As filed with the Securities and Exchange Commission on September 26, 1997.
Registration Nos. 33-29180, 811-5823
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 10
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 12
DOMINI SOCIAL EQUITY FUND
(Exact Name of Registrant as Specified in Charter)
St. James Avenue, Boston, Massachusetts 02116
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: 617-423-0800
Philip W. Coolidge, Esq.
Signature Broker-Dealer Services, Inc.
6 St. James Avenue
Boston, Massachusetts 02116
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b) [ ] on (date) pursuant to
paragraph (b) [X] 60 days after filing pursuant to paragraph (a)(i) [ ] on
(date) pursuant to paragraph (a)(i) [ ] 75 days after filing pursuant to
paragraph (a)(ii) [ ] on (date) pursuant to paragraph (a)(ii) 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.
Registrant has registered an indefinite number of its shares of beneficial
interest (without par value) pursuant to Rule 24f-2 under the Investment Company
Act of 1940. Registrant filed the Notice required by Rule 24f-2 on or about
September 30, 1996 for Registrant's fiscal year ended July 31, 1996.
<PAGE>
Domini Social Index Portfolio has also executed this registration statement.
<PAGE>
DOMINI SOCIAL EQUITY FUND
CROSS REFERENCE SHEET
(As required by Rule 495)
<TABLE>
<CAPTION>
==========================================================================================================================
Item Number Statement of Additional
Form N-1A, Part A Prospectus Caption Information Caption
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
1 Front Cover Page *
- --------------------------------------------------------------------------------------------------------------------------
2 Expense Summary *
- --------------------------------------------------------------------------------------------------------------------------
3 Financial Highlights; Performance Information
Performance Information
- --------------------------------------------------------------------------------------------------------------------------
4 Front Cover Page; Investment *
Objective and Policies
- --------------------------------------------------------------------------------------------------------------------------
5 The Fund; Management; Manager, *
Submanager, Sponsor; Service
Organizations, Transfer Agent
and Custodian; Back Cover Page;
Other Information Concerning
Shares of the Fund-Expenses
- --------------------------------------------------------------------------------------------------------------------------
5A Not Applicable *
- --------------------------------------------------------------------------------------------------------------------------
6 Other Information Concerning *
Shares of the Fund-Description
of Shares, Voting Rights and
Liabilities; Service
Organizations, Transfer Agent
and Custodian; Other
Information Concerning Shares
of the Fund-Dividends and
Capital Gains Distributions;
Tax Matters
- --------------------------------------------------------------------------------------------------------------------------
7 Purchases and Redemptions of *
Shares-Purchases, Automatic
Investment Plan, Individual
Retirement Accounts; Other
Information Concerning Shares
of the Fund-Net Asset Value,
Distribution Plan and
Agreement; Service
Organizations, Transfer Agent
and Custodian
- --------------------------------------------------------------------------------------------------------------------------
8 Purchases and Redemptions of *
Shares-Redemptions, Systematic
Withdrawal Plan
- --------------------------------------------------------------------------------------------------------------------------
9 Not Applicable *
==========================================================================================================================
<PAGE>
==========================================================================================================================
Item Number Statement of Additional
Form N-1A, Part B Prospectus Caption Information Caption
- --------------------------------------------------------------------------------------------------------------------------
10 * Front Cover Page
- --------------------------------------------------------------------------------------------------------------------------
11 * Front Cover Page
- --------------------------------------------------------------------------------------------------------------------------
12 * The Fund
- --------------------------------------------------------------------------------------------------------------------------
13 Investment Objective and Investment Objective,
Policies Policies and Restrictions
- --------------------------------------------------------------------------------------------------------------------------
14 * Management of the Fund
and the
Portfolio-Trustees of the Fund and
the Portfolio, Officers
- --------------------------------------------------------------------------------------------------------------------------
15 * Management of the Fund
and the
Portfolio-Trustees of the Fund and
the Portfolio, Officers
- --------------------------------------------------------------------------------------------------------------------------
16 Other Information Concerning *
Shares of the Fund-Expenses
Management of the Management of the Fund
Fund-Administrator, Sponsor and the
Portfolio-Manager and Submanager,
Sponsor
Purchases and Redemptions of Management of the Fund
Shares-Distribution Plan and and the
Agreement Portfolio-Distributor
Service Organizations, Transfer Management of the Fund
Agent and Custodian-Transfer and Portfolio; Transfer
Agent and Custodian; Back Cover Agent, Custodian and
Page Service Organizations;
Independent Auditors;
Back Cover Page
<PAGE>
Management of the Fund
and the
Portfolio-Distributor
- --------------------------------------------------------------------------------------------------------------------------
17 * Portfolio Transactions
and Brokerage Commissions
- --------------------------------------------------------------------------------------------------------------------------
18 Other Information Concerning Description of Shares,
Shares of the Fund-Description Voting Rights and
of Shares, Voting Rights and Liabilities
Liabilities
<PAGE>
- --------------------------------------------------------------------------------------------------------------------------
19 Purchases and Redemptions of Management of the Fund
Shares; Other Information and the
Concerning Shares of the Portfolio-Transfer Agent,
Fund-Net Asset Value Custodian and Service
Organizations
- --------------------------------------------------------------------------------------------------------------------------
20 Tax Matters Taxation
- --------------------------------------------------------------------------------------------------------------------------
21 * Management of the Fund
and the
Portfolio-Distributor
- --------------------------------------------------------------------------------------------------------------------------
22 Performance Information Performance Information
- --------------------------------------------------------------------------------------------------------------------------
23 * Financial Statements
==========================================================================================================================
</TABLE>
Form N-1A, Part C
Information required to be included in Part C is set forth under the
appropriately numbered item in Part C of this registration statement.
<PAGE>
[DSI201D] PROSPECTUS
November 28, 1997
DOMINI SOCIAL EQUITY FUND
The investment objective of the Domini Social Equity Fund (the "Fund")
is to provide its shareholders with long-term total return which corresponds to
the total return performance of the Domini 400 Social IndexSM, an index
comprised of stocks selected according to social criteria. The Fund seeks to
achieve its investment objective by investing all of its investable assets in
the Domini Social Index Portfolio (the "Portfolio"), a diversified open-end
management investment company having the same investment objective as the Fund.
The Portfolio invests in the common stocks included in the Domini 400 Social
IndexSM.
TABLE OF CONTENTS PAGE
Investment in the Fund.................................................
The Fund...............................................................
Expense Summary........ ...............................................
Financial Highlights...................................................
Performance Information................................................
Investment Objective and Policies......................................
Management.............................................................
Purchases and Redemptions of Shares....................................
Tax Matters............................................................
Other Information Concerning Shares of the Fund........................
Service Organizations, Transfer Agent and Custodian....................
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The manager of the Portfolio is Domini Social Investments LLC. The
investment submanager of the Portfolio is Mellon Equity Associates. The sponsor
of the Fund is Domini Social Investments LLC and the distributor of the Fund is
Signature Broker-Dealer Services, Inc. Investments in the Fund are neither
insured nor guaranteed by the U.S. Government. SHARES OF THE FUND ARE NOT
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY BANK, AND THE SHARES ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER FEDERAL, STATE
OR OTHER GOVERNMENTAL AGENCY.
"DominiSM" and "Domini 400 Social IndexSM" are service marks of Kinder,
Lydenberg, Domini & Co., Inc.
This Prospectus sets forth concisely the information concerning the Fund
that a prospective investor ought to know before investing. The Fund has filed
with the Securities and Exchange Commission a Statement of Additional
Information, dated November 28, 1997, as amended from time to time, which
contains more detailed information about the Fund and is incorporated into this
Prospectus by reference. An investor may obtain a copy of the Statement of
Additional Information without charge by contacting the distributor (see back
cover for address and phone number).
UNLIKE OTHER MUTUAL FUNDS WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN
PORTFOLIO OF SECURITIES, THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY
INVESTING ALL OF ITS INVESTABLE ASSETS IN THE PORTFOLIO. THE FUND INVESTS IN THE
PORTFOLIO THROUGH A TWO-TIER MASTER-FEEDER INVESTMENT FUND
STRUCTURE. SEE "SPECIAL INFORMATION CONCERNING THE MASTER-FEEDER
INVESTMENT FUND STRUCTURE" HEREIN.
INVESTORS SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE
REFERENCE.
<PAGE>
INVESTMENT IN THE FUND
The Fund seeks to provide its shareholders with long-term total return
which corresponds to the total return performance of the Domini 400 Social
IndexSM, an index comprised of stocks selected according to social criteria. The
Fund may be appropriate, therefore, for investors who are willing to ride out
stock market fluctuations in pursuit of long-term returns. Because the Fund
seeks to track, rather than exceed, the performance of a particular index, the
Fund is not managed in the same way as other mutual funds. In particular, the
manager generally does not judge the merits of any particular stock as an
investment. Therefore, investors should not expect to achieve the potentially
greater results that could be obtained by a fund that aggressively seeks growth.
The value of an investment in the Fund varies from day to day, generally
reflecting changes in the financial condition of the companies in which the
Portfolio invests, general market conditions and political and economic factors.
Stock prices can fluctuate dramatically in response to these and other factors
or speculation about these factors. Over the long term, stocks have generally
shown greater growth potential than other types of securities. However, when you
sell your Fund shares, they may be worth more or less than what you paid for
them.
Potential investors should note that because the Portfolio seeks to be
fully invested in the stocks comprising the Domini 400 Social IndexSM, the Fund
is not a balanced investment plan. Potential investors should also note that the
manager of the Portfolio, Domini Social Investments LLC, has no prior experience
in managing or advising a mutual fund. You should carefully consider your
investment objectives and risk tolerance before making a decision to invest in
the Fund.
THE FUND
Domini Social Equity Fund (the "Fund") is a no-load, diversified,
open-end management investment company which was organized as a business trust
under the laws of the Commonwealth of Massachusetts on June 7, 1989. Although
shares of the Fund are sold without a sales load, Signature Broker-Dealer
Services, Inc. ("Signature" or the "Distributor") receives a distribution fee
from the Fund pursuant to a Distribution Plan adopted in accordance with Rule
12b-1 under the Investment Company Act of 1940, as amended (the "1940 Act"). The
Fund offers to buy back (redeem) its shares from its shareholders at any time at
net asset value.
Shares of the Fund are sold continuously by the Distributor. The minimum
initial investment is $1,000, except that the minimum initial investment for an
investor investing through an automatic investment plan is $500 and the minimum
initial investment for an Individual Retirement Account ("IRA") is $250. An
investor should obtain from the Distributor, and should read in conjunction with
this prospectus, the materials describing the procedures under which Fund shares
may be purchased and redeemed. See "Purchases and Redemptions of Shares" herein.
2
<PAGE>
Proceeds from the sale of shares of the Fund are invested in the
Portfolio which then purchases securities in accordance with its investment
objective and policies. Domini Social Investments LLC ("DSI") is the Portfolio's
manager (the "Manager") and provides investment supervisory and administrative
services to the Portfolio. Mellon Equity Associates ("Mellon Equity") is the
Portfolio's investment submanager (the "Submanager"). DSI is also the sponsor
("Sponsor") of the Fund and provides administrative services I to the Fund. The
Boards of Trustees of the Fund and of the Portfolio provide I broad supervision
over the affairs of the Fund and of the Portfolio, I respectively. The Trustees
who are not "interested persons" as I defined in the 1940 Act (the "Independent
Trustees") of the Fund, are the same as the Independent Trustees of the
Portfolio. A majority of the Fund's Trustees are not affiliated with the Manager
or the Submanager . For further information about the Trustees of the Fund and
the Portfolio, see "Management of the Fund and the Portfolio" in the Statement
of Additional Information.
Kinder, Lydenberg, Domini & Co., Inc. ("KLD"), the former investment
adviser of the Portfolio and an affiliate of DSI, determines the composition of
the Domini 400 Social IndexSM (which determines the composition of the
Portfolio's securities). The following persons are primarily responsible for the
development and maintenance of the Domini 400 Social IndexSM: Steven D.
Lydenberg, Director of Research, KLD, since 1990; and Peter D. Kinder,
President, KLD, since 1988. The Submanager manages the investments of the
Portfolio from day to day in accordance with the Portfolio's investment
objective and policies.
EXPENSE SUMMARY
The following table provides (i) a summary of expenses relating to
purchases and sales of shares of the Fund, and the aggregate annual operating
expenses for the Fund and the Portfolio, as a percentage of average net assets
of the Fund, and (ii) an example illustrating the dollar cost of such expenses
on a $1,000 investment in the Fund.
SHAREHOLDER TRANSACTION EXPENSES . . . . . . . . . . . . 0%
ANNUAL OPERATING EXPENSES:
Advisory and Management Fees . . . . . . . . . . . 0.154%(1)
12b-1 Fees . . . . . . . . . . . . . . . . . . . . 0.120%(2)
Other Expenses
--Administrative Services and Sponsorship Fees . . 0.423%(3)
--Other Expenses . . . . . . . . . . . . . . . . . 0.283%
--Expense Payment Fees . . . . . . . . . . . . . . 0.000%
Total Operating Expenses . . . . . . . . . . . . . 0.980%(4)(5)
(1) Under the Management Agreement between the Portfolio and DSI, DSI's fee for
advisory and administrative services to the Portfolio is 0.20% of the
average daily net assets of the Portfolio but will be reduced to the extent
necessary to keep the aggregate annual operating expenses of the Portfolio
(excluding brokerage fees and commissions, interest, taxes and other
extraordinary expenses) at no greater than 0.20% of the average daily net
assets of the Portfolio,
<PAGE>
through [November 1, 1998]. If this fee reduction were not in effect,
advisory and management fees for the Portfolio would be 0.20% of the
average daily net assets of the Portfolio.
(2) The percentage represents actual expenditures, expressed as a percentage of
average daily net assets, under the Fund's Distribution Plan during the
fiscal year ended July 31, 1997. The Distribution Plan permits
reimbursement for expenses incurred by the Distributor of up to 0.25% of
the Fund's average daily net assets. See "Other Information Concerning
Shares of the Fund--Distribution Plan and Agreement
(3) Under the Sponsorship Agreement between DSI and the Fund, DSI's fee for
administrative and sponsorship services is 0.50% of the average daily net
assets of the Fund but will be reduced to the extent necessary to keep the
aggregate annual operating expenses of the Fund (including the Fund's share
of the Portfolio's expenses but excluding brokerage fees and commissions,
interest, taxes and other extraordinary expenses) at no greater than 0.98%
of the average daily net assets of the Fund through [November 1, 1998]. If
this fee reduction were not in effect, administrative services and
sponsorship fees for the Fund would be 0.50% of the average daily net
assets of the Fund.
(4) Other Expenses and Total Operating Expenses do not reflect either the
payment to Signature by the Fund of $550,000 in connection with termination
of the expense payment arrangements with Signature or other expenses
incurred by the Fund in connection with the termination of such
arrangements. Had such nonrecurring expenses been included, Other Expenses
and Total Operating Expenses would be 0.793% and 1.49%, respectively.
(5) Without the automatic fee reductions, which expire [November 1, 1998], it
is estimated that the aggregate annual operating expenses of the Fund
(including the Fund's share of the Portfolio's expenses) would be 1.103% of
the average daily net assets of the Fund assuming the same level of assets
and expenses of the Fund as existed during the fiscal year ended July 31,
1997.
The expense information in the expense table provided above has been
restated to reflect fees currently in effect. The purpose of the expense table
is to help investors understand the various costs and expenses that a
shareholder will bear directly or indirectly. Without reimbursement, historical
operating expenses expressed as a ratio of the Fund's average net assets were
1.07% for the fiscal year ended July 31, 1997. See "Management" and "Other
Information Concerning Shares of the Fund--Expenses" for more information with
respect to the expenses of the Fund and the Portfolio.
4
<PAGE>
EXAMPLE:
A shareholder of the Fund would pay the following expenses on a
$1,000 investment in the Fund, assuming (1) 5% annual return and
(2) redemption at the end of:
1 year . . . . . . . . . . . . . . . . . . . $ 10
3 years . . . . . . . . . . . . . . . . . . $ 31
5 years . . . . . . . . . . . . . . . . . . $ 54
10 years . . . . . . . . . . . . . . . . . . $120
The Fund pays a distribution fee at an annual rate of up to 0.25% of the
Fund's average daily net assets in reimbursement of, or in anticipation of,
expenses incurred by the Distributor in connection with the sale of shares of
the Fund. Long-term shareholders may pay more than the economic equivalent of
the maximum distribution charges permitted by the National Association of
Securities Dealers, Inc. The Fund may pay fees to Service Organizations (as
defined below) in amounts up to an annual rate of 0.25% of the daily net asset
value of shares of the Fund owned by shareholders with whom the Service
Organization has a servicing relationship. See "Other Information Concerning
Shares of the Fund--Distribution Plan and Agreement" and "Service Organizations,
Transfer Agent and Custodian".
THE "EXAMPLE" SET FORTH ABOVE IS HYPOTHETICAL AND SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OF THE FUND. ACTUAL
EXPENSES AND RETURNS MAY BE MORE OR LESS THAN THOSE SHOWN.
The Fund's Trustees believe that the aggregate per share expenses of the
Fund and the Portfolio will be less than or approximately equal to the expenses
which the Fund would incur if it retained the services of an investment manager
and an investment submanager and invested directly in the types of securities
being held by the Portfolio.
FINANCIAL HIGHLIGHTS
The following selected data for a share outstanding for the indicated
periods have been audited by [ ], independent certified public accountants,
whose reports thereon are incorporated by reference in the Statement of
Additional Information. This information should be read in conjunction with the
financial statements incorporated by reference in the Statement of Additional
Information.
The Fund's Annual Report includes a discussion of those factors,
strategies and techniques that materially affected the Fund's performance during
the fiscal year ended July 31, 1997, as well as certain related information. A
copy of the Annual Report will be made available without charge upon request.
5
<PAGE>
<TABLE>
<CAPTION>
For the Fiscal Years Ended July 31
-------------------------------------------------------------
<S> <C> <C> <C> <C>
1997 1996 1995 1994
------------- ------------- ------------- -------------
Net Asset Value, beginning of period.............. $ 16.70 $ 14.85 $ 12.13 $ 12.00
------------- ------------- ------------- -------------
Income from investment operations:
Net investment income........................... 0.112 0.163 0.172 0.175
Net realized and unrealized gain (loss) on
investments.................................... 8.848 1.927 2.825 0.178
------------- ------------- ------------- -------------
Total from investment operations.................. 8.960 2.090 2.997 0.353
------------- ------------- ------------- -------------
Less distributions and dividends:
Dividends to shareholders from net investment
income......................................... (0.112) (0.158) (0.195) (0.150)
Distributions to shareholders from net realized
gain........................................... (0.118) (0.082) (0.082) (0.073)
------------- ------------- ------------- -------------
Total distributions............................... (0.230) (0.240) (0.277) (0.223)
------------- ------------- ------------- -------------
Net asset value, end of period.................... $ 25.43 $ 16.70 $ 14.85 $ 12.13
============= ============= ============= =============
Ratios/supplemental data:
Total return.................................... 54.01% 14.11% 25.10% 2.90%
Net assets, end of period (in 000's)............ $212,310 $80,915 $54,638 $31,369
Ratio of expenses to average net assets......... 0.98%(1) 0.98%(1) 0.90%(2) 0.75%(2)
Ratio of net investment income to average net
assets......................................... 0.62%(1) 1.01%(1) 1.38%(2) 1.67%(2)
<CAPTION>
For the Period
August 10, 1990
to July 31,
1993 1992 1991
------------- ------------- ---------------
<S> <C> <C> <C>
Net Asset Value, beginning of period.............. $ 11.06 $ 9.95 $ 10.00
------------- ------------- -------
Income from investment operations:
Net investment income........................... 0.137 0.117 0.018
Net realized and unrealized gain (loss) on
investments.................................... 0.968 1.106 (0.068)
------------- ------------- -------
Total from investment operations.................. 1.105 1.223 (0.050)
------------- ------------- -------
Less distributions and dividends:
Dividends to shareholders from net investment
income......................................... (0.150) (0.113) --
Distributions to shareholders from net realized
gain........................................... (0.015) -- --
------------- ------------- -------
Total distributions............................... (0.165) (0.113) --
------------- ------------- -------
Net asset value, end of period.................... $ 12.00 $ 11.06 $ 9.95
============= ============= =======
Ratios/supplemental data:
Total return.................................... 10.00% 12.30% (0.50)%
Net assets, end of period (in 000's)............ $ 17,229 $ 7,174 $ 1,740
Ratio of expenses to average net assets......... 0.75%(2) 0.75%(2) 0.75%(3)
Ratio of net investment income to average net
assets......................................... 1.41%(2) 1.53%(2) 1.49%(3)
</TABLE>
- ------------------------------
(1) Had an expense payment agreement not been in place the ratio of expenses
and net investment income to average net assets for the fiscal years ended
July 31, 1997 and 1996, would have been 0.84% and 0.76%, and 1.07% and
0.92%, respectively.
(2) Reflects a voluntary waiver of fees by Signature and KLD due to
limitations set forth in an expense payment agreement. Had Signature and
KLD not waived their fees, the ratios of net investment income and
expenses to average net assets for the years ended July 31, 1995, 1994
and 1993 would have been 1.13% and 1.15%, 1.39% and 1.03% and 1.26% and
0.90%, respectively.
(3) Annualized.
6
<PAGE>
PERFORMANCE INFORMATION
Performance information concerning the Fund may from time to time be
used in advertisements, shareholder reports or other communications to
shareholders. The Fund may provide period and average annualized "total rates of
return" with respect to the Fund. The "total rate of return" of the Fund refers
to the change in the value of an investment in a Fund over a stated period based
on any change in net asset value per share and includes the value of any shares
purchasable with any dividends or capital gains distributions declared during
such period. Period total rates of return may be annualized. An annualized total
rate of return is a compounded total rate of return which assumes that the
period total rate of return is generated over a 52-week period, and that all
dividends and capital gains distributions are reinvested. An annualized total
rate of return will be slightly higher than a period total rate of return if the
period is shorter than one year, because of the effect of compounding.
