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
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(Name of Registrant as Specified in Its Charter)
QUAKER INVESTMENT TRUST
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
NOT APPLICABLE
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The Quaker Investment Trust
OFFERING THE QUAKER FAMILY OF FUNDS
QUAKER CORE EQUITY FUND QUAKER AGGRESSIVE GROWTH FUND
QUAKER LARGE-CAP VALUE FUND QUAKER MID-CAP VALUE FUND
QUAKER SMALL-CAP VALUE FUND QUAKER FIXED INCOME FUND
1288 Valley Forge Road, Suite 76, Valley Forge, PA 19482
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 23, 2000
To the Shareholders of the Quaker Family of Funds:
The Quaker Investment Trust (the "Trust") is holding a special meeting of
its shareholders on Friday, June 23, 2000 at 10:00 a.m., Eastern Time. The
meeting will be held at the Trust's offices, located at 1288 Valley Forge Road,
Suite 76, Valley Forge, PA 19482.
The Trust is a Massachusetts business trust, operating as a registered
management investment company. The Trust has authorized the division of its
shares into various series (each a "Fund" and together the "Funds")and currently
offers shares of the following Funds to the public: Quaker Core Equity Fund;
Quaker Aggressive Growth Fund; Quaker Large-Cap Value Fund; Quaker Mid-Cap Value
Fund; Quaker Small-Cap Value Fund, and; Quaker Fixed Income Fund.
The Trust further has authorized the division of its shares into various
classes, each with different sales charges and/or ongoing fees. The table below
briefly describes the various share classes currently offered by the Trust and
identifies which Funds offer which share class. This proxy statement relates
only to the No-Load shareholders of the Funds because the Trust has not yet
begun offering its other share classes to the public.
<TABLE>
<CAPTION>
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CLASS A SHARES ARE CLASS C SHARES ARE
OFFERED TO THE CLASS B SHARES ARE OFFERED WITHOUT SALES NO-LOAD SHARES ARE
PUBLIC WITH A OFFERED WITH A LOADS, BUT WITH A OFFERED WITHOUT SALES
FRONT-END SALES DECLINING CONTINGENT CONTINUING ADDITIONAL CHARGES OR ADDITIONAL
FUND CHARGE. DEFERRED SALES CHARGE. SERVICING FEE. ONGOING SERVICING FEES
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<S> <C> <C> <C> <C>
CORE EQUITY X X X X
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AGGRESSIVE GROWTH X X X X
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LARGE-CAP VALUE X X X X
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MID-CAP VALUE X X X X
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SMALL-CAP VALUE X X X X
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FIXED INCOME X X X X
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</TABLE>
The meeting is being held for the following purposes:
(1) To Approve a new Master Investment Advisory Agreement for all series of the
Trust;
(2) To approve new sub-advisory agreements for each series of the Trust;
(3) To approve the conversion of No-Load shares to Class A shares; and
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(4) To transact such other business as may properly come before the meeting.
You may vote at the meeting if you are the record owner of shares of any
Fund as of the close of business on April 28, 2000. If you attend the meeting,
you may vote your shares in person. If you expect to attend the meeting, please
call the Trust at 1-800-220-8888 to inform them. If you do not expect to attend
the meeting, please fill in, date, sign and return the proxy card in the
enclosed, postage paid envelope.
PLEASE VOTE NOW TO HELP SAVE THE COST OF ADDITIONAL SOLICITATIONS.
As always, we thank you for your confidence and support.
By Order of the Board of Trustees,
/s/ Jeffry H. King
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JEFFRY H. KING
Chairman
May 25, 2000
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THE QUAKER INVESTMENT TRUST
QUAKER CORE EQUITY FUND QUAKER AGGRESSIVE GROWTH
QUAKER LARGE-CAP VALUE FUND QUAKER MID-CAP VALUE FUND
QUAKER SMALL-CAP VALUE FUND QUAKER FIXED INCOME FUND
1288 Valley Forge Road, Suite 76, Valley Forge, PA 19482
Toll Free: 800-220-8888
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PROXY STATEMENT
DATED MAY 25, 2000
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SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 23, 2000
WHAT IS HAPPENING?
The Board of Trustees (the "Board") of the Quaker Investment Trust (the
"Trust") has voted to call a special meeting of all shareholders of each of
the six separate series listed above (each a "Fund" and together the
"Funds"), in order to seek shareholder approval of three proposals relating
to the Trust. The meeting will be held at the Trust's offices, located at
1288 Valley Forge Road, Suite 76, Valley Forge, PA 19482, at 10:00 a.m.,
Eastern Time, on Friday, June 23, 2000. If you expect to attend the meeting
in person, please call the Trust at 1-800-220-8888 to inform them of your
intentions.
WHAT ITEMS OF TRUST BUSINESS AM I BEING ASKED TO VOTE ON?
The Board is asking you to approve three proposals: (1) Approve a new
Master Investment Advisory Agreement for all Funds, (2) Approve new
sub-investment advisory agreements for each Fund; and (3) Approve the
conversion of No-Load shares to Class A shares.
WHICH PROPOSALS APPLY TO ME?
The table below summarizes each proposal to be presented at the meeting and
shows the Funds (and share classes) whose shareholders may vote for each
proposal.
<TABLE>
<CAPTION>
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PROPOSAL WHICH SHAREHOLDERS MAY VOTE
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<S> <C>
1. Approving a new Master Investment Advisory Agreement
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2. Approving a new sub-investment advisory agreement:
A. For the Quaker Core Equity Fund A. All Shareholders of the Core Equity Fund only.
B. For the Quaker Aggressive Growth Fund B. All Shareholders of the Aggressive Growth Fund only.
C. For the Quaker Large Cap Value Fund C. All Shareholders of the Large-Cap Value Fund only.
D. For the Quaker Mid-Cap Value Fund D. All Shareholders of the Mid-Cap Value Fund only.
E. For the Quaker Small-Cap Value Fund E. All Shareholders of the Small-Cap Value Fund only.
F. For the Quaker Fixed Income Fund F. All Shareholders of the Fixed Income Fund only.
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3. Approving the conversion of No-Load shares to Class A All shareholders of all Funds.
shares.
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</TABLE>
<PAGE>
AM I ELIGIBLE TO VOTE?
If you were the record owner of any shares of any Fund as of the close of
business on April 28, 2000 (the "Record Date"), then you are eligible to
vote on one or more of the proposals (See the table in the preceding
paragraph to find out which proposals apply to you). The number of shares
for each class of shares outstanding for each Fund as of the Record Date is
listed in Appendix A to this proxy statement. Each share counts as one
vote, and fractional shares count as fractional votes.
HOW DO I VOTE?
VOTING BY PROXY
The simplest and quickest way for you to vote is to complete, sign and date
the enclosed proxy card and mail it back to the Trust in the envelope
provided. The Board urges you to fill out and return your proxy card even
if you plan to attend the meeting. Returning your proxy card will not
affect your right to attend the meeting and vote.
The Board has named Linda Coyne, Krista Ziegler, and David Ganley as
proxies, and their names appear on your proxy card(s). By signing your
proxy card and returning it, you are appointing those persons to vote for
you at the meeting. If you properly fill in your proxy card and return it
to the Trust in time to vote, one of the appointed proxies will vote your
shares as you have directed. If you sign and return your proxy card, but do
not make specific choices, one of the appointed proxies will vote your
shares on each proposal as recommended by the Board.
If an additional matter is presented for vote at the meeting, one of the
appointed proxies will vote in accordance with his or her best judgment. At
the time this proxy statement was printed, the Board was not aware of any
other matter that needed to be acted upon at the meeting other than the
three proposals discussed in this proxy statement.
If you appoint a proxy by signing and returning your proxy card, you can
revoke that appointment at any time before it is exercised. You can revoke
your proxy by sending in another proxy with a later date, or by notifying
the Trust's secretary in writing, before the meeting, that you have revoked
your proxy, at the following address: Ms. Laurie Keyes, The Quaker
Investment Trust, 1288 Valley Forge Road, Valley Forge, PA 19482.
VOTING IN PERSON
If you attend the meting and wish to vote in person, you will be given a
ballot when you arrive. If you have already voted by proxy and wish to vote
in person instead, you will be given an opportunity to do so during the
meeting. If you attend the meeting, but your shares are held in the name of
your broker, bank or other nominee, you must bring with you a letter from
that nominee stating that you are the beneficial owner of the shares on the
Record Date and authorizing you to vote.
HOW DOES THE BOARD RECOMMEND THAT I VOTE?
The Board recommends that you vote "For" each of the proposals described in
this proxy statement.
WHAT IS A QUORUM AND WHY IS IT IMPORTANT?
A quorum is the number of outstanding shares, as of the Record Date, that
must be present, in person or by proxy, in order for the Trust to hold a
valid shareholder meeting. The Trust cannot hold a valid shareholder
meeting unless there is a quorum of shareholders present in person or by
proxy. The Trust's Agreement and Declaration of Trust requires that the
presence, in person or by proxy, of a majority of the shares entitled to
vote on a matter shall constitute a quorum, unless a larger number of
shares is required pursuant to law. The table below sets forth the quorum
required for each proposal to be voted at the meeting:
2
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<TABLE>
<CAPTION>
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PROPOSAL NUMBER OF SHARES REQUIRED FOR QUORUM
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<S> <C>
1. Approving a new Master Investment Advisory A majority of all outstanding shares (as of April 28,
Agreement. 2000) of each Fund, with each Fund voting separately.
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2. Approving New Sub-investment Advisory
Agreements;
A. For the Quaker Core Equity Fund. A. A majority of the outstanding shares (as of
April 28, 2000) of the Core Equity Fund only.
B. For the Quaker Aggressive Growth Fund. B. A majority of the outstanding shares (as of
April 28, 2000) of the Aggressive Growth Fund
C. For the Quaker Large-Cap Value Fund. only.
C. A majority of the outstanding shares (as of
D. For the Quaker Mid-Cap Value Fund. April 28, 2000) of the Large-Cap Value Fund only.
D. A majority of the outstanding shares (as of
E. For the Quaker Small-Cap Value Fund. April 28, 2000) of the Mid-Cap Value Fund only.
E. A majority of the outstanding shares (as of
F. For the Quaker Fixed Income Fund. April 28, 2000) of the Small-Cap Value Fund only
F. A majority of the outstanding shares (as of
April 28, 2000) of the Fixed Income Fund only.
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3. Approving the Conversion of No-Load shares to A majority of the outstanding shares (as of April 28,
Class A Shares. 2000) of each Fund, with each Fund voting separately.
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</TABLE>
Under rules applicable to broker-dealers, if your broker holds your shares
in its name, the broker is not allowed to vote your shares on any of the
Proposals unless it has received voting instructions from you. If your
broker does not vote your shares on one or more Proposals because it has
not received instructions from you, those shares will be considered broker
non-votes.
Broker non-votes and abstentions with respect to a proposal count as
present for purposes of establishing a quorum, and count as votes cast
against each Proposal.
WHAT IS THE VOTE NECESSARY TO APPROVE EACH PROPOSAL?
The following table describes the votes needed to approve each Proposal:
<TABLE>
<CAPTION>
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PROPOSAL NUMBER OF SHARES REQUIRED TO APPROVE;
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<S> <C>
1. Approving a new Master Investment Advisory The affirmative vote of a majority of the shares entitled
Agreement for all Funds. to vote of each Fund is required to approve the Proposal
as to that Fund. Each Fund votes independently.
Accordingly, the shareholders of one Fund could approve
the Proposal and the shareholders of another Fund could
reject the Proposal.
The Board has decided that a Master Investment Advisory
Agreement is feasible only if it applies to all Funds of
the Trust. Accordingly, the Board has decided that, in
order for the Master Agreement to pass and take effect,
the affirmative vote of a majority of each Fund's
shareholders is required. If the shareholders of any one
Fund reject the Proposal, then the Proposal fails in its
entirety.
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3
<PAGE>
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2. Approving New Sub-Investment Advisory
Agreements;
A. For the Quaker Core Equity Fund. A. A majority of the outstanding shares entitled to
vote of the Core Equity Fund only.
B. For the Quaker Aggressive Growth Fund. B. A majority of the outstanding shares entitled to
vote of the Aggressive Growth Fund only.
C. For the Quaker Large-Cap Value Fund. C. A majority of the outstanding shares entitled to
vote of the Large-Cap Value Fund only.
D. For the Quaker Mid-Cap Value Fund. D. A majority of the outstanding shares entitled to
vote of the Mid-Cap Value Fund only.
E. For the Quaker Small-Cap Value Fund. E. A majority of the outstanding shares entitled to
vote of the Small-Cap Value Fund only.
F. For the Quaker Fixed Income Fund. F. A majority of the outstanding shares entitled to
vote of the Fixed Income Fund only.
Approval of this Proposal is contingent on the Approval
of Proposal # 1 by a majority of the outstanding shares
of each Fund. If the shareholders of any one Fund reject
Proposal # 1, Proposal # 2 fails automatically as to all
Funds. In such an event, the current investment adviser
to all Funds except the Aggressive Growth Fund and the
Fixed Income Fund would remain the same. For the
Aggressive Growth Fund and the Fixed Income Funds, the
Board would be forced to seek alternative solutions.
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3. Approving the Conversion of No-Load Class The affirmative vote of a majority of the shares entitled
Shares to Class A Shares. to vote of each Fund is required to approve the
Proposal. Each Fund votes separately. Accordingly, the
shareholders of one or more Funds could approve the
Proposal and the shareholders of one or more Funds could
reject the Proposal.
Approval of this Proposal is not contingent on the
passage of any other Proposal.
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</TABLE>
The Investment Company Act of 1940, as amended (the "1940 Act") defines a
"majority" of the outstanding voting securities of a Fund as the lesser of
(a) the vote of holders of at least 67% of the voting securities of the
Fund present in person or by proxy, if more than 50% of such shares are
present in person or by proxy; or (b) the vote of holders of more than 50%
of the outstanding voting securities of the Fund.
Broker non-votes will not count as votes cast and will have the effect of
votes against each Proposal.
CAN THE MEETING BE ADJOURNED?
