1933 Act Registration No. 811-3176
1940 Act Registration No. 2-72066
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20546
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [32]
and
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. [31]
DECLARATION FUND
(Exact name of registrant as specified in Charter)
555 North Lane, Suite 6160
Conshohocken, PA 19428
(Address of Principle Executive Offices and Zip Code)
610-832-1075
(Registrant's Telephone Number including Area Code)
Terence P. Smith
The Declaration Group
555 North Lane, Suite 6160
Conshohocken, PA 19428
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering:
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It is proposed that this filing will become effective (check appropriate box)
[ ] Immediately upon filing pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[X] 75 days after filing pursuant to paragraph (a)(2)
[ ] On ___________, pursuant to paragraph (b)
[ ] On ___________, pursuant to paragraph (a)(1)
[ ] On ___________, pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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THE DECLARATION MONEY MARKET FUND
CROSS-REFERENCE SHEET
(As required by Rule 495)
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ITEM NO. ON FORM N-1A CAPTION OR SUBHEADING IN PROSPECTUS
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OR STATEMENT OF ADDITIONAL INFORMATION
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PART A - INFORMATION REQUIRED IN PROSPECTUS
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<S> <C>
1. Front and Back Cover Pages. Cover Page; Back Cover Page
2. Risk/Return Summary: Investments,
Risks, and Performance. Summary of the Fund; Fees and Expenses
3. Risk/Return Summary/ Fee Table. Fees and Expenses
4. Investment Objectives, Principal Summary of the Fund; Investment Objectives
Investment Strategies, and Related and Policies, Primary Investments of the Fund;
Risks Risk Factors
5. Management's Discussion of Not Applicable
Fund Performance
6. Management, Organization and Management of the Fund; Investment Adviser;
Capital Structure General Information
7. Shareholder Information Purchasing Shares; Redeeming Shares;
Plan of Distribution; Federal Taxes; General
Information
8. Distribution Arrangements Redeeming Shares; Plan of Distribution;
9. Financial Highlights Information Not Applicable
PART B. STATEMENT OF ADDITIONAL INFORMATION
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10. Cover Page and Table of Contents Cover Page; Table of Contents
11. Fund History Not covered in Statement of Additional
Information (covered under Item 6 of
Part A)
12. Description of the Fund and its Investment Policies and Restrictions
Investments and Risks
13. Management of the Fund. Investment Adviser; Directors and
Officers
14. Control Persons and Principal Directors and Officers; Investment Adviser
Holders of Securities.
15. Investment Advisory and other Investment Adviser; Fund Service Providers
Services.
16. Brokerage Allocation and Other Portfolio Transactions
Practices
17. Capital Stock and Other Capital Stock
Securities.
18. Purchase, Redemption and Pricing Determination of Net Asset Values
of Securities Being Offered Purchasing and Redeeming Shares
19. Taxation of the Fund. Tax Information
20. Underwriters Fund Service Providers
and Transfer Agents
21. Calculations of Performance Data. Performance Information
22. Financial Statements Not Applicable.
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PART C
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Information required to be included in PART C is set forth under the appropriate
Item, so numbered, in PART C of the Registration Statement.
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PART A
PROSPECTUS
Dated _______________, 1998
The Declaration Money Market Fund
A No-Load Series of the Declaration Fund
9225 West Charleston Blvd., # 2065
Las Vegas, Nevada 89117
702-525-1494
The Declaration Money Market Fund's (the "Fund") investment objective is to
provide as high a level of current income as is consistent with the preservation
of capital and liquidity. The Fund seeks to achieve its objective by investing
in money market instruments such as bankers' acceptances, certificates of
deposit, repurchase agreements, time deposits, commercial paper, all of which
will be denominated in U.S. dollars (referred to collectively as "Money Market
Instruments") and U.S. Government direct obligations and U.S. Government
agencies' securities.
The minimum investment in the Fund is $1,000 for regular accounts and $1000 for
retirement accounts. The minimum subsequent investment is $500 for regular
accounts and $50 for retirement accounts. The Fund is a No-Load Fund. This means
that 100% of your initial investment is invested in shares of the Fund. THIS
FUND IS ONLY AVAILABLE TO SHAREHOLDERS OF OTHER MUTUAL FUNDS WHICH ARE CLIENTS
OF THE DECLARATION GROUP, CONSHOHOCKEN PA, OTHER MUTUAL FUNDS IN THE DECLARATION
FUND SERIES, AND EMPLOYEES, OFFICERS, DIRECTORS AND FAMILY MEMBERS OF THOSE
MUTUAL FUNDS AND OF THE DECLARATION GROUP.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
Summary of the Fund
Fees And Expenses.
Investment Objectives And Policies
Primary Investments of the Fund
Risk Factors.
Federal Taxes.
Purchasing Shares.
Redeeming Shares.
Investment Adviser.
Management of the Fund.
Plan of Distribution
General Information.
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SUMMARY OF THE FUND
The Fund is a diversified mutual fund whose primary investment objective is to
provide as high a level of current income as is consistent with the preservation
of capital and liquidity. The Fund intends to invest only in repurchase
agreements, U.S. Government direct obligations and U.S. Government agencies'
securities. The Fund will not invest in instruments maturing more than 397 days
from the date of investment, and will maintain a dollar-weighted average
portfolio maturity of 90 days or less. The Fund will also try to maintain a
stable net assets value of $1.00.
The Fund will limit investments in Money Market Instruments to those which at
the date of purchase are "First Tier" securities as defined in Rule 2a-7 under
the Investment Company Act of 1940 (the "1940 Act"). The Fund will normally hold
portfolio securities to maturity, but may dispose of such securities prior to
maturity if the Fund believes such disposition is in the best interests of the
Fund.
Investing in Money Market Instruments of short maturity and/or actively managing
its portfolio will result in a large number of transactions, but since the costs
of these transactions are small, they are not expected to have a significant
effect on net asset value or yield. There can be no assurance that the Fund's
investment objective will be achieved, or that its net assets value can be
maintained.
The principal risks of investing in the Fund are:
(1) Although the risk is remote due to the manner in which the Fund will invest
its assets, you may lose money by investing in the Fund. The Fund will
attempt to maintain a stable net asset value, but at times may not be able
to, due to market fluctuations or unforeseen events which may cause the
Fund to liquidate securities and realize losses.
(2) This is a new Fund without a prior operating history, and this is a new
position for the Adviser to the Fund. The Fund's lack of performance
history and management experience may pose additional risks.
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FEES AND EXPENSES
This table describes the fees and expenses you may pay if you buy and hold
shares of the Fund.
