................13
Redemption of Shares..........................................................13
Pricing of Shares.............................................................14
Tax Status....................................................................15
Calculations of Performance Data..............................................15
Independent Auditors..........................................................16
Financial Statements..........................................................16
KITCOLE STRATEGIC GROWTH FUND
GENERAL INFORMATION ABOUT KIT COLE INVESTMENT TRUST
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The KitCole Strategic Growth Fund is one of several anticipated mutual
funds that are part of the Fund group called Kit Cole Investment Trust (the
"Trust"). The Trust is an open-end management investment company and was
organized as a Delaware business trust on March 28, 2000. The Trust currently
offers one series of shares to investors, the KitCole Strategic Growth Fund (the
"Fund"). The Fund is a non-diversified series and has its own investment
objective and policies. The Trust may start other series and offer shares of new
Fund under the Trust at any time. The Fund's registered office in Delaware is
The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801
and its principal office is 851 Irwin Street, San Rafael, California, 94901.
Shares, when issued, will be fully paid and nonassessable. Shares of
the Fund have equal dividend, voting, liquidation and redemption rights, and are
voted in the aggregate and not by class except in matters where a separate vote
is required by the Investment Company Act of 1940 (the "1940 Act") or when the
matter affects only the interest of a particular class. The beneficial interest
of the Trust is divided into an unlimited number of shares, with no par value.
When matters are submitted to shareholders for a vote, each shareholder is
entitled to one vote for each full share owned and fractional votes for
fractional shares owned. The Trust does not normally hold annual meetings of
shareholders. The Trustees shall promptly call and give notice of a meeting of
shareholders for the purpose of voting upon removal of any Trustee when
requested to do so in writing by shareholders holding 10% or more of the Trust's
outstanding shares. The Trust will comply with the provisions of Section 16(c)
of the 1940 Act in order to facilitate communications among shareholders. Shares
will be maintained in open accounts on the books of the Transfer Agent, and
certificates for shares will generally not be issued.
Each share of the Fund represents an equal proportionate interest in
the assets and liabilities belonging to that Fund with each other share of that
Fund and is entitled to such dividends and distributions out of the income
belonging to the Fund as are declared by the Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any Fund into a greater or lesser number of shares of that Fund so long as the
proportionate beneficial interests in the assets belonging to that Fund and the
rights of shares of any other Fund are in no way affected. In case of any
liquidation of a Fund, the holders of shares of the Fund being liquidated will
be entitled to receive as a class a distribution out of the assets, net of the
liabilities, belonging to that Fund. Expenses attributable to any Fund are borne
by that Fund. Any general expenses of the Trust not readily identifiable as
belonging to a particular Fund are allocated by or under the direction of the
Trustees in such manner as the Trustees deem equitable. No shareholder is liable
to further calls or to assessment by the Trust without his or her express
consent.
The assets of the Fund received for the issue or sale of its shares,
and all income, earnings, profits and proceeds thereof, subject only to the
rights of creditors, shall constitute the underlying assets of the Fund. In the
event of the dissolution or liquidation of the Fund, the holders of shares of
the Fund are entitled to share pro rata in the net assets of the Fund available
for distribution to shareholders.
DESCRIPTION OF THE KITCOLE STRATEGIC GROWTH FUND
- --------------------------------------------------------------------------------
The Fund is a non-diversified Fund and seeks to achieve the long term
growth of your investment capital. The investment objective is fundamental and
therefore cannot be changed without the approval of shareholders.
INVESTMENT RESTRICTIONS
- --------------------------------------------------------------------------------
In addition to the investment objectives and policies set forth in the
Prospectus, the Fund is subject to certain investment policies and restrictions,
as set forth below. The Fund's investment objective and fundamental policies and
restrictions may not be changed without the vote of a majority of the Fund's
outstanding shares. "Majority," as used in the Prospectus and in this Statement
of Additional Information, means the lesser of (a) 67% of the Fund's outstanding
shares voting at a meeting of shareholders at which more than 50% of the
outstanding shares are represented in person or by proxy or (b) a majority of
the Fund's outstanding shares. Unless specifically identified as fundamental,
each investment policy discussed in the Prospectus or this Statement of
Additional Information is not fundamental and may be changed by the Fund's Board
of Trustees without shareholder approval.
For purposes of the investment restrictions, all percentage and rating
limitations apply at the time of acquisition of a security, and any subsequent
change in any applicable percentage resulting from market fluctuations or in a
rating by a rating service will not require elimination of any security from the
Fund.
As fundamental policies, unless otherwise specified below, the Fund
will not:
1. Purchase or sell commodities or commodity futures contracts,
except that the Fund may purchase stock and bond index options,
financial futures contracts and options on such contracts.
2. Purchase or sell real estate or real estate mortgage loans, except
that the Fund may invest in securities secured by real estate or
interests therein or issued by companies that invest in real
estate or interests therein.
3. Make loans, except that the Fund may (a) purchase and hold debt
obligations in accordance with its investment objective and
policies, (b) enter into repurchase agreements, (c) lend portfolio
securities on a collateralized basis , and (d) engage in similar
cash management and income enhancement transactions.
The Fund has also adopted the following restrictions for the Fund that
are not fundamental policies and may be changed by the Board of Trustees without
shareholder approval. The Fund shall not:
1. Invest in the securities of companies in any one industry, with
the exception of securities issued or guaranteed by the U.S.
Government, its agencies, and instrumentalities, if as a result,
more than 25% of the Fund's total assets would be invested in such
industry. Various types of technology and utilities companies are
considered to be in separate industries.
2. Invest in companies for the purpose of exercising control or
management.
3. Purchase the securities of other investment companies except as
permitted by the 1940 Act.
4. Issue any senior securities except as permitted by the 1940 Act.
5. Purchase any securities on margin except to obtain such short-term
credits as may be necessary for the clearance of transactions.
6. Underwrite securities of other issuers, except that the Fund may
acquire portfolio securities under circumstances where if sold,
the Fund might be deemed an underwriter for purposes of the
Securities Act of 1933.
7. Borrow money except from banks for temporary or emergency
purposes. The amount of such borrowing may not exceed 50% of the
Fund's total assets (calculated before giving effect to the amount
borrowed). This restriction does not preclude the Fund from
engaging in reverse repurchase agreements, short sales, or similar
transactions as permitted by the 1940 Act..
8. Invest more than 15% of its net assets in illiquid securities,
such as restricted securities, repurchase agreements with a
maturity of more than seven days, or securities with no readily
available market quotation. The value of any options purchased in
the over-the-counter market is currently deemed to be illiquid.
INVESTMENTS AND RISKS
- --------------------------------------------------------------------------------
Although not part of the Fund's principal strategy, the Fund may invest
in small or medium-size companies that meet the Advisor's criteria and display
the potential for capital growth. The Fund may also invest in securities
convertible into common stock. If the Advisor sees an opportunity for capital
growth within foreign markets, the Fund may also invest a portion of its assets
in common stock of foreign companies. These non-principal strategies, as well as
others, are further discussed below.
U.S. GOVERNMENT SECURITIES
The Fund may invest in U.S. Government Securities, which are
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. Obligations issued by the U.S. Treasury include Bills, Notes
and Bonds ("Treasury Securities") which differ from each other mainly in their
interest rates and the length of their maturity at original issue. In this
regard, Treasury Bills have a maturity of one year or less, Treasury Notes have
maturities of one to ten years and Treasury Bonds generally have maturities
greater than ten years. Such Treasury Securities are backed by the full faith
and credit of the U.S. Government. As with all fixed-income securities, various
market forces influence the value of such securities. There is an inverse
relationship between the market value of such securities and yield. As interest
rates rise, the value of the securities falls; conversely, as interest rates
fall, the market value of such securities rises.
BOND SECURITIES
To the extent the Fund invests in bonds, it will be exposed to the
risks of bond investing. A bond's market value is affected significantly by
changes in interest rates. Generally, when interest rates rise, the bond's
market value declines and when interest rates decline, its market value rises.
Also, the longer a bond's maturity, the greater the risk and the higher its
yield. Conversely, the shorter a bond's maturity, the lower the risk and the
lower its yield. A bond's value can also be affected by changes in the bond's
credit quality rating or its issuer's financial condition.
CONVERTIBLE SECURITIES
To the extent the Fund invests in convertible securities, it will be
exposed to the risks of convertible securities. Convertible securities are
securities that may be exchanged or converted into a predetermined number of the
issuer's underlying common shares at the option of the holder during a specified
time period. Convertible securities may take the form of convertible preferred
stock, convertible bonds or debentures, or a combination of the features of
these securities. As with all fixed-income securities, various market forces
influence the market value of convertible securities, including changes in the
prevailing level of interest rates. As the level of interest rates increases,
the market value of convertible securities tends to decline and, conversely, as
interest rates decline, the market value of convertible securities tends to
increase. The unique investment characteristic of convertible securities (the
right to exchange for the issuer's common stock) causes the market value of the
convertible securities to increase when the value of the underlying common stock
increases. However, because security prices fluctuate, there cannot be an
assurance of capital appreciation. Most convertible securities will not reflect
as much capital appreciation as their underlying common stocks.
OPTIONS TRANSACTIONS
The Fund may write exchange-traded covered call and put options on or
relating to specific securities in order to earn additional income or to
minimize or hedge against anticipated declines in the value of the Fund's
securities. All call options written by the Fund are covered, which means that
the Fund will own the securities subject to the option as long as the option is
outstanding. All put options written by the Fund are covered, which means that
the Fund has deposited with the Trust's custodian cash or liquid securities with
a value at least equal to the exercise price of the option. Call and put options
written by the Fund may also be covered to the extent that the Fund's
liabilities under such options are offset by its rights under call or put
options purchased by the Fund (E.G. closing purchase transactions) and call
options written by the Fund may also be covered by depositing cash or liquid
securities with the Trust's custodian in the same manner as written puts are
covered. Some of the more frequently used stock indices for which options are
currently traded include the S&P 500 Index, Value Line Index, National OTC
Index, Major Market Index, and NYSE Beta Index. The Fund may also use options on
such other indices as may now or in the future be available.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements on U.S. Government
Securities or other liquid securities to invest cash awaiting investment and/or
for temporary defensive purposes. A repurchase agreement involves the purchase
by the Fund of liquid securities, usually U.S. Government Securities with the
condition that after a stated period of time (usually seven days or less) the
original seller will buy back the same securities ("collateral") at a
predetermined price or yield. Repurchase agreements involve certain risks not
associated with direct investments in securities. In the event the original
seller defaults on its obligation to repurchase, as a result of its bankruptcy
or otherwise, the Fund will have to sell the collateral, which action could
involve costs or delays. In such case, the Fund's ability to dispose of the
collateral to recover such investment may be restricted or delayed. While
collateral will at all times be maintained in an amount equal to the repurchase
price under the agreement (including accrued interest due thereunder), to the
extent proceeds from the sale of collateral were less than the repurchase price,
the Fund would suffer a loss.
MONEY MARKET INSTRUMENTS
Under normal market conditions, the Fund will stay fully invested in
stocks. However, the Fund may temporarily depart from its principal investment
strategy by making short term investments in cash equivalents in response to
adverse markets, economic or political conditions. This may result in the Fund
not reaching its investment objective. The Fund may invest in money market
instruments, which include:
(a) U.S. Treasury Bills;
(b) U.S. Treasury Notes with maturities of 18 months or less;
(c) U.S. Government Securities subject to repurchase agreements;
(d) Obligations of domestic branches of U.S. banks (including
certificates of deposit and bankers' acceptances with maturities
of 18 months or less) which, at the date of investment, have
capital, surplus, and undivided profits (as of the date of their
most recently published financial statements) in excess of
$10,000,000 and obligations of other banks or savings and loan
associations if such obligations are insured by the Federal
Deposit Insurance Corporation ("FDIC");
(e) Commercial paper which at the date of investment is rated A-1 by
S&P or P-1 by Moody's or, if not rated, is issued or guaranteed as
to payment of principal and interest by companies which, at the
date of investment, have an outstanding debt issue rated AA or
better by S&P or Aa or better by Moody's;
(f) Short-term (maturing in one year or less) corporate obligations which,
at the date of investment, are rated AA or better by S&P or Aa or
better by Moody's; and
(g) Shares of no-load money market mutual Funds (subject to the
ownership restrictions of the 1940 Act). Investment by the Fund in
shares of a money market mutual fund indirectly results in the
investor paying not only the advisory fee and related fees charged
by the Fund, but also the advisory fees and related fees charged
by the Advisor and other entities providing services to the money
market mutual fund.
