SCHEDULE 14A(RULE 14A-101)INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO
SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
QUAKER INVESTMENT TRUST
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
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/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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IMPORTANT NEWS FOR QUAKER CORE EQUITY FUND AND
QUAKER SMALL-CAP VALUE FUND SHAREHOLDERS
WHILE WE ENCOURAGE YOU TO READ THE FULL TEXT OF THE ENCLOSED PROXY STATEMENT,
HERE'S A BRIEF OVERVIEW OF MAJOR MATTERS TO BE VOTED UPON.
Q & A ABOUT THE ENCLOSED PROXY MATERIALS
Q. WHAT IS HAPPENING?
A. West Chester Capital Advisers, Inc., the Investment Adviser to the Quaker
Core Equity Fund ("Equity Fund") is resigning, effective October 19, 1998.
As a result, the Board of Trustees of the Fund has undertaken a nationwide
search for a new investment manager and has chosen Geewax, Terker & Co.
("GTC") of Phoenixville, Pennsylvania, to be the new adviser. Equity Fund
shareholders are being asked to vote to approve the board's choice. The
board has also negotiated a new fee structure arrangement with Aronson +
Partners ("Aronson"), the investment adviser to the Quaker Small-Cap Value
Fund ("Value Fund"), which may result in an increase in management fees to
the Value Fund's shareholders. Accordingly, Value Fund shareholders are
being asked to approve the new fee structure. A vote is also being sought
from the Equity Fund's shareholders on a revised Rule 12b-1 Plan*.
Q. WHY AM I BEING ASKED TO VOTE ON THE PROPOSED NEW INVESTMENT MANAGEMENT
AGREEMENTS?
A. The Investment Company Act of 1940 (the "Act") requires a vote of the
shareholders of a fund whenever there is a change in control of an
investment manager, or a material change to an existing investment
management agreement. The Equity Fund's management change and the Value
Fund's alteration of its management agreement both require fund shareholder
approval under the Act.
Q. WHY AM I BEING ASKED TO VOTE ON A PROPOSED NEW 12B-1 DISTRIBUTION PLAN?
A. The Investment Company Act of 1940 requires a vote of a fund's shareholders
whenever there is a material amendment to, or an assignment of, a 12b-1
Plan. The 12b-1 Plan for the Equity Fund currently is between the Fund and
West Chester Capital Advisers, Inc. After full consideration, the Board has
decided to continue the 12b-1 Plans with the new adviser, which requires a
new plan and shareholder approval.
Q. HOW WILL THESE CHANGES AFFECT ME AS A FUND SHAREHOLDER?
A. Your funds will not change. You will still own the same shares in the same
fund. For shareholders of the Equity Fund, your board has made every effort
to choose a successor adviser who can provide excellent service and
above-average returns to your fund. For shareholders of the Value Fund, the
board negotiated the new fee structure with Aronson in order to retain an
investment adviser who has enjoyed extraordinary success over the last few
years; the terms of the new investment management agreement are performance
based, meaning that Aronson will receive increased fees only if his
performance is above-average. Accordingly, although the fees themselves may
actually go up under the new agreement, because of the performance
requirements imposed on Aronson, the new agreement, in the board's opinion,
is more advantageous to you than the current agreement. If the new
investment management agreements and Rule 12b-1 plan are approved, your
fund shares will not change, the advisory fees charged to the Value Fund
may increase or decrease, the advisory fees payable for the Equity Fund
will not change, and the fee rate payable under the Equity Fund's 12b-1
plan will stay the same. GTC and Aronson have both committed to provide all
resources necessary to provide your funds with top quality investment
management and shareholder services.
Q. WILL THE INVESTMENT ADVISORY AND RULE 12B-1 FEES BE THE SAME?
A. The investment advisory fees paid by the Equity Fund will stay the same.
The advisory fees paid by the Value Fund may go up or down, depending on
the future performance of the Adviser. The 12b-1 fees paid by the Equity
Fund will stay the same.
Q. HOW DO THE BOARD MEMBERS OF MY FUND SUGGEST THAT I VOTE?
A. After careful consideration, the board members of your fund, including the
independent members, recommend that you vote "For" all the items on the
enclosed ballot.
Q. WHO IS PAYING THE COST OF THE SHAREHOLDER MEETING AND THIS PROXY
SOLICITATION?
A. GTC and Aronson. -- not your fund -- is paying all costs of the fund's
shareholder meeting and proxy solicitation.
Q. WHOM DO I CALL FOR MORE INFORMATION?
A. Please call Shareholder Services at 1-800-220-8888
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* Rule 12b-1 of the Investment Company Act of 1940 sets forth the terms under
which an investment company (mutual fund) may use fund assets to pay for
the distribution of fund shares. Declaration Distributors, Inc., the
principal underwriter and distributor for each fund, distributes each
fund's shares according to a Rule 12b-1 plan.
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ABOUT THE BALLOT
Shown below is the ballot that you will use to vote on the matters described
above and hereafter in these proxy materials.
1. For Shareholders of the Quaker Core Equity Fund Only. Approve a new
investment management agreement with Geewax, Terker & Co. on the same terms
as the current agreement between the Equity Fund and West Chester Capital
Advisers, Inc.
For Against Abstain
/ / / / / /
2. For Shareholders of the Quaker Small-Cap Value Fund Only. Approve a new
investment management agreement with Aronson + Partners on different terms
than the current agreement, which may result in an increase in fees to the
fund.
For Against Abstain
/ / / / / /
3. For Quaker Core Equity Fund Shareholders Only. Approve a new Rule 12b-1
distribution plan on the same terms as the current plan.
For Against Abstain
/ / / / / /
Signature(s) (All registered owners of accounts shown to the left must sign. If
signing for a corporation, estate or trust, please indicate your capacity or
title.)
X
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Signature Date
X
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Signature Date
PLEASE VOTE TODAY!
Please vote all issues shown on your ballot.
Please vote on each issue using blue or black ink to mark an X in one of the
three boxes provided on each ballot. On all Items, mark -- For, Against or
Abstain. Then sign, date and return your ballot in the accompanying postage-paid
envelope. All registered owners of an account, as shown in the address on the
ballot, must sign the ballot. If you are signing for a corporation, trust or
estate, please indicate your title or position.
THANK YOU FOR MAILING YOUR BALLOT PROMPTLY!
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Quaker Investment Trust
1288 Valley Forge Road, SUITE 76
Valley Forge, Pennsylvania 19482
TELEPHONE 1-800-220-8888
September 28, 1998
Dear Shareholder:
As you read in the Questions and Answers (Q & A) on page 1, the adviser to
the Equity Fund has resigned and must be replaced, and the board has negotiated
a new fee structure with the adviser to the Value Fund.
We're sending this proxy statement to you because your vote is important to
the changes taking place in your funds. Because of the change of advisers in the
Equity Fund, and the alteration of the investment management contract in the
Value Fund, it is necessary for you to approve new investment management
agreements and, for shareholders of the Equity Fund, a new Rule 12b-1 Plan.
As you review these materials, please keep in mind that if the new
investment management agreements and Rule 12b-1 Plan are approved, YOUR FUND
SHARES WILL NOT CHANGE, THE ADVISORY FEES CHARGED TO THE EQUITY FUND WILL STAY
THE SAME, THE FEES PAYABLE UNDER THE NEW AGREEMENT WITH THE VALUE FUND WILL ONLY
INCREASE IF THE FUND'S PERFORMANCE INCREASES, AND THE FEE RATE PAYABLE UNDER THE
EQUITY FUND'S RULE 12B-1 PLAN WILL STAY THE SAME. If you approve the new
investment management agreements and Rule 12b-1 Plan, you should continue to
receive the high quality investment management and shareholder services that you
have come to expect.
Your BOARD OF TRUSTEES has approved the proposals and recommends them for
your approval. I encourage you to vote in favor of the proposals. PLEASE VOTE
NOW TO HELP SAVE THE COST OF ADDITIONAL SOLICITATIONS.
As always, we thank you for your confidence and support.
Sincerely,
/s/ Peter F. Waitneight
CHAIRMAN
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QUAKER INVESTMENT TRUST
1288 Valley Forge Road, Suite 76
Valley Forge, PA 19482
TELEPHONE 1-800-220-8888
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS
OCTOBER 19, 1998 AND PROXY STATEMENT
October 2, 1998
To the Shareholders:
You are invited to attend a joint special meeting of shareholders of the
following series OF THE QUAKER INVESTMENT TRUST (the "Trust"):
THE QUAKER CORE EQUITY FUND (THE "EQUITY FUND")
THE QUAKER SMALL-CAP VALUE FUND (THE "VALUE FUND")
The meeting will be held at 1288 Valley Forge Road, Suite 76, Valley Forge, PA
19482 on Monday, October 19, 1998 at 10:00 a.m., Eastern time, for the following
purposes and to transact such other business as may properly come before the
meeting or any adjournment of the meeting:
1. For shareholders of the Equity Fund Only. To approve a new investment
management agreement with Geewax, Terker & Co. on the same terms as
the current agreement with the former adviser.
2. For shareholders of the Value Fund Only. To approve a new investment
management agreement with Aronson + Partners which may result in an
increase in fees to the fund.
3. For shareholders of the Equity Fund Only. To approve a new Rule 12b-1
distribution plan with Geewax, Terker & Co. ("GTC") on the same terms
as the current plan.
