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As filed with the Securities and Exchange Commission on April 18, 1997
File No. 2-34215
File No. 811-1911
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 61
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 42
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SCHRODER CAPITAL FUNDS (DELAWARE)
(FORMERLY SCHRODER CAPITAL FUNDS, INC.)
(Exact Name of Registrant as Specified in Charter)
Two Portland Square, Portland, Maine 04101
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code: 207-879-1900
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Catherine S. Wooledge, Esq.
Forum Financial Services, Inc.
Two Portland Square, Portland, Maine 04101
(Name and Address of Agent for Service)
Copies of Communications to:
Scott M. Shepard, Esq.
Jacobs Persinger & Parker
77 Water Street, New York, New York 10005
Alexandra Poe, Esq.
Schroder Capital Management International Inc.
787 seventh Avenue, 34th Floor
New York, New York 10019
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It is proposed that this filing will become effective:
X immediately upon filing pursuant to Rule 485, paragraph (b)
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on [date] pursuant to Rule 485, paragraph (b)
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60 days after filing pursuant to Rule 485, paragraph (a)(i)
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on _________ pursuant to Rule 485, paragraph (a)(i)
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75 days after filing pursuant to Rule 485, paragraph (a)(ii)
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on [ ] pursuant to Rule 485, paragraph (a)(ii)
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this post-effective amendment designates a new effective date for a
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previously filed post-effective amendment.
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The Registrant has registered an indefinite number of shares of beneficial
interest under the Securities Act of 1933 pursuant to Rule 24f-2 under the
Investment Company Act of 1940. Accordingly, no fee is payable herewith.
Registrant filed a Rule 24f-2 Notice for its various portfolios with a October
31 fiscal year end on December 27, 1996.
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PART A as filed in Post-Effective Amendment No. 58 to its Registration Statement
under the Securities Act of 1933 and Amendment No. 39 to the Registration
Statement under the Investment Company Act of 1940 is incorporated by reference
herein in its entirety by the Registrant.
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CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 404(A))
PART B
(Statement of Additional Information offering Investor Shares and
Advisor Shares of Schroder U.S. Equity Fund)
Form N-1A Location in Statement of
Item No. (Caption) Additional Information (Caption)
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10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and Other Information - Organization
History
13. Investment Objectives and Investment Policies; Investment
Policies Restrictions
14. Management of the Fund Management - Officers and Trustees
15. Control Persons and Principal Not Applicable
Holders of Securities
16. Investment Advisory and Management - Investment Adviser;
Other Services Officers and Trustees;
Administrative Services;
Distribution of Fund Shares;
Service Organizations; Portfolio
Accounting; Fees and Expenses;
Portfolio Transactions - Investment
Decisions; Brokerage and Research
Services; Other Information -
Custodian; Transfer Agent and
Dividend Disbursing Agent; Legal
Counsel; Independent Accountants
17. Brokerage Allocation and Portfolio Transactions
Other Practices
18. Capital Stock and Other Other Information - Capitalization
Securities and Voting
19. Purchase, Redemption and Determination of Net Asset Value
Pricing of Securities Being Per Share
Offered
20. Tax Status Taxation
21. Underwriters Management - Distribution of Fund
Shares; Fees and Expenses
22. Calculation of Performance Other Information - Performance
Data Information
23. Financial Statements Not Applicable
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SCHRODER U.S. EQUITY FUND
STATEMENT OF ADDITIONAL INFORMATION
MARCH 1, 1997, AS AMENDED APRIL 18, 1997
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[Graphic]
INVESTMENT ADVISER AND ADMINISTRATOR
Schroder Capital Management International Inc. ("SCMI")
DISTRIBUTOR
Schroder Fund Advisors, Inc. ("Schroder Advisors")
SUBADMINISTRATOR
Forum Administrative Services, Limited Liability Company ("Forum")
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Forum Financial Corp. ("FFC")
GENERAL INFORMATION: (207) 879-8903
ACCOUNT INFORMATION: (800) 344-8332
FAX: (207) 879-6206
Investor Shares of Schroder U.S. Equity Fund (the "Fund") are offered for sale
at net asset value with no sales charge as an investment vehicle for
individuals, institutions, corporations and fiduciaries. Advisor Shares of the
Fund also are offered for sale at net asset value to individual investors, in
most cases through Service Organizations (as defined herein). Advisor Shares
incur more expenses than Investor Shares.
This Statement of Additional Information ("SAI") is not a prospectus and is
authorized for distribution only when preceded or accompanied by the Fund's
current Prospectus dated March 1, 1997, as amended from time to time (the
"Prospectus"). This SAI contains additional and more detailed information than
that set forth in the Prospectus and should be read in conjunction with the
Prospectus and retained for future reference. All terms used in this SAI that
are defined in the Prospectus have the meaning assigned in the Prospectus. You
may obtain an additional copy of the Prospectus without charge by writing to the
Fund at Two Portland Square, Portland, Maine 04101 or calling the numbers listed
above.
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TABLE OF CONTENTS
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . 3
INVESTMENT POLICIES. . . . . . . . . . . . . . . . . . . . . . . 3
Convertible Securities . . . . . . . . . . . . . . . . . . . . . 3
Temporary Defensive and Operating Investments. . . . . . . . . . 4
U.S. Government Securities . . . . . . . . . . . . . . . . . . . 4
Illiquid and Restricted Securities . . . . . . . . . . . . . . . 5
Leverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Loans of Portfolio Securities. . . . . . . . . . . . . . . . . . 5
INVESTMENT RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . 6
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Officers and Trustees. . . . . . . . . . . . . . . . . . . . . . 7
Investment Adviser . . . . . . . . . . . . . . . . . . . . . . . 9
Subadministrator . . . . . . . . . . . . . . . . . . . . . . . . 10
Distribution of Fund Shares. . . . . . . . . . . . . . . . . . . 10
Service Organizations. . . . . . . . . . . . . . . . . . . . . . 11
Portfolio Accounting . . . . . . . . . . . . . . . . . . . . . . 12
Fees and Expenses. . . . . . . . . . . . . . . . . . . . . . . . 12
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . 13
Investment Decisions . . . . . . . . . . . . . . . . . . . . . . 13
Brokerage and Research Services. . . . . . . . . . . . . . . . . 13
ADDITIONAL PURCHASE AND
REDEMPTION INFORMATION . . . . . . . . . . . . . . . . . . . . 15
Determination of Net Asset Value per Share . . . . . . . . . . . 15
Redemption In-Kind . . . . . . . . . . . . . . . . . . . . . . . 15
TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . 17
Organization . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Capitalization and Voting. . . . . . . . . . . . . . . . . . . . 17
Principal Shareholders . . . . . . . . . . . . . . . . . . . . . 18
Performance Information. . . . . . . . . . . . . . . . . . . . . 18
Custodian. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Transfer Agent and Dividend Disbursing Agent . . . . . . . . . . 19
Legal Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . 19
Independent Accountant . . . . . . . . . . . . . . . . . . . . . 19
Registration Statement . . . . . . . . . . . . . . . . . . . . . 19
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . 20
APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
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INTRODUCTION
Schroder U.S. Equity Fund is a diversified, separately managed series of
Schroder Capital Funds (Delaware) (the "Trust"), an open-end management
investment company currently consisting of five separate series, each of which
has a different investment objective and policies.
The Fund's investment objective is to seek growth of capital. There is no
assurance that this objective will be achieved. The Fund invests at least 65%
of its total assets, and normally expect to invest substantially all its assets,
in common stocks, and securities convertible into common stock, of U.S. issuers.
The Fund also may invest in warrants or other rights to purchase common stock,
and to a lesser extent in non-convertible preferred stock and debt securities.
INVESTMENT POLICIES
The Fund's investment objective and policies authorize it to invest in certain
types of securities and to engage in certain investment techniques identified in
"Investment Objective" and "Investment Policies" in the Prospectus. The
following information supplements the discussion in those sections by providing
additional information or elaborating upon the discussion there.
The Fund is a "diversified" portfolio and, as such, at least 75% of its total
assets must be represented by cash and cash items, Government securities and
securities limited in respect of any one issuer to not more than 5% of the
Fund's total assets and to not more than 10% of the voting securities of such
issuer. The classification of the Fund as diversified under the Investment
Company Act of 1940 (the "1940 Act") cannot be changed without the majority
approval of the Fund's shareholders. As used in this SAI, "majority approval of
the Fund's shareholders" means approval of the lesser of: (i) 67% or more of
the Fund's shares present at a meeting if the holders of more than 50% of the
outstanding shares of the Fund are present or represented by proxy; or (ii) more
than 50% of the outstanding shares of the Fund.
The investment objective of the Fund set forth in the Prospectus is a
fundamental policy of the Fund, meaning that it cannot be changed without
majority approval of the Fund's shareholders. A non-fundamental policy could be
changed by the Trust's Board of Trustees (the "Trust Board") without such prior
shareholder approval. Unless otherwise indicated, all of the investment
policies of the Fund described below are also fundamental policies.
The Fund generally purchases securities that are believed to have potential for
capital appreciation. Securities, however, are disposed of in situations where
the Fund's investment adviser believes that such potential is no longer feasible
or the risk of decline in market price is too great. Pursuant to this policy,
the Fund has invested, and normally will invest, substantially all its assets in
common stocks and securities convertible into common stock. The Fund also may
invest in other securities with common stock purchase warrants attached or in
such warrants or other rights to purchase common stock. The Fund also may
invest to a limited degree in non-convertible preferred and debt securities.
Such investments might be made at such times as in the opinion of management
substantially greater yields could be earned on such securities of investment
grade than on U.S. Government securities and bank certificates of deposit. As a
non-fundamental policy, the Fund will not invest more than 15% of its total
assets in such non-convertible preferred and debt securities.
CONVERTIBLE SECURITIES
The Fund may invest in convertible preferred stocks and convertible debt
securities ("convertible securities"). A convertible security is a bond,
debenture, note, preferred stock or other security that may be converted into or
exchanged for a prescribed amount of common stock of the same or a different
issuer within a particular period of time at a specified price or formula.
Convertible securities rank senior to common stocks in a corporation's capital
structure and, therefore, carry less risk than the corporation's common stock.
The value of a convertible security is a function of its "investment value" (its
value as if it did not have a conversion privilege), and its "conversion value"
(the security's worth if it were to be exchanged for the underlying security, at
market value, pursuant to its conversion privilege).
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TEMPORARY DEFENSIVE AND OPERATING INVESTMENTS
For temporary defensive purposes, the Fund may invest all or any portion of its
assets in investment-grade corporate bonds or debentures (meaning for these
purposes bonds or debentures rated "A" or better by Standard & Poor's ("S&P") or
the equivalent thereof), preferred stock, U.S. Government securities or bank
certificates of deposit. (According to S&P, bonds rated "A" have a strong
capacity to pay principal and interest although they are somewhat more
susceptible to the adverse effect of changes in circumstances and economic
conditions.) The conditions under which the Fund may so invest for temporary
defensive purposes will be at times when in the opinion of the investment
adviser, the market appears relatively fully priced or uncertain economic
conditions indicate the advisability of assuming such a temporary defensive
position.
As an operating, non-fundamental policy, the Fund also may invest temporarily in
certain short-term fixed-income securities. Such securities may be used to
invest uncommitted cash balances or to maintain liquidity to meet shareholder
redemptions or other Fund obligations. Such securities might include U.S.
Government securities, commercial paper, bank certificates of deposit, time
deposits and bankers acceptances, and repurchase agreements collateralized by
such securities. The Fund will limit its total investment at any time in these
securities for this operating purpose to not more than 25% of its total assets.
Certain of the securities in which the Fund may invest for either of the
foregoing temporary purposes are more fully described as follows:
U.S. GOVERNMENT SECURITIES
The Fund may invest in securities issued or guaranteed by the U.S. Government
(or its agencies, instrumentalities or government-sponsored enterprises) that
have remaining maturities not exceeding one year. Agencies, instrumentalities
and government-sponsored enterprises that issue or guarantee debt securities
have been established or sponsored by the U.S. Government and include the Bank
for Cooperatives, the Export-Import Bank, the Federal Farm Credit System, the
Federal Home Loan Banks, the Federal Home Loan Mortgage Corporation, the Federal
Intermediate Credit Banks, the Federal Land Banks, the Federal National Mortgage
Association, the Government National Mortgage Association and the Student Loan
Marketing Association. Except for obligations issued by the U.S. Treasury and
the Government National Mortgage Association, none of the obligations of the
other agencies, instrumentalities or government-sponsored enterprises referred
to above are backed by the full faith and credit of the U.S. Government. There
can be no assurance that the U.S. Government will provide financial support to
these obligations where it is not obligated to do so.
BANK OBLIGATIONS. These securities consist of certificates of deposit and
bankers' acceptances issued by U.S. banks having total assets at the time of
purchase in excess of $1 billion. Such banks must be members of the Federal
Deposit Insurance Corporation. A certificate of deposit is an interest-bearing
negotiable certificate issued by a bank against funds deposited in the bank. A
bankers' acceptance is a short-term draft drawn on a commercial bank by a
borrower, usually in connection with an international commercial transaction.
Although the borrower is liable for payment of the draft, the bank
unconditionally guarantees to pay the draft at its face value on the maturity
date. The foregoing limitation as to banks in whose obligations the Fund may
invest is a non-fundamental policy of the Fund. The Fund also may invest in
time deposits issued by a bank in exchange for the deposit of funds. Similar to
a certificate of deposit, a time deposit earns a specified rate of interest over
a definite time period; however, it cannot be traded in the secondary market.
COMMERCIAL PAPER. These instruments are short-term unsecured promissory notes
issued in bearer form by bank holding companies, corporations and finance
companies. The commercial paper purchased by the Fund for temporary purposes
consists of direct obligations of domestic issuers that, at the time of
investment, are rated "P-1" by Moody's Investor Services ("Moody's") or "A-1" by
S&P, or securities, if not rated, are issued by companies having an outstanding
debt issue currently rated "Aaa" or "Aa" by Moody's or "AAA" or "AA" by S&P.
The rating "P-1" is the highest commercial paper rating assigned by Moody's, and
the rating "A-1" is the highest commercial paper rating assigned by S&P. Such
limitations with respect to commercial paper constitute a non-fundamental policy
of the Fund.
4
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REPURCHASE AGREEMENTS. The Fund may invest in securities subject to repurchase
agreements that mature or may be terminated by notice in seven days or less
(normally one day) with member banks of the Federal Reserve System or certain
dealers listed on the Federal Reserve Bank of New York's list of reporting
dealers or their affiliates. In a typical repurchase agreement, the seller of a
security commits itself at the time of the sale to repurchase such security from
the buyer at a mutually agreed-upon time and price. The repurchase price
exceeds the sale price, reflecting an agreed-upon interest rate effective for
the period the buyer owns the security subject to repurchase. The agreed-upon
rate is unrelated to the interest rate on the underlying security. The value of
the underlying collateral is monitored by the Fund's investment adviser at all
times during the term of the repurchase agreement to insure that the value of
the collateral always equals or exceeds the repurchase price. In the event of
default by the seller under the repurchase agreement, the Fund may have
difficulties in exercising its rights to the underlying collateral and may incur
costs and experience time delays in connection with the disposition of such
collateral. To evaluate potential risks, the investment adviser reviews the
creditworthiness of those banks and dealers with which the Fund enters into
repurchase agreements. The foregoing policy with respect to repurchase
agreements is a non-fundamental policy of the Fund.
ILLIQUID AND RESTRICTED SECURITIES
"Illiquid and Restricted Securities" under "Investment Policies" in the
Prospectus sets forth the circumstances in which the Fund may invest in
"restricted securities." In connection with the Fund's original purchase of
restricted securities, it may negotiate rights with the issuer to have such
securities registered for sale at a later time. Further, the registration
expenses of illiquid restricted securities may also be negotiated by the Fund
with the issuer at the time such securities are purchased by the Fund. When
registration is required, however, a considerable period may elapse between the
decision to sell the securities and the time the Fund would be permitted to sell
such securities. A similar delay might be experienced in attempting to sell
such securities pursuant to an exemption from registration. Thus, the Fund may
not be able to obtain as favorable a price as that prevailing at the time of the
decision to sell.
LEVERAGE
The Fund is authorized to borrow money from a bank on its promissory note or
other evidence of indebtedness. Monies borrowed would be invested and any
appreciation thereon, to the extent it exceeded interest paid on the loan, would
cause the net assets value of Fund shares to rise faster than it would
otherwise. If, however, the investment performance of additional monies failed
to cover the Fund's interest charges, the net asset value would decrease faster
than would otherwise be the case. This is the speculative feature known as
"leverage". Any such borrowing: (i) would not exceed one-third of the value of
the Fund's total assets after borrowing; (ii) if at any time it exceeded such
one-third limitation, the Fund would within three days thereafter (not including
Sundays or holidays) or such longer period as the Securities and Exchange
Commission may prescribe by rules and regulations, reduce its borrowings to the
limitation; and (iii) might or might not be secured and, if secured, all or any
part of the Fund's assets could be pledged. To comply with such limitations,
the Fund might be required to dispose of certain assets when it might be
disadvantageous to do so. Any such borrowings would be subject to Federal
Reserve Board regulations. The Fund has not borrowed money for investment or
any other purpose during the last ten years and, as a non-fundamental policy,
does not borrow for investment in the future.
LOANS OF PORTFOLIO SECURITIES
The Fund may lend its portfolio securities subject to the restrictions stated in
the Prospectus. Under applicable regulatory requirements (which are subject to
change), the loan collateral must: (i) on each business day, at least equal the
market value of the loaned securities; and (ii) consist of cash, bank letters of
credit, U.S. Government securities, other cash equivalents or liquid equity
securities in which the Fund is permitted to invest. To be acceptable as
collateral, letters of credit must obligate a bank to pay amounts demanded by
the Fund if the demand meets the terms of the letter. Such terms and the
issuing bank must be satisfactory to the Fund. When lending portfolio
securities, the Fund receives from the borrower an amount equal to the interest
paid or the dividends declared on the loaned securities during the term of the
loan plus the interest on the collateral securities (less any finders' or
administrative fees the Fund pays in arranging the loan). The Fund may share
the interest it receives on
5
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the collateral securities with the borrower if it realizes at least a minimum
amount of interest required by the lending guidelines established by the Trust
Board. The Fund will not lend its portfolio securities to any officer,
director, employee or affiliate of the Fund or SCMI. The terms of the Fund's
loans must meet certain tests under the Internal Revenue Code and permit the
Fund to reacquire loaned securities on five business days' notice or in time to
vote on any important matter.
Portfolio securities purchased with cash collateral are subject to possible
depreciation. Loans of securities by the Fund will be subject to termination at
the Fund's or the borrower's option. The Fund may pay reasonable negotiated
fees in connection with loaned securities, so long as such fees are set forth in
a written contract and approved by the Trust Board.
INVESTMENT RESTRICTIONS
The following investment restrictions are in addition to those described under
"The Fund -- Investment Restrictions" in the Prospectus. These restrictions,
which are fundamental policies (except as set forth), provide that the Fund:
1. Will not issue senior securities except that it may borrow money from
a bank on its promissory Fund's total assets after the borrowing; (ii)
if at any time it exceeded such one-third limitation, the Fund would
within three days thereafter (not including Sundays or holidays) or
such longer period as the Securities and Exchange Commission may
prescribe by rules and regulations, reduce its borrowings to the
limitation; and (iii) might or might not be secured and, if secured,
all or any part of the Fund's assets could be pledged. To comply with
such limitations, the Fund might be required to dispose of certain
assets when it might be disadvantageous to do so. Any such borrowings
would be subject to Federal Reserve Board regulations. (As a
non-fundamental policy, the Fund does not borrow for investment
purposes.)
2. Will not effect short sales, purchase any security on margin or write
or purchase put and call options.
3. Will not acquire more than 10% of the voting securities of any one
issuer.
4. Will not invest 25% or more of the value of its total assets in any
one industry.
5. Will not engage in the purchase and sale of illiquid interests in real
estate, including illiquid interests in real estate investment trusts.
6. Will not engage in the purchase and sale of commodities or commodity
contracts.
7. Will not invest in companies for the purpose of exercising control or
management.
8. Will not underwrite securities of other issuers, except that the Fund
may acquire portfolio securities, not in excess of 10% of the value of
its total assets, under circumstances where if sold it might be deemed
to be an underwriter for the purposes of the Securities Act of 1933.
9. Will not make loans to other persons except that it may purchase
evidences of indebtedness of a type distributed privately to financial
institutions but not in excess of 10% of the value of its total
assets.
10. Will not acquire securities described in 8 and 9 above which in the
aggregate exceed 10% of the value of the Fund's total assets.
11. Will not invest in other investment companies.
As non-fundamental policies, the Fund: (i) will not invest more than 10% of its
total assets in illiquid securities, including securities described in items 8
and 9 above and repurchase agreements maturing more than seven days; and (ii)
will not engage in writing, buying or selling of stock index futures, options on
stock index futures, financial futures contracts or options thereon.
6
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MANAGEMENT
OFFICERS AND TRUSTEES
The following information relates to the principal occupations during the past
five years of each Trustee and executive officer of the Trust and shows the
nature of any affiliation with SCMI.
PETER E. GUERNSEY, Oyster Bay, New York - Trustee of the Trust - Insurance
Consultant since August 1986; prior thereto Senior Vice President, Marsh &
McLennan, Inc., insurance brokers.
RALPH E. HANSMANN (Honorary), 40 Wall Street, New York, New York - Honorary
Trustee of the Trust - Private investor; Director, First Eagle Fund of America,
Inc.; Director, Verde Exploration, Ltd.; Trustee Emeritus, Institute for
Advanced Study; Trustee and Treasurer, New York Public Library; Life Trustee,
Hamilton College.
JOHN I. HOWELL, Greenwich, Connecticut - Trustee of the Trust - Private
Consultant since February 1987; Honorary Director, American International Group,
Inc.; Director, American International Life Assurance Company of New York.
CLARENCE F. MICHALIS, 44 East 64th Street, New York, New York - Trustee of the
Trust - Chairman of the Board of Directors, Josiah Macy, Jr. Foundation
(charitable foundation).
HERMANN C. SCHWAB, 787 Seventh Avenue, New York, New York - Chairman (Honorary)
and Trustee of the Trust - retired since March, 1988; prior thereto, consultant
to SCMI since February 1, 1984.
MARK J. SMITH (b), 33 Gutter Lane, London, England - President and Trustee of
the Trust - First Vice President of SCMI since April 1990; Director and Vice
President, Schroder Advisors.
ROBERT G. DAVY, 787 Seventh Avenue, New York, New York - a Vice President of the
Trust - Director of SCMI and Schroder Capital Management International Ltd.
since 1994; First Vice President of SCMI since July, 1992; prior thereto,
employed by various affiliates of Schroders plc in various positions in the
investment research and portfolio management areas since 1986.
MARGARET H. DOUGLAS-HAMILTON (b) (c), 787 Seventh Avenue, New York, New York -
Vice President of the Trust - Secretary of SCM since July 1995; Secretary of
Schroder Advisors since April 1990; First Vice President and General Counsel of
Schroders Incorporated(b) since May 1987; prior thereto, partner of Sullivan &
Worcester, a law firm.
RICHARD R. FOULKES, 787 Seventh Avenue, New York, New York - a Vice President of
the Trust; Deputy Chairman of SCMI since October 1995; Director and Executive
Vice President of Schroder Capital Management International Ltd. since 1989.
CATHERINE S. WOOLEDGE, Two Portland Square, Portland, Maine - Assistant
Treasurer and Assistant Secretary of the Trust - Counsel, Forum Financial
Services, Inc. since November 1996. Prior thereto, associate at Morrison &
Foerster, Washington, D.C. from October 1994 to November 1996, associate
corporate counsel at Franklin Resources, Inc. from September 1993 to September
1994, and prior thereto associate at Drinker Biddle & Reath, Philadelphia, PA.
BARBARA GOTTLIEB (c), 787 Seventh Avenue, New York, New York - Assistant
Secretary of the Trust - Assistant Vice President of SWIS since July 1995 prior
thereto held various positions with SWIS affiliates.
ROBERT JACKOWITZ (b) (c), 787 Seventh Avenue, New York, New York - Treasurer of
the Trust - Vice President of SCM since September 1995; Treasurer of SCM and
Schroder Advisors since July 1995; Vice President of SCMI since June 1995; and
Assistant Treasurer of Schroders Incorporated since January 1993.
7
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JOHN Y. KEFFER, Two Portland Square, Portland, Maine - Vice President of the
Trust. President of FFC, the Fund's transfer and dividend disbursing agent and
fund accountant and other affiliated entities including Forum Financial
Services, Inc. and Forum Advisors, Inc.
JANE P. LUCAS (c), 787 Seventh Avenue, New York, New York - Vice President of
the Trust - Director and Senior Vice President SCMI; Director of SCM since
September 1995; Assistant Director Schroder Investment Management Ltd. since
June 1991.
GERARDO MACHADO, 787 Seventh Avenue, New York, New York - Assistant Secretary of
the Trust - Associate, SCMI.
CATHERINE A. MAZZA, 787 Seventh Avenue, New York, New York - Vice President of
the Trust - President of Schroder Advisors since 1997; First Vice President of
SCMI and SCM since 1996; prior thereto, held various marketing positions at
Alliance Capital, an investment adviser, since July 1985.
THOMAS G. SHEEHAN, Two Portland Square, Portland, Maine - Assistant Treasurer
and Assistant Secretary of the Trust - Counsel, Forum Financial Services, Inc.
since 1993; prior thereto, Special Counsel, U.S. Securities and Exchange
Commission, Division of Investment Management, Washington, D.C.
FARIBA TALEBI, 787 Seventh Avenue, New York, New York - Vice President of the
Trust - First Vice President of SCMI since April 1993, employed in various
positions in the investment research and portfolio management areas since 1987.
JOHN A. TROIANO (b), 787 Seventh Avenue, New York, New York - Vice President of
the Trust - Managing Director and Senior Vice President of SCMI since October
1995; Director of Schroder Advisors since October 1992; Director of SCMI since
1991; prior thereto, employed by various affiliates of SCMI in various positions
in the investment research and portfolio management areas since 1981.