The table that follows sets forth average annual total return
information for the periods indicated
7/31/97 9/30/97
1 Year: . . . . . . . . . . .[__.__ --.--]
5 Years: . . . . . . . . . . .[__.__ --.--]
Commencement of Investment in the
Portfolio* to date . . . . . .[__.__ --.--]
* The Fund commenced investment in the Portfolio on June 3, 1991.
The Fund may provide "yield" quotations with respect to the Fund. The
"yield" of the Fund refers to the income generated by an investment in the Fund
over a 30-day or one-month period (which period shall be stated in any
advertisement or communications with a shareholder). This income is then
"annualized", that is, the amount of income generated by the investment over the
period is assumed to be generated over a 52-week period and is shown as a
percentage of investment. A "yield" quotation, unlike a total rate of return
quotation, does not reflect changes in net asset value.
From time to time the Fund may also quote fund rankings from various
sources, such as Lipper Analytical Services, Inc., and may compare its
performance to that of the Domini 400 Social IndexSM and various other unmanaged
securities indices, such as the Standard & Poor's 500 Composite Stock Price
Index (the "S&P 500") and the Dow Jones Industrial Average. "Standard &
Poor(R)", "S&P(R)" and "Standard & Poor's 500(R)" are trademarks of Standard &
Poor's Corporation.
See the Statement of Additional Information for further information
concerning the calculation of yield and any total rate of return quotations.
Since the Fund's yield and total rate of return quotations are based on
historical earnings and since such yield and rates of return fluctuate overtime,
such quotations should not be considered as an indication or representation of
the future performance of the Fund.
7
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
INVESTMENT OBJECTIVE--The investment objective of the Fund is to provide
its shareholders with long-term total return (reflecting both dividend and price
performance of the Fund) which corresponds to the total return performance of
the Domini 400 Social IndexSM (referred to herein as the "Index" or the "Domini
Social Index"). There can, of course, be no assurance that the Fund will achieve
its investment objective. The investment objective of the Fund may be changed
without approval by the Fund's shareholders.
INVESTMENT POLICIES--The Fund seeks to achieve its investment objective
by investing all of its investable assets in the Portfolio, which has the same
investment objective as the Fund. The Portfolio seeks to achieve its investment
objective by investing in the common stocks comprising the Domini Social Index.
The Portfolio will approximate the weightings of securities held by the
Portfolio to the weightings of the stocks in the Index, except as described
below, and will seek a correlation between the weightings of securities held by
the Portfolio and the weightings of the stocks in the Index of 0.95 or better. A
figure of 1.0 would indicate a perfect correlation. As of September 30, 1997,
the correlation between the weightings of securities held by the Portfolio and
the weightings of the stocks in the Index was [_.__]. To the extent practicable,
the Portfolio will attempt to be fully invested. The ability of the Fund to
duplicate the performance of the Index by investing in the Portfolio will depend
to some extent on the size and timing of cash flows into and out of the Fund and
the Portfolio as well as the Fund's and the Portfolio's expenses. Adjustments in
the securities holdings of the Portfolio to accommodate cash flows will track
the Index to the extent practicable, but this will result in brokerage expenses.
SOCIAL CRITERIA--The Domini Social Index was developed and is currently
maintained by KLD. The Index is a common stock index comprised of the stocks of
approximately 400 companies which meet certain social criteria. The weightings
of the stocks compromising the Index are based upon market capitalization. The
criteria used in developing and maintaining the Index involve the subjective
judgment of KLD. KLD, based on available data, seeks to exclude the following
types of companies: firms that derive more than 2% of their gross revenues from
the sale of military weapons; firms that derive any revenues from the
manufacture of tobacco products or alcoholic beverages; firms that derive any
revenues from gambling enterprises; and firms that have an ownership share in,
or operate, nuclear power plants, or participate in businesses related to the
nuclear fuel cycle. KLD also considers criteria such as corporate citizenship,
employee relations, environmental performance, and product-related issues when
evaluating stocks for inclusion in the Index. The corporate citizenship criteria
include a company's record with regard to its philanthropic activities and its
community relations in general. The employee relations criteria include a
company's record with regard to labor matters, workplace safety, equal
employment opportunity, employee benefit programs, and meaningful participation
in company profits either through stock purchase or profit sharing plans. The
environmental performance criteria include a company's record with regard to
fines or penalties, waste disposal, toxic emissions, efforts in waste reduction
and emissions reduction, recycling, and environmentally beneficial fuels,
products and services. The product-related
8
<PAGE>
criteria include a company's record with regard to product safety, marketing
practices, and commitment to quality.
The Manager intends to vote proxies of companies included in the
Portfolio consistent with the social criteria used in developing and maintaining
the Domini Social Index.
INDEX MANAGEMENT--The Portfolio is not managed in the traditional
investment sense, since changes in the composition of its securities holdings
are made in order to track the changes in the composition of securities included
in the Domini Social Index. Moreover, inclusion of a stock in the Index does not
imply an opinion by KLD or the Manager as to the merits of that specific stock
as an investment. However, KLD and the Manager believe that enterprises which
exhibit a social awareness, based on the criteria described above, should be
better prepared to meet future societal needs for goods and services and may
also be less likely to incur certain legal liabilities that may be incurred when
a product or service is determined to be harmful, and that such enterprises
should over the longer term be able to provide a positive return to investors.
In selecting stocks for inclusion in the Domini Social Index:
1. KLD evaluated, in accordance with the social criteria described
above, each of the companies the stocks of which comprise the S&P 500. If a
company whose stock was included in the S&P 500 met KLD's social criteria and
met KLD's further criteria for industry diversification, financial solvency,
market capitalization, and minimal portfolio turnover, it was included in the
Domini Social Index. As of July 31, 1997, of the 500 companies whose stocks
comprised the S&P 500, approximately [__]% were included in the Index.
2. The remaining stocks comprising the Domini Social Index (I.E., those
which are not included in the S&P 500) were selected based upon KLD's evaluation
of the social criteria described above, as well as upon KLD's criteria for
industry diversification, financial solvency, market capitalization, and minimal
portfolio turnover. Because of the social criteria applied in the selection of
stocks comprising the Index, industry sector weighting in the Index may vary
materially from the industry weightings in other stock indices, including the
S&P 500, and certain industry sectors will be excluded altogether.
The component stocks of the S&P 500 are chosen by Standard & Poor's
Corporation ("S&P") solely with the aim of achieving a distribution by broad
industry groupings that approximates the distribution of these groupings in the
New York Stock Exchange common stock population, taken as the assumed model
forthe composition of the total market. Construction of the S&P 500 by S&P
proceeds from industry groups to the whole. Since some industries are
characterized by companies of relatively small stock capitalization, the S&P 500
does not comprise the 500 largest companies listed on the New York Stock
Exchange. Not all stocks included in the S&P 500 are listed on the New York
Stock Exchange. However, the total market value of the S&P 500 as of July 31,
1997 represented [__]% of the aggregate market value of common stocks traded on
the New York Stock Exchange.
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Inclusion of a stock in the S&P 500 in no way implies an opinion by S&P
as to its attractiveness as an investment, nor is S&P a sponsor of or otherwise
affiliated with the Fund or the Portfolio.
Some of the stocks included in the Domini Social Index may be stocks of
foreign issuers (provided that the stocks are traded in the United States in the
form of American Depositary Receipts or similar instruments the market for which
is denominated in United States dollars). Securities of foreign issuers may
represent a greater degree of risk (I.E., as a result of exchange rate
fluctuation, tax provisions, war or expropriation) than do securities of
domestic issuers.
The weightings of stocks in the Domini Social Index are based on each
stock's relative total market capitalization, (I.E., market price per share
times the number of shares outstanding). Because of this weighting, as of July
31,
1997 approximately [__] of the Index was comprised of the [__] largest
companies in the Index.
KLD may exclude from the Domini Social Index stocks issued by companies
which are in bankruptcy or whose bankruptcy KLD believes may be imminent.
The Portfolio intends to readjust its securities holdings periodically
such that those holdings will correspond, to the extent reasonably practicable,
to the Domini Social Index both in terms of composition and weighting. The
timing and extent of adjustments in the holdings of the Portfolio, and the
extent of the correlation of the holdings of the Portfolio with the Index, will
reflect the Submanager's judgment as to the appropriate balance between the goal
of correlating the holdings of the Portfolio with the composition of the Index,
and the goals of minimizing transaction costs and keeping sufficient reserves
available for anticipated redemptions of Fund shares. To the extent practicable,
the Portfolio will seek a correlation between the weightings of securities held
by the Portfolio to the weightings of the securities in the Index of 0.95 or
better. The Board of Trustees of the Portfolio will receive and review, at least
quarterly, a report prepared by the Submanager comparing the performance of the
Fund and the Portfolio with that of the Index, and comparing the composition and
weighting of the Portfolio's holdings with those of the Index, and will consider
what action, if any, should be taken in the event of a significant variation
between the performance of the Fund or the Portfolio, as the case may be, and
that of the Index, or between the composition and weighting of the Portfolio's
securities holdings with those of the stocks comprising the Index. If the
correlation between the weightings of securities held by the Portfolio and the
weightings of the stocks in the Index falls below 0.95, the Board of Trustees
will review with the Submanager methods for increasing such correlation, such as
through adjustments in securities holdings of the Portfolio.
The Portfolio may invest cash reserves in short-term debt securities
(I.E., securities having a remaining maturity of one year or less) issued by
agencies or instrumentalities of the United States Government, bankers'
acceptances, commercial paper or certificates of deposit, provided that the
issuer satisfies KLD's social criteria. The Portfolio does not currently intend
to invest in direct obligations of the United States Government. Short-term debt
securities
10
<PAGE>
purchased by the Portfolio will be rated at least Prime-1 by Moody's
Investors Service, Inc. or A-1+ or A-1 by S&P or, if not rated, determined to be
of comparable quality by the Portfolio's Board of Trustees. The Portfolio's
policy is to hold its assets in such securities pending readjustment of its
portfolio holdings of stocks comprising the Domini Social Index and in order to
meet anticipated redemption requests. Such investments are not intended to be
used for defensive purposes in periods of anticipated market decline.
The annual portfolio turnover rates of the Portfolio for the fiscal
years ended July 31, 1996 and July 31, 1997 were 5% and 1%, respectively. The
Portfolio's average brokerage commission rates paid per share for the fiscal
years ended July 31, 1996 and July 31, 1997 were $0.05 and $0.05, respectively.
The Portfolio's primary consideration in placing securities transactions
with broker-dealers for execution is to obtain, and maintain the availability
of, execution at the most favorable prices and in the most effective manner
possible. Neither the Portfolio nor the Fund will engage in brokerage
transactions with the
Manager, the Submanager or the Sponsor or any of their respective
affiliates or any affiliate of the Fund or the Portfolio. For further discussion
regarding securities trading by the Portfolio, see the
Statement of Additional Information.
Consistent with applicable regulatory policies, including those of the
Board of Governors of the Federal Reserve System and the Securities and Exchange
Commission, the Portfolio may make loans of its securities to member banks of
the Federal Reserve System and to broker-dealers. Such loans would be required
to be secured continuously by collateral consisting of securities, cash or cash
equivalents maintained on a current basis at an amount at least equal to the
market value of the securities loaned. The Portfolio would have the right to
call a loan and obtain the securities loaned at any time on three days' notice.
During the existence of a loan, the Portfolio would continue to collect the
equivalent of the dividends paid by the issuer on the securities loaned and
would also receive interest on investment of cash collateral. The Portfolio may
pay finder's and other fees in connection with securities loans. Loans of
securities involve a risk that the borrower may fail to return the securities or
may fail to provide additional collateral.
Although it has no current intention to do so, the Portfolio may make
short sales of securities or maintain a short position, if at all times when a
short position is open the Portfolio owns an equal amount of such securities, or
securities convertible into such securities.
SPECIAL INFORMATION CONCERNING THE MASTER FEEDER INVESTMENT FUND STRUCTURE
Unlike other mutual funds which directly acquire and manage their own
portfolio securities, the Fund seeks to achieve its investment objective by
investing all of its investable assets in the Portfolio, a separate registered
investment company with the same investment objective as the Fund. In addition
to selling a beneficial interest to the Fund, the Portfolio may sell beneficial
interests to other mutual funds or institutional investors. Such investors will
invest in the Portfolio on the same terms and conditions as the Fund and will
pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to sell their shares at
the same
11
<PAGE>
public offering price as the Fund due to variations in sales
commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the different funds that invest in the Portfolio.
Such differences in returns are also present in other mutual fund structures.
Information concerning other holders of interests in the Portfolio is available
from the Manager at [(___) ___-____].
The investment objective of the Fund may be changed without the approval
of the Fund's shareholders, but not without written notice thereof to
shareholders thirty days prior to implementing the change. If there were a
change in the Fund's investment objective, shareholders should consider whether
the Fund remains an appropriate investment in light of their then-current
financial positions and needs. The investment objective of the Portfolio may
also be changed without the approval of the investors in the Portfolio, but not
without written notice thereof to the investors in the Portfolio (and notice by
the Fund to its shareholders) 30 days prior to implementing the change. There
can, of course, be no assurance that the investment objective of either the Fund
or the Portfolio will be achieved. See "Investment Restrictions" in the
Statement of Additional Information for a description of the fundamental
policies of the Fund and of the Portfolio that cannot be changed without
approval by the holders of a "majority of the outstanding voting securities" (as
defined in the 1940 Act) of the Fund or the Portfolio, respectively. Except as
stated otherwise, all investment guidelines, policies and restrictions described
herein and in the Statement of Additional Information are non-fundamental.
Smaller funds investing in the Portfolio may be materially affected by
the actions of larger funds investing in the Portfolio. For example, if a large
fund withdraws from the Portfolio, the remaining funds may experience higher pro
rata operating expenses, thereby producing lower returns. Additionally, the
Portfolio may become less diverse, resulting in increased portfolio risk.
(However, this possibility exists as well for traditionally structured funds
which have large or institutional investors.) Also, funds with a greater pro
rata ownership in the Portfolio could have effective voting control of the
operations of the Portfolio. Subject to exceptions that are not inconsistent
with applicable rules or policies of the Securities and Exchange Commission,
whenever the Fund is requested to vote on matters pertaining to the Portfolio,
the Fund will hold a meeting of shareholders of the Fund and will cast all of
its votes in the same proportion as the votes of the Fund's shareholders. Fund
shareholders who do not vote will not affect the Fund's votes at the Portfolio
meeting. The percentage of the Fund's votes representing Fund shareholders not
voting will be voted by the Trustees of the Fund in the same proportion as the
Fund shareholders who do, in fact, vote. Certain changes in the Portfolio's
investment objective, policies or restrictions may require the Fund to withdraw
its interest in the Portfolio. Any such withdrawal could result in a
distribution "in kind" of portfolio securities (as opposed to a cash
distribution from the Portfolio). If securities are distributed, the Fund could
incur brokerage, tax or other charges in converting the securities to cash. In
addition, the distribution in kind may result in a less diversified portfolio of
investments or adversely affect the liquidity of the Fund. Notwithstanding the
above, there are other means for meeting shareholder redemption requests, such
as borrowing.
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<PAGE>
The Fund may withdraw its investment from the Portfolio at any time, if
the Board of Trustees of the Fund determines that it is in the best interests of
the Fund to do so. Upon any such withdrawal, the Board of Trustees would
consider what action might be taken, including the investment of all the assets
of the Fund in another pooled investment entity having the same investment
objective as the Fund or the retention of an investment adviser to manage the
Fund's assets in accordance with the investment policies described above with
respect to the Portfolio. In the event the Trustees of the Fund were unable to
find a substitute investment company in which to invest the Fund's assets and
were unable to secure directly the services of an investment manager and
investment submanager, the Trustees will seek to determine the best course of
action.
For more information about the Portfolio's policies, management and
expenses see "Investment Objective and Policies", "Management" and "Other
Information Concerning Shares of the Fund--Expenses". For information about the
Portfolio's investment restrictions see the Statement of Additional Information.
------------------------
As a matter of fundamental policy, the Fund will invest all of its
investable assets (either directly or through the Portfolio) in one or more of:
(i) stocks comprising an index of securities selected applying social criteria,
which initially will be the Domini Social Index, (ii) short-term debt securities
of issuers which meet social criteria, (iii) cash, and (iv) options on equity
securities. This fundamental policy cannot be changed without the approval of
the holders of a majority of the Fund's shares (which, as used in this
Prospectus, means the lesser of (a) more than 50% of the outstanding shares of
the Fund, or (b) 67% or more of the outstanding shares of the Fund present at a
meeting at which holders of more than 50% of the Fund's outstanding shares are
represented in person or by proxy). Except for this fundamental policy, investor
approval is not required to change the Fund's or the Portfolio's investment
objective or any of the investment policies described above.
The Statement of Additional Information includes a discussion of other
investment policies and a listing of specific investment restrictions which
govern the Portfolio's and the Fund's investment policies. Certain of the
investment restrictions listed in the Statement of Additional Information may
not be changed by the Portfolio without the approval of the Fund and the other
investors in the Portfolio or by the Fund without the approval of the
shareholders of the Fund. If a percentage or rating restriction on investment or
utilization of assets is adhered to at the time an investment is made or assets
are so utilized, a later change in percentage resulting from changes in the
Portfolio's total assets or the value of the Portfolio's securities or a later
change in the rating of a security held by the Portfolio will not be considered
a violation of policy.
Expenses of the Portfolio with respect to investment management and
administrative services, investment submanagement services and sponsorship
services are described herein under "Management--Manager,-- Submanager, and--
Sponsor", respectively.
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<PAGE>
MANAGEMENT
The Boards of Trustees of the Fund and the Portfolio provide broad
supervision over the affairs of the Fund and the Portfolio, respectively. The
Fund has retained the services of DSI as Sponsor, but has not retained the
services of an investment manager or investment submanager since the Fund seeks
to achieve its investment objective by investing all of its investable assets in
the Portfolio. The Portfolio has retained the services of DSI as investment
manager and Mellon Equity as investment submanager.
MANAGER
DSI, a Massachusetts limited liability company, provides investment
management and administrative services to the Portfolio pursuant to a Management
Agreement. DSI has been registered as an investment adviser under the Investment
Advisers Act of 1940 since 1997. The services provided by the Manager consist of
investment supervisory services, overall operational support and administrative
services. The administrative services include the provision of general office
facilities and supervising the overall administration of the Portfolio. For its
services under the Management Agreement, the Manager receives from the Portfolio
a fee accrued daily and paid monthly at an annual rate equal to 0.20% of the
Portfolio's average daily net assets, on an annualized basis for the Portfolio's
then-current fiscal year, subject to reduction. See "Expenses" for a description
of this fee reduction pursuant to the Management Agreement.
Prior to [November 1, 1997], KLD, as the Portfolio's former investment
adviser, received from the Portfolio a fee accrued daily and paid monthly at an
annual rate equal to 0.025% of the Portfolio's average daily net assets, on an
annualized basis for the Portfolio's then-current fiscal year. Additionally,
prior to [November 1, 1997], KLD received from the Portfolio a fee accrued daily
and paid monthly at an annual rate equal to 0.025% of the average daily net
assets of the Portfolio for its then current fiscal year for administrative
services.
"DominiSM" and "Domini 400 Social IndexSM" are service marks of KLD
which are licensed to DSI with the consent of Amy L. Domini. Pursuant to
agreements among DSI, Amy L. Domini, and each of the Fund and the Portfolio, the
Portfolio may be required to discontinue use of these service marks if DSI
ceases to be the Manager of the Portfolio or Ms. Domini withdraws her consent,
and the Fund may be required to discontinue the use of these service marks if
either DSI ceases to be the Sponsor of the Fund or Ms. Domini withdraws her
consent or if either DSI ceases to be the Manager of the Portfolio or the Fund
ceases to invest all of its assets in the Portfolio.
SUBMANAGER
Mellon Equity provides investment submanagement services to the
Portfolio on a day-to-day basis pursuant to a Submanagement Agreement with DSI.
Mellon Equity does not determine the composition of the Domini Social Index.
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<PAGE>
Under the Submanagement Agreement, DSI pays Mellon Equity an investment
submanagement fee equal on an annual basis to 0.10% of the average daily net
assets of the Portfolio. Prior to [November 1, 1997], the Portfolio paid Mellon
Equity an investment management fee equal on an annual basis to 0.10% of the
average daily net assets of the Portfolio.
Mellon Equity is a Pennsylvania business trust founded in 1987 whose
beneficial owners are Mellon Bank N.A. and MMIP, Inc (a wholly owned subsidiary
of Mellon Bank Corporation ("Mellon Bank")). Mellon Equity has been registered
as an investment adviser under the Investment Advisers Act of 1940 since 1986.
Prior to 1987, the Submanager was part of the Equity Management Group of Mellon
Bank's Trust and Investment Department, which managed domestic equity,
tax-exempt and institutional pension assets since 1947. As of December 31, 1996,
the Submanager had approximately $11.3 billion in assets under management.
[John R. O'Toole (a senior vice president of Mellon Equity, CFA and a
member of AIMR), has been primarily responsible for the day-to-day portfolio
management of the Portfolio since November 1994. He has been employed by Mellon
Equity and/or Mellon Bank as a portfolio manager for over five years.]
SPONSOR
Pursuant to a Sponsorship Agreement, DSI provides the Fund with the
administrative personnel and services necessary to operate the Fund. In addition
to general administrative services and facilities for the Fund similar to those
provided by DSI to the Portfolio under the Management Agreement, DSI answers
questions from the general public and the media regarding the composition of the
Domini Social Index and the securities holdings of the Portfolio. For these
services and facilities, DSI receives fees computed and paid monthly from the
Fund at an annual rate equal to 0.50% of the average daily net assets of the
Fund for the Fund's then-current fiscal year, subject to reduction. See
"Expenses" for a description of this fee reduction pursuant to the Sponsorship
Agreement.