SMALL AND MEDIUM-SIZED COMPANIES
To the extent the Fund invests in small or medium-size companies, it
will be exposed to the risks smaller sized companies. Small and medium-size
companies often have narrower markets for their goods and/or services and more
limited managerial and financial resources than larger, more established
companies. As a result, their performance can be more volatile and they face
greater risk of business failure, which could increase the volatility of the
Fund's portfolio.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The Fund may purchase short-term obligations on a when-issued or
delayed delivery basis. These transactions are arrangements in which the Fund
purchases securities with payment and delivery scheduled for a future time. The
seller's failure to complete these transactions may cause Fund to miss a price
or yield considered advantageous.
SECURITIES LENDING
The Fund may lend portfolio securities up to 50% of the value of its
total assets, on a short- or long-term basis, to broker/dealers, banks, or other
institutional borrowers of securities. The collateral received when the Fund
lends portfolio securities must be valued daily and, should the market value of
the loaned securities increase, the borrower must furnish additional collateral
to the Fund. During the time portfolio securities are on loan, the borrower pays
the Fund any dividends or interest paid on such securities. Loans are subject to
termination at the option of the Fund or the borrower. The Fund may pay
reasonable administrative and custodial fees in connection with a loan and may
pay a negotiated portion of the interest earned on the cash or equivalent
collateral to the borrower or placing broker. The Fund would not have the right
to vote securities on loan, but would terminate the loan and regain the right to
vote if that were considered important with respect to the investment. The Fund
will only enter into loan arrangements with broker/dealers, banks, or other
institutions that the Advisor has determined are creditworthy under guidelines
established by the Fund's Board of Trustees. The Fund must also receive
collateral in the form of cash or U.S. government securities equal to at least
100% of the securities loaned at all times.
RESTRICTED AND ILLIQUID SECURITIES
The Fund may invest in a limited amount of restricted securities.
Restricted securities are securities that are thinly traded or whose resale is
restricted by federal securities laws. Restricted securities are any securities
in which the Fund may invest pursuant to their investment objective and policies
but which are subject to restrictions on resale under federal securities laws.
The Fund's Board of Trustees has established criteria that allows the Advisor to
consider certain restricted securities as liquid.
BORROWING
The Fund may borrow up to 50% of its value of its total assets as a
temporary, extraordinary, or emergency measure or to facilitate management of
the Fund by enabling the Fund to meet redemption requests when the liquidation
of portfolio securities is deemed to be inconvenient or disadvantageous.
Interest paid on borrowed funds would decrease the net earnings of that Fund.
The Fund will not purchase portfolio securities while outstanding borrowings
exceed 5% of the value of the Fund's total assets. The Fund may mortgage,
pledge, or hypothecate its assets in an amount not exceeding 10% of the value of
its total assets to secure temporary or emergency borrowing.
REVERSE REPURCHASE AGREEMENTS
The Fund may enter into reverse repurchase agreements. This transaction
is similar to borrowing cash. In a reverse repurchase agreement, the Fund
transfers possession of a portfolio instrument to another person, such as a
financial institution, broker, or dealer, in return for a percentage of the
instrument's market value in cash and agrees that on a stipulated date in the
future the Fund will repurchase the portfolio instrument by remitting the
original consideration, plus interest at an agreed upon rate. The use of reverse
repurchase agreements may enable the Fund to avoid selling portfolio instruments
at a time when a sale may be deemed to be disadvantageous, but the ability to
enter into reverse repurchase agreements does not ensure that the Fund will be
able to avoid selling portfolio instruments at a disadvantageous time.
WARRANTS
The Fund may invest in warrants. Warrants are basically options to
purchase common stock at a specific price (usually at a premium above the market
value of the optioned common stock at issuance) valid for a specific period of
time. If the market price of the common stock does not exceed the warrant's
exercise price during the life of the warrant, the warrant will expire as
worthless. Warrants have no voting rights, pay no dividends, and have no rights
with respect to the assets of the corporation issuing them. The percentage
increase or decrease in the market price of the warrant may tend to be greater
than the percentage increase or decrease in the market price of the optioned
common stock.
REAL ESTATE INVESTMENT TRUSTS
The Fund may invest in equity or mortgage real estate investment trusts
(REITs) that together produce income. A REIT is a managed portfolio of real
estate investments. An equity REIT holds equity positions in real estate and
provides its shareholders with income from the leasing of its properties and
capital gains from any sales of properties. A mortgage REIT specializes in
lending money to developers of properties and passes any interest income earned
to its shareholders. Risks associated with real estate investments include the
fact that equity and mortgage real estate investment trusts are dependent upon
management skill and are not diversified, and are, therefore, subject to the
risk of financing single projects or unlimited number of projects. They are also
subject to heavy cash flow dependency, defaults by borrowers, and
self-liquidation.
OVER-THE-COUNTER OPTIONS
The Fund may generally purchase over-the-counter options on portfolio
securities in negotiated transactions with the writers of the options when
options on the portfolio securities held by the Fund are not traded on an
exchange. The Fund purchase options only with investment dealers and other
financial institutions (such as commercial banks or savings associations) deemed
creditworthy by the Advisor.
INVESTMENTS IN FOREIGN SECURITIES
The Fund may invest in foreign securities, which may include other
investment companies that invest primarily in international securities. The
international securities include equity securities of non-U.S. companies and
corporate and government fixed-income securities denominated in currencies other
than U.S. dollars. The international equity securities may be traded
domestically or abroad through various stock exchanges, American Depositary
Receipts (ADRs), International Depositary Receipts (IDRs) European Depositary
Receipts ("EDRs"), Global Depository Receipts ("GDRs"), and other similar global
instruments available in emerging markets, or other securities convertible into
securities of eligible issuers. Generally, ADRs in registered form are designed
for use in U.S. securities markets, and EDRs and other similar global
instruments in bearer form are designed for use in European securities markets.
For purposes of the Fund's investment policies, the Fund's investments in ADRs,
EDRs and similar instruments will be deemed to be investments in the equity
securities representing the securities of foreign issuers into which they may be
converted. The international fixed-income securities include ADRs, IDRs, and
government securities of other nations and must be rated Baa or better by
Moody's or BBB or better by S&P. If the securities are unrated, the Advisor must
determine that they are of similar quality to the rated securities before a Fund
may invest in them. The Fund does not intend to invest more than 20% of their
respective assets in international securities
Investments in foreign securities involve special risks that differ
from those associated with investments in domestic securities. The risks
associated with investments in foreign securities relate to political and
economic developments abroad, as well as those that result from the differences
between the regulation of domestic securities and issuers and foreign securities
and issuers. These risks may include, but are not limited to, expropriation,
confiscatory taxation, currency fluctuations, withholding taxes on interest,
limitations on the use or transfer of Fund assets, political or social
instability and adverse diplomatic developments. In addition, there are
restrictions on foreign investments in other jurisdictions and there tends to be
difficulty in obtaining judgments from abroad and effecting repatriation of
capital invested abroad. Delays could occur in settlement of foreign
transactions, which could adversely affect shareholder equity. Moreover,
individual foreign economies may differ favorably or unfavorably from the
domestic economy in such respects as growth of gross national product, the rate
of inflation, capital reinvestment, resource self-sufficiency and balance of
payments position.
Other differences between investing in foreign companies and in U.S.
companies, depending on the specific security and foreign market, may include:
o information is less publicly available
o there is a lack of uniform financial accounting standards applicable to
foreign companies
o market quotations are less readily available
o there are differences in government regulation and supervision of foreign
securities exchanges, brokers, listed companies and banks
o there is generally a lower foreign securities market volume
o it is likely that foreign securities may be less liquid or more volatile
o there are generally higher foreign brokerage commissions
o there may be difficulties in enforcing contractual obligations or obtaining
court judgments abroad because of differences in the legal systems
o the mail service between countries may be unreliable
o there are political or financial changes that adversely affect investments in
some countries.
FOREIGN CURRENCY TRANSACTIONS
The Fund may use foreign currency transactions to settle securities
transactions. Because foreign securities may be denominated in foreign
currencies, changes in foreign currency exchange rates could affect the Fund's
net asset value, the value of interest earned, gains and losses realized on the
sale of securities, and net investment income and capital gain. If the value of
a foreign currency rises against the U.S. dollar, the value of an the Fund's
assets denominated in that currency will increase. If the value of the foreign
currency declines against the U.S. dollar, the value of the Fund assets
denominated in that currency decrease. Although the Fund value its assets daily
in U.S. dollars, it will not convert its holdings of foreign currencies to U.S.
dollars daily. When the Fund converts its holdings to another currency, it may
incur currency conversion costs. Foreign exchange dealers realize a profit on
the difference between the prices at which they buy and sell currencies.
TEMPORARY DEFENSIVE POSITIONS
The Fund may deviate from its fundamental and non-fundamental
investment policies during periods of adverse or abnormal market, economic,
political and other circumstances requiring immediate action to protect assets.
In such cases, the Fund may invest up to 100% of its assets in U.S. Government
Securities and any money market investment described above.
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
BOARD OF TRUSTEES
The Fund is managed by a Board of Trustees. The Fund's Board of
Trustees consists of five individuals, three of whom are not "interested
persons" of the Fund as that term is defined in the 1940 Act. The Trustees are
fiduciaries of the Fund's shareholders and are governed by the laws of the state
of Delaware. They establish policies for the operation of the Fund and appoint
the officers who conduct the daily business of the Fund.
MANAGEMENT INFORMATION
The names, addresses and principal occupations during the past five
years of the Trustees and executive officers of the Fund are as follows:
<TABLE>
<CAPTION>
- ------------------------------- -------- ------------------- ------------------------------------------------
POSITION WITH THE
NAME AND ADDRESS AGE FUND PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- ------------------------------- -------- ------------------- ------------------------------------------------
<S> <C> <C> <C>
Kit Cole* Chairperson and
851 Irwin Street Trustee
San Rafael, CA 94901
- ------------------------------- -------- ------------------- ------------------------------------------------
Jeff Tappan Chief Executive
851 Irwin Street Officer
San Rafael, CA 94901
- ------------------------------- -------- ------------------- ------------------------------------------------
Jamie Tappan* Chief Financial
851 Irwin Street Officer,
San Rafael, CA 94901 Secretary and
Trustee
- ------------------------------- -------- ------------------- ------------------------------------------------
TBA
- ------------------------------- -------- ------------------- ------------------------------------------------
TBA
- ------------------------------- -------- ------------------- ------------------------------------------------
</TABLE>
*This trustee is deemed to be an "interested person" of the Fund by virtue of
his or her affiliation with Kit Cole Advisory Services, Inc. Jamie Tappan is the
daughter of Kit Cole.
COMPENSATION
For their services as Trustees, the independent Trustees will receive
compensation a trustee's fee of $_____ per year plus $_____ for each meeting
attended and will be reimbursed for the expenses of attending such meetings.
Neither the Trust nor the Fund pays any fees to the trustees who are considered
"interested persons" of the Trust or the Fund or the Fund's investment adviser,
as defined in the Investment Company Act. Neither the Trust nor the Fund
maintains any deferred compensation, pension or retirement plans, and no pension
or retirement benefits are accrued as part of Trust or Fund expenses. Presently,
none of the executive officers receive compensation from the Fund.
CONTROL PERSON AND PRINCIPAL HOLDERS OF SECURITIES
- --------------------------------------------------------------------------------
As of ___________, 2000, which was prior to the public offering of the
Fund's shares, Kit Cole Investment Advisory Services, Inc. was the holder of
100% of the Fund's shares, and there were otherwise no control persons or
principal holders of securities of the Fund. Control persons are persons deemed
to control the Fund because they own beneficially over 25% of the outstanding
equity securities. Principal holders are persons that own beneficially 5% or
more of the Fund's outstanding equity securities.
INVESTMENT ADVISOR
- --------------------------------------------------------------------------------
Kit Cole Investment Advisory Services, Inc., a California corporation,
is an investment management and financial planning firm that specializes in
helping women and families reach their lifetime financial goals through a
collaborative, comprehensive and education-oriented approach to investment
management. From its headquarters in San Rafael, California, Kit Cole Investment
Advisory Services assists clients throughout the country.