Shareholder Transaction Expenses:
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Maximum Sales Charges Imposed on Purchases NONE
(as a percentage of offering price)
Maximum Deferred Sales Charges NONE
(as a percentage of offering price)
Maximum Sales Charges Imposed
On Reinvested Dividends NONE
(as a percentage of net asset value)
Redemption Fees NONE
(as a percentage of amount redeemed)
Exchange Fees NONE
Maximum Account Fee NONE
Annual Fund Operating Expenses: (expenses that are deducted from Fund assets)
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This table sets out the regular operating expenses that are paid out of the
Fund's average daily assets. These fees are used to pay for services such as the
investment management of the Fund, maintaining shareholder records and
furnishing shareholder statements. This is a new Fund without a prior operating
history, so the following expense figures are estimates. True expenses may be
greater or lower than those shown below.
Investment Advisory Fees. 0.25%
Operating Service Fees. 0.49%
12b-1 Fees. 0.25%
Other Fees (estimated) 0.01%
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Total Fund Operating Expenses. 1.00%
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Example: This example is intended to help you compare the costs of investing in
the Fund with the costs of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions, your costs would be:
One Year Three Years Five Years Ten Years
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$----- $----- $------ $-------
You would pay the following expenses if you did not redeem your shares:
One Year Three Years Five Years Ten Years
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$----- $----- $------ $-------
The Fund's Adviser has agreed to waive receipt of its fees and/or assume certain
expenses of the Fund, to the extent possible, to insure that the Fund's total
expenses do not exceed 1.00% annually. If the Advisor waives fees or assumes
expenses of the Fund, such actions would have the effect of lowering the expense
ratio and increasing the yield to investors. Also, the Fund is required by law
to use a 5% assumed annual rate of return in the example. The Fund's actual
annual rate of return may be higher or lower than the example.
INVESTMENT OBJECTIVES AND POLICIES
The Fund is a diversified mutual fund whose primary investment objective is to
provide as high a level of current income as is consistent with the preservation
of capital and liquidity. The Fund intends to invest only in repurchase
agreements, U.S. Government direct obligations and U.S. Government agencies'
securities.
The Fund will not invest in instruments maturing more than 397 days from the
date of investment, and will maintain a dollar-weighted average portfolio
maturity of 90 days or less.
The Fund must comply with the requirements of Rule 2a-7 under the 1940Act, which
govern the operations of money market funds and may be more restrictive than the
Fund's restrictions. If any of the Fund's policies and restrictions are more
restrictive than Rule 2a-7, the Fund's policies and restrictions will be
followed.
The Fund will attempt to take prompt advantage of changes in market conditions.
This means that, although the Fund will normally hold portfolio securities to
maturity, it will purchase and sell securities whenever the Adviser believes
such actions will help the Fund achieve its investment objective. You should be
aware that selling securities which have been held for short time periods might
result in the Fund realizing short-term capital gains, and that may have an
impact on your tax status. Please see the Statement of Additional Information
("SAI") for a more detailed discussion of taxation issues, and consult with your
tax advisor to determine what impact the Fund's investment policies may have on
your personal tax situation.
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PRIMARY INVESTMENTS OF THE FUND
FIXED INCOME SECURITIES
DEBT SECURITIES. The Fund will normally invest at least 75% of its net assets in
the following securities:
(1) U.S. Government Treasury Bills, Treasury Notes, and Treasury bonds with
remaining maturities of less than 397 days,
(2) U.S. Government agencies' securities bonds with remaining maturities of
less than 397 days,
U.S. Government securities include direct obligations of the U.S. Government and
obligations issued by U.S. Government agencies and instrumentalities. The market
value of such securities fluctuates in response to interest rates and the
creditworthiness of the issuer. In the case of securities backed by the full
faith and credit of the United States Government, credit risk is minimal;
shareholders are generally exposed only to interest rate risk.
OTHER SECURITIES
The Fund may invest in the following securities to maintain liquidity and for
temporary and defensive purposes:
REPURCHASE AGREEMENTS. The Fund may invest in repurchase agreements ("Repos")
with broker-dealers, banks and other financial institutions, provided that the
Fund's custodian always has possession of the securities serving as collateral
for the Repos or has proper evidence of book entry receipt of said securities.
In a Repo, the Fund purchases securities subject to the seller's simultaneous
agreement to repurchase those securities from the Fund at a specified time
(usually one day) and price. The repurchase price reflects an agreed-upon
interest rate during the time of investment. All Repos entered into by the Fund
must be collateralized by U.S. Government Securities, the market values of which
equal or exceed 102% of the principal amount of the money invested by the Fund.
If an institution with whom the Fund has entered into a Repo enters insolvency
proceedings, the resulting delay, if any, in the Fund's ability to liquidate the
securities serving as collateral could cause the Fund some loss if the
securities declined in value prior to liquidation. To minimize the risk of such
loss, the Fund will enter into Repos only with institutions and dealers
considered creditworthy.
CASH RESERVES. The Fund may hold a portion of its assets in cash to meet
liquidity needs or for temporary defensive purposes.
WHEN-ISSUED SECURITIES AND DELAYED-DELIVERY TRANSACTIONS. The Fund may purchase
securities on a when-issued basis, and it may purchase or sell securities for
delayed-delivery. These transactions occur when securities are purchased or sold
by the Fund with payment and delivery taking place at some future date. The Fund
may enter into such transactions when, in the Adviser's opinion, doing so may
secure an advantageous yield and/or price to the Fund that might otherwise be
unavailable. The Fund has not established any limit on the percentage of assets
it may commit to such transactions, but to minimize the risks of entering into
these transactions, the Fund will maintain a segregated account with its
Custodian consisting of cash, cash equivalents, U.S. Government Securities or
other high-grade liquid debt securities, denominated in U.S. dollars or non-U.S.
currencies, in an amount equal to the aggregate fair market value of its
commitments to such transactions.
A complete listing of the Fund's permissible investments, as well as the Fund's
fundamental investment policies and investment restrictions, is contained in the
SAI in the Section entitled, "Investment Policies and Restrictions".
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RISK FACTORS
You may lose money by investing in the Fund. The likelihood of loss is greater
if you invest for a shorter period of time. Your investment in the Fund is not a
deposit or obligation of, or insured or guaranteed by, any entity or person,
including the U.S. Government and the Federal Deposit Insurance Corporation. The
Fund is appropriate for investors who wish to obtain current income, but is not
appropriate for investors who are seeking capital growth. Although the fund will
attempt to maintain a stable net asset value of $1.00, the value of the Fund's
investments may vary from day-to-day, reflecting changes in market conditions,
interest rates and other company, political, and economic news. Lastly, the Fund
has no operating history, and this may pose additional risks. There is no
assurance that the Fund can achieve its investment objective, since all
investments are inherently subject to market risk.