PURCHASES AND REDEMPTIONS OF SHARES
PURCHASES
Shares of the Fund may be purchased without a sales load at the net
asset value next determined after an order for shares is received and accepted
by the Fund provided such order is received and accepted on any day the New York
Stock Exchange is open for trading (a "Fund Business Day"). The minimum initial
investment in the Fund is $1,000, except that the minimum initial investment for
an investor who invests through an automatic investment plan is $500 and the
minimum initial investment for an IRA is $250. Except as noted below, there is
no minimum on additional investments.
The Fund reserves the right to cease offering its shares for sale at any
time or to reject any order for the purchase of its shares.
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<PAGE>
For each shareholder of record, the Fund establishes an open account to
which all shares purchased are credited together with any dividends and capital
gains distributions which are paid in additional shares. See "Other Information
Concerning Shares of the Fund--Dividends and Capital Gains Distributions".
Although most shareholders elect not to receive share certificates, certificates
for full shares can be obtained on specific written request to the Fund. No
certificates are issued for fractional shares.
Shares may be purchased directly from the Distributor or through Service
Organizations (see "Service Organizations" below) by clients of those Service
Organizations. If an investor purchases shares through a Service Organization,
the Service Organization must promptly transmit such order to the Fund so that
the order receives the net asset value next determined following receipt of the
order. Service Organizations may impose minimum customer account and other
requirements in addition to those imposed by the Fund. Investors wishing to
purchase shares through a Service Organization should contact that organization
directly for appropriate instructions. Other investors may purchase Fund shares
in the manner described below.
Investors desiring to purchase shares of the Fund by mail should
complete an Account Application and mail the Application and a check (in U.S.
dollars), payable to "Domini Social Equity Fund", to the Fund at the following
address:
Domini Social Equity Fund
P.O. Box 117
New York, New York 10274-0117
An investor desiring to purchase shares by a wire transfer of funds
should request its bank to transmit immediately available funds. The information
transmitted with the funds must include the investor's name and address and a
statement indicating whether a new account is being established by such wire
transfer or whether such wire transfer is being made by a shareholder with an
account with the Fund. If the initial purchase by an investor is by a wire
transfer of funds, an account number will be assigned to such investor and an
Account Application must subsequently be completed and mailed to the Fund. For
purchases by wire transfer, please call Fundamental Shareholder Services, Inc.,
the Fund's transfer agent (the "Transfer Agent"), at 1-800-782-4165 to obtain
wire transfer instructions.
Shares of the Fund may be purchased by exchanging securities acceptable
to the Fund for shares of the Fund. The Fund will not accept a security in
exchange for Fund shares unless (a) the security is consistent with the
investment objective and policies of the Fund and the Portfolio, and (b) the
security is deemed acceptable by the Manager and the Submanager. Securities
offered in exchange for shares of the Fund will be valued in accordance with the
usual valuation procedure for the Fund. See "Net Asset Value".
Investors making purchases through a Service Organization should be
aware that it is the responsibility of the Service Organization to transmit
orders for purchases of shares by its customers to the Transfer Agent and to
deliver required funds on a timely basis, in accordance with the procedures
stated above.
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<PAGE>
For further information on how to purchase shares of the Fund, an
investor should contact the Distributor (see back cover for address and phone
number).
AUTOMATIC INVESTMENT PLAN
The Fund offers a plan for regularly investing specified dollar amounts
($25.00 minimum in monthly, quarterly, semi-annual or annual intervals) in the
Fund. The minimum initial investment for an investor investing through an
automatic investment plan is $500. If an Automatic Investment Plan is selected,
subsequent investments will be automatic and will continue until such time as
the Fund and the investor's bank are notified to discontinue further
investments. Due to the varying procedures to prepare, process and to forward
the bank withdrawal information to the Fund, there may be a delay between the
time of the bank withdrawal and the time the money reaches the Fund. The
investment in the Fund will be made at the public offering price per share
determined on the day that both the check and bank withdrawal data are received
in the form required by the Fund. Further information about the plan and form
may be obtained from the Transfer Agent or the Distributor at the telephone
numbers listed on the back cover of the prospectus.
INDIVIDUAL RETIREMENT ACCOUNTS
Shares of the Fund may be used as a funding medium for an Individual
Retirement Account ("IRA"). An Internal Revenue Service-approved IRA plan is
available from the Distributor naming Investors Bank & Trust Company as
custodian. The minimum initial investment for an IRA is $250; the minimum
subsequent investment is $100. IRAs are available to individuals who receive
compensation or earned income and their spouses whether or not they are active
participants in a tax-qualified or Government-approved retirement plan. An IRA
contribution by an individual who participates, or whose spouse participates, in
a tax-qualified or Government-approved retirement plan may not be deductible
depending upon various factors, including the individual's income. Individuals
also may establish an IRA to receive a "rollover" contribution of distributions
from another IRA or a qualified plan. Tax advice should be obtained before
planning a rollover.
REDEMPTIONS
A shareholder may redeem all or any portion of the shares in its account
at any time at the net asset value next determined after a redemption request in
proper form is furnished by the shareholder to the Fund. Redemptions will
therefore be effected on the same day the redemption order is received by the
Fund provided such order is received and accepted on a Fund Business Day prior
to the time at which the net asset value of the Fund is determined. The proceeds
of a redemption will be paid by the Fund in federal funds normally on the next
Fund Business Day, but in any event within seven days if all checks in payment
for the purchase of shares to be redeemed have been cleared by the Fund (which
may take up to 15 days). Redemptions may be paid by the Fund by check or by wire
transfer if the appropriate box on the Account Application has been completed.
Instructions for wire redemptions are set forth in the Account Application. If
shares to be redeemed are held in certificate form, the certificates must be
17
<PAGE>
mailed to the Fund at the address noted below. Do not sign the
certificates and, for protection, use registered mail.
Redemptions may be made by letter to the Fund specifying the dollar
amount or number of shares to be redeemed and the account number. The letter
must be signed in exactly the same way the account is registered and the
signatures must be guaranteed by an eligible signature guarantor. In some cases
the Fund may require the furnishing of additional documents.
Written requests should be mailed to the Fund at the following address:
Domini Social Equity Fund
P.O. Box 117
New York, New York 10274-0117
For overnight deliveries, please use the following address:
Domini Social Equity Fund
c/o Fundamental Shareholder Services, Inc.
90 Washington Street
New York, New York 10006
(212) 635-5000
An investor may also redeem shares by telephone by calling the Transfer
Agent, at 1-800-782-4165, if the appropriate box on the Account Application has
been completed. The Fund, Transfer Agent and Distributor will not be liable for
any loss, liability, cost or expense for acting upon telephone instructions
believed to be genuine. Accordingly, shareholders will bear the risk of loss.
The Fund will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine, including, without limitation, recording
telephone instructions and/or requiring the caller to provide some form of
personal identification. Failure to employ reasonable procedures may make the
Fund liable for any losses due to unauthorized or fraudulent telephone
instructions. The following information must be supplied by the shareholder or
broker at the time a request for a telephone redemption is made: (1) the
shareholder's account number; (2) the shareholder's social security number; and
(3) the name and account number of the shareholder's designated securities
dealer or bank.
The Fund, Transfer Agent and Distributor reserve the right to refuse
wire or telephone redemptions. Procedures for redeeming shares by wire or
telephone may be modified or terminated at any time by the Fund or the
Distributor. A Service Organization may request a wire redemption provided a
Wire Authorization Form is on file with the Fund. The proceeds of a wire
redemption will be sent to an account with a Service Organization designated on
the appropriate form. The Fund reserves the right to restrict or terminate wire
redemption privileges. Proceeds of wire redemptions will be transferred within
seven days after receipt of the request.
The value of shares redeemed may be more or less than the shareholder's
cost, depending on the Fund's performance during the period the shareholder
owned
18
<PAGE>
its shares. Redemptions of shares are taxable events on which the
shareholder may recognize a gain or a loss.
The right of any shareholder to receive payment with respect to any
redemption may be suspended or the payment of the redemption proceeds postponed
during any period in which the New York Stock Exchange is closed (other than
weekends or holidays) or trading on such Exchange is restricted, or, to the
extent otherwise permitted by the 1940 Act, if an emergency exists.
SYSTEMATIC WITHDRAWAL PLAN
Any shareholder who owns shares of the Fund with an aggregate value of
$10,000 or more may establish a Systematic Withdrawal Plan under which he or she
redeems at net asset value the number of full and fractional shares which will
produce the monthly, quarterly, semi-annual or annual payments specified
(minimum $50.00 per payment). Depending on the amounts withdrawn, systematic
withdrawals may deplete the investor's principal. Investors contemplating
participation in this Plan should consult their tax advisers. No additional
charge to the shareholder is made for this service.
TAX MATTERS
Each year the Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). Provided the Fund qualifies as a "regulated investment company"
under the Code, and distributes all of its net investment income and realized
capital gains to shareholders in accordance with the timing requirements imposed
by the Code, the Fund will not be required to pay any federal income or excise
taxes. The Portfolio will also not be required to pay any federal income or
excise taxes. However, shareholders of the Fund normally will have to pay
federal income taxes, and any state or local taxes, on distributions of net
investment income and net realized capital gains from the Fund. After the end of
each calendar year, each shareholder receives information for tax purposes on
the distributions received during that calendar year including the portion
taxable as ordinary income, the portion taxable as long-term capital gains, the
portion, if any, representing a return of capital (which is generally treated as
a reduction in basis rather than taxable income) and the amount of dividends
eligible for the corporate dividends received deduction.
Dividends and distributions to shareholders will be treated in the same
manner for federal income tax purposes whether received in cash or reinvested in
additional shares of the Fund. Distributions of net capital gains (I.E., the
excess of net long-term capital gains over net short-term capital losses) will
cause any short-term capital loss realized on the disposition by a Fund's
shareholder of Fund shares held for six or fewer months to be recharacterized,
to the extent of those distributions, as long-term capital loss. Under the
back-up withholding rules of the Code, certain shareholders may be subject to
31% withholding of federal income tax on distributions and payments made by the
Fund. Generally, shareholders are subject to back-up withholding if they have
not provided the Fund with a correct taxpayer identification number and certain
other certifications.
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The Fund is organized as a Massachusetts business trust and, under
current law, is not liable for any income or franchise tax in the Commonwealth
of Massachusetts as long as it qualifies as a regulated investment company under
the Code.
The foregoing discussion is intended for general information only. A
prospective shareholder should consult with its own tax advisor as to the tax
consequences of an investment in the Fund including the status of distributions
from the Fund under applicable state or local law.
OTHER INFORMATION CONCERNING SHARES OF THE FUND
NET ASSET VALUE
The Fund determines the net asset value of each of its shares on each
Fund Business Day. This determination is made once during each such day as of
the close of regular trading on the New York Stock Exchange by deducting the
amount of the Fund's liabilities from the value of its assets and dividing the
difference by the number of shares of the Fund outstanding.
Since the Fund will invest all of its assets in the Portfolio, the value
of the Fund's assets will be equal to the value of its beneficial interest in
the Portfolio. The net asset value of the Portfolio is determined as of the
close of regular trading on the New York Stock Exchange on each Fund Business
Day, by deducting the amount of the Portfolio's liabilities from the value of
its assets. The value of the Fund's beneficial interest in the Portfolio will be
determined by multiplying the net asset value of the Portfolio by the
percentage, effective for that day, which represents the Fund's share of the
aggregate beneficial interests in the Portfolio. (See "Description of Shares,
Voting Rights and Liabilities" below.)
Equity securities held by the Portfolio are valued at the last sale
price on the exchange on which they are primarily traded or on the NASDAQ system
for unlisted national market issues, or at the last quoted bid price for
securities in which there were no sales during the day or for unlisted
securities not reported on the NASDAQ system. If the Portfolio purchases option
contracts, such option contracts which are traded on commodities or securities
exchanges are normally valued at the settlement price on the exchange on which
they are traded. Short-term obligations with remaining maturities of less than
sixty days are valued at amortized cost, which constitutes fair value as
determined by the Board of Trustees of the Portfolio. Portfolio securities
(other than short-term obligations with remaining maturities of less than sixty
days) for which there are no such quotations or valuations are valued at fair
value as determined in good faith by or at the direction of the Portfolio's
Board of Trustees.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
Substantially all of the Fund's net income from dividends and interest
is paid to the Fund's shareholders semi-annually (in the months of June and
December) as a dividend. For this purpose, the Fund's "net income from dividends
and interest" consists of all income from dividends and interest accrued on the
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assets of the Fund (I.E., the Fund's share of the Portfolio's net income from
dividends and interest), less all actual and accrued expenses of the Fund
determined in accordance with generally accepted accounting principles.
The Fund also declares a long-term capital gains distribution to its
shareholders on an annual basis, usually in December, if the Fund's share of the
Portfolio's profits during the year from the sale of securities held for longer
than the applicable long-term capital gains holding period exceeds the Fund's
share of the Portfolio's losses during such year from the sale of securities
together with the Fund's share of the Portfolio's net capital losses carried
forward from prior years (to the extent not used to offset short-term capital
gains). The Fund's share of the Portfolio's net short-term capital gains
realized during each fiscal year will also be distributed at that time.
The Fund will also make additional distributions to its shareholders to
the extent necessary to avoid application of the 4% nondeductible excise tax
created by the Tax Reform Act of 1986 on certain undistributed income and net
capital gains of mutual funds.
A shareholder of the Fund may elect to receive dividends and capital
gains distributions in either cash or additional shares. Unless otherwise
specified in writing by a shareholder, all dividends and capital gains
distributions will be reinvested in additional shares.
EXPENSES
The Fund and the Portfolio each are responsible for all of their
respective expenses, including the compensation of their respective Trustees who
are not interested persons of the Fund or the Portfolio; governmental fees;
interest charges; taxes; membership dues in the Investment Company Institute
allocable to the Fund or the Portfolio; fees and expenses of independent
auditors, of legal counsel and of any transfer agent, custodian, registrar or
dividend disbursing agent of the Fund or the Portfolio; insurance premiums; and
expenses of calculating the net asset value of the Portfolio and of shares of
the Fund.
The Fund will also pay sponsorship fees payable to the Sponsor; all
expenses of distributing and redeeming shares and servicing shareholder
accounts; expenses of preparing, printing and mailing prospectuses, reports,
notices, proxy statements and reports to shareholders and to governmental
offices and commissions; expenses of shareholder meetings; and expenses relating
to the issuance, registration and qualification of shares of the Fund and the
preparation, printing and mailing of prospectuses for such purposes.
Under the Sponsorship Agreement, DSI's fee will be reduced to the extent
necessary to keep the aggregate annual operating expenses of the Fund (including
the Fund's share of the Portfolio's expenses but excluding brokerage fees and
commissions, interest, taxes and other extraordinary expenses) at no greater
than 0.98% of the average daily net assets of the Fund through [November 1,
1998].
The Portfolio will also pay the expenses connected with the execution,
recording and settlement of security transactions; fees and expenses of the
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Portfolio's custodian for all services to the Portfolio, including safekeeping
of funds and securities and maintaining required books and accounts; expenses of
preparing and mailing reports to investors and to governmental offices and
commissions; expenses of meetings of investors; and the investment management
fees payable to the Manager .
Under the Management Agreement, DSI's fee will be reduced to the extent
necessary to keep the aggregate annual operating expenses of the Portfolio
(excluding brokerage fees and commissions, interest, taxes and other
extraordinary expenses) at no greater than 0.20% of the average daily net assets
of the Portfolio through [November 1, 1998].
There is no assurance that DSI will maintain the fee reductions pursuant
to the Management Agreement or the Sponsorship Agreement beyond the specified
date.
DISTRIBUTION PLAN AND AGREEMENT
The Trustees of the Fund have adopted a Distribution Plan in accordance
with Rule 12b-1 under the 1940 Act after having concluded that there is a
reasonable likelihood that the Distribution Plan will benefit the Fund and its
shareholders. As contemplated by the Distribution Plan, Signature, as the
Distributor, acts as agent of the Fund in connection with the offering of shares
of the Fund pursuant to a Distribution Agreement. Signature, as the Distributor,
acts as the principal underwriter of shares of the Fund and bears the
compensation of personnel necessary to provide such services and all costs of
travel, office expenses (including rent and overhead) and equipment.
Under the Distribution Plan, Signature may receive a fee from the Fund
at an annual rate not to exceed 0.25% of the Fund's average daily net assets in
anticipation of, or as reimbursement for, costs and expenses incurred in
connection with the sale of shares of the Fund, such as payments to
broker-dealers who advise shareholders regarding the purchase, sale or retention
of shares of the Fund, payments to employees of Signature, advertising expenses
and the expenses of printing and distributing prospectuses and reports used for
sales purposes, expenses of preparing and printing sales literature and other
distribution-related expenses. Signature will provide to the Trustees of the
Fund a quarterly written report of amounts expended by it under the Distribution
Plan and the purposes for which such expenditures were made.
DSI has informed the Fund's Board of Trustees that it, or an affiliate,
intends to become qualified as a broker-dealer and transfer agent within the
next year. In that event, the Trustees would consider appointing DSI, or such
affiliate, the distributor and/or transfer agent for the Fund.
DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Fund's Declaration of Trust permits the Trustees to issue an
unlimited number of full and fractional Shares of Beneficial Interest (without
par value) and to divide or combine the shares into a greater or lesser number
of shares without thereby changing the proportionate beneficial interests in the
Fund.
22
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Each share represents an equal proportionate interest in the Fund with
each other share. Shares have no pre-emptive or conversion rights. Shares when
issued are fully paid and non-assessable, except as set forth below.
Shareholders are entitled to one vote for each share held. The Fund is not
required to hold annual meetings of shareholders but the Fund will hold special
meetings of shareholders when in the judgment of the Trustees it is necessary or
desirable to submit matters for a shareholder vote. Upon liquidation of the
Fund, shareholders would be entitled to share pro rata in the net assets of the
Fund available for distribution to shareholders. Shareholders have under certain
circumstances the right to communicate with other shareholders in connection
with requesting a meeting of shareholders for the purpose of removing one or
more Trustees. Shareholders also have under certain circumstances the right to
remove one or more Trustees without a meeting.
The Fund reserves the right to create and issue any number of series of
shares, in which case the shares of each series would participate equally in the
earnings, dividends and assets of the particular series (except for differences
among any classes of shares of any series). Currently, the Fund has only one
series of shares, all of which are of the same class. The Fund may establish
additional classes of any series of shares. For example, the Fund may offer
another class of shares that has lower annual distribution fees or shareholder
servicing fees. Prior to offering another class of shares, the Fund would either
issue a new prospectus and statement of additional information or amend this
Prospectus and the Statement of Additional Information to reflect such issuance.
The Fund is an entity of the type commonly known as a "Massachusetts
business trust". Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable as partners for its
obligations. However, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which both
inadequate insurance existed and the Fund itself was unable to meet its
obligations.
The Portfolio, in which all of the investable assets of the Fund are
invested, is organized as a trust under the laws of the State of New York. The
Portfolio's Declaration of Trust provides that the Fund and other entities
investing in the Portfolio (I.E., other investment companies, insurance company
separate accounts and common and commingled trust funds) will each be liable for
all obligations of the Portfolio. However, the risk of the Fund incurring
financial loss on account of such liability is limited to circumstances in which
both inadequate insurance existed and the Portfolio itself was unable to meet
its obligations. Accordingly, the Fund's Trustees believe that neither the Fund
nor its shareholders will be adversely affected by reason of the Fund's
investing in the Portfolio. In addition, whenever the Fund is requested to vote
on a fundamental policy of the Portfolio, the Fund will hold a meeting of its
shareholders and will cast its vote as instructed by its shareholders.
Each investor in the Portfolio, including the Fund, may add to or reduce
its investment in the Portfolio on each Fund Business Day. At the close of each
such Fund Business Day, the value of each investor's beneficial interest in the
Portfolio will be determined by multiplying the net asset value of the Portfolio
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<PAGE>
by the percentage, effective for that day, which represents that investor's
share of the aggregate beneficial interests in the Portfolio. Any additions or
withdrawals, which are to be effected as of the close of business on that day,
will then be effected. The investor's percentage of the aggregate beneficial
interests in the Portfolio will then be re-computed as the percentage equal to
the fraction (i) the numerator of which is the value of such investor's
investment in the Portfolio as of the close of business on such day plus or
minus, as the case may be, the amount of any additions to or withdrawals from
the investor's investment in the Portfolio effected as of the close of business
on such day, and (ii) the denominator of which is the aggregate net asset value
of the Portfolio as of the close of business on such day plus or minus, as the
case may be, the amount of the net additions to or withdrawals from the
aggregate investments in the Portfolio by all investors in the Portfolio. The
percentage so determined will then be applied to determine the value of the
investor's interest in the Portfolio as of the close of business on the
following Fund Business Day.
SERVICE ORGANIZATIONS, TRANSFER AGENT AND CUSTODIAN
SERVICE ORGANIZATIONS
The Fund may also contract with various banks, trust companies (other
than Mellon Equity), broker-dealers (other than Signature) or other financial
organizations (collectively, "Service Organizations") to provide services for
the Fund, such as maintaining shareholder accounts and records. The Fund may pay
fees to Service Organizations (which may vary depending upon the services
provided) in amounts up to an annual rate of 0.25% of the daily net asset value
of the shares of the Fund owned by shareholders with whom the Service
Organization has a servicing relationship.
Some Service Organizations may impose additional or different
conditions on their clients such as requiring their clients to invest more than
the minimum initial investment specified by the Fund or charging a direct fee
for servicing. If imposed, these fees would be in addition to any amounts which
might be paid to the Service Organization by the Fund. Each Service Organization
has agreed to transmit to its clients a schedule of any such fees. Shareholders
using Service Organizations are urged to consult them regarding any such fees or
conditions.