Founded in 1977, Kit Cole Investment Advisory Services offers a
well-developed and time-proven investment philosophy, a talented professional
staff, and superior client service. Kit Cole Investment Advisory Services is
recognized as a leader in providing investment advisory services to women and
families. Its philosophy, however, has a very broad-based appeal and, as a
result, has a diverse customer base (40% of its current clients are men).
Kit Cole Investment Advisory Services serves as an investment advisor
to the Fund pursuant to an Investment Advisory Agreement dated as of
____________, 2000. This Investment Advisory Agreement is effective for a
maximum initial term of two years and will be continued on a year-to-year basis
thereafter, provided that specific approval is voted at least annually by the
Board of Trustees of the Trust or by the vote of the holders of a majority of
the outstanding voting securities of the Fund. In either event, it must also be
approved by a majority of the trustees of the Trust who are neither parties to
the Agreement nor interested persons of any such party as defined in the 1940
Act at a meeting called for the purpose of voting on such approval. The
Advisor's decisions are made subject to direction of the Board of Trustees. The
Agreement may be terminated at any time, without the payment of any penalty, by
vote of a majority of the outstanding voting securities of the Fund.
For the services provided by the Advisor under the Agreement, the
Trust, on behalf of the Fund, has agreed to pay to Kit Cole Investment Advisory
Services an annual fee of 1.00% of the Fund's average daily net assets. All fees
are computed on the average daily closing net asset value of the Fund and are
payable monthly. The Fund has an Expense Reimbursement and Fee Waiver Agreement
with the Advisor, under which the Advisor has agreed to limit the Fund's total
annual operating expenses inclusive of advisory and 12b-1 fees to 2.00% of
average daily net assets. The Expense Waiver and Reimbursement Agreement allows
the Advisor to recapture amounts reimbursed to the Fund and/or fees waived by
the Advisor over a three to five-year period if the amounts to be recaptured are
approved by the Board of Trustees and can be recaptured without causing the Fund
to exceed the applicable expense cap after paying all current expenses. The
Expense Reimbursement and Fee Waiver can only be terminated or amended in
material respect by action of a majority of the Board of Trustees (including a
majority of the independent members of the Board). Subsidies relating to year
one remain eligible for recapture for five years -- i.e., through the end of the
sixth fiscal year of the Fund's operations. Subsidies relating to years two and
three remain eligible for recapture for four years -- i.e., though the end of
the Fund's sixth and seventh fiscal years of operations, respectively. Subsidies
relating to year four and later remain eligibile for recapture for three years
- -- i.e., for year four, through the end of the seventh fiscal year of
operations; for year five, through the end of the eighth fiscal year of
operations, etc.
MORE INFORMATION ABOUT THE ADVISOR
Kit M. Cole, MBA, Founder and CEO of Kit Cole Investment Advisory
Services, Ms. Cole has managed marketable securities for over 20 years.
Ms. Cole was one of the first women in the country to be hired as a
stockbroker at a major brokerage firm. In 1977, she founded KIT COLE INVESTMENT
ADVISORY SERVICES (formerly known as Cole Financial Group, Inc.) which
specializes in providing investment management and financial counseling to women
and families. Ms. Cole also has a broad range of experience in income taxation,
banking, estate and personal financial planning. Ms. Cole is also the
Chairman/CEO and co-founder of Tamalpais Bank, one of Marin County's most
profitable financial institutions and Chairman Emeritus of Novato Community
Bank. Ms. Cole also co-founded and served as Chairman of the Board of New
Horizons Savings & Loan, which was acquired by Luther Burbank Savings in 1996.
Ms. Cole has been active in community affairs. Ms. Cole has served on the Marin
Women's Commission both as a Commissioner and as the Chairperson. In 1997, Ms.
Cole was inducted to the Marin County Women's Hall of Fame for her achievements
in the financial industry. Ms. Cole received her BA in English from California
State University, Long Beach with honors and her MBA in Finance from U.C.
Berkeley's Haas School of Business.
CODE OF ETHICS
- --------------------------------------------------------------------------------
Both the Trust and the Advisor have adopted Codes of Ethics that govern
the conduct of employees of the Trust and Advisor who may have access to
information about the Fund's securities transactions. The Codes recognize that
such persons owe a fiduciary duty to the Fund's shareholders and must place the
interests of shareholders ahead of their own interests. Among other things, the
Codes require pre-clearance of personal securities transactions; certain
blackout periods for personal trading of securities which may be considered for
purchase or sale by the Fund or other clients of the Advisor; annual and
quarterly reporting of personal securities holdings; and limitations on personal
trading of initial public offerings. Violations of the Codes are subject to
review by the Trustees and could result in severe penalties.
FUND ADMINISTRATION
- --------------------------------------------------------------------------------
Firstar Mutual Fund Services, LLC, a subsidiary of Firstar Bank, N.A.,
provides administrative personnel and services (including blue-sky services) to
the Fund. Administrative services include, but are not limited to, providing
office space, equipment, telephone facilities, various personnel, including
clerical and supervisory, and computers, as is necessary or beneficial to
provide compliance services to the Fund. Firstar Mutual Fund Services, LLC also
will serve as Fund accountant and transfer agent under separate agreements.
CUSTODIAN
- --------------------------------------------------------------------------------
The Custodian for the Fund and the Fund is Firstar Bank, N.A., 425
Walnut Street, Cincinnati, Ohio 45202. Firstar Bank, N.A., as Custodian, holds
all of securities and cash owned by the Fund.
LEGAL COUNSEL
- --------------------------------------------------------------------------------
The Fund's legal counsel is Paul, Hastings, Janofsky & Walker LLP
located at 345 California Street, San Francisco, California 94104.
DISTRIBUTOR
- --------------------------------------------------------------------------------
_______________, Inc. serves as the principal underwriter and national
distributor for the shares of the Fund pursuant to a Distribution Agreement with
the Trust dated as of ____________, 2000 (the "Distribution Agreement").
_________________, Inc. is registered as a broker-dealer under the Securities
Exchange Act of 1934 and each state's securities laws and is a member of the
NASD. The offering of the Fund's shares is continuous. The Distribution
Agreement provides that the Distributor, as agent in connection with the
distribution of Fund shares, will use its best efforts to distribute the Fund's
shares.
DISTRIBUTION PLAN
- --------------------------------------------------------------------------------
The Board of Trustees has adopted a Distribution Plan on behalf of the
Fund, in accordance with Rule 12b-1 (the "Plan") under the 1940 Act. The Fund is
authorized under the Plan to use the assets of the Fund to compensate the
Distributor or others for certain activities relating to the distribution of
shares of the Fund to investors and the provision of shareholder services. The
maximum amount payable under the Plan is 0.25% of the Fund's average net assets
on an annual basis.
The NASD's maximum sales charge rule relating to mutual fund shares
establishes limits on all types of sales charges, whether front-end, deferred or
asset-based. This rule may operate to limit the aggregate distribution fees to
which shareholders may be subject under the terms of the Plan.
The Plan authorizes the use of Fund assets to pay the Distributor, banks,
broker/dealers and other institutions that provide distribution assistance
and/or shareholder services such as:
|X| printing and distributing prospectuses to persons other than Fund
shareholders,
|X| printing and distributing advertising and sales literature and reports to
shareholders used in connection with selling shares of the Fund, and
|X| furnishing personnel and communications equipment to service shareholder
accounts and prospective shareholder inquiries.
The Plan requires the Fund to prepare and furnish to the Trustees for
their review, at least quarterly, written reports complying with the
requirements of the Rule and setting out the amounts expended under the Plan and
the purposes for which those expenditures were made. The Plan provides that so
long as it is in effect the selection and nomination of Trustees who are not
interested persons of the Trust will be committed to the discretion of the
Trustees then in office who are not interested persons of the Trust.
Neither the Plan nor any related agreements can take effect until
approved by a majority vote of both all the Trustees and those Trustees who are
not interested persons of the Trust and who have no direct or indirect financial
interest in the operation of the Plan or in any agreements related to the Plan,
cast in person at a meeting called for the purpose of voting on the Plan and the
related agreements. The Trustees approved the Plan on ___________, 2000.
The Plan will continue in effect only so long as its continuance is
specifically approved at least annually by the Trustees in the manner described
above for Trustee approval of the Plan. The Plan for the Fund may be terminated
at any time by a majority vote of the Trustees who are not interested persons of
the Trust and who have no direct or indirect financial interest in the
operations of the Plan or in any agreement related to the Plan or by vote of a
majority of the outstanding voting securities of the Fund.
The Plan may not be amended so as to materially increase the amount of
the distribution fees for the Fund unless the amendment is approved by a vote of
at least a majority of the outstanding voting securities of the Fund. In
addition, no material amendment may be made unless approved by the Trustees in
the manner described above for Trustee approval of the Plan.
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATIONS
- --------------------------------------------------------------------------------
The Advisor is responsible for decisions to buy and sell securities for
the Fund, the selection of broker-dealers to effect the transactions and the
negotiation of brokerage commissions, if any. In placing orders for securities
transactions, the primary criterion for the selection of a broker-dealer is the
ability of the broker-dealer, in the opinion of the Advisor, to secure prompt
execution of the transactions on favorable terms, including the reasonableness
of the commission (if any) and considering the state of the market at the time.
The primary consideration in effecting transactions for the Fund is
execution at the most favorable prices. The Advisor has complete freedom as to
the markets in and the broker-dealers through or with which (acting on an agency
basis or as principal) they seek execution. The Advisor may consider a number of
factors in determining which broker-dealers to use for the Fund's transactions.
These factors, which are also discussed in the Statement of Additional
Information, include research services, the reasonableness of commissions, the
quality of services and execution. Fund transactions for the Fund may be
effected through the Distributor if the commissions, fees or other remuneration
received by the Distributor are reasonable and fair compared to the commissions,
fees or other remuneration paid to other brokers in connection with comparable
transactions involving similar securities being purchased or sold on an exchange
during a comparable period of time. In effecting portfolio transactions through
the Distributor, the Fund intends to comply with Section 17(e)(1) of the 1940
Act, as amended.
When consistent with these objectives, business may be placed with
broker-dealers, including the Distributor, who furnish investment research
and/or services to the Advisor. Such research or services include advice, both
directly and in writing, as to the value of securities; the advisability of
investing in, purchasing or selling securities; and the availability of
securities, or purchasers or sellers of securities; as well as analyses and
reports concerning issues, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts. This allows the Advisor to
supplement its own investment research activities and enables the Advisor to
obtain the views and information of individuals and research staffs of many
different securities firms prior to making investment decisions for the Fund. To
the extent portfolio transactions are effected with broker-dealers who furnish
research services to the Advisor, the Advisor may receive a benefit, not capable
of evaluation in dollar amounts, without providing any direct monetary benefit
to the Fund from these transactions. The Advisor believes that most research
services obtained by it generally benefit several or all of the accounts that it
manages, as opposed to solely benefiting one specific managed fund or account.
Normally, research services obtained through managed funds or accounts investing
in common stocks would primarily benefit the managed funds or accounts which
invest in common stock; similarly, services obtained from transactions in
fixed-income securities would normally be of greater benefit to the managed
funds or accounts which invest in debt securities.
The Advisor may also purchase securities from time to time from
broker-dealers who are participating as underwriters in a firm commitment
underwriting of municipal securities where the Distributor is also a member of
the selling syndicate. The Board of Trustees of the Fund has adopted a policy
pursuant to Rule 10f-3 under the 1940 Act governing such purchases. The purchase
of such municipal securities shall only be made pursuant to the requirements of
Rule 10f-3 and the policies adopted by the Board of Trustees of the Fund.
In determining the commissions to be paid to the Distributor, it is the
policy of the Fund that such commissions, will, in the judgment of the Advisor,
subject to review by the Board of Trustees, be both (a) at least as favorable as
those which would be charged by other qualified brokers in connection with
comparable transactions involving similar securities being purchased or sold on
a securities exchange during a comparable period of time, (b) at least as
favorable as commissions contemporaneously charged by the Distributor on
comparable transactions for its most favored comparable unaffiliated customers,
and (c) conform to the requirements of Rule 17e-1 under the 1940 Act. While the
Advisor does not deem it practicable and in the best interest of the Fund to
solicit competitive bids for commission rates on each transaction, consideration
will regularly be given to posted commission rates as well as to other
information concerning the level of commissions charged on comparable
transactions by other qualified brokers.
