File No. 33-67852
811-7978
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ___
Post-Effective Amendment No. 12
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 14
NORTHSTAR TRUST
(Exact name of Registrant as specified in charter)
TWO PICKWICK PLAZA, GREENWICH, CT 06830
(Address of Principal Executive Offices)
(203) 863-6200
(Registrant's telephone number)
MARK L. LIPSON
C/O NORTHSTAR INVESTMENT MANAGEMENT CORPORATION
TWO PICKWICK PLAZA, GREENWICH, CONNECTICUT 06830
(Name and address of agent for service)
Copies of all correspondence to:
JEFFREY STEELE, ESQ.
DECHERT, PRICE & RHOADS
1500 K STREET, N.W., SUITE 500
WASHINGTON, D.C. 20005
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE:
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__ immediately upon filing pursuant to paragraph (b) __ on (date) pursuant to paragraph (b)
__ 60 days after filing pursuant to paragraph (a)(1) __ on (date) pursuant to paragraph (a)(1)
X 75 days after filing pursuant to paragraph (a)(2) __ on (date) pursuant to paragraph (a)(2) of Rule 485
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If appropriate, check the following box:
__ This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
Registrant has registered an indefinite number of shares of beneficial interest
by its initial Registration Statement pursuant to Rule 24f-2 under the
Investment Company Act of 1940, as amended, which became effective November 5,
1993. Registrant filed the notice required by Rule 24f-2 with respect to its
most recent fiscal year on December 8, 1995.
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CROSS REFERENCE SHEET
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The enclosed materials relate only to the Northstar International Value Fund
which is a separate investment series of the Northstar Trust (the "Trust") and
do not amend in any respect the Trust's other investment series. Information
relating to the Trust's other investment series is contained in previously filed
Post-Effective Amendments.
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Form N-1A Part A Item Prospectus Caption
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1. Cover Page................................ Cover Page
2. Synopsis.................................. Expense Information
3. Condensed Financial
Information............................... Financial Highlights
4. General Description of
Registrant................................ Cover Page; Investment Objective and
Policies of the Fund; Other Investment
Techniques; Investment Considerations and
Risk Factors; General Information
5. Management of the Fund.................... Management of the Fund
6. Capital Stock and Other
Securities................................ How Net Asset Value is
Determined; How to Purchase Shares;
Alternative Sales Arrangements;
Investor Services and Account Policies;
Dividends, Distribution and Taxes;
General Information
7. Purchases of Securities Being
Offered................................... How Net Asset Value is Determined;
How to Purchase Shares; Alternative
Sales Arrangements; Investor Services and
Account Policies; Distribution Plans
8. Redemption or Repurchase.................. How Net Asset Value is Determined; How
to Sell Shares
9. Legal Proceedings......................... Not Applicable
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CROSS REFERENCE SHEET
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Form N-1A Part B Item Statement of Additional Information
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Caption
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10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information & History Cover Page; Other Information
13. Investment Objectives & Policies Cover Page; Investment Restrictions;
Investment Techniques
14. Management of the Fund Trustees and Officers
15. Control Persons and Principal N/A
Holders of Securities
16. Investment Advisory and Services of Northstar, the Supervisor and
Other Services the Administrator; Other Information
17. Brokerage Allocation and Portfolio Transactions and Brokerage
Other Practices Allocation
18. Capital Stock and Other Securities Purchases and Redemptions
19. Purchases, Redemptions and Net Asset Value; Purchases and
Pricing Redemptions
20. Tax Status Dividends, Distributions and Taxes
21. Underwriter Underwriter and Distribution Services
22. Calculation of Performance Data Performance Information
23. Financial Statements Financial Statements
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PART C
The information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C of the Registration Statement.
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Two Pickwick Plaza (203) 863-6200
Greenwich, Connecticut 06830 (800) 595-7827
PROSPECTUS February 28, 1997
Northstar International Value Fund (the "Fund") is a separate diversified
portfolio of Northstar Trust, an open-end, management investment company (the
"Trust"), known as a mutual fund. The Fund's investment objective is long-term
capital appreciation. It will seek to achieve this objective by primarily
investing in equity securities of foreign issuers with market capitalizations
greater than $1 billion.
Northstar Investment Management Corporation ("Northstar" or the
"Adviser") is the investment adviser for the Fund. Brandes Investment Partners,
L.P. ("Brandes" or the "Sub-adviser") is the sub-adviser or manager of the
Fund's assets. Northstar Distributors, Inc. (the "Underwriter") is the
underwriter of the Fund's shares, and Northstar Administrators Corporation
(the "Administrator") serves as administrator to the Fund. The
Underwriter and Administrator are each affiliates of the Adviser.
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
February 28, 1997, has been filed with the Securities and Exchange Commission
and is incorporated herein by reference. The Statement of Additional Information
is available without charge upon request to Northstar at the address or
telephone number given above.
Mutual funds are not deposits or obligations of any bank, are not
guaranteed by any bank, and are not insured or guaranteed by the FDIC, the
Federal Reserve Board, or any other government agency. Investment in mutual
funds involves risks, including possible loss of principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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EXPENSE INFORMATION
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The tables and examples below are designed to assist you in understanding
the various costs and expenses that you will bear directly or indirectly as an
investor in the Fund. Shareholder Transaction Expenses are paid by investors
when purchasing or redeeming Fund shares. Annual Operating Expenses are paid by
the Fund and are reflected in the Fund's net asset value.
Class A Class B Class C
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Shareholder Transaction Expenses
Maximum Front-end Sales Load Imposed on Purchase
of Shares (as a % of offering price)............ 4.75% None None
Maximum Contingent Deferred Sales Load on Sale
of Shares (as a % of the lesser of original
price or redemption proceeds)................... None(1) 5.00%(2) 1.00%
Annual Fund Operating Expenses
(As a % of Average Net Assets)
Management Fee.................................... 1.00% 1.00% 1.00%
12b-1 Expenses.................................... 0.30% 1.00%(3) 1.00%(3)
Other Expenses.................................... 0.50% 0.50% 0.50%
Total Fund Operating Expenses..................... 1.80% 2.50% 2.50%
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(1) Purchases of $1 million or more are not subject to an initial sales charge;
however, a CDSC of up to 1% will be imposed on such purchases in the event
of certain redemption transactions within 18 months following the date of
purchase.
(2) The Class B CDSC on redemptions decreases 1% annually after year one to 2%
in years four and five and to 0% after year five.
(3) Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted by the National Association of
Securities Dealers, Inc. ("NASD") rules regarding investment companies.
Examples: An investor in the Fund would pay the following expenses on a $1,000
investment assuming a 5% annual return throughout the period, and, unless
otherwise noted, redemption at the end of each period.
CLASS A CLASS B CLASS B(1) CLASS C CLASS C(1)
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1 Year........... $ 65 $ 77 $ 26 $ 36 $ 26
3 Years.......... 103 112 79 79 79
5 Years.......... 143 158 136 136 136
10 Years......... 254 289 289 289 289
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(1) Assumes no redemption.
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The amounts listed in the Example should not be considered a
representation of past or future expenses and actual expenses may be greater or
less than those shown.
INVESTMENT OBJECTIVE AND POLICIES OF THE FUND
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The Fund's investment objective is long-term capital appreciation. It
cannot be changed without the approval by the holders of a majority (as defined
in the Investment Company Act of 1940, as amended (the "1940 Act") of the Fund's
outstanding voting shares. There can be no assurance that the Fund's investment
objective will be achieved.
The Fund invests primarily in equity securities of foreign issuers with
market capitalizations greater than $1 billion. The Fund may invest up to 25% of
its total assets in small capitalization companies. Small capitalization
companies are those with capitalization of $1 billion or less. Investments in
small capitalization companies while generally providing greater growth
potential than investments in companies with larger capitalizations, also entail
greater risks. Small capitalization companies often have limited product lines,
markets or financial resources and may be dependent on one person or a few key
persons for management. The securities of such companies may be subject to more
volatile market movements than securities of larger, more established companies,
both because the securities typically are traded in lower volume and because the
issuers typically are more subject to changes in earnings and prospects. Because
the Fund applies a U.S. size standard on a global basis, it may invest in
issuers which might, in some countries, rank among the largest companies in
terms of capitalization.
Under normal circumstances, the Fund will invest at least 65% of its total
assets in equity securities of issuers located in at least three countries other
than the United States. Countries in which the Fund may invest include, but are
not limited to, the nations of Western Europe, North and South America,
Australia and Asia. Equity securities include common stocks, preferred stocks
and securities convertible into common stocks. It is anticipated that securities
generally will be purchased in the form of common stock, American Depositary
Receipts ("ADRs"), European Depositary Receipts ("EDRs") or Global Depositary
Receipts ("GDRs"). ADRs, EDRs and GDRs, which may be sponsored or unsponsored,
are receipts typically issued by a U.S. bank or trust company evidencing
ownership of the underlying foreign securities. The issuers of securities
underlying unsponsored ADRs, EDRs and GDRs are not obligated to disclose
material information in the United States and, accordingly, there may not be a
correlation between such information and the market value of the Depositary
Receipts.