IRA L. UNSCHULD, 787 Seventh Avenue, New York, New York - Vice President of the
Trust - Vice President of SCMI since April, 1993 and an Associate from July,
1990 to April, 1993; prior to July, 1990, employed by various financial
institutions as a securities or financial analyst.
ALEXANDRA POE, 787 Seventh Avenue, New York, New York - Secretary and Vice
President of the Trust - Vice President of SCMI since August 1996; Fund Counsel
and Senior Vice President of Schroder Advisors since August 1996; prior thereto
an investment management attorney with Gordon Altman Butowsky Weitzen Shalov &
Wein since July 1994; prior thereto counsel and Vice President of Citibank, N.A.
since 1989.
MARY KUNKEMUELLER, 787 Seventh Avenue, New York, New York - Assistant Secretary
of the Trust.
(a) Interested Trustee of the Trust within the meaning of the 1940 Act.
(b) Schroder Advisors is a wholly owned subsidiary of SCMI, which is a wholly
owned subsidiary of Schroders Incorporated, which in turn is an indirect,
wholly owned U.S. subsidiary of Schroders plc.
(c) Schroder Capital Management, Inc. ("SCM") is a wholly owned subsidiary of
Schroder Wertheim Holdings Incorporated which is a wholly owned subsidiary
of Schroders, Incorporated, which in turn is an indirect wholly owned U.S.
subsidiary of Schroders plc.
Officers and Trustees who are interested persons of the Trust receive no salary,
fees or compensation from the Fund. Independent Trustees of the Trust receive
an annual fee of $1,000 and a fee of $250 for each meeting of the Trust Board
attended by them except in the case of Mr. Schwab, who receives an annual fee of
$1,500 and a fee of $500 for each meeting attended. The Fund has no bonus,
profit sharing, pension or retirement plans.
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The following table provides the fees paid to each Trustee of the Trust for the
fiscal year ended October 31, 1996.
Name of Trustee Aggregate Pension or Estimated Total
Compensation Retirement Annual Compensation
From Trust Benefits Benefits Upon From Trust And
Accrued Retirement Fund Complex
As Part Paid To
of Trust Trustees
Expenses
- --------------------------------------------------------------------------------
Mr. Guernsey $1,750 $0 $0 $1,750
Mr. Hansmann 1,375 0 0 1,375
Mr. Howell 1,750 0 0 1,750
Mr. Michalis 1,750 0 0 1,750
Mr. Schwab 3,000 0 0 3,000
Mr. Smith 0 0 0 0
As of February 15, 1997, the officers and Trustees of the Trust owned, in the
aggregate, less than 1% of the Fund's outstanding shares.
While the Trust is a Delaware business trust, certain of its Trustees or
officers are residents of the United Kingdom, and substantially all of their
assets may be located outside of the U.S. As a result it may be difficult for
U.S. investors to effect service upon such persons within the U.S. or to realize
U.S. civil judgments against them. Civil remedies and criminal penalties under
U.S. federal securities laws may be unenforceable in the United Kingdom.
Extradition treaties now in effect between the U.S. and the United Kingdom might
not subject such persons to effective enforcement of the criminal penalties of
such acts.
INVESTMENT ADVISER
SCMI, 787 Seventh Avenue, New York, New York 10019, serves as investment adviser
to the Fund under an Investment Advisory Agreement between the Trust and SCMI.
SCMI is a wholly owned U.S. subsidiary of Schroders Incorporated, the wholly
owned U.S. holding company subsidiary of Schroders plc. Schroders plc is the
holding company parent of a large world wide group of banks and financial
service companies (referred to as the "Schroder Group"), with associated
companies and branch and representative offices in eighteen countries. The
Schroder Group specializes in providing investment management services, with
funds under management currently in excess of $150 billion as of December 31,
1996.
Under the Investment Advisory Agreement, SCMI manages the investment and
reinvestment of the Fund's assets and continuously reviews, supervises and
administers its investments. In this regard, it is the responsibility of SCMI
to make decisions relating to the Fund's investments and to place purchase and
sale orders regarding such investments with brokers or dealers selected by it in
its discretion. SCMI also furnishes to the Trust Board, which has overall
responsibility for the business and affairs of the Trust, periodic reports on
the investment performance of the Fund.
Under the terms of the Investment Advisory Agreement, SCMI is required to manage
the Fund's investment portfolio in accordance with applicable laws and
regulations. In making its investment decisions, SCMI does not use material
inside information that may be in its possession or in the possession of its
affiliates.
The Investment Advisory Agreement continues in effect provided such continuance
is approved annually: (i) by the holders of a majority of the outstanding
voting securities of the Fund or by the Trust Board; and (ii) by a majority of
the Trustees who are not parties to the Agreement or "interested persons" (as
defined in the 1940 Act) of any such party. The Investment Advisory Agreement
may be terminated without penalty by vote of the Trustees or the shareholders of
the Fund on 60 days' written notice to the investment adviser, or by the
investment adviser on 60 days' written notice to the Trust, and it terminates
automatically if assigned. The Investment Advisory Agreement also provides
that, with respect to the Fund, neither SCMI nor its personnel shall be liable
for any error of judgment
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<PAGE>
or mistake of law or for any act or omission in the performance of duties to
the Fund, except for willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of reckless disregard of any
obligations and duties under the Investment Advisory Agreement.
Under the terms of the Investment Advisory Agreement, SCMI is entitled to
receive a fee for its services, computed daily and payable monthly, at the
annual rate of 0.75% of the first $100 million of the Fund's average daily net
assets and 0.50% of the Fund's average daily net assets in excess of $100
million. It is the Trust's understanding that although other mutual funds pay
investment advisory fees at annual rates of 0.75% or more of their average net
assets (or a portion thereof), the majority of other mutual funds, regardless of
size, pay advisory fees at rates lower than 0.75% of any portion of their
average net assets. For the fiscal years ended October 31, 1994, 1995 and 1996,
SCMI was paid advisory fees by the Fund an aggregate of $144,539, $140,988 and
$135,128 (after waivers of $4,355), respectively.
SUBADMINISTRATOR
On behalf of the Fund, the Trust has entered into a Subadministration Agreement
with Forum. Under the Subadministration Agreement, Forum provides certain
management and administrative services necessary for the Fund's operations,
other than the investment management and administrative services provided to the
Fund by SCMI pursuant to the Investment Advisory Agreement, including among
other things: (i) preparation of shareholder reports and communications; (ii)
regulatory compliance, such as reports to and filings with the Securities and
Exchange Commission and state securities commissions; and (iii) general
supervision of the operation of the Fund, including coordination of the services
performed by the Fund's investment adviser, transfer agent, custodian,
independent accountants, legal counsel and others. The Subadministration
Agreement is terminable with respect to the Fund without penalty, at any time,
by the Trust Board upon 60 days' written notice to Forum or by Forum upon 60
days' written notice to the Fund.
Under the Subadministration Agreement, Forum is entitled to receive a fee,
computed daily and payable monthly, at the annual rate of 0.10% of the Fund's
average daily net assets. The Trust, SCMI and Schroder Advisors formerly had
entered into a Sub-Administration Agreement with Forum Financial Services, Inc.
("FFSI") that had substantially similar terms and provisions in all material
respects to the current Subadministration Agreement except as to the
circumstances under which the fees were paid. Specifically, payment for FFSI's
services was made by SCMI and was not a separate expense of the Fund. For the
fiscal year ended October 31, 1996, Forum was paid $18,598 for subadministration
services.
DISTRIBUTION OF FUND SHARES
Schroder Advisors, 787 Seventh Avenue, New York, New York 10019, serves as
Distributor of the Fund shares pursuant a Distribution Agreement. Schroder
Advisors is a wholly owned subsidiary of Schroders Incorporated, the parent
company of SCMI, and is a registered broker-dealer organized to act as
administrator and/or distributor of mutual funds.
Under the Distribution Agreement, Schroder Advisors has agreed to use its best
efforts to secure purchases of Fund shares in jurisdictions in which such shares
may be legally offered for sale. Schroder Advisors is not obligated to sell any
specific amount of Fund shares. Further, Schroder Advisors has agreed in the
Distribution Agreement to serve without compensation and to pay from its own
resources all costs and expenses incident to the sale and distribution of Fund
shares including expenses of printing and distribution to prospective investors
of prospectuses and other sales materials and advertising expenses, and the
salaries and expenses of its employees or agents in connection with the
distribution of Fund shares.
Under a Distribution Plan (the "Plan") adopted by the Fund with respect to
Advisor Shares only, the Trust may pay directly or may reimburse the investment
adviser or a broker-dealer registered under the Securities Exchange Act of 1934
(the "1934 Act") (the investment adviser or such registered broker-dealer, if so
designated, being a "distributor" of the Fund's shares) monthly (subject to a
limit of 0.50% per annum of the Fund's average daily net
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assets) for: (i) advertising expenses including advertising by radio,
television, newspapers, magazines, brochures, sales literature or direct mail;
(ii) costs of printing prospectuses and other materials to be given or sent to
prospective investors; (iii) expenses of sales employees or agents of the
Distributor, including salary, commissions, travel, and related expenses in
connection with the distribution of Fund shares; and (iv) payments to
broker-dealers (other than the Distributor) or other organizations for services
rendered in the distribution of the Fund's shares, including payments in amounts
based on the average daily value of Fund shares owned by shareholders in respect
of which the broker-dealer or organization has a distributing relationship. .
The maximum annual amount currently payable under the Plan is 0.25%, but no
payments may be made under the Plan until the Trust Board so authorizes. Any
payment made pursuant to the Plan is contingent upon the Trust Board's approval.
The Fund is not liable for distribution expenditures of the Distributor in any
given year in excess of the maximum amount (0.50%) per annum of the Fund's
average daily net assets) payable under the Plan in that year. Salary expenses
of sales staff responsible for marketing shares of the Fund may be allocated
among various series of the Trust that have adopted a Plan similar to that of
the Fund on the basis of average net assets; travel expenses are allocated among
the series of the Trust. The Trust Board has concluded that there is a
reasonable likelihood that the Plan will benefit the Fund and its shareholders.
Without shareholder approval, the Plan may not be amended to increase materially
the costs that the Fund may bear. Other material amendments to the Plan must be
approved by the Trust Board, and by the Trustees who are not "interested
persons" (as defined in the 1940 Act) of the Trust and who have no direct or
indirect financial interest in the operation of the Plan or in any related
agreement, by vote cast in person at a meeting called for the purpose of
considering such amendments. The selection and nomination of the Trustees of
the Trust has been committed to the discretion of the Trustees who are not
"interested persons" of the Trust. The Plan has been approved, and is subject
to annual approval, by the Trust Board and by the Trustees who are not
"interested persons" and have no direct or indirect financial interest in the
operation of the Plan, by vote cast in person at a meeting called for the
purpose of voting on the Plan. The Plan is terminable with respect to the Fund
at any time by a vote of a majority of the 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 by vote of the holders of a majority of the shares
of the Fund.
SERVICE ORGANIZATIONS
The Fund may also contract with banks, trust companies, broker-dealers or other
financial organizations ("Service Organizations") to provide certain
administrative services to the Fund. The Fund may pay fees (which vary
depending upon the services provided) to Service Organizations in amounts up to
an annual rate of 0.25% of the daily net asset value of the Fund's shares owned
by shareholders with whom the Service Organization had a servicing relationship.
Services provided by Service Organizations may include: (i) providing personnel
and facilities necessary to establish and maintain certain shareholder accounts
and records; (ii) assisting in processing purchase and redemption transactions;
(iii) arranging for the wiring of funds; transmitting and receiving funds in
connection with client orders to purchase or redeem shares; (iv) verifying and
guaranteeing client signatures in connection with redemption orders, transfers
among and changes in client-designated accounts; (v) providing periodic
statements of a client's account balances and, to the extent practicable,
integrating such information with other client transactions; (vi) furnishing
periodic and annual statements and confirmations of all purchases and
redemptions of shares in a client's account; (vii) transmitting proxy
statements, annual reports, and updating prospectuses and other communications
from the Fund to clients; and (viii) such other services as the Fund or a client
reasonably may request, to the extent permitted by applicable statute, rule or
regulation. Neither SCMI nor Schroder Advisors will be a Service Organization
or receive fees for servicing. The Fund has no intention of making any such
payments to Service Organizations with respect to accounts of institutional
investors and, in any event, will make no such payments until the Trust Board
specifically so authorizes.
Some Service Organizations could impose additional or different conditions on
their clients, such as requiring them to invest more than the minimum
investments specified by the Fund or charging a direct fee for servicing. If
imposed, these fees would be in addition to any amounts that might be paid to
the Service Organization by the Fund. Each Service Organization would agree to
transmit to its clients a schedule of any such fees. Shareholders using Service
Organizations would be urged to consult them regarding any such fees or
conditions.
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<PAGE>
The Glass-Steagall Act and other applicable laws provide that banks may not
engage in the business of underwriting, selling or distributing securities.
There currently is no precedent prohibiting banks from performing administrative
and shareholder servicing functions as Service Organizations. However, judicial
or administrative decisions or interpretations of such laws, as well as changes
in either federal or state statutes or regulations relating to the permissible
activities of banks and their subsidiaries or affiliates, could prevent bank
service organization from continuing to perform all or a part of its servicing
activities. If a bank were prohibited from so acting, its shareholder clients
would be permitted to remain shareholders of the Fund and alternative means for
continuing the servicing of such shareholders would be sought. In that event,
changes in the operation of the Fund might occur and a shareholder serviced by
such a bank might no longer be able to avail itself of any services then being
provided by the bank. It is not expected that shareholders would suffer any
adverse financial consequences as a result of any of these occurrences.
PORTFOLIO ACCOUNTING
FFC, an affiliate of Forum, performs portfolio accounting services for the Fund
pursuant to a Fund Accounting Agreement with the Trust. The Accounting
Agreement is terminable with respect to the Fund without penalty, at any time by
the Trust Board upon 60 days' written notice to FFC or by FFC upon 60 days'
written notice to the Trust.
Under its agreement, FFC prepares and maintains books and records of the Fund on
behalf of the Trust that are required to be maintained under the 1940 Act,
calculates the net asset value per share of the Fund, calculates dividends and
capital-gain distributions, and prepares periodic reports to shareholders and
the Securities and Exchange Commission. For its services, FFC is entitled to
receive from the Trust a fee of $36,000 per year plus $12,000 per year for each
class of the Fund above one. FFC is entitled to an additional $24,000 per year
with respect to global and international funds. In addition, FFC is paid an
additional $12,000 per year with respect to tax-free money market funds and
funds with more than 25% of their total assets invested in asset-backed
securities, funds that have more than 100 security positions, or funds that have
a monthly portfolio turnover rate of 10% or greater.
FFC is required to use its best judgment and efforts in rendering fund
accounting services and is not liable to the Trust for any action or inaction in
the absence of bad faith, willful misconduct or gross negligence. FFC is not
responsible or liable for any failure or delay in performance of its fund
accounting obligations arising out of or caused, directly or indirectly, by
circumstances beyond its reasonable control. The Trust has agreed to indemnify
and hold harmless FFC and, its employees, agents, officers and directors against
and from any and all claims, demands, actions, suits, judgments, liabilities,
losses, damages, costs, charges, counsel fees and other expenses arising out of
or in any way related to FFC's actions taken or failures to act with respect to
a Fund or based, if applicable, upon information, instructions or requests with
respect to a Fund given or made to FFC by an officer of the Trust duly
authorized. This indemnification does not apply to FFC's actions taken or
failures to act in cases of FFC's own bad faith, willful misconduct or gross
negligence.
For the fiscal years ended October 31, 1994, 1995 and 1996, the Fund paid fund
accounting fees of $31,596, $38,000 and $36,000, respectively.
FEES AND EXPENSES
The Fund bears all costs of its operations other than expenses specifically
assumed by Schroder Advisors or SCMI. The costs borne by the Fund include legal
and accounting expenses; Trustees' fees and expenses; insurance premiums,
custodian and transfer agent fees and expenses; brokerage fees and expenses;
expenses of registering and qualifying the Fund's shares for sale with the SEC
and with various state securities commissions; expenses of obtaining quotations
on portfolio securities and pricing of the Fund's shares; a portion of the
expenses of maintaining the Fund's legal existence and of shareholders'
meetings; and expenses of preparation and distribution to existing shareholders
of reports, proxies and prospectuses. Trust expenses directly attributed to the
Fund are charged to the Fund; other expenses are allocated proportionately among
all the series of the Trust in relation to the net assets of each series.
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<PAGE>
PORTFOLIO TRANSACTIONS
INVESTMENT DECISIONS
Investment decisions for the Fund and for the other investment advisory clients
of SCMI are made with a view to achieving their respective investment
objectives. Investment decisions are the product of many factors in addition to
basic suitability for the particular client involved, and a particular security
may be bought or sold for other clients at the same time. Likewise, a
particular security may be bought for one or more clients when one or more other
clients are selling the security. In some instances, one client may sell a
particular security to another client. It also sometimes happens that two or
more clients simultaneously purchase or sell the same security, in which event
each day's transactions in such security are, insofar as is possible, averaged
as to price and allocated between such clients in a manner which in SCMI's
opinion is equitable to each and in accordance with the amount being purchased
or sold by each. There may be circumstances when purchases or sales of
portfolio securities for one or more clients will have an adverse effect on
other clients.
BROKERAGE AND RESEARCH SERVICES
Decisions with respect to allocation of portfolio brokerage are made by the
Trust's President, a Vice President or Treasurer.
The Investment Advisory Agreement authorizes and directs SCMI to place orders
for the purchase and sale of the Fund's investments with brokers and dealers it
selects and to seek "best execution" of such portfolio transactions. SCMI
places all such orders for the purchase and sale of portfolio securities and
buys and sells securities through a substantial number of brokers and dealers.
In so doing, SCMI uses its best efforts to obtain for the Fund the most
favorable price and execution available. The Fund may, however, pay higher than
the lowest available commission rates when SCMI believes it is reasonable to do
so in light of the value of the brokerage and research services provided by the
broker effecting the transaction. In seeking the most favorable price and
execution, SCMI considers all factors it may deem relevant (including price,
transaction size, the nature of the market for the security, the commission
amount, the timing of the transaction (taking into account market prices and
trends), the reputation, experience and financial stability of the
broker-dealers involved, and the quality of service rendered by the
broker-dealers in other transactions.
It is the Fund's policy, consistent with the best execution, to secure the
highest possible price on sales and the lowest possible price on purchases of
securities. Transactions on U.S. stock exchanges and other agency transactions
involve the payment of negotiated brokerage commissions. Over-the-counter
purchases and sales are transacted directly with principal market makers except
in those circumstances where in the opinion of the Trust's officers better
prices and executions are available elsewhere. Portfolio transactions are
frequently placed with broker-dealers who provide SCMI with research and
statistical assistance. The assistance may include advice as to the
advisability of investing in securities, security analysis and reports, economic
studies, industry studies, receipt of quotations for portfolio valuations and
similar services.
It has for many years been a common practice in the investment advisory business
for advisers of investment companies and other institutional investors to
receive research services from broker-dealers that execute portfolio
transactions for the clients of such advisers. Consistent with this practice,
SCMI may receive research services from broker-dealers with which SCMI places
the Fund's portfolio transactions. These services, which in some cases may also
be purchased for each, include such items as general economic and security
market review, industry and company reviews, evaluations of securities and
recommendations as to the purchase and sale of securities. Some of these
services are of value to SCMI in advising various of its clients (including the
Fund), although not all of these services are necessarily useful and of value in
managing the Fund. The investment advisory fee paid by the Fund is not reduced
because SCMI and its affiliates receive such services.
As permitted by Section 28(e) of the 1934 Act, SCMI may cause the Fund to pay a
broker-dealer that provides SCMI with "brokerage and research services" (as
defined in the Act) an amount of disclosed commission for
13
<PAGE>
effecting a securities transaction for the Fund in excess of the commission
which another broker-dealer would have charged for effecting that transaction.
In addition, SCMI may allocate brokerage transactions to broker-dealers who have
entered into arrangements under which the broker-dealer allocates a portion of
the commission paid by the Fund toward payment of Fund expenses, such as
custodian fees.
Consistent with the Conduct Rules of the National Association of Securities
Dealers, Inc. and subject to seeking the most favorable price and execution
available and such other policies as the Trustees may determine, SCMI may
consider sales of shares of the Fund as a factor in the selection of
broker-dealers to execute portfolio transactions for the Fund.
Subject to the general policies of the Fund regarding allocation of portfolio
brokerage as set forth above, the Trust Board has authorized the Fund to employ
Schroder Wertheim & Company, Incorporated ("Schroder Wertheim"), an affiliate of
SCMI, to effect securities transactions of the Fund, on the New York Stock
Exchange only, provided certain other conditions are satisfied as described
below.
Payment of brokerage commissions to Schroder Wertheim for effecting such
transactions is subject to Section 17(e) of the 1940 Act, which requires, among
other things, that commissions for transactions on a national securities
exchange paid by a registered investment company to a broker which is an
affiliated person of such investment company or an affiliated person of another
person so affiliated not exceed the usual and customary broker's commissions for
such transactions. It is the Fund's policy that commissions paid to Schroder
Wertheim will in the judgment of the officers of the Trust responsible for
making portfolio decisions and selecting brokers, be: (i) at least as favorable
as commissions contemporaneously charged by Schroder Wertheim on comparable
transactions for its most favored unaffiliated customers; and (ii) at least as
favorable as those which would be charged on comparable transactions by other
qualified brokers having comparable execution capability. The Trust Board,
including a majority of the non-interested Trustees, has adopted procedures
pursuant to Rule 17e-1 promulgated by the Securities and Exchange Commission
under Section 17(e) to ensure that commissions paid to Schroder Wertheim by the
Fund satisfy the foregoing standards. The Trust Board will review all
transactions at least quarterly for compliance with these procedures.
The Fund has no understanding or arrangement to direct any specific portion of
its brokerage to Schroder Wertheim and will not direct brokerage to Schroder
Wertheim in recognition of research services.
It is further a policy of the Fund that all such transactions effected for the
Fund by Schroder Wertheim on the New York Stock Exchange be in accordance be in
accordance with Rule 11a2-2(T) promulgated under the 1934 Act, which requires in
substance that a member of such exchange not associated with Schroder Wertheim
actually execute the transaction on the exchange floor or through the exchange
facilities. Thus, while Schroder Wertheim will bear responsibility for
determining important elements of execution such as timing and order size,
another firm will actually execute the transaction.
Schroder Wertheim pays a portion of the brokerage commissions it receives from
the Fund to the brokers executing the Fund transactions on the New York Stock
Exchange. In accordance with Rule 11a2-2(T), the Trust Board has entered into
an agreement with Schroder Wertheim permitting it to retain a portion of the
brokerage commissions paid to it by the Fund. This agreement has been approved
by the Trust Board, including a majority of the non-interested Trustees.
During the fiscal years ended October 31, 1994, 1995 and 1996 the total
brokerage commissions paid by the Fund on portfolio transactions were $23,579,
$31,381 and $31,868 respectively. These amounts do not include any spreads or
concessions on principal transactions on a net trade basis. Substantially all
of such commissions were paid to firms which provided SCMI with research and
statistical assistance. No commissions were paid to Schroder Wertheim during
any of the fiscal years ended October 31, 1994, 1995 and 1996.
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ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
DETERMINATION OF NET ASSET VALUE PER SHARE
The net asset value per share of the Fund is calculated as of 4:00 p.m. (Eastern
time), Monday through Friday, on each day that the New York Stock Exchange is
open for trading (which excludes the following national business holidays: New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day).
Portfolio securities listed on the New York Stock Exchange are valued on the
basis of the last sale on that date on the basis of information obtained from
authoritative sources at the end of the business day. Lacking any sales, they
are valued at the average of the closing bid and asked prices. Securities not
listed on such exchange are valued by the use of quotations on any other
national stock exchange on which the securities are listed, or if unlisted,
published quotations in common use and/or quotations from a market maker or
makers in the security, in each case on the basis of information obtained from
authoritative sources, or if securities for which no quotations are available,
including restricted securities, by such other method as the Trust Board, in
good faith, shall deem to reflect their fair value. If securities are listed on
more than one national stock exchange (other than the New York Stock Exchange),
they are valued on the basis of quotations on the national stock exchange in
which the primary market for the securities exists.
REDEMPTION IN-KIND
In the event that payment for redeemed shares is made wholly or partly in
portfolio securities, shareholders may incur brokerage costs in converting the
securities to cash. An in-kind distribution of portfolio securities is
generally less liquid than cash. The shareholder may have difficulty finding a
buyer for portfolio securities received in payment for redeemed shares.
Portfolio securities may decline in value between the time of receipt by the
shareholder and conversion to cash. A redemption in-kind of portfolio
securities could result in a less diversified portfolio of investments for the
Fund and could affect adversely the liquidity of the investment portfolio of the
Fund.
TAXATION
Under the Internal Revenue Code of 1986, as amended (the "Code"), the Fund and
each other series established from time to time by the Trust Board is treated as
a separate taxpayer for federal income tax purposes with the result that: (i)
each such series must meet separately the income and distribution requirements
for qualification as a regulated investment company; and (ii) the amounts of
investment income and capital gain earned will be determined on a
series-by-series (rather than on a Trust-wide) basis.
The Fund qualified for its last fiscal year as a regulated investment company
under Subchapter M of the Code and intends to so qualify each year so long as
such qualification is in the best interests of its shareholders. To do so, the
Fund intends to distribute to shareholders at least 90% of its "investment
company taxable income" as defined in the Code (which includes, among other
items, dividends, interest and the excess of any net short-term capital gain
over net long-term capital loss), and to meet certain diversification of assets,
source of income, and other requirements of the Code. By so doing, the Fund will
not be subject to federal income tax on its investment company taxable income
and "net capital gain" (the excess of net long-term capital gain over net
short-term capital loss) distributed to shareholders. If the Fund does not meet
all of these Code requirements, it will be taxed as an ordinary corporation, and
its distributions will be taxable to shareholders as ordinary income.