FEDERAL TAXES
The Fund intends to qualify each year as a regulated investment company under
the rules and regulations of the Internal Revenue Service (IRS). In any fiscal
year in which the Fund qualifies as a regulated investment company and
distributes to shareholders all of its net investment income and net capital
gains, the Fund will not have to pay any federal income tax.
Generally, all dividends and capital gains are taxable whether they are
reinvested or received in cash, unless you are exempt from taxation or entitled
to a tax deferral. The Fund intends to pay out any dividends and/or capital
gains at least annually, usually in December. Early each following year, you
will be notified as to the amount and federal tax status of all income
distributions paid to you from the prior year. Such distributions may also be
subject to state or local taxes. The tax treatment of redemptions from a
retirement plan account may differ from redemptions from an ordinary shareholder
account.
You must provide the Fund with your correct taxpayer identification number, and
certify that you are not subject to backup withholding (your taxpayer
identification number is usually your Social Security number). If you fail to do
so, the IRS may require the Fund to withhold 31% of your taxable distributions
and redemptions. Federal law also requires the Fund to withhold 30% or the
applicable treaty rate from dividends paid to certain nonresident aliens,
non-U.S. partnerships, and non-U.S. corporations.
This is a brief summary of the tax laws that affect your investment in the Fund.
Please see the Section entitled "Tax Information" in the SAI for additional
information, and consult with your own tax advisor, since every investor's tax
situation is unique.
PURCHASING SHARES
To purchase shares of the Fund, first complete and sign a New Account Purchase
Application and mail it, together with your check for the total purchase price,
to THE DECLARATION MONEY MARKET FUND, C/O DECLARATION DISTRIBUTORS, INC., 555
NORTH LANE, SUITE 6160, CONSHOHOCKEN, PA 19428. Checks are accepted subject to
collection at full face value in United States currency. If your check does not
clear, your purchase will be cancelled and you will be subject to any losses or
fees incurred by the Fund with respect to the transaction. If shares are
purchased by check and redeemed by letter within seven business days of
purchase, the Fund may hold redemption proceeds until the purchase check has
cleared, a period of up to fifteen days. You will also be subject to a
redemption fee of 1.00% of total assets in such a circumstance.
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You will receive a statement showing the number of shares purchased, the net
asset value at which your shares were purchased, and the new balance of Fund
shares owned each time you purchase shares of the Fund. The Fund does not issue
stock certificates. All full and fractional shares will be carried on the books
of the Fund.
Shares of the Fund are purchased at the net asset value next computed after the
receipt of your purchase order (See, "Determination of Net Asset Value." in the
SAI). The Fund's share price, also called its net asset value, is determined as
of the close of trading (normally 4:00 p.m., Eastern Time) every day the New
York Stock Exchange is open. The Fund calculates its net asset value per share
by dividing the total value of its assets after subtracting liabilities by the
number of its shares outstanding. The Fund generally determines the total value
of its shares by using market prices for the securities comprising its
portfolio. Securities for which quotations are not available and any other
assets are valued at a fair market value as determined in good faith by the
Adviser, subject to the review and supervision of the board of directors. The
Fund is a No-Load Fund. This means that you will not be charged any sales
commissions or underwriting discounts, so 100% of your initial investment is
invested in shares of the Fund. The minimum initial investment is $1,000 for
regular accounts and $1,000 for Individual Retirement Accounts (IRAs). Minimum
subsequent purchases for regular accounts are $500 and $50 for IRA accounts.
All applications to purchase shares of the Fund are subject to acceptance by
authorized officers of the Fund and are not binding until accepted. The Fund
reserves the right to reject purchase orders under circumstances or in amounts
considered disadvantageous to existing shareholders. Please see the SAI Sections
entitled "Purchasing and Redeeming Shares" and "Tax Information" for more
information concerning share purchases.
REDEEMING SHARES
You may redeem your shares in the Fund at any time and for any reason. Upon
receipt by the Fund of a redemption request in proper form, your shares of the
Fund will be redeemed at their next determined net asset value (See the Sections
entitled "Determination of Net Asset Value" and "Purchasing and Redeeming
Shares" in the SAI). Redemption requests must be in writing and delivered to the
Fund at THE DECLARATION MONEY MARKET FUND, C/O DECLARATION DISTRIBUTORS, INC.,
555 NORTH LANE, SUITE 6160, CONSHOHOCKEN, PA 19428. To be in "proper form," your
redemption request must:
1. Specify the number of shares or dollar amount to be redeemed, if less than
all shares are to be redeemed;
2. Be signed by all owners exactly as their names appear on the account;
3. If required, include a signature guarantee from any "eligible guarantor
institution" as defined by the rules under the Securities Exchange Act of
1934. Eligible guarantor institutions include banks, brokers, dealers,
credit unions, national securities exchanges, registered securities
associations, clearing agencies and savings associations. A notary public
is not an eligible guarantor.
Further documentation, such as copies of corporate resolutions and instruments
of authority may be requested from corporations, administrators, executors,
personal representatives, trustees, or custodians to evidence the authority of
the person or entity making the redemption request.
Signature Guarantees. A signature guarantee is designed to protect you and the
Fund by verifying your signature. SIGNATURE GUARANTEES ARE REQUIRED WHEN:
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(1) establishing certain services after the account is opened;
(2) requesting redemptions in excess of $10,000;
(3) redeeming or exchanging shares, when proceeds are: (i) being mailed to an
address other than the address of record, (ii) made payable to other than
the registered owner(s); or
(4) transferring shares to another owner.
The redemption price per share is net asset value, determined as of the close of
business on the day your redemption order is accepted by the Fund (See the
Sections entitled, "Purchasing and Redeeming Shares" and "Determination of Net
Asset Value" in the SAI). When you redeem your shares, they may be worth more or
less than you paid for them, depending upon the value of the Fund's portfolio
securities at the time of redemption.
If the value of your account falls below $1,000 as a result of previous
redemptions and not market price declines, the Fund may redeem the shares in
your account. However, the Fund will notify you first if such an event occurs,
and you will have 60 days to bring your account balance up to the minimum levels
before the Fund may exercise its option to redeem.
Payment for shares redeemed is made within seven days after receipt by the Fund
of a request for redemption in proper form. The Fund reserves the right to
suspend or postpone redemptions during any period when (a) trading on any of the
major U.S. stock exchanges is restricted, as determined by the Securities and
Exchange Commission, or that the major exchanges are closed for other than
customary weekend and holiday closings, (b) the Commission has by order
permitted such suspension, or (c) an emergency, as determined by the Commission,
exists making disposal of portfolio securities or valuation of net assets of the
Fund not reasonably practicable.
MANAGEMENT OF THE FUND
The Fund is a series of the Declaration Fund (the "Trust"), an open-end,
diversified management investment company organized as a Pennsylvania business
trust. The Trust's headquarters are at P.O. Box 844, Conshohocken PA 17428-0844.