The Fund may invest up to 25% of its assets in securities of companies
located in countries with emerging securities markets. Emerging markets are the
capital markets of any country that in the opinion of the Adviser is generally
considered a developing country by the international financial community. See
"Investment Considerations and Risk Factors -- Foreign Securities".
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In seeking out foreign securities for purchase, the Advisor does not
attempt to match the security allocations of foreign stock market indices.
Therefore, the Fund's country weightings may differ significantly from country
weightings found in published foreign stock indices. For example, the Advisor
may choose not to invest a Fund's assets in a country whose stock market, at any
given time, may comprise a large portion of a published foreign stock market
index. At the same time, the Advisor may invest a Fund's assets in countries
whose representation in such an index may be small or non-existent. The Advisor
selects stocks for each Fund based on their individual merits and not
necessarily on their geographic locations.
INVESTMENT CONSIDERATIONS AND RISK FACTORS
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The Fund's net asset value per share is expected to fluctuate. Investors
should consider the Fund as a supplement to an overall investment program and
should invest only if they are willing to undertake the risks involved.
Equity Securities. Equity securities can over time rise and fall in value,
often based on factors unrelated to the value of the issuer of the securities,
and such fluctuations can be pronounced. Changes in the value of the Fund's
investments will result in changes in the value of the Fund's shares and thus
its total return to investors.
The securities of smaller companies in which the Fund may invest may be
subject to more abrupt or erratic market movements than larger more established
companies, because these securities typically are traded in lower volume and the
issuers typically are subject to a greater degree to changes in earnings and
prospects.
Foreign Securities. Investing in foreign securities involves special
risks. These include currency fluctuations, political or economic instability in
the country of issue and the possible imposition of exchange controls or other
laws or restrictions. In addition, securities prices in foreign markets are
generally subject to different economic, financial, political and social factors
than are the prices of securities in U.S. markets. With respect to some foreign
countries there may be the possibility of expropriation or confiscatory
taxation, limitations on liquidity of securities or political or economic
developments which could affect the foreign investments of the Funds.
Further, securities of foreign issuers generally will not be registered
with the SEC, and such issuers will generally not be subject to the SEC's
reporting requirements. Accordingly, there is likely to be less publicly
available information concerning certain of the foreign issuers of securities
held by the Fund than is available concerning U.S. companies. Foreign companies
are also generally not subject to uniform accounting, auditing and financial
reporting standards or to practices and requirements comparable to those
applicable to U.S. companies. There may also be less government supervision and
regulation of foreign broker-dealers, financial institutions and listed
companies than exists in the U.S. These factors could make foreign investments,
especially those in developing countries, more volatile.
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Investing in emerging securities markets involves risks which are in
addition to the usual risks inherent in foreign investments. Some emerging
markets countries may have fixed or managed currencies that are not
free-floating against the U.S. dollar. Further, certain currencies may not be
traded internationally. Certain of these currencies have experienced a steady
devaluation relative to the U.S. dollar. Any devaluations in the currencies in
which the Fund's portfolio securities are denominated may have a detrimental
impact on the Fund.
Some countries with emerging securities markets have experienced
substantial, and in some periods extremely high, rates of inflation for many
years. Inflation and rapid fluctuations in inflation rates have had and may
continue to have negative effects on the economies and securities markets of
certain countries. Moreover, the economies of some countries may differ
favorably or unfavorably from the U.S. economy in such respects as rate of
growth of gross domestic product, the rate of inflation, capital reinvestment,
resource self-sufficiency, number and depth of industries forming the economy's
base, governmental controls and investment restrictions that are subject to
political change and balance of payments position. Further, there may be greater
difficulties or restrictions with respect to investments made in emerging
markets countries.
Emerging securities markets typically have substantially less volume than
U.S. markets, and securities in many of such markets are less liquid, and their
prices often are more volatile than securities of comparable U.S. companies.
Such markets often have different clearance and settlement procedures for
securities transactions, and in some markets there have been times when
settlements have been unable to keep pace with the volume of transactions,
making it difficult to conduct transactions. Delays in settlement could result
in temporary periods when assets which the Fund desires to invest in emerging
markets may be uninvested. Settlement problems in emerging markets countries
also could cause the Fund to miss attractive investment opportunities.
Satisfactory custodial services may not be available in some emerging markets
countries, which may result in the Fund incurring additional costs and delays in
the transportation and custody of such securities.
OTHER INVESTMENT TECHNIQUES
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The Fund may, but does not currently intend to, engage in certain
additional investment techniques not described in the Prospectus. These
techniques and additional information on the securities and techniques described
in the Prospectus are contained in the Statement of Additional Information.
Short-Term Investments. At times the Fund may invest in short-term cash
equivalent securities either for temporary, defensive purposes, or as part of
its overall investment strategy. These securities consist of high quality debt
obligations maturing in one year or less from the date of purchase, such as U.S.
Government securities, certificates of deposit, bankers' acceptances and
commercial paper. High quality means the obligations have been rated at least
A-1 by Standard & Poor's Corporation ("S&P") or Prime-1 by Moody's Investor's
Service, Inc. ("Moody's"), have an outstanding issue of debt securities rated at
least AA by S&P or Aa by Moody's, or are of comparable quality in the opinion of
the Sub-adviser.
<PAGE>
Repurchase Agreements. Short-term investments also include repurchase
agreements with respect to the high quality debt obligations listed above. A
repurchase agreement is a transaction in which the Fund purchases a security
and, at the same time, the seller (normally a commercial bank or broker-dealer)
agrees to repurchase the same security (and/or a security substituted for it
under the repurchase agreement) at an agreed-upon price and date in the future.
The resale price is in excess of the purchase price in that it reflects an
agreed-upon market interest rate effective for the period of time during which
the Fund holds the securities. The majority of these transactions run from day
to day and not more than seven days from the original purchase. The Fund's risk
is limited to the ability of the seller to pay the agreed- upon sum on the
delivery date; in the event of bankruptcy or the default by the seller, there
may be possible delays and expenses in liquidating the instrument purchased,
decline in its value and loss of interest. The securities will be marked to
market every business day so that their value is at least equal to the amount
due from the seller, including accrued interest. The Sub-adviser will also
consider the credit-worthiness of any bank or broker-dealer involved in
repurchase agreements under procedures adopted by the Board of Trustees.
U.S. Government Securities. The Fund may invest in securities issued or
guaranteed by the U.S. Government, its agencies and instrumentalities. U.S.
Government securities include direct obligations issued by the United States
Treasury, such as Treasury bills, certificates of indebtedness, notes and bonds.
U.S. Government agencies and instrumentalities that issue or guarantee
securities include, but are not limited to, the Federal Home Loan Banks, the
Federal National Mortgage Association, and the Student Loan Marketing
Association. Except for U.S. Treasury securities, obligations of U.S. Government
agencies and instrumentalities may or may not be supported by the full faith and
credit of the United States. Some, such as those of the Federal Home Loan Banks,
are backed by the right of the issuer to borrow from the Treasury, others by
discretionary authority of the U.S. Government to purchase the agencies'
obligations, while still others, such as the Student Loan Marketing Association,
are supported only by the credit of the instrumentality. In the case of
securities not backed by the full faith and credit of the United States, the
investor must look principally to the agency issuing or guaranteeing the
obligation for ultimate repayment and may not be able to assert a claim against
the United States itself in the event the agency or instrumentality does not
meet its commitment.
When-Issued Securities. The Fund may purchase securities on a when-issued
or delayed-delivery basis, generally in connection with an underwriting or other
offering. When-issued and delayed-delivery transactions occur when securities
are bought with payment for and delivery of the securities scheduled to take
place at a future time, beyond normal settlement dates, generally from 15 to 45
days after the transaction. No interest accrues to the purchaser during the
period before delivery. There is a risk in these transactions that the value of
the securities at settlement may be more or less than the agreed upon price, or
that the party with which the Fund enters into such a transaction may not
perform its commitment. The Fund will segregate liquid assets, such as cash,
U.S. Government securities and other liquid, high quality debt securities in an
amount sufficient to meet its payment obligations with respect to these
transactions.
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Securities Lending. The Fund may lend its securities in an amount not
exceeding 30% of its assets to financial institutions such as banks and brokers
if the loan is collateralized in accordance with applicable regulations. Under
the present regulatory requirements which govern loans of portfolio securities,
the loan collateral must, on each business day, at least equal the value of the
loaned securities and must consist of cash, letters of credit of domestic banks
or domestic branches of foreign banks, or securities of the U.S. Government.
Loans of securities involve risks of delay in receiving additional collateral or
in recovering the securities loaned or even loss of rights in the collateral
should the borrower of the securities fail financially. However, such securities
lending will be made only when, in the opinion of the Sub-adviser, the income to
be earned from the loans justifies the attendant risks. Loans are subject to
termination at the option of the Fund or the borrower.