Amounts not distributed on a timely basis in accordance with a calendar year
distribution requirement are subject to a 4% nondeductible excise tax. To
prevent imposition of the excise tax, the Fund must distribute for each calendar
year an amount equal to the sum of: (i) at least 98% of its ordinary income
(excluding any capital gain or loss) for the calendar year; (ii) at least 98% of
the excess of its capital gain over capital loss realized during the one-year
period ending October 31 of such year; and (iii) all such ordinary income and
capital gain for previous years that were not distributed during such years. A
distribution will be treated as paid during the calendar year if it is
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declared by the Fund in October, November or December of the year with a record
date in such month and paid by the Fund during January of the following year.
Such distributions will be taxable to shareholders in the calendar year in which
the distributions are declared, rather than the calendar year in which the
distributions are received.
Distributions of investment company taxable income (including net realized
short-term capital gain) are taxable to shareholders as ordinary income.
Generally, dividends of investment income (but not capital gain) from the Fund
will qualify for the federal 70% dividends-received deduction for corporate
shareholders to the extent such dividends do not exceed the aggregate amount of
dividends received by the Fund from domestic corporations, provided the Fund
shares are held by said shareholders for more than 45 days. If securities held
by the Fund are considered to be "debt-financed" (generally, acquired with
borrowed funds), are held by the Fund for less than 46 days (91 days in the case
of certain preferred stock), or are subject to certain forms of hedges or short
sales, the portion of the dividends paid by the Fund that corresponds to the
dividends paid with respect to such securities will not be eligible for the
corporate dividends-received deduction.
Distributions of net long-term capital gain are taxable to shareholders as
long-term capital gain, regardless of the length of time Fund shares have been
held by a shareholder and are not eligible for the dividends-received deduction.
A loss realized by a shareholder on the sale of shares of the Fund with respect
to which capital-gain distributions have been paid will, to the extent of such
capital-gain distributions, be treated as long-term capital loss (even though
such shares may have been held by the shareholder for one year or less).
Further, a loss realized on a disposition will be disallowed to the extent the
shares disposed of are replaced (whether by reinvestment of distributions or
otherwise) within a period of 61 days beginning 30 days before and ending 30
days after the shares are disposed of. In such a case, the basis of the shares
acquired will be adjusted to reflect the disallowed loss.
All distributions are taxable to the shareholder whether reinvested in
additional shares or received in cash. Shareholders receiving distributions in
the form of additional shares will have a cost basis for federal income tax
purposes in each share received equal to the net asset value of a share of the
Fund on the reinvestment date. Shareholders will be notified annually as to the
federal tax status of distributions.
Distributions by the Fund reduce the net asset value of the Fund's shares. If a
distribution reduces the net asset value below a shareholder's cost basis, such
distribution nevertheless would be taxable to the shareholder as ordinary income
or capital gain as described above, even though, from an investment standpoint,
it may constitute a partial return of capital. In particular, investors should
be careful to consider the tax implications of buying shares just prior to a
distribution. The price of shares purchased at that time includes the amount of
the forthcoming distribution, which will be returned to the investor in the form
of a taxable distribution.
Upon redemption or sale of his shares, a shareholder will realize a taxable gain
or loss, which will be treated as capital gain or loss if the shares are capital
assets in the shareholder's hands. Such gain or loss generally will be
long-term or short-term depending upon the shareholder's holding period for the
shares.
Ordinary income dividends paid by the Fund to shareholders who are nonresident
aliens is subject to a 30% U.S. withholding tax under existing provisions of the
Code applicable to foreign individuals and entities unless a reduced rate of
withholding or a withholding exemption is provided under applicable treaty law.
Nonresident shareholders are urged to consult their own tax advisors concerning
the applicability of the U.S. withholding tax.
The Trust is required to report to the Internal Revenue Service (the "IRS") all
distributions as well as gross proceeds from the redemption of the Fund shares,
except in the case of certain exempt shareholders. All such distributions and
proceeds generally will be subject to withholding of federal income tax at a
rate of 31% ("backup withholding") in the case of non-exempt shareholders if:
(i) the shareholder fails to furnish the Trust with and to certify the
shareholder's correct taxpayer identification number or social security number;
(ii) the IRS notifies the Trust that the shareholder has failed to report
properly certain interest and dividend income to the IRS and to respond to
notices to that effect; or (iii) when required to do so, the shareholder fails
to certify that it is not subject to backup withholding. If the withholding
provisions are applicable, any such distributions or proceeds, whether
reinvested in additional shares or taken in cash, will be reduced by the amount
required to be withheld. Any amounts withheld
16
<PAGE>
may be credited against the shareholder's federal income tax liability.
Investors may wish to consult their tax advisors about the applicability of the
backup withholding provisions.
The foregoing discussion relates only to federal income tax law as applicable to
U.S. persons (I.E., U.S. citizens and residents and U.S. domestic corporations,
partnerships, trusts and estates). Distributions by the Fund also may be
subject to state and local taxes, and their treatment under state and local
income tax laws may differ from the federal income tax treatment. Shareholders
should consult their tax advisors with respect to particular questions of
federal, state and local taxation. Shareholders who are not U.S. persons should
consult their tax advisors regarding U.S. and foreign tax consequences of
ownership of shares of the Fund including the likelihood that distributions to
them would be subject to withholding of U.S. tax at a rate of 30% (or a lower
rate under a tax treaty).
OTHER INFORMATION
ORGANIZATION
The Trust was originally organized as a Maryland corporation on July 30, 1969.
On February 29, 1988, the Trust was recapitalized to enable the Trust Board to
establish a series of separately managed investment portfolios, each having a
different investment objective and policies. At the time of the
recapitalization, the Trust's name was changed from "The Cheapside Dollar Fund
Limited" to "Schroder Capital Funds, Inc." On January 9, 1996, the Trust was
reorganized as a Delaware business trust. At that time, the Trust's name was
changed to its present name. The Trust is registered as an open-end management
investment company under the 1940 Act.
Delaware law provides that shareholders shall be entitled to the same
limitations of personal liability extended to stockholders of private
corporations for profit. The securities regulators of some states, however,
have indicated that they and the courts in their state may decline to apply
Delaware law on this point. To guard against this risk, the Trust Instrument
contains an express disclaimer of shareholder liability for the debts,
liabilities, obligations, and expenses of the Trust. The Trust Instrument
provides for indemnification out of each series' property of any shareholder or
former shareholder held personally liable for the obligations of the series.
The Trust Instrument also provides that each series shall, upon request, assume
the defense of any claim made against any shareholder for any act or obligation
of the series and satisfy any judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which Delaware law does not apply (or no contractual limitation
of liability was in effect) and the series is unable to meet its obligations.
Forum believes that, in view of the above, there is no risk of personal
liability to shareholders.
CAPITALIZATION AND VOTING
The Trust has authorized an unlimited number of authorized shares of beneficial
interest. The Trust Board may, without shareholder approval, divide the
authorized shares into an unlimited number of separate series (such as the Fund)
and may divide series into classes of shares, and the costs of doing so is borne
by the Trust. The Trust currently consists of five separate series, each of
which has separate investment objectives and policies, and two classes, Investor
Shares and Advisor Shares, in each series.
The shares of the Fund are fully paid and nonassessable and have no preferences
as to conversion, exchange, dividends, retirement or other features. Shares
have no preemptive rights and have non-cumulative voting rights, which means
that the holders of more than 50% of the shares voting for the election of
Trustees can elect 100% of the Trustees if they choose to do so. Each
shareholder of record is entitled to one vote for each full share held (and a
fractional vote for each fractional share held). Shares of each series vote
separately to approve investment advisory agreements or changes in investment
objectives and other fundamental policies affecting the series to which they
pertain, but all series vote together in the election of Trustees and
ratification of the selection of independent accountants. Shareholders of any
particular series or class would not be entitled to vote on any matters as to
which such series or class were not affected.
The Trust will not hold annual meetings of shareholders. The matters considered
at an annual meeting typically include the reelection of Trustees, approval of
an investment advisory agreement, and the ratification of the
17
<PAGE>
selection of independent accountants. These matters will not be submitted to
shareholders unless a meeting of shareholders is held for some other reason,
such as those indicated below. Each of the Trustees will serve until death,
resignation or removal. Vacancies will be filled by the remaining Trustees,
subject to the provisions of the 1940 Act requiring a meeting of shareholders
for election of Trustees to fill vacancies when less than a majority of Trustees
then in office have been elected by shareholders. Similarly, the selection of
independent accountants and renewal of investment advisory agreements for future
years will be performed annually by the Trust Board. Future shareholder
meetings will be held to elect Trustees if required by the 1940 Act, to obtain
shareholder approval of changes in fundamental investment policies, to obtain
shareholder approval of material changes in investment advisory agreements, to
select new independent accountants if the employment of the Trust's independent
accountants has been terminated, and to seek any other shareholder approval
required under the 1940 Act. The Trust Board has the power to call a meeting of
shareholders at any time when it believes it is necessary or appropriate. In
addition, Trust Instrument provides that a special meeting of shareholders may
be called at any time for any purpose by the holders of at least 10% of the
outstanding shares entitled to be voted at such meeting.
In addition to the foregoing rights, the Trust Instrument provides that holders
of at least two-thirds of the outstanding shares of the Trust may remove any
person serving as a Trustee either by declaration in writing or at a meeting
called for such purpose. Further, the Trust Board is required to call a
shareholders meeting for the purpose of considering the removal of one or more
Trustees if requested in writing to do so by the holders of not less than 10% of
the outstanding shares of the Trust. In addition, the Trust Board is required
to provide certain assistance if requested in writing to do so by ten or more
shareholders of record (who have been such for at least six months), holding in
the aggregate the lesser of: (i) shares of the Trust having a total net asset
value of at least $25,000; or (ii) 1% of the outstanding shares of the Trust,
for the purpose of enabling such holders to communicate with other shareholders
of the Trust with a view to obtaining the requisite signatures to request a
special meeting to consider such removal.
PRINCIPAL SHAREHOLDERS
As of March 31, 1997, the following persons owned of record or beneficially
5% or more of the Fund's shares:
SHAREHOLDER SHARE BALANCE PERCENT OF FUND
Gracechurch Co. 191,211.439 11.34%
75 Wall Street
New York, NY 10265
Schroder Nominees Limited 111,490.262 6.61%
120 Cheapside
London EC2V 6DS England
Wendel & Co. 110,983.024 6.58%
c/o The Bank of New York
Wall Street Station
New York, NY 10268
Fox & Co. 100,988.750 5.99%
P.O. Box 976
New York, NY 10268
PERFORMANCE INFORMATION
Quotations of average annual total return and cumulative total return data of a
class of the Fund will be in advertisements, sales literature, or reports to
shareholders or prospective investors.
18
<PAGE>
Average annual total returns are expressed in terms of the average annual
compounded rate of return of a hypothetical investment in a class of shares of
the Fund, and cumulative returns reflect the aggregate amount, over periods of 1
month, 3 months, 1, 3, 5, and 10 years and since inception, each calculated as
shown below.
1. AVERAGE ANNUAL TOTAL RETURN (PURSUANT TO SEC STANDARDIZED FORMULA)
1 - n
SEC Formula: T = {{[((ERV/P) - 1)(1 - S) - S](1 - R) - R} + 1}
where: T = average annual total return
P = initial payment of $1,000
n = number of years
ERV = ending redeemable value of the initial payment at
the end of the period
S = Maximum initial sales charge
R = Maximum redemption charge
Average Annual Total Return (assuming as deduction of sales/purchase/
redemption charges)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000
N(YR) 10/12 1/12 1/4 1/2 1 3 5 10 26
ERV 1127.00 1001.00 1130.30 1056.30 1194.50 1125.00 1937.40 2268.10 13202.9
S 0 0 0 0 0 0 0 0 0
R 0 0 0 0 0 0 0 0 0
T(%) 15.24 1.26 46.74 11.54 19.45 11.25 14.13 12.56 10.74
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
2. CUMULATIVE TOTAL RETURN (PURSUANT TO NON-STANDARDIZED FORMULA)
n
Formula: C = {{[(T + 1) - 1 - R]/(1 - R)} + S}/(1 - S)
where: C = cumulative total return of the investment over the
specified period
T = average annual total return (see above)
P = initial payment of $1,000
n = number of years
ERV = ending redeemable value of the initial payment at
the end of the period
CUMULATIVE TOTAL RETURN (assuming as deduction of sales/purchase/redemption
charges)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000
N(YR) 5/6 1/12 1/4 1/2 1 3 5 10 26
ERV 1127.00 1001.00 1100.30 1056.30 1194.50 1372.20 1937.40 2268.10 13202.9
S 0 0 0 0 0 0 0 0 0
R 0 0 0 0 0 0 0 0 0
C(%) 12.70 0.10 10.03 5.63 19.45 37.72 93.74 226.81 1320.29
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
Quotations of total return reflect only the performance of a hypothetical
investment in a class of shares of the Fund during the particular time period
shown and under the assumptions described. Total returns will vary based on
changes in market conditions and the level of the Fund's, and any
class-specific, expenses. Accordingly, no reported performance figure should be
considered an indication of future performance.
In connection with communicating performance data to current or prospective
investors, these figures may be compared with the performance of other mutual
funds tracked by mutual fund rating services or to various unmanaged indices
that may assume reinvestment of dividends but generally do not have
administrative and management costs.
CUSTODIAN
All securities and cash of the Fund are held by The Chase Manhattan Bank, N.A.,
Chase MetroTech Center, Brooklyn, New York 11245.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
FFC, Portland, Maine, acts as the Fund's transfer agent and dividend disbursing
agent.
LEGAL COUNSEL
Jacobs Persinger & Parker, 77 Water Street, New York, New York 10005, counsel
to the Fund, passes upon certain legal matters in connection with the shares
offered by the Fund.
INDEPENDENT ACCOUNTANT
Coopers & Lybrand L.L.P. serves as independent accountants for the Fund. Coopers
& Lybrand L.L.P. provides audit services and consultation in connection with
review of U.S. Securities and Exchange Commission filings. Their address is One
Post Office Square, Boston, Massachusetts 02109.
REGISTRATION STATEMENT
This SAI and the Prospectus do not contain all the information included in the
Trust's registration statement filed with the Securities and Exchange Commission
under the Securities Act of 1933 with respect to the securities offered hereby,
certain portions of which have been omitted pursuant to the rules and
regulations of the Securities and Exchange Commission. The registration
statement, including the exhibits filed therewith, may be examined at the office
of the Securities and Exchange Commission in Washington, D.C.
Statements contained herein and in the Prospectus as to the contents of any
contract or other documents referred to are not necessarily complete, and, in
each instance, reference is made to the copy of such contract or other documents
filed as an exhibit to the registration statement, each such statement being
qualified in all respects by such reference.
20
<PAGE>
FINANCIAL STATEMENTS
The audited Statement of Assets and Liabilities, Statement of Operations,
Statements of Changes in Net Assets, Statement of Investments, notes thereto,
and Financial Highlights of the Fund for the fiscal year ended October 31, 1996
and the Report of Independent Accountants thereon (included in the Annual Report
to shareholders), which are delivered along with this SAI, are incorporated
herein by reference.
21
<PAGE>
APPENDIX
RATINGS OF CORPORATE DEBT INSTRUMENTS
MOODY'S INVESTORS SERVICE
FIXED-INCOME SECURITY RATINGS
"Aaa" Fixed-income securities which are rated "Aaa" are judged to be of the
best quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edge". Interest payments are
protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
"Aa" Fixed-income securities which are rated "Aa" are judged to be of high
quality by all standards. Together with the "Aaa" group they comprise
what are generally known as high grade fixed-income securities. They
are rated lower than the best fixed-income securities because margins
of protection may not be as large as in "Aaa" securities or
fluctuation of protective elements may be of greater amplitude or
there may be other elements present which make the long-term risks
appear somewhat larger than in "Aaa" securities.
"A" Fixed-income securities which are rated "A" possess many favorable
investment attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest are
considered adequate, but elements may be present which suggest a
susceptibility to impairment sometime in the future.
COMMERCIAL PAPER RATINGS
Moody's commercial paper ratings are opinions of the ability to repay punctually
promissory obligations not having an original maturity in excess of nine months.
The ratings apply to municipal commercial paper as well as taxable commercial
paper. Moody's employs the following three designations, all judged to be
investment grade, to indicate the relative repayment capacity of rated issuers:
"Prime-1", "Prime-2", "Prime-3".
Issuers rated "Prime-1" have a superior capacity for repayment of short-term
promissory obligations. Issuers rated "Prime-2" have a strong capacity for
repayment of short-term promissory obligations; and Issuers rated "Prime-3" have
an acceptable capacity for repayment of short-term promissory obligations.
Issuers rated "Not Prime" do not fall within any of the Prime rating categories.
STANDARD & POOR'S
FIXED-INCOME SECURITY RATINGS
A S&P fixed-income security rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation. This
assessment may take into consideration obligors such as guarantors, insurers, or
lessees.
The ratings are based on current information furnished by the issuer or obtained
by S&P from other sources it considers reliable. The ratings are based, in
varying degrees, on the following considerations: (1) likelihood of
default-capacity and willingness of the obligor as to the timely payment of
interest and repayment of principal in accordance with the terms of the
obligation; (2) nature of and provisions of the obligation; and (3) protection
A-1
<PAGE>
afforded by, and relative position of, the obligation in the event of
bankruptcy, reorganization or other arrangement under the laws of bankruptcy and
other laws affecting creditors' rights.
S&P does not perform an audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended or withdrawn as a result of changes in, or unavailability of, such
information, or for other reasons.
"AAA" Fixed-income securities rated "AAA" have the highest rating assigned
by S&P. Capacity to pay interest and repay principal is extremely
strong.
"AA" Fixed-income securities rated "AA" have a very strong capacity to pay
interest and repay principal and differs from the highest-rated issues
only in small degree.
"A" Fixed-income securities rated "A" have a strong capacity to pay
interest and repay principal although they are somewhat more
susceptible to the adverse effects of changes in circumstances and
economic conditions than fixed-income securities in higher-rated
categories.
COMMERCIAL PAPER RATINGS
S&P commercial paper rating is a current assessment of the likelihood of timely
payment of debt having an original maturity of no more than 365 days. The
commercial paper rating is not a recommendation to purchase or sell a security.
The ratings are based upon current information furnished by the issuer or
obtained by S&P from other sources it considers reliable. The ratings may be
changed, suspended, or withdrawn as a result of changes in or unavailability of
such information. Ratings are graded into group categories, ranging from "A"
for the highest quality obligations to "D" for the lowest. Ratings are
applicable to both taxable and tax-exempt commercial paper.
Issues assigned "A" ratings are regarded as having the greatest capacity for
timely payment. Issues in this category are further refined with the
designation "1", "2", and "3" to indicate the relative degree of safety.
"A-1" Indicates that the degree of safety regarding timely payment is very
strong.
"A-2" Indicates capacity for timely payment on issues with this designation
is strong. However, the relative degree of safety is not as
overwhelming as for issues designated "A-1".
"A-3" Indicates a satisfactory capacity for timely payment. Obligations
carrying this designation are, however, somewhat more vulnerable to
the adverse effects of changes in circumstances than obligations
carrying the higher designations.
A-2
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS
Included in the Prospectus:
Financial Highlights (Schroder U.S. Equity Fund -- Investor Shares).
Incorporated by reference in the Statement of Additional Information for the
Schroder U.S. Equity Fund:
For the fiscal year ended October 31, 1996 - Statement of Assets and
Liabilities, Statement of Operations, Statements of Changes in Net Assets;
Statement of Investments, Notes to Financial Statements, Report of
Independent Accountants (for all Funds, filed with the Securities and
Exchange Commission on January 6, 1997 as part of Registrant's Annual
Report for such Fund pursuant to Rule 30b-1 under the Investment Company
Act of 1940, as amended, and incorporated herein by reference)
(b) EXHIBITS:
(1) Trust Instrument of Schroder Capital Funds (Delaware) (the "Trust") (filed
as Exhibit 1 to Registrant's Post-Effective Amendment No. 46 and incorporated
herein by reference).
(2) BYLAWS dated September 8, 1995, filed herewith.
(3) None.
(4) (a) Sections 2.04 and 2.06 of Registrant's Trust Instrument provide as
follows:
SECTION 2.04 TRANSFER OF SHARES. Except as otherwise provided by the Trustees,
Shares shall be transferable on the records of the Trust only by the record
holder thereof or by his agent thereunto duly authorized in writing, upon
delivery to the Trustees or the Trust's transfer agent of a duly executed
instrument of transfer and such evidence of the genuineness of such execution
and authorization and of such other matters as may be required by the Trustees.
Upon such delivery the transfer shall be recorded on the register of the Trust.
Until such record is made, the Shareholder of record shall be deemed to be the
holder of such Shares for all purposes hereunder and neither the Trustees nor
the Trust, nor any transfer agent or registrar nor any officer, employee or
agent of the Trust shall be affected by any notice of the proposed transfer.
SECTION 2.06 ESTABLISHMENT OF SERIES. The Trust created hereby shall consist of
one or more Series and separate and distinct records shall be maintained by the
Trust for each Series and the assets associated with any such Series shall be
held and accounted for separately from the assets of the Trust or any other
Series. The Trustees shall have full power and authority, in their sole
discretion, and without obtaining any prior authorization or vote of the
Shareholders of any Series of the Trust, to establish and designate and to
change in any manner any such Series of Shares or any classes of initial or
additional Series and to fix such preferences, voting powers, rights and
privileges of such Series or classes thereof as the Trustees may from time to
time determine, to divide or combine the Shares or any Series or classes thereof
into a greater or lesser number, to classify or reclassify any issued Shares or
any Series or classes thereof into one or more Series or classes of Shares, and
to take such other action with respect to the Shares as the Trustees may deem
desirable. The establishment and designation of any Series shall be effective
upon the adoption of a resolution by a majority of the Trustees setting forth
such establishment and designation and the relative rights and preferences of
the Shares of such Series. A Series may issue any number of Shares and need not
issue shares. At any time that there are no Shares outstanding of any particular
Series previously established and designated, the Trustees may by a majority
vote abolish that Series and the establishment and designation thereof.
<PAGE>
All references to Shares in this Trust Instrument shall be deemed to be Shares
of any or all Series, or classes thereof, as the context may require. All
provisions herein relating to the Trust shall apply equally to each Series of
the Trust, and each class thereof, except as the context otherwise requires.
Each Share of a Series of the Trust shall represent an equal beneficial interest
in the net assets of such Series. Each holder of Shares of a Series shall be
entitled to receive his pro rata share of all distributions made with respect to
such Series. Upon redemption of his Shares, such Shareholder shall be paid
solely out of the funds and property of such Series of the Trust."
(5) Investment Advisory Contract between the Trust and Schroder Capital
Management International Inc. dated January 9, 1996 filed herewith.
(6) Distribution Agreement between the Trust and Schroder Fund Advisors Inc.
dated January 9, 1996 filed herewith.
(7) None.
(8) Global Custody Agreement between the Trust and The Chase Manhattan Bank,
N.A. dated January 9, 1996, as amended May 3, 1996 filed herewith.
(9)(a) Form of Administration Agreement between the Trust and Schroder Fund
Advisors Inc. dated (filed as Exhibit (9)(a) to Registrant's Post-Effective
Amendment No. 46 and incorporated herein by reference).
(9)(b) Subadministration Agreement between the Trust and Forum Administrative
Services, Limited Liability Company dated February 1, 1997 filed herewith.
(9)(c) Transfer Agency Agreement between the Trust and Forum Financial Corp.
dated January 9, 1996 (filed as Exhibit 9(c) to Registrant's Post-Effective
Amendment No. 46 and incorporated herein by reference).
(9)(d) Fund Accounting Agreement between the Trust and Forum Financial Corp.
dated January 9, 1996 filed herewith.
(10) Opinion of Jacobs Persinger & Parker as to legality of shares to be issued
by the Trust (filed as Exhibit 10(d) to Registrant's Post - Effective Amendment
No. 46 and incorporated herein by reference).
(11) Consent of Coopers & Lybrand L.L.P. (filed herewith).
(15)(a) Form of Master Distribution Plan adopted by Registrant (filed as
Exhibit 15(a) to Registrant's Post-Effective Amendment No. 46 and incorporated
herein by reference).
(15)(b) Form of Distribution Plan Supplement (filed as Exhibit 15(b) to
Registrant's Post-Effective Amendment No. 46 and incorporated herein by
reference).
(16) Schedule of Sample Performance Calculations -- Schroder U.S. Equity Fund,
filed herewith.
Other Exhibits:
Copies of Powers of Attorney pursuant to which Trustees have signed this
Post-Effective Amendment (filed as Other Exhibits to Post-Effective Amendment
No. 45 and incorporated herein by reference).
Copy of Power of Attorney pursuant to which Mr. Jackowitz has signed this
Post-Effective Amendment (filed as an Other Exhibit to Post-Effective Amendment
No. 45 and incorporated herein by reference).
Copy of Power of Attorney pursuant to which Mr. Smith has signed this
Post-Effective Amendment filed herewith.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
<PAGE>
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
Title of Class Number of Record
Holders as of
March 31, 1997
-------------- ----------------
Schroder U.S. Equity Fund 603
Schroder International Fund 986
Schroder U.S. Smaller Companies Fund 182
Schroder Emerging Markets Fund 31
Institutional Portfolio
Schroder International Smaller Companies Fund 3
Schroder Latin America Fund 1
Schroder Global Asset Allocation Fund N/A
ITEM 27. INDEMNIFICATION.
In accordance with Section 3803 of the Delaware Business Trust Act, SECTION 5.2
of the Registrant's Trust Instrument provides as follows:
"5.2. Indemnification.