The business and affairs of the Trust and of the separate series within the
Trust are managed by the Trust's board of Trustees. The Trustees establish
policies, and have certain fiduciary duties and obligations to the Trust and the
separate series and their shareholders under the laws of the state of
Pennsylvania and applicable federal securities laws. Currently, the Trust offers
four series: Declaration The Fund, The Michigan Heritage Fund, The VanderPal
Protected Income and Growth Fund, and the Declaration Money Market Fund.
The Trust is aware of a potential problem that may occur when the year changes
from 1999 to 2000. Many computers and computer programs have been built where
dates are calculated using only two digits. As a result, these computers and
programs cannot tell the difference between 1900 and 2000, and when the year
changes from 1999 to 2000, there may be significant problems. The Trust has
taken steps to address this problem, specifically by entering into contracts
only with vendors who are aggressively addressing the problem and by updating
the Trust's own systems to address the problem. As of the date of this filing,
the Trust does not foresee "The Year 2000 Problem" as having any significant
negative impact on the Trust or the Fund.
INVESTMENT ADVISER
Declaration Investment Advisers, Inc., (the "Adviser") an investment advisory
company founded in 1998, is the investment advisor to the Fund. The Adviser is
headquartered at 555 North Lane, Suite 6160, Conshohocken, PA 19428. Mr. Terence
P. Smith is the sole shareholder of the Adviser and is the portfolio manager for
the Fund. Mr. Smith has no prior experience in managing a portfolio for an
investment company, and this may result in additional risks for the Fund.
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The Adviser manages the investment portfolio and business affairs of the Fund
under an Investment Advisory Agreement with the Fund, and manages, or arranges
to manage, the daily operations of the Fund under an Operational Services
Agreement.
INVESTMENT ADVISORY AGREEMENT. Under the terms of the Advisory Agreement, the
Adviser, subject to the supervision of the Board of Directors, will manage the
investment operations of the Fund in accordance with the Fund's investment
policies. In consideration of the Adviser's investment advisory services, the
Fund will pay to the Adviser on the last day of each month a fee equal to 0.25%
of average net asset value of the Fund, such fee to be computed daily based upon
the net asset value of the Fund.
The Advisor furnishes an investment program for the Fund, determines, subject to
the overall supervision and review of the Board of Directors of the Trust, what
investments should be purchased, sold and held, and makes changes on behalf of
the Trust in the investments of the Fund.
OPERATIONAL SERVICES AGREEMENT. Under the terms of the Operational Services
Agreement, the Adviser, subject to the supervision of the Board of Trustees,
will provide day-to-day operational services to the Fund including, but not
limited to, providing or arranging to provide accounting, administrative, legal
(except litigation), dividend disbursing, transfer agent, registrar, custodial,
fund share distribution, shareholder reporting, sub-accounting and record
keeping services. The Services Agreement provides that the Adviser pays all fees
and expenses associated with these and other functions, including but not
limited to, expenses of legal compliance, shareholder communications, and
meetings of the shareholders. Under the Services Agreement, the Fund will pay to
the Adviser on the last day of each month a fee equal to 0.49% of average net
asset value of the Fund, such fee to be computed daily based upon the net asset
value of the Fund. The Adviser has entered into an Investment Company Services
Agreement with Declaration Service Company to provide Transfer Agent and
essentially all administrative services for the Fund. The Adviser has also
entered into a Distribution Agreement with Declaration Distributors, Inc.
("DDI") wherein DDI will act as principal underwriter for the Fund's shares, and
an Investment Services Agreement with Declaration Service Company ("DSC")
wherein DSC will provide fund accounting, transfer agency, shareholder
servicing, and dividend disbursing agency services to the Fund. DDI and DSC are
affiliated companies. Both are controlled by Mr. Terence P. Smith.
From time to time, the Adviser may waive receipt of its fees and/ or voluntarily
assume certain Fund expenses, which would have the effect of lowering the Fund's
expense ratio and increasing yield to investors during the time such amounts are
waived or assumed. The Fund will not be required to pay the Adviser for any
amounts voluntarily waived or assumed, nor will the Fund be required to
reimburse the Adviser for any amounts waived or assumed during a prior fiscal
year.
The Fund pays all expenses incident to its operations and business not
specifically assumed by the Adviser, including expenses relating to custodial,
legal, and auditing charges; printing and mailing of reports and prospectuses to
existing shareholders; taxes and corporate fees; maintaining registration of the
Fund under the Investment Company Act of 1940, and registration of its shares
under the Securities Act of 1933; and qualifying and maintaining qualification
of its shares under the securities laws of certain states.
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GENERAL INFORMATION
The Fund will not issue stock certificates evidencing shares. Instead, your
account will be credited with the number of shares purchased, relieving you of
responsibility for safekeeping of certificates and the need to deliver them upon
redemption. Written confirmations are issued to you for all purchases of shares.
You will be provided at least semi-annually with a report showing the Fund's
portfolio and other information and annually after the close of the Fund's
fiscal year, which ends December 31, with a report containing audited financial
statements.
The shares making up the Fund represent an interest in the Fund only and in the
event of liquidation, each share of the Fund would have the same rights to the
distribution of assets as every other share of the Fund.
As a shareholder, you have voting rights with respect to the management and
operation of the Fund and its policies. You are entitled to one vote for each
whole share, and fractional votes for fractional shares held. Shares of the Fund
do not have cumulative voting rights. The Fund's shares are fully paid and
non-assessable, have no pre-emptive or subscription rights, and are fully
transferable, with no conversion rights.
Prior to the public offering made by this prospectus, the Adviser owned (having
purchased for investment), all of the outstanding shares of the Fund and as a
result may be deemed to then control the Fund.
In reports or other communications to investors, or in advertising material, the
Fund may describe general economic and market conditions affecting the Fund and
may compare its performance with other mutual funds as listed in the rankings
prepared by Lipper Analytical Services, Inc. or similar nationally recognized
rating services and financial publications that monitor mutual fund performance.
The Fund may also, from time to time, compare its performance to the Standard &
Poors Composite Index of 500 Stocks ("S&P 500"), a widely recognized, unmanaged
index of common stock prices.
According to the law of Pennsylvania, under which the Trust is incorporated, and
the Trust's bylaws, the Trust is not required to hold an annual meeting of
shareholders unless required to do so under the Investment Company Act of 1940.
Inquiries regarding the Fund should be directed to the Fund at its address or
telephone number shown on the front cover of this Prospectus.