The appointed proxies may propose to adjourn the meeting, either in order
to solicit additional proxies or for other purposes. If there is a proposal
to adjourn the meeting, the affirmative vote of a majority of the shares
present at the meeting, in person or by proxy, is required to approve such
proposal.
WHO IS PAYING THE COST OF THE SHAREHOLDER MEETING AND THIS PROXY SOLICITATION?
The Trust is paying the costs of the shareholder meeting and proxy
solicitation.
4
<PAGE>
WHO DO I CALL IF I HAVE QUESTIONS?
Please call the Trust at 1-800-220-8888 with any questions you may have
relating to this proxy statement. Also, at your request, the Trust will
send you a free copy of its most recent audited annual report. Simply call
the Trust to request a copy of either report.
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PROPOSAL # 1. APPROVAL OF A NEW MASTER INVESTMENT ADVISORY AGREEMENT WITH QUAKER
MANAGEMENT CORP.
WHICH SHAREHOLDERS VOTE FOR THIS PROPOSAL?
All shareholders of record as of April 28, 2000 of all Funds vote for this
proposal.
WHAT IS HAPPENING?
After thoughtful consideration, the Board has decided that the Trust could
be managed much more efficiently and investment advisory services could be
monitored more closely if the Trust engaged a single company to provide
overall investment management services to all Funds of the Trust, instead
of separate investment advisers for each Fund, as is now the case.
WHY DOES THE BOARD WANT TO CHANGE THE INVESTMENT MANAGEMENT STRUCTURE OF THE
FUNDS?
Currently, each Fund of the Trust employs an investment adviser to provide
investment advice to that Fund. The Board must oversee each investment
adviser and generally supervise the activities of each adviser.
After several years of operating in this manner, the Board has discovered
that such an arrangement is cumbersome, labor intensive and expensive for
each investment adviser to manage. Further, because the Board is
responsible for the monitoring of the investment activities of each Fund,
each investment adviser must provide periodic reports to the Board
concerning its activities. Some of the information contained in the reports
is duplicative of information contained in other reports, is time
consuming, both for the investment adviser and the Trust, and there is
always the potential that important information that the Board needs could
be overlooked due to the number and volume of separate reports that the
Board must review. Accordingly, the Board has decided to employ a single
company to be responsible for the investment operations of all the Funds,
to provide, or arrange to provide, day-to-day investment advisory services
to each Fund, and to be primarily responsible to the Board for the conduct
of each Fund's investment activities.
WHO HAS THE BOARD CHOSEN TO SERVE AS THE NEW INVESTMENT ADVISER?
On April 12, 2000, the Board met to consider a new Investment Adviser for
all the Funds, and after full deliberation, selected Quaker Management
Corp. to serve in that capacity. Quaker Management Corp. ("QMC") is a
Pennsylvania corporation doing business and registered with the Securities
and Exchange Commission ("SEC") as an investment adviser.
QMC's address is 1288 Valley Forge Road, Suite 75, Valley Forge, PA 19482.
QMC is a new company formed specifically to act as Master Investment
Adviser to the Trust. QMC is controlled by Jeffry H. King, who owns 100% of
QMC's outstanding shares. Mr. King is currently the sole director of QMC.
Mr. King is also a Trustee of the Trust and serves as Chairman of the
Board.
David C. Dameron is President of QMC and is responsible for the day-to-day
activities of QMC. Mr. Dameron has been an investment professional for more
than 13 years. He currently holds NASD Series 7 (General Securities
Representative), Series 63 (State Securities Representative), Series 65
(Registered Investment Adviser), and Series 24 (General Securities
Principal) licenses. Mr. Dameron also serves as an officer of the Trust in
the capacity of President of each Fund. Mr. Dameron also serves as Chief
Executive Officer of Quaker Financial Advisors, Inc., a Pennsylvania
investment advisory company, and is a registered representative with Quaker
Securities, Inc., a Pennsylvania broker/dealer company registered with the
5
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Securities and Exchange Commission. Prior to joining the Quaker Group, Mr.
Dameron was Director of Marketing for the Killen Group, a Pennsylvania
registered investment adviser, Berwyn Financial Services and the Berwyn
Fund of Berwyn, Pennsylvania, and was a registered representative with
Securities America of Omaha, Nebraska.
WHAT ARE QMC'S RESPONSIBILITIES?
If you approve this proposal, QMC will become the new investment adviser to
each Fund of the Trust. QMC will be responsible for the overall investment
operations of all the Funds; it will be required to provide, or arrange to
provide, day-to-day investment advisory services to each Fund, and it will
be primarily responsible to the Board for the conduct of each Fund's
investment activities.
QMC will prepare quarterly reports to the Board concerning the investment
activities of each Fund (or more frequently if the Board requires). QMC
will be responsible for ensuring that the Funds are managed in accordance
with their investment objectives and restrictions, all as set forth in the
Trust's most current prospectus and statement of additional information,
and QMC will be responsible for reporting any deviations to the Board and
will be responsible for taking such corrective actions as the Board may
direct.
QMC will be authorized to engage persons, subject to shareholder approval,
to serve one or more Funds as sub-advisers. These sub-advisers will provide
day-to-day investment advice and choose the securities in which to invest
to one or more Funds. The sub-advisers will be paid fees by QMC, will
report directly to QMC, and QMC will be responsible to report to the Board
for any errors or omissions made by a sub-adviser.
WHY IS MY VOTE REQUIRED?
Whenever there is a material change to an investment management agreement,
or a new investment adviser is chosen to serve a Fund, federal law requires
that the shareholders of the Fund approve the selection. Because the Board
has chosen QMC to serve as the new investment adviser to each Fund, the
shareholders of each Fund must separately approve the Board's selection.
IF QMC BECOMES THE INVESTMENT ADVISER, WILL MY FEES INCREASE?
If QMC becomes the new Investment Adviser to the Funds, the overall
investment advisory fees charged to each Fund will increase by 0.05%
annually for all Funds except the Aggressive Growth Fund, whose fees will
increase by 0.30% annually, and the Fixed Income Fund, whose fees will
increase by 0.30% annually. The Board believes that the increase in fees is
minimal and the benefits to each Fund of having a general investment
manager outweigh the slight increase in fees. A copy of the Master
Investment Advisory Agreement approved by the Board is included as Exhibit
1 to this proxy.
The table set forth below shows the aggregate investment advisory fees
payable by each Fund for its fiscal year that ended on June 30, 1999, the
investment advisory fees that would have been paid to QMC under the
proposed new agreement, and the difference in aggregate investment advisory
fees.
<TABLE>
<CAPTION>
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HYPOTHETICAL IA FEES HYPOTHETICAL
PAYABLE UNDER NEW MASTER DIFFERENCE IN FEES
AGGREGATE IA FEES AT AGREEMENT AT JUNE 30, 1999 PAYABLE AT JUNE 30,
FUND JUNE 30, 1999 1999
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<S> <C> <C> <C>
Quaker Core Equity $109,971 $117,302 $7,331
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Quaker Aggressive Growth $18,600 $26,040 $7,440
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Quaker Large-Cap Value $16,846 $17,969 $1,123
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Quaker Mid-Cap Value $70,885 $75,611 $4,726
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Quaker Small-Cap Value $85,980 $90,757 $4,777
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Quaker Fixed Income $30,773 $51,288 $20,515
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</TABLE>
Jeffry H. King, the controlling shareholder and sole director of QMC, also
serves as a Trustee for the Trust. Mr. King is not compensated for his
services to the Trust as Trustee, but may receive compensation from QMC as
a result of his ownership of QMC.
6
<PAGE>
HOW WILL THE APPROVAL OF QMC AFFECT THE INVESTMENT MANAGEMENT OF MY FUND?
Your Fund shares will not change. You will own the same shares in the same
Fund. Further, with the exception of the Quaker Aggressive Growth Fund and
the Quaker Fixed Income Fund, each current investment adviser to each Fund
has agreed to continue providing day-to-day investment advice to the Funds
in the capacity of sub-advisers. QMC has proposed, and the Board has
approved, the appointment of new sub-advisers to the Quaker Aggressive
Growth Fund and the Quaker Fixed Income Fund. QMC and each sub-adviser have
pledged to the Board that it will provide, or continue to provide, the same
high quality investment management services to your Fund that your Fund has
enjoyed in the past.
Since QMC, and not the sub-advisers, will be primarily responsible for the
reporting and monitoring functions previously shouldered entirely by the
sub-advisers, the sub-advisers will now have more time to devote to
investment management. The Board is confident that the new arrangement will
allow the Funds to have a greater opportunity to prosper than under the
current arrangement.
Information concerning sub-advisers to each Fund is contained in the
explanations relating to Proposal # 2.
WHAT HAPPENS IF QMC IS NOT APPROVED AS THE NEW INVESTMENT ADVISER?
The Board has determined that, in order to achieve the benefits of a Master
Investment Advisory arrangement, the arrangement must apply to ALL Funds of
the Trust. However, federal law dictates that the shareholders of each Fund
separately approve the Agreement. As a result, the shareholders of one or
more Funds could reject the Proposal. If that happened, the hoped-for
benefits of the arrangement would be destroyed. Accordingly, the Board has
decided that for Proposal # 1 to take effect, a majority of the
shareholders of all Funds must approve the appointment. If Proposal # 1 is
rejected by one or more Funds, the Proposal will fail in its entirety.
Also, if Proposal # 1 fails, Proposal # 2 will be moot as well. For the
Trust to obtain the full benefits of the proposed changes, all of the Funds
should approve the proposal.
If Proposal # 1 is rejected, the Board will consider alternate investment
management options.
HOW DOES THE BOARD RECOMMEND THAT I VOTE ON PROPOSAL # 1?
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YOUR BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL # 1.
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PROPOSAL # 2. APPROVAL OF NEW SUB-INVESTMENT ADVISORY AGREEMENTS
WHAT IS HAPPENING?
As you read in the explanation of Proposal # 1 above, the Board is seeking
your approval of QMC to serve as the new Master Investment Adviser for each
Fund. If you and your fellow shareholders approve Proposal # 1, QMC will
become the new Investment Adviser to all Funds. QMC has recommended to the
Board that QMC be allowed to engage certain persons to serve as
sub-advisers to each Fund. These persons, with the exception of the Quaker
Aggressive Growth Fund and the Quaker Fixed Income Fund, are the same
persons who currently serve as investment advisers to the Funds. The Board
has approved the appointment of each of the persons described below to
serve as sub-adviser to one or more Funds. The shareholders of each Fund
will vote on whether to approve the sub-adviser separately. If Proposal # 1
is rejected, the current Advisers will continue to serve as advisers,
except for the Aggressive Growth and Fixed Income Funds. Their situations
are discussed below in subsections 2(b) and 2(e), respectively.
WHY IS MY VOTE REQUIRED?
Whenever there is a material change to an investment management agreement,
or a new investment adviser is chosen to serve a Fund, federal law requires
that the shareholders of the Fund approve the selection. Because
7
<PAGE>
the Board has chosen QMC to serve as the new investment adviser to each
Fund, the shareholders of each Fund must separately approve the Board's
selection. Further, the same rules apply to the selection of sub-advisers.
Whenever there is material change to a sub-investment advisory agreement,
or a new agreement is approved by the Board, the shareholders of the
affected Fund must approve the Board's selection.
WHICH SHAREHOLDERS VOTE FOR THIS PROPOSAL?
Each new sub-advisory agreement, and the Fund to which it applies, is
described in detail below. For each Fund, there is a description of which
shareholders may vote for the Proposal. Please read the entire Proposal
carefully to make sure you know which subsection(s) to vote on.
PROPOSAL # 2(A) NEW SUB-ADVISORY AGREEMENT FOR THE QUAKER CORE EQUITY FUND
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WHICH SHAREHOLDERS VOTE FOR THIS PROPOSAL?
You may vote on this Proposal only if you were a shareholder of record of
shares of the Quaker Core Equity Fund on April 28, 2000.
WHO HAS THE BOARD CHOSEN TO SERVE AS THE FUND'S NEW SUB-ADVISER?
Geewax, Terker & Co. ("GTC") currently serves as the investment adviser to
the Fund. Under the current agreement with the Fund, GTC provides the Core
Equity Fund with a continuous program of investment management, including
the composition of its portfolio, and furnishes advice and recommendations
with respect to investments, investment policies and the purchase and sale
of securities.
QMC, with the Board's consent, has asked GTC to continue to serve the Fund
as its sub-adviser and GTC has agreed to do so, subject to final
shareholder approval.
WHY DID QMC AND THE BOARD CHOOSE GEEWAX, TERKER & CO.?
As the current investment adviser to the Fund, GTC has achieved outstanding
investment results for the Fund. For the Fund's fiscal year ending June 30,
1999, the Fund had a total return of 28.20%. For the Fund's fiscal year
through March 31, 2000 (nine months), the Fund's total return was 24.53%.
GTC has been recognized as one of the leading equity management firms in
the nation. Both QMC and the Board have been very pleased with GTC's
performance as investment adviser to the Fund, and both asked GTC to stay
on as sub-adviser in order to provide continuity of day-to-day investment
management for the Fund.
TELL ME SOMETHING ABOUT GTC'S BACKGROUND.
GTC was established as a Pennsylvania partnership in 1982 and is registered
as an investment adviser under the Investment Advisers Act of 1940, as
amended. GTC currently serves as investment adviser to over $8.2 billion in
assets. GTC operates as an investment advisory firm, and has been rendering
investment counsel, utilizing investment strategies substantially similar
to that of the Core Equity Fund, to individuals, pension and profit sharing
plans, trusts, estates, charitable organizations and corporations since
1987. GTC's address is 99 Starr Street, Phoenixville, Pennsylvania 19460.
GTC is controlled by John J. Geewax and Bruce E. Terker.
John J. Geewax, general partner of GTC, has responsibility for the
day-to-day management of the Fund's portfolio. Prior to establishing
Geewax, Terker & Co. in 1982, Mr. Geewax served as a portfolio manager with
Pennsylvania Asset Services beginning in 1980. He was also an instructor at
the Wharton School of the University of Pennsylvania from 1980 to 1982.