The Board of Trustees of your funds has selected the close of business on
September 28, 1998 as the record date for the determination of shareholders of
the funds entitled to notice of and to vote at the meeting. Shareholders are
entitled to one vote for each share held.
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PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD. SIGN, DATE
AND RETURN IT IN THE ENVELOPE PROVIDED. TO SAVE THE COST OF ADDITIONAL
SOLICITATIONS, PLEASE MAIL YOUR PROXY PROMPTLY.
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The accompanying proxy is solicited by the Board of Trustees (the "Board") of
the Quaker Investment Trust for voting at the joint special meeting of
shareholders be held on Monday, October 19, 1998, and at any and all
adjournments thereof (the "Meeting"). This proxy statement was first mailed to
shareholders on or about October 2, 1998.
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THE SERIES FUNDS. Quaker Investment Trust("Quaker" or the "Trust") is a "series
company" that issues various series of shares. (Each series also is sometimes
described herein as a "Fund.") Each series has its own investment objective and
policies and operates independently for purposes of investments, dividends and
redemptions.
The series of Quaker INCLUDE:
THE QUAKER CORE EQUITY FUND (THE "EQUITY FUND")
THE QUAKER SMALL-CAP VALUE FUND (THE "VALUE FUND")
THE QUAKER ENHANCED STOCK MARKET FUND
THE QUAKER MID-CAP VALUE FUND
THE QUAKER AGGRESSIVE GROWTH FUND
THE QUAKER FIXED INCOME FUND
EACH FUND PRESENTLY OFFERS A SINGLE CLASS OF SHARES, THE NO-LOAD CLASS. SHARES
OF EACH FUND REPRESENT A PROPORTIONATE INTEREST IN THAT FUND.
The shareholders of the Value Fund are being asked to vote on one item, approval
of a new investment management agreement with the present adviser. Shareholders
of the Equity Fund are being asked to vote on two items, approval of a new
investment management agreement with a new adviser and approval of a new 12b-1
Plan of Distribution. Shareholders of each Fund will vote for the items relating
to their Fund only. The Board of Trustees of your Funds recommends an
affirmative vote on all items. The vote required to approve each item is
described under the section of this proxy statement entitled "Miscellaneous."
The following table indicates which shareholders are solicited with respect to
each Item:
ITEM EQUITY FUND VALUE FUND
- ---- ----------- ----------
1. Approval of New Investment
Management Agreement with GTC. X
2. Approval of New Investment
Management Agreement with Aronson X
3. Approval of New Rule 12b-1
Plan for Equity Fund Shareholders. X
The Board of Trustees has fixed the close of business on September 28, 1998 as
the record date for the determination of shareholders of the funds entitled to
notice of and to vote at the Meeting. As of September 28, 1998, each Fund had
Shares issued and outstanding as follows:
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FUND NO-LOAD
- ---- -------
Equity Fund 344,470.988
Value Fund 855,240.461
ITEM 1. NEW INVESTMENT MANAGEMENT AGREEMENT WITH GEEWAX, TERKER & CO. FOR THE
EQUITY FUND.
INTRODUCTION
West Chester Capital Advisers, Inc ("Chester"), the current investment adviser
to the Equity Fund, has resigned as investment adviser, effective October 19,
1998. As a result, the Board of the Equity Fund has undertaken a nationwide
search to find a new investment adviser, and after full consideration, has
chosen Geewax, Terker & Co. ("GTC") to be the new investment adviser for the
Fund (the "Changeover").
The replacement of Chester by GTC will constitute an "assignment," as that term
is defined in the Investment Company Act of 1940 (the "1940 Act"), of the Fund's
current investment management agreement. As required by the 1940 Act, each
current investment management agreement provides for its automatic termination
in the event of its assignment. In anticipation of the resignation of Chester, a
new investment management agreement between Quaker and GTC ("management
agreement") is being proposed for approval by shareholders of the Equity Fund. A
copy of the form of the new management agreement is attached hereto as Exhibit
A. THE NEW MANAGEMENT AGREEMENT FOR THE FUND IS ON SUBSTANTIALLY THE SAME TERMS
AS THE CURRENT MANAGEMENT AGREEMENT.
BOARD OF TRUSTEES RECOMMENDATION
The Board met on September 16, 1998 to consider the Changeover and the
qualifications of GTC. The Board of Quaker, including a majority of the Trustees
who are not parties to such agreement or interested persons of any such party,
voted to approve the new management agreement and to recommend it to
shareholders for their approval.
For information about the Board's deliberations and the reasons for its
recommendation, please see "Board of Trustees Evaluation" near the end of this
Item 1.
The Board recommends that shareholders vote FOR approval of the new management
agreement.
INVESTMENT MANAGEMENT AGREEMENT
The current and new management agreements both provide that the Fund's
investment manager will act as investment adviser, manage it's investments,
administer its business affairs, furnish offices, necessary facilities and
equipment, provide clerical, bookkeeping and administrative services, provide
shareholder and information services and permit any of its officers or employees
to serve without compensation as Trustees or officers of Quaker if duly elected
to such positions.
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Under the current and new management agreements, Quaker agrees to assume and pay
the charges and expenses of its operations including, by way of example and not
by way of limitation, the compensation of the Trustees other than those
affiliated with the investment manager, charges and expenses of independent
auditors, of legal counsel, of any transfer or dividend disbursing agent, of any
registrar of Quaker and of the custodian (including fees for safekeeping of
securities), costs of calculating net asset value, all costs of acquiring and
disposing of portfolio securities, interest, if any, on obligations incurred by
Quaker, costs of share certificates, membership dues in the Investment Company
Institute or any similar organization, reports and notices to shareholders,
other like miscellaneous expenses and all taxes and fees to federal, state or
other governmental agencies.
Listed below is a comparison of the annual management fee rates as a percentage
of average daily net assets payable under the current management agreement and
the new management agreement for QUAKER.
CURRENT AGREEMENT NEW AGREEMENT
----------------- -------------
0.75% 0.75%
Each management agreement provides that Quaker 's investment manager shall not
be liable for any error of judgment or of law, or for any loss suffered by
Quaker in connection with the matters to which the management agreement relates,
except a loss resulting from willful misfeasance, bad faith or gross negligence
on the part of Quaker 's investment manager in the performance of its
obligations and duties or by reason of its reckless disregard of its obligations
and duties under the management agreement.
Each management agreement may be terminated by Quaker or series thereof without
penalty upon sixty (60) days written notice by Quaker or GTC, or by a majority
vote of the outstanding shares of the Equity Fund, and automatically terminates
in the event of its assignment.
The new management agreement for the Equity fund will be dated as of October 19,
1998. The new management agreement will continue in effect for an initial term
of two years, and may continue thereafter from year to year if specifically
approved at least annually by vote of "a majority of the outstanding voting
securities" of the Equity Fund, as defined under the 1940 Act, or by the Board
and, in either event, the vote of a majority of the Trustees who are not parties
to the agreement or interested persons of any such party, cast in person at a
meeting called for such purpose.
At the Board meeting on September 16, 1998, the Board voted to recommend the new
agreement to shareholders for their approval.
BOARD OF TRUSTEES EVALUATION
At a regular meeting of the Board on August 19, 1998, by mutual consent of both
parties, West Chester Capital Advisers, Inc. tendered its resignation, effective
October 19, 1998. The Board discussed its options with respect to replacing the
adviser, voted to undertake a search for a new
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adviser, and directed management of the Fund to begin such a search. Subsequent
to the Board Meeting, management of the Fund evaluated several replacement
advisers, and recommended Geewax, Terker & Co. ("GTC") to be the new adviser to
the Fund. In addition, counsel to the Fund and the independent Trustees prepared
and distributed an analysis of the Board's fiduciary obligations. At a special
meeting on September 16, 1998, the Trustees discussed the recommendation of fund
management and reviewed their fiduciary obligations. There was extended
discussion of, and questioning about, GTC's qualifications as an investment
advisor and its plans for the Equity Fund. As a result of their investigation
and consideration of GTC and the new management agreement, at its meeting on
September 16, 1998, the Board voted to approve the new management agreement and
to recommend it to the shareholders of the Equity Fund for their approval.
During its deliberations, the Board used outside assistance in its analysis of
GTC's financial status and other aspects of the Changeover to help evaluate the
potential effects upon the Equity Fund and Quaker. Throughout the review process
the independent Trustees had the assistance of legal counsel.
The Board obtained from GTC information regarding GTC and the future plans of
GTC with respect to the Equity Fund. Included in the information furnished to
and discussed with the Board were financial statements and other representations
of the financial condition of GTC In connection with their deliberations, the
Board obtained certain assurances from GTC, including the following:
- - - The Changeover will not result in any change in the Equity Fund's investment
objectives or policies.
- - - The Changeover is not expected to result in any adverse change in the
investment management or operations of the Equity Fund or of Quaker.
In connection with the Board's approval of the new management agreement, the
Board considered that the terms of the Changeover do not require any change in
the Fund's investment objective or policies, or the investment management or
operation of Quaker. If, after the Changeover, changes are proposed that might
materially affect GTC's services to the Equity Fund, the Board will consider the
effect of those changes and take such action as it deems advisable under the
circumstances.