The Trust will call a meeting of shareholders for the purpose of voting upon the
removal of a director or directors when requested in writing to do so by record
holders of at least 10% of the Fund's outstanding common shares, and in
connection with such meeting will comply with the provisions of section 16(c) of
the Investment Company Act of 1940 concerning assistance with a record
shareholder communication asking other record shareholders to join in that
request.
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THE DECLARATION MONEY MARKET FUND
(A No-Load Series of Declaration Fund)
Investment Adviser:
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Declaration Investment Advisers, Inc
555 North Lane, Suite 6160
Conshohocken, PA 19428
Custodian:
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First Union National Bank, N.A.
1339 Chestnut Street
Philadelphia, PA 19101-7618
Distributor:
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Declaration Distributors, Inc.
555 North Lane, Suite 6160
Conshohocken, PA 19428
Management Services:
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Declaration Service Company
555 North Lane, Suite 6160
Conshohocken, PA 19428
Independent Auditors:
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Legal Counsel:
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No person has been authorized to give any information or to make any
representations other than those contained in this prospectus, the statement of
additional information or the fund's official sales literature in connection
with the offering of shares of the fund, and if given or made, such other
information or representations must not be relied upon as having been authorized
by the fund.
This Prospectus concisely sets forth the information you should know before you
invest. Please read this Prospectus and keep it for future reference. A
Statement of Additional Information (the "SAI") regarding the Fund, dated
_______________, 1998, has been filed with the Securities and Exchange
Commission ("SEC") and is incorporated by reference into this Prospectus. You
can get a copy of the SAI at no charge by writing or calling the Fund at the
address or telephone number listed above. The SEC maintains a web site
(www.sec.gov) that contains the Statement of Additional Information and other
information regarding the Fund.
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STATEMENT OF ADDITIONAL INFORMATION
Dated ______________, 1998
Declaration Fund
555 North Lane, Suite 6160
Conshohocken, PA 19428
800-355-3553
This Statement of Additional Information is not a prospectus and should be read
in conjunction with the Prospectus of The Declaration Money Market Fund, dated
____________. You may obtain a copy of the Prospectus, free of charge, by
writing to Declaration Fund, c/o The Declaration Group, 555 North Lane, Suite
6160, Conshohocken, PA 19428, phone number 800-___-____..
TABLE OF CONTENTS
Declaration Fund
Investment Policies and Restrictions Custodian
Calculation of Yield
Investment Adviser Transfer Agent
Directors and Officers Administration
Performance Information Distributor
Purchasing and Redeeming Shares Independent Accountants
Tax Information Independent Auditors Report *
Portfolio Transactions Financial Statements *
* to be filed by amendment
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DECLARATION FUND
Declaration Fund is an open-end, diversified, management investment company.
Originally incorporated in Pennsylvania on April 9, 1981, Declaration Fund
changed its form of organization to a business trust effective, July 9,1984. It
became registered with the Commonwealth of Pennsylvania as a Pennsylvania
Business Trust on May 16, 1990. Declaration Fund is a series fund - Declaration
Money market Fund (hereafter sometimes "The Fund" or "Fund") is a series of
Declaration Fund. For more information, please see the Fund Prospectus.
INVESTMENT POLICIES AND RESTRICTIONS
The following statement of policies supplements the description of the
investment objective and policies set forth in the Declaration Money Market
Fund's Prospectus.
The Fund's Board of Trustees will undertake to assure, to the extent reasonably
practical, taking into account current market conditions affecting the Fund's
investment objectives, that its net asset value will not deviate from $1.00 per
share; In order to accomplish this, The Fund shall maintain a dollar-weighted,
average portfolio maturity appropriate to its objective of maintaining a stable
net asset value per share. To this end, The Fund will not:
(i) purchase any instrument with a remaining maturity of greater than 397
calendar days, or
(ii) maintain a dollar-weighted average portfolio maturity that exceeds 90days.
Investment Limitations
Certain limitations have been adopted which are designed to reduce the exposure
of The Fund in certain situations. Thus, The Fund may not:
(1) Invest in commodities or commodity contracts or purchase or sell real
estate;
(2) Write, purchase or sell warrants, put or call options, or combinations
thereof;
(3) Invest in interests in oil, gas, or other mineral exploration or
development programs;
(4) Make loans (except to the extent that the entry into repurchase agreements
may be considered loans) to other persons except by the purchase of the
debt obligations in which The Fund is authorized to invest in accordance
with its investment policies;
(5) Purchase securities on margin or sell securities short;
(6) Purchase more than 10% of the outstanding voting securities of any issuer,
except securities issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities;
(7) Purchase securities of any issuer except obligations of the U.S. Government
and its agencies and instrumentalities if as a result, more than 5% of the
value of the The Fund total assets would be invested in the securities of
such issuer;
(8) Purchase or retain securities of an issuer if an officer or director of
such issuer is an Officer or Trustee of Declaration Fund or an officer or
director of an investment advisor of Declaration Fund and one or more of
such Officers, Directors or Trustees of Declaration Fund or an investment
advisor of Declaration Fund owns beneficially more than one half percent of
the shares or securities of such issuer and all such Trustees, Directors
and Officers owning more than one half percent of such shares or securities
together own more than5% of such shares or securities;
(9) Participate with others in any trading accounts or act as an underwriter of
securities of other issuers;
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(10) Pledge, mortgage or hypothecate the Fund assets to an extent greater than
5% of the value of its total assets, and then only to secure temporary
borrowings;
(11) Borrow money (except from banks for temporary, emergency purposes and then
only in amounts of up to 20% of its net assets): no securities will be
purchased for The Fund if such borrowings exceed 5% of its net assets: any
borrowings over 5% of the net assets of The Fund will be made solely to
facilitate the orderly sale of portfolio securities should abnormally heavy
redemption requests occur;
(12) Invest more than 10% of The Fund's assets in securities which are not
readily marketable, including obligations of small banks and savings and
loan institutions;
(13) Invest for the purpose of controlling management of any company;
(14) Invest in securities of other investment companies except by purchase in
the open market involving only customary broker's commissions or as part of
a merger, consolidation, reorganization or purchase of assets approved by
The Fund's shareholders.
(15) Invest in securities of companies which have (with predecessors) a record
of less than three years continuous operation, except investments in
obligations guaranteed by the U.S. Government, or issued by its agencies or
instrumentalities;
(16) Purchase any securities of a type other than those securities described in
the Prospectus;
(18) Issue senior securities.
The above referenced investment limitations are considered at the time that
portfolio securities are purchased. The above restrictions are fundamental
policies and may not be changed without a vote of a majority of The Fund's
outstanding voting securities. The vote of a majority of the outstanding voting
securities, means the vote, at an annual or special meeting of the shareholders,
duly called, (a) of 67% or more of the voting securities present at the meeting,
if the holders of 50% of the outstanding voting securities of The Fund are
present or represented by proxy; or (b) of more than 50% of the outstanding
voting securities of The Fund, which ever is less.