Messrs. Geewax and Terker, under the aegis Geewax, Terker & Co., have
provided investment management services and counseling to a significant
number of individual clients, large institutional clients and other
registered investment companies, including the Noah Fund and Vanguard
Trustees Equity Fund since founding the company. GTC has served as
investment adviser to the Fund since November, 1998. Its current agreement
with the Fund is up for renewal on October 19, 2000. For the Fund's fiscal
year ending on June 30,
8
<PAGE>
1999, the Fund paid $109,971 in investment advisory fees to GTC, and GTC
reimbursed the Fund for $16,165 in expenses.
WHAT ARE GTC'S RESPONSIBILITIES AS SUB-ADVISER TO THE FUND?
GTC will be responsible for the day-to-day investments of the Fund and will
choose the securities in which the Fund invests. GTC also will provide the
Fund with investment advice and recommendations with respect to
investments, investment policies and the purchase and sale of securities.
GTC will report to and be under the general supervision of QMC. QMC will
have primary responsibility for the activities of GTC and will report to
the Board with respect to GTC's activities.
IF GTC BECOMES THE SUB-ADVISER, WILL MY FEES INCREASE?
If GTC becomes the new Sub-Adviser to the Fund, QMC will pay a portion of
the fee it receives to GTC. Accordingly, your overall investment management
fees will increase by 0.05% annually, the difference being the additional
amount paid to QMC under the Master Investment Advisory Agreement. The
Board believes that the increase in fees is minimal and the benefits to
your Fund of having a general investment manager outweigh the slight
increase in fees. GTC has agreed to serve as Sub-Adviser for the same fees
it currently received as adviser. A copy of the Sub-Investment Advisory
Agreement for the Fund as approved by the Board is included as Exhibit 2 to
this proxy.
HOW WILL THE APPROVAL OF GTC AFFECT THE INVESTMENT MANAGEMENT OF MY FUND?
Your Fund shares will not change. QMC and GTC have each pledged to the
Board that it will provide, or continue to provide, the same high quality
investment management services to your Fund that your Fund has enjoyed in
the past.
Since QMC, and not GTC, will be primarily responsible for the reporting and
monitoring functions previously shouldered entirely by GTC, GTC will now
have more time to devote to investment management. The Board is confident
that the new arrangement will allow your Fund to have a greater opportunity
to prosper than under the current arrangement.
WHAT HAPPENS IF GTC IS NOT APPROVED AS THE NEW SUB-ADVISER?
Your vote on this Proposal is only valid if Proposal # 1 has passed as to
all Funds. If Proposal # 1 is rejected, the situation with your Fund will
remain as it was and GTC will continue to serve as the Fund's investment
adviser. However, if Proposal # 1 is approved and you reject this Proposal,
then QMC will be the sole provider of investment advisory services to your
Fund.
If you and your fellow shareholders reject this Proposal, the Board will
consider alternate investment management options.
HOW DOES THE BOARD RECOMMEND THAT I VOTE ON PROPOSAL # 2(A)?
- --------------------------------------------------------------------------------
YOUR BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL # 2(A).
- --------------------------------------------------------------------------------
PROPOSAL # 2(B) NEW SUB-ADVISORY AGREEMENT FOR THE QUAKER AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
WHICH SHAREHOLDERS VOTE FOR THIS PROPOSAL?
You may vote on this Proposal only if you were a shareholder of record of
shares of the Quaker Aggressive Growth Fund on April 28, 2000.
9
<PAGE>
WHO HAS THE BOARD CHOSEN TO SERVE AS THE FUND'S NEW SUB-ADVISER?
DG Capital Management, Inc. ("DGCM") the former investment adviser to the
Fund, resigned as investment adviser effective April 30, 2000. On April 12,
2000, the Board met to choose a successor to DGCM, and appointed QMC to be
the Investment Adviser, subject to final shareholder approval. The Board's
reasons for choosing QMC are contained in the discussion relating to
Proposal # 1. QMC, for the reasons discussed below, recommended to the
Board that Quaker Financial Advisors, Inc. ("QFA"), a Pennsylvania
corporation, be appointed as the new Sub-Adviser to the Fund. After full
deliberation, the Board unanimously approved QFA as the new Sub-Adviser and
recommends that you and your fellow shareholders approve the Board's
selection.
WHY DID QMC AND THE BOARD CHOOSE QUAKER FINANCIAL ADVISORS, INC.?
DGCM resigned as investment adviser to the Fund because DGCM, for a variety
of business reasons, withdrew its federal registration as an investment
adviser. Generally, an entity may not serve as an investment adviser to a
mutual fund unless that entity is registered as an investment adviser with
the Securities and Exchange Commission. Once DGCM withdrew its
registration, it was no longer eligible to serve as investment adviser to
the Fund.
Mr. Manu Daftary is the President of DGCM and the firm's sole shareholder.
He also was the Fund's portfolio manager and has been responsible for the
day-to-day management of the Fund's portfolio since its inception. He has
been with DGCM since July 1996. Previously Mr. Daftary was a portfolio
manager with Greenville Capital Management during 1995 and early 1996; was
Senior Vice President/Portfolio Manager with Hellman, Jordan Management
Company from 1993-1995; was co-manager of the institutional growth stock
portfolio with Geewax, Terker & Co. from 1988-1993.
The Board has been extremely pleased with Mr. Daftary's investment
management of the Fund and was very saddened at the news that DGCM was
resigning as investment adviser to the Fund. However, Quaker Financial
Advisors. Inc. ("QFA") approached Mr. Daftary and asked him to join the
firm as an employee and portfolio manager. Mr. Daftary agreed to do so.
When the Board was informed that QFA had obtained the services of Mr.
Daftary and that he would be available to continue providing investment
advice to the Fund, the Board gave great weight to that fact in its
decision as to whether or not to engage QFA as Sub-Adviser.
By appointing QFA as Sub-Adviser, the Fund will continue to benefit from
the services of Mr. Daftary. Although past performance is no guarantee of
future results, Mr. Daftary's management of the Fund has been excellent.
For the Fund's fiscal year ending June 30, 1999, the Fund had a total
return of 49.50%. For the Fund's fiscal year through March 30, 2000, the
Fund's total return was 77.21%.
TELL ME SOMETHING ABOUT QFA'S BACKGROUND.
QFA was established as a Pennsylvania corporation in 1998 , and is
registered under the Investment Advisors Act of 1940, as amended. QFA
currently serves as investment advisor to over $20 million in assets. QFA
has been rendering investment counsel to individuals, banks and thrift
institutions, pension and profit sharing plans, trusts, estates, charitable
organizations and corporations since 1998. QFA's address is 1288 Valley
Forge Road, Suite 76, Valley Forge, PA 19482. QFA is controlled by Mr.
Jeffry H. King, who is also a Trustee of the Trust and Chairman of the
Board. Mr. David C. Dameron is President of QFA and is also an officer of
the Trust, serving as President of each Fund. Mr. King is the sole director
of QFA.
Mr. Manu Daftary serves as Portfolio Manager for QFA and will have
day-to-day responsibility for choosing the investments of the Fund.
In selecting portfolio companies for the Fund, the QFA will continue to
manage the Fund as it has in the past, seeking a balance between investing
in "special situation" companies and investing in the securities of
companies that have high or accelerating profitability, an element of
franchise value, and reasonable valuations. In purchasing securities for
the Fund, the Fund's Advisor looks for two primary characteristics: 1)
superior risk/reward due to inefficient pricing of the security due to lack
of research coverage; and 2) a measure of downside risk protection due to
the company's low correlation to the capital markets.
10
<PAGE>
WHAT ARE QFA'S RESPONSIBILITIES AS SUB-ADVISER TO THE FUND?
QFA will be responsible for the day-to-day investments of the Fund and will
choose the securities in which the Fund invests. QFA also will provide the
Fund with investment advice and recommendations with respect to
investments, investment policies and the purchase and sale of securities.
QFA will report to and be under the general supervision of QMC. QMC will
have primary responsibility for the activities of QFA and will report to
the Board with respect to QFA's activities.
IF QFA BECOMES THE SUB-ADVISER, WILL MY FEES INCREASE?
If QFA becomes the new Sub-Adviser to the Fund, QMC will pay a portion of
the fee it receives to QFA. Accordingly, your overall investment management
fees will increase by 0.30% annually, the difference being the additional
amount paid to QMC under the Master Investment Advisory Agreement (1.05% to
QMC vs 0.75% to DGCM). The Board believes that the benefits to your Fund of
having a general investment manager outweigh the increase in fees. Further,
it was important to the Board that Mr. Daftary be available to continue
providing day-to-day investment advice to the Fund, and The Board
concluded, in the exercise of its reasonable business judgment, that the
benefits to the Fund of having Mr. Daftary's continued services outweighed
the additional costs. A copy of the Sub-Investment Advisory Agreement for
the Fund as approved by the Board is included as Exhibit 3 to this proxy.
Mr. King, as sole shareholder and director of QFA, may receive compensation
from QFA from the advisory fees QFA receives for its services to the Fund.
Mr. King, as sole shareholder of QMC, may receive additional compensation
from QMC from the advisory fees QMC receives for its services to the Fund.
For the Fund's fiscal year ended June 30, 1999, the Fund paid $18,600 in
investment advisory fees and DGMC reimbursed the Fund for $16,878 in
expenses.
HOW WILL THE APPROVAL OF QFA AFFECT THE INVESTMENT MANAGEMENT OF MY FUND?
Your Fund shares will not change. QMC and QFA have each pledged to the
Board that it will provide, or continue to provide, the same high quality
investment management services to your Fund that your Fund has enjoyed in
the past.
Since QMC, and not QFA, will be primarily responsible for the reporting and
monitoring functions previously shouldered entirely by QFA, QFA will now
have more time to devote to investment management. The Board is confident
that the new arrangement will allow your Fund to have a greater opportunity
to prosper than under the current arrangement.
WHAT HAPPENS IF QFA IS NOT APPROVED AS THE NEW SUB-ADVISER?
Your vote on this Proposal is only valid if Proposal # 1 has passed as to
all Funds. If Proposal # 1 is rejected, the Trust will have to solicit your
vote on an alternative arrangement. That solicitation will take some time,
and there is the possibility that your Fund could be without the services
of an investment adviser for some period of time during the pendency of the
next solicitation. Further, failure to approve Proposal # 1 and this
proposal would result in significant increased expense to the Fund in
choosing a new adviser and gaining your approval of that choice.
If Proposal # 1 is approved, but you reject this Proposal, QFM will be the
sole investment manager for the Fund.
If you and your fellow shareholders reject this Proposal, the Board will
consider alternate investment management options.
HOW DOES THE BOARD RECOMMEND THAT I VOTE ON PROPOSAL # 2(B)?
- --------------------------------------------------------------------------------
YOUR BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL # 2(B).
- --------------------------------------------------------------------------------
11
<PAGE>
PROPOSAL # 2(C) NEW SUB-ADVISORY AGREEMENT FOR THE QUAKER LARGE-CAP VALUE FUND
- ------------------------------------------------------------------------------
WHICH SHAREHOLDERS VOTE FOR THIS PROPOSAL?
You may vote on this Proposal only if you were a shareholder of record of
shares of the Quaker Large-Cap Value Fund on April 28, 2000.
WHO HAS THE BOARD CHOSEN TO SERVE AS THE FUND'S NEW SUB-ADVISER?
Compu-Val Investments, Inc. ("CVI") has served as the investment adviser to
the Fund since February, 1999. CVI's current agreement with the Fund
expires on February 26, 2001. CVI currently provides the Fund with a
continuous program of investment management, including the composition of
its portfolio, and furnishes advice and recommendations with respect to
investments, investment policies and the purchase and sale of securities,
pursuant to an Investment Advisory Agreement with the Trust. The Board has
asked CVI to continue to serve the Fund as Sub-Adviser, and CVI has agreed
to do so, subject to final shareholder approval.
By appointing CVI as Sub-Adviser, the Fund will continue to benefit from
their investment management services.
TELL ME SOMETHING ABOUT CVI'S BACKGROUND.
CVI was established as a Delaware corporation in 1974 and is registered
under the Investment Advisers Act of 1940, as amended. CVI currently serves
as investment adviser to over $170 million in assets. CVI has been
rendering investment counsel, utilizing investment strategies substantially
similar to that of the Large-Cap Value Fund, to individuals, banks and
thrift institutions, pension and profit sharing plans, trusts, estates,
charitable organizations and corporations since 1974. CVI's address is 1702
Lovering Avenue, Wilmington, Delaware, 19806. CVI is controlled by James
Kalil, Ph.D. and Donald J. Kalil.
Christopher O'Keefe, Director of Equity Research for CVI since 1995, is the
Fund's portfolio manager. Previously, Mr. O'Keefe was an investment analyst
with CoreStates Investment Advisors, Philadelphia, PA , since 1989.
WHAT ARE CVI'S RESPONSIBILITIES AS SUB-ADVISER TO THE FUND?
CVI will be responsible for the day-to-day investments of the Fund and will
choose the securities in which the Fund invests. CVI also will provide the
Fund with investment advice and recommendations with respect to
investments, investment policies and the purchase and sale of securities.
CVI will report to and be under the general supervision of QMC. QMC will
have primary responsibility for the activities of CVI and will report to
the Board with respect to CVI's activities.
IF CVI BECOMES THE SUB-ADVISER, WILL MY FEES INCREASE?
If CVI becomes the new Sub-Adviser to the Fund, QMC will pay a portion of
the fee it receives to CVI. Accordingly, your overall investment management
fees will increase by 0.05% annually, the difference being the additional
amount paid to QMC under the Master Investment Advisory Agreement. The
Board believes that the increase in fees is minimal and the benefits to
your Fund of having a general investment manager outweigh the slight
increase in fees. CVI has agreed to serve as Sub-Adviser for the same fees
that it received as adviser. A copy of the Sub-Investment Advisory
Agreement for the Fund as approved by the Board is included as Exhibit 4 to
this proxy. For its fiscal year ended on June 30, 1999, the Fund paid
$16,846 to CVI and CVI reimbursed the Fund for $7,883 in expenses.