"(a) Subject to the exceptions and limitations contained in Section (b) below:
"(i) Every Person who is, or has been, a Trustee or officer of the Trust
(hereinafter referred to as a "Covered Person") shall be indemnified by the
Trust to the fullest extent permitted by law against liability and against all
expenses reasonably incurred or paid by him in connection with any claim,
action, suit or proceeding in which he becomes involved as a party or otherwise
by virtue of being or having been a Trustee or officer and against amounts paid
or incurred by him in the settlement thereof;
"(ii) The words "claim," "action," "suit," or "proceeding" shall apply to all
claims, actions, suits or proceedings (civil, criminal or other, including
appeals), actual or threatened while in office or thereafter, and the words
"liability" and "expenses" shall include, without limitation, attorneys' fees,
costs, judgments, amounts paid in settlement, fines, penalties and other
liabilities.
"(b) No indemnification shall be provided hereunder to a Covered Person:
"(i) Who shall have been adjudicated by a court or body before which the
proceeding was brought (A) to be liable to the Trust or its Holders by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the Covered Person's office or (B) not to have
acted in good faith in the reasonable belief that Covered Person's action was in
the best interest of the Trust; or
"(ii) In the event of a settlement, unless there has been a determination that
such Trustee or officer did not engage in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
Trustee's or officer's office,
"(A) By the court or other body approving the settlement;
<PAGE>
"(B) By at least a majority of those Trustees who are neither Interested Persons
of the Trust nor are parties to the matter based upon a review of readily
available facts (as opposed to a full trial-type inquiry); or
"(C) By written opinion of independent legal counsel based upon a review of
readily available facts (as opposed to a full trial-type inquiry); provided,
however, that any Holder may, by appropriate legal proceedings, challenge any
such determination by the Trustees or by independent counsel.
"(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not be exclusive of
or affect any other rights to which any Covered Person may now or hereafter be
entitled, shall continue as to a person who has ceased to be a Covered Person
and shall inure to the benefit of the heirs, executors and administrators of
such a person. Nothing contained herein shall affect any rights to
indemnification to which Trust personnel, other than Covered Persons, and other
persons may be entitled by contract or otherwise under law.
"(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described in
paragraph (a) of this Section 5.2 may be paid by the Trust or Series from time
to time prior to final disposition thereof upon receipt of an undertaking by or
on behalf of such Covered Person that such amount will be paid over by him to
the Trust or Series if it is ultimately determined that he is not entitled to
indemnification under this Section 5.2; provided, however, that either (a) such
Covered Person shall have provided appropriate security for such undertaking,
(b) the Trust is insured against losses arising out of any such advance payments
or (c) either a majority of the Trustees who are neither Interested Persons of
the Trust nor parties to the matter, or independent legal counsel in a written
opinion, shall have determined, based upon a review of readily available facts
(as opposed to a trial-type inquiry or full investigation), that there is reason
to believe that such Covered Person will be found entitled to indemnification
under this Section 5.2.
"(e) Conditional advancing of indemnification monies under this Section 5.2 for
actions based upon the 1940 Act may be made only on the following conditions:
(i) the advances must be limited to amounts used, or to be used, for the
preparation or presentation of a defense to the action, including costs
connected with the preparation of a settlement; (ii) advances may be made only
upon receipt of a written promise by, or on behalf of, the recipient to repay
that amount of the advance which exceeds that amount which it is ultimately
determined that he is entitled to receive from the Trust by reason of
indemnification; and (iii) (a) such promise must be secured by a surety bond,
other suitable insurance or an equivalent form of security which assures that
any repayments may be obtained by the Trust without delay or litigation, which
bond, insurance or other form of security must be provided by the recipient of
the advance, or (b) a majority of a quorum of the Trust's disinterested,
non-party Trustees, or an independent legal counsel in a written opinion, shall
determine, based upon a review of readily available facts, that the recipient of
the advance ultimately will be found entitled to indemnification.
"(f) In case any Holder or former Holder of any Series shall be held to be
personally liable solely by reason of the Holder or former Holder being or
having been a Holder of that Series and not because of the Holder or former
Holder acts or omissions or for some other reason, the Holder or former Holder
(or the Holder or former Holder's heirs, executors, administrators or other
legal representatives, or, in the case of a corporation or other entity, its
corporate or other general successor) shall be entitled out of the assets
belonging to the applicable Series to be held harmless from and indemnified
against all loss and expense arising from such liability. The Trust, on behalf
of the affected Series, shall, upon request by the Holder, assume the defense of
any claim made against the Holder for any act or obligation of the Series and
satisfy any judgment thereon from the assets of the Series."
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
The following are the directors and principal officers of SCMI, including their
business connections of a substantial nature. The address of each company
listed, unless otherwise noted, is 33 Gutter Lane, London EC2V 8AS, United
Kingdom. Schroder Capital Management International Limited ("Schroder Ltd.") is
a United Kingdom affiliate of SCMI which provides investment management services
international clients located principally in the United States.
David M. Salisbury. Chief Executive Officer, Director and Chairman of
Schroder Capital; Joint Chief Executive and Director of Schroder.
Richard R. Foulkes. Senior Vice President and Managing Director of
Schroder Capital.
<PAGE>
John A. Troiano. Managing Director and Senior Vice President. Mr. Troiano
is also a Director of Schroder Ltd.
David Gibson. Senior Vice President and Director of Schroder Capital.
Director of Schroder Wertheim Investment Services Inc.
John S. Ager. Senior Vice President and Director of Schroder Capital.
Sharon L. Haugh. Senior Vice President and Director of Schroder Capital,
Director and Chairman of Schroder Advisors Inc.
Gavin D.L. Ralston. Senior Vice President and Director of Schroder
Capital.
Mark J. Smith. Senior Vice President and Director of Schroder Capital.
Robert G. Davy. Senior Vice President. Mr. Davy is also a Director of
Schroder Ltd. and an officer of open end investment companies for which
SCMI and/or its affiliates provide investment services.
Jane P. Lucas. Senior Vice President and Director of Schroder Capital;
Director of Schroder Advisors Inc.; Director of Schroder Wertheim
Investment Services, Inc.
C. John Govett. Director of Schroder Capital; Group Managing Director of
Schroder Investment Management Ltd. And Director of Schroders plc.
Phillipa J. Gould. Senior Vice President and Director of Schroder
Capital.
Louise Croset. First Vice President and Director of Schroder Capital.
Abdallah Nauphal, Group Vice President and Director.
ITEM 29. PRINCIPAL UNDERWRITERS.
(A) Schroder Fund Advisors Inc., the Registrant's principal underwriter, also
serves as principal underwriter for WSIS Series Trust.
(B) Following is information with respect to each officer and director of
Schroder Fund Advisors Inc., the Distributor of the shares of Schroder
International Fund, Schroder U.S. Equity Fund, Schroder U.S. Smaller Companies
Fund, Schroder Emerging Markets Fund Institutional Portfolio, Schroder
International Smaller Companies Fund, Schroder International Bond Fund and
Schroder Latin America Fund (each a series of the Registrant):
Catherine A. Mazza, President
Mark J. Smith, Director and Vice President.
John A. Troiano, Director and Vice President
Sharon L. Haugh, Director
Robert Jackowitz, Treasurer
Margaret H. Douglas-Hamilton, Secretary
* Address for each is 787 Seventh Avenue, New York, New York 10019 except for
John A. Troiano and Mark J. Smith each of whose address is 33 Gutter Lane,
London, England.
(C) Inapplicable.
<PAGE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
The accounts, books and other documents required to be maintained by Registrant
with respect to Schroder Cash Reserves Fund pursuant to Section 31(a) of the
Investment Company Act of 1940 and the Rules thereunder will be maintained at
the offices of Schroder Capital Management International Inc. and Schroder Fund
Advisors Inc., 787 Seventh Avenue, New York, New York 10019, except that certain
items will be maintained at the following locations:
(a) Forum Financial Corp., Two Portland Square, Portland, Maine 04101
(shareholder records).
(B) Forum Financial Services, Inc., Two Portland Square, Portland, Maine 04101
(corporate minute book).
ITEM 31. MANAGEMENT SERVICES.
Inapplicable.
ITEM 32. UNDERTAKINGS.
(i) Registrant undertakes to file a post-effective amendment, using financial
statements which need not be certified, within four to six months from
the latter of the effective date of Registrant's Securities Act of 1933
Registration Statement relating to the prospectuses offering those shares
or the commencement of public shares of the respective shares; and,
(ii) Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of Registrant's latest annual report to
shareholders relating to the portfolio or class thereof to which the
prospectus relates upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that this post-effective amendment
to the Registration Statement meets all of the requirements for effectiveness
under paragraph (b) of Rule 485 under the Securities Act of 1933 and has duly
caused this amendment to its Registration Statement to be signed on its behalf
by the undersigned, thereto duly authorized, in the City of New York, and State
of New York on the 17th day of April, 1997.
SCHRODER CAPITAL FUNDS (DELAWARE)
By:/s/ Catherine A. Mazza
-----------------------
Catherine A. Mazza
Vice President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement amendment has been signed below by the following persons on the 17th
day of April, 1997.
SIGNATURES TITLE
(a) Principal Executive Officer
MARK J. SMITH President
By: /s/ Thomas G. Sheehan
------------------------------
Thomas G. Sheehan, Attorney-in-Fact
(b) Principal Financial and
Accounting Officer
ROBERT JACKOWITZ* Treasurer
*By: /s/ Thomas G. Sheehan
-----------------------------
Thomas G. Sheehan, Attorney-in-Fact
(c) Majority of the Trustees
PETER E. GUERNSEY* Trustee
JOHN I. HOWELL* Trustee
HERMANN C. SCHWAB* Trustee
CLARENCE F. MICHALIS* Trustee
*By: /s/ Thomas G. Sheeehan
-----------------------------
Thomas G. Sheehan, Attorney-in-Fact
<PAGE>
INDEX TO EXHIBITS
SEQUENTIAL
EXHIBIT PAGE NUMBER
- ------- -----------
(2) BYLAWS dated September 8, 1995, filed herewith.
(5) Investment Advisory Contract between the
Trust and Schroder Capital Management
International Inc. dated January 9, 1996 filed
herewith.
(6) Distribution Agreement between the Trust and
Schroder Fund Advisors Inc. dated January 9, 1996
filed herewith.
(8) Global Custody Agreement between the Trust and
The Chase Manhattan Bank, N.A. dated January 9, 1996,
as amended May 3, 1996 filed herewith.
(9)(b) Subadministration Agreement between the Trust and Forum
Administrative Services, Limited Liability Company
dated February 1, 1997 filed herewith.
(9)(d) Fund Accounting Agreement between the Trust and
Forum Financial Corp.dated January 9, 1996 filed herewith.
(11) Consent of Coopers & Lybrand L.L.P.
(15) Multiclass (Rule 18f-3) Plan
(16) Schedule of Sample Performance Calculations -- Schroder
U.S. Equity Fund, filed herewith.
Other Exhibits:
Copy of Power of Attorney pursuant to which Mr. Smith has signed this
Post-Effective Amendment filed herewith.
<PAGE>
EXHIBIT 2
SCHRODER CAPITAL FUNDS (DELAWARE)
BYLAWS
DATED SEPTEMBER 8, 1995
<PAGE>
SCHRODER CAPITAL FUNDS (DELAWARE)
BYLAWS
These Bylaws of Schroder Capital Funds (Delaware) (the "Trust"), a Delaware
business trust, are subject to the Trust Instrument of the Trust dated September
6, 1995, as from time to time amended, supplemented or restated (the "Trust
Instrument"). Capitalized terms used herein which are defined in the Trust
Instrument are used as therein defined.
ARTICLE I
PRINCIPAL OFFICE
The principal office of the Trust shall be located in Portland, Maine, or
such other location as the Trustees may, from time to time, determine. The
Trust may establish and maintain such other offices and places of business as
the Trustees may, from time to time, determine.
ARTICLE II
OFFICERS AND THEIR ELECTION
SECTION 2.01 OFFICERS. The officers of the Trust shall be a President, a
Treasurer, a Secretary, and such other officers as the Trustees may from time to
time elect. The Trustees may delegate to any officer or committee the power to
appoint any subordinate officers or agents. It shall not be necessary for any
Trustee or other officer to be a holder of Shares in the Trust.
SECTION 2.02 ELECTION OF OFFICERS. The Treasurer and Secretary shall be
chosen by the Trustees. The President shall be chosen by and from the Trustees.
Two or more offices may be held by a single person except the offices of
President and Secretary. Subject to the provisions of Section 3.13 hereof, the
President, the Treasurer and the Secretary shall each hold office until their
successors are chosen and qualified and all other officers shall hold office at
the pleasure of the Trustees.
SECTION 2.03 RESIGNATIONS. Any officer of the Trust may resign,
notwithstanding Section 2.02 hereof, by filing a written resignation with the
President, the Trustees or the Secretary, which resignation shall take effect on
being so filed or at such time as may be therein specified.
ARTICLE III
POWERS AND DUTIES OF OFFICERS AND TRUSTEES
SECTION 3.01 MANAGEMENT OF THE TRUST. The business and affairs of the
Trust shall be managed by, or under the direction of, the Trustees, and they
shall have all powers necessary and desirable to carry out their
responsibilities, so far as such powers are not inconsistent with the laws of
the State of Delaware, the Trust Instrument or with these Bylaws.
SECTION 3.02 EXECUTIVE AND OTHER COMMITTEES. The Trustees may elect from
their own number an executive committee, which shall have any or all the powers
of the Trustees while the Trustees are not in session. The Trustees may also
elect from their own number other committees from time to time. The number
composing such committees and the powers conferred upon the same are to be
determined by vote of a majority of the Trustees. All members of such
committees shall hold such offices at the pleasure of the Trustees. The
Trustees may abolish any such committee at any time. Any committee to which the
Trustees delegate any of their powers or duties shall keep records of its
meetings and shall report its actions to the Trustees. The Trustees shall have
power to rescind any action of any committee, but no such rescission shall have
retroactive effect.
SECTION 3.03 COMPENSATION. Each Trustee and each committee member may
receive such compensation for his services and reimbursement for his expenses as
may be fixed from time to time by resolution of the Trustees.
SECTION 3.04 CHAIRMAN OF THE TRUSTEES. The Trustees shall appoint from
among their number a Chairman who shall serve as such at the pleasure of the
Trustees. When present, he shall preside at all meetings of the Shareholders
and the Trustees, and he may, subject to the approval of the Trustees, appoint a
Trustee to preside at such meetings in his absence. He shall perform such other
duties as the Trustees may from time to time designate.
<PAGE>
SECTION 3.05 PRESIDENT. The President shall be the chief executive
officer of the Trust and, subject to the direction of the Trustees, shall have
general administration of the business and policies of the Trust. Except as the
Trustees may otherwise order, the President shall have the power to grant,
issue, execute or sign such powers of attorney, proxies, agreements or other
documents as may be deemed advisable or necessary in the furtherance of the
interests of the Trust or any Series thereof. He shall also have the power to
employ attorneys, accountants and other advisors and agents and counsel for the
Trust. The President shall perform such duties additional to all of the
foregoing as the Trustees may from time to time designate.
SECTION 3.06 TREASURER. The Treasurer shall be the principal financial
and accounting officer of the Trust. He shall deliver all funds and securities
of the Trust which may come into his hands to such company as the Trustees shall
employ as Custodian in accordance with the Trust Instrument and applicable
provisions of law. He shall make annual reports regarding the business and
condition of the Trust, which reports shall be preserved in Trust records, and
he shall furnish such other reports regarding the business and condition of the
Trust as the Trustees may from time to time require. The Treasurer shall
perform such additional duties as the Trustees may from time to time designate.
SECTION 3.07 SECRETARY. The Secretary shall record in books kept for the
purpose all votes and proceedings of the Trustees and the Shareholders at their
respective meetings. He shall have the custody of the seal of the Trust. The
Secretary shall perform such additional duties as the Trustees may from time to
time designate.
SECTION 3.08 VICE PRESIDENT. Any Vice President of the Trust shall
perform such duties as the Trustees or the President may from time to time
designate. At the request or in the absence or disability of the President, the
Vice President (or, if there are two or more Vice Presidents, then the senior of
the Vice Presidents present and able to act) may perform all the duties of the
President and, when so acting, shall have all the powers of and be subject to
all the restrictions upon the President.
SECTION 3.09 ASSISTANT TREASURER. Any Assistant treasurer of the Trust
shall perform such duties as the Trustees or the Treasurer may from time to time
designate, and, in the absence of the Treasurer, the senior Assistant Treasurer,
present and able to act, may perform all the duties of the Treasurer.
SECTION 3.10 ASSISTANT SECRETARY. Any Assistant Secretary of the Trust
shall perform such duties as the Trustees or the Secretary may from time to time
designate, and, in the absence of the Secretary, the senior Assistant Secretary,
present and able to act, may perform all the duties of the Secretary.
SECTION 3.11 SUBORDINATE OFFICERS. The Trustees from time to time may
appoint such officers or agents as they may deem advisable, each of whom shall
have such title, hold office for such period, have such authority and perform
such duties as the Trustees may determine. The Trustees from time to time may
delegate to one or more officers or committees of Trustees the power to appoint
any such subordinate officers or agents and to prescribe their respective terms
of office, authorities and duties.
SECTION 3.12 SURETY BONDS. The Trustees may require any officer or agent
of the Trust to execute a bond (including without limitation, any bond required
by the 1940 Act and the rules and regulations of the Commission) to the Trust in
such sum and with such surety or sureties as the Trustees may determine,
conditioned upon the faithful performance of his duties to the Trust including
responsibility for negligence and for the accounting of any of the Trust's
property, funds or securities that may come into his hands.
SECTION 3.13 REMOVAL. Any officer may be removed from office whenever in
the judgment of the Trustees the best interest of the Trust will be served
thereby, by the vote of a majority of the Trustees given at any regular meeting
or any special meeting of the Trustees. In addition, any officer or agent
appointed in accordance with the provisions of Section 3.10 hereof may be
removed, either with or without cause, by any officer upon whom such power of
removal shall have been conferred by the Trustees.
SECTION 3.14 REMUNERATION. The salaries or other compensation, if any, of
the officers of the Trust shall be fixed from time to time by resolution of the
Trustees.
<PAGE>
ARTICLE IV
SHAREHOLDER'S MEETINGS
SECTION 4.01 SPECIAL MEETINGS. A special meeting of the shareholders
shall be called by the Secretary whenever (a) ordered by the Trustees or (b)
requested in writing by the holder or holders of at least 10% of the Outstanding
Shares entitled to vote. If the Secretary, when so ordered or requested,
refuses or neglects for more than 30 days to call such special meeting, the
Trustees or the Shareholders so requesting, may, in the name of the Secretary,
call the meeting by giving notice thereof in the manner required when notice is
given by the Secretary. If the meeting is a meeting of the Shareholders of one
or more Series or classes of Shares, but not a meeting of all Shareholders of
the Trust, then only special meetings of the Shareholders of such one or more
Series or classes shall be called and only the shareholders of such one or more
Series or classes shall be entitled to notice of and to vote at such meeting.
SECTION 4.02 NOTICES. Except as provided in Section 4.01, notices of any
meeting of the Shareholders shall be given by the Secretary by delivering or
mailing, postage prepaid, to each Shareholder entitled to vote at said meeting,
written or printed notification of such meeting at least fifteen (15) days
before the meeting, to such address as may be registered with the Trust by the
Shareholder. Notice of any Shareholder meeting need not be given to any
Shareholder if a written waiver of notice, executed before or after such
meeting, is filed with the record of such meeting, or to any Shareholder who
shall attend such meeting in person or by proxy. Notice of adjournment of a
Shareholder's meeting to another time or place need not be given, if such time
and place are announced at the meeting or reasonable notice is given to persons
present at the meeting and the adjourned meeting is held within a reasonable
time after the date set for the original meeting.
SECTION 4.03 VOTING-PROXIES. Subject to the provisions of the Trust
Instrument, shareholders entitled to vote may vote either in person or by proxy,
provided that either (a) an instrument authorizing such proxy to act is executed
by the Shareholder in writing and dated not more than eleven (11) months before
the meeting, unless the instrument specifically provides for a longer period or
(b) the Trustees adopt by resolution an electronic, telephonic, computerized or
other alternative to execution of a written instrument authorizing the proxy to
act which authorization is received not more than eleven (11) months before the
meeting. Proxies shall be delivered to the Secretary of the Trust or other
person responsible for recording the proceedings before being voted. A proxy
with respect to Shares held in the name of two or more persons shall be valid if
executed by one of them unless at or prior to exercise of such proxy the Trust
receives a specific written notice to the contract from any one of them. Unless
otherwise specifically limited by their terms, proxies shall entitle the holder
thereof to vote at any adjournment of a meeting. A proxy purporting to be
exercised by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden or proving invalidity
shall rest on the challenger. At all meetings of the Shareholders, unless the
voting is conducted by inspectors, all questions relating to the qualifications
of voters, the validity of proxies, and the acceptance or rejection of votes
shall be decided by the Chairman of the meeting. Except as otherwise provided
herein or in the Trust Instrument, as these Bylaws or such Trust Instrument may
be amended or supplemented from time to time, all maters relating to the giving,
voting or validity of proxies shall be governed by the General Corporation Law
of the State of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and the Shareholders
were shareholder of a Delaware corporation.
SECTION 4.04 PLACE OF MEETING. All special meetings of the Shareholders
shall be held at the principal place of business of the Trust or at such other
place in the United States as the Trustees may designate.
SECTION 4.05 ACTION WITHOUT A MEETING. Any action to be taken by
Shareholders may be taken without a meeting if all Shareholders entitled to vote
on the matter consent to the action in writing and the written consents are
filed with the records of meetings of Shareholders of the Trust. Such consent
shall be treated for all purposes as a vote at a meeting of the Shareholders
held at the principal place of business of the Trust.
ARTICLE V
TRUSTEES' MEETINGS
SECTION 5.01 SPECIAL MEETINGS. Special meetings of the Trustees may be
called orally or in writing by the Chairman of the Board of Trustees or any two
other Trustees.
<PAGE>
SECTION 5.02 REGULAR MEETINGS. Regular meetings of the Trustees may be
held at such places and at such times as the Trustees may from time to time
determine; each Trustee present at such determination shall be deemed a party
calling the meeting and no call or notice will be required to such Trustee
provided that any Trustee who is absent when such determination is made shall be
given notice of the determination by the Chairman or any two other Trustees, as
provided for in Section 4.04 of the Trust Instrument.
SECTION 5.03 QUORUM. A majority of the Trustees shall constitute a quorum
for the transaction of business and an action of a majority of the quorum shall
constitute action of the Trustees.
SECTION 5.04 NOTICE. Except as otherwise provided, notice of any special
meeting of the Trustees shall be given by the party calling the meeting to each
Trustee, as provided for the Section 4.04 of the Trust Instrument. A written
notice may be mailed, postage prepaid, addressed to him at his address as
registered on the books of the Trust or, if not so registered, at his last known
address.
SECTION 5.05 PLACE OF MEETING. All special meetings of the Trustees shall
be held at the principal place of business of the Trust or such other place as
the Trustees may designate. Any meeting may adjourn to any place.
SECTION 5.06 SPECIAL ACTION. When all the Trustees shall be present at
any meeting, however called or wherever held, or shall assent to the holding of
the meeting without notice, or shall sign a written assent thereto filed with
the record of such meeting, the acts of such meeting shall be valid as if such
meeting had been regularly held.
SECTION 5.07 ACTION BY CONSENT. Any action by the Trustees may be taken
without a meeting if a written consent thereto is signed by all the Trustees and
filed with the records of the Trustees' meeting. Such consent shall be treated,
for all purposes, as a vote at a meeting of the Trustees held at the principal
place of business of the Trustees.
SECTION 5.08 PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Trustees
may participate in a meeting of Trustees by conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation shall constitute presence in
person at such meeting. Any meeting conducted by telephone shall be deemed to
take place at and from the principal office of the Trust.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
SECTION 6.01 BENEFICIAL INTEREST. The beneficial interest in the Trust
shall at all times divided into such transferable Shares of one or more separate
and distinct Series, or classes thereof, as the Trustees shall from time to time
create and establish. The number of Shares is unlimited, and each Share of each
Series or class thereof shall be without par value and shall represent an equal
proportionate interest with each other Share in the Series, none having priority
or preference over another, except to the extent that such priorities or
preference are established with respect to one or more classes of shares
consistent with applicable law and any rule or order of the Commission.
SECTION 6.02 TRANSFER OF SHARES. The Shares of the Trust shall be
transferable, so as to affect the rights of the Trust, only by transfer recorded
on the books of the Trust, in person or by attorney.
SECTION 6.03 EQUITABLE INTEREST NOT RECOGNIZED. The Trust shall be
entitled to treat the holder of record of any Share or Shares of beneficial
interest as equitable or other claim or interest in such Share or Shares on the
part of any other person except as may be otherwise expressly provided by law.
SECTION 6.04 SHARE CERTIFICATE. No certificates certifying the ownership
of Shares shall be issued except as the Trustees may otherwise authorize. The
Trustees may issue certificates to a Shareholder of any Series or class thereof
for any purpose and the issuance of a certificate to one or more Shareholders
shall not require the issuance of certificates generally. In the event that the
Trustees authorize the issuance of Share certificates, such certificate shall be
in the form proscribed from time to time by the Trustees and shall be signed by
the President or a Vice President and by the Treasurer, Assistant Treasurer,
Secretary or Assistant Secretary. Such signatures may be facsimiles if the
certificate is signed by a transfer or shareholder services agent or by a
registrar, other than a Trustee, officer or employee of the Trust. In case any
officer who has signed or whose facsimile signature has been placed on
certificate shall have ceased to be such officer
<PAGE>
before such certificate is issued, it may be issued by the Trust with the same
effect as if he or she were such officer at the time of its issue.
In lieu of issuing certificates for Shares, the Trustees or the transfer or
shareholder services agent may either issue receipts therefor or may keep
accounts upon the books of the Trusts for the record holders of such Shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such Shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
SECTION 6.05 LOSS OF CERTIFICATES. In the case of the alleged loss or
destruction or the mutilation of a Share certificate, a duplicate certificate
may be issued in place thereof, upon such terms as the Trustees may prescribe.