CALCULATION OF YIELD
The current yield of The Fund is calculated daily on a base period return of a
hypothetical account having a beginning balance of one share for a particular
seven (7) day period. The return is determined by dividing the net change
(exclusive of any capital changes in such account) by its average net asset
value for the period, and then multiplying it by 365/7 to get the annualized
current yield.
The calculation of net change reflects the value of additional shares purchased
with the dividends of The Fund, including dividends on both the original share
and on such additional shares purchased with the dividends from The Fund.
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An effective yield, which reflects the effects of compounding and represents an
annualization of the current yield with all dividends reinvested, may also be
calculated for The Fund by adding 1 to the base period return, raising the sum
to the 365/7 power, and subtracting 1 from the result.
Set forth below is an example, for purposes of illustration only, of the current
and effective yield calculations for The Fund for the seven (7) day base period
ending December 31, 1998:
12/31/98
- --------
Value of account at beginning of period $1.000000
Value of same account at end of period 1.000098
Net change in account value .000098
Annualized current net yield 0.51%
(Net Change x 365/7)/ average net asset value
Effective yield 0.51%
(Net Change + 1) 365/7 power -1
Average weighted maturity of investments 24 days
The net asset value of a share of The Fund is $1.00 and the value of the share
has remained at that amount since the initial offering. On the other hand, The
Fund's yield will fluctuate. The annualization of a week's dividends is not a
representation as to what an investment in The Fund will actually yield in the
future. Actual yields will depend on such variables as investment quality,
average maturity, the type of instruments selected for investment, changes in
interest rates on instruments, changes in expenses and other factors. Yields are
one basis investors may use to analyze The Fund and other investment vehicles;
however, yields of other investment vehicles may not be comparable because of
the factors set forth in the preceding sentence, differences in the time periods
compared, and differences in the methods used in valuing portfolio instruments,
computing net asset value and calculating yield. No charge is made for
redemptions. Any redemption may be more or less than the shareholder's cost
depending on the market value of the securities held by The Fund.
INVESTMENT ADVISER
Declaration Investment Advisors, Inc. was organized as a Pennsylvania
corporation in 1976. Its address is Suite 6160, 555 North Lane, Conshohocken,
PA19428. Its Directors and principal officers are: Terence P. Smith, Chief
Executive Officer and Sole Director, Gregory Sanginitti, President and Linda K.
Coyne, Executive Vice President and Secretary. The address of each of these
persons is Suite 6160, 555 North Lane, Conshohocken, PA 19428.
Declaration I/A is a wholly owned subsidiary of Declaration Holdings,
Inc.("Holdings"). Prior to August 21, 1997, Stephen B Tily, III and WMB
Holdings, Inc. owned all of the outstanding voting stock of Holdings. On August
21, 1997,all of the outstanding voting stock of Holdings was transferred to
Terence P. Smith, then the Secretary of the Company. On October 22, 1997, Mr.
Smith transferred 20% of the stock to Mentor Special Situations Fund (a venture
capital limited partnership), and 5% to Messers. George Stasen and Edward Sager
(the principals of Mentor Special Situations Fund). Mr. Smith now owns
75%,Mentor Special Situations 20% and Messrs. Stasen and Sager 2 1/2% each. The
address of each of the owners is 555 North Lane Suite 6160 Conshohocken,
Pennsylvania 19428.
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The Agreement provides that the adviser shall not be liable for any loss
suffered by the Fund or its shareholders as a consequence of any act or omission
in connection with services under the Agreement, except by reason of the
adviser's willful misfeasance, bad faith, gross negligence, or reckless
disregard of its obligations and duties under the Advisory Agreement.
The Agreement has a term of two years, but may be continued from year to year so
long as its continuance is approved annually (a) by the vote of a majority of
the Directors of the Fund who are not "interested persons" of the Fund or the
adviser cast in person at a meeting called for the purpose of voting on such
approval, and (b) by the Board of Directors as a whole or by the vote of a
majority (as defined in the 1940 Act) of the outstanding shares of the Fund. The
Agreement will terminate automatically in the event of its assignment (as
defined in the 1940 Act).
DIRECTORS AND OFFICERS
The board of directors has overall responsibility for conduct of the Company's
affairs. The day-to-day operations of the Fund are managed by the Advisor,
subject to the bylaws of the Company and review by the Board of Directors. The
directors of the Company, including those directors who are also officers, are
listed below:
Name, Age, Address, Position Principal Occupation For the
with Fund Last Five Years
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(1) Stephen B. Tiley, III (Age 60) From 1981 to January, 1992,
Chairman of the Board, Trustee President, CEO and Director of
Delaware Charter Guarantee & Trust
Company. Became Chairman and CEO on
January 1992. Resigned December
1993. Trustee of the Trust since
1988.
(2) Thomas S. Stewart, III (Age 50) Managing Partner of Stewart
Trustee Associates, a financial services
consulting firm since 1994.
Previously Director of Economic and
Investment Research with PNC Bank.
(3) George R. Stasen* (Age 52) Co-founder of Mentor Capital
Trustee Partners, Ltd., a Philadelphia
merchant banking firm, in 1993.
Formerly CFO of the Rushmore Group
of Bethesda, MD.
(4) A. Louis Denton (Age 39) President ands Chief Executive
Trustee Officer of Philadelphia Corporation
for Investment Services, a
financial advice and services firm.
Employed by firm since 1989.
(5) Dow W. Stewart (Age 53) President and CEO of Prime Capital
Trustee Holdings since 1997. Formerly Chief
Operating Officer and Treasurer of
Stone & McCarthy Research
Associates (1995-1996) and
co-founded and served as senior
Managing partner and Chief
Financial Officer to R. J. Walls &
Company (1990- 1995).
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(6) Terence P. Smith* (Age 51) Chief Executive Officer,
Trustee, President controlling shareholder, The
Declaration Group. With Company
since 1987.
(7) Arthur S. Filean (Age 59) Secretary, Principal Mutual Fund
Trustee Group since 1976. Previously Second
Vice-President, Principal Mutual
Life Insurance Company (1983-1990).
* Indicates an "interested person" as defined in the Investment Company Act of
1940.
The table below sets forth the compensation anticipated to be paid by the
Company to each of the independent directors of the Company during the fiscal
year ending ________.
Name of Director Compensation Pension Annual Total Compensation
from Company Benefits Benefits Paid to Director
- --------------------------------------------------------------------------------
Stephen B. Tiley
Thomas S. Stewart, III
George R. Stasen
A. Louis Denton
Dow W. Stewart
Terence P. Smith
Arthur S. Filean
The Adviser intends to purchase substantially all of the shares the Fund prior
to the effective date of the Fund's registration and will be deemed initially to
control the Fund.