Options. The Fund may write (sell) covered call options on individual
securities and on stock indices and engage in related closing transactions. A
covered call option on a security is an agreement by the Fund, in exchange for a
premium, to sell a particular portfolio security if the option is exercised at a
specified price before a set date. An option on a stock index gives the option
holder the right to receive, upon exercising the option, a cash settlement
amount based on the difference between the exercise price and the value of the
underlying stock index. Risks associated with writing covered options include
the possible inability to effect closing transactions at favorable prices and an
appreciation limit on the securities set aside for settlement. The Fund may also
purchase call options in closing transactions, to terminate option positions
written by the Fund. There is no assurance of liquidity in the secondary market
for purposes of closing out covered call option positions.
The Fund may purchase put and call options with respect to securities
which are eligible for purchase by the Fund and with respect to various stock
indices for the purpose of hedging against the risk of unfavorable price
movements adversely affecting the value of the Fund's securities or securities
the Fund intends to buy. A put option on a security is an agreement by the
writer of the option, in exchange for a premium, to purchase the security from
the Fund, if the option is exercised, at a specified price before a set date.
The Fund may also sell put and call options in closing transactions.
Special risks are associated with the use of options. There can be no
guarantee of a correlation between price movements in the option and in the
underlying securities or index. A lack of correlation could result in a loss on
both the Fund's portfolio holdings and the option so that the Fund's return
might have been better had the option not been purchased or sold. There can be
no assurance that a liquid market will exist at a time when the Fund seeks to
close out an option position. The Fund may purchase a put or call option only if
the value of its premium, when aggregated with the premiums on all other options
held by the Fund, does not exceed 5% of the Fund's total assets.
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Stock Index Futures. The Fund may buy and sell stock index futures
contracts for bona fide hedging purposes, e.g., in order to hedge against
changes in prices of the Fund's securities. No more than 25% of the Fund's
assets will be hedged.
A stock index futures contract is an agreement pursuant to which one party
agrees to deliver to the other an amount of cash equal to a specific dollar
amount times the difference between the value of a specific stock index at the
close of the last trading day of the contract and the price at which the
agreement is made. No physical delivery of securities is made. If the
Sub-adviser expected general stock market prices to rise, it might purchase a
stock index futures contract as a hedge against an increase in prices of
particular equity securities it wanted ultimately to buy. If in fact the stock
index did rise, the price of the equity securities intended to be purchased
might also increase, but that increase would be offset in part by the increase
in the value of the Fund's futures contract resulting from the increase in the
index. On the other hand, if the Sub-adviser expected general stock market
prices to decline, it might sell a futures contract on the index. If that index
did in fact decline, the value of some or all of the equity securities held by
the Fund might also be expected to decline, but that decrease would be offset in
part by the increase in the value of the futures contract.
There is no assurance that it will be possible at any particular time to
close a futures position. In the event that the Fund could not close a futures
position and the value of the position declined, the Fund would be required to
continue to make daily cash payments to the other party to the contract to
offset the decline in value of the position. There can be no assurance that
hedging transactions will be successful, as there may be an imperfect
correlation between movements in the prices of the futures contracts and of the
securities being hedged, or price distortions due to market conditions in the
futures markets. Successful use of futures contracts is subject to the
Sub-adviser's ability to predict correctly movements in the direction of
interest rates, market prices and other factors affecting the value of
securities.
Illiquid and Restricted Securities; Short Sales Against the Box. The Fund
may invest up to 5% of its total assets in illiquid securities, including (i)
securities for which there is no readily available market; (ii) securities which
may be subject to legal restrictions on resale (so-called "restricted
securities") other than Rule 144A securities noted below; (iii) repurchase
agreements having more than seven days to maturity; and (iv) fixed time deposits
subject to withdrawal penalties (other than those with a term of less than seven
days). Illiquid securities do not include those which meet the requirements of
Securities Act Rule 144A and which the Sub-adviser has determined to be liquid
based on guidelines approved by the Board of Trustees. The Fund is also
permitted to engage in short sales "against the box." Such short sales are a
method of locking in unrealized capital gains without current recognition of
such gains.
PERFORMANCE INFORMATION
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For purposes of advertising, performance may be calculated on several
bases, including current yield, average annual total return and/or cumulative
total return.
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Current yield shows the rate of income a Fund earns on its investments as
a percentage of the Fund's share price. It is calculated by dividing a Fund's
net investment income for a 30-day period by the average number of shares
entitled to receive dividends and dividing the result by the Fund's share price
at the end of the 30-day period. Yield does not include changes in share price.
Yields are calculated according to standardized SEC formulas and may not
equal the income on an investor's account. Yield is usually quoted on an
annualized basis. An annualized yield represents the amount you would earn if
you remained in a Fund for a year and that Fund continued to have the same yield
for the entire year.
Average annual total return represents the average annual percentage
change of an investment over a specified period. It is calculated by taking the
cumulative total return for the stated period and determining what constant
annual return would have produced the same cumulative return. Average annual
total returns tend to smooth out variations in a Fund's return and are not the
same as actual annual results.
Cumulative total return represents the actual rate of return on an
investment for a specified period. Cumulative total return is generally quoted
for more than one year (e.g., the life of the Fund). A cumulative total return
does not show interim fluctuations in the value of an investment.
Fund performance figures are based on historical results and are not
intended to indicate future performance. Investment returns and share price will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost. Comparative performance information may be used in
advertising, including data from Lipper Analytical Services, Inc., Moody's Bond
Survey Bond Index, Morningstar, Inc. and other industry publications.
HOW NET ASSET VALUE IS DETERMINED
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All purchases, redemptions and exchanges are processed at the net asset
value ("NAV") per share next calculated after your request is received. In order
to receive a day's price, your order must be received by 4:00 p.m. Eastern
Standard Time ("EST"). The Fund's NAV is determined separately for each class as
of the close of regular trading on the New York Stock Exchange ("NYSE")
(normally 4:00 p.m. EST) each day that the NYSE is open. NAV per share is
calculated by dividing the total value of the Fund's securities and other
assets, less all liabilities, by the total number of shares outstanding. The
specific expenses borne by each class of shares will be deducted from that class
and will result in different NAVs and dividend payments. The NAV of a Class B,
or Class C share will generally be lower than that of a Class A share because of
the higher distribution fees or certain other class specific expenses borne by
these classes. Securities are valued at market value or, if a market quotation
is not readily available, at their fair value determined in good faith under
procedures adopted by and under the supervision of the Trustees. Money market
instruments maturing within 60 days are valued at amortized cost, which
approximates market value. See "Net Asset Value" in the Statement of Additional
Information.
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MANAGEMENT OF THE FUND
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THE TRUSTEES. The Trustees of the Fund oversee the business affairs of the
Fund and are responsible for major decisions relating to the Fund's investment
objective and policies. The Trustees delegate the day-to-day management of the
Fund to the officers of the Trust and meet quarterly to review the Fund's
investment policies, performance, expenses and other business affairs.
THE INVESTMENT ADVISER and Affiliated Service Providers. Northstar
Investment Management Corporation is the investment adviser to the Fund.
Northstar furnishes continuous advice and recommendations concerning the Fund's
investments. Northstar Administrators Corporation ("NAC"), an affiliate of
Northstar, furnishes certain administrative, compliance and accounting services
to the Fund. Employees of Northstar and NAC serve as officers of the Fund, and
Northstar provides office space for the Fund and pays the salaries of all Fund
officers and Trustees who are affiliated with Northstar. Northstar Distributors,
Inc, also an affiliate of Northstar, serves as principal underwriter of the
shares of the Fund, conducting a continuous offering pursuant to a "best
efforts" arrangement requiring it to take and pay for only such securities as
may be sold to the public through investment dealers.
Northstar and its affiliates are indirect, majority owned subsidiaries of
ReliaStar Financial Corporation ("ReliaStar"). ReliaStar's address is 20
Washington Avenue South, Minneapolis, Minnesota 55401. Combined minority
interests of Northstar held by members of senior management currently equal 20%.
ReliaStar is a publicly traded holding company whose subsidiaries specialize in
the life and health insurance business. Through ReliaStar Life Insurance Company
and other subsidiaries, ReliaStar issues and distributes individual life
insurance, annuities and mutual funds, group life and health insurance and life
and health reinsurance, and provides related investment management services.
Under the terms of an investment advisory agreement between Northstar and
the Fund, the Fund has agreed to pay Northstar a monthly fee at the annual rate
of 1.00% of the Fund's average daily net assets. From time to time, Northstar
may waive receipt of its fees or voluntarily assume certain expenses of the
Fund.
The Fund pays NAC an administrative services fee, which is accrued daily
and paid monthly, at the annual rate of 0.10% of the Fund's average net assets.
NAC also charges an annual account service fee of $5.00 for each account of
beneficial holders of shares in the Fund for providing certain shareholder
services and assisting broker-dealers in servicing Fund accounts.