In evaluating the new management agreement, the Board took into account that the
new management agreement for the Equity Fund, including the terms relating to
the services to be provided and the fees and expenses payable by Quaker, is on
the same terms as the current management agreement. The Board considered a
number of factors in its evaluation of the proposed new agreement, including the
nature and quality of services provided by GTC; investment performance, both of
GTC itself and relative to that of competitive investment advisers; investment
management fees and expense ratios of Quaker and competitive investment
companies; Expected GTC profitability from managing the Equity Fund; fall-out
benefits to GTC from its relationship to Quaker, including revenues derived from
services provided to Quaker by affiliates of GTC; and the
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potential benefits to GTC and to Quaker and their shareholders of receiving
research services from broker/dealer firms in connection with the allocation of
portfolio transactions to such firms. The Board discussed the Changeover and the
financial condition of GTC with the senior management of GTC and among
themselves.
In evaluating the new management agreement, the Board gave great, though not
controlling, weight to the fact that the new management agreement would not
result in any material change to the management of the Fund or the provision of
services to the Fund by the Adviser. The nature and quality of services provided
by GTC; investment performance, both of Quaker itself and relative to that of
competitive investment companies; investment management fees and expense ratios
of Quaker and competitive investment companies; GTC profitability from managing
the Fund; fall-out benefits to GTC from its relationship to Quaker, including
revenues derived from services provided to Quaker by affiliates of GTC; and the
potential benefits to GTC and to Quaker and their shareholders of receiving
research services from broker/dealer firms in connection with the allocation of
portfolio transactions to such firms, were all equally important factors leading
the Board to conclude that the new management agreement would be of benefit to
the Fund. Of equal importance to the Board was the fact that approval of the new
management agreement would result in NO INCREASE in the ongoing expenses of the
Fund. Lastly, the Board gave careful consideration to the financial condition of
GTC, its ongoing financial viability, and its assurances to the Board that it
would continue to provide services to the Fund at the same level and in the same
manner as in the past.
As a result of their investigation and consideration of the Changeover and the
new management agreement, at its meeting on September 16, 1998, the Board voted
to approve the new management agreement and to recommend it to the shareholders
of the Equity Fund for their approval.
The Board of Quaker recommends that shareholders of the Equity fund vote FOR
approval of the new management agreement.
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ITEM 2. NEW INVESTMENT MANAGEMENT AGREEMENT WITH ARONSON + PARTNERS FOR THE
VALUE FUND.
INTRODUCTION
At a regular meeting of the Board of Trustees on August 19, 1998, Aronson +
Partners ("Aronson"), the current investment adviser to the Value Fund,
requested that the Board consider amending the investment management agreement
between Aronson and the Value Fund to institute a new fee structure. After
careful consideration, the board proposed to Aronson a new fee structure which
was performance-based, and which would, if Value Fund performance was
exceptional, result in an increase in investment advisory fees to the Fund.
The amendment of the current investment management agreement will constitute a
material alteration of the agreement, and under the Investment Company Act of
1940 (the "1940 Act"), such a material change must be approved by the
shareholders of the affected fund. Accordingly, a new investment management
agreement between Quaker and Aronson ("management agreement") is
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being proposed for approval by shareholders of the Value Fund. A copy of the
form of the new management agreement is attached hereto as Exhibit B. THE NEW
MANAGEMENT AGREEMENT FOR THE FUND IS ON THE SAME TERMS AS THE CURRENT MANAGEMENT
AGREEMENT, EXCEPT THAT THE FEE STRUCTURE HAS BEEN CHANGED WHICH WILL RESULT IN
AN INCREASE IN INVESTMENT ADVISORY FEES, BUT ONLY IF THE PERFORMANCE OF THE FUND
INCREASES.
BOARD OF TRUSTEES RECOMMENDATION
The Board met on September 16, 1998 to consider the revised management
agreement. The Board of Quaker, including a majority of the Trustees who are not
parties to such agreement or interested persons of any such party, voted to
approve the new management agreement and to recommend it to shareholders for
their approval.
For information about the Board's deliberations and the reasons for its
recommendation, please see "Board of Trustees Evaluation" near the end of this
Item 2.
The Board recommends that shareholders vote FOR approval of the new management
agreement.
INVESTMENT MANAGEMENT AGREEMENT
The current and new management agreements both provide that the Fund's
investment manager will act as investment adviser, manage it's investments,
administer its business affairs, furnish offices, necessary facilities and
equipment, provide clerical, bookkeeping and administrative services, provide
shareholder and information services and permit any of its officers or employees
to serve without compensation as Trustees or officers of Quaker if duly elected
to such positions. Under the current and new management agreements, Quaker
agrees to assume and pay the charges and expenses of its operations including,
by way of example and not by way of limitation, the compensation of the Trustees
other than those affiliated with the investment manager, charges and expenses of
independent auditors, of legal counsel, of any transfer or dividend disbursing
agent, of any registrar of Quaker and of the custodian (including fees for
safekeeping of securities), costs of calculating net asset value, all costs of
acquiring and disposing of portfolio securities, interest, if any, on
obligations incurred by Quaker, costs of share certificates, membership dues in
the Investment Company Institute or any similar organization, reports and
notices to shareholders, other like miscellaneous expenses and all taxes and
fees to federal, state or other governmental agencies.
Listed below is a comparison of the annual management fee rates as a percentage
of average daily net assets payable under the current management agreement and
the new management agreement for the Value Fund.
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CURRENT AGREEMENT NEW AGREEMENT
----------------- -------------
Present to September 30, 1998 0.75% 0.75%
October 1, 1998- October 1, 1999 0.75% 0.90%
Thereafter 0.75% Performance Based
As Follows:
From October 1, 1999 forward, a performance fee concept will be implemented.
This will provide for an investment advisory fee (Base Fee) at an annual rate of
0.90% of the daily net assets of the Fund to be computed and paid quarterly when
the cumulative investment results for the Fund over the prior twelve (12) months
exceed the return for the Russell 2000 Index for the same period by 3.0%. THIS
comparison will be repeated each quarter, using the data from the immediate
prior twelve (12) months. Adjustment factors will be applied to the investment
advisory fee according to the following formula.:
Cumulative 12 months Performance Fee
Return versus the Index Adjustment
Less than + 1.0% 0.3333 X Base Fee
Between +1.0 and +1.5% 0.4664 X Base Fee
Between +1.5 and +2.0% 0.5998 X Base Fee
Between +2.0 and +2.5% 0.7332 X Base Fee
Between +2.5 and + 3.0% 0.8666 X Base Fee
At +3.0% 1.0000 X Base Fee
Between +3.0 and + 3.5% 1.1334 X Base Fee
Between +3.5 and + 4.0% 1.2668 X Base Fee
Between +4.0 and + 4.5% 1.4002 X Base Fee
Between +4.5 and + 5.0% 1.5336 X Base Fee
More than +5.0% 1.6667 X Base Fee
Each management agreement provides that Quaker's investment manager shall not be
liable for any error of judgment or of law, or for any loss suffered by Quaker
in connection with the matters to which the management agreement relates, except
a loss resulting from willful misfeasance, bad faith or gross negligence on the
part of Quaker 's investment manager in the performance of its obligations and
duties or by reason of its reckless disregard of its obligations and duties
under the management agreement.
Each management agreement may be terminated by Quaker or series thereof without
penalty upon sixty (60) days written notice by Quaker or Aronson, or by a
majority vote of the outstanding shares of the Value Fund, and automatically
terminates in the event of its assignment.
The new management agreement for the Value Fund will be dated as of October 19,
1998. The new management agreement will continue in effect for an initial term
of two years, and may continue thereafter from year to year if specifically
approved at least annually by vote of "a majority of the outstanding voting
securities" of the Value Fund, as defined under the 1940 Act, or by the Board
and, in either event, the vote of a majority of the Trustees who are not parties
to the agreement or interested persons of any such party, cast in person at a
meeting called for such purpose.
At the Board meeting on September 16, 1998, the Board voted to recommend the new
agreement to shareholders for their approval.
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BOARD OF TRUSTEES EVALUATION
At a regular meeting of the Board on August 19, 1998, the Board was approached
by Aronson with its proposal to renegotiate the fee structure under the present
management agreement. The Board discussed its options with respect to Aronson's
request in light of Aronson's performance as investment adviser to the Value
Fund over the Fund's lifetime. The Board directed management of the Trust to
negotiate a new fee structure with Aronson and report the results of that
negotiation to the Board. At a special meeting on September 16, 1998, the
Trustees discussed the recommendation of fund management and reviewed their
fiduciary obligations. There was extended discussion of, and questioning about,
Aronson's qualifications as an investment advisor, its past performance history
and its future plans for the Value Fund. There was also extended discussion of
the new fee structure itself, the probable impact to the shareholders of the
Value Fund, and the possible impact to Aronson. As a result of their
investigation and consideration of the new management agreement, at its meeting
on September 16, 1998, the Board voted to approve the new management agreement
and to recommend it to the shareholders of the Value Fund for their approval.
During its deliberations, the Board used outside assistance in its analysis of
Aronson's financial status and other aspects of Aronson to help evaluate the
potential effects upon the Value Fund and Quaker. Throughout the review process
the independent Trustees had the assistance of legal counsel.
In connection with the Board's approval of the new management agreement, the
Board considered that the terms of the management agreement do not require any
change in the Fund's investment objective or policies, or the investment
management or operation of Quaker.