The Glass-Steagall Act and other applicable laws, among other things,
prohibit banks from engaging in the business of underwriting, selling or
distributing securities. There is currently 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 a 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. It is not expected that shareholders would
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<PAGE>
suffer any adverse financial consequences as a result of any of these
occurrences.
TRANSFER AGENT AND CUSTODIAN
The Fund has entered into a Transfer Agency Agreement with Fundamental
Shareholder Services, Inc. ("FSSI"), pursuant to which FSSI acts as Transfer
Agent for the Fund. The Transfer Agent maintains an account for each shareholder
of the Fund, performs other transfer agency functions and acts as dividend
disbursing agent for the Fund. Pursuant to Custodian Agreements, Investors Bank
& Trust Company ("IBT") acts as the custodian of the Fund's assets (I.E., cash
and the Fund's interest in the Portfolio) and as the custodian of the
Portfolio's assets (the "Custodian"). The Custodian's responsibilities include
safeguarding and controlling the Portfolio's cash and securities, handling the
receipt and delivery of securities, determining income and collecting interest
on the Portfolio's investments, maintaining books of original entry for
portfolio and fund accounting and other required books and accounts, and
calculating the daily net asset value of the Portfolio and the daily net asset
value of shares of the Fund. Securities held by the Portfolio may be deposited
into certain securities depositaries. The Custodian does not determine the
investment policies of the Portfolio or decide which securities the Portfolio
will buy or sell. The Portfolio may, however, invest in securities of the
Custodian and may deal with the Custodian as principal in securities
transactions. IBT also serves as transfer agent for the Portfolio. For their
services, FSSI and IBT will receive such compensation as may from time to time
be agreed upon by each of them and the Fund or the Portfolio.
------------------------
The Fund's Statement of Additional Information contains more detailed
information about the Fund and the Portfolio, including information related to
(i) investment policies and restrictions of the Fund and the Portfolio, (ii) the
Trustees, officers, Manager of the Portfolio and Sponsor of the Fund , (iii)
portfolio transactions, (iv) the Fund's shares, including rights and liabilities
of shareholders, (v) additional performance information, including the method
used to calculate yield and total rate of return quotations of the Fund, (vi)
determination of the net asset value of shares of the Fund, and (vii) the
audited financial statements of the Fund and the Portfolio at July 31, 1997.
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DOMINI SOCIAL EQUITY FUND
[11 West 25th Street
New York, NY 10010]
PORTFOLIO INVESTMENT CUSTODIAN:
MANAGER AND FUND SPONSOR: Investors Bank &
Domini Social Trust Company
Investments LLC 200 Clarendon Street
[11 West 25th Street Boston, MA 02116
New York, NY 10010]
[(___) ___-____] AUDITORS:
KPMG Peat Marwick LLP
PORTFOLIO INVESTMENT 99 High Street
SUBMANAGER: Boston, MA 02110
Mellon Equity
Associates LEGAL COUNSEL:
500 Grant Street Bingham, Dana & Gould LLP
Suite 3700 150 Federal Street
Pittsburgh, PA Boston, MA 02110
15258-0001
TRANSFER AGENT:
Fundamental Shareholder
DISTRIBUTOR: Services, Inc.
Signature Broker- 90 Washington Street
Dealer Services, Inc. New York, NY 10006
6 St. James Avenue
Boston, MA 02116
(800) 762-6814
DOMINI SOCIAL EQUITY FUND
PROSPECTUS
- -------------------------
NOVEMBER 28, 1997
[starfish]
INVESTING FOR GOODSM
[oceanic/starfish graphic]
[recycled symbol] Printed on Recycled Paper
[DSI201D]
<PAGE>
DSI195E
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER 28, 1997
DOMINI SOCIAL EQUITY FUND
TABLE OF CONTENTS PAGE
1. The Fund...................................................................2
2. Investment Objective, Policies and Restrictions............................2
3. Performance Information....................................................9
4. Determination of Net Asset Value; Valuation of Portfolio
Securities...................................................................10
5. Management of the Fund and the Portfolio..................................11
6. Independent Auditors .....................................................[]
7. Taxation..................................................................[]
8. Portfolio Transactions and Brokerage Commissions..........................[]
9. Description of Shares, Voting Rights and Liabilities .....................[]
10. Financial Statements ....................................................[]
DOMINI SOCIAL EQUITY FUND
[11 West 25th Street, New York, New York 10010] [(800) 762-6814]
This Statement of Additional Information sets forth information which
may be of interest to investors but which is not necessarily included in the
Fund's Prospectus dated November 28, 1997, as amended from time to time. This
Statement of Additional Information should be read in conjunction with the
Prospectus, a copy of which may be obtained by an investor without charge by
contacting Signature Broker-Dealer Services, Inc., the Fund's distributor, at
(800) 762-6814.
This Statement of Additional Information is NOT a prospectus and is
authorized for distribution to prospective investors only if preceded or
accompanied by an effective prospectus and should be read only in conjunction
with such prospectus.
<PAGE>
1. THE FUND
Domini Social Equity Fund (the "Fund") is a no-load diversified
open-end management investment company which was organized as a business trust
under the laws of the Commonwealth of Massachusetts on June 7, 1989. The Fund
offers to buy back (redeem) its shares from its shareholders at any time at net
asset value. References in this Statement of Additional Information to the
"Prospectus" are to the current Prospectus of the Fund, as amended or
supplemented from time to time.
Domini Social Investments LLC ("DSI") the Fund's sponsor (the
"Sponsor"), supervises the overall administration of the Fund. The Board of
Trustees provides broad supervision over the affairs of the Fund. Shares of the
Fund are continuously sold by Signature Broker-Dealer Services, Inc.
("Signature"), the Fund's distributor (the "Distributor"). The minimum initial
investment is $1,000, except that the minimum initial investment for an
Individual Retirement Account is $250 and the minimum initial investment for
investors who invest through an automatic investment plan is $500. An investor
should obtain from the Distributor, and should read in conjunction with the
Prospectus, the materials describing the procedures under which Fund shares may
be purchased and redeemed.
The Fund seeks to achieve its investment objective by investing all its
assets in the Domini Social Index Portfolio (the "Portfolio"), a diversified
open-end management investment company having the same investment objective as
the Fund. DSI is the Portfolio's investment manager (the "Manager"). Mellon
Equity Associates ("Mellon Equity") is the Portfolio's investment submanager
(the "Submanager"). Kinder, Lydenberg, Domini & Co., Inc. ("KLD") determines the
composition of the Domini 400 Social IndexSM. The Submanager manages the
investments of the Portfolio from day to day in accordance with the Portfolio's
investment objective and policies. "DominiSM" and "Domini 400 Social IndexSM"
are service marks of KLD.
2. INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide its shareholders
with long-term total return (reflecting both dividend and price performance of
the Fund) which corresponds to the performance of the Domini 400 Social IndexSM
(referred to herein as the "Index" or the "Domini Social Index"). There can, of
course, be no assurance that the Fund will achieve its investment objective. The
investment objective of the Fund may be changed without approval by the Fund's
shareholders.
INVESTMENT POLICIES
The Fund seeks to achieve its investment objective by investing all its
assets in the Portfolio, which has the same investment objective as the Fund.
The Fund may withdraw its investment in the Portfolio at any time if the Board
of Trustees of the Fund determines that it is in the best interests of the Fund
to do so. Upon any such withdrawal, the Board of Trustees would consider what
2
<PAGE>
action might be taken, including the investment of all the investable assets of
the Fund in another pooled investment entity having the same investment
objective as the Fund, or the retaining of an investment adviser to manage the
Fund's assets in accordance with the investment policies described below with
respect to the Portfolio. The approval of the Fund's shareholders would not be
required to change any of the Fund's investment policies.
The following supplements the information concerning the Portfolio's
investment policies contained in the Prospectus and should only be read in
conjunction therewith.
A company which is not included in the Standard & Poor's 500 Composite
Stock Price Index (the "S&P 500") may be included in the Domini Social Index
primarily in order to afford representation to an industrial sector which would
otherwise be under-represented in the Index. Because of the social criteria
applied in the selection of stocks comprising the Index, industry sector
weighting in the Index may vary materially from the industry weightings in other
stock indices, including the S&P 500.
With respect to stocks of foreign issuers, the Portfolio does not
purchase securities which the Portfolio believes, at the time of purchase, will
be subject to exchange controls or foreign withholding taxes; however, there can
be no assurance that such laws may not become applicable to certain of the
Portfolio's investments. In the event unforeseen exchange controls or foreign
withholding taxes are imposed with respect to any of the Portfolio's
investments, the effect may be to reduce the income received by the Portfolio on
such investments.
Although neither the Fund nor the Portfolio has any current intention
to do so, the Fund and the Portfolio may invest in securities which may be
resold pursuant to Rule 144A under the Securities Act of 1933 (the "1933 Act").
It is a fundamental policy of the Portfolio and the Fund that neither
the Portfolio nor the Fund may invest more than 25% of the total assets of the
Portfolio or the Fund, respectively, in any one industry, although the Fund will
invest all of its assets in the Portfolio, and the Portfolio may and would
invest more than 25% of its assets in an industry if stocks in that industry
were to comprise more than 25% of the Domini Social Index. Based on the current
composition of the Index, this is considered highly unlikely. If the Portfolio
were to concentrate its investments in a single industry, the Portfolio and the
Fund would be more susceptible to any single economic, political or regulatory
occurrence than would be another investment company which was not so
concentrated.
LOANS OF SECURITIES: The Portfolio may lend its securities to brokers,
dealers and financial institutions, provided that (1) the loan is secured
continuously by collateral, consisting of U.S. Government securities or cash or
letters of credit, which is marked to the market daily to ensure that each loan
is fully collateralized at all times; (2) the Portfolio may at any time call the
loan and obtain the return of the securities loaned within three business days;
(3) the Portfolio will receive any interest or dividends paid on the securities
loaned; and (4) the aggregate market value of securities loaned will not at any
time exceed 30% of the total assets of the Portfolio.
3
<PAGE>
The Portfolio will earn income for lending its securities either in the
form of fees received from the borrower of the securities or in connection with
the investment of cash collateral in short-term money market instruments. Loans
of securities involve a risk that the borrower may fail to return the securities
or may fail to provide additional collateral.
In connection with lending securities, the Portfolio may pay reasonable
finders, administrative and custodial fees. No such fees will be paid to any
person if it or any of its affiliates is affiliated with the Portfolio, the
Manager or the Submanager.
Although the Portfolio reserves the right to lend its securities, it
has no current intention of doing so in the foreseeable future.
RISK FACTORS INVOLVED IN OPTION CONTRACTS: Although it has no current
intention to do so, the Portfolio may in the future enter into certain
transactions in stock options for the purpose of hedging against possible
increases in the value of securities which are expected to be purchased by the
Portfolio or possible declines in the value of securities which are expected to
be sold by the Portfolio. Generally, the Portfolio would only enter into such
transactions on a short-term basis pending readjustment of its holdings of
underlying stocks.
The purchase of an option on an equity security provides the holder
with the right, but not the obligation, to purchase the underlying security, in
the case of a call option, or to sell the underlying security, in the case of a
put option, for a fixed price at any time up to a stated expiration date. The
holder is required to pay a non-refundable premium, which represents the
purchase price of the option. The holder of an option can lose the entire amount
of the premium, plus related transaction costs, but not more. Upon exercise of
the option, the holder is required to pay the purchase price of the underlying
security in the case of a call option, or deliver the security in return for the
purchase price in the case of a put option.
Prior to exercise or expiration, an option position may be terminated
only by entering into a closing purchase or sale transaction. This requires a
secondary market on the exchange on which the position was originally
established. While the Portfolio would establish an option position only if
there appears to be a liquid secondary market therefor, there can be no
assurance that such a market will exist for any particular option contract at
any specific time. In that event, it may not be possible to close out a position
held by the Portfolio, and the Portfolio could be required to purchase or sell
the instrument underlying an option, make or receive a cash settlement or meet
ongoing variation margin requirements. The inability to close out option
positions also could have an adverse impact on the Portfolio's ability
effectively to hedge its portfolio.
Each exchange on which option contracts are traded has established a
number of limitations governing the maximum number of positions which may be
held by a trader, whether acting alone or in concert with others. The Manager
does not believe that these trading and position limits would have an adverse
impact on the possible use of hedging strategies by the Portfolio.
4
<PAGE>
The approval of the Fund and of the other investors in the Portfolio is
not required to change the investment objective or any of the non-fundamental
investment policies discussed above, including those concerning security
transactions.
INVESTMENT RESTRICTIONS
The Fund and the Portfolio have each adopted the following policies
which may not be changed without approval by holders of a "majority of the
outstanding voting securities" of the Fund or the Portfolio, respectively, which
as used in this Statement of Additional Information means the vote of the lesser
of (i) 67% or more of the outstanding "voting securities" of the Fund or the
Portfolio, respectively, present at a meeting, if the holders of more than 50%
of the outstanding "voting securities" of the Fund or the Portfolio,
respectively, are present or represented by proxy, or (ii) more than 50% of the
outstanding "voting securities" of the Fund or the Portfolio, respectively. The
term "voting securities" as used in this paragraph has the same meaning as in
the Investment Company Act of 1940, as amended (the "1940 Act").
Except as described below, whenever the Fund is requested to vote on a
change in the investment restrictions of the Portfolio, the Fund will hold a
meeting of its shareholders and will cast its vote proportionately as instructed
by its shareholders. However, subject to applicable statutory and regulatory
requirements, the Fund would not request a vote of its shareholders with respect
to (a) any proposal relating to the Portfolio, which proposal, if made with
respect to the Fund, would not require the vote of the shareholders of the Fund,
or (b) any proposal with respect to the Portfolio that is identical in all
material respects to a proposal that has previously been approved by
shareholders of the Fund. Any proposal submitted to holders in the Portfolio,
and that is not required to be voted on by shareholders of the Fund, would
nevertheless be voted on by the Trustees of the Fund.
Neither the Fund nor the Portfolio may:
(1) borrow money, except that as a temporary measure for extraordinary
or emergency purposes either the Fund or the Portfolio may borrow an amount not
to exceed 1/3 of the current value of the net assets of the Fund or the
Portfolio, respectively, including the amount borrowed (moreover, neither the
Fund nor the Portfolio may purchase any securities at any time at which
borrowings exceed 5% of the total assets of the Fund or the Portfolio,
respectively, taken in each case at market value) (it is intended that the
Portfolio would borrow money only from banks and only to accommodate requests
for the withdrawal of all or a portion of a beneficial interest in the Portfolio
while effecting an orderly liquidation of securities); for additional related
restrictions, see clause (i) under the caption "Non-Fundamental State and
Federal Restrictions" below;
(2) purchase any security or evidence of interest therein on margin,
except that either the Fund or the Portfolio may obtain such short-term credit
as may be necessary for the clearance of purchases and sales of securities and
except that either the Fund or the Portfolio may make deposits of initial
deposit and
5
<PAGE>
variation margin in connection with the purchase, ownership, holding
or sale of options;
(3) write any put or call option or any combination thereof, provided
that this shall not prevent (i) the purchase, ownership, holding or sale of
warrants where the grantor of the warrants is the issuer of the underlying
securities, or (ii) the purchase, ownership, holding or sale of options on
securities;
(4) underwrite securities issued by other persons, except that the Fund
may invest all or any portion of its assets in the Portfolio and except insofar
as either the Fund or the Portfolio may technically be deemed an underwriter
under the 1933 Act in selling a security;
(5) make loans to other persons except (a) through the lending of
securities held by either the Fund or the Portfolio and provided that any such
loans not exceed 30% of its total assets (taken in each case at market value),
or (b) through the use of repurchase agreements or the purchase of short-term
obligations and provided that not more than 10% of its net assets will be
invested in repurchase agreements maturing in more than seven days; for
additional related restrictions, see paragraph (6) immediately following;
(6) invest in securities which are subject to legal or contractual
restrictions on resale (other than repurchase agreements maturing in not more
than seven days and other than securities which may be resold pursuant to Rule
144A under the 1933 Act if the Board of Trustees determines that a liquid market
exists for such securities) if, as a result thereof, more than 10% of its net
assets (taken at market value) would be so invested (including repurchase
agreements maturing in more than seven days), except that the Fund may invest
all or any portion of its assets in the Portfolio;
(7) purchase or sell real estate (including limited partnership
interests but excluding securities secured by real estate or interests therein),
interests in oil, gas or mineral leases, commodities or commodity contracts in
the ordinary course of business (the Fund and Portfolio reserve the freedom of
action to hold and to sell real estate acquired as a result of the ownership of
securities by the Fund or the Portfolio);
(8) make short sales of securities or maintain a short position, unless
at all times when a short position is open the Fund or the Portfolio, as
applicable, owns an equal amount of such securities or securities convertible
into or exchangeable, without payment of any further consideration, for
securities of the same issue as, and equal in amount to, the securities sold
short, and unless not more than 5% of the Fund's or the Portfolio's, as
applicable, net assets (taken in each case at market value) is held as
collateral for such sales at any one time (it is the present intention of the
Portfolio and the Fund to make such sales only for the purpose of deferring
realization of gain or loss for federal income tax purposes);
(9) issue any senior security (as that term is defined in the 1940 Act)
if such issuance is specifically prohibited by the 1940 Act or the rules and
regulations promulgated thereunder, except as appropriate to evidence a debt
incurred without violating paragraph (1) above;
6
<PAGE>
(10) as to 75% of its assets, purchase securities of any issuer if such
purchase at the time thereof would cause more than 5% of the Portfolio's or the
Fund's, as applicable, assets (taken at market value) to be invested in the
securities of such issuer (other than securities or obligations issued or
guaranteed by the United States or any agency or instrumentality of the United
States), except that for purposes of this restriction the issuer of an option
shall not be deemed to be the issuer of the security or securities underlying
such contract and except that the Fund may invest all or any portion of its
assets in the Portfolio; or
(11) invest more than 25% of its assets in any one industry unless the
stocks in a single industry were to comprise more than 25% of the Domini Social
Index, in which case the Portfolio or the Fund, as applicable, will invest more
than 25% of its assets in that industry, and except that the Fund may invest all
of its assets in the Portfolio.
NON-FUNDAMENTAL STATE AND FEDERAL RESTRICTIONS: In order to comply with
certain state and federal statutes and regulatory policies, neither the Fund nor
the Portfolio will as a matter of operating policy:
(i) borrow money for any purpose in excess of 10% of the total assets of the
Fund or the Portfolio, respectively (taken in each case at cost) (moreover,
neither the Fund nor the Portfolio will purchase any securities at any time at
which borrowings exceed 5% of its total assets (taken at market value)),
(ii) pledge, mortgage or hypothecate for any purpose in excess of 10%
of the net assets of the Fund or the Portfolio, respectively (taken in each case
at market value), provided that collateral arrangements with respect to options,
including deposits of initial deposit and variation margin, are not considered a
pledge of assets for purposes of this restriction,
(iii) sell any security which it does not own unless by virtue of its
ownership of other securities it has at the time of sale a right to obtain
securities, without payment of further consideration, equivalent in kind and
amount to the securities sold, and provided that if such right is conditional
the sale is made upon the same conditions,
(iv) invest for the purpose of exercising control or management, except
that all of the assets of the Fund may be invested in the Portfolio,
(v) purchase securities issued by any registered investment company,
except that the Fund may invest all its assets in the Portfolio and except by
purchase in the open market where no commission or profit to a sponsor or dealer
results from such purchase other than the customary broker's commission, or
except when such purchase, though not made in the open market, is part of a plan
of merger or consolidation; provided, however, that (except for the Fund's
investment in the Portfolio) the Fund and the Portfolio will not purchase the
securities of any registered investment company if such purchase at the time
thereof would cause more than 10% of the total assets of the Fund or the
Portfolio, respectively (taken at the greater of cost or market value) to be
invested in the securities of such issuers or would cause more than 3% of the
outstanding voting securities of the Fund or the Portfolio, respectively; and
provided, further, that (except
7
<PAGE>
for the Fund's investment in the Portfolio) the Fund and the Portfolio
shall not purchase securities issued by any open-end investment company, (vi)
invest more than 10% of the net assets of the Fund or the Portfolio,
respectively (taken at the greater of cost or market value), in securities
(excluding Rule 144A securities) that are restricted as to resale under the 1933
Act,
(vii) invest more than 15% of the net assets of the Fund or the
Portfolio, respectively (taken at the greater of cost or market value), (a) in
securities that are restricted as to resale by the 1933 Act (including Rule 144A
securities), and (b) in securities that are issued by issuers which (including
the period of operation of any predecessor company or unconditional guarantor of
such issuer) have been in operation less than three years, provided, however,
that no more than 5% of the net assets of the Fund or the Portfolio,
respectively, are invested in securities issued by issuers which (including
predecessors) have been in operation less than three years,
(viii) purchase puts, calls, straddles, spreads and any combination
thereof if the value of its aggregate investment in such securities will exceed
5% of the Funds or the Portfolio's total assets at the time of such purchase,
(ix) purchase securities of any issuer if such purchase at the time
thereof would cause it to hold more than 10% of any class of securities of such
issuer, for which purposes all indebtedness of an issuer shall be deemed a
single class and all preferred stock of an issuer shall be deemed a single
class, except that option contracts shall not be subject to this restriction,
and except that the Fund may invest all or any portion of its assets in the
Portfolio,
(x) purchase or retain any securities issued by an issuer any of whose
officers, directors, trustees or security holders is an officer or Trustee of
the Fund or the Portfolio, as the case may be, or a director of the Manager or
the Submanager, of all of the securities of such issuer by the Fund or the
Portfolio, as the case may be, one or more of such persons owns beneficially
more than 1/2 of 1% of the shares or securities, or both, all taken at market
value, of such issuer, and such persons owning more than 1/2 of 1% of such
shares or securities together own beneficially more than 5% of such shares or
securities, or both, all taken at market value, except that the Fund may invest
all or any portion of its assets in the Portfolio,
(xi) invest more than 5% of the Fund's or the Portfolio's net assets in
warrants (valued at the lower of cost or market), but not more than 2% of the
Fund's or the Portfolio's net assets may be invested in warrants not listed on
the New York Stock Exchange Inc. ("NYSE") or the American Stock Exchange, or
(xii) make short sales of securities or maintain a short position,
unless at all times when a short position is open, the Fund or the Portfolio
owns an equal amount of such securities or securities convertible into or
exchangeable, without payment of any further consideration, for securities of
the same issue and equal in amount to the securities sold short, and unless not
more than 10% of the Fund's or the Portfolio's, respectively, net assets (taken
at market value) is represented by such securities, or securities convertible
into or exchangeable
8
<PAGE>
for such securities, at any one time (neither the Fund nor the
Portfolio has any current intention to engage in short selling).