The Sub-adviser. Brandes Investment Partners, Inc. ("Brandes"), a
registered investment adviser, serves as the sub-adviser to the Fund pursuant to
a Subadvisory Agreement dated January 23, 1997 between Northstar and Brandes.
Brandes' principal address is 12750 High Bluff Drive, San Diego, California
<PAGE>
92130. Charles Brandes, who owns more than 25% of Brandes common stock, serves
as one of the managing directors of Brandes. Brandes currently manages in excess
of $5 billion for private accounts. Brandes will receive from Northstar, not the
Fund, a monthly fee for its services at an annual rate equal to 0.50% of the
management fee that the Fund pays Northstar. Northstar is responsible for
overseeing the investment management provided by Brandes, and assumes all cost
and expenses of the subadvisory arrangement.
Value Investing. The Sub-adviser is committed to the use of the Graham and
Dodd Value Investing approach as introduced in the classic book Security
Analysis. Utilizing this philosophy, the Sub-adviser views stocks as parts of
businesses which are for sale. It seeks to purchase a diversified group of these
businesses at prices its research indicates are well below their true long-term,
or intrinsic, value. By purchasing stocks whose current prices are believed to
be considerably below their intrinsic value, the Sub-adviser believes it can buy
not only a possible margin of safety against price declines, but also an
attractive opportunity for profit over the business cycle.
In estimating a company's true long-term value, the Sub-adviser uses
sources of information such as company reports, filings with the Securities and
Exchange Commission (the "SEC"), computer databases, industry publications,
general and business publications, brokerage firm research reports, and
interviews with company management. The Sub-adviser's analysis is focused on
fundamental characteristics of a company, including, but not limited to, book
value, cash flow and capital structure, as well as management's record and broad
industry issues. Once the intrinsic value of a company is estimated, this value
is compared to the price of the stock. If the price is substantially lower than
the estimated intrinsic value, the stock may be purchased. The Sub-adviser
believes that the margin between current price and intrinsic value should
provide a margin of safety against price declines. In addition, over a business
cycle of three to five years, the Sub-adviser believes the market should begin
to recognize the company's value and drive its price up toward its intrinsic
value. As a result, the investor could realize profits. Of course, there can be
no assurance that companies selected using the value investing approach will
generate profits or that the Sub-adviser's assessment of company value will be
correct.
The following tables set forth composite performance data for Brandes'
Investment Committee, the portfolio management team for the Fund, based on
historical performance of substantially similar accounts managed by Brandes'
Investment Committee since the dates indicated. The data is provided to
illustrate the past performance of Brandes' Investment Committee in managing
substantially similar accounts, as measured against the Morgan Stanley Capital
International (MSCI) EAFE Index, the same style that is being used for the Fund.
-------------------------------------------------
Brandes Investment MSCI EAFE
Year Committee Composite (a, c) Index (b,c)
- --------------------------------------------------------------- -----------
One Year................. 13.30% 13.28%
Three Years.............. 13.37 10.45
Five Years............... 16.41 9.99
<PAGE>
- --------------------
(a) The performance results include the actual performance of ALL fully
discretionary international equity accounts, except those managed pursuant
to a bundled wrap fee agreement, managed by Brandes' Investment Committee
from 1991 to present calculated in accordance with AIMR standards. These
accounts were managed with investment objectives and policies substantially
similar to those of the Fund. These accounts were not, however, subject to
the requirements of the Investment Company Act of 1940, the limitations of
which could affect performance results. These performance results are "net"
of fees, taking into account management fees, broker fees, commissions and
other normal expenses that were deducted from the accounts, except custodian
costs.
(b) The MSCI EAFE Index is an unmanaged index consisting of securities listed on
exchanges in European, Australian and Far Eastern markets. The Index is
adjusted to reflect reinvestment of dividends and distributions.
(c) All information set forth in the tables was supplied by Brandes Investment
Partners or from statistical services, reports or other sources believed by
Brandes Investment Partners to be reliable. However, such information has
not been verified or audited.
Historical performance is not indicative of future performance. The
composite account results presented above may not necessarily equate with the
return experienced by any one account managed by Brandes' Investment Committee,
as a result of differences in brokerage commissions, the size of positions taken
in relation to account size, timing of investments, additions and withdrawals,
and diversification of securities.
Portfolio Managers. The Fund is managed by Brandes' Investment Committee,
whose members are Brandes principals and/or portfolio managers. Current members
of the Investment Committee are Charles H. Brandes, CFA; Jeffrey A. Busby, CFA;
Glenn R. Carlson, CFA; Robert J. Gallagher; Ann W. Humphreville; Marnelle A.
Marchese, CFA; Jeffrey R. Meyer, CFA; William A. Pickering, CFA; Ronald J. Saba;
and Brent V. Woods.
Other Service Providers. The custodian and fund accounting agent for the
Fund is State Street Bank and Trust Company, located at 225 Franklin Street,
Boston, Massachusetts 02110. The transfer agent and blue sky administrator for
the Fund is First Data Investor Services Group, Inc. ("First Data" or the
"Transfer Agent"), located at One Exchange Place, Boston, Massachusetts, 02109.
HOW TO PURCHASE SHARES
------------------------------------------------------------------------------
The Fund continuously offers three classes of shares. Each class is
described below under "Alternative Purchase Arrangements." Shares of the Fund
may be purchased from the Fund or from investment dealers having a sales
agreement with the Underwriter. Orders received in good form prior to 4:00 p.m.
EST or placed with a financial service firm before such time and transmitted
before the Fund processes that day's share transactions, will be processed at
that day's closing NAV, plus any applicable sales charge. The minimum initial
purchase is $2,500, however the Fund reserves the right in its discretion to
<PAGE>
accept purchases of a lesser value. The minimum initial purchase does not apply
to IRA accounts, for which the minimum is $250; additional investments for as
little as $100 ($25 for IRA accounts) may be made at any time through an
investment dealer or by sending a check payable to Northstar Funds, c/o First
Data Investor Services Group, Inc., P.O. Box 5131, Westborough, Massachusetts
01581-5131, for the purchase of full and fractional shares. Most shareholders
choose not to hold their shares in certificate form because account transactions
such as exchanges and redemptions cannot be completed until the certificate has
been returned to the Fund and certificate holders may not participate in certain
shareholder services, such as telephone exchanges and redemptions, check-writing
and the withdrawal program. Certificates will be issued only upon written
request. Shareholders requesting certificates may incur a fee for lost or stolen
certificates and no certificates are issued for fractional shares (which shares
remain in the shareholder's account in book entry form). The Fund or the
Underwriter may refuse any purchase order for shares.
At various times, the Underwriter implements programs under which (a) a
dealer's sales force may be eligible to win cash or material awards for certain
sales efforts or under which (b) the Underwriter will reallow an amount not
exceeding the total applicable sales charges on the sales generated by the
dealer during such programs to any dealer that (i) sponsors sales contests or
recognition programs conforming to criteria established by the Underwriter or
(ii) participates in sales programs sponsored by the Underwriter. In addition,
the Adviser, Administrator and/or Underwriter may reimburse dealers for
administrative services. Sales personnel of broker-dealers distributing shares
of the Fund may receive differing compensation for selling different classes of
shares.
ALTERNATIVE SALES ARRANGEMENTS
------------------------------------------------------------------------------
The alternative purchase arrangements permit an investor to choose among
three methods (each a class) of purchasing shares. Each class is described
below. Which class is more beneficial to an investor depends on the amount and
intended length of the investment. Large investments qualifying for a reduced
Class A sales charge avoid the higher distribution fee. Investments in Class B
and Class C shares have 100% of the purchase invested immediately. The maximum
purchase of Class B shares is $500,000; the maximum purchase of Class C shares
is $750,000. Please consult your financial service firm.
All contingent deferred sales charges are deducted from the redemption
proceeds, not the amount remaining in the account. No contingent deferred sales
charge is imposed on shares acquired through reinvestment of dividends and
distributions, or on amounts representing appreciation. In determining whether a
contingent deferred sales charge is applicable to a redemption, the calculation
will be determined in the manner that results in the lowest possible rate being
charged. Accordingly, in determining whether a contingent deferred sales charge
will be payable and, if so, the percentage charge applicable, shares acquired
through reinvestment and then shares held the longest will be considered the
first to be redeemed.
<PAGE>
Class B shares automatically convert to Class A shares after eight years
from purchase. The purpose of the conversion is to relieve the holders from the
burden of higher distribution fees once the Underwriter had been reimbursed for
most of its distribution related expenses. For purposes of conversion to Class A
shares, shares purchased through the reinvestment of dividends and distributions
paid in respect of Class B shares in a shareholder's Fund account will be
considered to be held in a separate subaccount. Each time any Class B shares in
the shareholder's Fund account (other than those in the subaccount) convert to
Class A, an equal pro rata portion of the Class B shares in the subaccount will
also convert to Class A.
As set forth below, the initial or contingent deferred sales charges may
be reduced or eliminated for certain persons or organizations purchasing Fund
shares alone or in combination with other Northstar Funds. See the Statement of
Additional Information for more details regarding waivers and purchases at net
asset value.