HOW WILL THE APPROVAL OF CVI AFFECT THE INVESTMENT MANAGEMENT OF MY FUND?
Your Fund shares will not change. QMC and CVI have each pledged to the
Board that it will provide, or continue to provide, the same high quality
investment management services to your Fund that your Fund has enjoyed in
the past.
12
<PAGE>
Since QMC, and not CVI, will be primarily responsible for the reporting and
monitoring functions previously shouldered entirely by CVI, CVI will now
have more time to devote to investment management. The Board is confident
that the new arrangement will allow your Fund to have a greater opportunity
to prosper than under the current arrangement.
WHAT HAPPENS IF CVI IS NOT APPROVED AS THE NEW SUB-ADVISER?
Your vote on this Proposal is only valid if Proposal # 1 has passed as to
all Funds. If Proposal # 1 is rejected, the situation with your Fund will
remain as it was and CVI will continue to serve as the Fund's investment
adviser. However, if Proposal # 1 is approved and you reject this Proposal,
then QMC will be the sole provider of investment advisory services to your
Fund.
If you and your fellow shareholders reject this Proposal, the Board will
consider alternate investment management options.
HOW DOES THE BOARD RECOMMEND THAT I VOTE ON PROPOSAL # 2(C)?
- --------------------------------------------------------------------------------
YOUR BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL # 2(C).
- --------------------------------------------------------------------------------
PROPOSAL # 2(D) NEW SUB-ADVISORY AGREEMENT FOR THE QUAKER MID-CAP VALUE FUND
- ----------------------------------------------------------------------------
WHICH SHAREHOLDERS VOTE FOR THIS PROPOSAL?
You may vote on this Proposal only if you were a shareholder of record of
shares of the Quaker Mid-Cap Value Fund on April 28, 2000.
WHO HAS THE BOARD CHOSEN TO SERVE AS THE FUND'S NEW SUB-ADVISER?
Compu-Val Investments, Inc. ("CVI") has served as the investment adviser to
the Fund since February 26, 1999. CVI currently provides the Fund with a
continuous program of investment management, including the composition of
its portfolio, and furnishes advice and recommendations with respect to
investments, investment policies and the purchase and sale of securities,
pursuant to an Investment Advisory Agreement with the Trust which will
expire on February 26, 2001. The Board has asked CVI to continue to serve
the Fund as Sub-Adviser, and CVI has agreed to do so, subject to final
shareholder approval.
By appointing CVI as Sub-Adviser, the Fund will continue to benefit from
their investment management services. CVI has served as investment adviser
to the Fund since the Fund's inception.
TELL ME SOMETHING ABOUT CVI'S BACKGROUND.
CVI was established as a Delaware corporation in 1974 and is registered
under the Investment Advisers Act of 1940, as amended. CVI currently serves
as investment adviser to over $170 million in assets. CVI has been
rendering investment counsel, utilizing investment strategies substantially
similar to that of the Large-Cap Value Fund, to individuals, banks and
thrift institutions, pension and profit sharing plans, trusts, estates,
charitable organizations and corporations since 1974. CVI's address is 1702
Lovering Avenue, Wilmington, Delaware, 19806. CVI is controlled by James
Kalil, Ph.D. and Donald J. Kalil.
Christopher O'Keefe, Director of Equity Research for CVI since 1995, is the
Fund's portfolio manager. Previously, Mr. O'Keefe was an investment analyst
with CoreStates Investment Advisors, Philadelphia, PA , since 1989.
WHAT ARE CVI'S RESPONSIBILITIES AS SUB-ADVISER TO THE FUND?
CVI will be responsible for the day-to-day investments of the Fund and will
choose the securities in which the Fund invests. CVI also will provide the
Fund with investment advice and recommendations with respect to
13
<PAGE>
investments, investment policies and the purchase and sale of securities.
CVI will report to and be under the general supervision of QMC. QMC will
have primary responsibility for the activities of CVI and will report to
the Board with respect to CVI's activities.
IF CVI BECOMES THE SUB-ADVISER, WILL MY FEES INCREASE?
If CVI becomes the new Sub-Adviser to the Fund, QMC will pay a portion of
the fee it receives to CVI. Accordingly, your overall investment management
fees will increase by 0.05% annually, the difference being the additional
amount paid to QMC under the Master Investment Advisory Agreement. The
Board believes that the increase in fees is minimal and the benefits to
your Fund of having a general investment manager outweigh the slight
increase in fees. CVI has agreed to serve as Sub-Adviser for the same fees
that it received as adviser. A copy of the Sub-Investment Advisory
Agreement for the Fund as approved by the Board is included as Exhibit 4 to
this proxy. For the Fund's fiscal year ended on June 30, 1999, the Fund
paid $70,885 in investment advisory fees to CVI and CVI reimbursed the Fund
for $16,746 in expenses.
HOW WILL THE APPROVAL OF CVI AFFECT THE INVESTMENT MANAGEMENT OF MY FUND?
Your Fund shares will not change. QMC and CVI have each pledged to the
Board that it will provide, or continue to provide, the same high quality
investment management services to your Fund that your Fund has enjoyed in
the past.
Since QMC, and not CVI, will be primarily responsible for the reporting and
monitoring functions previously shouldered entirely by CVI, CVI will now
have more time to devote to investment management. The Board is confident
that the new arrangement will allow your Fund to have a greater opportunity
to prosper than under the current arrangement.
WHAT HAPPENS IF CVI IS NOT APPROVED AS THE NEW SUB-ADVISER?
Your vote on this Proposal is only valid if Proposal # 1 has passed as to
all Funds. If Proposal # 1 is rejected, the situation with your Fund will
remain as it was and CVI will continue to serve as the Fund's investment
adviser. However, if Proposal # 1 is approved and you reject this Proposal,
then QMC will be the sole provider of investment advisory services to your
Fund.
If you and your fellow shareholders reject this Proposal, the Board will
consider alternate investment management options.
HOW DOES THE BOARD RECOMMEND THAT I VOTE ON PROPOSAL # 2(D)?
- --------------------------------------------------------------------------------
YOUR BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL # 2(D).
- --------------------------------------------------------------------------------
PROPOSAL # 2(E) NEW SUB-ADVISORY AGREEMENT FOR THE QUAKER SMALL-CAP VALUE FUND
- ------------------------------------------------------------------------------
WHICH SHAREHOLDERS VOTE FOR THIS PROPOSAL?
You may vote on this Proposal only if you were a shareholder of record of
shares of the Quaker Small-Cap Value Fund on April 28, 2000.
WHO HAS THE BOARD CHOSEN TO SERVE AS THE FUND'S NEW SUB-ADVISER?
Aronson + Partners ("Aronson") currently provides the Quaker Small-Cap
Value Fund with a continuous program of investment management, including
the composition of its portfolio, and furnishes advice and recommendations
with respect to investments, investment policies and the purchase and sale
of securities, pursuant to an amended Investment Advisory Agreement
("Advisory Agreement") with the Trust, dated October 19, 1998. The
Agreement is due to expire on October 19, 2000. The Board has asked Aronson
to continue to serve the Fund as Sub-Adviser, and Aronson has agreed to do
so, subject to final shareholder approval.
14
<PAGE>
By appointing Aronson as Sub-Adviser, the Fund will continue to benefit
from their investment management services.
TELL ME SOMETHING ABOUT ARONSON'S BACKGROUND.
Aronson was established as a Pennsylvania partnership in 1984 and is
registered as an investment Advisor under the Investment Advisors Act of
1940, as amended. Aronson currently serves as investment advisor to over
$4.2 billion in assets. Aronson has been rendering investment counsel,
utilizing investment strategies substantially similar to that of the
Small-Cap Value Fund, to individuals, banks and thrift institutions,
pension and profit sharing plans, trusts, estates, charitable organizations
and corporations since its inception in 1984. Aronson's address is 230
South Broad Street, 20th Floor, Philadelphia, Pennsylvania 19012. Aronson
is controlled by Theodore R. Aronson.
Mr. Aronson has been responsible for day-to-day management of the Fund's
portfolio since its inception. He has been with Aronson since August 1984.
Previously Mr. Aronson was a partner with Addison Capital Management.
WHAT ARE ARONSON'S RESPONSIBILITIES AS SUB-ADVISER TO THE FUND?
Aronson will be responsible for the day-to-day investments of the Fund and
will choose the securities in which the Fund invests. Aronson also will
provide the Fund with investment advice and recommendations with respect to
investments, investment policies and the purchase and sale of securities.
Aronson will report to and be under the general supervision of QMC. QMC
will have primary responsibility for the activities of Aronson and will
report to the Board with respect to Aronson's activities.
IF ARONSON BECOMES THE SUB-ADVISER, WILL MY FEES INCREASE?
If Aronson becomes the new Sub-Adviser to the Fund, QMC will pay a portion
of the fee it receives to Aronson. Accordingly, your overall investment
management fees will increase by 0.05% annually, the difference being the
additional amount paid to QMC under the Master Investment Advisory
Agreement. The Board believes that the increase in fees is minimal and the
benefits to your Fund of having a general investment manager outweigh the
slight increase in fees. Aronson has agreed to serve as Sub-Adviser for the
same fees that it received as adviser. A copy of the Sub-Investment
Advisory Agreement for the Fund as approved by the Board is included as
Exhibit 5 to this proxy. For the Fund's fiscal year ended June 30, 1999,
the Fund paid $85,980 in investment advisory fees to Aronson and Aronson
reimbursed the Fund for $29,827 in expenses.
HOW WILL THE APPROVAL OF ARONSON AFFECT THE INVESTMENT MANAGEMENT OF MY FUND?
Your Fund shares will not change. QMC and Aronson have each pledged to the
Board that it will provide, or continue to provide, the same high quality
investment management services to your Fund that your Fund has enjoyed in
the past.
Since QMC, and not Aronson, will be primarily responsible for the reporting
and monitoring functions previously shouldered entirely by Aronson, Aronson
will now have more time to devote to investment management. The Board is
confident that the new arrangement will allow your Fund to have a greater
opportunity to prosper than under the current arrangement.
WHAT HAPPENS IF ARONSON IS NOT APPROVED AS THE NEW SUB-ADVISER?
Your vote on this Proposal is only valid if Proposal # 1 has passed as to
all Funds. If Proposal # 1 is rejected, the situation with your Fund will
remain as it was and Aronson will continue to serve as the Fund's
investment adviser. However, if Proposal # 1 is approved and you reject
this Proposal, then QMC will be the sole provider of investment advisory
services to your Fund.
If you and your fellow shareholders reject this Proposal, the Board will
consider alternate investment management options.
15
<PAGE>
HOW DOES THE BOARD RECOMMEND THAT I VOTE ON PROPOSAL # 2(E)?
- --------------------------------------------------------------------------------
YOUR BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL # 2(E).
- --------------------------------------------------------------------------------
PROPOSAL # 2(F) NEW SUB-ADVISORY AGREEMENT FOR THE QUAKER FIXED INCOME FUND
- ---------------------------------------------------------------------------
WHICH SHAREHOLDERS VOTE FOR THIS PROPOSAL?
You may vote on this Proposal only if you were a shareholder of record of
shares of the Quaker Fixed Income Fund on April 28, 2000.
WHO HAS THE BOARD CHOSEN TO SERVE AS THE FUND'S NEW SUB-ADVISER?
Fiduciary Asset Management Co. ("FAMCO") the former investment adviser to
the Fund, resigned as investment adviser effective December 31, 1999. FAMCO
resigned for business and economic reasons. On December 17, 1999, the Board
met to choose a successor to FAMCO, and after a diligent search appointed
ALM Advisors, Inc. ("ALM") to serve as the new Investment Adviser on an
interim basis and to serve as the New Sub-Adviser permanently if approved
by you and your fellow shareholders. ALM succeeded to FAMCO on February 29,
2000. During the interim, the Fund was managed by management of the Trust,
under the general supervision of the Board.
TELL ME SOMETHING ABOUT ALM'S BACKGROUND.
ALM was established as a California corporation in 1995 , and is registered
under the Investment Advisors Act of 1940, as amended. ALM currently serves
as investment advisor to over $136 million in assets. ALM has been
rendering investment counsel to individuals, banks and thrift institutions,
pension and profit sharing plans, trusts, estates, charitable organizations
and corporations since 1995. ALM 's address is 750 East Green Street, Suite
315, Pasadena, CA 91101. ALM is controlled by Mr. Jeffry G. Rollert.
Mr. Rollert serves as Portfolio Manager for ALM and will have day-to-day
responsibility for choosing the investments of the Fund.
WHAT ARE QFA'S RESPONSIBILITIES AS SUB-ADVISER TO THE FUND?
ALM will be responsible for the day-to-day investments of the Fund and will
choose the securities in which the Fund invests. ALM also will provide the
Fund with investment advice and recommendations with respect to
investments, investment policies and the purchase and sale of securities.
ALM will report to and be under the general supervision of QMC. QMC will
have primary responsibility for the activities of ALM and will report to
the Board with respect to ALM's activities.
IF ALM BECOMES THE SUB-ADVISER, WILL MY FEES INCREASE?
If ALM becomes the new Sub-Adviser to the Fund, QMC will pay a portion of
the fee it receives to ALM. Accordingly, your overall investment management
fees will increase by 0.30% annually, the difference being the additional
amount paid to QMC under the Master Investment Advisory Agreement. The
Board believes that the increase in fees is minimal and the benefits to
your Fund of having a general investment manager outweigh the slight
increase in fees. A copy of the Sub-Investment Advisory Agreement for the
Fund as approved by the Board is included as Exhibit 6 to this proxy.
HOW WILL THE APPROVAL OF ALM AFFECT THE INVESTMENT MANAGEMENT OF MY FUND?
Your Fund shares will not change. QMC and ALM have each pledged to the
Board that it will provide the same high quality investment management
services to your Fund that your Fund has enjoyed in the past.
16
<PAGE>
Since QMC, and not ALM, will be primarily responsible for the reporting and
monitoring functions previously shouldered entirely by ALM, ALM will now
have more time to devote to investment management. The Board is confident
that the new arrangement will allow your Fund to have a greater opportunity
to prosper than under the current arrangement.