The Company will call a meeting of shareholders for the purpose of voting upon
the question of removal of a director or directors when requested in writing to
do so by record holders of at least 10% of the Fund's outstanding common shares.
The Company's bylaws contain procedures for the removal of directors by its
stockholders. At any meeting of stockholders, duly called and at which a quorum
is present, the stockholders may by the affirmative vote of the holders of a
majority of the votes entitled to be cast thereon, remove any director or
directors from office and may elect a successor or successors to fill any
resulting vacancies for the unexpired terms of the removed directors.
PERFORMANCE INFORMATION
In sales literature, the Fund's performance may be compared with that of market
indices and other mutual funds. In addition to the above computations, the Fund
might use comparative performance as computed in a ranking determined by Lipper
Analytical Services, Morningstar, Inc., or that of another service.
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PURCHASING AND REDEEMING SHARES
Redemptions will be made at net asset value. The Fund's net asset value is
determined on days on which the New York Stock Exchange is open for trading. For
purposes of computing the net asset value of a share of the Fund, securities
traded on security exchanges, or in the over-the-counter market in which
transaction prices are reported, are valued at the last sales price at the time
of valuation or, lacking any reported sales on that day, at the most recent bid
quotations. Securities for which quotations are not available and any other
assets are valued at a fair market value as determined in good faith by the
Advisor, subject to the review and supervision of the board of directors. The
price per share for a purchase order or redemption request is the net asset
value next determined after receipt of the order.
It is the policy of Declaration Fund to attempt to maintain a net asset value of
$1.00 per share for the shares of Cash Account for purposes of sales and
redemptions. The instruments held in the portfolio of Cash Account are valued on
the basis of amortized cost which does not take into account unrealized capital
gains or losses. This involves valuing an instrument at cost and, thereafter,
assuming a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
the instrument. While this method provides certainty in valuation, it may result
in periods during which value, as determined by amortized cost, is either higher
or lower than the price that would be received if the instrument was sold.
During periods of declining interest rates, the daily yield on shares of Cash
Account, computed as described above, may tend to be higher than a like
computation made by a fund with identical investments utilizing a method of
valuation based upon market prices and estimates of market prices for all of its
portfolio instruments. Thus, if the use of amortized cost resulted in a lower
aggregate portfolio value on a particular day, a prospective investor in Cash
Account would be able to obtain a somewhat higher yield than would result from
investment in a fund utilizing solely market values, and existing Cash Account
investors would receive less investment income. The converse would apply in a
period of rising interest rates. The valuation of Cash Account's instruments
based upon their amortized cost and the commitment to attempt to maintain Cash
Account's per share net asset value of $1.00 is authorized by the provisions of
Rule 2a-7 under the 1940 Act. In compliance with the terms of the Rule, the
Board of Trustees has agreed, as a particular responsibility within the overall
duty of care owed to Cash Account shareholders, to establish procedures
reasonably designed to stabilize the net asset value per share, as computed, for
the purposes of sales and redemptions at$1.00 per share, taking into account
current market conditions and Cash Account's investment objective. These
procedures include periodic review (when the Board of Trustees deems appropriate
and at such intervals as are reasonable in light of current market conditions)
of the relationship between amortized cost value per share and a net asset value
per share based upon available indications of market value. In such review, all
portfolio securities including securities with maturities of less than 60 days
must be marked to market for purposes of computing market deviation. Other
investments and assets are valued at fair market value as determined in good
faith by the Board of Trustees or its designee(s). In the event of a difference
of over 1/2 of 1% between Cash Account's net asset value based upon available
market quotations or market equivalents and its per share net asset value based
on amortized cost, the
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Board of Trustees will promptly consider what action, if any, should be taken.
The Board of Trustees will also take such action, as it deems appropriate, to
eliminate or to reduce ,to the extent reasonably practicable, any material
dilution or other unfair results which might arise from differences between the
two methods of value. Such action may include redemption in kind, selling
portfolio instruments prior to maturity to realize capital gains or losses or to
shorten the average portfolio maturity, withholding dividends, or utilizing a
net asset value per share as determined by using available market quotations.
See "Daily Dividends" below.
Daily Dividends
The Fund will declare and automatically invest dividends from the net investment
income on each day that the Fund is open for business for shareholders of record
as of 11:00 A.M., East Coast time. Income for Saturdays, Sundays, and holidays
will be declared as a dividend on the next succeeding business day. The amount
of dividends declared and paid fluctuates from day to day. Dividends are
automatically reinvested at net asset value in additional shares. Shareholders
of the Fund will receive periodic transaction summaries of their accounts,
including information about dividends reinvested or paid. Shareholders who make
the request may have their dividends paid to them monthly in cash. For such
shareholders, the shares reinvested and credited to their account during the
month will be redeemed promptly after the end of the month and the proceeds paid
to them by check.
Net income, for dividend purposes, is the sum of: (1) net investment income,
which consists of the interest earned on Cash Account's investments(adjusted for
amortization of original issue, market discounts or premiums ),less the
estimated expenses of Declaration Fund; and (2) gains or losses realized on the
sale of portfolio securities. Net income will be so calculated immediately prior
to the determination of the Fund's net asset value per share(see "Determination
of Net Asset Value"). The Board of Trustees of Declaration Fund may revise the
above dividend policy, or postpone the payment of dividends, if Declaration Fund
should have or anticipate any large unexpected expenses, losses or fluctuations
in net assets with respect to Cash Account that, in the opinion of the Board of
Trustees, might have a significant effect on shareholders. The shareholders will
be notified of any such action taken by the Board of Trustees.
The Fund is open for business on each day that the New York Stock Exchange
("NYSE") is open. The Fund's share price or net asset value per share ("NAV") is
normally determined as of 4:00 p.m., New York time. The Fund's share price is
calculated by subtracting its liabilities from the closing fair market value of
its total assets and dividing the result by the total number of shares
outstanding on that day. Fund liabilities include accrued expenses and dividends
payable, and its total assets include the market value of the portfolio
securities as well as income accrued but not yet received. Since the Fund
generally does not charge sales or redemption fees, the NAV is the offering
price for shares of the Fund. For shares redeemed prior to being held for at
least six months, the redemption value is the NAV less a redemption fee equal to
1.00% of the NAV.
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TAX INFORMATION
TAX STATUS
The following is only a summary of certain tax considerations generally
affecting the Fund and its shareholders that are not described in the
Prospectus. No attempt is made to present a detailed explanation of the tax
treatment of shareholders, and the discussion here and in the Prospectus is not
intended as a substitute for careful tax planning. Investors in the Fund should
consult their tax advisors with specific reference to their tax situation.