Investors choosing the initial sales charge alternative may under certain
circumstances be entitled to pay reduced sales charges. The sales charge varies
with the size of the purchase and reduced charges apply to the aggregate of
purchases of the Fund made at one time by any "Purchaser," which term includes
(i) an individual and his/her spouse and their children under the age of 21,
(ii) a trustee or fiduciary purchasing for a single trust, estate or single
fiduciary account (including pension, profit-sharing or other employee benefit
trusts created pursuant to a plan qualified under Section 401 of the Internal
Revenue Code, a Simplified Employee Pension ("SEP"), Salary Reduction and other
Elective Simplified Employee Pension Accounts ("SARSEP")) and 403(b) and 457
plans, although more than one beneficiary or participant is involved; and (iii)
any other organized group of persons, whether incorporated or not, provided the
organization has been in existence for at least six months and has some purpose
other than the purchase at a discount of redeemable securities of a registered
investment company. The circumstances under which "Purchasers" may pay reduced
sales charges are described below.
RIGHTS OF ACCUMULATION. A Purchaser may qualify for reduced initial sales
charges based upon the Purchaser's existing investment in shares of the Fund at
the time of purchase. The applicable sales charge is determined by aggregating
the dollar amount of the new purchase and the greater of the Purchaser's total
(i) net asset value or (ii) cost of all shares owned in the Fund sold subject to
a front-end sales charge and/or designated as "Class A" shares then held by such
Purchaser, and applying the sales charge applicable to such aggregate.
In order to obtain this discount, the Underwriter (if a purchase is made
through an investment dealer) or Transfer Agent (if made by mail) must be
provided with sufficient information, including the Purchaser's total cost at
the time of purchase, to permit verification that the Purchaser qualifies for a
cumulative quantity discount, and confirmation of the order is subject to such
verification. The privilege of cumulative quantity discounts may be modified or
discontinued at any time.
LETTER OF INTENT. Purchasers may also qualify for reduced sales charges by
signing a Letter of Intent ("LOI"). This enables the Purchaser to aggregate
purchases over a 13-month period of all Funds sold subject to a front-end sales
<PAGE>
charge and/or designated as "Class A" shares. The sales charge is based on the
total amount invested during the 13-month period. A 90-day back-dated period can
be used to include earlier purchases (with a partial retroactive downward
adjustment in an amount equal to the commission paid to the broker-dealer); the
13-month period would then begin on the date of the first purchase during the
90-day period. No retroactive adjustment will be made if purchases exceed the
amount indicted in the LOI. A shareholder must notify the Transfer Agent
whenever a purchase is being made pursuant to a LOI.
The LOI is not a binding obligation on the investor to purchase the full
amount indicated; however, on the initial purchase, if required (or on
subsequent purchases if necessary), 5% of the dollar amount specified in the
Statement will be held in escrow by the Transfer Agent in shares registered in
the shareholder's name in order to assure payment of the proper sales charge. If
total purchases pursuant to the LOI (less any dispositions and exclusive of any
distributions on such shares automatically reinvested) are less than the amount
specified, the investor will be requested to remit to the Underwriter an amount
equal to the difference between the sales charge paid and the sales charge
applicable to the aggregate purchases actually made. If not remitted within 20
days after written request, an appropriate number of escrowed shares will be
redeemed in order to realize the difference.
CDSC WAIVERS. The contingent deferred sales charge is waived on
redemptions of Class B and Class C shares (a) following the death or disability,
as defined in Section 72(m)(7) of the Internal Revenue Code, of a shareholder
(or all shareholders in the case of joint accounts) if redemption is made within
one year of the death or disability of the shareholder, as relevant; (b) in
connection with redemptions of shares made pursuant to a shareholder's
participation in any systematic withdrawal plan adopted by the Funds provided,
however, that such withdrawals shall not exceed in any calendar year 7% of the
original principal amount invested (any excess being assessed the applicable
deferred sales charge, if any), and provided further that the redeeming
shareholder reinvests all dividends and capital gain distributions during
his/her participation in the withdrawal plan; (c) after attaining the age of 70
1/2 in the case of redemption from an IRA or other retirement plan such as a
Keogh plan or custodial account pursuant to Section 403(b)(7) of the Internal
Revenue Code, or on any redemption resulting from the tax-free return of an
excess contribution pursuant to Section 408(d)(4) or (5) of the Code; and (d) in
connection with the exercise of certain exchange privileges among Class B or
Class C shares of the Funds, including shares of the Class B or Class C Account
of the Money Market Portfolio.
Class A Shares. Class A shares are offered at net asset value plus an
initial or a contingent deferred sales charge as set forth below. Class A shares
bear a 0.25% annual service fee and a .05% annual distribution fee.
<PAGE>
- ------------------------------------------------------------------------------
Amount Purchased % of Amount % of Offering Price Amount Retained by
Invested be Dealers as % of
Offering Price
- ------------------------------------------------------------------------------
Up to $99,999 4.99% 4.75% 4.00%
- ------------------------------------------------------------------------------
$100,000 to $249,999 3.9 3.75 3.1
- ------------------------------------------------------------------------------
250,000 to 499,999 2.83 2.75 2.3
- ------------------------------------------------------------------------------
500,000 to 999,999 2.04 2 1.7
- ------------------------------------------------------------------------------
*1,000,000 and above -- -- --
- ------------------------------------------------------------------------------
- -------------------------
* The Underwriter pays investment dealers or financial service firms a
commission from its own resources of up to 1.00% of the amount invested for
amounts from $1,000,000 to $2,499,999, up to 0.50% on amounts of $2,500,000 to
$4,999,999 and up to 0.25% on amounts of $5 million and above. Purchases of over
$1 million are subject to a maximum contingent deferred sales charge of 1%
(scaled down to 0.50% for amounts of $2.5 million or more, and 0.25% on amounts
over $5 million) on redemptions made within eighteen months.
Class B Shares. Class B shares are offered at net asset value, without an
initial sales charge, subject to a 0.75% annual distribution fee for
approximately 8 years (at which time they convert to Class A shares bearing only
a 0.05% annual distribution fee), a 0.25% annual service fee and a contingent
deferred sales charge if shares are redeemed within five years after purchase.
As set forth below, the amount of the deferred sales charge varies depending on
the number of years after purchase that the redemption occurs. For determining
the date of purchase, all payments during a month will be aggregated and deemed
to have been made on the last day of the month. The deferred sales charge will
be assessed on an amount equal to the lesser of the current market value or the
cost of the shares being redeemed. The Underwriter currently pays investment
dealers a sales commission of 4% of the sale price of Class B shares sold by the
dealers, subject to future amendment or termination. The Underwriter will retain
all or a portion of the continuing distribution fee assessed to Class B
shareholders and will receive the entire amount of the contingent deferred sales
charge paid by shareholders on the redemption of shares to reimburse the
Underwriter in whole or in part for the payment of such sales commission, plus
financing costs and related marketing expenses.
CONTINGENT DEFERRED
SALES CHARGE AS A
PERCENTAGE OF
DOLLAR AMOUNT
SUBJECT TO
YEARS SINCE PURCHASE CHARGE
- ------------------------------------------- -------------------
First......................................................... 5%
Second........................................................ 4%
Third......................................................... 3%
Fourth........................................................ 2%
Fifth......................................................... 2%
Thereafter.................................................... 0%
<PAGE>
To provide an example, assume an investor purchased 100 shares at $10 per
share (at a cost of $1,000) and in the second year after purchase, the net asset
value per share is $12 and, during such time, the investor has acquired 10
additional shares upon dividend reinvestment. If, at such time the investor
makes his first redemption of 50 shares (proceeds of $600), 10 shares will not
be subject to charge because of dividend reinvestment. With respect to the
remaining 40 shares, the charge is applied only to the original cost of $10 per
share and not to the increase in net asset value of $2 per share. Therefore,
$400 of the $600 redemption proceeds will be charged at a rate of 4% (the
applicable rate in the second year after purchase).
CLASS C SHARES. Investors choosing Class C shares purchase shares at net
asset value without a sales charge at the time of purchase, subject to a 0.75%
annual distribution fee, a 0.25% annual service fee, and a 1.00% contingent
deferred sales charge on redemptions made within one year from the first day of
the month after purchase.
The Underwriter currently pays investment dealers a sales commission of 1%
of the sale price of Class C shares sold by such dealers, subject to future
amendment or termination. The Underwriter will retain the distribution fee
assessed against Class C shareholders in the first year of investment, and the
entire amount of the contingent deferred sales charge paid by Class C
shareholders upon redemption in year one, in order to compensate the Underwriter
for providing distribution related services to the Fund in connection with the
sale of Class C shares, and to reimburse the Underwriter in whole or in part for
the commissions (and any related financing costs) paid to dealers at the time of
purchase. There is no conversion feature associated with Class C shares;
therefore, Class C shareholders will be subject to the higher distribution fee
associated with such shares for the life of the shareholder's investment.