In certain instances, there may be securities that are suitable for the
Fund as well as for that of one or more of the advisory clients of the Advisor.
Investment decisions for the Fund and for such advisory clients are made by the
Advisor with a view to achieving the investment objective. It may develop that a
particular security is bought or sold for only one client of the Advisor even
though it might be held by, or bought or sold for, other clients. Likewise, a
particular security may be bought for one or more clients of one of the Advisor
when one or more other clients are selling that same security. Some simultaneous
transactions are inevitable when several clients receive investment advice from
the same investment advisor, particularly when the same security is suitable for
the investment objectives of more than one client. When two or more clients of
the Advisor are simultaneously engaged in the purchase or sale of the same
security, the securities are allocated among clients in a manner believed by the
Advisor to be equitable to each (and may result, in the case of purchases, in
allocation of that security only to some of those clients and the purchase of
another security for other clients regarded by the Advisor as a satisfactory
substitute). It is recognized that in some cases this system could have a
detrimental effect on the price or volume of the security as far as the Fund
involved is concerned. At the same time, however, it is believed that the
ability of the Fund to participate in volume transactions will sometimes produce
better execution prices.
The Board of Trustees of the Fund has also adopted a policy pursuant to
Rule 17a-7 under the 1940 Act that allows certain principal transactions between
certain remote affiliates of the Fund and the Fund and between Fund of the Fund.
These transactions will only be effected in accordance with the provisions of
Rule 17a-7 under the 1940 Act and are further restricted by the policies adopted
by the Board of Trustees pursuant thereto.
PURCHASE OF SHARES
- --------------------------------------------------------------------------------
Orders for shares received by the Trust in good order prior to the
close of business on the New York Stock Exchange (the "Exchange") on each day
during such periods that the Exchange is open for trading are priced at net
asset value per share computed as of the close of the regular session of trading
on the Exchange. Orders received in good order after the close of the Exchange,
or on a day it is not open for trading, are priced at the close of such Exchange
on the next day on which it is open for trading at the next determined net asset
value per share. No share certificates will be issued unless requested in
writing.
REDEMPTION OF SHARES
- --------------------------------------------------------------------------------
The Trust will redeem all or any portion of a shareholder's shares of
the Fund when requested in accordance with the procedures set forth in the "How
to Sell Shares" section of the Prospectus. Under the 1940 Act , a shareholder's
right to redeem shares and to receive payment therefore may be suspended at
times:
(a) when the New York Stock Exchange is closed, other than customary
weekend and holiday closings;
(b) when trading on that exchange is restricted for any reason;
(c) when an emergency exists as a result of which disposal by the Fund
of securities owned by it is not reasonably practicable or it is
not reasonably practicable for the Fund fairly to determine the
value of its net assets, provided that applicable rules and
regulations of the Securities and Exchange Commission (or any
succeeding governmental authority) will govern as to whether the
conditions prescribed in (b) or (c) exist; or
(d) when the Securities and Exchange Commission by order permits a
suspension of the right to redemption or a postponement of the
date of payment on redemption.
In case of suspension of the right of redemption, payment of a
redemption request will be made based on the net asset value next determined
after the termination of the suspension.
CORPORATE, PARTNERSHIP, EXECUTOR, TRUSTEE, ADMINISTRATORS, OR GUARDIAN
SHAREHOLDERS
Supporting documents in addition to those listed under "How to Sell
Shares" in the Fund's prospectus will be required from executors,
administrators, trustees, or if redemption is requested by one other than the
shareholder of record. Such documents include, but are not restricted to, stock
powers, trust instruments, certificates of death, appointments as executor,
certificates of corporate authority and waiver of tax required in some states
when settling estates.
REDEMPTION IN-KIND
The Fund does not intend to redeem shares in any form except cash.
However, if the amount you are redeeming is over the lesser of $250,000 or 1% of
the Fund's net asset value, the Fund has the right to redeem your shares by
giving you the amount that exceeds $250,000 or 1% of the Fund's net asset value
in securities instead of cash.
PRICING OF SHARES
- --------------------------------------------------------------------------------
The net asset value per share of the Fund will be determined on each
day when the New York Stock Exchange is open for business and will be computed
by taking the aggregate market value of all assets of the Fund less its
liabilities, and dividing by the total number of shares outstanding. Each
determination will be made by valuing portfolio securities, including open short
positions, which are traded on the New York Stock Exchange, American Stock
Exchange and on the NASDAQ National Market System at the last reported sales
price on that exchange; by valuing put and call options which are traded on the
Chicago Board Options Exchange or any other domestic exchange at the last sale
price on such exchange; by valuing listed securities and put and call options
for which no sale was reported on a particular day and securities traded on the
over-the-counter market at the mean between the last bid and asked prices; and
by valuing any securities or other assets for which market quotations are not
readily available at fair value in good faith and under the supervision of the
Trustees, although others may do the actual calculation.
The Advisor reserves the right to value securities, including options,
at prices other than last-sale prices when such last-sale prices are believed
unrepresentative of fair market value as determined in good faith by the
Advisor.
The share price (net asset value) of the shares of the Fund is
determined as of the close of the regular session of trading on the New York
Stock Exchange (currently 4:00 p.m., Eastern Time), on each day the Trust is
open for business. The Trust is open for business on every day except Saturdays,
Sundays and the following holidays: New Year's Day, Martin Luther King, Jr. Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
In valuing the Fund's assets for the purpose of determining net asset
value, readily marketable portfolio securities listed on a national securities
exchange are valued at the last sale price on such exchange on the business day
as of which such value is being determined. If there has been no sale on such
exchange on such day, the security is valued at the closing bid price on such
day. If no bid price is quoted on such exchange on such day, then the security
is valued by such method as the Advisor under the supervision of the Board of
Trustees determines in good faith to reflect its fair value. Readily marketable
securities traded only in the over-the-counter market are valued at the last
sale price, if available, otherwise at the most recent bid price. If no bid
price is quoted on such day, then the security is valued by such method as the
Advisor under the supervision of the Board of Trustees determines in good faith
to reflect its fair value. All other assets of the Fund, including restricted
securities and securities that are not readily marketable, are valued in such
manner as the Advisor under the supervision of the Board of Trustees in good
faith deems appropriate to reflect their fair value.
Trading in foreign securities may be completed at times that vary from
the closing of the NYSE. In computing the net asset value, the Fund values
foreign securities at the latest closing price on the exchange on which they are
traded immediately prior to the closing of the NYSE. Certain foreign currency
exchange rates may also be determined at the latest rate prior to the closing of
the NYSE. Foreign securities quoted in foreign currencies are translated into
U.S. dollars at current rates. Occasionally, events that affect these values and
exchange rates may occur between the times at which they are determined and the
closing of the NYSE. If such events materially affect the value of portfolio
securities, these securities may be valued at their fair value as determined in
good faith by the Fund's Board of Trustees, although the actual calculation may
be done by others.
TAX STATUS
- --------------------------------------------------------------------------------
The Fund will qualify and intends to continue to qualify as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"), so as to be relieved of federal income tax on
its capital gains and net investment income distributed to shareholders. To
qualify as a regulated investment company, the Fund must, among other things,
receive at least 90% of its gross income each year from dividends, interest,
gains from the sale or other disposition of securities and certain other types
of income including, with certain exceptions, income from options and futures
contracts. The Code also requires a regulated investment company to diversify
its holdings. The Internal Revenue Service has not made its position clear
regarding the treatment of futures contracts and options for purposes of the
diversification test, and the extent to which the Fund could buy or sell futures
contracts and options may be limited by this requirement.
The Code requires that all regulated investment companies pay a
nondeductible 4% excise tax to the extent the regulated investment company does
not distribute 98% of its ordinary income, determined on a calendar year basis,
and 98% of its capital gains, determined, in general, on an October 31 year end.
The required distributions are based only on the taxable income of a regulated
investment company.
By law, the Fund must withhold 31% of your taxable distributions and
proceeds if you do not provide your correct social security or taxpayer
identification number, or if the IRS instructs the Fund to do so. Ordinarily,
distributions and redemption proceeds earned by the Fund shareholder are not
subject to withholding of federal income tax. However, if a shareholder fails to
furnish a tax identification number or social security number, or certify under
penalties of perjury that such number is correct, the Fund may be required to
withhold federal income tax ("backup withholding") from all dividend, capital
gain and/or redemption payments to such shareholder. Dividends and capital gain
distributions may also be subject to backup withholding if a shareholder fails
to certify under penalties of perjury that such shareholder is not subject to
backup withholding due to the underreporting of certain income. These
certifications are contained in the purchase application enclosed with the
Prospectus.
CALCULATIONS OF PERFORMANCE DATA
- --------------------------------------------------------------------------------
From time to time the Fund may quote the yield for the Fund in
advertisements or in reports and other communications to shareholders. For this
purpose, yield is calculated by dividing the Fund's net investment income per
share for the base period, which is 30 days or one month, by the Fund's maximum
offering purchase price on the last day of the period and annualizing the
result. The Fund's net investment income changes in response to fluctuations in
interest rates and in the expenses of the Fund. Consequently, any given
quotation should not be considered as representative of what the Fund's yield
may be for any specified period in the future.
Yield information may be useful in reviewing the Fund's performance and
for providing a basis for comparison with other investment alternatives.
However, the Fund's yield will fluctuate, unlike other investments, which pay a
fixed yield for a stated period of time. Current yield should be considered
together with fluctuations in the Fund's net asset value over the period for
which yield has been calculated, which, when combined, will indicate the Fund's
total return to shareholders for that period. Other investment companies may
calculate yields on a different basis. In addition, investors should give
consideration to the quality and maturity of the portfolio securities of the
respective investment companies when comparing investment alternatives.
Investors should recognize that in periods of declining interest rates
a bond portfolio's yield will tend to be somewhat higher than prevailing market
rates, and in periods of rising interest rates, such portfolio's yield will tend
to be somewhat lower. Also, when interest rates are falling, the inflow of net
new money to a bond portfolio from the continuous sale of its shares will likely
be invested in instruments producing lower yields than the balance of such
portfolio's holdings, thereby reducing the current yield of such portfolio. In
periods of rising interest rates, the opposite can be expected to occur.
The Fund may also quote the indices of bond prices and yields prepared
by Lehman Bros., Inc., Salomon Bros., Inc., Merrill Lynch or other leading
broker-dealer firms. These indices are not managed for any investment goal and
their composition may be changed from time to time.
In connection with the quotations of yields in advertisements described
above, the Fund will also provide average annual total returns from the date of
inception for one, five and ten-year periods if applicable. Total return is a
calculation that equates the initial amount invested to the ending redeemable
value at a specified time. It assumes the reinvestment of all dividends and
capital gains distributions. Average total return will be the average of the
total returns for each year in the period. The Fund may also provide a total
return figure for the most recent calendar quarter prior to the publication of
the advertisement.
INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
__________________, serves as the Fund's independent auditors. Their
services include examination of the Fund's financial statements.
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Because the Fund has recently been formed, there are no financial
highlights to report.
KIT COLE INVESTMENT TRUST
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS
(a) DECLARATION OF TRUST
(i) Certificate of Trust -- Filed herewith
(ii) Agreement and Declaration of Trust-- Filed herewith
(b) BYLAWS - Filed herewith
(d) INSTRUMENTS DEFINING RIGHTS OF SECURITY HOLDERS-- Incorporated by reference
to the Agreements and Declaration of Trust and Bylaws
(d) ADVISORY AGREEMENT-- To be filed by amendment
(e) UNDERWRITING AGREEMENT-- To be filed by amendment.
(f) BONUS OR PROFIT SHARING CONTRACTS - Not applicable
(g) CUSTODY AGREEMENT-- To be filed by amendment.
(h) OTHER MATERIAL CONTRACTS
(i) Administration Agreement-- To be filed by amendment.
(ii) Transfer Agent Servicing Agreement-- To be filed by amendment.
(iii) Fund Accounting Services Agreement-- To be filed by amendment.
(i) OPINION AND CONSENT OF COUNSEL-- To be filed by amendment.