SECTION 6.06 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The Trustees may
at any time discontinue the issuance of Share certificates and may, by written
notice to each Shareholder, require the surrender of Share certificates to the
Trust for cancellation. Such surrender and cancellation shall not affect the
ownership of Shares in the Trust.
ARTICLE VII
OWNERSHIP OF ASSETS OF THE TRUST
The Trustees, acting for and on behalf of the Trust, shall be deemed to
hold legal and beneficial ownership of any income earned on securities held by
the Trust issued by any business entity formed, organized or existing under the
laws of any jurisdiction other than a state, commonwealth, possession or colony
of the United States or the laws of the United States.
ARTICLE VIII
INSPECTION OF BOOKS
The Trustees shall from time to time determine whether and to what extent,
and at what times and places, and under what conditions and regulations the
accounts and books of the Trust or any of them shall be open to the inspection
of the Shareholder; and no Shareholder shall have any right to inspect any
account or book or document of the Trust except as conferred by law or otherwise
by the Trustees or by resolution of the Shareholders.
ARTICLE IX
INSURANCE OF OFFICERS, TRUSTEES, AND EMPLOYEES
The Trust may purchase and maintain insurance on behalf of any Covered
Person or employee of the Trust, including any Covered Person or employee of the
Trust who is or was serving at the request of the Trust as a Trustee, officer or
employee of a corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the Trustees would
have the power to indemnify him against such liability.
The Trust may not acquire or obtain a contract for insurance that protects
or purports to protect any Trustee or officer of the Trust against any liability
to the Trust of its Shareholders to which he would otherwise be subject by
reason or willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office.
ARTICLE X
SEAL
The seal of the Trust shall be circular in form bearing the inscription:
"SCHRODER CAPITAL FUNDS (DELAWARE)
THE STATE OF DELAWARE"
<PAGE>
EXHIBIT 5
SCHRODER CAPITAL FUNDS (DELAWARE)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made as of the 9th day of January, 1996 between Schroder Capital
Funds (Delaware), a Delaware Business Trust (the "Trust") and Schroder Capital
Management International Inc., a New York Corporation (the "Adviser").
W I T N E S S E T H:
1. Prior to the effective date hereof, the Trust will furnish the Adviser
with copies properly certified or authenticated of each of the following:
(a) Trust Instrument of the Trust.
(b) Resolutions of the Board of Trustees of the Trust selecting
Schroder Capital Management International Inc. as investment adviser and
approving the form of this Agreement. The Trust will furnish the Adviser
from time to time with copies, properly certified or authenticated, of all
amendments of or supplements to the foregoing, if any.
2. The Adviser will regularly provide the Trust with respect to its class
of Common Stock and related investment portfolio entitled Schroder U.S. Equity
Fund (the "Portfolio") with investment research, advice and supervision and will
furnish continuously an investment program for the Portfolio's investments
consistent with the Trust's investment objectives for the Portfolio as set forth
in its Registration Statement, Form N-1A, as it may from time to time be in
effect under the Securities Act of 1993, as amended (hereinafter referred to as
the "1933 Act"). the Adviser will recommend what securities shall be bought or
sold by the Portfolio, and what portion of the Portfolio's assets shall be held
uninvested, subject always to the provisions of the Trust's Trust Instrument,
Registration Statement on Form N-1A under the 1933 Act and of the Investment
Company Act of 1940, as amended (hereinafter referred to as the "1940 Act"), as
each of the same shall be from time to time amended. The Adviser shall advise
and assist the officers of the Trust in taking such steps as are necessary or
appropriate to carry out the decisions of its Board of Trustees and the
appropriate committees of such Board regarding the foregoing matters and general
conduct of the investment business of the Portfolio.
3. (a) The Adviser will pay directly all office rent of the Trust to the
extent there is any.
(b) The Adviser will furnish or cause to be furnished without expense
to the Trust or the Portfolio, the services of such of the Adviser's officers
and employees and officers and employees of corporate affiliates of the Adviser,
as may be duly elected officers or trustees of the Trust, subject to their
individual consent to serve and to any limitations imposed by law.
<PAGE>
(c) The Adviser will provide for the Portfolio investment advisory,
research and statistical facilities and all clerical services relating to
research, statistical and investment work.
(d) Except to the extent provided in subsections (a), (b) and (c)
above, the Adviser shall have no responsibility or obligation to pay any costs
or expenses of the Trust or the Portfolio, including without limiting the
generality of the foregoing, brokers' commissions; legal, auditing or accounting
expenses, taxes or governmental fees; cost of preparing share certificates or
any other expenses (including clerical expenses) of issue (except that nothing
herein shall require the Trust or the Portfolio to bear any sales or promotional
expenses unless incurred pursuant to a plan or plans from time to time in effect
in the future duly adopted in accordance with Rule 12b-1 under the 1940 Act or a
successor provision), distribution, redemption or repurchase of shares of the
Trust; registration expenses under the 1933 Act or 1940 Act subsequent to the
initial registration thereunder (except that nothing herein shall require the
Trust to pay any registration expenses occasioned by the initial issuance of
classes or series of its capital stock not related or attributable to the
Portfolio); the cost of preparing and distributing reports and notices to
stockholders; fees or disbursements of the custodian of the Trust's assets, of
the Trust's dividend disbursing agent and of the Trust's transfer agent,
including expenses incurred in the performance of any obligations enumerated in
the Trust Instrument of the Trust insofar as they govern agreements with such
custodian, dividend disbursing agent or transfer agent. To the extent employees
of the Adviser or its affiliates devote their time to the affairs of the Trust,
other than as officers or trustees, the Trust will reimburse the Adviser the pro
rata share of said individual's salary or wages and expenses and the Adviser
will keep specific time and other records of the same.
4. (a) For all services to be rendered and payments made as provided in
paragraphs 2 and 3 hereof, the Trust will pay the Adviser a fee based on the
average daily net asset value of the Portfolio, as determined in accordance with
the Trust Instrument of the Trust, which shall be computed at the following
rates:
(i) 3/4 of 1% of the portion of such average daily net assets
that shall not exceed $100 million.
(ii) 1/2 of 1% of the portion of such average daily net assets
that shall exceed $100 million.
(b) The amounts due the Adviser in payment of such fee shall be
accrued daily by the Trust on the basis of the number of days in each calendar
month, the net asset value of the Portfolio applicable to the close of each
business day in such month and, in the case of any day in such month which is
not a business day, the net asset value applicable to the close of the last
preceding business day; and the amount accrued with respect to each calendar
month shall become due and payable to the Adviser on the first business day of
the next succeeding calendar month. The Adviser hereby acknowledges that the
Trust's obligation to pay such fee is binding only on the assets and property
belonging to the Portfolio.
5. If any occasion should arise in which the Adviser gives any advice to
its clients concerning the shares of the Trust, the Adviser will act solely for
such clients and not in any way on behalf of the Trust.
6. The Adviser shall not be liable for any error of judgment or for any
loss suffered by the Trust or the Portfolio in connection with the matters to
which this Agreement relates, except a loss resulting from willful misfeasance,
bad faith or gross negligence on the Adviser's part in the performance of its
duties or from reckless disregard by the Adviser of its obligations and duties
under this Agreement. Any person, even though also employed by the Adviser, who
may be or become an employee of and paid by the Trust shall not be deemed, when
acting within the scope of his employment by the Trust, to be the Adviser's
employee or agent. Any of the Adviser's officers or employees rendering
services (other than pursuant to paragraph 2 hereof) to the Trust as an officer
or employee of the Trust acting in any business of the Trust pursuant to the
undertakings contained in this Agreement, shall be deemed to render such service
solely to the Trust and in no respect to act under the Trust's control or
direction although paid by the Adviser.
7. This Agreement shall become effective on January 9, 1996, and
indefinitely thereafter, but only so long as the continuance after the second
anniversary of the effective date of this Agreement first set forth above shall
be specifically approved at least annually by the vote of a majority of Trustees
of the Trust or by a vote of a majority of the outstanding voting securities of
the Portfolio and, in either case, by vote of a majority of Trustees who are not
parties to this Agreement or "interested persons" of the Trust or the Adviser
within the meaning of the 1940 Act, cast in person at a meeting called for the
purpose of voting on such approval. This Agreement may, on 60 days' written
notice, be terminated at any time without
<PAGE>
the payment of any penalty, by the Board of Trustees of the Trust, by vote of a
majority of the outstanding voting securities of the Portfolio or by the
Adviser. This Agreement shall automatically terminate in the event of its
assignment. In interpreting the provisions of this paragraph 7, the definitions
contained in the 1940 Act (particularly the definitions of "interested persons,"
"assignment" and "voting security"), and in any regulation of the Securities and
Exchange Commission thereunder, shall be applied.
8. The Adviser consents to the use by the Trust in its corporate name and
to designate the Portfolio of the name "Schroder," or any variant thereof, but
only on condition that (a) any change in such corporate name or designation
which continues to use the "Schroder" name or variant is approved in writing by
the Adviser and (b) so long as this Agreement shall remain in force, the Trust
shall fully perform, fulfill and comply with all the provisions expressed herein
to be performed, fulfilled or complied with by it. No such name shall be used
by the Trust at any time or in any place for any purposes or under any
conditions except as provided in this paragraph 8. Upon any termination of this
Agreement by either party or upon the violation of any of its provisions by the
Trust, the Trust will, at the request of the Adviser made within 60 days after
the Adviser has knowledge of such termination or violation, change its corporate
name and the designation of the Portfolio so as to eliminate all reference to
"Schroder" or any variant thereof and will not thereafter transact any business
in a corporate name or on behalf of the Portfolio having a designation
containing such name or variant, or otherwise use such name or variant. Such
covenants on the part of the Trust set forth in this paragraph 8 shall be
binding upon it, its Trustees, officers, stockholders, creditors, affiliates and
all other persons claiming under or through it.
9. Upon the effective date of this Agreement, the Agreement dated as of
March 1, 1988, as amended, between the Adviser and the Trust shall be terminated
and shall be of no further force or effect, except as to the obligations to pay
fees accrued to the close of business on the date of termination.
10. There is to be no duplication of any fees payable to the Adviser under
this Agreement or the Agreement relating to the same subject matter between the
Trust and the Adviser which terminated on the effective date of this Agreement,
by reason of the termination of said prior Agreement and the commencement of
this Agreement.
11. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Agreement shall be effective until approved by
vote of (a) holders of a majority of the outstanding voting securities of the
Portfolio and (b) by vote of a majority of the Trustees of the Trust who are not
parties to this Agreement or "interested persons" of the Trust or the Adviser,
cast in person at a meeting called for the purpose of voting on such approval.
12. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties to this Agreement have hereinafter executed
this Agreement as of the day and year first above written.
SCHRODER CAPITAL MANAGEMENT
INTERNATIONAL INC.
By: /s/ L. E. Luckyn-Malone
--------------------------
Title: President
SCHRODER CAPITAL FUNDS
(DELAWARE)
By: /s/ Catherine A. Mazza
--------------------------
Title: Vice President
<PAGE>
EXHIBIT 6
SCHRODER CAPITAL FUNDS (DELAWARE)
DISTRIBUTION AGREEMENT
AGREEMENT made as of the 9th day of January, 1996, by and between Schroder
Capital Funds (Delaware), a Delaware business trust, with respect to its series
called "Schroder U.S. Equity Fund" (the "Fund") and Schroder Fund Advisors Inc.
(the "Distributor").
1. The Fund hereby appoints the Distributor its agent to sell and arrange
for the sale of shares of the Fund in jurisdictions wherein shares of the Fund
may legally be offered for sale. The Distributor shall discharge its
responsibilities in compliance with the objectives, policies and limitations set
forth in the Fund's current prospectus and applicable laws and regulations. The
Distributor accepts such appointment and agrees to use its "best efforts" to
secure purchases of shares of the Fund.
2. The Distributor will, upon receipt of unconditional orders (and not
before), transmit such orders to the Fund (or its authorized agent) for
acceptance and confirmation. The price at which shares are offered shall be the
net asset value per share as determined in accordance with the Fund's charter
and by-laws, subject to the provisions of the Investment Company Act of 1940
(the "1940 Act") and any regulations of the Securities and Exchange Commission,
as described in the then current prospectus (which for the purposes hereof is
deemed to include the Fund's current statement of additional information) of the
Fund.
3. Upon receipt of such orders from the Distributor, the Fund or its
agent shall open a new account in such names as shall be specified by the
Distributor, provided, however, that no shares shall be registered on the Fund's
books until (i) receipt by the Fund's Transfer Agent of the Distributor's
written request therefor; and (ii) receipt of payment of that amount by the
Fund, its Transfer Agent or its Custodian.
4. The Fund reserves the right to reject any order for the purchase of
shares, provided, however, that the Fund agrees that it will not arbitrarily or
without reasonable cause refuse acceptance or confirmation of such orders.
5. The Fund covenants and agrees that it will, at its own expense:
(a) use its best efforts to keep authorized, but unissued, sufficient
shares to meet the reasonable requirements of the Distributor;
(b) supply the Distributor with the net asset value per shares computed as
at the times prescribed by and in compliance with all pertinent
requirements of the charter of the Fund and the Securities and Exchange
Commission;
(c) prepare, file and keep effective registration statements, prospectuses
and licenses covering as many shares as may be necessary for distribution
and sale of shares in such
<PAGE>
jurisdictions where shares may lawfully be sold and as reasonably requested
by the Distributor;
(d) maintain qualified personnel and adequate facilities for the
acceptance and confirmation of orders for the sale of Shares.
6. The Distributor will pay all expenses incident to the sale and
distribution of the shares issued or sold hereunder, including (i) expenses of
printing and distributing or disseminating any sales literature (including
prospectuses and annual reports), advertising and selling aids in connection
with such offering of the shares for sale (except that such expenses shall not
include expenses incurred by the Fund in connection with the preparation,
printing and distribution of any report or other communication to holders of
shares in their capacity as such) and (ii) expenses of advertising in connection
with such offering. The Fund authorizes the Distributor in connection with the
sale or arranging for the sale of shares to give only such information and to
make only such statements or representations as are contained in the prospectus
or in sales literature or advertisements approved by the Fund.
7. The Distributor covenants and agrees that it will comply, at its own
expense, with the applicable Federal and state laws and regulations regulating
the affairs of broker-dealers, and will conduct its affairs with the Fund and
with dealers, brokers and investors in accordance with the Rules of Fair
Practice of The National Association of Securities Dealers. The Distributor
agrees that all sales literature and advertisements used by the Distributor
shall be subject to the approval of the Fund.
8. In the absence of (i) any breach of its obligations under this
Agreement (ii) willful misfeasance, bad faith or gross negligence on the part of
the Distributor, or (iii) reckless disregard by the Distributor of its
obligations and duties hereunder, the Distributor shall not be subject to any
liability whatsoever to the Fund, or to any shareholder of the Fund, for any
error of judgment, mistake of law or any other act or omission in the course of,
or connected with, rendering services hereunder. The Fund agrees to indemnify
and hold harmless the Distributor and each person who controls the Distributor
within the meaning of the Securities Act of 1933 (the "1933 Act") against any
and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the 1933 and 1940 Acts, the Securities
Exchange Act of 1934 or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the Fund's
registration statement for the registration of the Shares as originally filed or
in any amendment thereof, or in the Fund's current prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party for any legal loss, claim,
damage, liability or action; provided, however, that the Fund will not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Fund by or on behalf of the
Distributor specifically for use in connection with the preparation thereof.
9. This Agreement shall terminate automatically in the event of its
assignment. This Agreement may be terminated at any time, (i) by the Board of
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Fund by thirty days' written notice addressed to the
Distributor at its principal place of business; and (ii) by the Distributor by
thirty days' written notice addressed to the Fund at its principal place of
business.
10. This Agreement shall continue in effect for one year, and thereafter
only so long as its continuance is specifically approved at least annually by a
majority of the Board of Trustees of the Fund who are not parties to the
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval, or by vote of a majority of
the outstanding voting securities of the Fund.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the 9th day of January, 1996.
SCHRODER CAPITAL FUNDS (DELAWARE)
By: /s/ L. E. Luckyn-Malone
--------------------------
Title: President
SCHRODER FUND ADVISORS INC.
By: /s/ Catherine A. Mazza
--------------------------
Title: Vice President
<PAGE>
EXHIBIT 8
SCHRODER CAPITAL FUNDS (DELAWARE)
GLOBAL CUSTODY AGREEMENT
AGREEMENT, dated as of January 9, 1996, as amended May 3, 1996, between The
Chase Manhattan Bank, N.A. (the "Bank") and Schroder Capital Funds (Delaware).
(the "Customer") on behalf of each series of the Customer listed in Schedule A
hereto (each series, a "Fund").
SECTION 1. CUSTOMER ACCOUNTS
The Bank agrees to establish and maintain the following accounts
("Accounts"):
(a) A custody account in the name of the Customer ("Custody Account") for
any and all stocks, shares, bonds, debentures, notes, mortgages or
other obligations for the payment of money, bullion, coin and any
certificates, receipts, warrants or other instruments representing
rights to receive, purchase or subscribe for the same or evidencing or
representing any other rights or interests therein and other similar
property whether certificated or uncertificated as may be received by
the Bank or its Subcustodian (as defined in Section 3) for the account
of the Customer ("Securities"); and
(b) A deposit account in the name of the Customer ("Deposit Account") for
any and all cash in any currency received by the Bank or its
Subcustodian for the account of the Customer, which cash shall not be
subject to withdrawal by draft or check.
The Customer warrants its authority to: 1) deposit the cash and Securities
("Assets") received in the Accounts and 2) give Instructions (as defined in
Section 11) concerning the Accounts. The Bank may deliver securities of the
same class in place of those deposited in the Custody Account.
Upon written agreement between the Bank and the Customer, additional
Accounts may be established and separately accounted for as additional Accounts
under the terms of this Agreement.
SECTION 2. MAINTENANCE OF SECURITIES AND CASH AT BANK AND SUBCUSTODIAN
LOCATIONS
Unless Instructions specifically require another location acceptable to the
Bank:
(a) Securities will be held in the country or other jurisdiction in which
the principal trading market for such Securities is located, where
such Securities are to be presented for payment or where such
Securities are acquired; and
<PAGE>
(b) Cash will be credited to an account in a country or other jurisdiction
in which such cash may be legally deposited or is the legal currency
for the payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or non-
interest bearing accounts as may be available for the particular currency. To
the extent Instructions are issued and the Bank can comply with such
Instructions, the Bank is authorized to maintain cash balances on deposit for
the Customer with itself or one of its affiliates at such reasonable rates of
interest as may from time to time be paid on such accounts, or in non-interest
bearing accounts as the Customer may direct, if acceptable to the Bank.
If the Customer wishes to have any of its Assets held in the custody of an
institution other than the established Subcustodians as defined in Section 3 (or
their securities depositories), such arrangement must be authorized by a written
agreement, signed by the Bank and the Customer.
SECTION 3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES
The Bank may act under this Agreement through the Subcustodians listed in
Schedule B of this Agreement with which the Bank has entered into subcustodial
agreements ("Subcustodians"). The Customer authorizes the Bank to hold Assets
in the Accounts in accounts which the Bank has established with one or more of
its branches or Subcustodians. The Bank and Subcustodians are authorized to
hold any of the Securities in their account with any securities depository in
which they participate.
The Bank reserves the right to add new, replace or remove Subcustodians.
The Customer will be given reasonable notice by the Bank of any amendment to
Schedule B. Upon request by the Customer, the Bank will identify the name,
address and principal place of business of any Subcustodian of the Customer's
Assets and the name and address of the governmental agency or other regulatory
authority that supervises or regulates such Subcustodian.
The terms Subcustodian and securities depositories as used in this Agreement
shall mean a branch of a qualified U.S. bank, an eligible foreign custodian or
an eligible foreign securities depository, which are further defined as follows:
(a) "qualified U.S. Bank" shall mean a qualified U.S. bank as defined in
Rule 17f-5 under the Act;
(b) "eligible foreign custodian" shall mean (i) a banking institution or
trust company incorporated or organized under the laws of a country
other than the United States that is regulated as such by that
country's government or an agency thereof and that has shareholders'
equity in excess of $200 million in U.S. currency (or a foreign
currency equivalent thereof), (ii) a majority owned direct or indirect
subsidiary of a qualified U.S. bank or bank holding company that is
incorporated or organized under the laws of a country other than the
United States and that has shareholders' equity in excess of $100
million in U.S. currency (or a foreign currency equivalent thereof)
(iii) a banking institution or trust company incorporated or organized
under the laws of a country other than the United States or a majority
owned direct or indirect subsidiary of a qualified U.S. bank or bank
holding company that is incorporated or organized under the laws of a
country other than the United States which has such other
qualifications as shall be specified in Instructions and approved by
the Bank; or (iv) any other entity that shall have been so qualified
by exemptive order, rule or other appropriate action of the SEC; and
(c) "eligible foreign securities depository" shall mean a securities
depository or clearing agency, incorporated or organized under the
laws of a country other than the United States, which operates (i) the
central system for handling securities or equivalent book-entries in
that country, or (ii) a transnational system for the central handling
of securities or equivalent book-entries.
The Customer represents that its Board of Trustees has approved each of the
Subcustodians listed in Schedule B to this Agreement and the terms of the
subcustody agreements between the Bank and each Subcustodian, which are attached
as Exhibits I through ___ of Schedule B, and further represents that its Board
has determined that
<PAGE>
the use of each Subcustodian and the terms of each subcustody agreement are
consistent with the best interests of the Fund(s) and its (their) shareholders.
The Bank will supply the Customer with any amendment to Schedule B for approval.
The Customer has supplied or will supply the Bank with certified copies of its
Board of Trustees resolutions(s) with respect to the foregoing prior to placing
Assets with any Subcustodian so approved.
SECTION 4. USE OF SUBCUSTODIAN
(a) The Bank will identify such Assets on its books as belonging to the
Customer.
(b) A Subcustodian will hold such Assets together with assets belonging to
other customers of the Bank in accounts identified on such
Subcustodian's books as special custody accounts for the exclusive
benefit of customers of the Bank.
(c) Any Assets in the Accounts held by a Subcustodian will be subject only
to the instructions of the Bank or its agent. Any Securities held in
a securities depository for the account of a Subcustodian will be
subject only to the instructions of such Subcustodian.
(d) Any agreement the Bank enters into with a Subcustodian for holding its
customer's assets shall provide that such assets will not be subject
to any right, charge, security interest, lien or claim of any kind in
favor of such Subcustodian except for safe custody or administration,
and that the beneficial ownership of such assets will be freely
transferable without the payment of money or value other than for safe
custody or administration. The foregoing shall not apply to the
extent of any special agreement or arrangement made by the Customer
with any particular Subcustodian.
SECTION 5. DEPOSIT ACCOUNT TRANSACTIONS
(a) The Bank or its Subcustodians will make payments from a Deposit
Account upon receipt of Instructions which include all information
required by the Bank. Instructions bust be received from one or more
Authorized Person(s) and countersigned or confirmed in writing by one
or more Authorized Person(s) who are different than the Authorized
Person(s) that originated or drafted the Instructions.
(b) In the event that any payment to be made under this Section 5 exceeds
the funds available in a Deposit Account, the Bank, in its discretion,
may advance the Customer such excess amount which shall be deemed a
loan payable on demand, bearing interest at the rate customarily
charged by the Bank on similar loans.
(c) If the Bank credits a Deposit Account on a payable date, or at any
time prior to actual collection and reconciliation to that Deposit
Account, with interest, dividends, redemptions or any other amount
due, the Customer will promptly return any such amount upon oral or
written notification: (i) that such amount has not been received in
the ordinary course of business or (ii) that such amount was
incorrectly credited. If the Customer does not promptly return any
amount upon such notification, the Bank shall be entitled, upon oral
or written notification to the Customer, to reverse such credit by
debiting the Deposit Account for the amount previously credited. The
Bank or its Subcustodian shall have no duty or obligation to institute
legal proceedings, file a claim or a proof of claim in any insolvency
proceeding or take any other action with respect to the collection of
such amount, but may act for the Customer upon Instructions after
consultation with the Customer.
SECTION 6. CUSTODY ACCOUNT TRANSACTIONS
(a) Securities will be transferred, exchanged or delivered by the Bank or
its Subcustodian upon receipt by the Bank of Instructions which
include all information required by the Bank. Settlement and payment
for Securities received for, and delivery of Securities out of, a
Custody Account may be made in accordance with the customary or
established securities trading or securities processing practices and
procedures in the jurisdiction or market in which the transaction
occurs, including,
<PAGE>
without limitation, delivery of Securities to a purchaser, dealer or
their agents against a receipt with the expectation of receiving later
payment and free delivery. Delivery of Securities out of a Custody
Account may also be made in any manner specifically required by
Instructions acceptable to the Bank.
(b) The Bank, in its discretion, may credit or debit an Account on a
contractual settlement date with cash or Securities with respect to
any sale, exchange or purchase of Securities. Otherwise, such
transactions will be credited or debited to the Account on the date
cash or Securities are actually received by the Bank and reconciled to
the Account.
(i) The Bank may reverse credits or debits made to an Account in its
discretion if the related transaction fails to settle within a
reasonable period, determined by the Bank in its discretion,
after the contractual settlement date for the related
transaction.
(ii) If any Securities delivered pursuant to this Section 6 are
returned by the recipient thereof, the Bank may reverse the
credits and debits of the particular transaction at any time.
SECTION 7. ACTIONS OF THE BANK
The Bank shall follow Instructions received regarding assets held in the
Accounts. However, until it receives Instructions to the contrary, the Bank
will:
(a) Present for payment any Securities which are called, redeemed or
retired or otherwise become payable and all coupons and other income
items which call for payment upon presentation, to the extent that the
Bank or Subcustodian is actually aware of such opportunities.
(b) Execute in the name of the Customer such ownership and other
certificates as may be required to obtain payments in respect of
Securities.
(c) Exchange interim receipts or temporary Securities for definitive
Securities.
(d) Appoint brokers and agents for any transaction involving the
Securities, including, without limitation, affiliates of the Bank or
any Subcustodian.