In evaluating the new management agreement, the Board took into account that the
new management agreement for the Value Fund, including the terms relating to the
services to be provided and the fees and expenses payable by Quaker, is on the
same terms as the current management agreement, except for the fee schedule. The
Board considered a number of factors in its evaluation of the proposed new
agreement, including the nature and quality of services provided by Aronson;
investment performance, both of Aronson itself and relative to that of
competitive investment advisers; investment management fees and expense ratios
of Quaker and competitive investment companies; Expected Aronson profitability
from managing the Value Fund; fall-out benefits to Aronson from its relationship
to Quaker, including revenues derived from services provided to Quaker by
affiliates of Aronson; and the potential benefits to Aronson and to Quaker and
their shareholders of receiving research services from broker/dealer firms in
connection with the allocation of portfolio transactions to such firms.
In evaluating the new management agreement, the Board gave considerable weight
to the fact that Aronson had previously enjoyed a great deal of success as
investment manager to the Value Fund, and was experiencing a significant
increase in its client base. Further, Aronson had represented to the Board that
other Aronson clients were paying fees under a similar structure to that being
proposed o the Board. The nature and quality of services provided by Aronson;
investment performance, both of the Value Fund itself and relative to that of
competitive investment
9
<PAGE>
companies; investment management fees and expense ratios of the Value Fund under
the proposed fee structure; Aronson profitability from managing the Fund;
fall-out benefits to Aronson from its relationship to Quaker, including revenues
derived from services provided to Quaker by affiliates of Aronson; and the
potential benefits to Aronson and to Quaker and their shareholders of receiving
research services from broker/dealer firms in connection with the allocation of
portfolio transactions to such firms, were all equally important factors leading
the Board to conclude that the new management agreement would be of benefit to
the Value Fund and its shareholders. Lastly, the Board gave careful
consideration to the financial condition of Aronson, its ongoing financial
viability, and its assurances to the Board that it would continue to provide
services to the Fund at the same level and in the same manner as in the past.
As a result of their investigation and consideration of the new management
agreement, at its meeting on September 16, 1998, the Board voted to approve the
new management agreement and to recommend it to the shareholders of the Value
Fund for their approval.
The Board of Quaker recommends that shareholders of the Value Fund vote FOR
approval of the new management agreement.
- --------------------------------------------------------------------------------
ITEM 3. NEW RULE 12B-1 DISTRIBUTION PLAN FOR EQUITY FUND SHAREHOLDERS ONLY
INTRODUCTION
Rule 12b-1 under the 1940 Act (the "Rule"), provides, among other things, that
an investment company (mutual fund) may bear expenses of distributing its shares
only pursuant to a plan (a "Rule 12b-1 Plan") adopted in accordance with the
Rule. West Chester Capital Advisers, Inc. is a party to the Equity Fund's
current Rule 12b-1 Plan.
On or about August 19, 1998, West Chester Capital Advisers, Inc. resigned as
investment adviser to the Equity Fund, and was replaced, pursuant to a vote of
Quaker's Board and independent Trustees, voting separately, by Geewax, Terker &
Co. ("GTC"). As required by the 1940 Act, each Fund's Rule 12b-1 Plan provides
for its automatic termination in the event of its assignment. Accordingly, a new
Rule 12b-1 Plan is being submitted for Equity Fund shareholder approval. THE NEW
RULE 12B-1 PLAN IS ON THE SAME TERMS AS QUAKER'S CURRENT RULE 12B-1 PLAN. A form
of the new Rule 12b-1 Plan is attached hereto as Exhibit C. NO CHANGE IN FEES IS
BEING PROPOSED.
On September 16, 1998, the Board, including a majority of the "non-interested"
Trustees, voted to approve the new Rule 12b-1 Plan and directed that the Plan be
submitted to the Equity Fund shareholders at the Meeting, along with a
recommendation that such shareholders approve the Rule 12b-1 Plan.
If the new Rule 12b-1 Plan is approved by the Equity Fund shareholders, it will
become effective and will replace the current Rule 12b-1 Plan immediately. If
the shareholders do not approve the new Rule 12b-1 Plan, the Board would
consider appropriate action.
10
<PAGE>
DESCRIPTION OF THE NEW RULE 12B-1 PLANS
As noted above, a form of the new Rule 12b-1 Plan is attached as Exhibit C and
this summary is qualified in its entirety by reference to Exhibit C. THE TERMS
OF THE NEW RULE 12B-1 PLAN DESCRIBED BELOW ARE THE SAME AS IN THE CURRENT RULE
12B-1 PLAN.
Under the new Rule 12b-1 Plan, GTC will receive a distribution fee, payable as
an expense of the Shares of the Fund, which GTC will use to pay for distribution
services which it has previously provided to the Fund. If Rule 12b-1 fees are
paid under the Plan, investment advisory fees paid to GTC will decrease by the
same amount as the Rule 12b-1 fees paid, so that total Fund expenses will be
unaffected. GTC bears all the expenses of providing such services, including the
payment of any commissions or distribution fees. GTC provides for the
preparation of advertising or sales literature and bears the cost of printing
and mailing prospectuses to persons other than shareholders. Quaker bears the
cost of qualifying and maintaining the qualification of Shares for sale under
the securities laws of the various states, and the expense of registering its
Shares with the SEC.
Equity Fund Shares are sold to the public at net asset value. Like the current
Plan, GTC will receive a distribution fee, payable monthly upon presentation to
the Fund of receipts evidencing proper expenditures, at the annual rate of 0.25%
of average daily net assets of the Equity Fund Shares. HOWEVER, LIKE THE CURRENT
PLAN, GTC'S INVESTMENT ADVISORY FEE WILL DECREASE BY ANY AMOUNTS PAID PURSUANT
TO THE PLAN, SO THAT THE EFFECT ON SHAREHOLDERS WILL BE THAT OVERALL FEES WILL
NOT INCREASE.
No fees have been paid to date from the current Rule 12b-1 Plan.
The new Rule 12b-1 Plan will continue in effect for an initial term of one year,
and may continue thereafter from year to year if specifically approved at least
annually by vote of "a majority of the outstanding voting securities" of the
Equity Fund, as defined under the 1940 Act, or by the Board, including, in
either event, the vote of a majority of the "non interested" Trustees, cast in
person at a meeting called for such purpose. Pursuant to the new Rule 12b-1
Plan, GTC will prepare reports to the Board on a quarterly basis showing the
amounts paid to the various firms, if any, and such other information as from
time to time the Board may reasonably request.
In approving the new Rule 12b-1 Plan, the Board determined, as with the current
Rule 12b-1 Plan, that there is a reasonable likelihood that the new Rule 12b-1
Plan would benefit Quaker, the Equity Fund and its shareholders. In doing so,
the Board considered several factors, including that the new Rule 12b-1 Plans
would likely (i) facilitate distribution of the Fund's shares, (ii) help
maintain the competitive position of Quaker in relation to other funds that have
implemented or are seeking to implement similar distribution arrangements; and
(iii) permit possible economies of scale through increased Fund size.
11
<PAGE>
BOARD OF TRUSTEES RECOMMENDATION
As a result of their consideration of the foregoing factors, the Board voted to
approve the new Rule 12b-1 Plan and to submit it to the shareholders for their
approval.
The Board recommends that shareholders vote FOR approval of the new Rule 12b-1
Plans.
- --------------------------------------------------------------------------------
OTHER INFORMATION
UNDERWRITER.
Declaration Distributors, Inc. ("DDI") is a broker/dealer registered as such
with the Securities and Exchange Commission, and is a member in good standing of
the National Association of Securities Dealers. DDI has been providing
underwriting services to mutual fund companies for ten years. DDI is a
wholly-owned subsidiary of Declaration Holdings, Inc. ("DHI"), a Delaware
corporation. Declaration Service Company ("DSC"), another wholly-owned
subsidiary of DHI, provides transfer agency, accounting and administrative
services to mutual fund companies, including Quaker.
DDI receives a flat fee of $10,000 per year from Quaker as principal underwriter
for each series of Quaker. Quaker receives in all cases the full net asset value
of the shares sold.
ALLOCATION OF PORTFOLIO TRANSACTIONS. GTC will be the investment manager for the
Equity Fund, and Aronson is the investment manager for the Value Fund (the
"Advisers"). The Advisers, in effecting purchases and sales of portfolio
securities for the account of a Fund, implement Quaker's policy of seeking best
execution of orders, which includes best net prices, except to the extent that
the Advisers may be permitted to pay higher brokerage commissions for research
services as described below. Consistent with this policy, orders for portfolio
transactions are placed with broker-dealer firms giving consideration to the
quality, quantity and nature of each firm's professional services, which include
execution, clearance procedures, wire service quotations and statistical and
other research information provided to a Fund and the Advisers. Any research
benefits derived are available for all clients, including clients of affiliated
companies. Since statistical and other research information is only
supplementary to research efforts of the Advisers and still must be analyzed and
reviewed by its staff, the receipt of research information is not expected to
materially reduce their expenses. In selecting among firms believed to meet the
criteria for handling a particular transaction, the Advisers may give
consideration to those firms that have sold or are selling shares Quaker, as
well as to those firms that provide market, statistical and other research
information to Quaker and to the Advisers. The Advisers are not authorized to
pay higher commissions or in the case of principal trades, higher prices, to
firms that provide such services, except as provided below.