Restrictions (i) through (xii) are not fundamental and may be changed
with respect to the Fund by the Fund without approval by the Fund's shareholders
or with respect to the Portfolio by the Portfolio without the approval of the
Fund or its other investors. The Fund will comply with the state securities laws
and regulations of all states in which it is registered. The Portfolio will
comply with the applicable investment limitations found in the state securities
laws and regulations of all states in which the Fund is registered.
PERCENTAGE RESTRICTIONS: If a percentage restriction or rating
restriction on investment or utilization of assets set forth above or referred
to in the Prospectus is adhered to at the time an investment is made or assets
are so utilized, a later change in percentage resulting from changes in the
value of the securities held by the Fund or the Portfolio or a later change in
the rating of a security held by the Fund or the Portfolio will not be
considered a violation of policy; provided that if at any time the ratio of
borrowings of the Fund or the Portfolio to the net asset value of the Fund or
the Portfolio, respectively, exceeds the ratio permitted by Section 18(f) of the
1940 Act, the Fund or the Portfolio as the case may be, will take the corrective
action required by Section 18(f).
3. PERFORMANCE INFORMATION
The Fund will calculate its total rate of return for any period by (a)
dividing (i) the sum of the net asset value per share on the last day of the
period and the net asset value per share on the last day of the period of shares
purchasable with dividends and capital gains declared during such period with
respect to a share held at the beginning of such period and with respect to
shares purchased with such dividends and capital gains distributions, by (ii)
the public offering price per share (i.e., net asset value) on the first day of
such period, and (b) subtracting 1 from the result. Any annualized total rate of
return quotation will be calculated by (x) adding 1 to the period total rate of
return quotation calculated above, (y) raising such sum to a power which is
equal to 365 divided by the number of days in such period, and (z) subtracting 1
from the result.
Any current "yield" quotation of the Fund shall consist of an
annualized historical yield, carried at least to the nearest hundredth of one
percent, based on a thirty calendar day period and shall be calculated by (a)
raising to the sixth power the sum of 1 plus the quotient obtained by dividing
the Fund's net investment income earned during the period by the product of the
average daily number of shares outstanding during the period that were entitled
to receive dividends and the maximum offering price per share on the last day of
the period, (b) subtracting 1 from the result, and (c) multiplying the result by
2.
Total rate of return and yield information with respect to the Domini
Social Index will be computed in the same fashion as set forth above with
respect to the Fund, except that for purposes of this computation an investment
will be assumed to have been made in a portfolio consisting of all of the stocks
comprising the
9
<PAGE>
Index weighted in accordance with the weightings of the stocks
comprising the Index. Performance information with respect to the Index will not
take into account brokerage commission and other transaction costs which will be
incurred by the Portfolio.
4. DETERMINATION OF NET ASSET VALUE;
VALUATION OF PORTFOLIO SECURITIES
The net asset value of each share of the Fund is determined each day on
which the NYSE is open for trading ("Fund Business Day"). (As of the date of
this Statement of Additional Information, the NYSE is open for trading every
weekday except for the following holidays: New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day). This determination of net asset value
of shares of the Fund is made once during each such day as of the close of the
NYSE by dividing the value of the Fund's net assets (i.e., the value of its
investment in the Portfolio and any other assets less its liabilities, including
expenses payable or accrued) by the number of shares outstanding at the time the
determination is made. Purchases and redemptions will be effected at the time of
determination of net asset value next following the receipt of any purchase or
redemption order deemed to be in good order. See "Purchases and Redemptions of
Shares" in the Prospectus.
The value of the Portfolio's net assets (i.e., the value of its
securities and other assets less its liabilities, including expenses payable or
accrued) is determined at the same time and on the same day as the Fund
determines its net asset value per share. The net asset value of the Fund's
investment in the Portfolio is equal to the Fund's pro rata share of the total
investment of the Fund and of other investors in the Portfolio less the Fund's
pro rata share of the Portfolio's liabilities. Equity securities held by the
Portfolio are valued at the last sale price on the exchange on which they are
primarily traded or on the NASDAQ system for unlisted national market issues, or
at the last quoted bid price for securities in which there were no sales during
the day or for unlisted securities not reported on the NASDAQ system. If the
Portfolio purchases option contracts, such option contracts which are traded on
commodities or securities exchanges are normally valued at the settlement price
on the exchange on which they are traded. Short-term obligations with remaining
maturities of less than sixty days are valued at amortized cost, which
constitutes fair value as determined by the Board of Trustees of the Portfolio.
Portfolio securities (other than short-term obligations with remaining
maturities of less than sixty days) for which there are no such quotations or
valuations are valued at fair value as determined in good faith by or at the
direction of the Portfolio's Board of Trustees.
A determination of value used in calculating net asset value must be a
fair value determination made in good faith utilizing procedures approved by the
Portfolio's Board of Trustees. While no single standard for determining fair
value exists, as a general rule, the current fair value of a security would
appear to be the amount which the Portfolio could expect to receive upon its
current sale. Some, but not necessarily all, of the general factors which may be
considered in determining fair value include: (i) the fundamental analytical
10
<PAGE>
data relating to the investment; (ii) the nature and duration of restrictions on
disposition of the securities; and (iii) an evaluation of the forces which
influence the market in which these securities are purchased and sold. Without
limiting or including all of the specific factors which may be considered in
determining fair value, some of the specific factors include: type of security,
financial statements of the issuer, cost at date of purchase, size of holding,
discount from market value, value of unrestricted securities of the same class
at the time of purchase, special reports prepared by analysts, information as to
any transactions or offers with respect to the security, existence of merger
proposals or tender offers affecting the security, price and extent of public
trading in similar securities of the issuer or comparable companies, and other
relevant matters.
Interest income on short-term obligations held by the Portfolio is
determined on the basis of interest accrued less amortization of premium.
5. MANAGEMENT OF THE FUND AND THE PORTFOLIO
The Trustees and officers of the Fund and the Portfolio and their
principal occupations during the past five years are set forth below. Their
titles may have varied during that period. Asterisks indicate that those
Trustees and officers are "interested persons" (as defined in the 1940 Act) of
the Fund. Unless otherwise indicated below, the address of each Trustee and
officer is [11 West 25th Street, New York, New York 10010].
TRUSTEES OF THE FUND AND THE PORTFOLIO
EMILY W. CARD -- 1223 Wilshire Boulevard, No. 334, Santa Monica,
California 90403; Attorney; President, The Card Group, Inc; Trustee, Domini
Institutional Trust. Her date of birth is May 8, 1942.
AMY L. DOMINI* -- 230 Congress Street, Boston, Massachusetts 02110;
Chair, President and Trustee of the Fund, Portfolio and Domini Institutional
Trust; Manager of DSI; Officer of Kinder, Lydenberg, Domini & Co., Inc.; Private
Trustee, Loring, Wolcott & Coolidge; Trustee , Episcopal Church Pension Fund;
Member, Governing Board, Interfaith Center on Corporate Responsibility. Her date
of birth is January 15, 1950.
[ALLEN M. MAYES -- P.O. Box 21222, Beaumont, Texas 77720; Trustee,
Domini Institutional Trust; Retired Senior Associate General Secretary of the
General Board of Pensions of the United Methodist Church, Director of
Ministerial Services, Texas Annual Conference, The United Methodist Church;
Former Member of the Board of Directors of Investor Responsibility Research
Center; Member of Board of Trustees of Wiley College. His date of birth is
September 20, 1920.]
WILLIAM C. OSBORN -- 115 Buckminster Road, Brookline, Massachusetts
02146; Manager, Venture Investment Management Company LLC; Trustee , Domini
Institutional Trust; Vice President and General Manager, TravElectric Services
Corp (prior to 1995); President, Environmental [Packaging] Technologies (prior
to 1993; Director, Evergreen Solar, Inc; Director, Conservation Services Group.
His date of birth is July 7, 1944.
11
<PAGE>
[KAREN PAUL -- 4050 Park Avenue, Miami, Florida 33133; Associate Dean
and Professor of Business Environment, Florida International University;
Trustee, Domini Institutional Trust. Her date of birth is September 23, 1944.]
TIMOTHY SMITH -- 475 Riverside Drive, New York, New York 10115;
Executive Director , Interfaith Center on Corporate Responsibility; Trustee,
Calvert New Africa Fund; Trustee, Domini Institutional Trust. His date of birth
is September 15, 1943.
FREDERICK C. WILLIAMSON -- Five Roger Williams Green, Providence, Rhode
Island 02904; Treasurer and Trustee , RIGHA (charitable foundation supporting
health care needs); Chairman, Rhode Island Historical Preservation and Heritage
Commission; Trustee, National Parks and Conservation Commission; Trustee ,
Domini Institutional Trust. His date of birth is September 20, 1914.
Each Trustee is paid an annual fee as follows for serving as Trustee of
the Fund and the Portfolio and is reimbursed for expenses incurred in connection
with service as a Trustee. The compensation paid to the Trustees for the fiscal
year ended July 31, 1997 is set forth below. The Trustees may hold
various other directorships unrelated to the Fund or Portfolio.
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT
BENEFITS TOTAL
AGGREGATE ACCRUED AS COMPENSATION
COMPENSATION PART OF FROM THE
FROM THE FUND ANNUAL BENEFITS FUND, PORTFOLIO AND
FUND EXPENSES UPON RETIREMENT DOMINI INSTITUTIONAL TRUST
<S> <C> <C> <C> <C>
Amy L. Domini*, Chair, None None None None
President and Trustee
Emily $1,600 None None $1,805
W. Card, Trustee
[Karen Paul, Trustee $1,800 None $2,005]
None
William C. Osborn, $1,800 None None $2,005
Trustee
$0 None None $2,400]
[Allen M. Mayes, Trustee
$55 None None $2,455
Timothy Smith, Trustee
$55 None None $2,455
Frederick C. Williamson, Sr., Trustee
</TABLE>
OFFICERS
PETER D. KINDER* -- Vice President of the Fund and the Portfolio;
President of Kinder, Lydenberg, Domini & Co., Inc.; [ ] Domini Social
Investments LLC (since 1997).
STEVEN D. LYDENBERG* -- Vice President of the Fund and the Portfolio;
Director of Research of Kinder, Lydenberg, Domini & Co., Inc.; [ ] Domini Social
Investments LLC (since 1997).
DAVID P. WIEDER* -- Vice President of the Fund and the Portfolio (since
1997); [ ] Domini Social Investments LLC (since 1997); President of Fundamental
Shareholder Services, Inc.
12
<PAGE>
SIGWARD M. MOSER* -- Vice President of the Fund and the Portfolio
(since 1997); President of Communications House International, Inc.; Director of
Financial Communications Society; [ ] Domini Social Investments LLC (since
1997).
CAROLE M. LAIBLE* -- Secretary and Treasurer of the Fund and the
Portfolio (since 1997); Compliance Officer of Domini Social Investments LLC
(since 1997); [ ] Fundamental Shareholder Services, Inc.
As of September 1, 1997, all Trustees and officers of the Fund and the
Portfolio as a group owned less than 1% of the Fund's outstanding shares . As of
the same date, the following shareholders of record owned 5% or more of the
outstanding shares of the Fund: Charles Schwab & Co., Inc. (as a nominee on
behalf of its customers), 2,612,979.548 shares (29.6%) (the Fund has no
knowledge as to the beneficial ownership of these shares). The Fund has no
knowledge of any other owners of record or beneficial owners of 5% or more of
the outstanding shares of the Fund. Shareholders owning 25% or more of the
outstanding shares of the Fund may take actions without the approval of any
other investor in the Fund.
The Trustees who are not "interested persons" (the "Disinterested
Trustees") of the Fund as defined by the 1940 Act are the same as the
Disinterested Trustees of the Portfolio. A majority of the disinterested
Trustees have adopted written procedures reasonably appropriate to deal with
potential conflicts of interest arising from the fact that the same individuals
are Trustees of the Fund and the Portfolio, up to and including creating a
separate board of Trustees. Any conflict of interest between the Fund and the
Portfolio will be resolved by the Trustees in accordance with their fiduciary
obligations and in accordance with the 1940 Act. The Fund's Declaration of Trust
provides that it will indemnify its Trustees and officers (the "Indemnified
Parties") against liabilities and expenses incurred in connection with
litigation in which they may be involved because of their offices with the Fund,
unless, as to liability to the Fund or its shareholders, it is finally
adjudicated that the Indemnified Parties engaged in wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in their
offices, or unless with respect to any other matter it is finally adjudicated
that the Indemnified Parties did not act in good faith in the reasonable belief
that their actions were in the best interests of the Fund. In case of
settlement, such indemnification will not be provided unless it has been
determined by a court or other body approving the settlement or other
disposition, or by a reasonable determination, based upon a review of readily
available facts, by vote of a majority of disinterested Trustees or in a written
opinion of independent counsel, that such Indemnified Parties have not engaged
in wilful misfeasance, bad faith, gross negligence or reckless disregard of
their duties.
MANAGER AND SUBMANAGER
DSI provides advice to the Portfolio pursuant to a Management Agreement
(the "Management Agreement"). The services provided by the Manager consist of
furnishing continuously an investment program for the Portfolio. DSI will have
authority to determine from time to time what securities are purchased, sold or
exchanged, and what portion of assets of the Portfolio is held uninvested. DSI
13
<PAGE>
will also perform such administrative and management tasks as may from time to
time be reasonably requested, including: (i) maintaining office facilities and
furnishing clerical services necessary for maintaining the organization of the
Portfolio and for performing administrative and management functions; (ii)
supervising the overall administration of the Portfolio, including negotiation
of contracts and fees with and monitoring of performance and billings of the
Portfolio's transfer agent, shareholder servicing agents, custodian and other
independent contractors or agents; (iii) overseeing (with the advice of
Portfolio's counsel) the preparation of and, if applicable, filing all documents
required for compliance by the Portfolio with applicable laws and regulations,
including registration statements, prospectuses and statements of additional
information, semi-annual and annual reports to shareholders, proxy statements
and tax returns; (iv) preparing agendas and supporting documents for and minutes
of meetings of Trustees, committees of Trustees and shareholders; and (v)
arranging for maintenance of the books and records of the Portfolio. The Manager
furnishes at its own expense all facilities and personnel necessary in
connection with providing these services. The Management Agreement will continue
in effect if such continuance is specifically approved at least annually by the
Portfolio's Board of Trustees or by a majority of the outstanding voting
securities of the Portfolio at a meeting called for the purpose of voting on the
Management Agreement (with the vote of each investor in the Portfolio being in
proportion to the amount of its investment), and, in either case, by a majority
of the Portfolio's Trustees who are not parties to the Management Agreement or
interested persons of any such party at a meeting called for the purpose of
voting on the Management Agreement.
The Management Agreement provides that the Manager may render services
to others. DSI may employ, at its own expense, or may request that the Portfolio
employ (subject to the requirements of the 1940 Act) one or more subadvisers or
submanagers, subject to DSI's supervision. The Management Agreement is
terminable without penalty on not more than 60 days' nor less than 30 days'
written notice by the Portfolio when authorized either by majority vote of the
outstanding voting securities in the Portfolio (with the vote of each investor
in the Portfolio being in proportion to the amount of its investment) or by a
vote of a majority of its Board of Trustees, or by the Manager, and will
automatically terminate in the event of its assignment. The Management Agreement
provides that neither the Manager nor its personnel shall be liable for any
error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in its services to the Portfolio, except
for wilful misfeasance, bad faith or gross negligence or reckless disregard of
its or their obligations and duties under the Management Agreement.
The Fund's Prospectus contains a description of fees payable to the
Manager for services under the Management Agreement.
DSI is a newly formed Massachusetts limited liability company with
offices at 11 West 25th Street, 7th Floor, New York, New York 10010, and is
registered as an investment adviser under the Investment Advisers Act of 1940
(the "Advisers Act"). the names of the principal owners of DSI, their
relationship to the Fund and their percentage ownership of DSI follows: Amy L.
Domini, Chairman of the
14
<PAGE>
Board and President of the Fund, is the Manager and principal executive
officer of DSI and a 21.55% owner of DSI. Ms. Domini is also Chief Executive
Officer, Secretary, Treasurer and 51% owner of KLD which licenses the Domini
Social Index to DSI. Peter D. Kinder, Vice President of the Fund, is a 21.25%
owner of DSI. Mr. Kinder is also President and 19% owner of KLD. Sigward M.
Moser, Vice President of the Fund, is a 21.25% owner of DSI. David P. Wieder,
Vice President of the Fund is a 21.25% owner of DSI. Mr. Wieder is also
President and an owner of Fundamental Shareholder Services, Inc. ("FSSI"), a
registered transfer agent which has served as the Fund's transfer agent since
1995.
Mellon Equity manages the assets of the Portfolio pursuant to an
Investment Submanagement Agreement (the "Submanagement Agreement"). The
Submanager furnishes at its own expense all services, facilities and personnel
necessary in connection with managing the Portfolio's investments and effecting
securities transactions for the Portfolio. The Submanagement Agreement will
continue in effect if such continuance is specifically approved at least
annually by the Portfolio's Board of Trustees or by a majority vote of the
outstanding voting securities in the Portfolio at a meeting called for the
purpose of voting on the Submanagement Agreement (with the vote of each being in
proportion to the amount of its investment), and, in either case, by a majority
of the Portfolio's Trustees who are not parties to the Submanagement Agreement
or interested persons of any such party at a meeting called for the purpose of
voting on the Submanagement Agreement.
The Submanagement Agreement provides that the Submanager may render
services to others. The Submanagement Agreement is terminable without penalty
upon not more than 60 days' nor less than 30 days' written notice by the
Portfolio when authorized either by majority vote of the outstanding voting
securities in the Portfolio (with the vote of each being in proportion to the
amount of their investment) or by a vote of the majority of its Board of
Trustees, or by the Manager with the consent of the Trustees and may be
terminated by the Submanager on not less than 90 days' written notice to the
Manager and the Trustees, and will automatically terminate in the event of its
assignment. The Submanagement Agreement provides that the Submanager shall not
be liable for any error of judgment or mistake of law or for any loss arising
out of any investment or for any act or omission in its services to the
Portfolio, except for wilful misfeasance, bad faith or gross negligence or
reckless disregard for its or their obligations and duties under the
Submanagement Agreement.
Mellon Equity is a Pennsylvania business trust founded in 1987, which
is beneficially owned by Mellon Bank, N.A. (99% beneficial interest) and MMIP
(1% beneficial interest), a wholly owned subsidiary of Mellon Bank Corporation
("Mellon Bank"). Mellon Equity is a professional investment counseling firm that
provides investment management services to the equity and balanced pension,
public fund, and profit-sharing investment management markets, and is a
registered investment adviser under the Advisers Act. Mellon Bank's predecessor
organization managed domestic equity, tax-exempt and institutional pension
accounts since 1947. The address of Mellon Equity and each of the principal
executive officers and directors of Mellon Equity is 500 Grant Street, Suite
3700, Pittsburgh, Pennsylvania 15258.
15
<PAGE>
The Fund's Prospectus contains a description of fees payable to the
Submanager for services under the Submanagement Agreement. Prior to [November 1,
1997], pursuant to an investment advisory agreement (the "KLD Advisory
Agreement"), KLD served as investment adviser to the Portfolio and furnished
continuously an investment program by determining the stocks to be included in
the Index. Additionally, prior to [November 1, 1997], pursuant to a management
agreement (the "Mellon Equity Management Agreement"), Mellon Equity served as
investment manager and managed the assets of the Portfolio on a daily basis.
Prior to November 21, 1994, pursuant to an investment management agreement (the
"State Street Management Agreement"), State Street Bank and Trust Company served
as investment manager to the Portfolio. Prior to [November 1, 1997], pursuant to
a sponsorship agreement (the "KLD Sponsorship Agreement"), KLD furnished
administrative services for the Portfolio. Prior to November 6, 1996, pursuant
to an administrative services agreement (the "Signature Administration
Agreement"), Signature served as the administrator of the Portfolio. Prior to
[November 1, 1997], the aggregate investment management and administration fees
under the prior agreements with respect to the Portfolio were equal to 0.15% of
the Portfolio's average daily net assets for its then current fiscal year.
For the fiscal year ended July 31, 1997, the Portfolio incurred $46,528
in advisory fees pursuant to the KLD Advisory Agreement, $46,528 in
administration fees pursuant to the KLD Sponsorship Agreement and $182,885 in
management fees pursuant to the Mellon Equity Management Agreement. For the
fiscal year ended July 31, 1996, the Portfolio incurred $38,150 in advisory fees
pursuant to the KLD Advisory Agreement, $38,150 in aggregate administration fees
pursuant to the Signature Administration Agreement and the KLD Sponsorship
Agreement, and $128,901 in management fees pursuant to the Mellon Equity
Management Agreement. For the fiscal year ended July 31, 1995, KLD waived all of
its fees payable pursuant to the KLD Advisory Agreement, Signature waived all of
its fees payable pursuant to the Signature Administration Agreement and the
Portfolio incurred $10,180 in management fees pursuant to the State Street
Management Agreement and $29,409 in management fees pursuant to the Mellon
Equity Management Agreement.