(e) Issue statements to the Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
The Bank will send the Customer an advice or notification of any transfers
of Assets to or from the Accounts. Such statements, advices or notifications
shall indicate the identity of the entity having custody of the Assets. Unless
the Customer sends the Bank a written exception or objection to any Bank
statement within sixty (60) days of receipt, the Customer shall be deemed to
have approved such statement. In such event, or where the Customer has
otherwise approved any such statement, the Bank shall, to the extent permitted
by law, be released, relieved and discharged with respect to all matters set
forth in such statement or reasonably implied therefrom as though it had been
settled by the decree of a court of competent jurisdiction in an action where
the Customer and all persons having or claiming an interest in the Customer or
the Customer's Accounts were parties.
All collections of funds or other property paid or distributed in respect
of Securities in the Custody Account shall be made at the risk of the Customer.
The Bank shall have no liability for any loss occasioned by delay in the actual
receipt of notice by the Bank or by its Subcustodians of any payment, redemption
or other transaction regarding Securities in the Custody Account in respect of
which the Bank has agreed to take any action under this Agreement.
<PAGE>
SECTION 8. CORPORATE ACTIONS; PROXIES
Whenever the Bank receives information concerning the Securities which
requires discretionary action by the beneficial owner of the Securities (other
than a proxy), such as subscription rights, bonus issues, stock repurchase plans
and rights offerings, or legal notices or other material intended to be
transmitted to securities holders ("Corporate Actions"), the Bank will give the
Customer notice of such Corporate Actions to the extent that the Bank's central
corporate actions department has actual knowledge of a Corporate Action in time
to notify its customers.
When a rights entitlement or a fractional interest resulting from a rights
issue, stock dividend, stock split or similar Corporate Action is received which
bears an expiration date, the Bank will endeavor to obtain Instructions from the
Customer or its Authorized Person as defined in Section 10, but if Instructions
are not received in time for the Bank to take timely actions, or actual notice
of such Corporate Action was received too late to seek Instructions, the Bank is
authorized to sell such rights entitlement or fractional interest and to credit
the Deposit Account with the proceeds or take any other action it deems, in good
faith, to be appropriate in which case it shall be held harmless for any such
action.
The Bank will deliver proxies to the Customer or its designated agent
pursuant to special arrangements which may have been agreed to in writing. Such
proxies shall be executed in the appropriate nominee name relating to Securities
in the Custody Account registered in the name of such nominee but without
indicating the manner in which such proxies are to be voted; and where bearer
Securities are involved, proxies will be delivered in accordance with
Instructions.
SECTION 9. NOMINEES
Securities which are ordinarily held in registered form may be registered
in a nominee name of the Bank, Subcustodian or securities depository, as the
case may be. The Bank may without notice to the Customer cause any such
Securities to cease to be registered in the name of any such nominee and to be
registered in the name of the Customer. In the event that any Securities
registered in a nominee name are called for partial redemption by the issuer,
the Bank may allot the called portion to the respective beneficial holders of
such class of security in any manner the Bank deems to be fair and equitable.
The Customer agrees to hold the Bank, Subcustodians, and their respective
nominees harmless from any liability arising from their status as a mere record
holder of Securities in the Custody Account.
SECTION 10. AUTHORIZED PERSONS.
As used in this Agreement, the term "Authorized Person" means employees or
agents including investment managers as have been designated by written notice
from the Customer or its designated agent to act on behalf of the Customer under
this Agreement. Such persons shall continue to be Authorized Persons until such
time as the Bank receives Instructions from the Customer or its designated agent
that any such employee or agent is no longer an Authorized Person.
SECTION 11. INSTRUCTIONS.
The term "Instructions" means instructions of any Authorized Person
received by the Bank, via telephone, telex, TWX, facsimile transmission, bank
wire or other teleprocess or electronic instruction or trade information system
acceptable to the Bank which the Bank believes in good faith to have been given
by Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which the Bank may specify.
Unless otherwise expressly provided, all Instructions shall continue in full
force and effect until canceled or superseded.
Any Instructions delivered to the Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which confirmation
may bear the facsimile signature of such Person), but the Customer will
<PAGE>
hold the Bank harmless for the failure of an Authorized Person to send such
confirmation in writing, the failure of such confirmation to conform to the
telephone instructions received or the Bank's failure to produce such
confirmation at any subsequent time. The Bank may electronically record any
Instructions given by telephone, and any other telephone discussions with
respect to the Custody Account. The Customer shall be responsible for
safeguarding any testkeys, identification codes or other security devices which
the Bank shall make available to the Customer or its Authorized Persons.
Deposit Account Payments and Custody Account Transactions made pursuant to
Section 5 and 6 of this Agreement may be made only for the purposes listed
below. Instructions must specify the purpose for which any transaction is to be
made and Customer shall be solely responsible to assure that Instructions are in
accord with any limitations or restrictions applicable to the Customer by law or
as may be set forth in its prospectus.
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions;
(b) When Securities are called, redeemed or retired, or otherwise become
payable;
(c) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan or merger,
consolidation, reorganization, recapitalization or readjustment;
(d) Upon conversion of Securities pursuant to their terms into other
securities;
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities;
(f) For the payment of interest, taxes, management or supervisory fees,
distributions or operating expenses;
(g) In connection with any borrowings by the Customer requiring a pledge
of Securities, but only against receipt of amounts borrowed;
(h) In connection with any loans, but only against receipt of adequate
collateral as specified in Instructions which shall reflect any
restrictions applicable to the Customer;
(i) For the purpose of redeeming shares of the capital stock of the
Customer and the delivery to, or the crediting to the account of, the
Bank, its Subcustodian or the Customer's transfer agent, such shares
to be purchased or redeemed;
(j) For the purpose of redeeming in kind shares of the Customer against
delivery to the Bank, its Subcustodian or the Customer's transfer
agent of such shares to be so redeemed;
(k) For delivery in accordance with the provisions of any agreement among
the Customer, the Bank and a broker-dealer registered under the
Securities Exchange Act of 1934 (the "Exchange Act") and a member of
The National Association of Securities Dealers, Inc. ("NASD"),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange, or of
any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Customer;
(l) For release of Securities to designated brokers under covered call
options, provided, however, that such Securities shall be released
only upon payment to the Bank of monies for the premium due and a
receipt for the Securities which are to be held in escrow. Upon
exercise of the option, or at expiration, the Bank will receive from
brokers the Securities previously deposited. The Bank will act
strictly in accordance with Instructions in the delivery of Securities
to be held in escrow and will have no responsibility or liability for
any such Securities which are not returned promptly when due other
than to make proper request for such return;
<PAGE>
(m) For spot or forward foreign exchange transactions to facilitate
security trading, receipt of income from Securities or related
transactions;
(n) For other proper purposes as may be specified in Instructions issued
by an officer of the Customer which shall include a statement of the
purpose for which the delivery or payment is to be made, the amount of
the payment or specific Securities to be delivered, the name of the
person or persons to whom delivery or payment is to be made, and a
certification that the purpose is a proper purpose under the
instruments governing the Customer; and
(o) Upon the termination of this Agreement as set forth in Section 14(i).
SECTION 12. STANDARD OF CARE; LIABILITIES
(a) The Bank shall be responsible for the performance of only such duties
as are set forth in this Agreement or expressly contained in
Instructions which are consistent with the provisions of this
Agreement as follows:
(i) The Bank will use reasonable care with respect to
its obligations under this Agreement and the
safekeeping of Assets. The Bank shall be liable
to the Customer for any loss which shall occur as
the result of the failure of a Subcustodian to
exercise reasonable care with respect to the
safekeeping of such Assets to the same extent that
the Bank would be liable to the Customer if the
Bank were holding such Assets in New York. In the
event of any loss to the Customer by reason of the
failure of the Bank or its Subcustodian to utilize
reasonable care, the Bank shall be liable to the
customer only to the extent of the Customer's
direct damages, to be determined based on the
market value of the property which is the subject
of the loss at the date of discovery of such loss
and without reference to any special conditions or
circumstances.
(ii) The Bank will not be responsible for any act,
omission, default or for the solvency of any
broker or agent which it or a Subcustodian
appoints unless such appointment was made
negligently or in bad faith.
(iii) The Bank shall be indemnified by, and without
liability to the Customer for any actions taken or
omitted by the Bank whether pursuant to
Instructions or otherwise within the scope of this
Agreement if such act or omission was in good
faith, without negligence. In performing its
obligations under this Agreement, the Bank may
rely on the genuineness of any document which it
believes in good faith to have been validly
executed.
(iv) The Customer agrees to pay for and hold the Bank
harmless from any liability or loss resulting from
the imposition or assessment of any taxes or other
governmental charges, and any related expenses
with respect to income from or Assets in the
Accounts.
(v) The Bank shall be entitled to rely, and may act,
upon the advice of counsel (who may be counsel for
the Customer) on all matters and shall be without
liability for any action reasonably taken or
omitted pursuant to such advice.
(vi) The Bank need not maintain any insurance for the
benefit of the Customer.
<PAGE>
(vii) Without limiting the foregoing, the Bank shall not
be liable for any loss which results from: 1) the
general risk of investing, or 2) investing or
holding Assets in a particular country including,
but not limited to, losses resulting from
nationalization, expropriation or other
governmental actions; regulation of the banking or
securities industry; currency restrictions,
devaluations or fluctuations; and market
conditions which prevent the orderly execution of
securities transactions or affect the value of
Assets.
(viii) Neither party shall be liable to the other for any
loss due to forces beyond their control including,
but not limited to strikes or work stoppages, acts
of war or terrorism, revolution, nuclear fusion,
fission or radiation, or acts of God.
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that the Bank shall have
no duty or responsibility to:
(i) question Instructions or make any suggestions to
the Customer or an Authorized Person regarding
such Instructions;
(ii) supervise or make recommendations with respect to
investments or the retention of Securities;
(iii) advise the Customer or an Authorized Person
regarding any default in the payment of principal
or income of any security other than as provided
in Section 5(c) of this Agreement;
(iv) evaluate or report to the Customer or an
Authorized Person regarding the financial
condition of any broker, agent or other party
(except for brokers, agents other than
subcustodians or depositories or other parties
selected by the Bank, except in markets where
there is only one registered or otherwise
qualified broker, agent or other party) to which
Securities are delivered or payments are made
pursuant to this Agreement; or
(v) review or reconcile trade confirmations received
from brokers. The Customer or its Authorized
Persons (as defined in Section 10) issuing
Instructions shall bear any responsibility to
review such confirmations against Instructions
issued to and statements issued by the Bank.
(c) The Customer authorizes the Bank to act under this Agreement
notwithstanding that the Bank or any of its divisions or affiliates
may have a material interest in a transaction, or circumstances are
such that the Bank may have a potential conflict of duty or interest
including the fact that the Bank or any of its affiliates may provide
brokerage services to other customers, act as financial advisor to the
issuer of Securities, act as a lender to the issuer of Securities, act
in the same transaction as agent for more than one customer, have a
material interest in the issue of Securities, or earn profits from any
of the activities listed herein.
(d) The Bank hereby warrants to the Customer that in its opinion, after
due inquiry, the established procedures to be followed by each of its
branches, each branch of a qualified U.S. bank, each eligible foreign
custodian and each eligible foreign securities depository holding the
Customer's Securities pursuant to this Agreement afford protection for
such Securities at least equal to that
<PAGE>
afforded by the Bank's established procedures with respect to similar
securities held by the Bank and its securities depositories in New
York.
SECTION 13. FEES AND EXPENSES
The Customer agrees to pay the Bank for its services under this Agreement
such amount as may be agreed upon in writing, together with the Bank's
reasonable out-of-pocket or incidental expenses, including, but not limited to,
legal fees. The Bank shall have a lien on and is authorized to charge any
Accounts of the Customer for any amount owing to the Bank under any provision of
this Agreement, so long as such lien does not contravene the provisions of
S.E.C. Release #40-12053, as amended from time to time. No fee shall be payable
hereunder with respect to any Fund during any period in which such Fund invests
all (or substantially all) of its investment assets in a registered, open-end
management investment company, or separate series thereof, in accordance with
section 12(d)(1)(E) under the Investment Company Act of 1940.
SECTION 14. MISCELLANEOUS
(a) FOREIGN EXCHANGE TRANSACTIONS. To facilitate the administration of
the Customer's trading and investment activity, the Bank is authorized
to enter into spot or forward foreign exchange contracts with the
Customer or an Authorized Person for the Customer and may also provide
foreign exchange through its subsidiaries, affiliates or
Subcustodians. Instructions, including standing instructions, may be
issued with respect to such contracts, but the Bank may establish
rules or limitations concerning any foreign exchange facility made
available. In all cases where the Bank, its subsidiaries, affiliates
or Subcustodians enter into a foreign exchange contract related to an
Account, the terms and conditions of the then current foreign exchange
contract of the Bank, its subsidiary, affiliate or Subcustodian and,
to the extent not inconsistent, this Agreement shall apply to such
transaction.
(b) CERTIFICATION OF RESIDENCY, ETC. The Customer certifies that it is a
resident of the United States and agrees to notify the Bank of any
changes in residency. The Bank may rely upon this certification or
the certification of such other facts as may be required to administer
the Bank's obligations under this Agreement. The Customer will
indemnify the Bank against all losses, liability, claims or demands
arising directly or indirectly from any such certifications.
(c) ACCESS TO RECORDS. The Bank shall allow the Customer's independent
public accountant reasonable access to the records of the Bank
relating to the Assets as is required in connection with their
examination of books and records pertaining to the customer's
affairs. Subject to restrictions under applicable law, the Bank shall
also obtain an undertaking to permit the Customer's independent public
accountants reasonable access to the records of any Subcustodian which
has physical possession of any Assets as may be required in connection
with the examination of the Customer's books and records. Upon
reasonable request from the Customer, the Bank shall furnish the
Customer such reports (or portions thereof) of the Bank's system of
internal accounting controls applicable to the Bank's duties under
this Agreement. The Bank shall endeavor to obtain and furnish the
Customer with such similar reports as it may reasonably request with
respect to each Subcustodian and securities depository holding the
Customer's assets.
(d) GOVERNING LAW; SUCCESSORS AND ASSIGNS. This Agreement shall be
governed by the laws of the State of New York and shall not be
assignable by either party, but shall bind the successors in interest
of the Customer and the Bank.
<PAGE>
(e) ENTIRE AGREEMENT; APPLICABLE RIDERS. Customer represents that the
Assets deposited in the Accounts are (Check one):
Employee Benefit Plan or other assets subject to the Employee
--- Retirement Income Security Act of 1974, as amended ("ERISA");
X Mutual Fund assets subject to certain Securities and Exchange
--- Commission ("SEC")rules and regulations;
Neither of the above.
---
This Agreement consists exclusively of this document together with Schedule A,
Schedule B, Exhibits I-___ and the following Rider(s) [Check applicable
rider(s)]:
ERISA
---
X MUTUAL FUND
---
X SPECIAL TERMS AND CONDITIONS
---
There are no other provisions of this Agreement and this Agreement
supersedes any other agreements, whether written or oral, between the parties.
Any amendment to this Agreement must be in writing, executed by both parties.
(f) SEVERABILITY. In the event that one or more provisions of this
Agreement are held invalid, illegal or enforceable in any respect on
the basis of any particular circumstances or in any jurisdiction, the
validity, legality and enforceability of such provision or provisions
under other circumstances or in other jurisdictions and of the
remaining provisions will not in any way be affected or impaired.
(g) WAIVER. Except as otherwise provided in this Agreement, no failure or
delay on the part of either party in exercising any power or right
under this Agreement operates as a waiver, nor does any single or
partial exercise of any power or right preclude any other or further
exercise, or the exercise of any other power or right. No waiver by a
party or any provision of this Agreement, or waiver of any breach or
default, is effective unless in writing and signed by the party
against whom the waiver is to be enforced.
(h) NOTICES. All notices under this Agreement shall be effective when
actually received. Any notices or other communications which may be
required under this Agreement are to be sent to the parties at the
following addresses or such other addresses as may subsequently be
given to the other party in writing:
Bank: The Chase Manhattan Bank, N.A.
Attention: Global Custody Division
Woolgate House, Coleman Street
London, EC2P 2HD, United Kingdom
or telex:
Customer: Schroder Capital Funds (Delaware)
c/o Forum Financial Services, Inc., Legal Dept.
Two Portland Square
Portland, Maine 04101
or telex: (207) 879-6050
<PAGE>
(i) TERMINATION. This Agreement may be terminated by the Customer or the
Bank by giving sixty (60) days written notice to the other, provided
that such notice to the Bank shall specify the names of the persons to
whom the Bank shall deliver the assets in the Accounts. If notice of
termination is given by the Bank, the Customer shall, within sixty
(60) days following receipt of the notice, deliver to the Bank
Instructions specifying the names of the persons to whom the Bank
shall deliver the Assets. In either case, the Bank will deliver the
Assets to the persons so specified, after deducting any amounts which
the Bank determines in good faith to be owed to it under Section 13.
If within sixty (60) days following receipt of a notice of termination
by the Bank, the Bank does not receive Instructions from the Customer
specifying the names of the persons to whom the Bank shall deliver the
Assets, the Bank, at its election, may deliver the Assets to a bank or
trust company doing business in the State of New York to be held and
disposed of pursuant to the provisions of this Agreement, or to
Authorized Persons, or may continue to hold the Assets until
Instructions are provided to the Bank.
(j) A copy of the Trust Instrument of the Schroder Capital Funds
(Delaware) is on file with the Secretary of the State of Delaware and
notice is hereby given that the Agreement is not binding upon any of
the trustees, officers, or shareholders of the Customer individually,
but are binding only upon the assets and property of the applicable
Fund. The Bank agrees that no shareholder, trustee, or officer of the
Customer or any Fund may be held personally liable or responsible for
any obligations of any fund arising out of the Agreement. With
respect to the obligations of a Fund arising out of the Agreement, the
Bank shall look for payment or satisfaction of any claim solely to the
assets and property of that Fund, and not to the assets of any other
series of the Trust.
SCHRODER CAPITAL FUNDS (DELAWARE)
On behalf of each fund listed in Schedule A.
By: /s/ L. E. Luckyn-Malone
--------------------------
Name:Laura E. Luckyn-Malone
Title: President
THE CHASE MANHATTAN BANK, N.A.
By: /s/ Caroline Willson
--------------------------
Name: Caroline Willson
Title: Director
<PAGE>
SCHRODER CAPITAL FUNDS (DELAWARE)
GLOBAL CUSTODY AGREEMENT
SCHEDULE A
(as of March 15, 1996)
Schroder International Fund
Schroder Emerging Markets Fund Institutional Portfolio
Schroder U.S. Equity Fund
Schroder U.S. Smaller Companies Fund
Schroder Latin American Fund
Schroder International Smaller Companies Fund
Schroder Global Asset Allocation Fund
<PAGE>
SCHRODER CAPITAL FUNDS (DELAWARE)
GLOBAL CUSTODY AGREEMENT
SCHEDULE B
(List of authorized Subcustodians)
<PAGE>
SPECIAL TERMS AND CONDITIONS
These Special Terms and Conditions supplement the Agreement by and between
The Chase Manhattan Bank, N.A. (the "Bank") and Schroder Capital Funds
(Delaware) (the "Customer") effective January 9, 1996. To the extent that any
term or provision of the Agreement is inconsistent with these Special Terms and
Conditions, the Special Terms and Conditions shall control.
In order to properly allocate the responsibilities of the parties, the term
"Customer" shall have the meanings designated below.
a) In the following sections of the Agreement, the term "Customer" shall
mean "each Fund":
-- Section 1(a) & (b)
-- Section 2
-- Section 4
-- Section 13, and
-- Section 14(c)
b) In the following sections of the Agreement the term "Customer" shall
refer to the Customer on behalf of a Fund.
-- Section 1; the last paragraphs
-- Section 3
-- Section 4
-- Section 5(c)
-- Section 7(b) & (e)
-- Section 7; the last paragraph
-- Section 8
-- Section 10
-- Section 11, and
-- Section 14(a) & (i)
c) In sections 9 and 12 of the Agreement, the term "Customer" shall mean
the Customer or the Fund.
<PAGE>
EXHIBIT 9(b)
SCHRODER CAPITAL FUNDS (DELAWARE)
SUBADMINISTRATION AGREEMENT
THIS AGREEMENT dated as of the AGREEMENT made this 1st day of February,
1997, between Schroder Capital Funds (Delaware) (the "Fund"), a business trust
organized under the laws of the State of Delaware with its principal place of
business at Two Portland Square, Portland, Maine 04101, and Forum Administrative
Services, Limited Liability Company ("Subadministrator"), a limited liability
company organized under the laws of the State of Delaware.
WHEREAS, the Fund is registered under the Investment Company Act of 1940 as
amended ("1940 Act") as an open-end management investment company and is
authorized to issue shares of beneficial interest ("Shares") in separate series
and classes;
WHEREAS, the Fund has entered into various Investment Advisory Agreements
with Schroder Capital Management International Inc. (the "Adviser") and
Administrative Services Agreement with Schroder Fund Advisers Inc. (the
"Administrator"), pursuant to which the Adviser and Administrator provide
certain management and administrative services for the Fund.
WHEREAS, the Fund desires that the Subadministrator perform certain
administrative services for each of the series of the Fund as listed in Appendix
A hereto (each a "Series") and each class of shares of each Series (each a
"Class") other than any administrative services required to be performed by the
Adviser or the Administrator, and the Subadministrator is willing to provide
those services on the terms and conditions set forth in this Agreement;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Fund and the Subadministrator agree as follows:
SECTION 1. APPOINTMENT. The Fund hereby appoints the Subadministrator as
subadministrator of the Fund and of each Series and any class of Shares thereof
and the Subadministrator hereby accepts such appointment, all in accordance with
the terms and conditions of this Agreement. In connection therewith, the Fund
has delivered to the Subadministrator copies of its Trust Instrument and Bylaws,
the Fund's Registration Statement and all amendments thereto filed pursuant to
the Securities Act of 1933, as amended (the "Securities Act"), or the 1940 Act
(the "Registration Statement"), and the current prospectus and statement of
additional information of each Class of each Series (collectively, as currently
in effect and as amended or supplemented, the "Prospectus"), all in such manner
and to such extent as may from time to time be authorized by the Fund's Board of
Trustees (the "Board"), and shall promptly furnish the Subadministrator with all
amendments of or supplements to the foregoing.
SECTION 2. FURNISHING OF EXISTING ACCOUNTS AND RECORDS. The Fund shall
promptly turn over to the Subadministrator such of the accounts and records
previously maintained by or for it as are necessary for the Subadministrator to
perform its functions under this Agreement. The Fund authorizes the
Subadministrator to rely on such
- 2 -
<PAGE>
accounts and records turned over to it and hereby indemnifies and will hold the
Subadministrator, its successors and assigns, harmless of and from any and all
expenses, damages, claims, suits, liabilities, actions, demands and losses
whatsoever arising out of or in connection with any error, omission, inaccuracy
or other deficiency of such accounts and records or in the failure of the Fund
to provide any portion of such or to provide any information needed by the
Subadministrator to knowledgeably perform its functions.
SECTION 3. ADMINSTRATIVE DUTIES
(a) Subject to the direction and control of the Board and in cooperation
with the Adviser and the Administrator, the Subadministrator shall provide
administrative services necessary for the Fund's operations with respect to each
Series except those services that are the responsibility of the Adviser, the
Administrator or the Series' custodian or transfer agent, all in such manner and
to such extent as may be authorized by the Board and requested by the
Administrator.
(b) With respect to the Fund, each Series and each Class thereof, as
applicable, the Subadministrator shall:
(i) oversee (A) the preparation and maintenance by the Adviser and the
Fund's custodian, transfer agent, dividend disbursing agent and fund
accountant (or if appropriate, prepare and maintain) in such form, for
such periods and in such locations as may be required by applicable
law, of all documents and records relating to the operation of the
Fund required to be prepared or maintained by the Fund or its agents
pursuant to applicable law; (B) the reconciliation of account
information and balances among the Adviser and the Fund's custodian,
transfer agent, dividend disbursing agent and fund accountant; (C) the
transmission of purchase and redemption orders for Shares; (D) the
notification to the Adviser of available funds for investment; and (E)
the performance of fund accounting, including the calculation of the
net asset value of the Shares;
(ii) oversee the performance of administrative and professional services
rendered to the Fund by others, including its custodian, transfer
agent and dividend disbursing agent as well as legal, auditing and
shareholder servicing and other services performed for each Series or
class thereof;
(iii) be responsible for the preparation and the printing of the periodic
updating of the Registration Statement and Prospectus, tax returns,
and reports to shareholders, the Securities and Exchange Commission
and state securities commissions;
(iv) be responsible for the preparation of proxy and information statements
and any other communications to shareholders;
(v) at the request of the Board, provide the Fund with adequate general
office space and facilities and provide persons suitable to the Board
to serve as officers of the Fund;
(vi) provide the Fund,, at the Fund's expense's request, with the services
of persons who may bare competent to perform such supervisory, or
administrative and clerical functions as are necessary to provide
effective operationsfor effective operation of the Fund;
(vii) prepare, file and maintain the Fund's governing documents, including
the Trust Instrument and minutes of meetings of Trustees and
shareholders;
(viii) with the cooperation of the Fund's counsel, the Administrator, the
Adviser, and other relevant parties, prepare and disseminate materials
for meetings of the Board;
(ix) monitor sales of Shares and ensure that such Shares are properly and
duly registered with the Securities and Exchange Commission and
applicable state securities commissions;
<PAGE>
(x) oversee the calculation of performance data for dissemination to
information services covering the investment company industry, for
sales literature of the Fund and other appropriate purposes;
(xi) oversee the determination of the amount of, and supervise the
declaration of, dividends and other distributions to shareholders as
necessary to, among other things, maintain the qualification of each
Series as a regulated investment company under the Internal Revenue
Code of 1986, as amended, and prepare and distribute to appropriate
parties notices announcing the declaration of dividends and other
distributions to shareholders; and
(xii) advise the Fund and its Board on matters concerning the Fund and its
affairs.