The Advisers may in certain instances be permitted to pay higher brokerage
commissions solely for receipt of market, statistical and other research
services. Subject to Section 28(e) of the Securities Exchange Act of 1934 and
procedures adopted by the Board, a Fund could pay to a firm that provides
research services to GTC and/or Aronson a commission for effecting a securities
transaction for a Fund in excess of the amount other firms would have charged
for the transaction. A Fund could do this if GTC and/or Aronson determines in
good faith that the greater commission is reasonable in relation to the value of
the research services provided by the executing firm viewed in terms either of a
particular transaction or the Advisers' overall responsibilities to its Fund or
other clients. Not all such research services may be useful or of value in
advising a particular series. Research benefits will be available for all
clients of the Advisers and their subsidiaries. In addition, the investment
management fee paid by a Fund to GTC or Aronson is not reduced because either or
both of them receives these research services.
12
<PAGE>
SET FORTH IN EXHIBIT D ARE THE TOTAL BROKERAGE COMMISSIONS PAID BY QUAKER FOR
ITS MOST RECENTLY COMPLETED FISCAL YEAR, AS WELL AS THE PERCENTAGE OF SUCH THAT
WAS ALLOCATED TO BROKER-DEALER FIRMS ON THE BASIS OF RESEARCH INFORMATION OR ON
THE BASIS OF SALES OF SHARES.
MISCELLANEOUS
GENERAL
The cost of preparing, printing and mailing the enclosed proxy, accompanying
notice and proxy statement and all other costs in connection with solicitation
of proxies will be paid by GTC and Aronson, including any additional
solicitation made by letter, telephone or telegraph. In addition to solicitation
by mail, certain officers and representatives of Quaker, officers and employees
of GTC and/or Aronson and certain financial services firms and their
representatives, who will receive no extra compensation for their services, may
solicit proxies by telephone, telegram or personally. In addition, Quaker, GTC
and/or Aronson may retain a firm to solicit proxies on behalf of the Board, the
fee for which will be borne by the party incurring the expense. A COPY OF YOUR
FUND'S ANNUAL REPORT AND ANY MORE RECENT SEMI-ANNUAL REPORT ARE AVAILABLE
WITHOUT CHARGE UPON REQUEST BY WRITING TO QUAKER, 1288 VALLEY FORGE ROAD, VALLEY
FORGE, PA 19482, OR BY CALLING 1-800-220-8888.
PROPOSALS OF SHAREHOLDERS
As a Massachusetts Business Trust, Quaker is not required to hold annual
shareholder meetings, but will hold special meetings as required or deemed
desirable. Since Quaker does not hold regular meetings of shareholders, the
anticipated date of the next shareholders meeting cannot be provided. Any
shareholder proposal that may properly be included in the proxy solicitation
material for a special shareholder meeting must be received by Quaker no later
than four months prior to the date when proxy statements are mailed to
shareholders.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board of Trustees of Quaker is not aware of any matters that will be
presented for action at the Meeting other than the matters set forth herein.
Should any other matters requiring a vote of shareholders arise, the proxy in
the accompanying form will confer upon the person or persons entitled to vote
the shares represented by such proxy the discretionary authority to vote the
shares as to any such other matters in accordance with their best judgment in
the interest of Quaker.
VOTING, QUORUM
Each share of a Fund is entitled to one vote on each matter submitted to a vote
of the holders of that shares of such Fund at the Meeting; no shares have
cumulative voting rights.
Each valid proxy will be voted in accordance with the instructions on the proxy
and as the persons named in the proxy determine on such other business as may
come before the Meeting. If no instructions are given, the proxy will be voted
FOR all items on the proxy. Shareholders who execute proxies may revoke them at
any time before they are voted, either by writing to Quaker or in person at the
time of the Meeting. Proxies given by telephone or electronically transmitted
instruments may be counted if obtained pursuant to procedures designed to verify
that such instructions have been authorized.
13
<PAGE>
Item 1 (approval of new investment management agreement with GTC), requires the
affirmative vote of a "majority of the outstanding voting securities" of the
Equity Fund. Item 2 (approval of new investment management agreement with
Aronson), requires the affirmative vote of a "majority of the outstanding voting
securities" of the Value Fund, and Item 3 (approval of new Rule 12b-1 Plan)
requires the affirmative vote of a "majority of the outstanding voting
securities" of the Equity Fund. The term "majority of the outstanding voting
securities" as defined in the 1940 Act means: the affirmative vote of the lesser
of (1) 67% of the voting securities of the Fund present at the meeting if more
than 50% of the outstanding shares of the Fund are present in person or by proxy
or (2) more than 50% of the outstanding shares of the Fund.
On all Items presented, shareholders will vote by series.
The Declaration of Trust and By-Laws of Quaker provide that the presence at a
shareholder meeting in person or by proxy of at least 33.3% of the shares of a
series constitutes a quorum for that series. Thus, the meeting for a particular
series could not take place on its scheduled date if less than 33.3% of the
shares of that series were represented. If, by the time scheduled for the
meeting, a quorum of shareholders of a series is not present or if a quorum is
present but sufficient votes in favor of any of the items are not received, the
persons named as proxies may propose one or more adjournments of the meeting for
that series to permit further soliciting of proxies from its shareholders. Any
such adjournment will require the affirmative vote of a majority of the shares
of the series as to which the meeting is being adjourned present (in person or
by proxy) at the session of the meeting to be adjourned. The persons named as
proxies will vote in favor of any such adjournment if they determine that such
adjournment and additional solicitation are reasonable and in the interest of
the respective series' shareholders.
In tallying shareholder votes, abstentions and "broker non-votes" (i.e., shares
held by brokers or nominees as to which (i) instructions have not been received
from the beneficial owners or persons entitled to vote and (ii) the broker or
nominee does not have discretionary voting power on a particular matter) will be
counted for purposes of determining whether a quorum is present for purposes of
convening the Meeting. On Item 1 & 2, abstentions and broker non-votes will not
be counted as "votes cast" and will have no effect on the result of the vote. On
Item 3, abstentions and broker non-votes will be considered to be both present
at the Meeting and issued and outstanding and, as a result, will have the effect
of being counted as voted against the Items. The Board of Trustees of Quaker
recommends an affirmative vote on all items.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
By order of the Board of Trustees,
Peter F. Waitneight
President
14
<PAGE>
EXHIBIT A
HOLDERS OF MORE THAN 5% OF
ANY CLASS OF A FUND'S SHARES
FUND NAME AND ADDRESS % OWNERSHIP # SHARES
- ---- ---------------- ----------- --------
EQUITY FUND ST. MARY'S COUNTY SHERIFF'S 74.81% 257,687.733
DEPARTMENT PENSION FUND
ROUTE 245, PO BOX 653
LEONARDTOWN, MD 20650
VALUE FUND CHARLES SCHWAB & CO. 7.83% 66,979.135
FBO CUSTOMERS
101 MONTGOMERY STREET
SAN FRANSISCO, CA 94104
THEODORE ARONSON IRA 5.31% 45,370.971
1234 COUNTRY CLUB ROAD
GALDWYNE, PA 19035
ALTRU COMPANY FBO CUSTOMERS 5.46% 46,656.204
PO BOX 2450
ALTOONA, PA 16603
OKLAHOMA PUBLISHING CO. 56.66% 484,580.887
RETIRMENT PLAN
<PAGE>
EXHIBIT B
FORM OF
INVESTMENT MANAGEMENT AGREEMENT
INVESTMENT ADVISOR AGREEMENT
AGREEMENT, made this 19th day of October, 1998, between Quaker Investment
Trust (the "Trust") and Geewax, Terker & Co., a Pennsylvania partnership (the
"Adviser"), registered as an investment adviser under the Investment Advisers
Act of 1940, as amended (the "Act").
BACKGROUND
WHEREAS, the Trust is registered as a diversified, open-end management
investment company of the series type under the investment Company Act of 1940,
as amended (the "1940 Act"); and
WHEREAS, the Trust desires to retain the Adviser to furnish investment
advisory services to the Quake Core Equity Fund (the "Fund") series of the Trust
pursuant to the terms and conditions of this Agreement, and the Adviser is
willing to so furnish such services;
NOW THEREFORE, in consideration of the foregoing and the agreements and
covenants herein contained, the parties hereto, intending to be legally bound,
agree as follows:
1. Appointment
-----------
The Trust hereby appoints the Adviser to act as Investment Adviser to the
Quaker Core Equity Fund (the "Fund") for the periods and on the terms set forth
in this Agreement. The Adviser accepts the appointment and agrees to furnish the
services herein set forth for the compensation herein provided.
2. Delivery of Documents
---------------------
The Trust has furnished the Investment Adviser with copies properly
certified or authenticated copies of each of the following:
a. The Trust's Declaration of Trust, as filed with the Commonwealth of
Massachusetts (such Declaration, as presently in effect and as it
shall from time to time be amended, is herein called the
"Declaration");
b. The Trust's By-Laws (such By-Laws, as presently in effect and as they
may be from time to time amended, are herein called the "By-Laws")
c. Resolutions of the Trust's Board of Trustees authorizing the
appointment of the Adviser and approving this Agreement;
d. The Trust's Registration Statement on form N-1A promulgated under the
1940 Act and under the Securities Act of 1933, as amended (the "1933
Act"), relating to shares of beneficial interest of the fund (herein
called the "Shares") as filed with the Securities and Exchange
Commission ("SEC") and all amendments thereto;
e. The Fund's Prospectus, Statement of Additional Information (such
Prospectus, together with the statement of Additional Information, as
presently in effect and all amendments and supplements thereto are
herein called the "Prospectus")
14
<PAGE>
The Trust will furnish the Adviser from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the foregoing
at the same time as such documents are required to be filed with the SEC.