SPONSOR
Pursuant to a Sponsorship Agreement, DSI provides the Fund with
oversight, administrative and management services. DSI provides the Fund with
general office facilities and supervises the overall administration of the Fund,
including, among other responsibilities, the negotiation of contracts and fees
with, and the monitoring of performance and billings of, the independent
contractors and agents of the Fund; the preparation and filing of all documents
required for compliance by the Fund with applicable laws and regulations,
including registration statements, prospectuses and statements of additional
information, semi-annual and annual reports to shareholders, proxy statements
and tax returns; preparing agendas and supporting documents for and minutes of
meetings of Trustees, committees of Trustees and shareholders; maintaining
telephone coverage to respond to shareholder inquiries; answering questions from
the general public, the media and investors in the Fund regarding the securities
holdings of the Portfolio, limits on investment and the Fund's proxy voting
philosophy and shareholder activism philosophy; and arranging for the
maintenance of books and records of the Fund. The Sponsor provides persons
satisfactory to
16
<PAGE>
the Board of Trustees of the Fund to serve as officers of the Fund.
Such officers, as well as certain other employees and Trustees of the Fund, may
be directors, officers or employees of the Sponsor or its affiliates.
The Fund's Prospectus contains a description of the fees payable to DSI
by the Fund, as Sponsor of the Fund under the Sponsorship Agreement. Prior to
[November 1, 1997], Signature served as administrator. For the fiscal year ended
July 31, 1995, Signature voluntarily waived all of its administrative services
fees from the Fund. For the fiscal years ended July 31, 1996 and 1997, the Fund
incurred $73,423 and [$], respectively, in administrative fees.
The Sponsorship Agreement with the Fund provides that DSI may render
administrative services to others. The Sponsorship Agreement with the Fund also
provides that neither the Sponsor nor its personnel shall be liable for any
error of judgment or mistake of law or for any act or omission in the
administration or management of the Fund, except for wilful misfeasance, bad
faith or gross negligence in the performance of its or their duties or by reason
of reckless disregard of its or their obligations and duties under the Fund's
Sponsorship Agreement.
DISTRIBUTOR
The Fund has adopted a Distribution Plan which provides that the Fund
may pay the Distributor a fee not to exceed 0.25% per annum of the Fund's
average daily net assets in anticipation of, or as reimbursement for, expenses
incurred in connection with the sale of shares of the Fund, such as payments to
broker-dealers who advise shareholders regarding the purchase, sale or retention
of shares of the Fund, payments to employees of the Distributor, advertising
expenses and the expenses of printing and distributing prospectuses and reports
used for sales purposes, expenses of preparing and printing sales literature and
other distribution-related expenses. For the fiscal years ended July 31, 1995 ,
1996 and 1997, the Fund accrued $36,641 , $183,558, and $[], respectively, in
distribution fees. For the fiscal year ended July 31, 1997, payments pursuant to
the Distribution Plan were used for advertising ($[]), printing and mailing of
prospectuses to other than current shareholders ($[]), compensation to dealers
($[]), compensation to sales personnel ($[]), and marketing consulting ($[]). In
addition, $[] was paid to service organization for maintaining shareholder
accounts and records.
The Distribution Plan will continue in effect indefinitely if such
continuance is specifically approved at least annually by a vote of both a
majority of the Fund's Trustees and a majority of the Fund's Trustees who are
not "interested persons of the Fund" and who have no direct or indirect
financial interest in the operation of the Distribution Plan or in any agreement
related to such Plan ("Qualified Trustees"). The Distributor will provide to the
Trustees of the Fund a quarterly written report of amounts expended by it under
the Distribution Plan and the purposes for which such expenditures were made.
The Distribution Plan further provides that the selection and nomination of the
Fund's Qualified Trustees shall be committed to the discretion of the
17
<PAGE>
disinterested Trustees of the Fund. The Distribution Plan may be terminated at
any time by a vote of a majority of the Fund's Qualified Trustees or by a vote
of the shareholders of the Fund. The Distribution Plan may not be materially
amended without a vote of the majority of both the Fund's Trustees and the
Fund's Qualified Trustees. The Distributor will preserve copies of any plan,
agreement or report made pursuant to the Distribution Plan for a period of not
less than six (6) years from the date of the Distribution Plan, and for the
first two (2) years the Distributor will preserve such copies in an easily
accessible place.
The Fund has entered into a Distribution Agreement with the
Distributor. Under the Distribution Agreement, the Distributor acts as the agent
of the Fund in connection with the offering of shares of the Fund.
19
<PAGE>
TRANSFER AGENT, CUSTODIAN AND SERVICE ORGANIZATIONS
The Fund has entered into a Transfer Agency Agreement with FSSI
pursuant to which FSSI acts as the transfer agent for the Fund. Mr. David P.
Wieder, Vice President of the Fund and a principal of DSI, the Manager of the
Portfolio and Sponsor of the Fund, is a [ ]% owner of, and President of FSSI.
For its services to the Fund as transfer agent, FSSI receives compensation at
the rate of [ ]. The Fund has entered into a Custodian Agreement with Investors
Bank & Trust Company ("IBT") pursuant to which IBT acts as custodian for the
Fund. The Portfolio has entered into a Transfer Agency Agreement with IBT
pursuant to which IBT acts as transfer agent for the Portfolio. The Portfolio
has entered into a Custodian Agreement with IBT pursuant to which IBT acts as
custodian for the Portfolio. For additional information, see "Transfer Agent and
Custodian" in the Prospectus.
The Fund may from time to time enter into agreements with various
banks, trust companies (other than Mellon Equity), broker-dealers (other than
Signature) or other financial organizations to provide services for the Fund,
such as maintaining shareholder accounts and records. For the fiscal year ended
July 31, 1995, the Fund did not accrue any service organization fees. For the
fiscal years ended July 31, 1996 and 1997, the Fund accrued $12,526 and $[],
respectively, in service organization fees. For additional information, see
"Service Organizations, Transfer Agent and Custodian--Service Organizations" in
the Prospectus.
6. INDEPENDENT AUDITORS
[ ] are the independent auditors for the Fund and for the Portfolio,
providing audit services, tax return preparation, and assistance and
consultation with respect to the preparation of filings with the Securities and
Exchange Commission.
7. TAXATION
Each year the Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code").
18
<PAGE>
Provided the Fund qualifies as a "regulated investment company"
under the Code, and distributes all of its net investment income and net
realized capital gains to shareholders in accordance with the timing
requirements imposed by the Code, the Fund will not be required to pay any
federal income or excise taxes. If the Fund should fail to qualify as a
"regulated investment company" in any year, the Fund would incur a regular
corporate federal income tax upon its taxable income and would be required to
pay Massachusetts income and excise taxes. Additionally, Fund distributions
would generally be taxable as ordinary dividend income to the shareholders.
It is assumed that, (1) the Portfolio will be treated for federal
income tax purposes as a partnership and (2) for purposes of determining whether
the Fund satisfies the income and diversification requirements to maintain its
status as a regulated investment company, the Fund, as an investor in the
Portfolio, will be deemed to own a proportionate share of the Portfolio's assets
and will be deemed to be entitled to the Portfolio's income or loss attributable
to that share. The Portfolio has advised the Fund that it intends to conduct its
operations so as to enable its investors, including the Fund, to satisfy those
requirements.
Shareholders of the Fund normally will have to pay federal income
taxes, and any state or local taxes, on distributions of net investment income
and net realized capital gains from the Fund. Dividends from ordinary income and
any distributions from net short-term capital gains are taxable to shareholders
as ordinary income for federal income tax purposes, whether the distributions
are made in cash or in additional shares. A portion of the Fund's distributions
from net investment income is normally eligible for the corporate dividends
received if the recipient otherwise qualifies for that deduction with respect to
its holding of Fund shares. Availability of the deduction for a particular
corporate shareholder is subject to certain limitations, and deducted amounts
may be subject to the alternative minimum tax and result in certain basis
adjustments. Distributions of net capital gains (i.e., the excess of net
long-term capital gains over net short-term capital losses), whether made in
cash or in additional shares, are taxable to shareholders as long-term capital
gains for federal income tax purposes without regard to the length of time the
shareholders have held their shares.
Amounts not distributed on a timely basis in accordance with the
calendar year distribution requirement are subject to a nondeductible 4% excise
tax. To prevent imposition of the excise tax, the Fund must, and intends to,
distribute during each calendar year substantially all of its ordinary income
for that year and substantially all of its capital gain in excess of its capital
losses for that year, plus any undistributed ordinary income and capital gains
from previous years. Any Fund dividend that is declared in October, November, or
December of any calendar year, that is payable to shareholders of record in such
a month, and that is paid the following January will be treated as if received
by the shareholders on December 31 of the year in which the divided is declared.
The Fund will notify shareholders regarding the federal tax status of its
distributions after the end of each calendar year.
Any Fund distribution will have the effect of reducing the per share
net asset value of shares in the Fund by the amount of the distribution.
19
<PAGE>
Shareholders purchasing shares shortly before the record date of any
distribution may thus pay the full price for the shares and then effectively
receive a portion of the purchase price back as a taxable distribution.
In general, any gain or loss realized upon a taxable disposition of
shares of the Fund by a shareholder that holds such shares as a capital asset
will be treated as long-term capital gain or loss if the shares have been held
for more than twelve months and otherwise as a short-term capital gain or loss.
However, any loss realized upon a disposition of shares in the Fund held for six
months or less will be treated as a long-term capital loss to the extent of any
distributions of net capital gain made with respect to those shares. Any loss
realized upon a disposition of shares may also be disallowed under rules
relating to wash sales.
The Fund anticipates that the Portfolio will be treated as a
partnership for federal income tax purposes. As such, the Portfolio is not
subject to federal income taxation. Instead, the Fund must take into account, in
computing its federal income tax liability, its share of the Portfolio's income,
gains, losses, deductions, credits and tax preference items, without regard to
whether it has received any cash distributions from the Portfolio. Withdrawals
by the Fund from the Portfolio generally will not result in the Fund recognizing
any gain or loss for federal income tax purposes, except that (1) gain will be
recognized to the extent that any cash distributed exceeds the basis of the
Fund's interest in the Portfolio prior to the distribution, (2) income or gain
will be realized if the withdrawal is in liquidation of the Fund's entire
interest in the Portfolio and includes a disproportionate share of any
unrealized receivables held by the Portfolio, and (3) loss will be recognized if
the distribution is in liquidation of that entire interest and consists solely
of cash and/or unrealized receivables. The basis of the Fund's interest in the
Portfolio generally equals the amount of cash and the basis of any property that
the Fund invests in the Portfolio, increased by the Fund's share of income from
the Portfolio and decreased by the Fund's share of losses from the Portfolio and
the amount of any cash distributions and the basis of any property distributed
from the Portfolio.
The Portfolio is organized as a New York trust. The Portfolio is not
subject to any income or franchise tax in the State of New York or the
Commonwealth of Massachusetts. The investment by the Fund in the Portfolio does
not cause the Fund to be liable for any income or franchise tax in the State of
New York.
Fund shareholders may be subject to state and local taxes on Fund
distributions to them. Shareholders are advised to consult with their tax
advisers with respect to the particular tax consequences of an investment in the
Fund.
8. PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
Specific decisions to purchase or sell securities for the Portfolio are
made by a portfolio manager who is an employee of the Submanager and who is
appointed and supervised by its senior officers. Changes in the Portfolio's
20
<PAGE>
investments are reviewed by its Board of Trustees. The portfolio manager of the
Portfolio may serve other clients of the Submanager in a similar capacity.
The Portfolio's primary consideration in placing securities
transactions with broker-dealers for execution is to obtain and maintain the
availability of execution at the most favorable prices and in the most effective
manner possible. The Submanager attempts to achieve this result by selecting
broker-dealers to execute transactions on behalf of the Portfolio and other
clients of the Submanager on the basis of their professional capability, the
value and quality of their brokerage services, and the level of their brokerage
commissions. In the case of securities traded in the over-the-counter market
(where no stated commissions are paid but the prices include a dealer's markup
or markdown), the Submanager normally seeks to deal directly with the primary
market makers, unless in its opinion, best execution is available elsewhere. In
the case of securities purchased from underwriters, the cost of such securities
generally includes a fixed underwriting commission or concession. From time to
time, soliciting dealer fees are available to the Submanager on the tender of
the Portfolio's securities in so-called tender or exchange offers. Such
soliciting dealer fees are in effect recaptured for the Portfolio by the
Submanager. At present no other recapture arrangements are in effect. Consistent
with the foregoing primary consideration, the Conduct Rules of the National
Association of Securities Dealers, Inc. and such other policies as the Trustees
of the Portfolio may determine, the Submanager may consider sales of shares of
the Fund and of securities of other investors in the Portfolio as a factor in
the selection of broker-dealers to execute the Portfolio's securities
transactions.
Under the Submanagement Agreement and as permitted by Section 28(e) of
the Securities Exchange Act of 1934, the Submanager may cause the Portfolio to
pay a broker-dealer acting on an agency basis which provides brokerage and
research services to the Submanager or the Manager an amount of commission for
effecting a securities transaction for the Portfolio in excess of the amount
other broker-dealers would have charged for the transaction if the Submanager
determines in good faith that the greater commission is reasonable in relation
to the value of the brokerage and research services provided by the executing
broker-dealer viewed in terms of either a particular transaction or the
Submanager's or the Manager's overall responsibilities to the Portfolio or to
its other clients. Not all of such services are useful or of value in advising
the Portfolio.
The term "brokerage and research services" includes advice as to the
value of securities, the advisability of investing in, purchasing, or selling
securities, and the availability of securities or of purchasers or sellers of
securities; furnishing analyses and reports concerning issues, industries,
securities, economic factors and trends, portfolio strategy and the performance
of accounts; and effecting securities transactions and performing functions
incidental thereto such as clearance and settlement. However, because of the
Portfolio's policy of investing in accordance with the Domini Social Index, the
Submanager and the Manager currently intend to make only a limited use of such
brokerage and research services.
Although commissions paid on every transaction will, in the judgment of
the Submanager, be reasonable in relation to the value of the brokerage services
21
<PAGE>
provided, commissions exceeding those which another broker might charge
may be paid to broker-dealers who were selected to execute transactions on
behalf of the Portfolio and the Submanager's or the Manager's other clients, in
part for providing advice as to the availability of securities or of purchasers
or sellers of securities and services in effecting securities transactions and
performing functions incidental thereto such as clearance and settlement.
Certain broker-dealers may be willing to furnish statistical, research and other
factual information or services to the Submanager or the Manager for no
consideration other than brokerage or underwriting commissions.
The Submanager and the Manager attempt to evaluate the quality of
research provided by brokers. The Submanager and the Manager sometimes use
evaluations resulting from this effort as a consideration in the selection of
brokers to execute portfolio transactions. However, neither the Submanager nor
the Manager is able to quantify the amount of commissions which are paid as a
result of such research because a substantial number of transactions are
effected through brokers which provide research but which are selected
principally because of their execution capabilities.
The fees that the Portfolio pays to the Submanager and the Manager will
not be reduced as a consequence of the Portfolio's receipt of brokerage and
research services. To the extent the Portfolio's securities transactions are
used to obtain brokerage and research services, the brokerage commissions paid
by the Portfolio will exceed those that might otherwise be paid for such
portfolio transactions and research, by an amount which cannot be presently
determined. Such services may be useful and of value to the Submanager or the
Manager in serving both the Portfolio and other clients and, conversely, such
services obtained by the placement of brokerage business of other clients may be
useful to the Submanager or the Manager in carrying out its obligations to the
Portfolio. While such services are not expected to reduce the expenses of the
Submanager or the Manager, the Submanager or the Manager would, through use of
the services, avoid the additional expenses which would be incurred if it should
attempt to develop comparable information through its own staff. For the fiscal
years ended July 31, 1995,1996 and 1997, respectively, the Portfolio paid
brokerage commissions of $15,222 , $45,017 and $[], respectively.
In certain instances there may be securities which are suitable for the
Portfolio as well as for one or more of the Submanager's or the Manager's other
clients. Investment decisions for the Portfolio and for the Submanager's or the
Manager's other clients are made with a view to achieving their respective
investment objectives. It may develop that a particular security is bought or
sold for only one client even though it might be held by, or bought or sold for,
other clients. Likewise, a particular security may be bought for one or more
clients when one or more clients are selling that same security. Some
simultaneous transactions are inevitable when several clients receive investment
advice from the same investment adviser, particularly when the same security is
suitable for the investment objectives of more than one client. When two or more
clients are simultaneously engaged in the purchase or sale of the same security,
the securities are allocated among clients in a manner believed to be equitable
to each. It is recognized that in some cases this system could have a
detrimental effect on the price or volume of the security as far as the
Portfolio is concerned. However, it is believed that the ability of the
Portfolio to
22
<PAGE>
participate in volume transactions will produce better executions for
the Portfolio.
9. DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Fund's Declaration of Trust permits the Fund's Board of Trustees to
issue an unlimited number of full and fractional shares of beneficial interest
(without par value) and to divide or combine the shares into a greater or lesser
number of shares without thereby changing the proportionate beneficial interests
in the Fund. Each share represents an equal proportionate interest in the Fund
with each other share. Upon liquidation or dissolution of the Fund, the Fund's
shareholders are entitled to share pro rata in the Fund's net assets available
for distribution to its shareholders. The Fund reserves the right to create and
issue a number of series of shares, in which case the shares of each series
would participate equally in the earnings, dividends and assets of the
particular series (except for any differences among classes of shares of a
series). Shares of each series would be entitled to vote separately to approve
advisory agreements or changes in investment policy, but shares of all series
may vote together in the election or selection of Trustees, principal
underwriters and accountants for the Fund. Upon liquidation or dissolution of
the Fund, the shareholders of each series would be entitled to share pro rata in
the net assets of their respective series available for distribution to
shareholders.
Shareholders are entitled to one vote for each share held. Shareholders
in the Fund do not have cumulative voting rights, and shareholders owning more
than 50% of the outstanding shares of the Fund may elect all of the Trustees of
the Fund if they choose to do so and in such event the other shareholders in the
Fund would not be able to elect any Trustee. The Fund is not required to hold
annual meetings of shareholders but the Fund will hold special meetings of
shareholders when in the judgment of the Fund's Trustees it is necessary or
desirable to submit matters for a shareholder vote. No material amendment may be
made to the Fund's Declaration of Trust without the affirmative vote of the
holders of a majority of its outstanding shares. Shares have no preference,
preemptive, conversion or similar rights. Shares, when issued, are fully paid
and non-assessable, except as set forth below. The Fund may enter into a merger
or consolidation, or sell all or substantially all of its assets, if approved by
the vote of the holders of two-thirds of its outstanding shares, except that if
the Trustees of the Fund recommend such sale of assets, the approval by vote of
the holders of a majority of the Fund's outstanding shares will be sufficient.
The Fund may also be terminated upon liquidation and distribution of its assets,
if approved by the vote of the holders of two-thirds of its outstanding shares.
If not so terminated, the Fund will continue indefinitely. Stock certificates
are issued only upon the written request of a shareholder.
The Fund is an entity of the type commonly known as a "Massachusetts
business trust". Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable as partners for its
obligations and liabilities. However, the Declaration of Trust contains an
express disclaimer of shareholder liability for acts or obligations of the Fund
and provides for indemnification and reimbursement of expenses out of Fund
property for any shareholder held personally liable for the obligations of the
23
<PAGE>
Fund. The Declaration of Trust also provides that the Fund shall maintain
appropriate insurance (for example, fidelity bonding and errors and omissions
insurance) for the protection of the Fund, its shareholders, Trustees, officers,
employees and agents covering possible tort and other liabilities. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which both inadequate insurance existed
and the Fund itself was unable to meet its obligations.
The Declaration of Trust further provides that obligations of the Fund
are not binding upon the Trustees individually but only upon the property of the
Fund and that the Trustees will not be liable for any action or failure to act,
but nothing in the Declaration of Fund protects a Trustee against any liability
to which he or she would otherwise be subject by reason of wilful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties involved in the
conduct of his or her office.
Each investor in the Portfolio, including the Fund, may add to or
reduce its investment in the Portfolio on each Fund Business Day. At the close
of each such business day, the value of each investor's interest in the
Portfolio will be determined by multiplying the net asset value of the Portfolio
by the percentage representing that investor's share of the aggregate beneficial
interests in the Portfolio effective for that day. Any additions or withdrawals,
which are to be effected as of the close of business on that day, will then be
effected. The investor's percentage of the aggregate beneficial interests in the
Portfolio will then be re-computed as the percentage equal to the fraction (i)
the numerator of which is the value of such investor's investment in the
Portfolio as of the close of business on such day plus or minus, as the case may
be, the amount of any additions to or withdrawals from the investor's investment
in the Portfolio effected as of the close of business on such day, and (ii) the
denominator of which is the aggregate net asset value of the Portfolio as of the
close of business on such day plus or minus, as the case may be, the amount of
the net additions to or withdrawals from the aggregate investments in the
Portfolio by all investors in the Portfolio. The percentage so determined will
then be applied to determine the value of the investor's interest in the
Portfolio as of the close of business on the following Fund Business Day.
10. FINANCIAL STATEMENTS
The financial statements of the Fund and the Portfolio , dated January
31, 1997, from the Fund's semi-annual report are incorporated herein by
reference from the Fund's Form N-30D filed with the Securities and Exchange
Commission on April 11, 1997 (accession no. 0001035347-97-000008). A copy of
such report will be provided, without charge, to each person receiving this
Statement of Additional Information upon request by calling (800) 762-6814.