Since all of the Fund's net investment income is expected to be derived from
earned interest, it is anticipated that no part of any distribution will be
eligible for the dividends received deduction for corporations. It is not
expected that the Fund will realize long-term capital gains and, therefore, it
does not contemplate payment of any "capital gains dividends" as described in
the Code. It will be required, in certain cases, to withhold and remit to the
United States Treasury, 31% of dividends paid to any Fund shareholder who has
failed to provide a tax identification number, or who has provided an incorrect
number, or who is subject to withholding by the Internal Revenue Service for
failure to properly include on his or her return, payments of interest or
dividends. In those states and localities which have income tax laws, the
treatment of the Fund and its shareholders and Declaration Fund may differ under
such laws from the treatment under Federal income tax laws. Shareholders are
advised to consult their tax advisers concerning the application of state and
local taxes.
PORTFOLIO TRANSACTIONS
The Fund will generally purchase and sell securities without regard to the
length of time the security has been held. Accordingly, the rate of portfolio
turnover may be substantial. However, the Fund expects that its annual portfolio
turnover rate will not exceed 50% under normal conditions. However, there can be
no assurance that the Fund will not exceed this rate, and the portfolio turnover
rate may vary from year to year.
High portfolio turnover in any year will result in the payment by the Fund of
above-average transaction costs and could result in the payment by shareholders
of above-average amounts of taxes on realized investment gains. Distributions to
shareholders of such investment gains, to the extent they consist of short-term
capital gains, will be considered ordinary income for federal income tax
purposes.
Decisions to buy and sell securities for the Fund are made by the Adviser
subject to review by the Company's Board of Directors. In placing purchase and
sale orders for portfolio securities for the Fund, it is the policy of the
Adviser to seek the best execution of orders at the most favorable price. In
selecting brokers to effect portfolio transactions, the determination of what is
expected to result in the best execution at the most favorable price involves a
number of largely judgmental considerations. Among these are the Adviser's
evaluations of the broker's efficiency in executing and clearing transactions.
Over-the-counter securities are generally purchased and sold directly with
principal market makers who retain the difference in their cost in the security
and its selling price. In some instances, the Adviser feels that better prices
are available from non-principal market makers that are paid commissions
directly.
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CUSTODIAN
_____________________________ acts as custodian for the Fund. As such,
_______________ holds all securities and cash of the Fund, delivers and receives
payment for securities sold, receives and pays for securities purchased,
collects income from investments and performs other duties, all as directed by
officers of the Company. CoreStates Bank does not exercise any supervisory
function over the management of the Fund, the purchase and sale of securities or
the payment of distributions to shareholders.
TRANSFER AGENT
Declaration Services Company ("DSC") acts as transfer, dividend disbursing, and
shareholder servicing agent for the Fund pursuant to a written agreement with
the Advisor and Fund. Under the agreement, DSC is responsible for administering
and performing transfer agent functions, dividend distribution, shareholder
administration, and maintaining necessary records in accordance with applicable
rules and regulations.
ADMINISTRATION
DSC also provides services as Administrator to the Fund pursuant to a written
agreement with the Advisor and Fund. The Administrator supervises all aspects of
the operations of the Fund except those performed by the Adviser under the
Fund's investment advisory agreement. The Administrator is responsible for:
(a) calculating the Fund's net asset value
(b) preparing and maintaining the books and accounts specified in Rule 31a-1
and 31a-2 of the Investment Company Act of 1940
(c) preparing financial statements contained in reports to stockholders of the
Fund
(d) preparing the Fund's federal and state tax returns
(e) preparing reports and filings with the Securities and Exchange Commission
(f) preparing filings with state Blue Sky authorities
(g) maintaining the Fund's financial accounts and records
DISTRIBUTOR
Declaration Distributors, Inc., 555 North Lane, Suite 6160, Conshohocken, Pa
19428, a wholly-owned subsidiary of The Declaration Group, serves as distributor
and principal underwriter of the Fund's shares pursuant to a written agreement
with the Advisor and Fund.
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INDEPENDENT ACCOUNTANTS
Sanville & Company serves as the Company's independent auditors for the fiscal
year ending December 31, 1998.
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PART C
OTHER INFORMATION
Item 23. Exhibits
- -------- --------
A. Articles of Incorporation of Registrant*
B. Bylaws of Registrant*
C. None [Not Applicable]
D. Investment Advisory Agreement.*
E. Distribution Agreement with Declaration Distributors, Inc.*
F. None [Not Applicable]
G. Custodian Agreement with ______________*
H.(1) Operating Services Agreement.*
(2) Investment Services Agreement with Declaration Service Company*
I. Opinion of Counsel*
J. Consent of Independent Auditors*
Power of Attorney*
K. None [Not Applicable]
L. Subscription Agreement*
M. None [Not Applicable]
N. Financial Data Schedule*
O. Not Applicable
* To be filed by amendment
Item 24. Persons Controlled by or under Common Control with Registrant.
- -------- --------------------------------------------------------------
No person is directly or indirectly controlled by, or under common control with
the Registrant.
<PAGE>
Item 25. Indemnification.
- -------- ----------------
The Law of Pennsylvania generally authorizes the registrant to indemnify its
directors and officers under specified circumstances. Section 7 of Article VII
of the bylaws of the Registrant (exhibit 2 to the registration statement, which
is incorporated herein by reference) provides in effect that the registrant
shall provide certain indemnification to its directors and officers. In
accordance with section 17(h) of the Investment Company Act and other applicable
federal laws, this provision of the bylaws shall not protect any person against
any liability to the registrant or its shareholders to which he or she would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office. With respect to the indemnification provisions of any agreement
entered into by the Company, to the extent that such indemnification provisions
may be inconsistent with, or unenforceable, under any federal or state
securities law, the Company shall not be liable therefore.
Item 26. Business and Other Connections of Investment Adviser.
- -------- -----------------------------------------------------
The Advisor has no other business or other connections.
Item 27. Principal Underwriters.
- -------- -----------------------
Declaration Distributors, Inc., 555 North Lane, Suite 6160, Conshohocken, PA
will be the Fund's principal underwriter.
Item 28. Location of Accounts and Records.
- -------- ---------------------------------
Declaration Service Company.
555 North Lane, Suite 6160
Conshohocken, PA
Item 29. Management Services.
- -------- --------------------
Declaration Service Company.
555 North Lane, Suite 6160
Conshohocken, PA
Item 30. Undertakings.
- -------- -------------
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration to
be signed on its behalf by the undersigned, thereto duly authorized, in the City
of Charlotte and State of North Carolina on the 4th day of December.
Declaration Fund
(Registrant)
By: /s/ Terence P. Smith, President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
Name Title Date
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EXHIBIT INDEX