WHAT HAPPENS IF ALM IS NOT APPROVED AS THE NEW SUB-ADVISER?
Your vote on this Proposal is only valid if Proposal # 1 has passed as to
all Funds. If Proposal # 1 is rejected, the Trust will have to solicit your
vote on an alternative arrangement. That solicitation will take some time,
and there is the possibility that your Fund could be without the services
of an investment adviser for some period of time during the pendency of the
next solicitation. Further, failure to approve Proposal # 1 and this
proposal would result in significant increased expense to the Fund in
choosing a new adviser and gaining your approval of that choice.
If Proposal # 1 is approved, but you reject this Proposal, QFM will be the
sole investment manager for the Fund.
If you and your fellow shareholders reject this Proposal, the Board will
consider alternate investment management options.
HOW DOES THE BOARD RECOMMEND THAT I VOTE ON PROPOSAL # 2(F)?
- --------------------------------------------------------------------------------
YOUR BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL # 2(F).
- --------------------------------------------------------------------------------
PROPOSAL # 3. CONVERSION OF NO-LOAD CLASS SHARES TO CLASS A SHARES
- ------------------------------------------------------------------
WHO MAY VOTE ON THIS PROPOSAL?
All shareholders (as of April 28, 2000) of all Funds may vote on this
Proposal. Shareholders of each Fund vote separately. That means that the
shareholders of one or more Funds may approve the Proposal and the
shareholders of one or more Funds may reject the Proposal.
WHY IS THE TRUST SEEKING TO CONVERT NO-LOAD CLASS SHARES TO CLASS A SHARES?
In addition to its No-Load shares, the Trust has registered and is
preparing to offer Class A, Class B and Class C shares on each Fund. Each
share Class has different sales charges and ongoing fee structures. Each
share class offered by the Trust is subject to fees and expenses relating
to the operations of that share class, as well as fees and expenses that
are common to all share classes.
After extensive deliberations, the Board has determined that it would not
be wise marketing strategy to offer load shares and no-load shares at the
same time. The share types are intended for different types of investors,
and are distributed to the public in different manners. Load shares are
typically distributed through brokers, dealers and other financial
professionals. No-Load shares generally are sold directly to investors or
through fee-based investment advisers. Recently, the Trust has received a
great deal of interest from the broker/dealer community to provide load
shares of each Fund. After consultation with Trust management, the Board
has decided to offer Load shares exclusively and discontinue offering
No-Load shares as of June 16, 2000.
Although the Trust will cease offering new No-Load Class shares to the
public on June 16, 2000, the existing and outstanding No-Load Class shares
of each Fund are still incurring ongoing fees and expenses, and will
continue to do so as long as they exist. The only way to stop the accrual
of fees is for (1) all No-Load Class shareholders to redeem their shares;
or (2) convert the No-Load Class shares to another Class. After full
discussion, the Board unanimously agreed that it would be in the best
interests of the No-Load Class shareholders and the Trust to convert all
No-Load Class shares to Class A shares.
17
<PAGE>
HOW WILL THE CONVERSION TO CLASS A SHARES AFFECT ME?
Your ongoing expenses, except with respect to investment advisory fees,
will not increase as a result of the conversion and your current account
will be exempt from all sales loads on all current holdings as well as
sales charges on any new Class A shares you purchase in the future. If you
open a new account in a different name, however, you will be subject to
sales charges.
If you vote to convert from No-Load Class to Class A shares, all reinvested
dividends and capital gains distributions from your existing shares will
also be exempt from sales charges.
DOES A MAJORITY OF NO-LOAD CLASS SHAREHOLDERS OF ALL FUNDS HAVE TO APPROVE THE
CONVERSION?
No. Each Fund's No-Load Class shareholders are independent of each other
Fund. All No-Load Class shareholders will vote on the conversion, but each
Fund's No-Load Class share vote will be tallied separately. Accordingly,
No-Load Class shareholders of one Fund might approve the conversion, while
No-Load Class shareholders of another Fund might reject the conversion. In
such a case, the Fund(s) that gained approval for the conversion would then
have only three classes of shares, Class A, B and C, and the Fund(s) that
rejected the conversion would continue to have all four Classes.
WHAT HAPPENS IF MY FUND'S NO-LOAD CLASS SHAREHOLDERS DO NOT APPROVE THE
CONVERSION TO CLASS A SHARES?
If you and your fellow shareholders do not approve the conversion for your
Fund, your fees and expenses are likely to increase and have a negative
effect on the performance of your No-Load Class shares over time.
The Board has decided not to offer No-Load Class shares any more. That
means that there will be no additional shareholders of No-Load Class shares
to help you share the burden of fees and expenses on those shares. You and
your remaining shareholders will bear those expenses alone. As other
No-Load Class shareholders redeem their shares, fewer and fewer of you will
be paying expenses that are, in many cases fixed for the entire Class, no
mater how few shareholders there are. This means that as there are fewer
shareholders, the remaining shareholders will pay an increasing share of
those expenses. The effect on your shares is obvious. As your expenses
increase, your overall return will decrease.
WHEN WILL PROPOSAL # 3 BE IMPLEMENTED?
If each Fund's No-Load Class shareholders approve the Proposal, it will
take effect immediately and your shares will be converted to Class A shares
as of the close of business on that day. If the No-Load Class shareholders
of one or more affected Funds do not approve the Proposal, the Board will
consider alternative actions.
HOW DOES THE BOARD RECOMMEND THAT I VOTE ON PROPOSAL # 3?
- --------------------------------------------------------------------------------
YOUR BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL # 3.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OTHER INFORMATION
UNDERWRITER
Declaration Distributors, Inc. ("DDI") 555 North Lane, Suite 6160,
Conshohocken, PA 19428, 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 the Funds of the Trust since October, 1998.
18
<PAGE>
DDI is paid a flat fee of $20,000, annually, by the Trust for its services
to the Funds of the Trust. DDI generally retains commissions on sales of
Fund shares when such sales are not effected by an outside broker, dealer
or financial professional. DDI receives the same commissions as any other
broker with whom the Trust has entered into a selling agreement.
ADMINISTRATOR, TRANSFER AGENT AND FUND ACCOUNTING
Declaration Service Company, 555 North Lane, Suite 6160, Conshohocken, PA
19428, provides administrative, transfer agent, and accounting services to
each Fund pursuant to a written agreement with the Trust.
ALLOCATION OF PORTFOLIO TRANSACTIONS
Each Adviser and Sub-Adviser, in effecting purchases and sales of portfolio
securities for the account of the Funds, is responsible for insuring that
such purchases and sales are effected in accordance with the Trust's policy
of seeking best execution of orders, which includes best net prices, except
to the extent that the Sub-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 the Funds. 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 Adviser and the Sub-Advisers, and such information
still must be analyzed and reviewed by its staff, the receipt of research
information is not expected to materially reduce the Sub-Advisers'
expenses. In selecting among firms believed to meet the criteria for
handling a particular transaction, the Sub-Advisers may give consideration
to those firms that have sold or are selling shares of the Trust, as well
as to those firms that provide market, statistical and other research
information to the Trust, the Adviser and to the Sub-Advisers. The Adviser
and the Sub-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 Adviser and the Sub-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, the Funds could
pay to a firm that provides research services to the Adviser and/or the
Sub-Advisers a commission for effecting a securities transaction for a Fund
in excess of the amount other firms would have charged for the transaction.
The Fund could do this if the Adviser and/or the Sub-Advisers determine(s)
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 Adviser's and/or the
Sub-Advisers' overall responsibilities to the Funds 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 Adviser and/or Sub-Advisers and its/their subsidiaries. In addition,
the investment management fee paid by the Fund to the Adviser is not
reduced because it receives these research services.
PROPOSALS OF SHAREHOLDERS
As a Massachusetts Business Trust, the Trust is not required to hold annual
shareholder meetings, but will hold special meetings as required or deemed
desirable. Since the Trust 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
the Trust no later than four months prior to the date when proxy statements
are mailed to shareholders.
19
<PAGE>
OTHER MATTERS TO COME BEFORE THE MEETING
The Board 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 the Trust.
OWNERSHIP OF FUND SHARES BY TRUSTEES
The following Trustees own 5% or more of the following Funds as of April
28, 2000.
- --------------------------------------------------------------------------------
TRUSTEE NAME OF FUND NUMBER OF SHARES OWNED % OF FUND
- --------------------------------------------------------------------------------
Jeffry H. King Aggressive Growth 894,134 6.50%
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
The financial statements for each Fund and the Trust are incorporated
herein by reference to the Trust's audited annual financial report, dated
June 30, 1999, and the Trust's unaudited semi-annual financial report,
dated December 31, 1999.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
20
<PAGE>
EXHIBIT A
TOTAL OUTSTANDING SHARES
OF EACH FUND, BY CLASS AND TOTAL,
AS OF APRIL 28, 2000
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
NAME OF QUAKER FUND NO-LOAD CLASS A CLASS B CLASS C TOTAL
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Core Equity Fund 30,214,539 NA NA NA 30,214,539
- -------------------------------------------------------------------------------------------------------------
Aggressive Growth Fund 13,759,734 NA NA NA 13,759,734
- -------------------------------------------------------------------------------------------------------------
Large-Cap Value Fund 6,784,095 NA NA NA 6,784,095
- -------------------------------------------------------------------------------------------------------------
Mid-Cap Value Fund 8,906,519 NA NA NA 8,906,519
- -------------------------------------------------------------------------------------------------------------
Small-Cap Value Fund 11,525,687 NA NA NA 11,525,687
- -------------------------------------------------------------------------------------------------------------
Fixed Income Fund 7,205,680 NA NA NA 7,205,680
- -------------------------------------------------------------------------------------------------------------
</TABLE>
HOLDERS OF MORE THAN
5% OF EACH FUND'S SHARES
AS OF APRIL 28, 2000
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
% OWNERSHIP
NAME OF FUND IN SHARE CLASS NUMBER OF OF TOTAL FUND
NAME OF SHAREHOLDER WHICH SHARES HELD OWNED SHARES OWNED SHARES
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
National Investor Services, FBO Quaker Core Equity Fund
Client Accts No-Load 10,940,421 36.21%
- --------------------------------------------------------------------------------------------------------------
St. Mary's County Sheriff's Quaker Core Equity Fund
Department Retirement Plan No-Load 5,415,307 17.92%
- --------------------------------------------------------------------------------------------------------------
Charles Schwab, FBO Client Accts Quaker Core Equity Fund No-Load 3,892,002 12.88%
- --------------------------------------------------------------------------------------------------------------
Geewax, Terker & Company Quaker Core Equity Fund No-Load 2,199,534 7.28%
- --------------------------------------------------------------------------------------------------------------
Geewax, Terker & Company Quaker Core Equity Fund No-Load 1,912,725 6.33%
- --------------------------------------------------------------------------------------------------------------
Boynton, E., Individual Quaker Core Equity Fund No-Load 1,598,571 5.29%
- --------------------------------------------------------------------------------------------------------------
National Investor Services, FBO Quaker Aggressive
Client Accts Growth Fund No-Load 1,420,195 10.32%
- --------------------------------------------------------------------------------------------------------------
Quaker Aggressive
Daftary, Manu, Individual Growth Fund No-Load 1,039,787 7.56%
- --------------------------------------------------------------------------------------------------------------
Quaker Aggressive
King, Jeffry H., Individual Growth Fund No-Load 894,134 6.50%
- --------------------------------------------------------------------------------------------------------------
National Investor Services, FBO Quaker Large-Cap Value
Client Accts Fund No-Load 5,402,115 79.63%
- --------------------------------------------------------------------------------------------------------------
National Investor Services, FBO Quaker Mid-Cap Value
Client Accts Fund No-Load 7,493,212 84.13%
- --------------------------------------------------------------------------------------------------------------
Quaker Mid-Cap Value
Trust Company of Illinois Fund No-Load 560,851 6.29%
- --------------------------------------------------------------------------------------------------------------
Bank of Oklahoma OPUBCO Quaker Small-Cap Value
Fund No-Load 4,910,149 42.60%
- --------------------------------------------------------------------------------------------------------------
Charles Schwab, FBO Client Accts Quaker Small-Cap Value
Fund No-Load 2,075,887 18.01%
- --------------------------------------------------------------------------------------------------------------
Quaker Small-Cap Value
Aronson, T., Individual Fund No-Load 652,511 5.66%
- --------------------------------------------------------------------------------------------------------------
Quaker Small-Cap Value
Berger, S., Individual Fund No-Load 614,599 5.33%
- --------------------------------------------------------------------------------------------------------------
St. Mary's County Sheriff's Quaker Fixed Income
Department Retirement Plan Value Fund No-Load 4,782,113 66.37%
- --------------------------------------------------------------------------------------------------------------
Charles Schwab, FBO Client Accts Quaker Fixed Income
Value Fund No-Load 1,304,305 18.10%
- --------------------------------------------------------------------------------------------------------------
Quaker Fixed Income
Waitneight, P., Individual Value Fund No-Load 657,067 9.12%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
EXHIBIT 1
FORM OF MASTER INVESTMENT ADVISORY AGREEMENT
QUAKER INVESTMENT TRUST
AGREEMENT FOR INVESTMENT ADVISORY SERVICES
THIS AGREEMENT is made as of this 16st day of June, 2000, between Quaker
Investment Trust (the "Trust") and Quaker Management Corp., a Pennsylvania
corporation (the "Adviser").