(j) CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS-- To be filed by amendment.
(k) OMITTED FINANCIAL STATEMENTS - Not applicable
(l) AGREEMENT RELATING TO INITIAL CAPITAL-- To be filed by amendment.
(m) RULE 12B-1 PLAN - To be filed by amendment.
(n) RULE 18F-3 PLAN - Not applicable
(o) RESERVED
(p) CODE OF ETHICS - To be filed by amendment
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
No person is directly or indirectly controlled by or under common
control with the Registrant.
ITEM 25. INDEMNIFICATION.
Reference is made to Article VII of the Registrant's Agreement and
Declaration of Trust.
Pursuant to Rule 484 under the Securities Act of 1933, as amended, the
Registrant furnishes the following undertaking: "Insofar as indemnification for
liability arising under the Securities Act of 1933 (the "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 Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a trustee,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such trustee, officer or controlling
person in connection with the securities 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 Act and
will be governed by the final adjudication of such issue."
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
(a) Inapplicable
(b) Inapplicable
ITEM 27. PRINCIPAL UNDERWRITERS.
To be completed.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
The books and records required to be maintained by Section 31(a) of
the Investment Company Act of 1940 are maintained at the following locations:
<TABLE>
<CAPTION>
- ----------------------------------------------- -------------------------------------------
Records Relating to: Are located at:
- ----------------------------------------------- -------------------------------------------
<S> <C>
Registrant's fund accountant, administrator Firstar Mutual Fund Services, LLC
and transfer agent 615 East Michigan Street
Milwaukee, WI 53202
- ----------------------------------------------- -------------------------------------------
Registrant's custodian Firstar Bank, N.A.
425 Walnut Street
Cincinnati, OH 45202
- ----------------------------------------------- -------------------------------------------
Registrant's investment adviser Kit Cole Investment Advisory Services
851 Irwin Street
San Rafael, CA 94901
- ----------------------------------------------- -------------------------------------------
</TABLE>
ITEM 29. MANAGEMENT SERVICES NOT DISCUSSED IN PARTS A AND B.
Inapplicable
ITEM 30. UNDERTAKINGS.
The Registrant hereby undertakes to furnish each person to whom a
Prospectus for one or more of the series of the Registrant is delivered with a
copy of the relevant latest annual report to shareholders, upon request and
without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this Registration Statement to be signed below on its behalf by the undersigned,
thereunto duly authorized, in the City of San Rafael and the State of California
on the 5th day of April, 2000.
KIT COLE INVESTMENT TRUST
BY:/S/ JEFF TAPPAN
Jeff Tappan, Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, Registration
Statement has been signed below by the following persons in the capacities and
on 5th day of April, 2000.
SIGNATURE TITLE
/S/ KIT COLE Chairperson and Trustee
Kit Cole
/S/ JAMIE TAPPAN Chief Financial Officer, Secretary
Jamie Tappan and Trustee
CERTIFICATE OF TRUST
OF
KIT COLE INVESTMENT TRUST
A Delaware Business Trust
This Certificate of Trust of KIT COLE INVESTMENT TRUST (the "Trust"),
dated as of this 27th day of March, 2000 is being duly executed and filed, in
order to form a business trust pursuant to the Delaware Business Trust Act (the
"Act"), Del. Code Ann.tit. 12, Sections 3801-3819.
1. NAME. The name of the business trust formed hereby is "Kit Cole Investment
Trust."
2. REGISTERED OFFICE AND REGISTERED AGENT. The Trust will become, prior to the
issuance of shares of beneficial interest, a registered investment company under
the Investment Company Act of 1940, as amended. Therefore, in accordance with
section 3807(b) of the Act, the Trust has and shall maintain in the State of
Delaware a registered office and a registered agent for service of process.
(A) REGISTERED OFFICE. The registered office of the Trust in Delaware is The
Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801.
(B) REGISTERED AGENT. The registered agent for service of process on the Trust
in Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington,
Delaware 19801.
3. LIMITATION OF LIABILITY. Pursuant to section 3804(a) of the Act, the debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular series of the Trust, established pursuant
to the terms of the Agreement and Declaration of Trust, shall be enforceable
against the assets of such series only and not against the assets of the Trust
generally.
IN WITNESS WHEREOF, the Trustee named below does hereby execute this
Certificate of Trust as of the date first-above written.
/S/ JEFF TAPPAN
Jeff Tappan
AGREEMENT AND DECLARATION OF TRUST
of
KIT COLE INVESTMENT TRUST
a Delaware Business Trust
Principal Place of Business:
Kit Cole Investment Trust
851 Irwin Street
San Rafael, California 94901
TABLE OF CONTENTS
KIT COLE INVESTMENT TRUST
AGREEMENT AND DECLARATION OF TRUST
PAGE
ARTICLE I Name and Definitions................................................1
1. Name.................................................................1
2. Definitions..........................................................1
(a) Trust.......................................................1
(b) Trust Property..............................................1
(c) Trustees....................................................1
(d) Shares......................................................1
(e) Shareholder.................................................2
(f) Person......................................................2
(g) Investment Company Act......................................2
(h) Commission and Principal Underwriter........................2
(i) Declaration of Trust........................................2
(j) By-Laws.....................................................2
(k) Interested Person...........................................2
(l) Investment Adviser..........................................2
(m) Series......................................................2
ARTICLE II Purpose of Trust....................................................2
ARTICLE III Shares.............................................................2
1. Division of Beneficial Interest......................................2
2. Ownership of Shares..................................................3
3. Investments in the Trust.............................................3
4. Status of Shares and Limitation of Personal Liability................3
5. Power of Board of Trustees to Change Provisions Relating to Shares...4
6. Establishment and Designation of Series..............................4
(a) Assets Held with Respect to a Particular Series.............4
(b) Liabilities Held With Respect to a Particular Series........5
(c) Dividends, Distributions, Redemptions and Repurchases.......5
(d) Voting......................................................5
(e) Equality....................................................6
(f) Fractions...................................................6
(g) Exchange Privilege..........................................6
(h) Combination of Series.......................................6
(i) Elimination of Series.......................................6
7. Indemnification of Shareholders......................................6
ARTICLE IV The Board of Trustees...............................................6
1. Number, Election and Tenure..........................................6
2. Effect of Death, Resignation, etc. of a Trustee......................7
3. Powers...............................................................7
4. Payment of Expenses by the Trust....................................10
5. Payment of Expenses by Shareholders.................................10
6. Ownership of Assets of the Trust....................................10
7. Service Contracts...................................................10
ARTICLE V Shareholders' Voting Powers and Meetings............................11
1. Voting Powers.......................................................12
2. Voting Power and Meetings...........................................12
3. Quorum and Required Vote............................................12
4. Action by Consent...................................................12
5. Record Dates........................................................13
6. Additional Provisions...............................................13
ARTICLE VI Net Asset Value, Distributions and Redemptions.....................13
1. Determination of Net Asset Value, Net Income and Distributions......13
2. Redemptions and Repurchases.........................................13
3. Redemptions at the Option of the Trust..............................14
ARTICLE VII Compensation and Limitation of Liability of Trustees..............14
1. Compensation........................................................14
2. Indemnification and Limitation of Liability.........................14
3. Trustee's Good Faith Action, Expert Advice, No Bond or Surety.......15
4. Insurance...........................................................15
ARTICLE VIII Miscellaneous....................................................15
1. Liability of Third Persons Dealing with Trustees....................15
2. Termination of Trust or Series......................................15
3. Merger and Consolidation............................................16
4. Amendments..........................................................16
5. Filing of Copies, References, Headings..............................16
6. Applicable Law......................................................17
7. Provisions in Conflict with Law or Regulations......................17
8. Business Trust Only.................................................17
9. Use of the Identifying Words "Kit Cole".............................17
AGREEMENT AND DECLARATION OF TRUST
OF
KIT COLE INVESTMENT 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 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 Kit Cole Investment
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,
including without limitation the rights referenced in Article VIII, Section 9
hereof;
(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
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 "Investment Company Act" refers to the Investment Company Act of 1940,
as amended, 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 Investment Company 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 the Investment
Company Act;
(l) "Investment Adviser" or "Manager" means a party furnishing services to the
Trust pursuant to any contract described in Article IV, Section 7(a) hereof; and
(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 of a management investment company registered under the Investment
Company Act through one or more Series investing primarily in securities.
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
no par value. 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 this 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 Share 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 2 hereof. All
dividends and distributions shall be made ratably among all Shareholders of a
particular class of a particular Series and, if no classes, of a particular
Series from the assets held with respect to such Series according to the number
of Shares of such class of such Series or of such Series 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.
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 of each Series). 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 of each Series) 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 the identity of the
Shareholders of each Series (or class of each Series) 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 instrument. Every Shareholder, by virtue of having become a Shareholder,
shall be held to have expressly assented and agreed to the terms hereof and to
have become a party hereto. The death of a Shareholder during the 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 Shareholder, nor, except as specifically provided herein, to call
upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay.
SECTION 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 the Declaration of
Trust as provided elsewhere herein, the Board of Trustees shall have the power
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 Investment Company Act or other applicable law. If
Shares have been issued, Shareholder approval shall be required to adopt any
amendments to this Declaration of Trust that would adversely affect to a
material degree the rights and preferences of the Shares of any Series (or class
of any Series) or to increase or decrease the par value of the Shares of any
Series (or class of any Series).
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 that 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
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, and shall be required by contract to look
exclusively, to the assets of that particular Series for payment of such credit,
claim, or contract. In the absence of an express contractual agreement so
limiting the claims of such creditors, claimants and contract providers, each
creditor, claimant and contract provider will be deemed nevertheless to have
impliedly agreed to such limitation unless an express provision to the contrary
has been incorporated in the written contract or other document establishing the
claimant relationship.
(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, nor, except as specifically provided in Section 7 of
this Article III, shall any Shareholder of any particular Series 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 claim hereunder
as a Shareholder of such other Series. The Trustees shall have full discretion,
to the extent not inconsistent with the Investment Company 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): that is, 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 voting
by separate Series (or classes). First, if the Investment Company 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 the basis of one vote for each dollar of net asset value per
share. Second, if any 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.
(i) ELIMINATION OF SERIES. At any time that there are no Shares outstanding of
any particular Series (or class) previously established and designated or such
other time and such manner not prohibited by the Investment Company Act or other
applicable law, 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 or her being or having been a Shareholder, and not because of
his or her acts or omissions, the Shareholder or former Shareholder (or his or
her 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 applicable Series 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 fewer than one (1) 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 or she 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 or her
successor. Any Trustee may resign at any time by written instrument signed by
him or her 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 or her
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 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. EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE. The death,
declination, 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 this Article IV, Section l, 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,
declination, resignation, retirement, removal, or incapacity of all the then
Trustees within a short period of time and without the opportunity for at least
one Trustee being able to appoint additional Trustees to fill vacancies, the
Trust's Investment Adviser(s) are empowered to appoint new Trustees subject to
the provisions of Section 16(a) of the Investment Company Act.
SECTION 3. 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, 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;
(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
combinations 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
(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 4. 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 5. 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 6. 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
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 or she 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 has
been executed and delivered.
SECTION 7. 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 Adviser 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.
(e) The fact that:
(i) any of the Shareholders, Trustees, or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, investment adviser,
manager, 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
(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, trusts, 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 Investment Company 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. As appropriate, voting may be by Series (or
class). Each dollar of net asset value of a Share shall be entitled to one vote
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 l 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. 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 or her 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 dollar-weighted voting power of 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 Shareholder'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 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 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 or by
applicable law) 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 or by means of electronic communication and
such consent is 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.
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
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.
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 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; or (iv) in connection
with the elimination of a series under Section 6(i) of Article III or Section 2
of Article VIII.
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, Investment Adviser 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, demands and expenses
(including attorneys' fees) whatsoever arising out of or related to each
Trustee's performance of his or her 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 or she would otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his or her office.
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 or her 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 discretion hereunder shall be
binding upon everyone interested. A Trustee shall be liable to the Trust and to
any Shareholder solely for his or her own wilful 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 or she becomes involved by virtue of his or her 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
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 this
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 the 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
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 "Business Trust Act"). The Trust shall be a Delaware
business trust pursuant to such Business Trust 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 Investment Company 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.