INVESTOR SERVICES AND ACCOUNT POLICIES
------------------------------------------------------------------------------
An account will be opened for each investor after an initial investment is
made. Shares purchased will be held in the shareholder's account by the Transfer
Agent. The Fund will send you a confirmation statement after every transaction
that affects your account balance or your account registration. The Fund sends
annual and semi-annual financial statements to all of its shareholders. To
reduce expenses, only one copy of most Fund reports will be mailed to accounts
listed under the same social security number or to households for multiple
accounts with the same surname. Information regarding the tax status of income
dividends and capital gains distribution will be mailed to shareholders on or
before January 31st of each year. Account tax information will also be sent to
the IRS. Requests for account assistance or additional information should be
directed to Northstar at (800)595-7827.
DIVIDEND AND DISTRIBUTION REINVESTMENT OPTIONS. Shareholders of Class A,
Class B and Class C shares may direct that income dividends and capital gain
distributions be paid to them through any one of the following options: income
dividends and capital gain distributions both paid in additional shares of the
<PAGE>
same class of the Fund at net asset value; income dividends paid in cash and
capital gain distributions paid in additional shares of the same class of the
Fund at net asset value; or income dividends and capital gain distributions both
paid in cash. If a shareholder does not indicate which option is preferred upon
the opening of an account, both income dividends and capital gain distributions
will be paid in additional shares of the Fund from which the investor earned
such distributions. Payment options may be changed at any time by notifying
Northstar in writing.
AUTOMATIC INVESTMENT PLAN. Shareholders may elect to purchase shares
through the establishment of an Automatic Investment Plan, in which case the
minimum investment in order to open an account is $25. An Automatic Investment
Authorization Form (available on request from Northstar) provides for funds to
be automatically drawn on a shareholder's bank account and deposited in his or
her Fund account ($25 per month minimum). The shareholder's bank may charge a
nominal fee in connection with the establishment and use of automatic deposit
services. Shareholders may not participate in the Automatic Investment Plan
while participating in the Systematic Withdrawal Program described below.
WITHDRAWAL PROGRAM. A shareholder owning $5,000 or more worth of shares of
the Fund in book-entry form may establish a withdrawal program with the Fund and
provide for the payment monthly or quarterly of any requested dollar amount ($25
minimum per payment) from the account to his or her order. A sufficient number
of full and fractional shares will be redeemed to make the designated payment.
The purchase of shares while participating in a withdrawal program will
ordinarily be disadvantageous to the investor, since a sales charge will be paid
by the investor on the purchase of shares at the same time the shares are being
redeemed in the case of Class A shares. For this reason, shareholders may not
maintain an Automatic Investment Plan while participating in the withdrawal
program. In the case of shares subject to a contingent deferred sales charge,
unless the investor qualifies for a waiver, the investor may incur a sales
charge at the time of each withdrawal. The Fund may terminate an investor's
withdrawal program if the account value falls below $5,000 due to the transfer
or redemption of shares from the account. See the enclosed application form.
TAX-SHELTERED RETIREMENT PLANS. Shares of the Fund may be offered in
connection with the following qualified prototype retirement plans: IRA and
Rollover IRA, SEP-IRA, Profit-Sharing and Money Purchase Pension Plans which can
be adopted by self-employed persons ("Keogh") and by corporations. Call or write
Northstar for further information.
EXCHANGE PRIVILEGES. Shareholders may exchange shares of the Fund for the
same class of shares of another Fund or for shares of The Cash Management Fund
of Salomon Brothers Investment Series (an open-end management investment company
comprised of various portfolios, hereafter referred to as "Money Market
Portfolio," that is not one of the Funds, but is available by purchase or
exchange through the Underwriter). Exchange requests in proper form will be
honored prior to 4:00 p.m. EST. For telephone exchanges or authorization forms,
contact Northstar at 1-800-595-7827. Exchanges will be based upon each Fund's
NAV per share next computed following receipt of a properly executed exchange
request, without a sales charge; provided, however, in the case of exchanges
<PAGE>
after a direct purchase into the Money Market Portfolio from Class A shares of
the Fund, a sales charge will be imposed in accordance with the sales charge
table that is applicable to direct purchases. Collection of the contingent
deferred sales charge will be deferred on shares subject to a charge that are
exchanged for shares of the same class of another Fund, or converted to shares
of the Money Market Portfolio. Under these circumstances, the combined holding
period of shares in each Fund, or in a Fund and the Money Market Portfolio,
shall be used to calculate the conversion period, if applicable, and to
determine the deferred sales charge due upon redemption, if any. The exchange of
shares from the Fund to another fund is treated as a sale of the exchanged
shares and a purchase of the acquired shares for Federal income tax purposes.
Shareholders may, therefore, realize a taxable gain or loss. See "Exchanges" and
"Dividends, Distributions and Taxes" in the Statement of Additional Information.
The Fund reserves the right to terminate or modify its exchange privileges
at any time upon prominent notice to shareholders. Such notice will be given at
least 60 days in advance. The Fund and the Money Market Portfolio have different
investment objectives and policies. Shareholders should obtain and review the
prospectus of the Fund into which the exchange is to be made before any exchange
requests are made.
TELEPHONE TRANSACTIONS. Shareholders holding shares in book-entry form may
authorize the Fund to accept telephone redemptions and exchanges. Shareholders
may redeem up to $50,000 worth of their shares by telephoning Northstar prior to
4:00 p.m. EST. Redemption proceeds must be payable to the record holder of the
shares and mailed to the shareholder's address of record or wire transferred to
the shareholder's account at a domestic commercial bank that is a member of the
Federal Reserve System, normally within one business day, but in no event longer
than three days after the request. The minimum amount for a wire transfer is
$1,000. If at any time the Fund determines that it is necessary to terminate or
modify telephone transaction privileges, shareholders would be promptly
notified. Information on these services is included in the Application and is
available from Northstar. Neither Northstar, the Underwriter nor the Fund will
be liable for any loss, damages, expense or cost arising out of any telephone
transaction effected in accordance with the Fund's procedures, upon instructions
believed to be genuine. Shareholders who utilize telephone privileges bear the
risk of any loss, damages, expense or cost arising from their election,
including risk of unauthorized use; provided, however that the Fund shall employ
reasonable procedures to confirm that all telephone instructions are genuine.
For this purpose, the Fund or its agent will require all individuals delivering
telephone instructions to provide specific information to identify themselves as
the account holder, such as the name in which the account is registered, the
account holder's social security number, account number, and broker of record.
In the absence of such procedures, or should the Fund or its agents for any
reason fail to follow such procedures, the Fund or its agents may be liable for
losses due to unauthorized or fraudulent telephone instructions.
INVOLUNTARY REDEMPTIONS. Due to the high cost of maintaining accounts with
small account values, the Fund reserves the right to close all accounts that
have been in existence for at least one year and have a value that is less than
$500. Involuntary redemptions will not be effected because of market movements;
they will only be effected in the event of redemptions resulting in an account
<PAGE>
value of less than $500. Shareholders will receive 60 days' written notice
during which time they may bring the value up to $500 or more. If the account
value is not raised during that time, the Fund will redeem all shares in the
account and send the proceeds to the shareholder's address of record.
The Fund reserves the right to close all accounts of a shareholder who has
failed to provide a social security number or other taxpayer identification
number and certification (if required) that such number is correct, or if a
shareholder is deemed to engage in activities which are illegal or otherwise
detrimental to the Fund.
REINSTATEMENT PRIVILEGE. Shareholders have a one time privilege of
reinstating their investment into the Fund, subject to the terms of exchange
(see "Exchange Privileges") at the NAV next determined after the request for
reinstatement is made. For Federal income tax purposes, a redemption and
reinstatement will be treated as a sale and purchase of shares; special rules
may apply in computing the amount of gain or loss in these situations. See
"Dividends, Distributions and Taxes" in the Statement of Additional Information.
A written request for reinstatement must be received by the Underwriter within
30 days of the redemption accompanied by payment for the shares (not in excess
of the redemption). Shareholder accounts will be credited with an amount equal
to the deferred sales charge (or pro rata portion thereof) paid upon redemption.
HOW TO SELL SHARES
------------------------------------------------------------------------------
Shareholders may sell their shares back to the Fund at the NAV next
determined after the Fund receives a redemption request with any other required
documentation in proper form. Investors will be subject to the applicable
deferred sales charge, if any, for such shares. The Transfer Agent requires a
written request, with the signature guaranteed by a bank, a national stock
exchange member or other eligible guarantor institution. The Transfer Agent may
waive the signature guarantee requirement in the case of book-entry share
redemption requests of less than $50,000 if the proceeds are payable to the
account as registered and mailed to the address of record. Redemption requests
must be signed by each person in whose name the account is registered.