DSI195E
<PAGE>
PART C
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Financial Statements Included In Part A:
Financial Highlights [to be finalized by amendment]
Financial Statements Incorporated by Reference In Part B:
For the Registrant:
Statement of Assets and Liabilities at January 31, 1997 (unaudited)
Statement of Operations for the six months ended January 31, 1997
(unaudited) Statements of Changes in Net Assets for the periods
indicated (unaudited) Financial Highlights for the periods indicated
(unaudited) Notes to Financial Statements at January 31, 1997
(unaudited)
For Domini Social Index Portfolio:
Portfolio of Investments at January 31, 1997 (unaudited) Statement of
Assets and Liabilities at January 31, 1997 (unaudited) Statement of
Operations for the six months ended July 31, 1997 (unaudited) Statement
of Changes in Net Assets for the periods indicated (unaudited)
Financial Highlights for the periods indicated (unaudited) Notes to
Financial Statements at January 31, 1997 (unaudited)
(b) Exhibits
1. Amended and Restated Declaration of Trust of the Registrant.5
2. By-Laws of the Registrant, as amended June 13, 1997.7
4. Specimen of certificate representing ownership of the
Registrant's Shares of Beneficial Interest.3
6. Distribution Agreement between the Registrant and Signature
Broker-Dealer Services, Inc. ("SBDS"), as distributor.1
8. Custodian Agreement between the Registrant and Investors Bank
& Trust Company, as custodian.1
9(a). Form of Transfer Agency Agreement between the Registrant and
Fundamental Shareholder Services, Inc.5
9(b). Administrative Services Agreement between the Registrant and
SBDS, as administrator.6
11. Consent of KPMG Peat Marwick LLP, independent auditors for the
Registrant. [to be filed by amendment]
13. Copies of investment representation letters from initial
shareholders.1
15. Distribution Plan of the Registrant.1
16. Schedule for Calculation of Performance Quotations.2
18. Powers of Attorney.7
27. Financial Data Schedule.7
1 Incorporated by reference from Pre-Effective Amendment No. 2 to
Registrant's Registration Statement (the "Registration Statement") as
filed with the Securities and Exchange Commission (the "SEC") on June
7, 1989.
2 Incorporated by reference from Post-Effective Amendment ("PEA") No. 1
to the Registration Statement as filed with the SEC on December 2,
1991.
3 Incorporated by reference from PEA No. 2 to the Registration
Statement as filed with the SEC on November 16, 1992.
4 Incorporated by reference from PEA No. 4 to the Registration
Statement as filed with the SEC on September 16, 1993.
5 Incorporated by reference from PEA No. 7 to the Registration
Statement as filed with the SEC on November 22, 1995.
6 Incorporated by reference from PEA No. 9 to the Registration Statement
as filed with the SEC on November 27, 1996.
7 Filed herewith.
Item 25. Persons Controlled by or under Common Control with Registrant
Not applicable.
Item 26. Number of Holders of Securities
Title of Class: Shares of Beneficial Interest (without par value).
Number of Record Holders as of August 31, 1997: 6,500.
C-1
<PAGE>
Item 27. Indemnification
Reference is hereby made to (a) Article V of the Registrant's
Declaration of Trust, filed as an exhibit hereto; (b) Section 4 of the
Distribution Agreement by and between the Registrant and SBDS, filed as an
exhibit hereto; and (c) the undertaking of the Registrant regarding
indemnification set forth in Item 32 below.
The Trustees and officers of the Registrant and the personnel of the
Registrant's administrator and distributor are insured under an errors and
omissions liability insurance policy. The Registrant and its officers are also
insured under the fidelity bond required by Rule 17g-1 under the Investment
Company Act of 1940, as amended (the "1940 Act").
Item 28. Business and Other Connections of Investment Adviser
Not applicable.
Item 29. Principal Underwriters
(a) SBDS is the distributor for the Registrant. SBDS and its
affiliates serve as the distributor for other registered
investment companies.
(b) The information required by this Item 29 with respect to each
director or officer of SBDS is incorporated herein by
reference from Schedule A of Form BD (File No. 8-41134) as
filed by SBDS pursuant to the Securities Exchange Act of 1934.
(c) Not applicable.
Item 30. Location of Accounts and Records
The accounts and records of the Registrant are located, in whole or in
part, at the offices of the Registrant and at the following locations:
Name: Address:
Kinder, Lydenberg, Domini & Co., Inc. 129 Mt. Auburn Street
(subadministrator) Cambridge, MA 02138
Signature Broker-Dealer Services, Inc. 6 St. James Avenue
(administrator and distributor) Boston, MA 02116
Investors Bank & Trust Company P.O. Box 1537
(custodian) Boston, MA 02205
Fundamental Shareholder Services, Inc. 90 Washington Street
C-2
<PAGE>
(transfer agent) New York, NY 10006
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) The Registrant's Declaration of Trust mandates indemnification by the
Registrant of its Trustees, officers and certain others under certain
conditions. Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "1933 Act"), may be permitted to
Trustees, officers and controlling persons of the Registrant, pursuant to the
foregoing provisions or otherwise, the Registrant has been advised that in the
opinion of the SEC such indemnification is against public policy as expressed in
the 1933 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Trustee of officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Trustee, officer or controlling person of the
Registrant in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether or not such indemnification by it is against public policy
as expressed in the 1933 Act and will be governed by the final adjudication of
such issue.
(b) The Registrant undertakes to comply with Section 16(c) of the 1940 Act
as though such provisions of the 1940 Act were applicable to the Registrant,
except that the request referred to in the third full paragraph thereof may only
be made by shareholders who hold in the aggregate at least 10% of the
outstanding shares of the Registrant, regardless of the net asset value or value
of shares held by such requesting shareholders.
(c) If the information called for by Item 5A of Form N-1A is contained in
the latest annual report to shareholders, the registrant shall furnish each
person to whom a prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders upon request and without charge.
C-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereto duly authorized
in the City of Boston, and Commonwealth of Massachusetts on the 26th day of
September, 1997.
DOMINI SOCIAL EQUITY FUND
By: /S/ MOLLY S. MUGLER
MOLLY S. MUGLER, Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated on September 26, 1997.
Signature, Title
AMY L. DOMINI*
AMY L. DOMINI
President (Principal Executive Officer)
/S/ JOHN R. ELDER
JOHN R. ELDER
Treasurer, Principal Financial Officer and Principal Accounting Officer
EMILY WATTS CARD*
EMILY WATTS CARD
Trustee
AMY L. DOMINI*
AMY L. DOMINI
Trustee, Chair
WILLIAM C. OSBORN*
WILLIAM C. OSBORN
Trustee
KAREN PAUL*
KAREN PAUL
Trustee
TIMOTHY SMITH*
TIMOTHY SMITH
Trustee
FREDERICK C. WILLIAMSON*
FREDERICK C. WILLIAMSON
Trustee
*By /S/ MOLLY S. MUGLER
MOLLY S. MUGLER
*Pursuant to powers of attorney filed herewith.
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SIGNATURES
Domini Social Index Portfolio (the "Portfolio") has duly caused this
post-effective amendment to the registration statement on Form N-1A (File No.
33-29180) of Domini Social Equity Fund (the "Fund") to be signed on its behalf
by the undersigned, thereto duly authorized, in the City of Boston, and
Commonwealth of Massachusetts on the 26th day of September, 1997.
DOMINI SOCIAL INDEX PORTFOLIO
By: /S/ MOLLY S. MUGLER
MOLLY S. MUGLER, Assistant Secretary
This post-effective amendment to the registration statement on Form
N-1A (File No. 33-29180) of the Fund has been signed below by the following
persons in the capacities indicated on September 26, 1997.
Signature, Title
AMY L. DOMINI*
AMY L. DOMINI
President (Principal Executive Officer) of the Portfolio
/S/ JOHN R. ELDER
JOHN R. ELDER
Treasurer, Principal Financial Officer and Principal Accounting Officer of
the Portfolio
EMILY WATTS CARD
Trustee of the Portfolio
AMY L. DOMINI*
AMY L. DOMINI
Trustee , Chair of the Portfolio
ALLEN M. MAYES*
ALLEN M. MAYES
Trustee of the Portfolio
WILLIAM C. OSBORN*
WILLIAM C. OSBORN
Trustee of the Portfolio
TIMOTHY SMITH*
TIMOTHY SMITH
Trustee of the Portfolio
FREDERICK C. WILLIAMSON*
FREDERICK C. WILLIAMSON
Trustee of the Portfolio
*By /S/ MOLLLY S. MUGLER
MOLLY S. MUGLER
*Pursuant to powers of attorney filed herewith.
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
EX-99.B2 By-Laws of the Registrant , as amended June 13, 1997
EX-99B.18 Powers of Attorney
EX-99.B17 Financial Data Schedules
BY-LAWS
OF
DOMINI SOCIAL EQUITY FUND
(formerly, DOMINI SOCIAL INDEX TRUST)
ARTICLE I
DEFINITIONS
The terms "COMMISSION", "DECLARATION", "DISTRIBUTOR", "INVESTMENT
ADVISER", "MAJORITY SHAREHOLDER VOTE", "1940 ACT", "SHAREHOLDER", "SHARES",
"TRANSFER AGENT", "TRUST", "TRUST PROPERTY" and "TRUSTEES" have the respective
meanings given them in the Declaration of Trust of Domini Social Equity Fund
(formerly, Domini Social Index Trust) dated June 7, 1989 as amended and restated
March 1, 1990.
ARTICLE II
OFFICES
SECTION 1. PRINCIPAL OFFICE. Until changed by the Trustees, the
principal office of the Trust in the Commonwealth of Massachusetts shall be in
the City of Boston, County of Suffolk.
SECTION 2. OTHER OFFICES. The Trust may have offices in such other
places without as well as within the Commonwealth as the Trustees may from time
to time determine.
ARTICLE III
SHAREHOLDERS
SECTION 1. MEETINGS. A meeting of Shareholders may be called at any time
by a majority of the Trustees and shall be called by any Trustee upon written
request, which shall specify the purpose or purposes for which such meeting is
to be called, of Shareholders holding in the aggregate not less than 10% of the
outstanding Shares entitled to vote on the matters specified in such written
request. Any such meeting shall be held within or without the Commonwealth of
Massachusetts on such day and at such time as the Trustees shall designate. The
holders of a majority of outstanding Shares entitled to vote present in person
or by proxy shall constitute a quorum at any meeting of the Shareholders. In the
absence of a quorum, a majority of outstanding Shares entitled to vote present
in person or by proxy may adjourn the meeting from time to time until a quorum
shall be present.
SECTION 2. NOTICE OF MEETINGS Notice of all meetings of Shareholders,
stating the time, place and purposes of the meeting, shall be given by the
Trustees by mail to each Shareholder entitled to vote at such meeting at his
address as recorded on the register of the Trust, mailed at least 10 days and
not
<PAGE>
more than 60 days before the meeting. Only the business stated in the
notice of the meeting shall be considered at such meeting. Any adjourned meeting
may be held as adjourned without further notice. No notice need be given to any
Shareholder who shall have failed to inform the Trust of his current address or
if a written waiver of notice, executed before or after the meeting by the
Shareholder or his attorney thereunto authorized, is filed with the records of
the meeting.
SECTION 3. RECORD DATE. For the purpose of determining the Shareholders
who are entitled to notice of and to vote at any meeting, or to participate in
any distribution, or for the purpose of any other action, the Trustees may from
time to time close the transfer books for such period, not exceeding 30 days, as
the Trustees may determine; or without closing the transfer books the Trustees
may fix a date not more than 60 days prior to the date of any meeting of
Shareholders or distribution or other action as a record date for the
determination of the persons to be treated as Shareholders of record for such
purpose.
SECTION 4. ACTION. The Shareholders shall take action by the affirmative
vote of the holders of a majority, except in the case of the election of
Trustees which shall only require a plurality, of the Shares present and
entitled to vote at a meeting of Shareholders at which a quorum is present,
except as may be otherwise required by the 1940 Act, or the Declaration of
Trust.
SECTION 5. PROXIES. At any meeting of Shareholders, any holder of Shares
entitled to vote thereat may vote by proxy, provided that no proxy shall be
voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a vote of a majority of the Trustees, proxies may be solicited in
the name of the Trust or one or more Trustees or officers of the Trust. Only
Shareholders of record shall be entitled to vote. Each full Share shall be
entitled to one vote and fractional Shares shall be entitled to a vote of such
fraction. When any Share is held jointly by several persons, any one of them may
vote at any meeting in person or by proxy in respect of such Share, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Share. A proxy
purporting to be executed by or on behalf of a Shareholder shall be deemed valid
unless challenged at or prior to its exercise, and the burden of proving
invalidity shall rest on the challenger. If the holder of any such Share is a
minor or a person of unsound mind, and subject to guardianship or to the legal
control of any other person as regards the charge or management of such Share,
such Share may be voted by such guardian or such other person appointed or
having such control, and such vote may be given in person or by proxy.
SECTION 6. INSPECTION OF RECORDS. The records of the Trust shall be
open to inspection by Shareholders to the same extent as is permitted
shareholders of a Massachusetts business corporation.
SECTION 7. ACTION WITHOUT MEETING. Any action which may be taken by
Shareholders may be taken without a meeting if a majority of Shareholders
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entitled to vote on the matter (or such larger proportion thereof as shall be
required by law, the Declaration or these By-Laws for approval of such matter)
consent to the action in writing and the written consents are filed with the
records of the meetings of Shareholders. Such consent shall be treated for all
purposes as a vote taken at a meeting of Shareholders.
ARTICLE IV
TRUSTEES
SECTION 1. MEETINGS OF THE TRUSTEES. The Trustees may in their
discretion provide for regular or stated meetings of the Trustees. Notice of
regular or stated meetings need not be given. Meetings of the Trustees other
than regular or stated meetings shall be held whenever called by the Chairman or
by any Trustee. Notice of the time and place of each meeting other than regular
or stated meetings shall be given by the Secretary or an Assistant Secretary or
by the officer or Trustee calling the meeting and shall be mailed to each
Trustee at least two days before the meeting, or shall be telegraphed, cabled,
or wirelessed to each Trustee at his business address, or personally delivered
to him at least one day before the meeting. Notice of a meeting need not be
given to any Trustee if a written waiver of notice, executed by him before or
after the meeting, is filed with the records of the meeting, or to any Trustee
who attends the meeting without protesting prior thereto or at its commencement
the lack of notice to him. A notice or waiver of notice need not specify the
purpose of any meeting. The Trustees may meet by means of a telephone conference
circuit or similar communications equipment by means of which all persons
participating in the meeting can hear each other, which telephone conference
meeting shall be deemed to have been held at a place designated by the Trustees
at the meeting. Participation in a telephone conference meeting shall constitute
presence in person at such meeting. Any action required or permitted to be taken
at any meeting of the Trustees may be taken by the Trustees without a meeting if
all the Trustees consent to the action in writing and the written consents are
filed with the records of the Trustees' meetings. Such consents shall be treated
as a vote for all purposes.
SECTION 2. QUORUM AND MANNER OF ACTING. A majority of the Trustees
present in person at any regular or special meeting of the Trustees shall
constitute a quorum for the transaction of business at such meeting and (except
as otherwise required by law, the Declaration or these By-Laws) the act of a
majority of the Trustees present at any such meeting, at which a quorum is
present, shall be the act of the Trustees. In the absence of a quorum, a
majority of the Trustees present may adjourn the meeting from time to time until
a quorum shall be present. Notice of an adjourned meeting need not be given.
SECTION 3. ATTENDANCE BY TRUSTEES. A Trustee who fails, during any
fiscal year of the Trust, to attend at least 75% of the meetings of the Board,
or who fails to attend at least 75% of the meetings of each Committee of the
Board of which such Trustee is a member, unless such failure was the result of
an illness or incapacity which, as determined by the Board, is not likely to
materially interfere with the future performance of the duties of such Trustee,
shall be subject to removal for cause by vote of two-thirds of the remaining
Trustees.
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The foregoing shall not be construed to limit in any way the authority
of the Board with respect to removal of Trustees.
ARTICLE V
COMMITTEES AND ADVISORY BOARD
SECTION 1. EXECUTIVE AND OTHER COMMITTEES. The Trustees by vote of a
majority of all the Trustees may elect from their own number an Executive
Committee to consist of not less than three Trustees to hold office at the
pleasure of the Trustees.
While the Trustees are not in session, the Executive Committee shall have the
power to conduct the current and ordinary business of the Trust, including the
purchase and sale of securities and the designation of securities to be
delivered upon redemption of Shares of the Trust, and such other powers of the
Trustees as the Trustees may, from time to time, delegate to the Executive
Committee except those powers which by law, the Declaration or these By-Laws the
Trustees are prohibited from so delegating. The Trustees may also elect from
their own number other Committees from time to time, the number composing such
Committees, the powers conferred upon the same (subject to the same limitations
as with respect to the Executive Committee) and the term of membership on such
Committees to be determined by the Trustees. The Trustees may designate a
chairman of any such Committee. In the absence of such designation a Committee
may elect its own chairman.
SECTION 2. MEETING, QUORUM AND MANNER OF ACTING. The Trustees may (i)
provide for stated meetings of any Committee, (ii) specify the manner of calling
and notice required for special meetings of any Committee, (iii) specify the
number of members of a Committee required to constitute a quorum and the number
of members of a Committee required to exercise specified powers delegated to
such Committee, (iv) authorize the making of decisions to exercise specified
powers by written assent of the requisite number of members of a Committee
without a meeting, and (v) authorize the members of a Committee to meet by means
of a telephone conference circuit.
Each Committee shall keep regular minutes of its meetings and records of
decisions taken without a meeting and cause them to be recorded in a book
designated for that purpose and kept in the office of the Trust.
SECTION 3. ADVISORY BOARD. The Trustees may appoint an Advisory Board to
consist in the first instance of not less than three members. Members of such
Advisory Board shall not be Trustees or officers and need not be Shareholders. A
member of such Advisory Board shall hold office for such period as the Trustees
may by vote provide and may resign therefrom by a written instrument signed by
him which shall take effect upon its delivery to the Trustees. The Advisory
Board shall have no legal powers and shall not perform the functions of Trustees
in any manner, such Advisory Board being intended merely to act in an advisory
capacity. Such Advisory Board shall meet at such times and upon such notice as
the Trustees may by vote provide.
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SECTION 4. CHAIRMAN. The Trustees may, by a majority vote of all the
Trustees, elect from their own number a Chairman, to hold office until his
successor shall have been duly elected and qualified. The Chairman shall not
hold any other office. The Chairman may be, but need not be, a Shareholder. The
Chairman shall preside at all meetings of the Trustees and shall have such other
duties as from time to time may be assigned to him by the Trustees.
ARTICLE VI
OFFICERS
SECTION 1. GENERAL PROVISIONS. The officers of the Trust shall be a
President, a Treasurer and a Secretary, each of whom shall be elected by the
Trustees. The Trustees may elect or appoint such other officers or agents as the
business of the Trust may require, including one or more Vice Presidents, one or
more Assistant Treasurers, and one or more Assistant Secretaries. The Trustees
may delegate to any officer or committee the power to appoint any subordinate
officers or agents.
SECTION 2. TERM OF OFFICE AND QUALIFICATIONS. Except as otherwise
provided by law, the Declaration or these By-Laws, the President, the Treasurer
and the Secretary shall hold office until his respective successor shall have
been duly elected and qualified, and all other officers shall hold office at the
pleasure of the Trustees. The Secretary and Treasurer may be the same person. A
Vice President and the Treasurer or a Vice President and the Secretary may be
the same person, but the offices of Vice President, Secretary and Treasurer
shall not be held by the same person. The President shall not hold any other
office. Except as above provided, any two offices may be held by the same
person. Any officer may be, but does not need be, a Trustee or Shareholder.
SECTION 3. REMOVAL. The Trustees, at any regular or special meeting of
the Trustees, may remove any officer with or without cause by a vote of a
majority of the Trustees. Any officer or agent appointed by any officer or
committee may be removed with or without cause by such appointing officer or
committee.
SECTION 4. POWERS AND DUTIES OF THE PRESIDENT. The President, unless a
Chairman is so elected by the Trustees, shall be the principal executive officer
of the Trust. Subject to the control of the Trustees and any committee of the
Trustees, the President shall at all times exercise a general supervision and
direction over the affairs of the Trust. The President shall have the power to
employ attorneys and counsel for the Trust and to employ such subordinate
officers, agents, clerks and employees as he may find necessary to transact the
business of the Trust. The President shall also have the power to grant, issue,
execute or sign such powers of attorney, proxies or other documents as may be
deemed advisable or necessary in the furtherance of the interests of the Trust.
The President shall have such other powers and duties as, from time to time, may
be conferred upon or assigned to him by the Trustees.
SECTION 5. POWERS AND DUTIES OF VICE PRESIDENTS. In the absence or
disability of the President, the Vice President or, if there are more than one
5
<PAGE>
Vice President, any Vice President designated by the Trustees shall perform all
the duties and may exercise any of the powers of the President, subject to the
control of the Trustees. Each Vice President shall perform such other duties as
may be assigned to him from time to time by the Trustees or the President.
SECTION 6. POWERS AND DUTIES OF THE TREASURER. The Treasurer shall be
the principal financial and accounting officer of the Trust. The Treasurer shall
deliver all funds of the Trust which may come into his hands to such custodian
as the Trustees may employ pursuant to Article X hereof. The Treasurer shall
render a statement of condition of the finances of the Trust to the Trustees as
often as they shall require the same and shall in general perform all the duties
incident to the office of Treasurer and such other duties as from time to time
may be assigned to him by the Trustees. The Treasurer shall give a bond for the
faithful discharge of his duties, if required to do so by the Trustees, in such
sum and with such surety or sureties as the Trustees shall require.
SECTION 7. POWERS AND DUTIES OF THE SECRETARY. The Secretary shall keep
the minutes of all meetings of the Shareholders in proper books provided for
that purpose; shall keep the minutes of all meetings of the Trustees; shall have
custody of the seal of the Trust; and shall have charge of the Share transfer
books, lists and records unless the same are in the charge of the Transfer
Agent. The Secretary shall attend to the giving and serving of all notices by
the Trust in accordance with the provisions of these By-Laws and as required by
law; and subject to these By-Laws, shall in general perform all the duties
incident to the office of Secretary and such other duties as from time to time
may be assigned to him by the Trustees.