(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 Business Trust Act, and thereby to create only
the relationship of trustee and beneficial owners within the meaning of such
Business Trust 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 . USE OF THE IDENTIFYING WORDS "KIT COLE". The identifying words "Kit
Cole" and all rights to the use of such identifying words belong to Kit Cole
Investment Advisory Services, the proposed Investment Adviser of the Trust's
Shares. Kit Cole Investment Advisory Services has licensed the Trust to use the
identifying words "Kit Cole " in the Trust's name. If Kit Cole Investment
Advisory Services or an affiliate of Kit Cole Investment Advisory Services is
not appointed or ceases to be the Investment Adviser of the Trust, the
non-exclusive license may be revoked by Kit Cole Investment Advisory Services,
and the Trust and any series thereof shall respectively cease using the
identifying words "Kit Cole" unless otherwise consented to by Kit Cole
Investment Advisory Services or any successor to Kit Cole Investment Advisory
Services's interests.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Trustees named below do hereby make
and enter into this Declaration of Trust as of the 31st day of March, 2000
Name: /s/ Kit M. Cole
Kit M. Cole
Position: Trustee
BY-LAWS
FOR THE REGULATION, EXCEPT AS
OTHERWISE PROVIDED BY STATUTE OR THE
AGREEMENT AND DECLARATION OF TRUST, OF
KIT COLE INVESTMENT TRUST
A DELAWARE BUSINESS TRUST
BY-LAWS
OF
KIT COLE INVESTMENT TRUST
DELAWARE BUSINESS TRUST
TABLE OF CONTENTS
PAGE
ARTICLE I OFFICES.........................................................1
Section 1. PRINCIPAL OFFICE................................................1
Section 2. DELAWARE OFFICE.................................................1
Section 3. OTHER OFFICES...................................................1
ARTICLE II MEETINGS OF SHAREHOLDERS........................................1
Section 1. PLACE OF MEETING................................................1
Section 2. CALL OF MEETING.................................................1
Section 3. NOTICE OF SHAREHOLDERS' MEETING.................................1
Section 4. MANNER OF GIVING NOTICE: AFFIDAVIT OF NOTICE....................2
Section 5. ADJOURNED MEETING; NOTICE.......................................2
Section 6. VOTING..........................................................3
Section 7. WAIVER OF NOTICE BY CONSENT OF ABSENT SHAREHOLDERS..............3
Section 8. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.........3
Section 9. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING AND GIVING CONSENTS..4
Section 10. PROXIES.........................................................4
Section 11. INSPECTORS OF ELECTION..........................................5
ARTICLE III TRUSTEES........................................................5
Section 1. POWERS..........................................................5
Section 2. NUMBER OF TRUSTEES..............................................5
Section 3. VACANCIES.......................................................6
Section 4. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE.....................6
Section 5. REGULAR MEETINGS................................................6
Section 6. SPECIAL MEETINGS................................................6
Section 7. QUORUM..........................................................7
Section 8. WAIVER OF NOTICE................................................7
Section 9. ADJOURNMENT.....................................................7
Section 10. NOTICE OF ADJOURNMENT...........................................7
Section 11. ACTION WITHOUT A MEETING........................................7
Section 12. FEES AND COMPENSATION OF TRUSTEES...............................7
Section 13. DELEGATION OF POWER TO OTHER TRUSTEES...........................8
ARTICLE IV COMMITTEES......................................................8
Section 1. COMMITTEES OF TRUSTEES..........................................8
Section 2. MEETINGS AND ACTION OF COMMITTEES...............................9
ARTICLE V OFFICERS........................................................9
Section 1. OFFICERS........................................................9
Section 2. ELECTION OF OFFICERS............................................9
Section 3. SUBORDINATE OFFICERS............................................9
Section 4. REMOVAL AND RESIGNATION OF OFFICERS.............................9
Section 5. VACANCIES IN OFFICES...........................................10
Section 6. CHAIRPERSON OF THE BOARD.......................................10
Section 7. CEO............................................................10
Section 8. VICE PRESIDENTS................................................10
Section 9. SECRETARY......................................................11
Section 10. CEO............................................................11
ARTICLE VI INDEMNIFICATION OF TRUSTEES, OFFICERS, EMPLOYEES AND OTHER
AGENTS.........................................................11
Section 1. AGENTS, PROCEEDINGS AND EXPENSES...............................11
Section 2. ACTIONS OTHER THAN BY TRUST....................................12
Section 3. ACTIONS BY THE TRUST...........................................12
Section 4. EXCLUSION OF INDEMNIFICATION...................................12
Section 5. SUCCESSFUL DEFENSE BY AGENT....................................13
Section 6. REQUIRED APPROVAL..............................................13
Section 7. ADVANCE OF EXPENSES............................................14
Section 8. OTHER CONTRACTUAL RIGHTS.......................................14
Section 9. LIMITATIONS....................................................14
Section 10. INSURANCE......................................................14
Section 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN...........................14
ARTICLE VII RECORDS AND REPORTS...........................................15
Section 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER..................15
Section 2. MAINTENANCE AND INSPECTION OF BY-LAWS.........................15
Section 3. MAINTENANCE AND INSPECTION OF OTHER RECORDS...................15
Section 4. INSPECTION BY TRUSTEES........................................15
Section 5. FINANCIAL STATEMENTS..........................................15
ARTICLE VIII GENERAL MATTERS................................................16
Section 1. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS.......................16
Section 2. CONTRACTS AND INSTRUMENTS - HOW EXECUTED.......................16
Section 3. CERTIFICATES FOR SHARES........................................16
Section 4. LOST CERTIFICATES..............................................16
Section 5. REPRESENTATION OF SHARES OF OTHER ENTITIES HELD BY TRUST.......17
Section 6. FISCAL YEAR....................................................17
ARTICLE IX AMENDMENTS.....................................................17
Section 1. AMENDMENT BY SHAREHOLDERS......................................17
Section 2. AMENDMENT BY TRUSTEES..........................................17
Section 3. INCORPORATION BY REFERENCE INTO AGREEMENT AND DECLARATION OF
TRUST OF THE TRUST.............................................17
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The Board of Trustees shall fix and, from time to
time, may change the location of the principal executive office of the Kit Cole
Investment Trust (the "Trust") at any place within or outside the State of
Delaware.
Section 2. DELAWARE OFFICE. The Board of Trustees shall establish a registered
office in the State of Delaware and shall appoint as the Trust's registered
agent for service of process in the State of Delaware an individual resident of
the State of Delaware or a Delaware corporation or a corporation authorized to
transact business in the State of Delaware; in each case the business office of
such registered agent for service of process shall be identical with the
registered Delaware office of the Trust.
Section 3. OTHER OFFICES. The Board of Trustees may at any time establish branch
or subordinate offices at any place or places where the Trust intends to do
business.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. PLACE OF MEETING. Meetings of shareholders shall be held at any place
designated by the Board of Trustees. In the absence of any such designation,
shareholders, meetings shall be held at the principal executive office of the
Trust.
Section 2. CALL OF MEETING. A meeting of the shareholders may be called at any
time by the Board of Trustees or by the Chairperson of the Board of the Chief
Executive Officer (CEO).
Section 3. NOTICE OF SHAREHOLDERS' MEETING. All notices of meetings of
shareholders shall be sent or otherwise given in accordance with Section 4 of
this Article II not less than seven (7) nor more than seventy-five (75) days
before the date of the meeting. The notice shall specify (i) the place, date and
hour of the meeting, and (ii) the general nature of the business to be
transacted. The notice of any meeting at which Trustees are to be elected also
shall include the name of any nominee or nominees whom at the time of the notice
are intended to be presented for election.
If action is proposed to be taken at any meeting for approval of (i) a
contract or transaction in which a Trustee has a direct or indirect financial
interest, (ii) an amendment of the Agreement and Declaration of Trust of the
Trust, (iii) a reorganization of the Trust, or (iv) a voluntary dissolution of
the Trust, the notice shall also state the general nature of that proposal.
Section 4. MANNER OF GIVING NOTICE: AFFIDAVIT OF NOTICE. Notice of any meeting
of shareholders shall be given either personally or by first-class mail or
telegraphic or other written communication, charges prepaid, addressed to the
shareholder at the address of that shareholder appearing on the books of the
Trust or its transfer agent or given by the shareholder to the Trust for the
purpose of notice. If no such address appears on the Trust's books or is given,
notice shall be deemed to have been given if sent to that shareholder by
first-class mail or telegraphic or other written communication to the Trust's
principal executive office, or if published at least once in a newspaper of
general circulation in the county where that office is located. Notice shall be
deemed to have been given at the time when delivered personally or deposited in
the mail or sent by telegram or other means of written communication.
If any notice addressed to a shareholder at the address of that
shareholder appearing on the books of the Trust is returned to the Trust by the
United States Postal Service marked to indicate that the Postal Service is
unable to deliver the notice to the shareholder at that address, all future
notices or reports shall be deemed to have been duly given without further
mailing if these shall be available to the shareholder on written demand of the
shareholder at the principal executive office of the Trust for a period of one
year from the date of the giving of the notice.
An affidavit of the mailing or other means of giving any notice of any
shareholder's meeting shall be executed by the Secretary, Assistant Secretary or
any transfer agent of the Trust giving the notice and shall be filed and
maintained in the minute book of the Trust.
Section 5. ADJOURNED MEETING; NOTICE. Any shareholder's meeting, whether or not
a quorum is present, may be adjourned from time to time by the vote of the
majority of the shares represented at that meeting, either in person or by
proxy.
When any meeting of shareholders is adjourned to another time or place,
notice need not be given of the adjourned meeting at which the adjournment is
taken, unless a new record date of the adjourned meeting is fixed or unless the
adjournment is for more than sixty (60) days from the date set for the original
meeting, in which case the Board of Trustees shall set a new record date. Notice
of any such adjourned meeting shall be given to each shareholder of record
entitled to tote at the adjourned meeting in accordance with the provisions of
Sections 3 and 4 of this Article II. At any adjourned meeting, the Trust may
transact any business which might have been transacted at the original meeting.
Section 6. VOTING. The shareholders entitled to vote at any meeting of
shareholders shall be determined in accordance with the provisions of the
Agreement and Declaration of Trust of the Trust, as in effect at such time. The
shareholders, vote may be by voice vote or by ballot, provided, however, that
any election for Trustees must be by ballot if demanded by any shareholder
before the voting has begun. On any matter other than elections of Trustees, any
shareholder may vote part of the shares in favor of the proposal and refrain
from voting the remaining shares or vote them against the proposal, but if the
shareholder fails to specify the number of shares that the shareholder is voting
affirmatively, it will be conclusively presumed that the shareholder's approving
vote is with respect to the total shares that the shareholder is entitled to
vote on such proposal.
Section 7. WAIVER OF NOTICE BY CONSENT OF ABSENT SHAREHOLDERS. The transactions
of the meeting of shareholders, however called and noticed and wherever held,
shall be as valid as though had at a meeting duly held after regular call and
notice if a quorum be present either in person or by proxy and if, either before
or after the meeting, each person entitled to vote who was not present in person
or by proxy signs a written waiver of notice or a consent to a holding of the
meeting or an approval of the minutes. The waiver of notice or consent need not
specify either the business to be transacted or the purpose of any meeting of
shareholders.
Attendance by a person at a meeting shall also constitute a waiver of
notice of that meeting, except when the person objects at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened and except that attendance at a meeting is not a waiver of
any right to object to the consideration of matters not included in the notice
of the meeting if that objection is expressly made at the beginning of the
meeting.
Section 8. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any action
which may be taken at any meeting of shareholders may be taken without a meeting
and without prior notice if a consent in writing setting forth the action so
taken is signed by the holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorize or take that action
at a meeting at which all shares entitled to vote on that action were present
and voted. All such consents shall be filed with the Secretary of the Trust and
shall be maintained in the Trust's records. Any shareholder giving a written
consent or the shareholder's proxy holders or a transferee of the shares or a
personal representative of the Shareholder or their respective Proxy holders may
revoke the consent by a writing received by the Secretary of the Trust before
written consents of the number of shares required to authorize the proposed
action have been filed with the Secretary.