RECITALS
WHEREAS, the Trust is organized under the laws of the state of
Massachusetts as an unincorporated business trust operating and registered as an
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 is authorized by its Amended and Restated Declaration of
Trust and by-laws to issue separate Portfolios of shares representing interests
in separate investment portfolios (the "Portfolios"), and
WHEREAS, The Trust has authorized the issuance of shares of beneficial
interest ("Shares") in the Portfolios which are identified on Schedule A
attached hereto and incorporated herein, which Schedule A may be amended from
time to time by mutual agreement of the Trust and Adviser (the "Portfolios"),
and;
WHEREAS, Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") and engages in
the business of asset management; and
WHEREAS, the Trust desires to retain Adviser to furnish investment advisory
services to the Portfolios, and such other Portfolios as may be added from time
to time by mutual agreement of the parties, pursuant to the terms and conditions
of this Agreement, and 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 Adviser to act as investment adviser to the
Portfolios for the periods and pursuant to the terms and conditions as set forth
in this Agreement. 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 Adviser with properly certified or authenticated
copies of each of the following:
a. The Trust's Amended and Restated Declaration of Trust as filed with
the Commonwealth of Massachusetts;
b. The Trust's Amended and Restated By-Laws;
c. Resolutions of the Trust's Board of Trustees authorizing the
appointment of Adviser and approving this Agreement;
d. The Trust's most current Registration Statement on form N-1A
promulgated under the 1940 Act and under the Securities Act of 1933,
as amended (the "1933 Act");
e. The Trust's current Prospectus and Statement of Additional Information
(together called the "Prospectus")
<PAGE>
The Trust will furnish Adviser from time to time with properly
certified or authenticated copies of all amendments of or supplements
to the foregoing at the same time as such documents are required to be
filed with the SEC and/or state authorities.
3. Management
----------
Subject to the general supervision of the Trust's Board of Trustees (the
"Board"), Adviser will be responsible for providing a continuous investment
program for the Portfolios, including investment research and management with
respect to all securities, investments, cash and cash equivalents held by the
Portfolios.
Adviser may, with the prior written consent of the Board and the approval
of the appropriate Trust shareholders, as required, employ persons or entities
to serve as sub-advisers to one or more Portfolios. The Adviser and/or such
sub-advisers, if any, may, in their sole discretion, determine from time to time
what securities and other investments will be purchased, retained or sold by the
Portfolios. The investment activities of such sub-advisers, if any, as such
services relate to the Portfolios, will at all times be subject to the general
supervision and control of Adviser. Adviser will provide, through its own
efforts itself and/or through the medium of its previously approved
sub-adviser(s), the services under this Agreement in accordance with each
Portfolio's investment objectives, policies and restrictions as such are set
forth in the Prospectus from time to time. Adviser 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 monitor the investment activities of any sub-adviser which it
employs to insure that such sub-adviser conducts its activities with
respect to the applicable Portfolio(s) in accordance with the
Prospectus and any and all federal and/or state laws and regulations
relating to the applicable Portfolio(s);
(c) Will place orders, or monitor the placement of orders by sub-advisers,
pursuant to good faith investment determinations for the Portfolios
either directly with the respective issuers or with appropriate
brokers and dealers. In placing orders with brokers or dealers, the
Advisor, or sub-adviser(s) under the supervision of Adviser, will
attempt to obtain the best net price and the most favorable execution
of its orders. Consistent with this obligation, when Adviser, or
Adviser's duly authorized sub-adviser(s), believes two or more brokers
or dealers are comparable in price and execution, Adviser, or
Adviser's duly authorized sub-adviser(s), may prefer: (I) brokers and
dealers who provide the Portfolio(s) with research advice and other
services, or who recommend or sell Trust shares, and (II) brokers who
are affiliated with the Trust, Adviser or sub-adviser; provided,
however, that in no instance will portfolio securities be purchased
from or sold to Adviser or any sub-adviser in principal transactions;
(d) Will provide, at its own cost, all office space, facilities and
equipment necessary for the conduct of its advisory activities on
behalf of the Trust.
4. Services not Exclusive
----------------------
The services to be furnished by Adviser hereunder are not to be considered
exclusive, and Adviser 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 prior written consent of the Board, Adviser will not
serve as an investment advisor to any other investment company having a similar
investment objective to that of the Trust.
5. Books and Records
-----------------
In compliance with Rule 31a-3 promulgated under the 1940 Act, Adviser
hereby agrees that all records which it maintains for the benefit of the Trust
are the property of the Trust and further agrees to surrender promptly to the
Trust any of such records upon the Trust's request. Adviser further agrees to
preserve for the periods prescribed by Rule 31a-2 the records required to be
maintained by it pursuant to such Rule that are not maintained by others on
behalf of the Trust.
<PAGE>
6. Expenses
--------
During the term of this Agreement, Adviser will pay all expenses incurred
by it in connection with its investment advisory services furnished to the Trust
other than the costs of securities and other investments (including brokerage
commissions and other transaction charges) purchased or sold for the Portfolios.
7. Compensation
------------
The Trust will pay Adviser, and Adviser will accept as full compensation
for its services rendered hereunder, the investment advisory fees for each
Portfolio as set forth on Schedule B attached hereto and incorporated herein,
which Schedule B may be amended from time to time by mutual agreement of the
Trust, Adviser and shareholders as applicable. All fees payable to Adviser
pursuant to this Agreement shall be computed at the end of each month and
payable within five (5) business days thereafter, and shall be computed as an
annual rate as a percentage of the average daily net assets of the applicable
Portfolio. All parties to this Agreement do hereby expressly authorize and
instruct the Trust's Administrator, Declaration Service Company or its
successor, to provide, in accordance with the fees set forth on Schedule B, a
calculation each month of the gross amounts due Adviser for each Portfolio and
to remit such fee payments hereunder promptly to Adviser.
8. Limitation of Liability
-----------------------
Adviser shall not be liable for any error of judgment, mistake of law or
for any other loss suffered by the Trust or any Portfolio 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
Adviser's 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 as of the date first written above
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 affirmative vote of a majority of those members of the Board
who are not parties to the Agreement or interested persons of any such
party (as 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 affirmative vote of either a majority of the entire Board or a
majority (as that term is defined in the 1940 Act) of the outstanding
voting securities of the Trust.
Notwithstanding the foregoing, this Agreement may be terminated by the
Trust or by Adviser at any time upon sixty (60) days written notice, without
payment of any penalty; provided, however that termination by the Trust must be
authorized by majority vote of the Board or by vote of a majority of the
outstanding voting securities of the Trust. This Agreement will automatically
terminate in the event of its assignment (as that term is defined in the 1940
Act).
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.
<PAGE>
12. Counterparts
------------
This Agreement may be executed in counterparts by the parties hereto, each
of which shall constitute an 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.
14. Notices
-------
Except as otherwise provided in this Agreement, any notice or other
communication required by or permitted to be given in connection with this
Agreement will be in writing and will be delivered in person or sent by first
class mail, postage prepaid or by prepaid overnight delivery service to the
respective parties as follows:
If to the Trust: If to the Adviser:
- ---------------- ------------------
Quaker Investment Trust Quaker Management Corp.
1288 Valley Forge Road, Suite 76 1288 Valley Forge Road, Suite 75
Valley Forge, PA 19482 Valley Forge, PA 19482
Jeffry H. King David Dameron
Chairman President
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: ____________________________________
Title: Jeffry H. King
Title: Chairman
Attest: QUAKER MANAGEMENT CORP.
By: ________________________ By: ____________________________________
Title: David C. Dameron
Title: President
<PAGE>
Schedule A
Quaker Investment Trust
Portfolios of the Trust
The following Portfolios are offered by the Trust and subject to this Agreement:
- ------------------------------------------------
Name of Portfolio
- ------------------------------------------------
Quaker Core Equity Fund
- ------------------------------------------------
Quaker Aggressive Growth Fund
- ------------------------------------------------
Quaker Large-Cap Value Fund
- ------------------------------------------------
Quaker Mid-Cap Value Fund
- ------------------------------------------------
Quaker Small-Cap Value Fund
- ------------------------------------------------
Quaker Fixed Income Fund
- ------------------------------------------------
Quaker High Yield Fund
- ------------------------------------------------
Quaker Small-Cap Growth Fund
- ------------------------------------------------
Quaker Money Market Fund
- ------------------------------------------------
Schedule B
Quaker Investment Trust
Compensation Schedule
- --------------------------------------------------------------------------------
Annual Fee Rate, as percentage of
average daily net assets
Name of Portfolio
- --------------------------------------------------------------------------------
Quaker Core Equity Fund 0.80%
- --------------------------------------------------------------------------------
Quaker Aggressive Growth Fund 1.05%
- --------------------------------------------------------------------------------
Quaker Large-Cap Value Fund 0.80%
- --------------------------------------------------------------------------------
Quaker Mid-Cap Value Fund 0.80%
- --------------------------------------------------------------------------------
Quaker Small-Cap Value Fund 0.95%
- --------------------------------------------------------------------------------
Quaker Fixed Income Fund 0.75%
- --------------------------------------------------------------------------------
Quaker High Yield Fund 0.80%
- --------------------------------------------------------------------------------
Quaker Small-Cap Growth Fund 0.80%
- --------------------------------------------------------------------------------
Quaker Money Market Fund 0.55%
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 2
FORM OF SUB-INVESTMENT ADVISORY AGREEMENT
WITH GEEWAX, TERKER & CO.
QUAKER INVESTMENT TRUST
SUB-INVESTMENT ADVISORY AGREEMENT
This AGREEMENT is made as of the 16st day of June, 2000, by and between
Quaker Investment Trust (the "Trust"), Quaker Management Corp. (the "Adviser")
and Geewax, Terker & Co., a Pennsylvania partnership (the "Sub-Adviser").
RECITALS
WHEREAS, the Trust is organized under the laws of the state of
Massachusetts as an unincorporated business trust operating and registered as an
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 is authorized by its Amended and Restated Declaration of
Trust and by-laws to issue separate Portfolios of shares representing interests
in separate investment portfolios (the "Portfolios"), and
WHEREAS, The Trust has authorized the issuance of shares of beneficial
interest in, among others, a Portfolio known as the Quaker Core Equity Fund (the
"Fund"), and;
WHEREAS, Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") and engages in
the business of asset management; and
WHEREAS, the Trust has retained Adviser to furnish investment advisory
services to the Fund pursuant to a written agreement dated May 31, 2000;
WHEREAS, Adviser, with the consent of the Trust, desires to retain
Sub-Adviser to furnish day-to-day investment advisory services to the Fund
pursuant to the terms and conditions of this Agreement, and Sub-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
-----------
Adviser, with the consent of the Trust, hereby appoints the Sub-Adviser to
provide day-to-day investment advisory services to the Fund for the periods and
on the terms set forth in this Agreement. Sub-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 Sub-Adviser with properly certified or
authenticated copies of each of the following:
o The Trust's Amended and Restated Declaration of Trust as filed with
the Commonwealth of Massachusetts;
o The Trust's Amended and Restated By-Laws;
o Resolutions of the Trust's Board of Trustees authorizing the
appointment of Sub-Adviser and approving this Agreement;
o The Trust's most current Registration Statement on form N-1A
promulgated under the 1940 Act and under the Securities Act of 1933,
as amended (the "1933 Act");
<PAGE>
o The Trust's current Prospectus and Statement of Additional Information
(together called the "Prospectus")
The Trust will furnish Sub-Adviser from time to time with properly
certified or authenticated copies of all amendments of or supplements to the
foregoing at the same time as such documents are required to be filed with the
SEC and/or state authorities.
3. Management
----------
Subject to the supervision of the Trust's Board of Trustees and Adviser,
Sub-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. Sub-Adviser will determine from time to
time what securities and other investments will be purchased, retained or sold
by the Fund. Sub-Adviser 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. Sub-Adviser further
agrees that it:
o 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;
o 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, Sub-Adviser will
attempt to obtain the best net price and the most favorable execution
of its orders. Consistent with this obligation, when Sub-Adviser
believes two or more brokers or dealers are comparable in price and
execution, Sub-Adviser 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,
Adviser, and/or Sub-Adviser; provided, however, that in no instance
will portfolio securities be purchased from or sold to Sub-Adviser in
principal transactions; and
o 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 Sub-Adviser hereunder are not to
be considered exclusive, and Sub-Adviser 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, Sub-Adviser 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, Sub-Adviser
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. Sub-Adviser 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, Sub-Adviser 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.
7. Compensation
------------
Adviser will pay to Sub-Adviser, and Sub-Adviser 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. All parties to this Agreement
<PAGE>
do hereby authorize and instruct the Fund's Administrator, Declaration Service
Company, or its successor, to provide a calculation each month of the gross
amount due the Advisor, to deduct such amounts from the investment advisory fee
payable to Adviser under its investment advisory agreement with the Fund, and to
remit such fee payments directly to Sub-Adviser.
8. Limitation of Liability
-----------------------
Sub-Adviser shall not be liable for any error of judgment, 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 as of the date first written above
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:
o 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 (as that term is defined in the 1940 Act), cast in person at a
meeting called for the purpose of voting on such approval; and
o 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
Trust or by Adviser or by Sub-Adviser at any time upon sixty (60) days written
notice, without payment of any penalty. Any such termination by the Trust 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).
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 an 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.
<PAGE>
14. Notices
-------
Except as otherwise provided in this Agreement, any notice or other
communication required by or permitted to be given in connection with this
Agreement will be in writing and will be delivered in person or sent by first
class mail, postage prepaid or by prepaid overnight delivery service to the
respective parties as follows:
If to the Trust: If to the Adviser:
- ---------------- ------------------
Quaker Investment Trust Quaker Management Corp.
1288 Valley Forge Road, Suite 76 1288 Valley Forge Road, Suite 75
Valley Forge, PA 19482 Valley Forge, PA 19482
Jeffry H. King David Dameron
Chairman President
If to the Sub-Adviser:
- ---------------------
Geewax, Terker & Company
99 Starr Street
Phoenixville, PA 19460
John J. Geewax
General Partner
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: ____________________________
Title: Jeffry H. King
Title: Chairman
Attest: QUAKER MANAGEMENT CORP.
By: _______________________ By: ____________________________
Title: David C. Dameron
Title: President
Attest: GEEWAX, TERKER & CO.
By: ________________________ By: ____________________________
Title: John J. Geewax
Title: General Partner
<PAGE>
EXHIBIT 3
FORM OF SUB-INVESTMENT ADVISORY AGREEMENT
FOR QUAKER FINANCIAL ADVISORS, INC.