3. Management
----------
Subject to the supervision of the Trust's Board of Trustees, the Adviser
will provide a continuous investment program for the Fund, including investment
research and management with respect to all securities, investments, cash and
cash equivalents in the Fund. The Advisor will determine from time to time what
securities and other investments will be purchased, retained or sold by the
Fund. The Advisor will provide the services under this Agreement in accordance
with the Funds investment objectives, policies and restrictions as such are set
forth in the prospectus from time to time. The Advisor further agrees that it:
(a) Will conform its activities to all applicable rules and Regulations of
the SEC and will, in addition, conduct its activities under this
agreement in accordance with the regulations of any other Federal and
State agencies which may now or in the future have jurisdiction over
its activities under this Agreement.
(b) Will place orders pursuant to its investment determinations for the
Fund either directly with the respective issuers or with any broker or
dealer. In placing orders with brokers or dealers, the Advisor will
attempt to obtain the best net price and the most favorable execution
of its orders. Consistent with this obligation, when the Advisor
believes two or more brokers or dealers are comparable in price and
execution, the Advisor may prefer: (I) brokers and dealers who provide
the Fund with research advice and other services, or who recommend or
sell Trust shares, and (II) brokers who are affiliated with the Fund
or the Advisor; provided, however, that in no instance will portfolio
securities be purchased from or sold to the Advisor in principal
transactions;
(c) Will provide, at its own cost, all office space, facilities and
equipment necessary for the conduct of its advisory activities on
behalf of the fund.
4. Services Not Exclusive
----------------------
The advisory services to be furnished by the Advisor hereunder are not to
be considered exclusive, and the Advisor shall be free to furnish similar
services to others so long as its services under this Agreement are not impaired
thereby; provided, however, that without the written consent of the Trustees of
the Trust, the Advisor will not serve as an investment advisor to any other
investment company having a similar investment objective to that of the fund.
5. Books and Records
-----------------
In compliance with Rule 31a-3 promulgated under the 1940 Act, that Advisor
hereby agrees that all records which it maintains for the benefit of the Fund
are the property of the Fund and further agrees to surrender promptly to the
Fund any of such records upon the Fund's request. The Advisor further agrees to
preserve for the periods prescribed by Rule 31a-2 promulgated under the 1940
Act. The records required to be maintained by it pursuant to Rule 31a-1
promulgated under the 1940 Act that are not maintained by others on behalf of
the Fund.
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<PAGE>
6. Expenses
--------
During the term of this Agreement, the Advisor will pay all expenses
incurred by it in connection with its investment advisory services furnished to
the Fund other than the costs of securities and other investments (including
brokerage commissions and other transaction charges) purchased or sold for the
Fund. In addition, in accordance with the plan of Distribution adopted by the
Fund under the provisions of Rule 12b-1 promulgated under the 1940 Act, the
Advisor agrees to pay, from the Advisory fees paid to it hereunder, the amounts
set forth in Exhibit A attached hereto to qualified brokers and dealers who are
authorized to sell Fund shares and receive compensation therefore.
7. Compensation
------------
The trust will pay the Advisor, and the Advisor will accept as full
compensation for its services rendered hereunder, an investment advisory fee,
computed at the end of each month and payable within five (5) business days
thereafter, equal to the annual rate of 0.75% of the average daily net assets of
the Fund. The Advisor hereby acknowledges that the expense ratio for the Fund
will be capped at 1.35% of the average daily net assets of the Fund and hereby
agrees to waive its fees to the extent necessary to achieve such expense ratio,
on a basis that is pro rata to the fees charged by other providers of services
to the Fund. All parties to this Agreement do hereby authorize and instruct the
Declaration Group, the Fund's Administrator, to provide a calculation each month
of the gross amount due the Advisor and to deduct from such amount all
applicable amounts of fee waivers as well as the amounts set forth in Exhibit A,
if applicable, prior to remitting fee payments hereunder.
8. Limitation of Liability
-----------------------
The Advisor shall not be liable for any error of judgement, mistake of law
or for any other loss suffered by the Fund in connection with the performance of
this Agreement, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss resulting from
willful malfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations or
duties under this Agreement.
9. Duration and Termination
------------------------
This Agreement shall become effective upon the resignation of the existing
investment advisor to the Fund and, unless sooner terminated as provided herein,
shall continue in effect for two years. Thereafter, this Agreement shall be
renewable for successive periods of one year each, provided such continuance is
specifically approved annually:
(a) By the vote of a majority of those members of the Board of Trustees
who are not parties to the Agreement or interested persons of any such
party 9as that term is defined in the 1940 Act), cast in person at a
meeting called for the purpose of voting on such approval; and
(b) By vote of either the Board of Trustees or a majority (as that term is
defined in the 1940 Act) of the outstanding voting securities of the
Fund.
Notwithstanding the foregoing, this Agreement may be terminated by the Fund
or by the Advisor at any time upon sixty (60) days written notice, without
payment of any penalty. Provided that termination by the Fund must be authorized
by vote of the Board of Trustees or by vote of a majority of the outstanding
voting securities of the Fund. This Agreement will automatically terminate in
the event of its assignment (as that term is defined in the 1940 Act).
16
<PAGE>
10. Amendment of this Agreement
---------------------------
No provision of this Agreement may be changed, waived, discharged, or
terminated orally, but only by a written instrument signed by the party against
which enforcement of the change, waiver, discharge or termination is sought. No
material amendment of this Agreement shall be effective until approved by vote
of the holders of a majority of the Fund's outstanding voting securities (as
defined in the 1940 Act).
11. Miscellaneous
-------------
The captions in this Agreement are included for convenience of reference
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of the Agreement shall not be affected thereby. This Agreement shall
be binding on, and shall inure to the benefit of, the parties hereto and their
respective successors.
12. Counterparts
------------
This Agreement may be executed in counterparts by the parties hereto, each
of which shall constitute and original, and all of which, together, shall
constitute one Agreement.
13. Governing Law
-------------
This Agreement shall be construed in accordance with, and governed by, the
laws of the Commonwealth of Pennsylvania.
17
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
Attest: QUAKER INVESTMENT TRUST
By: By: /s/ Peter F. Waitneight
------------------------------- --------------------------------
Title: Title: President
Attest: GEEWAX, TERKER & CO.
By: By:
------------------------------- --------------------------------
Title: Title:
18
<PAGE>
EXHIBIT A
---------
12b-1 Fees
For shares sold through the Charles Schwab Mutual Fund Marketplace,
Fidelity Brokerage Services, Inc., Waterhouse Securities, Inc., or Jack White &
Company, the 12b-1 fees to be paid shall be equal to 0.20% of the purchase price
of such shares.
For shares sold through an authorized wholesaler, the 12b-1 fees to be paid
shall be equal to:
25% of management fee on amount of Fund shares sold for first 12 months
10% of management fee on such amount for succeeding 12 months
5% of management fee on such amount thereafter.
The foregoing shall be in effect with respect to Fund shares until such
shares are redeemed.
19
<PAGE>
EXHIBIT C
---------
FORM OF INVESTMENT ADVISORY AGREEMENT WITH ARONSON + PARTNERS
INVESTMENT ADVISOR AGREEMENT
AGREEMENT, made this 19th day of October, 1998, between Quaker Investment
Trust (the "Trust") and Aronson + Partners., a Pennsylvania partnership (the
"Adviser"), registered as an investment adviser under the Investment Advisers
Act of 1940, as amended (the "Act").
BACKGROUND
WHEREAS, the Trust is registered as a diversified, open-end management
investment company of the series type under the investment Company Act of 1940,
as amended (the "1940 Act"); and
WHEREAS, the Trust desires to retain the Adviser to furnish investment
advisory services to the Quake Small-Cap Value Fund (the "Fund") series of the
Trust pursuant to the terms and conditions of this Agreement, and the Adviser is
willing to so furnish such services;
NOW THEREFORE, in consideration of the foregoing and the agreements and
covenants herein contained, the parties hereto, intending to be legally bound,
agree as follows:
1. Appointment
The Trust hereby appoints the Adviser to act as Investment Adviser to the
Quaker Core Equity Fund (the "Fund") for the periods and on the terms set forth
in this Agreement. The Adviser accepts the appointment and agrees to furnish the
services herein set forth for the compensation herein provided.
2. Delivery of Documents
The Trust has furnished the Investment Adviser with copies properly
certified or authenticated copies of each of the following:
f. The Trust's Declaration of Trust, as filed with the Commonwealth of
Massachusetts (such Declaration, as presently in effect and as it
shall from time to time be amended, is herein called the
"Declaration");
g. The Trust's By-Laws (such By-Laws, as presently in effect and as they
may be from time to time amended, are herein called the "By-Laws")
h. Resolutions of the Trust's Board of Trustees authorizing the
appointment of the Adviser and approving this Agreement;
i. The Trust's Registration Statement on form N-1A promulgated under the
1940 Act and under the Securities Act of 1933, as amended (the "1933
Act"), relating to shares of beneficial interest of the fund (herein
called the "Shares") as filed with the Securities and Exchange
Commission ("SEC") and all amendments thereto;
j. The Fund's Prospectus, Statement of Additional Information (such
Prospectus, together with the statement of Additional Information, as
presently in effect and all amendments and supplements thereto are
herein called the "Prospectus")
The Trust will furnish the Adviser from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the foregoing
at the same time as such documents are required to be filed with the SEC.