If the consents of all shareholders entitled to vote have not been
solicited in writing and if the unanimous written consent of all such
shareholders shall not have been received, the Secretary shall give prompt
notice of the action approved by the shareholders without a meeting. This notice
shall be given in the manner specified in Section 4 of this Article II. In the
case of approval of (i) contracts or transactions in which a Trustee has a
direct or indirect financial interest, (ii) indemnification of agents of the
Trust, and (iii) a reorganization of the Trust, the notice shall be given at
least ten (10) days before the consummation of any action authorized by that
approval.
Section 9. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING AND GIVING CONSENTS. For
purposes of determining the shareholders entitled to notice of any meeting or to
vote or entitled to give consent to action without a meeting, the Board of
Trustees may fix in advance a record date which shall not be more than ninety
(90) days nor less than seven (7) days before the date of any such meeting as
provided in the Agreement and Declaration of Trust of the Trust.
If the Board of Trustees does not so fix a record date:
(a) The record date for determining shareholders entitled
to notice of or to vote at a meeting of shareholders
shall be at the close of business on the business day
next preceding the day on which notice is given or,
if notice is waived, at the close of business on the
business day next preceding the day on which the
meeting is held.
(b) The record date for determining shareholders entitled
to give consent to action in writing without a
meeting, (i) when no prior action by the Board of
Trustees has been taken, shall be the day on which
the first written consent is given, or (ii) when
prior action of the Board of Trustees has been taken,
shall be at the close of business on the day on which
the Board of Trustees adopt the resolution relating
to that action or the seventy-fifth day before the
date of such other action, whichever is later.
Section 10. PROXIES. Every person entitled to vote for Trustees or on any other
matter shall have the right to do so either in person or by one or more agents
authorized by a written proxy signed by the person and filed with the Secretary
of the Trust. A proxy shall be deemed signed if the shareholder's name is placed
on the proxy (whether by manual signature, typewriting, telegraphic transmission
or otherwise) by the shareholder or the shareholder's attorney-in-fact. A
validly executed proxy that does not state that it is irrevocable shall continue
in full force and effect unless (i) revoked by the person executing it before
the vote pursuant to that proxy by a writing delivered to the Trust stating that
the proxy is revoked or by a subsequent proxy executed by, or attendance at the
meeting and voting in person by, the person executing that proxy; or (ii)
written notice of the death or incapacity of the maker of that proxy is received
by the Trust before the vote pursuant to that proxy is counted; provided
however, that no proxy shall be valid after the expiration of eleven (11) months
from the date of the proxy unless otherwise provided in the proxy.
Section 11. INSPECTORS OF ELECTION. Before any meeting of shareholders, the
Board of Trustees may appoint any persons other than nominees for office to act
as inspectors of election at the meeting or its adjournment. If no inspectors of
election are so appointed, the chairperson of the meeting may and, on the
request of any shareholder or a shareholder's proxy, shall appoint inspectors of
election at the meeting. The number of inspectors shall be either one (1) or
three (3). If inspectors are appointed at a meeting on the request of one or
more shareholders or proxies, the holders of a majority of shares or their
proxies present at the meeting shall determine whether one (1) or three (3)
inspectors are to be appointed. If any person appointed as inspector fails to
appear or fails or refuses to act, the Chairperson of the meeting may and, on
the request of any shareholder or a shareholder's proxy, shall appoint a person
to fill the vacancy.
These inspectors shall:
(a) Determine the number of shares outstanding and the voting power of
each, the shares represented at the meeting, the existence of a quorum
and the authenticity, validity and effect of proxies;
(b) Receive votes, ballots or consents;
(c) Hear and determine all challenges and questions in any way arising
in connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct the election or
vote with fairness to all shareholders.
ARTICLE III
TRUSTEES
Section 1. POWERS. Subject to the applicable provisions of the Agreement and
Declaration of Trust of the Trust and these By-Laws relating to action required
to be approved by the shareholders or by the outstanding shares, the business
and affairs of the Trust shall be managed and all powers shall be exercised by
or under the direction of the Board of Trustees.
Section 2. NUMBER OF TRUSTEES. The exact number of Trustees within the limits
specified in the Agreement and Declaration of Trust of the Trust shall be fixed
from time to time by a written instrument signed or a resolution approved at a
duly constituted meeting by a majority of the Board of Trustees.
Section 3. VACANCIES. Vacancies in the Board of Trustees may be filled by a
majority of the remaining Trustees, though less than a quorum, or by a sole
remaining Trustee, unless the Board of Trustees calls a meeting of shareholders
for the purposes of electing Trustees. In the event that at any time less than a
majority of the Trustees holding office at that time were so elected by the
holders of the outstanding voting securities of the Trust, the Board of Trustees
shall forthwith cause to be held as promptly as possible, and in any event
within sixty (60) days, a meeting of such holders for the purpose of electing
Trustees to fill any existing vacancies in the Board of Trustees, unless such
period is extended by order of the United States Securities and Exchange
Commission. Notwithstanding the above, whenever and for so long as the Trust is
a participant in or otherwise has in effect a Plan under which the Trust may be
deemed to bear expenses of distributing its shares as that practice is described
in Rule 12b-1 under the Investment Company Act of 1940, then the selection and
nomination of the Trustees who are not interested persons of the Trust (as that
term is defined in the Investment Company Act of 1940) shall be, and is,
committed to the discretion of such disinterested Trustees.
Section 4. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE. All meetings of the
Board of Trustees may be held at any place that has been designated from time to
time by resolution of' the Board. In the absence of such a designation, regular
meetings shall be held at the principal executive office of the Trust. Any
meeting, regular or special, may be held by conference telephone or similar
communication equipment, so long as all Trustees participating in the meeting
can hear one another and all such Trustees shall be deemed to be present in
person at the meeting.
Section 5. REGULAR MEETINGS. Regular meetings of the Board of Trustees shall be
held without call at such time as shall from time to time be fixed by the Board
of Trustees. Such regular meetings may be held without notice.
Section 6. SPECIAL MEETINGS. Special meetings of the Board of Trustees for any
purpose or purposes may be called at any time by the Chairperson of the Board or
the CEO or any Vice President or the Secretary or any two (2) Trustees.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each Trustee or sent by first-class mail or
telegram, charges prepaid, addressed to each Trustee at that Trustee's address
as it is shown on the records of the Trust. In case the notice is mailed, it
shall be deposited in the United States mail at least seven (7) calendar days
before the time of the holding of the meeting. In case the notice is delivered
personally or by telephone or to the telegraph company or by express mail or
similar service, it shall be given at least forty-eight (48) hours before the
time of the holding of the meeting. Any oral notice given personally or by
telephone may be communicated either to the Trustee or to a person at the office
of the Trustee who the person giving the notice has reason to believe will
promptly communicate it to the Trustee. The notice need not specify the purpose
of the meeting or the place if the meeting is to be held at the principal
executive office of the Trust.
Section 7. QUORUM. A majority of the authorized number of Trustees shall
constitute a quorum for the transaction of business, except to adjourn as
provided in Section 10 of this Article III. Every act or decision done or made
by a majority of the Trustees present at a meeting duly held at which a quorum
is present shall be regarded as the act of the Board of Trustees, subject to the
provisions of the Agreement and Declaration of Trust of the Trust. A meeting at
which a quorum is initially present may continue to transact business
notwithstanding the withdrawal of Trustees if any action taken is approved by a
least a majority of the required quorum for that meeting.
Section 8. WAIVER OF NOTICE. Notice of any meeting need not be given to any
Trustee who either before or after the meeting signs a written waiver of notice,
a consent to holding the meeting, or an approval of the minutes. The waiver of
notice or consent need not specify the purpose of the meeting. All such waivers,
consents, and approvals shall be filed with the records of the Trust or made a
part of the minutes of the meeting. Notice of a meeting shall also be deemed
given to any Trustee who attends the meeting without protesting before or at its
commencement the lack of notice to that Trustee.
Section 9. ADJOURNMENT. A majority of the Trustees present, whether or not
constituting a quorum, may adjourn any meeting to another time and place.
Section 10. NOTICE OF ADJOURNMENT. Notice of the time and place of holding an
adjourned meeting need not be given unless the meeting is adjourned for more
than forty-eight (48) hours, in which case notice of the time and place shall be
given before the time of the adjourned meeting in the manner specified in
Section 7 of this Article III to the Trustees who were present at the time of
the present at the time of the adjournment.
Section 11. ACTION WITHOUT A MEETING. Except to the extent prohibited by the
Investment Company Act of 1940, any action required or permitted to be taken by
the Board of Trustees may be taken without a meeting if a majority of the
members of the Board of Trustees shall individually or collectively consent to
that action in writing or by any means of electronic communication. Any action
so approved by written consent or by a means of electronic communication shall
have the same force and effect as an action approved by a majority vote of the
Board of Trustees at a meeting. All written or electronically communicated
consent or consents shall be filed with the minutes of the proceedings of the
Board of Trustees.
Section 12. FEES AND COMPENSATION OF TRUSTEES. Trustees and members of
committees may receive such compensation, if any, for their services and such
reimbursement of expenses as may be fixed or determined by resolution of the
Board of Trustees. This Section 12 shall not be construed to preclude any
Trustee from serving the Trust in any other capacity as an officer, agent,
employee, or otherwise and receiving compensation for those services.
Section 13. DELEGATION OF POWER TO OTHER TRUSTEES. Any Trustee may, by power of
attorney, delegate its power for a period not exceeding six (6) months at any
one time to any other Trustee or Trustees; provided that in no case shall fewer
than two (2) Trustees personally exercise the powers granted to the Trustees
under the Agreement and Declaration of Trust of the Trust except as otherwise
expressly provided herein or by resolution of the Board of Trustees. Except
where applicable law may require a Trustee to be present in person, a Trustee
represented by another Trustee pursuant to such power of attorney shall be
deemed to be present for purposes of establishing a quorum and satisfying the
required majority vote.
ARTICLE IV
COMMITTEES
Section 1. COMMITTEES OF TRUSTEES. The Board of Trustees may by resolution
adopted by a majority of the authorized number of Trustees designate one or more
committees, each consisting of two (2) or more Trustees, to serve at the
pleasure of the Board. The Board may designate one or more Trustees as alternate
members of any committee who may replace any absent member at any meeting of the
committee. Any committee, to the extent provided in the resolution of the Board,
shall have the authority of the Board, except with respect to:
(a) the approval of any action which under applicable law
also requires shareholders' approval or approval of
the outstanding shares, or requires approval by a
majority of the entire Board or certain members of said Board;
(b) the filling of vacancies on the Board of Trustees or in any
committee;
(c) the fixing of compensation of the Trustees for serving on the
Board of Trustees or on any committee;
(d) the amendment or repeal of the Agreement and Declaration of Trust
of the Trust or of the By-Laws or the adoption of new By-Laws;
(e) the amendment or repeal of any resolution of the Board of Trustees
which by its express terms is not so amendable or repealable;
(f) a distribution to the shareholders of the Trust, except at a rate
or in a periodic amount or within a designated range determined by the
Board of Trustees; or
(g) the appointment of any other committees of the Board of Trustees
or the members of these committees.
Section 2. MEETINGS AND ACTION OF COMMITTEES. Meetings and action of committees
shall be governed by and held and taken in accordance with the provisions of
Article III of these By-Laws, with such changes in the context thereof as are
necessary to substitute the committee and its members for the Board of Trustees
and its members, except that the time of regular meetings of committees may be
determined either by resolution of the Board of Trustees or by resolution of the
committee. Special meetings of committees may also be called by resolution of
the Board of Trustees. Alternate members shall be given notice of meetings of
committees and shall have the right to attend all meetings of committees. The
Board of Trustees may adopt rules for the government of any committee not
inconsistent with the provisions of these By-Laws.
ARTICLE V
OFFICERS
Section 1. OFFICERS. The officers of the Trust shall be a CEO, a Secretary, and
a Chief Financial Officer (CFO). The Trust may also have, at the discretion of
the Board of Trustees, a Chairperson of the Board, one or more Vice Presidents,
one or more Assistant Secretaries, one or more Assistant Treasurers, and such
other officers as may be appointed in accordance with the provisions of Section
3 of this Article V. Any number of offices may be held by the same person.
Section 2. ELECTION OF OFFICERS. The officers of the Trust, except such officers
as may be appointed in accordance with the provisions of Section 3 or Section 5
of this Article V, shall be chosen by the Board of Trustees, and each shall
serve at the pleasure of the Board of Trustees, subject to the rights, if any,
of an officer under any contract of employment.