SECTION 8. POWERS AND DUTIES OF ASSISTANT TREASURERS. In the absence or
disability of the Treasurer, any Assistant Treasurer designated by the Trustees
shall perform all the duties, and may exercise any of the powers, of the
Treasurer. Each Assistant Treasurer shall perform such other duties as from time
to time may be assigned to him by the Trustees. Each Assistant Treasurer shall
give a bond for the faithful discharge of his duties, if required to do so by
the Trustees, in such sum and with such surety or sureties as the Trustees shall
require.
SECTION 9. POWERS AND DUTIES OF ASSISTANT SECRETARIES. In the absence or
disability of the Secretary, any Assistant Secretary designated by the Trustees
shall perform all of the duties, and may exercise any of the powers, of the
Secretary. Each Assistant Secretary shall perform such other duties as from time
to time may be assigned to him by the Trustees.
SECTION 10. COMPENSATION OF OFFICERS AND TRUSTEES AND MEMBERS OF THE
ADVISORY BOARD. Subject to any applicable law or provision of the Declaration,
the compensation of the officers and Trustees and members of the Advisory Board
shall be fixed from time to time by the Trustees or, in the case of officers, by
any committee of officers upon whom such power may be conferred by the Trustees.
No officer shall be prevented from receiving such compensation as such officer
by reason of the fact that he is also a Trustee.
ARTICLE VII
6
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FISCAL YEAR
The fiscal year of the Trust shall be that annual period as designated
by the Trustees of the Trust.
ARTICLE VIII
SEAL
The Trustees shall adopt a seal which shall be in such form and shall
have such inscription thereon as the Trustees may from time to time prescribe.
ARTICLE IX
WAIVERS OF NOTICE
Whenever any notice is required to be given by law, the Declaration or
these By-Laws, a waiver thereof in writing, signed by the person or persons
entitled to such notice, whether before or after the time stated therein, shall
be deemed equivalent thereto. A notice shall be deemed to have been telegraphed,
cabled or wirelessed for the purposes of these By-Laws when it has been
delivered to a representative of any telegraph, cable or wireless company with
instruction that it be telegraphed, cabled or wirelessed. Any notice shall be
deemed to be given at the time when the same shall be mailed, telegraphed,
cabled or wirelessed.
ARTICLE X
CUSTODIAN
SECTION 1. APPOINTMENT AND DUTIES. The Trustees shall at all times
employ a bank or trust company having a capital, surplus and undivided profits
of at least $5,000,000 as custodian with authority as its agent, but subject to
such restrictions, limitations and other requirements, if any, as may be
contained in the Declaration, these By-Laws and the 1940 Act:
(i) to hold the securities owned by the Trust and deliver the same upon written
order;
(ii) to receive and receipt for any monies due to the Trust and deposit the same
in its own banking department or elsewhere as the Trustees may direct;
(iii)to disburse such funds upon orders or vouchers;
(iv) if authorized by the Trustees, to keep the books and accounts of the Trust
and furnish clerical and accounting services; and
(v) if authorized by the Trustees, to compute the net income of the Trust and
the net asset value of Shares;
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all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
custodian and upon such terms and conditions as may be agreed upon between the
custodian and such sub-custodian and approved by the Trustees, provided that in
every case such sub-custodian shall be a bank or trust company organized under
the laws of the United States or one of the states thereof and having capital,
surplus and undivided profits of at least $5,000,000.
SECTION 2. CENTRAL CERTIFICATE SYSTEM. Subject to such rules,
regulations and orders as the Commission may adopt, the Trustees may direct the
custodian to deposit all or any part of the securities owned by the Trust in a
system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or with such other person
as may be permitted by the Commission, or otherwise in accordance with the 1940
Act, pursuant to which system all securities of any particular class or series
of any issuer deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject to withdrawal only
upon the order of the Trust or its custodian.
SECTION 3. ACCEPTANCE OF RECEIPTS IN LIEU OF Certificates. Subject to
such rules, regulations and orders as the Commission may adopt, the Trustees may
direct the custodian to accept written receipts or other written evidences
indicating purchases of securities held in book-entry form in the Federal
Reserve System in accordance with regulations promulgated by the Board of
Governors of the Federal Reserve System and the local Federal Reserve Banks in
lieu of receipt of certificates representing such securities.
SECTION 4. PROVISIONS OF CUSTODIAN CONTRACT. The following provisions
shall apply to the employment of a custodian pursuant to this Article X and to
any contract entered into with the custodian so employed:
(a) The Trustees shall cause to be delivered to the custodian all securities
owned by the Trust or to which it may become entitled, and shall order the
same to be delivered by the custodian only upon completion of a sale,
exchange, transfer, pledge, or other disposition thereof, and upon receipt
by the custodian of the consideration therefor or a certificate of deposit
or a receipt of an issuer or of its Transfer Agent, all as the Trustees may
generally or from time to time require or approve, or to a successor
custodian; and the Trustees shall cause all funds owned by the Trust or to
which it may become entitled to be paid to the custodian, and shall order
the same disbursed only for investment against delivery of the securities
acquired, or in payment of expenses, including management compensation, and
liabilities of the Trust, including distributions to Shareholders, or to a
successor custodian; provided, however, that nothing herein shall prevent
delivery of securities for examination to the broker purchasing the same in
accord with the "street delivery" custom whereby such securities are
delivered to such broker in exchange for a delivery
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receipt exchanged on the same day for an uncertified check of such broker
to be presented on the same day for certification.
(b) In case of the resignation, removal or inability to serve of any such
custodian, the Trust shall promptly appoint another bank or trust company
meeting the requirements of this Article X as successor custodian. The
agreement with the custodian shall provide that the retiring custodian
shall, upon receipt of notice of such appointment, deliver all Trust
Property in its possession to and only to such successor, and that pending
appointment of a successor custodian, or a vote of the Shareholders to
function without a custodian, the custodian shall not deliver any Trust
Property to the Trust, but may deliver all or any part of the Trust
Property to a bank or trust company doing business in Boston,
Massachusetts, of its own selection, having an aggregate capital, surplus
and undivided profits (as shown in its last published report) of at least
$5,000,000; provided that arrangements are made for the Trust Property to
be held under terms similar to those on which they were held by the
retiring custodian.
ARTICLE XI
AMENDMENTS
These By-Laws, or any of them, may be altered, amended or repealed, or
new By-Laws may be adopted (a) by the Shareholders by a Majority Shareholder
Vote, or (b) by the Trustees, provided, however, that no By-Law may be amended,
adopted or repealed by the Trustees if such amendment, adoption or repeal
requires, pursuant to law, the Declaration or these By-Laws, a vote of the
Shareholders.
DSI198A
9
DOMINI SOCIAL INDEX TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge,
Peter D. Kinder, Steven D. Lydenberg, Cynthia J. Colitti, Thomas M. Lenz,
Molly S. Mugler, James B. Craver, Donald S. Rumery, Barbara M. Cahoon and
Richard S. Enfield, and each of them, with full powers of substitution as her
true and lawful attorneys and agents to execute in her name and on her behalf in
any and all capacities the Registration Statement on Form N-1A, and any and all
amendments thereto, filed by Domini Social Index Trust (the "Trust") with
the Securities and Exchange Commission under the Investment Company Act of 1940
and the Securities Act of 1933 and any and all instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Trust to
comply with such Acts, the rules, regulations and requirements of the Securities
and Exchange Commission, and the securities or Blue Sky laws of any state or
other juristiction, and the undersigned hereby ratifies and confirms as her own
act and deed any and all that such attorneys and agents, or any of them, shall
do or cause to be done by virtue hereof. Any one of such attorneys and agents
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand this 4th
day of December, 1992.
/s/ Emily W. Card
Emily W. Card
<PAGE>
DOMINI SOCIAL INDEX TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge,
Peter D. Kinder, Steven D. Lydenberg, Cynthia J. Colitti, Thomas M. Lenz,
Molly S. Mugler, James B. Craver, Donald S. Rumery, Barbara M. Cahoon and
Richard S. Enfield, and each of them, with full powers of substitution as her
true and lawful attorneys and agents to execute in her name and on her behalf
in any and all capacities the Registration Statement on Form N-1A, and any and
all amendments thereto, filed by Domini Social Index Trust (the "Trust") with
the Securities and Exchange Commission under the Investment Company Act of 1940
and the Securities Act of 1933 and any and all instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Trust to
comply with such Acts, the rules, regulations and requirements of the Securities
and Exchange Commission, and the securities or Blue Sky laws of any state or
other juristiction, and the undersigned hereby ratifies and confirms as her own
act and deed any and all that such attorneys and agents, or any of them, shall
do or cause to be done by virtue hereof. Any one of such attorneys and agents
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand this 17th
day of June, 1991.
/s/ Amy L. Domini
Amy L. Domini
<PAGE>
DOMINI SOCIAL INDEX TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge,
Peter D. Kinder, Steven D. Lydenberg, Cynthia J. Colitti, Thomas M. Lenz,
Molly S. Mugler, James B. Craver, Donald S. Rumery, Barbara M. Cahoon and
Richard S. Enfield, and each of them, with full powers of substitution as his
true and lawful attorneys and agents to execute in his name and on his behalf
in any and all capacities the Registration Statement on Form N-1A, and any and
all amendments thereto, filed by Domini Social Index Trust (the "Trust") with
the Securities and Exchange Commission under the Investment Company Act of 1940
and the Securities Act of 1933 and any and all instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Trust to
comply with such Acts, the rules, regulations and requirements of the Securities
and Exchange Commission, and the securities or Blue Sky laws of any state or
other juristiction, and the undersigned hereby ratifies and confirms as his own
act and deed any and all that such attorneys and agents, or any of them, shall
do or cause to be done by virtue hereof. Any one of such attorneys and agents
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 17th
day of June, 1991.
/s/ William C. Osborn
William C. Osborn
<PAGE>
DOMINI SOCIAL INDEX TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge,
Peter D. Kinder, Steven D. Lydenberg, Cynthia J. Colitti, Thomas M. Lenz,
Molly S. Mugler, James B. Craver, Donald S. Rumery, Barbara M. Cahoon and
Richard S. Enfield, and each of them, with full powers of substitution as her
true and lawful attorneys and agents to execute in her name and on her behalf
in any and all capacities the Registration Statement on Form N-1A, and any and
all amendments thereto, filed by Domini Social Index Trust (the "Trust") with
the Securities and Exchange Commission under the Investment Company Act of 1940
and the Securities Act of 1933 and any and all instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Trust to
comply with such Acts, the rules, regulations and requirements of the Securities
and Exchange Commission, and the securities or Blue Sky laws of any state or
other juristiction, and the undersigned hereby ratifies and confirms as her own
act and deed any and all that such attorneys and agents, or any of them, shall
do or cause to be done by virtue hereof. Any one of such attorneys and agents
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand this 17th
day of June, 1991.
/s/ Karen Paul
Karen Paul
<PAGE>
DOMINI SOCIAL EQUITY FUND
The undersigned hereby constitutes and appoints Philip W. Coolidge,
John R. Elder, Linda T. Gibson, Molly S. Mugler, Roger P. Joseph, Mari A. Wilson
and each of them, with full powers of substitution as his true and lawful
attorneys and agents to execute in his name and on his behalf in any and all
capacities the Registration Statement on Form N-1A, and any and all amendments
thereto, filed by Domini Social Equity Fund on behalf of the Domini Social
Equity Fund (the "Trust") with the Securities and Exchange Commission under the
Investment Company Act of 1940 and any and all instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Trust to
comply with such Act, the rules, regulations and requirements of the Securities
and Exchange Commission, and the securities or Blue Sky laws of any state or
other juristiction, and the undersigned hereby ratifies and confirms as his own
act and deed any and all that such attorneys and agents, or any of them, shall
do or cause to be done by virtue hereof. Any one of such attorneys and agents
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
_____ day of ______, 1997.
/s/ Timothy Smith
Timothy Smith
<PAGE>
DOMINI SOCIAL EQUITY FUND
The undersigned hereby constitutes and appoints Philip W. Coolidge,
John R. Elder, Linda T. Gibson, Molly S. Mugler, Roger P. Joseph, Mari A. Wilson
and each of them, with full powers of substitution as his true and lawful
attorneys and agents to execute in his name and on his behalf in any and all
capacities the Registration Statement on Form N-1A, and any and all amendments
thereto, filed by Domini Social Equity Fund on behalf of the Domini Social
Equity Fund (the "Trust") with the Securities and Exchange Commission under the
Investment Company Act of 1940 and any and all instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Trust to
comply with such Act, the rules, regulations and requirements of the Securities
and Exchange Commission, and the securities or Blue Sky laws of any state or
other juristiction, and the undersigned hereby ratifies and confirms as his own
act and deed any and all that such attorneys and agents, or any of them, shall
do or cause to be done by virtue hereof. Any one of such attorneys and agents
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
_____ day of _______, 1997.
/s/ Frederick C. Williamson
Frederick C. Williamson
<PAGE>
DOMINI SOCIAL INDEX PORTFOLIO
The undersigned hereby constitutes and appoints Philip W. Coolidge,
Peter D. Kinder, Steven D. Lydenberg, Cynthia J. Colitti, Thomas M. Lenz,
Molly S. Mugler, James B. Craver, Donald S. Rumery, Barbara M. Cahoon and
Richard S. Enfield, and each of them, with full powers of substitution as her
true and lawful attorneys and agents to execute in her name and on her behalf
in any and all capacities the Registration Statement on Form N-1A, and any and
all amendments thereto, filed by Domini Social Index Trust (the "Trust") with
the Securities and Exchange Commission under the Investment Company Act of 1940
and the Securities Act of 1933 and any and all instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Trust to
comply with such Acts, the rules, regulations and requirements of the Securities
and Exchange Commission, and the securities or Blue Sky laws of any state or
other juristiction, and the undersigned hereby ratifies and confirms as her own
act and deed any and all that such attorneys and agents, or any of them, shall
do or cause to be done by virtue hereof. Any one of such attorneys and agents
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand this 17th
day of June, 1991.
/s/ Amy L. Domini
Amy L. Domini
<PAGE>
DOMINI SOCIAL INDEX PORTFOLIO
The undersigned hereby constitutes and appoints Philip W. Coolidge,
Peter D. Kinder, Steven D. Lydenberg, Cynthia J. Colitti, Thomas M. Lenz,
Molly S. Mugler, James B. Craver, Donald S. Rumery, Barbara M. Cahoon and
Richard S. Enfield, and each of them, with full powers of substitution as his
true and lawful attorneys and agents to execute in his name and on his behalf
in any and all capacities the Registration Statement on Form N-1A, and any and
all amendments thereto, filed by Domini Social Index Trust (the "Trust") with
the Securities and Exchange Commission under the Investment Company Act of 1940
and the Securities Act of 1933 and any and all instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Trust to
comply with such Acts, the rules, regulations and requirements of the Securities
and Exchange Commission, and the securities or Blue Sky laws of any state or
other juristiction, and the undersigned hereby ratifies and confirms as his own
act and deed any and all that such attorneys and agents, or any of them, shall
do or cause to be done by virtue hereof. Any one of such attorneys and agents
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 17th
day of June, 1991.
/s/ Allen M. Mayes
Allem M. Mayes
<PAGE>
DOMINI SOCIAL INDEX PORTFOLIO
The undersigned hereby constitutes and appoints Philip W. Coolidge,
John R. Elder, Linda T. Gibson, Molly S. Mugler, Roger P. Joseph, Mari A. Wilson
and each of them, with full powers of substitution as his true and lawful
attorneys and agents to execute in his name and on his behalf in any and all
capacities the Registration Statement on Form N-1A, and any and all amendments
thereto, filed by Domini Social Index Portfolio Portfolio (the "Portfolio") with
the Securities and Exchange Commission under the Investment Company Act of 1940
and any and all instruments which such attorneys and agents, or any of them,
deem necessary or advisable to enable the Portfolio to comply with such Act, the
rules, regulations and requirements of the Securities and Exchange Commission,
and the securities or Blue Sky laws of any state or other juristiction, and the
undersigned hereby ratifies and confirms as his own act and deed any and all
that such attorneys and agents, or any of them, shall do or cause to be done by
virtue hereof. Any one of such attorneys and agents have, and may exercise, all
of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
______ day of _______, 1997.
/s/ William Osborn
William Osborn
<PAGE>
DOMINI SOCIAL INDEX PORTFOLIO
The undersigned hereby constitutes and appoints Philip W. Coolidge,
Peter D. Kinder, Steven D. Lydenberg, Cynthia J. Colitti, Thomas M. Lenz,
Molly S. Mugler, James B. Craver, Donald S. Rumery, Barbara M. Cahoon and
Richard S. Enfield, and each of them, with full powers of substitution as his
true and lawful attorneys and agents to execute in his name and on his behalf
in any and all capacities the Registration Statement on Form N-1A, and any and
all amendments thereto, filed by Domini Social Index Trust (the "Trust") with
the Securities and Exchange Commission under the Investment Company Act of 1940
and the Securities Act of 1933 and any and all instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Trust to
comply with such Acts, the rules, regulations and requirements of the Securities
and Exchange Commission, and the securities or Blue Sky laws of any state or
other juristiction, and the undersigned hereby ratifies and confirms as his own
act and deed any and all that such attorneys and agents, or any of them, shall
do or cause to be done by virtue hereof. Any one of such attorneys and agents
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 17th
day of June, 1991.
/s/ Timothy Smith
Timothy Smith
<PAGE>
DOMINI SOCIAL INDEX PORTFOLIO
The undersigned hereby constitutes and appoints Philip W. Coolidge,
Peter D. Kinder, Steven D. Lydenberg, Cynthia J. Colitti, Thomas M. Lenz,
Molly S. Mugler, James B. Craver, Donald S. Rumery, Barbara M. Cahoon and
Richard S. Enfield, and each of them, with full powers of substitution as his
true and lawful attorneys and agents to execute in his name and on his behalf
in any and all capacities the Registration Statement on Form N-1A, and any and
all amendments thereto, filed by Domini Social Index Trust (the "Trust") with
the Securities and Exchange Commission under the Investment Company Act of 1940
and the Securities Act of 1933 and any and all instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Trust to
comply with such Acts, the rules, regulations and requirements of the Securities
and Exchange Commission, and the securities or Blue Sky laws of any state or
other juristiction, and the undersigned hereby ratifies and confirms as his own
act and deed any and all that such attorneys and agents, or any of them, shall
do or cause to be done by virtue hereof. Any one of such attorneys and agents
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 17th
day of June, 1991.
/s/ Frederick C. Williamson, Sr.
Frederick C. Williamson, Sr.
<PAGE>
DOMINI SOCIAL INDEX PORTFOLIO
The undersigned hereby constitutes and appoints Peter D. Kinder, Steven D.
Lyndenberg, Thomas M. Lenz, Molly S. Mugler, Linda T. Gibson, Andres E. Saldana,
Brian J. Hall, David G. Danielson and Daniel E. Shea, and each of them, with
full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Domini
Social Euqity Fund, Domini Institutional Trust, DEVCAP Trust, and Green Century
Funds (each a "Trust"), or the Registration Statement(s), and any and all
amendments thereto, filed by any other investor in any registered investment
company in which any of the Trusts invest, with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended, and/or the
Securities Act of 1933, as amended, and any and all instruments which such
attorneys and agents, or any of them, deem necessary or advisable to enable each
Trust to comply with such Acts, the rules, regulations and requirements of the
Securities and Exchange Commission, and the securities or Blue Sky laws of any
state or other jurisdiction, and the undersigned hereby ratifies and confirms as
his own act and deed any and all acts that such attorneys and agents, or any of
them, shall do or cause to be done by virtue hereof. Any one of such attorneys
and agents have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th
day of April, 1996.
/s/ John R. Elder
John R. Elder
DSI166B
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
semiannual report to shareholders dated January 1, 1997 of Domini Social Equity
Fund and is qualified in its entirety by reference to such report
</LEGEND>
<CIK> 0000851680
<NAME> Domini Social Equity Fund
<SERIES>
<NAME> Domini Social Equity Fund
<NUMBER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-START> AUG-01-1996
<PERIOD-END> JAN-31-1997
<INVESTMENTS-AT-COST> 85,711,494
<INVESTMENTS-AT-VALUE> 125,703,700
<RECEIVABLES> 47,044
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 125,750,744
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 80,394
<TOTAL-LIABILITIES> 80,394
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 85,494,238
<SHARES-COMMON-STOCK> 6,047,797
<SHARES-COMMON-PRIOR> 4,844,260
<ACCUMULATED-NII-CURRENT> 70,562
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 113,344
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 39,992,206
<NET-ASSETS> 125,670,350
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 694,521
<EXPENSES-NET> 331,572
<NET-INVESTMENT-INCOME> 362,949
<REALIZED-GAINS-CURRENT> 200,891
<APPREC-INCREASE-CURRENT> 22,578,335
<NET-CHANGE-FROM-OPS> 23,142,175
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 366,662
<DISTRIBUTIONS-OF-GAINS> 665,632
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,558,900
<NUMBER-OF-SHARES-REDEEMED> 399,510
<SHARES-REINVESTED> 44,147
<NET-CHANGE-IN-ASSETS> 44,755,129
<ACCUMULATED-NII-PRIOR> 74,275
<ACCUMULATED-GAINS-PRIOR> 578,085
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 719,364
<AVERAGE-NET-ASSETS> 105,801,222
<PER-SHARE-NAV-BEGIN> 14.85
<PER-SHARE-NII> 0.163
<PER-SHARE-GAIN-APPREC> 1.927
<PER-SHARE-DIVIDEND> 0.158
<PER-SHARE-DISTRIBUTIONS> 0.082
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.70
<EXPENSE-RATIO> 0.98
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