QUAKER INVESTMENT TRUST
SUB-INVESTMENT ADVISORY AGREEMENT
This AGREEMENT is made as of the 16th day of June, 2000, by and between
Quaker Investment Trust (the "Trust"), Quaker Management Corp. (the "Adviser")
and Quaker Financial Advisors, Inc., a Pennsylvania corporation (the
"Sub-Adviser").
RECITALS
WHEREAS, the Trust is organized under the laws of the state of
Massachusetts as an unincorporated business trust operating and registered as an
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 is authorized by its Amended and Restated Declaration of
Trust and by-laws to issue separate Portfolios of shares representing interests
in separate investment portfolios (the "Portfolios"), and
WHEREAS, The Trust has authorized the issuance of shares of beneficial
interest in, among others, a Portfolio known as the Quaker Aggressive Growth
Fund (the "Fund"), and;
WHEREAS, Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") and engages in
the business of asset management; and
WHEREAS, the Trust has retained Adviser to furnish investment advisory
services to the Fund pursuant to a written agreement dated May 31, 2000;
WHEREAS, Adviser, with the consent of the Trust, desires to retain
Sub-Adviser to furnish day-to-day investment advisory services to the Fund
pursuant to the terms and conditions of this Agreement, and Sub-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
-----------
Adviser, with the consent of the Trust, hereby appoints the Sub-Adviser to
provide day-to-day investment advisory services to the Fund for the periods and
on the terms set forth in this Agreement. Sub-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 Sub-Adviser with properly certified or
authenticated copies of each of the following:
o The Trust's Amended and Restated Declaration of Trust as filed with
the Commonwealth of Massachusetts;
o The Trust's Amended and Restated By-Laws;
o Resolutions of the Trust's Board of Trustees authorizing the
appointment of Sub-Adviser and approving this Agreement;
o The Trust's most current Registration Statement on form N-1A
promulgated under the 1940 Act and under the Securities Act of 1933,
as amended (the "1933 Act");
<PAGE>
o The Trust's current Prospectus and Statement of Additional Information
(together called the "Prospectus")
The Trust will furnish Sub-Adviser from time to time with properly
certified or authenticated copies of all amendments of or supplements to the
foregoing at the same time as such documents are required to be filed with the
SEC and/or state authorities.
3. Management
----------
Subject to the supervision of the Trust's Board of Trustees and Adviser,
Sub-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. Sub-Adviser will determine from time to
time what securities and other investments will be purchased, retained or sold
by the Fund. Sub-Adviser 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. Sub-Adviser further
agrees that it:
o 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;
o 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, Sub-Adviser will
attempt to obtain the best net price and the most favorable execution
of its orders. Consistent with this obligation, when Sub-Adviser
believes two or more brokers or dealers are comparable in price and
execution, Sub-Adviser 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,
Adviser, and/or Sub-Adviser; provided, however, that in no instance
will portfolio securities be purchased from or sold to Sub-Adviser in
principal transactions; and
o 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 Sub-Adviser hereunder are not to
be considered exclusive, and Sub-Adviser 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, Sub-Adviser 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, Sub-Adviser
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. Sub-Adviser 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, Sub-Adviser 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.
7. Compensation
------------
Adviser will pay to Sub-Adviser, and Sub-Adviser 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 1.00% of the average daily net assets of
the Fund. All parties to this Agreement do hereby authorize and instruct the
Fund's Administrator, Declaration Service Company, or its successor, to provide
a
<PAGE>
calculation each month of the gross amount due the Advisor, to deduct such
amounts from the investment advisory fee payable to Adviser under its investment
advisory agreement with the Fund, and to remit such fee payments directly to
Sub-Adviser.
8. Limitation of Liability
-----------------------
Sub-Adviser shall not be liable for any error of judgment, 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 as of the date first written above
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:
o 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 (as that term is defined in the 1940 Act), cast in person at a
meeting called for the purpose of voting on such approval; and
o 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
Trust or by Adviser or by Sub-Adviser at any time upon sixty (60) days written
notice, without payment of any penalty. Any such termination by the Trust 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).
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 an 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.
<PAGE>
14. Notices
-------
Except as otherwise provided in this Agreement, any notice or other
communication required by or permitted to be given in connection with this
Agreement will be in writing and will be delivered in person or sent by first
class mail, postage prepaid or by prepaid overnight delivery service to the
respective parties as follows:
If to the Trust: If to the Adviser:
- ---------------- ------------------
Quaker Investment Trust Quaker Management Corp.
1288 Valley Forge Road, Suite 76 1288 Valley Forge Road, Suite 75
Valley Forge, PA 19482 Valley Forge, PA 19482
Jeffry H. King David Dameron
Chairman President
If to the Sub-Adviser:
- ---------------------
Quaker Financial Advisors, Inc.
1288 Valley Forge Road, Suite 75
Valley Forge, PA 19482
David Dameron
President
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: ____________________________
Title: Jeffry H. King
Title: Chairman
Attest: QUAKER MANAGEMENT CORP.
By: _______________________ By: ____________________________
Title: David Dameron
Title: President
Attest: QUAKER FINANCIAL ADVISORS, INC.
By: ________________________ By: ____________________________
Title: David Dameron
Title: President
<PAGE>
EXHIBIT 4
FORM OF SUB-INVESTMENT ADVISORY AGREEMENT
FOR COMPU-VAL INVESTMENTS, INC.
QUAKER INVESTMENT TRUST
SUB-INVESTMENT ADVISORY AGREEMENT
This AGREEMENT is made as of the 16th day of June, 2000, by and between
Quaker Investment Trust (the "Trust"), Quaker Management Corp. (the "Adviser")
and Compu-Val Investments, Inc., a Delaware corporation (the "Sub-Adviser").
RECITALS
WHEREAS, the Trust is organized under the laws of the state of
Massachusetts as an unincorporated business trust operating and registered as an
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 is authorized by its Amended and Restated Declaration of
Trust and by-laws to issue separate Portfolios of shares representing interests
in separate investment portfolios (the "Portfolios"), and
WHEREAS, The Trust has authorized the issuance of shares of beneficial
interest in, among others, two Portfolios known as the Quaker Large-Cap Value
Fund and the Quaker Mid-Cap Value Fund (each a "Fund" and together the "Funds"),
and;
WHEREAS, Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") and engages in
the business of asset management; and
WHEREAS, the Trust has retained Adviser to furnish investment advisory
services to the Funds pursuant to a written agreement dated May 31, 2000;
WHEREAS, Adviser, with the consent of the Trust, desires to retain
Sub-Adviser to furnish day-to-day investment advisory services to the Funds
pursuant to the terms and conditions of this Agreement, and Sub-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
-----------
Adviser, with the consent of the Trust, hereby appoints the Sub-Adviser to
provide day-to-day investment advisory services to the Funds for the periods and
on the terms set forth in this Agreement. Sub-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 Sub-Adviser with properly certified or
authenticated copies of each of the following:
o The Trust's Amended and Restated Declaration of Trust as filed with
the Commonwealth of Massachusetts;
o The Trust's Amended and Restated By-Laws;
o Resolutions of the Trust's Board of Trustees authorizing the
appointment of Sub-Adviser and approving this Agreement;
o The Trust's most current Registration Statement on form N-1A
promulgated under the 1940 Act and under the Securities Act of 1933,
as amended (the "1933 Act");
<PAGE>
o The Trust's current Prospectus and Statement of Additional Information
(together called the "Prospectus")
The Trust will furnish Sub-Adviser from time to time with properly
certified or authenticated copies of all amendments of or supplements to the
foregoing at the same time as such documents are required to be filed with the
SEC and/or state authorities.
3. Management
----------
Subject to the supervision of the Trust's Board of Trustees and Adviser,
Sub-Adviser will provide a continuous investment program for each Fund,
including investment research and management with respect to all securities,
investments, cash and cash equivalents in each Fund. Sub-Adviser will determine
from time to time what securities and other investments will be purchased,
retained or sold by the Funds. Sub-Adviser 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.
Sub-Adviser further agrees that it:
o 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;
o Will place orders pursuant to its investment determinations for the
Funds either directly with the respective issuers or with any broker
or dealer. In placing orders with brokers or dealers, Sub-Adviser will
attempt to obtain the best net price and the most favorable execution
of its orders. Consistent with this obligation, when Sub-Adviser
believes two or more brokers or dealers are comparable in price and
execution, Sub-Adviser 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(s), Adviser, and/or Sub-Adviser; provided, however, that in no
instance will portfolio securities be purchased from or sold to
Sub-Adviser in principal transactions; and
o Will provide, at its own cost, all office space, facilities and
equipment necessary for the conduct of its advisory activities on
behalf of the Funds.
4. Services not Exclusive
----------------------
The advisory services to be furnished by Sub-Adviser hereunder are not to
be considered exclusive, and Sub-Adviser 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, Sub-Adviser will not serve as an investment advisor to any other
investment company having a similar investment objective to that of either Fund.
5. Books and Records
-----------------
In compliance with Rule 31a-3 promulgated under the 1940 Act, Sub-Adviser
hereby agrees that all records which it maintains for the benefit of the Fund
are the property of the Funds and further agrees to surrender promptly to the
Funds any of such records upon any Fund's request. Sub-Adviser 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 Funds.
6. Expenses
--------
During the term of this Agreement, Sub-Adviser will pay all expenses
incurred by it in connection with its investment advisory services furnished to
the Funds other than the costs of securities and other investments (including
brokerage commissions and other transaction charges) purchased or sold for the
Funds.
7. Compensation
------------
Adviser will pay to Sub-Adviser, and Sub-Adviser 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
each Fund. All parties to this Agreement
<PAGE>
do hereby authorize and instruct the Fund's Administrator, Declaration Service
Company, or its successor, to provide a calculation each month of the gross
amount due the Advisor, to deduct such amounts from the investment advisory fee
payable to Adviser under its investment advisory agreement with each Fund, and
to remit such fee payments directly to Sub-Adviser.
8. Limitation of Liability
-----------------------
Sub-Adviser shall not be liable for any error of judgment, mistake of law
or for any other loss suffered by either 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 as of the date first written above
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:
o 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 (as that term is defined in the 1940 Act), cast in person at a
meeting called for the purpose of voting on such approval; and
o 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
Funds.
Notwithstanding the foregoing, this Agreement may be terminated by the
Trust or by Adviser or by Sub-Adviser at any time upon sixty (60) days written
notice, without payment of any penalty. Any such termination by the Trust 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).
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 applicable 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 an 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.
<PAGE>
14. Notices
-------
Except as otherwise provided in this Agreement, any notice or other
communication required by or permitted to be given in connection with this
Agreement will be in writing and will be delivered in person or sent by first
class mail, postage prepaid or by prepaid overnight delivery service to the
respective parties as follows:
If to the Trust: If to the Adviser:
- ---------------- ------------------
Quaker Investment Trust Quaker Management Corp.
1288 Valley Forge Road, Suite 76 1288 Valley Forge Road, Suite 75
Valley Forge, PA 19482 Valley Forge, PA 19482
Jeffry H. King David Dameron
Chairman President
If to the Sub-Adviser:
- ---------------------
Compu-Val Investments, Inc.
1702 Lovering Avenue
Wilmington, DE 19806
Christopher O'Keefe
Director of Equity Research
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: ____________________________
Title: Jeffry H. King
Title: Chairman
Attest: QUAKER MANAGEMENT CORP.
By: _______________________ By: ____________________________
Title: David Dameron
Title: President
Attest: COMPU-VAL INVESTMENTS, INC.
By: ________________________ By: ____________________________
Title: Donald Kalil
Title: President
<PAGE>
EXHIBIT 5
FORM OF SUB-INVESTMENT ADVISORY AGREEMENT
FOR ARONSON + PARTNERS
QUAKER INVESTMENT TRUST
SUB-INVESTMENT ADVISORY AGREEMENT
This AGREEMENT is made as of the 16TH day of May, 2000, by and between
Quaker Investment Trust (the "Trust"), Quaker Management Corp. (the "Adviser")
and Aronson + Partners, a Pennsylvania partnership (the "Sub-Adviser").
RECITALS
WHEREAS, the Trust is organized under the laws of the state of
Massachusetts as an unincorporated business trust operating and registered as an
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 is authorized by its Amended and Restated Declaration of
Trust and by-laws to issue separate Portfolios of shares representing interests
in separate investment portfolios (the "Portfolios"), and
WHEREAS, The Trust has authorized the issuance of shares of beneficial
interest in, among others, a Portfolio known as the Quaker Small-Cap Value Fund
(the "Fund"), and;
WHEREAS, Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") and engages in
the business of asset management; and
WHEREAS, the Trust has retained Adviser to furnish investment advisory
services to the Fund pursuant to a written agreement dated May 31, 2000;
WHEREAS, Adviser, with the consent of the Trust, desires to retain
Sub-Adviser to furnish day-to-day investment advisory services to the Fund
pursuant to the terms and conditions of this Agreement, and Sub-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
-----------
Adviser, with the consent of the Trust, hereby appoints the Sub-Adviser to
provide day-to-day investment advisory services to the Fund for the periods and
on the terms set forth in this Agreement. Sub-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 Sub-Adviser with properly certified or
authenticated copies of each of the following:
o The Trust's Amended and Restated Declaration of Trust as filed with
the Commonwealth of Massachusetts;
o The Trust's Amended and Restated By-Laws;
o Resolutions of the Trust's Board of Trustees authorizing the
appointment of Sub-Adviser and approving this Agreement;
o The Trust's most current Registration Statement on form N-1A
promulgated under the 1940 Act and under the Securities Act of 1933,
as amended (the "1933 Act");
<PAGE>
o The Trust's current Prospectus and Statement of Additional Information
(together called the "Prospectus")
The Trust will furnish Sub-Adviser from time to time with properly
certified or authenticated copies of all amendments of or supplements to the
foregoing at the same time as such documents are required to be filed with the
SEC and/or state authorities.