(c) The Subadministrator shall prepare and maintain or cause to be
prepared and maintained records in such form for such periods and in such
locations as may be required by applicable regulations, all documents and
records relating to the services provided to the Fund pursuant to this Agreement
required to be maintained pursuant to the 1940 Act, rules and regulations of the
Securities and Exchange Commission, the Internal Revenue Service and any other
national, state or local government entity with jurisdiction over the Fund. The
accounts and records pertaining to the Fund which are in possession of the
Subadministrator shall be the property of the Fund. The Fund, or the Fund's
authorized representatives, shall have access to such accounts and records at
all times during the Subadministrator's normal business hours. Upon the
reasonable request of the Fund, copies of any such accounts and records shall be
provided promptly by the Subadministrator to the Fund or the Fund's authorized
representatives. In the event the Fund designates a successor to any of the
Subadministrator's obligations under this agreement, the Subadministrator shall,
at the expense and direction of the Fund, transfer to such successor all
relevant books, records and other data established or maintained by the
Subadministrator under this Agreement.
SECTION 4. STANDARD OF CARE.
(a) The Subadministrator, in performing under the terms and conditions of
this Agreement, shall use its best judgment and efforts in rendering the
services described herein, and shall incur no liability for its status under
this agreement or for any reasonable actions taken or omitted in good faith. As
an inducement to the Subadministrator's undertaking to render these services,
the Fund hereby agrees to indemnify and hold harmless the Subadministrator, its
employees, agents, officers and directors, from any and all loss, liability and
expense, including any legal expenses, arising out of the Subadministrator's
performance under this Agreement, or status, or any act or omission of the
Subadministrator, its employees, agents, officers and directors; provided that
this indemnification shall not apply to the Subadministrator's actions taken or
failures to act in cases of the Subadministrator's own bad faith, willful
misconduct or gross negligence in the performance of its duties under this
Agreement; and further provided, that the Subadministrator shall give the Fund
notice and reasonable opportunity to defend against any such loss, claim,
damage, liability or expense in the name of the Fund or the Subadministrator, or
both. The Fund will be entitled to assume the defense of any suit brought to
enforce any such claim or demand, and to retain counsel of good standing chosen
by the Fund and approved by the Subadministrator,such approval not to which
approval shall be unreasonably withheldnot be withheld unreasonably. In the
event the Fund does elect to assume the defense of any such suit and retain
counsel of good standing approved by the Subadministrator, the defendant or
defendants in such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case the Fund does not elect to assume
the defense of any such suit, or in case the Subadministrator does not approve
of counsel chosen by the Fund or the Subadministrator has been advised that it
may have available defenses or claims which are not available or conflict with
those available to the Fund, the Fund will reimburse the Subadministrator, its
employees, agents, officers and directors for the fees and expenses of any one
counsellaw firm retained as counsel by the Subadministrator or them. The
Subadministrator may, at any time, waive its right to indemnification under this
agreement and assume its own defense. The provisions of paragraphs (b) through
(d) of this Section 4 should not in any way limit the foregoing:
(a) The Subadministrator may rely upon the advice of the Fund or of
counsel, who may be counsel for the Fund or counsel for the Subadministrator,
and upon statements of accountants, brokers and other persons believed by it in
good faith to be expert in the matters upon which they are consulted, and the
Subadministrator shall not be liable to anyone for any actions taken in good
faith upon such statements.
- 2 -
<PAGE>
(b) The Subadministrator may act upon any oral instruction which it
receives and which it believes in good faith was transmitted by the person or
persons authorized by the Board of the Fund to give such oral instruction. The
Subadministrator shall have no duty or obligation to make any inquiry or effort
of certification of such oral instruction.
(c) The Subadministrator shall not be liable for any action taken in good
faith reliance upon any written instruction or certified copy of any resolution
of the Board of the Fund, and the Subadministrator may rely upon the genuineness
of any such document or copy thereof reasonably believed in good faith by the
Subadministrator to have been validly executed.
(d) The Subadministrator may rely and shall be protected in acting upon
any signature, instruction, request, letter of transmittal, certificate, opinion
of counsel, statement, instrument, report, notice, consent, order, or other
paper document believed by it to be genuine and to have been signed or presented
by the purchaser, Fund or other proper party or parties.
SECTION 5. EXPENSES. Subject to any agreement by the Subadministrator
or other person to reimburse any expenses of the Fund that relate to any Series,
the Fund shall be responsible for and assume the obligation for payment of all
of its expenses, including: (a) the fee payable under Section 6 hereof; (b) any
fees payable to the Adviser; (c) any fees payable to the Administrator; (d)
expenses of issue, repurchase and redemption of Shares; (e) interest charges,
taxes and brokerage fees and commissions; (f) the cost (or appropriate share
thereof) of reasonable premiums for errors and omissions and other liability
insurance policy of FFSI; (g) premiums of insurance for the Fund, its Trustees
and officers and fidelity bond premiums; (hg) fees, interest charges and
expenses of third parties, including the Fund's custodian, transfer agent,
dividend disbursing agent and fund accountant; (ih) fees of pricing, interest,
dividend, credit and other reporting services; (ij) costs of membership in trade
associations; (kj) telecommunications expenses; (l) funds transmission expenses;
(m) auditing, legal and compliance expenses; (n) costs of forming the Fund and
maintaining its existence; (o) to the extent permitted by the 1940 Act, costs of
preparing and printing the Series' Prospectuses, subscription application forms
and shareholder reports and delivering them to existing shareholders; (p)
expenses of meetings of shareholders and proxy solicitations therefore; (q)
costs of maintaining books of original entry for portfolio and fund accounting
and other required books and accounts, of calculating the net asset value of
shares of the Fund and of preparing tax returns; (r) costs of reproduction,
stationery and supplies; (s) fees and expenses of the Fund's Trustees; (t)
compensation of the Fund's officers and employees who are not employees of the
Adviser or Sub- Subadministrator or their respective affiliated persons and
costs of other personnel (who may be employees of the Adviser, the
Administrator, the Subadministrator or their respective affiliated persons)
performing services for the Fund; (u) costs of Trustee meetings; (v) Securities
and Exchange Commission registration fees and related expenses; (w) state or
foreign securities laws registration fees and related expenses; and (x) all fees
and expenses paid by the Fund in accordance with any distribution plan adopted
pursuant to Rule 12b-1 under the 1940 Act or under any shareholder service plan
or agreement.
SECTION 6. COMPENSATION.
(a) In consideration of the services performed by the Subadministrator
under this Agreement, the Fund will pay the Subadministrator, with respect to
each Fund, a fee at the annual rate, as listed in Appendix B hereto. Such fee
shall be accrued by the Fund daily and shall be payable monthly in arrears on
the first day of each calendar month for services performed under this agreement
during the prior calendar month. (a) For the administrative services
provided by the Sub-Administrator pursuant to this AgreementIf the fees payable
pursuant to this provision begin to accrue before the end of any month or if
this Agreement terminates before the end of any month, the fees for the period
from that date to the end of that month or from the beginning of that month to
the date of termination, as the case may be, shall be prorated according to the
proportion that the period bears to the full month in which the effectiveness or
termination occurs. Upon the termination of this Agreement, the Fund shall pay
to the Sub- Administrator Subadministrator such compensation as shall be payable
prior to the effective date of such termination.
- 3 -
<PAGE>
(b) In the event that this agreement is terminated, the Subadministrator
shall be reimbursed for reasonable charges and disbursements associated with
promptly transferring to its successor as designated by the Fund or the
Administrator the original or copies of all accounts and records maintained by
the Subadministrator under this agreement, and cooperating with, and providing
reasonable assistance to its successor in the establishment of the accounts and
records necessary to carry out the successor's or other person's
responsibilities.
(c) Notwithstanding anything in this Agreement to the contrary, the
Subadministrator and its affiliated persons may receive compensation or
reimbursement from the Fund with respect to (i) the provision of services on
behalf of the Series in accordance with any distribution plan adopted by the
Fund pursuant to Rule 12b-1 under the 1940 Act or (ii) the provision of
shareholder support or other services, including fund accounting services or
(iii) service as a Director or officer of the Fund.
SECTION 7. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective on the date first above written
with respect to each Series of the Fund then existing and shall relate to every
other Series as of the later of the date on which the Fund's Registration
Statement relating to the shares of such Series becomes effective and the Series
commences operations.
(b) This Agreement shall continue in effect for twelve months and,
thereafter, shall be automatically renewed each year for an additional term of
one year.
(c) This Agreement may be terminated with respect to a Series at any time,
without the payment of any penalty, (i) by the Board on 60 days' written notice
to the Subadministrator or (ii) by the Subadministrator on 60 days' written
notice to the Fund. Upon receiving notice of termination by the
Subadministrator, the Fund shall use its best efforts to obtain a successor
subadministrator. Upon receipt of written notice from the Fund of the
appointment of a successor, and upon payment to the Subadministrator of all fees
owed through the effective termination date, and reimbursement for reasonable
charges and disbursements, the Subadministrator shall promptly transfer to the
successor subadministrator the original or copies of all accounts and records
maintained by the Subadministrator under this agreement including, in the case
of records maintained on computer systems, copies of such records in
machine-readable form, and shall cooperate with, and provide reasonable
assistance to, the successor sub-administrator in the establishment of the
accounts and records necessary to carry out the successor sub-administrator's
responsibilities. For so long as the Subadministrator continues to perform any
of the services contemplated by this Agreement after termination of this
Agreement as agreed to by the Fund and the Subadministrator, the provisions of
Sections 4 and 6 hereof shall continue in full force and effect.
SECTION 8. ACTIVITIES OF SUB-ADMINISTRATOR. Except to the extent
necessary to perform its obligations under this Agreement, nothing herein shall
be deemed to limit or restrict the Subadministrator's right, or the right of any
of its officers, directors or employees (whether or not they are a Trustee,
officer, employee or other affiliated person of the Fund) to engage in any other
business or to devote time and attention to the management or other aspects of
any other business, whether of a similar or dissimilar nature, or to render
services of any kind to any other corporation, trust, fund, firm, individual or
association.
SECTION 9. COOPERATION WITH INDEPENDENT ACCOUNTANTS. The Subadministrator
shall cooperate with the Fund's independent public accountants and shall take
reasonable action to make all necessary information available to such
accountants for the performance of their duties.
SECTION 10. SERVICE DAYS. Nothing contained in this Agreement is intended
to or shall require the Subadministrator, in any capacity under this agreement,
to perform any functions or duties on any day other than a business day of the
Fund or of a Series. Functions or duties normally scheduled to be performed on
any day which is not a business day of the Fund or of a Series shall be
performed on, and as of, the next business day, unless otherwise required by
law.
SECTION 11. NOTICES. Any notice or other communication required by or
permitted to be given in connection with this Agreement shall be in writing and
shall be delivered in person, or by first-class mail, postage
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<PAGE>
prepaid, or by overnight or two-day private mail service to the respective
party. Notice to the Fund shall be given as follows or at such other address as
a party may have designated in writing, shall be deemed to have been properly
given:
Schroder Capital Funds (Delaware)
787 Seventh Avenue
New York, New York 10019
Notice to the Subadministrator shall be given as follows or at such other
address as a party may have designated in writing, shall be deemed to have been
properly given:
Forum Administrative Services, Limited Liability Company
Two Portland Square
Portland, Maine 04101
Notices and other communications received by the parties at the addresses
listed above.
SECTION 12. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY.
The Trustees of the Fund and the shareholders of each Series shall not be
liable for any obligations of the Fund or of the Series under this Agreement,
and the Subadministrator agrees that, in asserting any rights or claims under
this Agreement, it shall look only to the assets and property of the Fund or the
Series to which the Subadminstrator's rights or claims relate in settlement of
such rights or claims, and not to the Trustees of the Fund or the shareholder of
the Series.
SECTION 13. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto.
(b) This Agreement may be executed in two or more counterparts, each of
which, when so executed shall be deemed to be an original, but such counterparts
shall together constitute but one and the same instrument.
(c) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(d) Section and Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
(e) This Agreement shall extend to and shall be binding upon the parties
hereto and their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by the fund without the written consent of the
Subadministrator, or by the Subadministrator, without the written consent of the
Fund authorized or approved by a resolution of the Board.
(f) This Agreement shall be governed by the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
SCHRODER CAPITAL FUNDS (DELAWARE)
- 5 -
<PAGE>
By: ALEXANDRA POE, SECRETARY AND VICE
-------------------------------------
PRESIDENT
------------
FORUM ADMINISTRATIVE SERVICES,
LIMITED LIABILITY COMPANY
By: Forum Advisors, Inc. as Manager
By: JOHN Y. KEFFER, PRESIDENT
------------------------------
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<PAGE>
SCHRODER CAPITAL FUNDS (DELAWARE)
SUBADMINISTRATION AGREEMENT
APPENDIX A
SERIES OF THE FUND
Schroder International Fund
Schroder U.S. Equity Fund
Schroder U.S. Smaller Companies Fund
Schroder Latin American Fund
Schroder Emerging Markets Fund Institutional Portfolio
Schroder International Smaller Companies Fund
Schroder Global Asset Allocation Fund
<PAGE>
SCHRODER CAPITAL FUNDS (DELAWARE)
SUBADMINISTRATION AGREEMENT
APPENDIX B
SERIES OF THE FUND
International Equity Fund
Schroder U.S. Equity Fund
Schroder U.S. Smaller Companies Fund
SCHEDULE B
SUBADMINISTRATION FEES
Fee As % of the Average Annual
Series of the Fund Daily Net Assets of the Series
------------------ ------------------------------
Schroder International Fund 0.05%
Schroder U.S. Equity Fund,
Schroder U.S. Smaller Companies Fund,
Schroder Latin American Fund and
Schroder Emerging Markets Fund
Institutional Portfolio 0.10%
Schroder International Smaller Companies Fund and
Schroder Global Asset Allocation Fund 0.075%
(a) The minimum administration fee per Series, except Schroder
International Fund, Schroder U.S. Equity Fund, Schroder U.S. Smaller Companies
Fund, Schroder Latin American Fund and Schroder Emerging Markets Fund
Institutional Portfolio, is $25,000 plus $12,000 per Class for each Class of the
Series above one.
(b) During any period in which Schroder Emerging Markets Fund
Institutional Portfolio invests all (or substantially all) of its investable
assets in a registered, open-end management investment company, or separate
Series thereof ("Core Portfolio"), the above listed fee for this Series shall be
0.05%. The Subadministrator agrees to waive this fee only after the full waiver
of fees payable by the Series or the Core Portfolio to the Adviser and the
Administrator, and then only to the extent necessary to keep the total expense
ratio for this Series (including its pro rata share of the expenses of the Core
Portfolio) at or below 1.60% of average annual daily net assets in the Series.
(c) During any period in which Schroder U.S. Smaller Companies Fund
invests all (or substantially all) of its investable assets in a Core Portfolio,
the above listed fee for this Series shall be 0.05%.
<PAGE>
EXHIBIT 9(d)
SCHRODER CAPITAL FUNDS (DELAWARE)
FUND ACCOUNTING AGREEMENT
THIS AGREEMENT dated as of the 9th day of January, 1996, by and between
Schroder Capital Funds (Delaware) (the "Fund") and Forum Financial Corp.
("FFC"), both corporations organized under the laws of the State of Delaware.
WHEREAS, the Fund is registered under the Investment Company Act of 1940 as
an open-end management investment company and is authorized to issue shares of
common stock in separate Series and Classes;
WHEREAS, the Fund currently consists of five Series portfolios:
International Equity Fund, Schroder U.S. Equity Fund, Schroder U.S. Smaller
Companies Fund, Schroder Emerging Markets Fund Institutional Portfolio and
Schroder Latin American Fund;
WHEREAS, the Fund desires that FFC perform certain fund accounting and
related services for each Series of the Fund, and Class thereof, that currently
exists or in the future may be created, and FFC is willing to perform those
services on the terms and conditions set forth in this Agreement; and
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Fund and FFC agree as follows:
SECTION 1. APPOINTMENT. The Fund hereby appoints FFC as Accounting
Services Agent of the Fund and FFC hereby accepts such appointment, all in
accordance with the terms and conditions of this Agreement.
SECTION 2. DEFINITIONS. Whenever used in this Agreement, the following
terms shall have the meanings specified, insofar as the context will allow:
a) ACT: The term Act shall mean the Investment Company Act of 1940, as
amended from time to time.
b) BOARD: The term Board shall mean the Board of Trustees of the Fund.
c) CLASS: The term Class shall mean any future classes of each Series
listed in Appendix A or any class of any Series that the Fund shall
subsequently establish.
d) CUSTODIAN: The term Custodian shall mean Chase Manhattan Bank, NA; or
any successor or other custodian acting as such for any current or
future Series of the Fund.
e) FUND: The term Fund shall mean Schroder Capital Funds (Delaware).
<PAGE>
f) FUND BUSINESS DAY. The term Fund Business Day shall mean each day that
the New York Stock Exchange is open for trading (which excludes the
following national business holidays: New Year's Day, President's Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day, and Christmas Day).
g) ORAL INSTRUCTION: The term Oral Instruction shall mean an
authorization, instruction, approval, item or set of data, or
information of any kind transmitted to FFC in person or by telephone,
vocal telegram or other electronic means, by a person or persons
reasonably believed in good faith by FFC to be a person or persons
authorized by a resolution of the Board of the Fund to give Oral
Instructions on behalf of the Fund. Each Oral Instruction shall
specify whether it is applicable to all of the Fund or to a specific
Series or Class.
h) PROSPECTUS: The term Prospectus shall mean the then-current prospectus
forming a part of an effective Registration Statement of the Fund under
the Securities Act of 1933, as amended, and the Act covering the Shares
of a Series or Class as the case may be, as the same may be amended or
supplemented from time to time.
i) SERIES: The term Series shall mean each series listed in Appendix A or
any series that the Fund shall subsequently establish.
j) SHAREHOLDERS: The term Shareholders shall mean the registered owners
from time to time of the Shares, as reflected on the share registry
records of the Fund.
k) SHARES: The term Shares shall mean the issued and outstanding shares
of common stock of the Fund, including any fractions thereof.
l) WRITTEN INSTRUCTIONS: The term Written Instructions shall mean an
authorization, instruction, approval, item or set of data, or
information of any kind transmitted to FFC in original writing
containing original signatures, or a copy of such document transmitted
by facsimile, including transmission of such signature, or other
mechanical or documentary means at the request of a person or persons
reasonably believed in good faith by FFC to be a person or persons
authorized by a resolution of the Board to give Written Instructions on
behalf of the Fund. Each Written Instruction shall specify whether it
is applicable to all of the Fund or a specific Series or Class.
SECTION 3. FURNISHING OF EXISTING ACCOUNTS AND RECORDS. The Fund shall
promptly turn over to FFC such of the Accounts and Records (as defined in
Section 4(a)) previously maintained by or for it as are necessary for FFC to
perform its functions under this Agreement. The Fund authorizes FFC to rely on
such Accounts and Records turned over to it and hereby indemnifies and will hold
FFC, its successors and assigns, harmless of and from any and all expenses,
damages, claims, suits, liabilities, actions, demands and losses whatsoever
arising out of or in connection with any error, omission, inaccuracy or other
deficiency of such Accounts and Records or in the failure of the Fund to provide
any portion of such or to provide any information needed by FFC to knowledgeably
perform its functions.
SECTION 4. SERVICES TO BE PERFORMED. For each Series and Class thereof,
FFC shall perform the services listed in this Section. FFC and the Fund's
administrator, Schroder Fund Advisors Inc., or sub-administrator, Forum
Financial Services, Inc. ("Forum"), may from time to time adopt such procedures
as they agree upon to implement the terms of this Section.
(a) PREPARATION AND MAINTENANCE OF ACCOUNTS AND RECORDS. To the extent it
receives the necessary information from the Fund and its agents by Written or
Oral Instructions (as defined in Section 4), FFC shall maintain, in accordance
with Rule 31a-1 under the Act, the following accounts and records ("Accounts and
Records") relating to the business of the Fund, and each Series and Class
thereof, in such form as may be mutually agreed to between the Fund and FFC:
<PAGE>
1) Cash Receipts Journal
2) Cash Disbursements Journal
3) Dividends Paid Record
4) Purchase and Sales Journal - Portfolio Securities
5) Subscription and Redemption Journals
6) Security Ledgers
7) Broker-Dealer Ledger
8) General Ledger
9) Daily Expense Accruals
10) Daily Interest Accruals
11) Securities and Monies borrowed or loaned and collateral therefore
12) Daily Trial Balances
13) Investment Income Journal
14) Other records required by the Rule or any successor rule or pursuant
to interpretations thereof to be kept by open-end management
investment companies, but limited to those provisions of the Rule
applicable to portfolio transactions (but not the records the adviser
is required to maintain pursuant to 31a-1(b)(5), (6) and (7)), or as
agreed upon by the parties hereto.
The Accounts and Records shall be prepared and maintained in such form, for
such periods and in such locations as may be required by Rule 31a-2 under the
Act. The Accounts and Records maintained by FFC shall be the property of the
Fund, and shall be made available to the Fund promptly upon request. FFC shall
assist the Fund's independent auditors, or upon approval of the Fund, or upon
demand, any regulatory body, in any requested review of the Fund's Accounts and
Records, but shall be reimbursed for all expenses and employee time invested in
any such review outside of routine and normal periodic reviews. Upon receipt
from the Fund of the necessary information, FFC shall supply the necessary data
for the Fund or accountant's completion of any necessary tax returns,
questionnaires, periodic reports to shareholders and such other reports and
information requests as the Fund and FFC shall agree upon from time to time.
The Fund, prior to 4:00 p.m., Eastern time, will furnish FFC with Written
or Oral Instructions containing all necessary information (exclusive of
portfolio prices) to perform the above functions and to calculate the net asset
value of each Series of the Fund. The Fund shall indemnify and hold harmless
FFC from and against any liability arising from any discrepancy between the
information received by FFC and used in such calculations and any subsequent
information received from the Fund or any of its designated agents or pricing
services.
It shall be the responsibility of the Fund to furnish or cause to be
furnished to FFC, the declaration, record, payment dates and amounts of any
dividends or income and any other special actions required on or concerning each
of its portfolio securities.
(b) CALCULATION OF NET ASSET VALUE. FFC shall perform the ministerial
calculations necessary to calculate the net asset value of each Series and Class
of the Fund daily, in accordance with the Fund's current Prospectus except where
the Fund has given or caused to be given specific Written or Oral Instructions
to utilize a
2
<PAGE>
different method of calculation. If required because quotes are not available,
portfolio securities shall be given such values as the Fund or its agent
provides by Written or Oral Instructions. FFC shall have no responsibility or
liability for the accuracy of the information supplied by the Fund; or for any
loss, liability, damage or cost arising out of any inaccuracy of such data. FFC
shall have no responsibility or duty to include information or valuations to be
provided by the Fund or its designated agent in any computation unless and until
it is timely supplied to FFC in useable form. Unless the necessary information
to calculate the net asset value daily is furnished by Written or Oral
Instructions from the Fund or its designated agent, FFC shall incur no
liability, and the Fund shall indemnify and hold harmless FFC from and against
any liability arising from any failure to provide complete information or from
any discrepancy between the information received by FFC and used in such
calculation and any subsequent information received from the Fund or any of its
designated agents.
SECTION 5. WRITTEN AND ORAL INSTRUCTIONS. Each Written Instruction shall
set forth the specific transaction or type of transaction involved, including a
specific statement of the purpose for which such action is requested. Oral
instructions will be considered proper instructions if FFC reasonably believes
them to have been given by a person authorized to give such instructions with
respect to the transactions involved. The Fund shall cause all Oral
Instructions to be confirmed in writing. Upon receipt of a certificate of the
Secretary or an Assistant Secretary as to the authorization by the Board of the
Fund, Oral Instructions may include communications effected directly between
electromechanical or electronic devices, provided that the Board and FFC are
satisfied that such procedures afford adequate safeguards for the Fund's assets.
SECTION 6. RELIANCE ON INSTRUCTIONS. For all purposes under this
Agreement, FFC is authorized to act upon receipt of the first of any Written or
Oral Instruction it receives from the Fund or its agents on behalf of the Fund.
In cases where the first Instruction is an Oral Instruction, a confirming
Written Instruction shall be delivered, and in cases where FFC receives an
Instruction, whether Written or Oral, to enter a portfolio transaction on the
records, the Fund shall cause the broker-dealer executing the trade to send a
written confirmation to FFC. FFC shall be entitled to rely on the first
Instruction received, and for any act or omission undertaken in compliance
therewith shall be free of liability and fully indemnified and held harmless by
the Fund, provided however, that in the event a Written or Oral Instruction
received by FFC is countermanded by a timely later Written or Oral Instruction
received by FFC prior to acting upon such countermanded Instruction, FFC shall
act upon such later Written or Oral Instruction. The sole obligation of FFC
with respect to any follow-up or confirming Written Instruction, Oral
Instruction in documentary or written form, or Broker-Dealer written
confirmation shall be to make reasonable efforts to detect any discrepancy
between the original Instruction and such confirmation and to report such
discrepancy to the Fund. The Fund shall be responsible, at the Fund's expense
for taking any action, including any reprocessing, necessary to correct any
discrepancy or error, and to the extent such action requires FFC to act, the
Fund shall give FFC specific Written Instructions as to the action required.
SECTION 7. MONTHLY STATEMENTS. At the end of each month, the Fund shall
cause the Custodian to forward to FFC a monthly statement of cash and portfolio
transactions, which FFC shall reconcile with FFC's Accounts and Records
maintained for the Fund. FFC will report any discrepancies to the Custodian,
and report any unreconciled items to the Fund.
SECTION 8. PERIODIC REPORTS. FFC shall promptly supply daily and periodic
reports to the Fund or its agents as requested by the Fund and agreed upon by
FFC. FFC shall prepare and maintain appropriate work papers to support the
accounts that it maintains pursuant to this Agreement. FFC will prepare the
following financial reports: (a) Daily trial balances; (b) Semi-annual and
annual reports containing required financial statements; and (c) Schedules of
purchases and sales of securities.