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3. Management
Subject to the supervision of the Trust's Board of Trustees, the Adviser
will provide a continuous investment program for the Fund, including investment
research and management with respect to all securities, investments, cash and
cash equivalents in the Fund. The Advisor will determine from time to time what
securities and other investments will be purchased, retained or sold by the
Fund. The Advisor will provide the services under this Agreement in accordance
with the Funds investment objectives, policies and restrictions as such are set
forth in the prospectus from time to time. The Advisor further agrees that it:
(d) Will conform its activities to all applicable rules and Regulations of
the SEC and will, in addition, conduct its activities under this
agreement in accordance with the regulations of any other Federal and
State agencies which may now or in the future have jurisdiction over
its activities under this Agreement.
(e) Will place orders pursuant to its investment determinations for the
Fund either directly with the respective issuers or with any broker or
dealer. In placing orders with brokers or dealers, the Advisor will
attempt to obtain the best net price and the most favorable execution
of its orders. Consistent with this obligation, when the Advisor
believes two or more brokers or dealers are comparable in price and
execution, the Advisor may prefer: (I) brokers and dealers who provide
the Fund with research advice and other services, or who recommend or
sell Trust shares, and (II) brokers who are affiliated with the Fund
or the Advisor; provided, however, that in no instance will portfolio
securities be purchased from or sold to the Advisor in principal
transactions;
(f) Will provide, at its own cost, all office space, facilities and
equipment necessary for the conduct of its advisory activities on
behalf of the fund.
4. Services not Exclusive
The advisory services to be furnished by the Advisor hereunder are not to
be considered exclusive, and the Advisor shall be free to furnish similar
services to others so long as its services under this Agreement are not impaired
thereby; provided, however, that without the written consent of the Trustees of
the Trust, the Advisor will not serve as an investment advisor to any other
investment company having a similar investment objective to that of the fund.
5. Books and Records
In compliance with Rule 31a-3 promulgated under the 1940 Act, that Advisor
hereby agrees that all records which it maintains for the benefit of the Fund
are the property of the Fund and further agrees to surrender promptly to the
Fund any of such records upon the Fund's request. The Advisor further agrees to
preserve for the periods prescribed by Rule 31a-2 promulgated under the 1940
Act. The records required to be maintained by it pursuant to Rule 31a-1
promulgated under the 1940 Act that are not maintained by others on behalf of
the Fund.
6. Expenses
During the term of this Agreement, the Advisor will pay all expenses
incurred by it in connection with its investment advisory services furnished to
the Fund other than the costs of securities and other investments (including
brokerage commissions and other transaction charges) purchased or sold for the
Fund. In addition, in accordance with the plan of Distribution adopted by the
Fund under the provisions of Rule 12b-1 promulgated under the 1940 Act, the
Advisor agrees to pay, from the Advisory fees paid to it hereunder, the amounts
set forth in Exhibit A attached hereto to qualified brokers and dealers who are
authorized to sell Fund shares and receive compensation therefore.
21
<PAGE>
7. Compensation
The trust will pay the Advisor, and the Advisor will accept as full
compensation for its services rendered hereunder, an investment advisory fee,
computed at the end of each month and payable within five (5) business days
thereafter, as follows. Through the end of the period ending September 30, 1998
the fee will continue to be equal to the annual rate of 0.75% of the average
daily net assets of the Fund. Beginning October 1, 1998 and continuing for one
year thereafter, the fee will rise to the annual rate of 0.90% of the average
daily net assets of the Fund. The Advisor hereby acknowledges that the expense
ratio for the Fund will be capped at 1.50% of the average daily net assets of
the Fund for the year following October 1, 1998 and hereby agrees to waive its
fees to the extent necessary to achieve such expense ratio, on a basis that is
pro rata to the fees charged by other providers of services to the Fund.
From October 1, 1999 forward, a performance fee concept will be
implemented. This will provide for an investment advisory fee (Base Fee) at an
annual rate of 0.90% of the daily net assets of the Fund to be computed and paid
quarterly when the cumulative investment results for the Fund over the prior
twelve (12) months exceed the return for the Russell 2000 Index for the same
period by 3.0%. this comparison will be repeated each quarter, using the data
from the immediate prior twelve (12) months. Adjustment factors will be applied
to the investment advisory fee according to the following formula.:
Cumulative 12 months Performance Fee
Return versus the Index Adjustment
Less than + 1.0% 0.3333 X Base Fee
Between +1.0 and +1.5% 0.4664 X Base Fee
Between +1.5 and +2.0% 0.5998 X Base Fee
Between +2.0 and +2.5% 0.7332 X Base Fee
Between +2.5 and + 3.0% 0.8666 X Base Fee
At +3.0% 1.0000 X Base Fee
Between +3.0 and + 3.5% 1.1334 X Base Fee
Between +3.5 and + 4.0% 1.2668 X Base Fee
Between +4.0 and + 4.5% 1.4002 X Base Fee
Between +4.5 and + 5.0% 1.5336 X Base Fee
More than +5.0% 1.667 X Base Fee
All parties to this Agreement do hereby authorize and instruct the
Declaration Group, the Fund's Administrator, to provide a calculation each month
of the gross amount due the Advisor and to deduct from such amount all
applicable amounts of fee waivers as well as the amounts set forth in Exhibit A,
if applicable, prior to remitting fee payments hereunder.
14. Limitation of Liability
The Advisor shall not be liable for any error of judgement, mistake of law
or for any other loss suffered by the Fund in connection with the performance of
this Agreement, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss resulting from
willful malfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations or
duties under this Agreement.
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<PAGE>
15. Duration and Termination
This Agreement shall become effective upon the resignation of the existing
investment advisor to the Fund and, unless sooner terminated as provided herein,
shall continue in effect for two years. Thereafter, this Agreement shall be
renewable for successive periods of one year each, provided such continuance is
specifically approved annually:
(c) By the vote of a majority of those members of the Board of Trustees
who are not parties to the Agreement or interested persons of any such
party 9as that term is defined in the 1940 Act), cast in person at a
meeting called for the purpose of voting on such approval; and
(d) By vote of either the Board of Trustees or a majority (as that term is
defined in the 1940 Act) of the outstanding voting securities of the
Fund.
Notwithstanding the foregoing, this Agreement may be terminated by the Fund
or by the Advisor at any time upon sixty (60) days written notice, without
payment of any penalty. Provided that termination by the Fund must be authorized
by vote of the Board of Trustees or by vote of a majority of the outstanding
voting securities of the Fund. This Agreement will automatically terminate in
the event of its assignment (as that term is defined in the 1940 Act).
16. Amendment of this Agreement
No provision of this Agreement may be changed, waived, discharged, or
terminated orally, but only by a written instrument signed by the party against
which enforcement of the change, waiver, discharge or termination is sought. No
material amendment of this Agreement shall be effective until approved by vote
of the holders of a majority of the Fund's outstanding voting securities (as
defined in the 1940 Act).
17. Miscellaneous
The captions in this Agreement are included for convenience of reference
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of the Agreement shall not be affected thereby. This Agreement shall
be binding on, and shall inure to the benefit of, the parties hereto and their
respective successors.
18. Counterparts
This Agreement may be executed in counterparts by the parties hereto, each
of which shall constitute and original, and all of which, together, shall
constitute one Agreement.
19. Governing Law
This Agreement shall be construed in accordance with, and governed by, the
laws of the Commonwealth of Pennsylvania.
23
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
Attest: QUAKER INVESTMENT TRUST
By: By: /s/ Peter F. Waitneight
-------------------------------- --------------------------------
Title: Title: President
Attest: ARONSON + PARTNERS
By: By:
-------------------------------- --------------------------------
Title: Title: General Partner
24
<PAGE>
EXHIBIT A
---------
12b-1 Fees
For shares sold through the Charles Schwab Mutual Fund Marketplace,
Fidelity Brokerage Services, Inc., Waterhouse Securities, Inc., or Jack White &
Company, the 12b-1 fees to be paid shall be equal to 0.20% of the purchase price
of such shares.
For shares sold through an authorized wholesaler, the 12b-1 fees to be paid
shall be equal to:
25% of management fee on amount of Fund shares sold for first 12 months
10% of management fee on such amount for succeeding 12 months
5% of management fee on such amount thereafter.
The foregoing shall be in effect with respect to Fund shares until such
shares are redeemed.