Shareholders may also sell shares back to the Fund through dealers who are
members of the selling group. The redemption price in such a case will be the
price as of the close of the New York Stock Exchange on that day, provided the
order is received by the dealer prior to the close of the Exchange and is
transmitted to the Underwriter prior to the close of its business. The dealer is
responsible for the timely transmission of orders to the Underwriter. No service
charge is made by the Fund on redemptions, but shares tendered through
investment dealers may be subject to a service charge by such dealers. Payment
for shares redeemed is normally made within three days. However, for shares
recently purchased by check, the Fund cannot send proceeds until the check has
cleared, which may take up to 15 days.
Redemptions by corporations, partnerships or other organizations,
executors, administrators, trustees, custodians, guardians, or from IRA's or
other retirement plans may require additional documentation. To avoid delay in
<PAGE>
redemption or transfer, shareholders having questions about specific
requirements, including eligible guarantor institutions, should contact
Northstar at (800) 595-7827. Redemption requests will not be honored until all
required documents in the proper form have been received.
DISTRIBUTION PLANS
------------------------------------------------------------------------------
The Fund has adopted a distribution plan under Rule 12b-1 of the 1940 Act
for each class of shares of the Fund (collectively, the "Plans"). The Plans
permit the Fund to compensate the Underwriter in connection with activities
intended to promote the sale of shares of each class of shares of the Fund.
Pursuant to the Plans, the Fund shall pay the Underwriter 0.30% annually of the
average daily net assets of the Fund's Class A shares and 1.00% annually of the
average daily net assets of the Fund's Class B and Class C shares. Under the
NASD rules, fees of this type are limited to 0.75% annually for distribution
fees and 0.25% annually for service fees, subject to aggregate limits. The
Underwriter uses the fee to defray the costs of commissions and service fees
paid to financial service firms which have sold Fund shares, and to defray other
expenses such as sales literature, prospectus printing and distribution,
shareholder servicing costs and compensation to wholesalers. Should the fees
exceed the Underwriter's expenses in any year, the Underwriter would realize a
profit.
DIVIDENDS, DISTRIBUTIONS AND TAXES
------------------------------------------------------------------------------
The following discussion is intended for general information only. Each
investor should consult with his or her own tax advisor as to the tax
consequences of an investment in the Fund.
The Fund intends to continue to qualify annually and elect to be treated
as a regulated investment company under the Internal Revenue Code of 1986, as
amended (the "Code"). To qualify, the Fund must meet certain income,
distribution and diversification requirements. In any year in which a Fund
qualifies as a regulated investment company and timely distributes all of its
taxable income, the Fund generally will not pay any U.S. federal income or
excise tax. The Fund intends to distribute to shareholders substantially all of
its net investment income and any net capital gains at least annually. It is
intended that dividends from net investment income will be paid annually on the
Fund's shares.
Dividends paid out of the Fund's investment company taxable income
(including dividends, interest and net short-term capital gains) will be taxable
to a shareholder as ordinary income. If a portion of the Fund's income consists
of dividends paid by U.S. corporations, a portion of the dividends paid by the
Fund may be eligible for the corporate dividends-received deduction.
Distributions of net capital gains (the excess of net long-term capital gains
over net short-term capital losses), if any, designated as capital gain
dividends are taxable as long-term capital gains, regardless of how long the
shareholder has held the Fund's shares. Dividends are taxable to shareholders in
the same manner whether received in cash or reinvested in additional Fund
shares.
<PAGE>
Each year the Fund will notify shareholders of the tax status of dividends
and distributions. The Fund may be required to withhold U.S. federal income tax
at the rate of 31% of all taxable distributions payable to shareholders who fail
to provide the Fund with their correct taxpayer identification number or to make
required certifications, or who have been notified by the IRS that they are
subject to backup withholding.
Investors who purchase shares of the Fund just before the distribution
will pay full price for the shares and receive a portion of the purchase price
back as a taxable distribution. Unless your account is set up as a tax-deferred
account, dividends paid to you would be included in your gross income for tax
purposes even though you may not have participated in the increase in the net
asset value of the Fund. Further information relating to tax consequences is
contained in the Statement of Additional Information. Fund distributions also
may be subject to state, local and foreign taxes. Fund distributions that are
derived from interest on obligations of the U.S. Government and certain of its
agencies, authorities and instrumentalities may be exempt from state and local
taxes in certain states.
A distribution will be treated as paid on December 31 of the current
calendar year if it is declared by the Fund in October, November or December
with a record date in such a month and paid by the Fund during January of the
following calendar year. Such distributions will be taxable to shareholders in
the calendar year in which the distributions are declared, rather than the
calendar year in which the distributions are received.
Investments in zero coupon securities will result in income to the Fund
each year equal to a portion of the excess of the face value of the securities
over their issue price, even though the Fund receives no cash interest payments
from the securities.
Upon the sale or other disposition of shares of the Fund, a shareholder
may realize a capital gain or loss which will be long-term or short-term,
generally depending upon the shareholder's holding period for the shares.
GENERAL INFORMATION
-----------------------------------------------------------------------------
ORGANIZATION OF THE FUND. The Northstar International Value Fund is a
series of the Northstar Trust (the "Trust") (formerly the "Northstar Advantage
Trust"), a Massachusetts business trust. The Trust was organized in 1993.
The Trust's Declaration of Trust, as amended, provides that the Trustees
are authorized to create an unlimited number of series and, with respect to each
series, to issue an unlimited number of full and fractional shares of one or
more classes and to divide or combine the shares into a greater or lesser number
of shares without thereby changing the proportionate beneficial interests in the
series. All shares have equal voting rights, except that only shares of the
respective series or separate classes within a series are entitled to vote on
matters concerning only that series or class. As of the date of this Prospectus,
each Fund within the Trust has three classes of shares.
<PAGE>
Neither the Trust nor the Fund are required to hold shareholder meetings,
but special meetings may be called under certain circumstances. Meetings of the
shareholders will be called upon written request of shareholders holding in the
aggregate not less than 10% of the outstanding shares of the affected Fund or
class having voting rights.
REGISTRATION STATEMENT. This prospectus does not contain all the
information included in the Registration Statement filed for the Fund with the
Securities and Exchange Commission under the Securities Act of 1933 and the 1940
Act, with respect to the securities offered hereby, certain portions of which
have been omitted pursuant to the rules and regulations of the Securities and
Exchange Commission. The Registration Statement, including the exhibits filed
therewith, may be examined at the office of the Securities and Exchange
Commission in Washington, D.C.
<PAGE>
Principal Underwriter
Northstar Distributors, Inc.
Two Pickwick Plaza
Greenwich, CT 06830
Investment Adviser
Northstar Investment Management Corporation
Two Pickwick Plaza
Greenwich, Connecticut 06830
Transfer Agent
First Data Investor Services Group, Inc.
4400 Computer Drive
Westborough, MA 01581-5120
1-800-595-7827
No dealer, salesperson or any other person has been authorized to give any
information or make any representations other than those contained in this
prospectus, and, if given or made, such information or representations must not
be relied upon. This prospectus does not constitute an offer to sell or
solicitation of an offer to buy any of the securities offered hereby in any
state in which, or to any person to whom it is unlawful to make such an offer.
Neither the delivery of this prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that information herein is correct at
any time subsequent to its date.
TABLE OF CONTENTS
Page
----
Expense Information.................................................... 2
Financial Highlights................................................... _
Investment Objective and Policies of the Fund.......................... 3
Investment Considerations and Risk Factors............................. 4
Other Investment Techniques............................................ 5
Performance Information................................................ 8
How Net Asset Value is Determined...................................... 9
Management of the Fund................................................. 10
How to Purchase Shares................................................. 12
Alternative Sales Arrangements......................................... 13
Investor Services and Account Policies................................. 17
How to Sell Shares..................................................... 20
Distribution Plans..................................................... 21
Dividends, Distributions and Taxes..................................... 21
General Information.................................................... 22
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
New Account Application
---------------------------------------------------------------------------------------------------------------------------------
1 ACCOUNT REGISTRATION
---------------------------------------------------------------------------------------------------------------------------------
Type of Account (Choose One Only):
/ / INDIVIDUAL / / JOINT ACCOUNT / / FOR A MINOR / / TRUST, CORPORATION, PARTNERSHIP OR OTHER ENTITY
USE LINE A USE LINES A & B USE LINE C USE LINE D
Print name exactly as account is to be registered:
A._________________________________________________ ___-____-_____
NAME (FIRST, MIDDLE, LAST) SOCIAL SECURITY NUMBER
B._________________________________________________ ___-____-_____
NAME (FIRST, MIDDLE, LAST) SOCIAL SECURITY NUMBER
C._________________________________________________
CUSTODIAN'S NAME (FIRST, MIDDLE, LAST)
_________________________________________________ ____-____-_____
MINOR'S NAME (FIRST, MIDDLE, LAST) MINOR'S SOCIAL SECURITY NUMBER
_________________________________________________ ___-_________
TAX I.D. NUMBER
UNDER THE _____________ UNIFORM GIFTS/TRANSFERS TO MINORS ACT OR
NAME OF STATE
D._________________________________________________ ___-___-_____
NAME (IF A TRUST, INCLUDE DATE OF AGREEMENT) SOCIAL SECURITY NUMBER
---------------------------------------------------------------------------------------------------------------------------------
2 MAILING ADDRESS
---------------------------------------------------------------------------------------------------------------------------------
___________________________________________________
STREET
( )______________________________________________
DAYTIME PHONE NUMBER
___________________________________________________
CITY STATE ZIP
---------------------------------------------------------------------------------------------------------------------------------
3 PURCHASE OF SHARES
---------------------------------------------------------------------------------------------------------------------------------
MINIMUM INITIAL INVESTMENT $2,500 / / MAKE CHECK PAYABLE TO NORTHSTAR FUNDS. Check enclosed for $__________
/ / Shares purchased and paid for through my/our investment dealer.