SECTION 9. SHARE INFORMATION. The Fund shall, and shall require each of
its agents (including without limitation its Transfer Agent and its Custodian),
to provide FFC as of the close of each business day, or on such other schedule
as the Fund determines is necessary, (to be delivered to FFC by 10:00 a.m. the
next following business day) all data and information necessary for FFC to
maintain the Fund's Accounts and Records and FFC may conclusively assume that
the information to be received is complete and accurate. Among the information
to be received by FFC are reports of share purchases, redemptions, and total
shares outstanding on the next business
3
<PAGE>
day after each net asset valuation. If supplied by the Fund, any such
information shall be supplied by Written or Oral Instructions.
SECTION 10. OTHER PROCEDURES. FFC and the Fund may from time to time
adopt such procedures as they agree upon in writing, and FFC may conclusively
rely on a determination by the Fund that any procedure approved by the Fund, or
directed by the Fund, does not conflict with or violate any requirements of the
respective Prospectus, Trust Instrument, or any rule or regulation of any
regulatory body or governmental agency. The Fund shall be responsible for
notifying FFC of any changes in regulations or rules which might necessitate
changes in FFC's procedures, and for working out with FFC such changes.
SECTION 11. STANDARD OF CARE; LIMITATION OF LIABILITY; INDEMNIFICATION.
FFC, in performing under the terms and conditions of this Agreement, shall use
its best judgment and efforts in rendering the services described herein, and
shall incur no liability for its status hereunder or for any reasonable actions
taken or omitted in good faith. As an inducement to FFC's undertaking to render
these services, the Fund hereby agrees to indemnify and hold harmless FFC, its
employees, agents, officers and trustees, from any and all loss, liability and
expense, including any legal expenses, arising out of FFC's performance under
this Agreement, or status, or any act or omission of FFC, its employees, agents,
officers and trustees; provided that this indemnification shall not apply to
FFC's actions taken or failures to act in cases of FFC's own bad faith, willful
misconduct or gross negligence performance of its duties under this Agreement;
and provided further that FFC shall give the Fund notice and reasonable
opportunity to defend against any such loss, claim, damage, liability or expense
in the name of the Fund or FFC, or both. The Fund will be entitled to assume
the defense of any suit brought to enforce any such claim or demand, and to
retain counsel of good standing chosen by the Fund and approved by FFC, which
approval shall not be withheld unreasonably. In the event the Fund does elect
to assume the defense of any such suit and retain counsel of good standing
approved by FFC, the defendant or defendants in such suit shall bear the fees
and expenses of any additional counsel retained by any of them; but in case the
Fund does not elect to assume the defense of any such suit, or in case FFC does
not approve of counsel chosen by the Fund or FFC has been advised that it may
have available defenses or claims which are not available or conflict with those
available to the Fund, the Fund will reimburse FFC, its officers or trustees or
the controlling person or persons named as defendant or defendants in such suit,
for the fees and expenses of any one law firm retained as counsel by FFC or
them. FFC may, at any time, waive its right to indemnification hereunder and
assume its own defense. Without limitation of the foregoing:
a) FFC may rely upon the advice of the Fund or of counsel, who may be
counsel for the Fund or counsel for FFC and upon statements of
accountants, brokers and other persons believed by it in good faith to
be expert in the matters upon which they are consulted, and FFC shall
not be liable to anyone for any actions taken in good faith upon such
statements.
b) FFC may act upon any Oral Instruction which it receives and which it
believes in good faith was transmitted by the person or persons
authorized by the Board of the Fund to give such Oral Instruction.
FFC shall have no duty or obligation to make any inquiry or effort of
certification of such Oral Instruction.
c) FFC shall not be liable for any action taken in good faith reliance
upon any Written Instruction or certified copy of any resolution of
the Board of the Fund, and FFC may rely upon the genuineness of any
such document or copy thereof reasonably believed in good faith by FFC
to have been validly executed.
d) FFC may rely and shall be protected in acting upon any signature,
instruction, request, letter of transmittal, certificate, opinion of
counsel, statement, instrument, report, notice, consent, order, or
other paper document believed by it to be genuine and to have been
signed or presented by the purchaser, Fund or other proper party or
parties.
SECTION 12. COMPENSATION
(a) FEE. For the services provided by FFC pursuant to this
Agreement, the Fund shall pay to FFC a fee with respect to each Series as
calculated in accordance with Appendix B hereto. These fees shall be paid
4
<PAGE>
monthly in advance. Fees will begin to accrue for each Series on the latter of
the effective date of this Agreement or the date of commencement of operations
of the Series.
(b) REIMBURSEMENT OF EXPENSES. The Fund shall reimburse FFC for all out
of pocket and ancillary costs incurred in providing any fund accounting services
hereunder, including the cost of (or appropriate share of the cost of) (i)
pricing services; (ii) any and all forms and stationery used or specially
prepared for the purpose; (iii) postage; (iv) telephone services; (v) bank fees;
(vi) electronic or facsimile transmission; and (vii) any items the Fund is
responsible for as described in the Fund's agreements with FFC, Forum Financial
Services, Inc., Schroder Capital Management International Inc., or Schroder Fund
Advisers Inc. The Fund shall reimburse FFC for all expenses and employee time
attributable to any review of the Fund's accounts and records by the Fund's
independent public accountants or any regulatory body outside of routine and
normal periodic reviews. In the event that this agreement is terminated and a
successor fund accountant is appointed, FFC shall be reimbursed for reasonable
charges and disbursements associated with promptly transferring to the successor
fund accountant the original or copies of all books and records maintained by
FFC hereunder, and cooperating with, and providing reasonable assistance to, the
successor fund accountant in the establishment of the books and records
necessary to carry out the successor fund accountant's responsibilities.
SECTION 13. EFFECTIVENESS, DURATION AND TERMINATION.
(a) EFFECTIVENESS. This Agreement shall become effective as of the date
first above written with respect to the International Equity Fund, Schroder U.S.
Equity Fund, Schroder U.S. Smaller Companies Fund and Schroder Emerging Markets
Fund Institutional Portfolio and shall relate to any other Series as of the date
on which FFC first calculates the NAV for that Series.
(b) DURATION. This Agreement shall remain in effect indefinitely.
(c) TERMINATION. This Agreement may be terminated with respect to any
Series, or Class thereof, without the payment of any penalty, (i) by a vote of a
majority of the Fund's Board on 60 days' written notice to FFC or (ii) by FFC on
not less than 60 days' written notice to the Fund. Such termination shall be
effective as of the date specified in the notice. Upon receiving notice of
termination by FFC, the Fund shall use its best efforts to obtain a successor
fund accountant. Upon receipt of written notice from the Fund of the
appointment of the successor fund accountant and Oral or Written Instructions,
and upon payment to FFC of all fees owed through the effective termination date,
and reimbursement for reasonable charges and disbursements (as described in
Section 12), FFC shall promptly transfer to the successor fund accountant the
original or copies of all books and records maintained by FFC hereunder
including, in the case of records maintained on computer systems, copies of such
records in machine-readable form, and shall cooperate with, and provide
reasonable assistance to, the successor fund accountant in the establishment of
the books and records necessary to carry out the successor fund accountant's
responsibilities. For so long as FFC continues to perform any of the services
contemplated by this Agreement after termination of this Agreement (as agreed to
by the Fund and FFC), the provisions of Sections 11 and 12 hereof shall continue
in full force and effect.
SECTION 14. SERVICE DAYS. Nothing contained in this Agreement is intended
to or shall require FFC, in any capacity hereunder, to perform any functions or
duties on any day other than a Fund Business Day. Functions or duties normally
scheduled to be performed on days other than a Fund Business Day such days shall
be performed on, and as of, the next Fund Business Day. Notwithstanding the
foregoing, FFC shall compute the net asset value of the Fund on each day
required pursuant to Rule 22 c-1 promulgated under the Act.
SECTION 15. BOARD RESOLUTIONS. The Fund shall file with FFC a certified
copy of the operative resolution of the Board authorizing the execution of
Written Instructions or the transmittal of Oral Instructions.
SECTION 16. NOTICES. Any notice or other communication required by or
permitted to be given in connection with this Agreement shall be in writing and
shall be delivered in person, or by first-class mail, postage prepaid, or by
overnight or two-day private mail service to the respective party. Notice to
the Fund shall be given as follows until further notice:
5
<PAGE>
Schroder Capital Funds (Delaware)
Two Portland Square
Portland, Maine 04101
Notice to FFC shall be given as follows until further notice:
Forum Financial Corp.
Two Portland Square
Portland, Maine 04101
SECTION 17. REPRESENTATIONS AND WARRANTIES. The Fund represents and
warrants to FFC that the execution and delivery of this Agreement by the
undersigned officer of the Fund has been duly and validly authorized by
resolution of the Board. FFC represents and warrants to the Fund that the
execution and delivery of this Agreement by the undersigned officer of FFC has
also been duly and validly authorized.
SECTION 18. MISCELLANEOUS.
a) MODIFICATIONS AND AMENDMENTS. No provisions of this Agreement may be
amended or modified in any manner except by a written agreement
properly authorized and executed by both parties hereto.
b) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which, when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and
the same instrument.
c) CONSTRUCTION IF PROVISION DEEMED ILLEGAL OR INVALID. If any part, term
or provision of this Agreement is held to be illegal, in conflict with
any law or otherwise invalid, the remaining portion or portions shall
be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the
Agreement did not contain the particular part, term or provision held
to be illegal or invalid.
d) SECTION AND PARAGRAPH HEADINGS. Section and Paragraph headings in this
Agreement are included for convenience only and are not to be used to
construe or interpret this Agreement.
e) NOTICES. Notices, requests, instructions and communications received
by the parties at their respective principal addresses, or at such
other address as a party may have designated in writing, shall be
deemed to have been properly given.
f) SUCCESSORS AND ASSIGNS. This Agreement shall extend to and shall be
binding upon the parties hereto and their respective successors and
assigns; provided, however, that this Agreement shall not be assignable
by the Fund without the written consent of FFC, or by FFC, without the
written consent of the Fund authorized or approved by a resolution of
the Board.
6
<PAGE>
a) GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
SCHRODER CAPITAL FUNDS (DELAWARE)
/s/ L. E. LUCKYN-MALONE
-------------------------------------------
Laura E. Luckyn-Malone, President
FORUM FINANCIAL CORP.
/s/ JOHN Y. KEFFER
-------------------------------------------
John Y. Keffer, President
<PAGE>
SCHRODER CAPITAL FUNDS (DELAWARE)
FUND ACCOUNTING AGREEMENT
APPENDIX A
SERIES OF SCHRODER CAPITAL FUNDS (DELAWARE)
AS OF MARCH 15, 1996
Schroder International Fund
Schroder U.S. Equity Fund
Schroder U.S. Smaller Companies Fund
Schroder Emerging Markets Fund Institutional Portfolio
Schroder Latin American Fund
Schroder International Smaller Companies Fund
Schroder Global Asset Allocation Fund
<PAGE>
SCHRODER CAPITAL FUNDS (DELAWARE)
FUND ACCOUNTING AGREEMENT
APPENDIX B
Standard Fee per Series with one Class $36,000/year
Fee for each additional Class $12,000/year
Plus additional surcharges for each of:
Global or International Funds $24,000/year
Tax Free Money Market Funds $12,000/year
Series with more than 25% of net assets
invested in asset backed securities $1000/month
Series with more than 50% of net assets
invested in asset backed securities $1000/month
Series with more than 100 security positions $1,000/month
Series with a monthly portfolio turnover
rate of 10% or greater $1,000/month
Monthly surcharges are determined based upon the total assets or security
positions as of the end of the prior month and on the portfolio turnover rate
for the prior month. Portfolio turnover rate shall have the meaning ascribed
thereto in Securities and Exchange Commission Form N-1A.
The rates set forth above shall remain fixed through December 31, 1995. On
January 1, 1996, and on each successive January 1, the rates shall be adjusted
to reflect changes in the Consumer Price Index for the preceding calendar year,
as published by the U.S. Department of Labor, Bureau of Labor Statistics.
Notwithstanding the foregoing, FFC agrees, with respect to the Schroder
U.S. Smaller Companies Fund, to waive its surcharge for Series with more than
100 security positions for so long as the number of security positions remains
close to 100 security positions. If the number of security positions held by
Schroder U.S. Smaller Companies Fund materially exceeds 100 security positions
for any consecutive two month period, FFC shall have the right, following
notification to the Fund, to be paid the surcharge set forth above for Series
having more than 100 security positions.
During any period in which International Equity Fund or Schroder Emerging
Markets Fund Institutional Portfolio, or any other series of the Trust, invests
all (or substantially all) of its investment assets in a registered, open-end
management investment company, or separate series thereof, in accordance with
Section 12(d)(1)(E) under the Investment Company Act of 1940, the fee payable
hereunder shall be $12,000 annually for each series so invested.
<PAGE>
EXHIBIT 11
[LOGO] COOPERS & LYBRAND L.L.P.
[vertical line]
a professional services firm
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Schroder Capital Funds (Delaware):
We hereby consent to the following with respect to Post-Effective Amendment
No. 61 to the Registration Statement on Form N-1A (File No. 2-34215) of Schroder
Capital Funds (Delaware) (consisting of Schroder U.S. Equity Fund, the "Fund"):
1. The reference to our firm under the heading "Financial Highlights" in
the Prospectus.
2. The incorporation by reference of our report dated December 23, 1996
on our audit of the financial statements and financial highlights of
the Fund, which report is included in the Fund's Annual Report for the
year ended October 31, 1996, which is incorporated by reference in the
Statement of Additional Information.
3. The reference to our firm under the heading "Independent Accountant"
in the Statement of Additional Information.
/s/Coopers & Lybrand L.L.P./
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
April 18, 1997
<PAGE>
EXHIBIT 15
SCHRODER CAPITAL FUNDS (DELAWARE)
MULTICLASS (RULE 18f-3) PLAN
March 15, 1996, as revised March 5, 1997
This Plan is adopted by Schroder Capital Funds (Delaware) (the "Trust")
pursuant to Rule 18f-3 under the Investment Company Act of 1940 (the "Act") in
order to document the separate arrangements and expense allocations of each
class (each, a "Class") of shares of beneficial interest ("Shares") of the
series of the Trust specified on Schedule A attached hereto (each, a "Multiclass
Fund").
SECTION 1. CLASS DESIGNATIONS
For each Multiclass Fund, the types of Classes are "Investor Shares" and
"Advisor Shares." Each Class has a different arrangement for shareholder
services or distribution or both, as follows:
(a) INVESTOR SHARES. Are offered by the related Multiclass Fund with no
sales charges or distribution expenses, provided that Investor Shares of
Schroder Emerging Markets Fund Institutional Portfolio are offered subject to a
purchase charge of 0.50% and a redemption charge of 0.50%. The investment
minimum for Investor Shares of each Multiclass Fund generally is higher than
that for Advisor Shares for the Multiclass Fund, subject to reduction by
Schroder Fund Advisors Inc. ("Schroder Advisors"), the Trust's administrator, or
Forum Administrative Services, Limited Liability Company ("Forum"), the Trust's
sub-administrator.
(b) ADVISOR SHARES. Are offered by the related Multiclass Fund with no
sales charges, provided that Advisor Shares of Schroder Emerging Markets Fund
Institutional Portfolio are offered subject to a purchase charge of 0.50% and a
redemption charge of 0.50%; and further provided that Advisor Shares of each
Multiclass Funds are sold subject to an asset-based sales charge under a
distribution plan adopted in accordance with Rule 12b-1 under the Act and,
further, Advisor Shares of each Multiclass Fund are sold subject to a servicing
fee under a Shareholder Service Plan, each as described in the applicable
prospectus. The investment minimum for Advisor Shares of each Multiclass Fund
is generally lower than that for Investor Shares for the Multiclass Fund.
SECTION 2. VOTING
Each Class shall have exclusive voting rights on any matter submitted to a
shareholder vote that relates solely to the Class' arrangement for shareholder
service or distribution, and each Class shall have separate voting rights with
respect to any matter submitted to a shareholder vote in which the interests of
one Class differ from the interests of another Class.
SECTION 3. EXPENSES
(a) DISTRIBUTION EXPENSES. All expenses incurred under a Class's
distribution plan adopted in accordance with Rule 12b-1 under the Act, if any,
shall be allocated to that Class.
(b) SHAREHOLDER SERVICE EXPENSES. All expenses incurred under a Class's
shareholder service plan, if any, shall be allocated to that Class.
(c) OTHER CLASS EXPENSES. The following expenses, which are incurred by
Classes in different amounts or reflect differences in the amount or kind of
services that different Classes receive (collectively with expenses under
Sections 3(a) and 3(b), "Class Expenses"), shall be allocated to the Class that
incurred the expenses to the extent practicable:
(i) Administration and transfer agent fees and expenses;
(ii) Litigation, legal and audit fees;
(iii) State and foreign securities registration fees;
(iv) Shareholder report expenses;
(v) Trustee fees and expenses;
<PAGE>
(vi) Preparation, printing and related fees and expenses for proxy
statements and, with respect to current shareholders,
prospectuses and statements of additional information;
(vii) Expenses incurred in connection with shareholder meetings; and
(viii) Subject to approval by the Trustees, such other fees and expenses
as Schroder Advisors or Forum, pursuant to Rule 18f-3, deems to
be allocable to specified Classes.
(d) CLASS EXPENSE ALLOCATIONS. Class Expenses are to be borne solely by
the Class to which they relate. Item (i) of Section 3(c) in its entirety is
incurred by each Multiclass Fund on a Class-by-Class basis and, accordingly, is
wholly allocated to the specific Class to which it relates. All fees of a
Multiclass Fund's investment adviser and custodian and administrator and all
portfolio based fees of a Multiclass Fund's fund accountant are incurred by a
Multiclass Fund and not by an individual Class of the Fund. All other items in
Section 3(c) are allocated to a specific Class to the extent they are
attributable to each Class in different amounts.
SECTION 4. OTHER ALLOCATIONS AND WAIVERS/REIMBURSEMENTS
(a) EXPENSES APPLICABLE TO MORE THAN ONE FUND. Expenses (other than Class
Expenses) incurred by the Trust on behalf of one series of the Trust, including
the Multiclass Funds (each, a "Fund"), shall be allocated to that Fund, and
expenses (other than Class Expenses) incurred by the Trust on behalf of more
than one Fund shall be allocated among the Funds that incurred the expenses
based on the net asset values of the Funds in relation to the net asset value of
all Funds to which the expense relates.
(b) OTHER ALLOCATIONS. Income, realized and unrealized capital gain and
loss, and other expenses (excluding Class Expenses related to a Multiclass Fund)
shall be allocated to each Class on the basis of the net asset value of that
Class in relation to the net asset value of the Multiclass Fund.
(c) WAIVERS AND REIMBURSEMENTS. Nothing in this Plan shall be construed
as limiting the ability of any person to waive any fee paid by a Fund or Class
to that person or to reimburse any or all expenses of a Fund or Class; provided,
however, that no waiver or reimbursement shall be made such that the waiver or
reimbursement is, in effect, a DE FACTO modification of the fees provided for in
the Fund's various service agreements.
SECTION 5. EXCHANGES
Shareholders of a Class may exchange their Shares for Shares of the same
Class of any other Fund in accordance with Section 11(a) of the Act, the rules
thereunder and, if permitted by each Multiclass Fund pursuant to its then-
current prospectus, the requirements of such prospectus.
SECTION 6. AMENDMENTS AND BOARD REVIEW
(a) NON-MATERIAL AMENDMENTS. Non-material amendments to this Plan may be
made at any time by Schroder Advisors.
(b) MATERIAL AMENDMENTS. Material amendments to this Plan may only be
made by a majority of the Trustees of the Trust, including a majority of the
Trustees who are not interested persons of the Trust as defined by the Act, upon
a finding that the amendment is in the best interests of the Classes and/or Fund
affected by the amendment and of the Trust. Prior to any material amendment to
this Plan, the Board of Trustees (the "Board") shall request such information as
may be reasonably necessary to evaluate the Plan as proposed to be amended.
(c) BOARD REVIEW. The Board, including a majority of those Trustees who
are not interested persons of the Trust as defined in the Act, shall review
periodically review: (i) this Plan for its continuing appropriateness; and (ii)
any fee waivers and expense reimbursements to determine that the Multiclass
Funds are in compliance with Section 4(c) of the Plan.
<PAGE>
SCHEDULE A
SCHRODER CAPITAL FUNDS (DELAWARE) FUNDS
TO WHICH THE MULTICLASS PLAN APPLIES
Fund Date Subject to Plan
---- --------------------
Schroder International Fund March 15, 1996
Schroder Emerging Markets Fund
Institutional Portfolio March 15, 1996
Schroder U.S. Smaller Companies Fund March 15, 1996
Schroder Latin American Fund March 15, 1996
Global Asset Allocation Fund March 15, 1996
Schroder International Smaller
Companies Fund March 15, 1996
Schroder U.S. Equity Fund November 26, 1996
Schroder Emerging Markets Fund November 26, 1996
Schroder European Growth Fund November 26, 1996
Schroder Japan Fund November 26, 1996
Schroder Pacific Basin Fund November 26, 1996
Schroder United Kingdom Fund November 26, 1996
Schroder International Bond Fund March 5, 1997
Schroder Cash Reserves Fund March 5, 1997
<PAGE>
EXHIBIT 16
SCHEDULE OF SAMPLE PERFORMANCE QUOTATION CALCULATIONS
[SCHRODER U.S EQUITY FUND (INVESTOR SHARES)]
Note: All performance is for the period ended: 10/31/96
-----------------
1. AVERAGE ANNUAL TOTAL RETURN (PURSUANT TO SEC STANDARDIZED FORMULA)
1 - n
SEC Formula: T = {{[((ERV/P) - 1)(1 - S) - S](1 - R) - R} + 1}
where: T = average annual total return
P = initial payment of $1,000
n = number of years
ERV = ending redeemable value of the initial payment at
the end of the period
S = Maximum initial sales charge
R = Maximum redemption charge
AVERAGE ANNUAL TOTAL RETURN (assuming deduction of the maximum
sales/purchase/redemption charges)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000
N(YR) 10/12 1/12 1/4 1/2 1 3 5 10 26
ERV 1127.00 1001.00 1130.30 1056.30 1194.50 1125.00 1937.40 2268.10 13202.9
S 0 0 0 0 0 0 0 0 0
R 0 0 0 0 0 0 0 0 0
T(%) 15.24 1.26 46.74 11.54 19.45 11.25 14.13 12.56 10.74
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
2. CUMULATIVE TOTAL RETURN (PURSUANT TO NON-STANDARDIZED FORMULA)
n
Formula: C = {{[(T + 1) - 1 - R]/(1 - R)} + S}/(1 - S)
where: C = cumulative total return of the investment over the
specified period
T = average annual total return (see above)
P = initial payment of $1,000
n = number of years
ERV = ending redeemable value of the initial payment at the
end of the period
CUMULATIVE TOTAL RETURN (assuming deduction of the maximum
sales/purchase/redemption charges)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
CAL YR 1 MTH 3 MTH 6 MTH 1 YR 3 YR 5 YR 10 YR INCEPT
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
P($) 1000 1000 1000 1000 1000 1000 1000 1000 1000
N(YR) 5/6 1/12 1/4 1/2 1 3 5 10 26
ERV 1127.00 1001.00 1100.30 1056.30 1194.50 1372.20 1937.40 2268.10 13202.9
S 0 0 0 0 0 0 0 0 0
R 0 0 0 0 0 0 0 0 0
C(%) 12.70 0.10 10.03 5.63 19.45 37.72 93.74 226.81 1320.29
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
OTHER EXHIBIT
SCHRODER CAPITAL FUNDS (Delaware), INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Mark J. Smith constitutes and appoints
Thomas G. Sheehan, David I. Goldstein and Laura E. Luckyn-Malone and each of
them, as true and lawful attorneys-in-fact and agents with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign the Registration Statement on Form N-1A and any
or all amendments thereto of Schroder Capital Funds (Delaware), and to file the
same, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
/s/ Mark J. Smith
------------------
Mark J. Smith
Dated: November 8, 1995
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
SCHRODER U.S. EQUITY FUND DATED OCTOBER 31, 1996, AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<SERIES>
<NUMBER> 010
<NAME> U.S. EQUITY FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 12,748,010
<INVESTMENTS-AT-VALUE> 16,739,069
<RECEIVABLES> 21,912
<ASSETS-OTHER> 473,363
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 17,234,344
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 47,708
<TOTAL-LIABILITIES> 47,708
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9,505,831
<SHARES-COMMON-STOCK> 1,761,071
<SHARES-COMMON-PRIOR> 2,092,004
<ACCUMULATED-NII-CURRENT> 41,186
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,648,560
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,991,059
<NET-ASSETS> 17,186,636
<DIVIDEND-INCOME> 312,532
<INTEREST-INCOME> 28,722
<OTHER-INCOME> 0
<EXPENSES-NET> 260,792
<NET-INVESTMENT-INCOME> 80,462
<REALIZED-GAINS-CURRENT> 3,648,561
<APPREC-INCREASE-CURRENT> (368,123)
<NET-CHANGE-FROM-OPS> 3,360,900
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 158,133
<DISTRIBUTIONS-OF-GAINS> 2,560,576
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 613,444
<NUMBER-OF-SHARES-REDEEMED> 5,567,945
<SHARES-REINVESTED> 1,811,255
<NET-CHANGE-IN-ASSETS> (2,501,055)
<ACCUMULATED-NII-PRIOR> 118,857
<ACCUMULATED-GAINS-PRIOR> 2,560,575
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 139,483
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 265,147
<AVERAGE-NET-ASSETS> 18,597,691
<PER-SHARE-NAV-BEGIN> 9.41
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> 1.62
<PER-SHARE-DIVIDEND> .07
<PER-SHARE-DISTRIBUTIONS> 1.24
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.76
<EXPENSE-RATIO> 1.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