Section 3. SUBORDINATE OFFICERS. The Board of Trustees may appoint and may
empower the CEO to appoint such other officers as the business of the
Trust may require, each of whom shall hold office for such period, have such
authority and perform such duties as are provided in these By-Laws or as the
Board of Trustees may from time to time determine.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights, if any,
of an officer under any contract of employment, any officer may be removed,
either with or without cause, by the Board of Trustees at any regular or special
meeting of the Board of Trustees or by the principal executive officer or by
such other officer upon whom such power of removal may be conferred by the Board
of Trustees.
Any officer may resign at any time by giving written notice to the
Trust. Any resignation shall take effect at the date of the receipt of that
notice or at any later time specified in that notice; and unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the Trust under any contract to which the officer is a party.
Section 5. VACANCIES IN OFFICES. A vacancy in any office because of death,
resignation, removal, disqualification or other cause shall be filled in the
manner prescribed in these By-Laws for regular appointment to that office. The
CEO may make temporary appointments to a vacant office pending action by
the Board of Trustees.
Section 6. CHAIRPERSON OF THE BOARD. The Chairperson of the Board, if such an
Officer is elected, shall if present preside at meetings of the Board of
Trustees and shall, subject to the control of the Board of Trustees, have
general supervision, direction and control of the business and the Officers of
the Trust and exercise and perform such other powers and duties as may be from
time to time assigned to him or her by the Board of Trustees or prescribed by
the By-Laws.
Section 7. CEO. Subject to such supervisory powers, if any, as may be
given by the Board of Trustees to the Chairperson of the Board, if there be such
an officer, the CEO shall be the chief operating officer of the Trust and
shall, subject to the control of the Board of Trustees and the Chairman, have
general supervision, direction and control of the business and the officers of
the Trust. The CEO shall preside at all meetings of the shareholders and
in the absence of the Chairperson of the Board or if there be none, at all
meetings of the Board of Trustees. The CEO shall have the general powers and
duties of management usually vested in the office of CEO of a corporation and
shall have such other powers-and duties as may be prescribed by the Board of
Trustees or these By-Laws.
Section 8. VICE PRESIDENTS. In the absence or disability of the CEO, the
Vice Presidents, if any, in order of their rank as fixed by the Board of
Trustees or if not ranked, the Executive Vice President (who shall be considered
first ranked) and such other Vice Presidents as shall be designated by the Board
of Trustees, shall perform all the duties of the CEO and when so acting
shall have all powers of and be subject to all the restrictions upon the
CEO. The Vice Presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for them respectively by the
Board of Trustees or the CEO or the Chairperson of the Board or by these
By-Laws.
Section 9. SECRETARY. The Secretary shall keep or cause to be kept at the
principal executive office of the Trust, or such other place as the Board of
Trustees may direct, a book of minutes of all meetings and actions of Trustees,
committees of Trustees and shareholders with the time and place of holding,
whether regular or special, and if special, how authorized, the notice given,
the names of those present at Trustees' meetings or committee meetings, the
number of shares present or represented at shareholders, meetings, and the
proceedings.
The Secretary shall keep or cause to be kept at the principal executive
office of the Trust or at the office of the Trust's transfer agent or registrar,
a share register or a duplicate share register showing the names of all
shareholders and their addresses, the number and classes of shares held by each,
the number and date of certificates issued for the same and the number and date
of cancellation of every certificate surrendered for cancellation.
The Secretary shall give or cause to be given notice of all meetings of
the shareholders and of the Board of Trustees required to be given by these
By-Laws or by applicable law and shall have such other powers and perform such
other duties as may be prescribed by the Board of Trustees or by these By-Laws.
Section 10. CFO. The CFO shall be the chief financial officer and chief
accounting officer of the Trust and shall keep and maintain or cause to be
kept and maintained adequate and correct books and records of accounts of the
properties and business transactions of the Trust, including accounts of its
assets, liabilities, receipts, disbursements, gains, losses, capital, retained
earnings and shares. The books of account shall at all reasonable times be open
to inspection by any Trustee.
The CFO shall deposit all monies and other valuables in the name
and to the credit of the Trust with such depositories as may be designated by
the Board of Trustees. The CFO shall disburse the funds of the Trust as
may be ordered by the Board of Trustees, shall render to the CEO and
Trustees, whenever they request it, an account of all of the CFO's
transactions as chief financial officer and of the financial condition of the
Trust and shall have other powers and perform such other duties as may be
prescribed by the Board of Trustees or these By-Laws.
ARTICLE VI
INDEMNIFICATION OF TRUSTEES, OFFICERS,
EMPLOYEES AND OTHER AGENTS
Section 1. AGENTS, PROCEEDINGS AND EXPENSES. For the purpose of this Article,
"agent" means any person who is or was a Trustee, officer, employee or other
agent of this Trust or is or was serving at the request of this Trust as a
Trustee, director, officer, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise or was a
Trustee, director, officer, employee or agent of a foreign or domestic
corporation which was a predecessor of another enterprise at the request of such
predecessor entity; "proceeding" means any threatened, pending or completed
action or proceeding, whether civil, criminal, administrative or investigative;
and "expenses" includes without limitation attorney's fees and any expenses of
establishing a right to indemnification under this Article.
Section 2. ACTIONS OTHER THAN BY TRUST. This Trust shall indemnify any person
who was or is a party or is threatened to be made a party to any proceeding
(other than an action by or in the right of this Trust) by reason of the fact
that such person is or was an agent of this Trust, against expenses, judgments,
fines, settlements and-other amounts actually and reasonably incurred in
connection with such proceeding, if it is determined that such person acted in
good faith and reasonably believed:
(a) in the case of conduct in such person's official capacity as a
Trustee of the Trust, that the conduct was in the Trust's best
interests, and
(b) in all other cases, that the conduct was at least not opposed to
the Trust's best interests, and
(c) in the case of a criminal proceeding, that the person 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 the person, whether or not the benefit
resulted from an action taken in the person's
official capacity; or
(b) In respect of any claim, issue or matter as to which
that person shall have been adjudged to be liable in
the performance of that person's duty to 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.
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.
ARTICLE VII
RECORDS AND REPORTS
Section 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER. This Trust shall keep
at its principal executive office or at the office of its transfer agent or
registrar, if either be appointed and as determined by resolution of the Board
of Trustees, a record of its shareholders, giving the names and addresses of all
shareholders and the number and series of shares held by each shareholder.
Section 2. MAINTENANCE AND INSPECTION OF BY-LAWS. The Trust shall keep at its
principal executive office the original or a copy of these By-Laws as amended to
date, which shall be open to inspection by the shareholders at all reasonable
times during office hours.
Section 3. MAINTENANCE AND INSPECTION OF OTHER RECORDS. The accounting books and
records and minutes of proceedings of the shareholders and the Board of Trustees
and any committee or committees of the Board of Trustees shall be kept at such
place or places designated by the Board of Trustees or in the absence of such
designation, at the principal executive office of the Trust. The minutes shall
be kept in written form and the accounting books and records shall be kept
either in written form or in any other form capable of being converted into
written form. The minutes and accounting books and records shall be open to
inspection upon the written demand of any shareholder or holder of a voting
trust certificate at any reasonable time during usual business hours for a
purpose reasonably related to the holder's interests as a shareholder or as the
holder of a voting trust certificate. The inspection may be made in person or by
an agent or attorney and shall include the right to copy and make extracts.
Section 4. INSPECTION BY TRUSTEES. Every Trustee shall have the absolute right
at any reasonable time to inspect all books, records, and documents of every
kind and the physical properties of the Trust. This inspection by a Trustee may
be made in person or by an agent or attorney and the right of inspection
includes the right to copy and make extracts of documents.
Section 5. FINANCIAL STATEMENTS. A copy of any financial statements and any
income statement of the Trust for each quarterly period of each fiscal year and
accompanying balance sheet of the Trust as of the end of each such period that
has been prepared by the Trust shall be kept on file in the principal executive
office of the Trust for at least twelve (12) months and each such statement
shall be exhibited at all reasonable times to any shareholder demanding an
examination of any such statement or a copy shall be mailed to any such
shareholder.
The quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report, if any, of any independent
accountants engaged by the Trust or the certificate of an authorized officer of
the Trust that the financial statements were prepared without audit from the
books and records of the Trust.
ARTICLE VIII
GENERAL MATTERS
Section 1. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS. All checks, drafts, or
other orders for payment of money, notes or other evidences of indebtedness
issued in the name of or payable to the Trust shall be signed or endorsed in
such manner and by such person or persons as shall be designated from time to
time in accordance with the resolution of the Board of Trustees.
Section 2. CONTRACTS AND INSTRUMENTS - HOW EXECUTED. The Board of Trustees,
except as otherwise provided in these By-Laws, may authorize any officer or
officers, agent or agents, to enter into any contract or execute any instrument
in the name of and on behalf of the Trust and this authority may be general or
confined to specific instances; and unless so authorized or ratified by the
Board of Trustees or within the agency power of an officer, no officer, agent,
or employee shall have any power or authority to bind the Trust by any contract
or engagement or to pledge its credit or to render it liable for any purpose or
for any amount.
Section 3. CERTIFICATES FOR SHARES. A certificate or certificates for shares of
beneficial interest in any series of the Trust may be issued to a shareholder
upon the shareholder's request when such shares are fully paid. All certificates
shall be signed in the name of the Trust by the Chairperson of the Board or the
CEO or Vice President and by the CFO or an Assistant Treasurer or the Secretary
or any Assistant Secretary, certifying the number of shares and the series of
shares owned by the respective shareholder. Any or all of the signatures on the
certificate may be facsimile. In case any officer, transfer agent, or registrar
who has signed or whose facsimile signature has been placed on a certificate
shall have ceased to be that officer, transfer agent, or registrar before that
certificate is issued, it may be issued by the Trust with the same effect as if
that person were an officer, transfer agent or registrar at the date of issue.
Notwithstanding the foregoing, the Trust may adopt and use a system of issuance,
recordation and transfer of its shares by electronic or other means.
Section 4. LOST CERTIFICATES. Except as provided in this Section 4, no new
certificates for shares shall be issued to replace an old certificate unless the
latter is surrendered to the Trust and canceled at the same time. The Board of
Trustees may in case any share certificate or certificate for any other security
is lost, stolen, or destroyed, authorize the issuance of a replacement
certificate on such terms and conditions as the Board of Trustees may require,
including a provision for indemnification of the Trust secured by a bond or
other adequate security sufficient to protect the Trust against any claim that
may be made against it, including any expense or liability on account of the
alleged loss, theft, or destruction of the certificate or the issuance of the
replacement certificate.
Section 5. REPRESENTATION OF SHARES OF OTHER ENTITIES HELD BY TRUST. The
Chairperson of the Board, the CEO or any Vice President or any other person
authorized by resolution of the Board of Trustees or by any of the foregoing
designated officers, is authorized to vote or represent on behalf of the Trust
any and all shares of any corporation, partnership, trusts, or other entities,
foreign or domestic, standing in the name of the Trust. The authority granted
may be exercised in person or by a proxy duly executed by such designated
person.
Section 6. FISCAL YEAR. The fiscal year of the Trust shall be fixed and refixed
or changed from time to time by resolution of the Trustees. The fiscal year of
the Trust shall be the taxable year of each Series of the Trust.
ARTICLE IX
AMENDMENTS
Section 1. AMENDMENT BY SHAREHOLDERS. These By-Laws may be amended or repealed
by the affirmative vote or written consent of a majority of the outstanding
shares entitled to vote, except as otherwise provided by applicable law or by
the Agreement and Declaration of Trust of the trust or these By-Laws.
Section 2. AMENDMENT BY TRUSTEES. Subject to the right of shareholders as
provided in Section 1 of this Article to adopt, amend or repeal By-Laws, and
except as otherwise provided by applicable law or by the Agreement and
Declaration of Trust of the Trust, these By-Laws may be adopted, amended, or
repealed by the Board of Trustees.
Section 3. INCORPORATION BY REFERENCE INTO AGREEMENT AND DECLARATION OF TRUST OF
THE TRUST. These By-Laws and any amendments thereto shall be incorporated by
reference to the Agreement and Declaration of Trust of the Trust.