3. Management
----------
Subject to the supervision of the Trust's Board of Trustees and Adviser,
Sub-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. Sub-Adviser will determine from time to
time what securities and other investments will be purchased, retained or sold
by the Fund. Sub-Adviser 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. Sub-Adviser further
agrees that it:
o 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;
o 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, Sub-Adviser will
attempt to obtain the best net price and the most favorable execution
of its orders. Consistent with this obligation, when Sub-Adviser
believes two or more brokers or dealers are comparable in price and
execution, Sub-Adviser 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,
Adviser, and/or Sub-Adviser; provided, however, that in no instance
will portfolio securities be purchased from or sold to Sub-Adviser in
principal transactions; and
o 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 Sub-Adviser hereunder are not to
be considered exclusive, and Sub-Adviser 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, Sub-Adviser 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, Sub-Adviser
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. Sub-Adviser 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, Sub-Adviser 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.
7. Compensation
------------
Adviser will pay to Sub-Adviser, and Sub-Adviser will accept as full
compensation for its services rendered hereunder, an investment advisory fee as
set forth on Schedule A attached to this Agreement and incorporated by reference
herein, which Schedule A may be amended from time to time by mutual agreement of
the Trust, Adviser and shareholders as applicable. All parties to this Agreement
do hereby authorize and instruct the Fund's Administrator,
<PAGE>
Declaration Service Company, or its successor, to provide a calculation each
month of the gross amount due the Advisor, to deduct such amounts from the
investment advisory fee payable to Adviser under its investment advisory
agreement with the Fund, and to remit such fee payments directly to Sub-Adviser
pursuant to Schedule A.
8. Limitation of Liability
-----------------------
Sub-Adviser shall not be liable for any error of judgment, 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 as of the date first written above
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:
o 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 (as that term is defined in the 1940 Act), cast in person at a
meeting called for the purpose of voting on such approval; and
o 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
Trust or by Adviser or by Sub-Adviser at any time upon sixty (60) days written
notice, without payment of any penalty. Any such termination by the Trust 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).
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 an 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.
<PAGE>
14. Notices
-------
Except as otherwise provided in this Agreement, any notice or other
communication required by or permitted to be given in connection with this
Agreement will be in writing and will be delivered in person or sent by first
class mail, postage prepaid or by prepaid overnight delivery service to the
respective parties as follows:
If to the Trust: If to the Adviser:
- ---------------- ------------------
Quaker Investment Trust Quaker Management Corp.
1288 Valley Forge Road, Suite 76 1288 Valley Forge Road, Suite 75
Valley Forge, PA 19482 Valley Forge, PA 19482
Jeffry H. King David Dameron
Chairman President
If to the Sub-Adviser:
- ---------------------
Aronson + Partners
230 South Broad Street, 20th Floor
Philadelphia, PA 19012
Theodore R. Aronson
President
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: ____________________________
Title: Jeffry H. King
Title: Chairman
Attest: QUAKER MANAGEMENT CORP.
By: _______________________ By: ____________________________
Title: David Dameron
Title: President
Attest: ARONSON + PARTNERS
By: ________________________ By: ____________________________
Title: Theodore R. Aronson
Title: President
<PAGE>
SCHEDULE A
TO
SUB-ADVISORY AGREEMENT
OF
QUAKER INVESTMENT TRUST
Under the Sub-Advisory Agreement with the Trust to which this Schedule A is
attached and made a part of, Adviser shall pay to Aronson a base fee (Base Fee)
at an annual rate of 0.90% of the daily net assets of the Fund to be computed
and paid quarterly; provided, however, that the following adjustment factors
will be applied to the Base Fee to determine net fees payable to Aronson:.
Cumulative Running 12 months Performance Fee
Return of Fund vs. 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
* The "Index" refers to the Russell 2000 Index, a widely recognized, unmanaged
index of approximately 2000 companies in the United States. The Index is
generally considered to represent approximately 90% of the publicly traded
companies in the United States as measured by market capitalization. The Index
assumes reinvestment of all dividends and distributions and does not reflect any
asset-based charges for investment management or other expenses.
<PAGE>
EXHIBIT 6
FORM OF SUB-INVESTMENT ADVISORY AGREEMENT
FOR ALM ADVISORS, INC.
QUAKER INVESTMENT TRUST
SUB-INVESTMENT ADVISORY AGREEMENT
This AGREEMENT is made as of the 16TH day of June, 2000, by and between
Quaker Investment Trust (the "Trust"), Quaker Management Corp. (the "Adviser")
and ALM Advisors, Inc., a California corporation (the "Sub-Adviser").
RECITALS
WHEREAS, the Trust is organized under the laws of the state of
Massachusetts as an unincorporated business trust operating and registered as an
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 is authorized by its Amended and Restated Declaration of
Trust and by-laws to issue separate Portfolios of shares representing interests
in separate investment portfolios (the "Portfolios"), and
WHEREAS, The Trust has authorized the issuance of shares of beneficial
interest in, among others, two Portfolios known as the Quaker Fixed Income Fund
and the Quaker High Yield Fund (each a "Fund and together the "Funds"), and;
WHEREAS, Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") and engages in
the business of asset management; and
WHEREAS, the Trust has retained Adviser to furnish investment advisory
services to the Funds pursuant to a written agreement dated May 31, 2000;
WHEREAS, Adviser, with the consent of the Trust, desires to retain
Sub-Adviser to furnish day-to-day investment advisory services to the Funds
pursuant to the terms and conditions of this Agreement, and Sub-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
-----------
Adviser, with the consent of the Trust, hereby appoints the Sub-Adviser to
provide day-to-day investment advisory services to the Funds for the periods and
on the terms set forth in this Agreement. Sub-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 Sub-Adviser with properly certified or
authenticated copies of each of the following:
o The Trust's Amended and Restated Declaration of Trust as filed with
the Commonwealth of Massachusetts;
o The Trust's Amended and Restated By-Laws;
o Resolutions of the Trust's Board of Trustees authorizing the
appointment of Sub-Adviser and approving this Agreement;
o The Trust's most current Registration Statement on form N-1A
promulgated under the 1940 Act and under the Securities Act of 1933,
as amended (the "1933 Act");
<PAGE>
o The Trust's current Prospectus and Statement of Additional Information
(together called the "Prospectus")
The Trust will furnish Sub-Adviser from time to time with properly
certified or authenticated copies of all amendments of or supplements to the
foregoing at the same time as such documents are required to be filed with the
SEC and/or state authorities.
3. Management
----------
Subject to the supervision of the Trust's Board of Trustees and Adviser,
Sub-Adviser will provide a continuous investment program for the Funds,
including investment research and management with respect to all securities,
investments, cash and cash equivalents in the Funds. Sub-Adviser will determine
from time to time what securities and other investments will be purchased,
retained or sold by the Funds. Sub-Adviser will provide the services under this
Agreement in accordance with each Fund's investment objectives, policies and
restrictions as such are set forth in the prospectus from time to time.
Sub-Adviser further agrees that it:
o 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;
o Will place orders pursuant to its investment determinations for the
Funds either directly with the respective issuers or with any broker
or dealer. In placing orders with brokers or dealers, Sub-Adviser will
attempt to obtain the best net price and the most favorable execution
of its orders. Consistent with this obligation, when Sub-Adviser
believes two or more brokers or dealers are comparable in price and
execution, Sub-Adviser may prefer: (I) brokers and dealers who provide
the Funds with research advice and other services, or who recommend or
sell Trust shares, and (II) brokers who are affiliated with the Funds,
Adviser, and/or Sub-Adviser; provided, however, that in no instance
will portfolio securities be purchased from or sold to Sub-Adviser in
principal transactions; and
o Will provide, at its own cost, all office space, facilities and
equipment necessary for the conduct of its advisory activities on
behalf of the Funds.
4. Services not Exclusive
----------------------
The advisory services to be furnished by Sub-Adviser hereunder are not to
be considered exclusive, and Sub-Adviser 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, Sub-Adviser will not serve as an investment advisor to any other
investment company having a similar investment objective to that of either Fund.
5. Books and Records
-----------------
In compliance with Rule 31a-3 promulgated under the 1940 Act, Sub-Adviser
hereby agrees that all records which it maintains for the benefit of the Fund
are the property of the Funds and further agrees to surrender promptly to the
Funds any of such records upon any Fund's request. Sub-Adviser 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 Funds.
6. Expenses
--------
During the term of this Agreement, Sub-Adviser will pay all expenses
incurred by it in connection with its investment advisory services furnished to
the Funds other than the costs of securities and other investments (including
brokerage commissions and other transaction charges) purchased or sold for the
Funds.
7. Compensation
------------
Adviser will pay to Sub-Adviser, and Sub-Adviser 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 0.50% of the average daily net assets of
the Quaker Fixed Income Fund and
<PAGE>
0.75% of the average daily net assets of the Quaker High Yield Fund. All parties
to this Agreement do hereby authorize and instruct the Fund's Administrator,
Declaration Service Company, or its successor, to provide a calculation each
month of the gross amounts due the Advisor for its services to each Fund, to
deduct such amounts from the investment advisory fee payable to Adviser under
its investment advisory agreement with each Fund, and to remit such fee payments
directly to Sub-Adviser.
8. Limitation of Liability
-----------------------
Sub-Adviser shall not be liable for any error of judgment, mistake of law
or for any other loss suffered by the Funds 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 as of the date first written above
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:
o 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 (as that term is defined in the 1940 Act), cast in person at a
meeting called for the purpose of voting on such approval; and
o 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
Funds.
Notwithstanding the foregoing, this Agreement may be terminated by the
Trust or by Adviser or by Sub-Adviser at any time upon sixty (60) days written
notice, without payment of any penalty. Any such termination by the Trust 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).
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 applicable 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 an 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.
<PAGE>
14. Notices
-------
Except as otherwise provided in this Agreement, any notice or other
communication required by or permitted to be given in connection with this
Agreement will be in writing and will be delivered in person or sent by first
class mail, postage prepaid or by prepaid overnight delivery service to the
respective parties as follows:
If to the Trust: If to the Adviser:
- ---------------- ------------------
Quaker Investment Trust Quaker Management Corp.
1288 Valley Forge Road, Suite 76 1288 Valley Forge Road, Suite 75
Valley Forge, PA 19482 Valley Forge, PA 19482
Jeffry H. King David Dameron
Chairman President
If to the Sub-Adviser:
- ---------------------
ALM Advisors, Inc.
750 E. Green Street, Suite 315
Pasadena, CA 91101
Jeffry Rollert
President
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: ____________________________
Title: Jeffry H. King
Title: Chairman
Attest: QUAKER MANAGEMENT CORP.
By: _______________________ By: ____________________________
Title: David Dameron
Title: President
Attest: ALM ADVISORS, INC.
By: ________________________ By: ____________________________
Title: Jeffry G. Rollert
Title: President
<PAGE>
- --------------------------------------------------------------------------------
BALLOT
- --------------------------------------------------------------------------------
THE QUAKER INVESTMENT TRUST
PROPOSAL # 1. APPROVE A NEW INVESTMENT ADVISORY AGREEMENT WITH QUAKER
MANAGEMENT CORP. TO SERVE AS INVESTMENT ADVISER TO EACH FUND.
Quaker Core Equity Fund Shareholders Only:
- -----------------------------------------
For Against Abstain
/ / / / / /
Quaker Large-Cap Value Fund Shareholders Only:
- ---------------------------------------------
For Against Abstain
/ / / / / /
Quaker Small-Cap Value Fund Shareholders Only:
- ---------------------------------------------
For Against Abstain
/ / / / / /
Quaker Aggressive Growth Fund Shareholders Only:
- -----------------------------------------------
For Against Abstain
/ / / / / /
Quaker Mid-Cap Value Fund Shareholders Only:
- -------------------------------------------
For Against Abstain
/ / / / / /
Quaker Fixed Income Fund Shareholders Only:
- ------------------------------------------
For Against Abstain
/ / / / / /
PROPOSAL # 2. APPROVE NEW SUB-INVESTMENT ADVISORY AGREEMENTS AS FOLLOWS:
2(a) Quaker Core Equity Fund Shareholders Only: Approve a new Sub-Investment
Advisory Agreement with Geewax, Terker and Co.
For Against Abstain
/ / / / / /
2(b) Quaker Aggressive Growth Fund Shareholders Only: Approve a new
Sub-Investment Advisory Agreement with Quaker Financial Management, Inc.
For Against Abstain
/ / / / / /
2(c) Quaker Large-Cap Value Fund Shareholders Only: Approve a new Sub-Investment
Advisory Agreement with Compu-Val Investments, Inc.
For Against Abstain
/ / / / / /
2(d) Quaker Mid-Cap Value Fund Shareholders Only: Approve a new Sub-Investment
Advisory Agreement with Compu-Val Investments, Inc.
For Against Abstain
/ / / / / /
<PAGE>
2(e) Quaker Small-Cap Value Fund Shareholders Only: Approve a new Sub-Investment
Advisory Agreement with Aronson + Partners.
For Against Abstain
/ / / / / /
2(e) Quaker Fixed Income Fund Shareholders Only: Approve a new Sub-Investment
Advisory Agreement with ALM Advisors, Inc..
For Against Abstain
/ / / / / /
PROPOSAL # 3. APPROVE THE CONVERSION OF NO-LOAD SHARES TO CLASS A SHARES:
Quaker Core Equity Fund Shareholders Only:
- -----------------------------------------
For Against Abstain
/ / / / / /
Quaker Large-Cap Value Fund Shareholders Only:
- ---------------------------------------------
For Against Abstain
/ / / / / /
Quaker Small-Cap Value Fund Shareholders Only:
- ---------------------------------------------
For Against Abstain
/ / / / / /
Quaker Aggressive Growth Fund Shareholders Only:
- -----------------------------------------------
For Against Abstain
/ / / / / /
Quaker Mid-Cap Value Fund Shareholders Only:
- -------------------------------------------
For Against Abstain
/ / / / / /
Quaker Fixed Income Fund Shareholders Only:
- ------------------------------------------
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 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!
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 the Trust. 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.
<PAGE>
The signers of this proxy hereby appoint Linda Coyne, Krista Ziegler and David
Ganley, 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 June 16, 2000, and at any adjournments thereof, as specified herein,
and in accordance with their best judgment, on any other business that may
properly come before this meeting. Your shares will be voted in accordance with
your designations on this proxy. 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 TRUST WHICH RECOMMENDS A VOTE "FOR" ALL MATTERS.