25
<PAGE>
EXHIBIT D
FORM OF
PLAN PURSUANT TO RULE 12B-1
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
WHEREAS, Quaker Investment Trust, an unincorporated business trust organized and
existing under the laws of the Commonwealth of Massachusetts (the
"Trust"),engages in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended
(the"1940 Act"); and
WHEREAS, the Trust is authorized to issue an unlimited number of shares of
beneficial interest (the "Shares"), in separate series representing the
interests in separate funds of securities and other assets; and
WHEREAS, the Trust offers a series of such Shares representing interests in the
QUAKER CORE EQUITY FUND (the "Fund") of the Trust, which Shares are divided into
two Classes of Investor and Institutional Shares;
WHEREAS, the Trustees of the Trust as a whole, and the Trustees who are not
interested persons of the Trust (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement relating hereto (the "Non-Interested Trustees"), having determined, in
the exercise of reasonable business judgment and in light of their fiduciary
duties under state law and under Section 36(a) and (b) of the 1940 Act, that
there is a reasonable likelihood that this Plan will benefit the Trust and its
shareholders, have approved this Plan by votes cast at a meeting called for the
purpose of voting hereon and on any agreements related hereto; and
NOW, THEREFORE, the Trust hereby adopts this Plan in accordance with Rule 12b-1
under the 1940 Act, on the following terms and conditions:
1. Distribution and Servicing Activities. Subject to the supervision of the
Trustees of the Trust, the Trust may, directly or indirectly, engage in any
activities primarily intended to result in the sale of Investor Shares of
the Fund, which activities may include, but are not limited to, the
following: (a)payments to the Trust's Distributor and to securities dealers
and others in respect of the sale of Investor Shares of the Fund; (b)
payment of compensation to and expenses of personnel (including personnel
of organizations with which the Trust has entered into agreements related
to this Plan) who engage in or support distribution of Investor Shares of
the Fund or who render shareholder support services not otherwise provided
by the Trust's transfer agent, administrator, or custodian, including but
not limited to, answering inquiries regarding the Trust, processing
shareholder transactions, providing personal services and/or the
maintenance of shareholder accounts, providing other shareholder liaison
services, responding to shareholder inquiries, providing information on
shareholder investments in the Fund, and providing such other shareholder
services as the Trust may reasonably request; (c) formulation and
implementation of marketing and promotional activities, including, but not
limited to, direct mail promotions and television, radio, newspaper,
magazine and other mass media advertising; (d) preparation, printing and
distribution of sales literature; (e) preparation, printing and
distribution of prospectuses and statements of additional information and
reports of the Trust for recipients other than existing shareholders of the
Trust; and (f) obtaining such information, analyses and reports with
respect to marketing and promotional activities as the Trust may, from time
to time, deem advisable. The Trust is authorized to engage in the
activities listed above, and in any other activities primarily intended to
result in the sale of Investor Shares of the Fund, either directly or
through other persons with which the Trust has entered into agreements
related to this Plan.
26
<PAGE>
2. Maximum Expenditures. The expenditures to be made by the Trust pursuant to
this Plan and the basis upon which payment of such expenditures will be
made shall be determined by the Trustees of the Trust, but in no event may
such expenditures exceed an amount calculated at the rate of 0.25% per
annum of the average daily net asset value of the Investor Shares of the
Fund for each year or portion thereof included in the period for which the
computation is being made, elapsed since the inception of this Plan to the
date of such expenditures. Notwithstanding the foregoing, in no event may
such expenditures paid by the Trust as service fees exceed an amount
calculated at the rate of0.25% of the average annual net assets of the
Investor Shares of the Fund, nor may such expenditures paid as service fees
to any person who sells Investor Shares of the Fund exceed an amount
calculated at the rate of 0.25% of the average annual net asset value of
such shares. Such payments for distribution and shareholder servicing
activities may be made directly by the Trust or to other persons with which
the Trust has entered into agreements related to this Plan.
3. Term and Termination. (a) This Plan shall become effective as of the19th
day of October, 1998. Unless terminated as herein provided, this Plan shall
continue in effect for one year from the date hereof and shall continue in
effect for successive periods of one year thereafter, but only so long as
each such continuance is specifically approved by votes of a majority of
both (i) the Trustees of the Trust and (ii) the Non-Interested Trustees,
cast at a meeting called for the purpose of voting on such approval. (b)
This Plan may be terminated at any time with respect to the Fund bya vote
of a majority of the Non-Interested Trustees or by a vote of a majority of
the outstanding voting securities of the Investor Class of the Fund as
defined in the 1940 Act.
4. Amendments. This Plan may not be amended to increase materially the maximum
expenditures permitted by Section 2 hereof unless such amendment is
approved by a vote of the majority of the outstanding voting securities of
the Investor Class of the Fund as defined in the 1940 Act with respect to
which a material increase in the amount of expenditures is proposed, and no
material amendment to this Plan shall be made unless approved in the manner
provided for annual renewal of this Plan in Section 3(a) hereof.
5. Selection and Nomination of Trustees. While this Plan is n effect, the
selection and nomination of the Non-Interested Trustees of the Trust shall
be committed to the discretion of such Non-Interested Trustees.
6. Quarterly Reports. The Treasurer of the Trust shall provide to the Trustees
of the Trust and the Trustees shall review quarterly a written report of
the amounts expended pursuant to this Plan and any related agreement and
the purposes for which such expenditures were made.
7. Record keeping. The Trust shall preserve copies of this Plan and any
related agreement and all reports made pursuant to Section 6 hereof, for a
period of not less than six years from the date of this Plan. Any such
related agreement or such reports for the first two years will be
maintained in an easily accessible place.
27
<PAGE>
8. Limitation of Liability. Any obligations of the Trust hereunder shall not
be binding upon any of the Trustees, officers or shareholders of the Trust
personally, but shall bind only the assets and property of the Trust. The
term "Quaker Investment Trust" means and refers to the Trustees from time
to time serving under the Agreement and Declaration of Trust of the Trust,
a copy of which is on file with the Secretary of The Commonwealth of
Massachusetts. The execution of this Plan has been authorized by the
Trustees, and this Plan has been signed on behalf of the Trust by an
authorized officer of the Trust, acting as such and not individually, and
neither such authorization by such Trustees nor such execution by such
officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the
assets and property of the Trust as provided in the Agreement and
Declaration of Trust.
IN WITNESS THEREOF, the parties hereto have caused this Plan to be executed as
of the date written above.
QUAKER INVESTMENT TRUST
Attest:
By
-------------------------------
QUAKER CORE EQUITY FUND
Attest:
By
-------------------------------
28
<PAGE>
EXHIBIT F
FEES AND EXPENSES
EQUITY FUND VALUE FUND
----------- ----------
Fiscal Year End ........................................ 06/30/98 06/30/98
Investment Advisory Fees ............................... 17,770 16,365
Administrator Fees ..................................... 3,377 4,406
Custodian Fees ......................................... 578 683
Transfer Agent Fees .................................... 3,941 4,175
Professional Fees ...................................... 2,785 2,785
Trustee Fees ........................................... 156 156
Registration Fees ...................................... 1,718 2,165
Distribution Fees ...................................... 5,982 5,451
Printing Fees .......................................... 1,579 1,653
Amortization of Deferred Organizational Costs ........ 6,756 6,756
Miscellaneous Expenses ............................... 3,154 2,833
Total Other Expenses ................................. 35,439 44,382
- --------------------------------------------------------------------------------
Total expenses before waivers & contributions ........ 83,235 91,810
- --------------------------------------------------------------------------------
Waiver of Investment Advisory Fees ................... (17,770) (16,356)
Contribution from Adviser ............................ (27,126) (40,418)
Shareholder Service Fees Waived ...................... (5,982) (5,451)
- --------------------------------------------------------------------------------
Total Expenses, Net .................................. 32,357 29,585
- --------------------------------------------------------------------------------
Thank you for mailing your ballot promptly!
We appreciate your continuing support and look forward to serving
your future investment needs.
15
<PAGE>
QUAKER INVESTMENT TRUST
1. For Shareholders of the Quaker Core Equity Fund Only. Approve a new
investment management agreement with Geewax, Terker & Co. on the same terms
as the current agreement between the Equity Fund and West Chester Capital
Advisers, Inc.
For Against Abstain
/ / / / / /
2. For Shareholders of the Quaker Small-Cap Value Fund Only. Approve a new
investment management agreement with Aronson + Partners on different terms
than the current agreement, which may result in an increase in fees to the
fund.
For Against Abstain
/ / / / / /
3. For Quaker Core Equity Fund Shareholders Only. Approve a new Rule 12b-1
distribution plan on the same terms as the current plan.
For Against Abstain
/ / / / / /
Signature(s) (All registered owners of accounts shown to the left must sign. If
signing for a corporation, estate or trust, please indicate your capacity or
title.)
X
- --------------------------------------------------------------------------------
Signature Date
X
- --------------------------------------------------------------------------------
Signature Date
PLEASE VOTE TODAY! PLEASE VOTE PROMPTLY!
Your vote is needed! Please vote on the reverse side of this form and sign in
the space provided. Return your completed proxy in the enclosed envelope today.
You may receive additional proxies for your other accounts with Quaker. These
are not duplicates; you should sign and return each proxy card in order for your
votes to be counted. Please return them as soon as possible to help save the
cost of additional mailings.
The signers of this proxy hereby appoint DAVID F. GANLEY and PAUL L. GIORGIO,
and each of them, attorneys and proxies, with power of substitution in each, to
vote all shares for the signers at the special meeting of shareholders to be
held October 19, 1998, and at any adjournments thereof, as specified herein, and
in accordance with their best judgement, on any other business that may properly
come before this meeting. If no specification is made herein, all shares will be
voted "FOR" the proposals set forth on this proxy. The proxy is solicited by the
Board of Quaker which recommends a vote "FOR" all matters.