Trade Date_______ Order#_______
Number of Shares: Class A_______ Class B_______ Class C_______
Please check the box beside the name of each Northstar Advantage Fund being purchased and enter the dollar amount of each
purchase. All distributions will be reinvested in additional shares unless instructed otherwise.
/ / INTERNATIONAL VALUE FUND $_______
Class A / / Class B / / Class C / /
DIVIDENDS / / Cash / / Other*
CAPITAL GAINS / / Cash / / Other*
______________________________________________________________________________________________________________________
/ / MONEY MARKET PORTFOLIO FUND $_______
(Money Market Account)
Class A / / Class B / / Class C / /
DIVIDENDS / / Cash / / Other*
CAPITAL GAINS / / Cash / / Other*
______________________________________________________________________________________________________________________
*Please reinvest my dividends from ________________ to ________________
(Name of Fund) (Name of Fund)
---------------------------------------------------------------------------------------------------------------------------------
4 LETTER OF INTENT, RIGHT OF ACCUMULATION (CLASS A SHARES ONLY)
---------------------------------------------------------------------------------------------------------------------------------
LETTER OF INTENT
Although I/we have made no commitment to do so, I/we intend to invest the dollar amount indicated below within a 13-month
period in shares of one or more of the eligible Northstar Funds.
/ / $100,000 / / $250,000 / / $500,000 / / $1,000,000
RIGHTS OF ACCUMULATION
If this account qualified for a Reduced Sales Charge under the terms of the current Prospectus, please list account numbers:
/ / $100,000 / / $250,000 / / $500,000 / / $1,000,000
- -
---- -------- ---- ---------
---------------------------------------------------------------------------------------------------------------------------------
5 AGREEMENTS AND SIGNATURES
---------------------------------------------------------------------------------------------------------------------------------
I/We am/are of legal age and wish to establish an account in accordance with the terms and conditions of the current applicable
Prospectus, a copy of which has been received and read. I/We understand and agree that neither First Data nor the Northstar Funds
shall be held liable for any loss, liability, cost or expense for acting in accordance with this application, or any section
thereof. I/We acknowledge that the account(s) established by this application will be subject to the telephone exchange and
redemption privileges described in this current prospectus, unless indicated otherwise, with the understanding that the Fund,
Northstar and the Transfer Agent will not be able to verify the authenticity of any telephone or redemption order received from
persons other than registered representatives of Northstar Distributors, Inc. and that they will not be liable for following
telephone exchange or redemption instructions that prove to be fraudulent. Shareholders would bear the loss resulting from
instructions entered by an unauthorized third party.
Under penalties of perjury, I certify (1) that the number shown on this form is my correct taxpayer identification number and (2)
that I am not* subject to backup withholding as a result of a failure to report all interest or dividends, or the Internal Revenue
Service has notified me that I am no longer subject to backup withholding.
*If you are subject to backup withholding, please cross through the word "not" in part (2) above.
---------------------------------------------------------------------------------------------------------------------------------
INDIVIDUAL (OR CUSTODIAN) DATE
---------------------------------------------------------------------------------------------------------------------------------
CO-OWNER (OR CORPORATE OFFICER, PARTNER OR TRUSTEE) DATE
---------------------------------------------------------------------------------------------------------------------------------
(IF APPLICABLE, TRUSTEE) DATE
---------------------------------------------------------------------------------------------------------------------------------
(IF APPLICABLE, TRUSTEE) DATE
---------------------------------------------------------------------------------------------------------------------------------
6 FOR DEALER USE ONLY
---------------------------------------------------------------------------------------------------------------------------------
We guarantee the signature(s) and legal capacity of the applicant(s) referred to herein, and in the case of a withdrawal program
we affirm that, in our opinion, the designated withdrawal is reasonable in view of the circumstances involved.
---------------------------------------------------------------------------------------------------------------------------------
DEALER NAME (PLEASE PRINT CAREFULLY) DEALER NO.
---------------------------------------------------------------------------------------------------------------------------------
AUTHORIZED SIGNATURE (MUST BE PROVIDED FOR WITHDRAWAL PROGRAMS, TELEPHONE REDEMPTIONS AND TELEPHONE EXCHANGES)
---------------------------------------------------------------------------------------------------------------------------------
BRANCH NUMBER BRANCH ADDRESS
---------------------------------------------------------------------------------------------------------------------------------
REP NAME (PLEASE PRINT CAREFULLY) FIRST AND LAST NAME PHONE NUMBER (IMPORTANT) REP NUMBER
( )
----------------------------------------------------------------------------------------------------------------------------------
<PAGE>
------------------------------------------------
Upon completion of the application, please
return with a check made payable to:
NORTHSTAR FUNDS,
c/o FIRST DATA, Box 8758, Providence, RI 02940
SPECIAL ACCOUNT OPTION
---------------------------------------------------------------------------------------------------------------------------------
7 AUTOMATIC INVESTMENT PLAN
---------------------------------------------------------------------------------------------------------------------------------
Attach a VOIDED CHECK from your bank account and a check for an initial deposit to establish this plan (minimum $25). Please
complete the following information to invest automatically the dollar amount stated below on approximately the 15th / /, 30th
/ / or the 15th and 30th / /, of the month.
The applicant authorizes the Northstar Funds to draw monthly drafts on your bank account number _________ and use the proceeds
($25 minimum) therefrom to purchase shares of Northstar ___________ _____________
FUND NAME $ AMOUNT
Registered in the name(s) of __________________________________________
RESTRICTIONS
Each purchase of shares will be made at the current offering price determined as of the close of business on the day on which
such purchase is made. Automatic investments may be discontinued by either Northstar Funds or the purchaser upon 30 days
written notice to the other.
The Northstar Funds reserves the right to cancel any transaction which was executed in reliance on a draft authorized where the
bank upon which the draft was drawn refused to make payment thereon for any reason.
ATTACH VOID CHECK HERE
---------------------------------------------------------------------------------------------------------------------------------
8 WITHDRAW PROGRAM
---------------------------------------------------------------------------------------------------------------------------------
A Withdrawal Plan is available on Class A shares (non-certificated shares only) provided the Fund being purchased has a value of
$5,000 or more.
Withdrawals with respect to Class B and Class C shares are limited (see the Prospectus) and are conditional upon dividends and
capital gains being automatically reinvested.
1. The amount of each payment shall be ($25 minimum)
--------- -------- --------- --------
FUND NAME $ AMOUNT FUND NAME $ AMOUNT
2. Payments are to be made / / Monthly / / Quarterly / / Semi-Annually / / Annually on the / / 1st or / / 15th of the month
Choose one of the following methods of distribution.
/ / ACH Please have my payments electronically transferred to my bank. I have attached the required voided check and I have
verified that my bank is a member of the Automated Clearing House (ACH).
/ / MAIL Please have my payments mailed. I understand that the payments will be made payable to me and mailed to my account
mailing address unless a special designation is referenced below:
---------------------------------------------------------------------------------------------------------------------------------
NAME (PLEASE PRINT CAREFULLY.)
---------------------------------------------------------------------------------------------------------------------------------
STREET
---------------------------------------------------------------------------------------------------------------------------------
CITY STATE ZIP CODE YOUR BANK ACCOUNT NUMBER
---------------------------------------------------------------------------------------------------------------------------------
ATTACH VOID CHECK HERE
---------------------------------------------------------------------------------------------------------------------------------
9 TELEPHONE EXCHANGE REDEMPTION AND EXPEDITED TELEPHONE REDEMPTION
---------------------------------------------------------------------------------------------------------------------------------
Signature guarantees are required if: 1. Redemption is over $50,000.
2. Proceeds are to be sent to address other than record.
ALL SHAREHOLDERS AND THEIR DEALER REPRESENTATIVES WILL AUTOMATICALLY RECEIVE TELEPHONE EXCHANGE AND REDEMPTION PRIVILEGES,
(NON-CERTIFICATED SHARES ONLY) UNLESS AN ELECTION NOT TO RECEIVE THESE PRIVILEGES IS EXERCISED BELOW.
/ / DO NOT CODE MY / / DO NOT CODE MY
ACCOUNT FOR TELEPHONE ACCOUNT FOR TELEPHONE
EXCHANGE PRIVILEGE. REDEMPTION PRIVILEGE.
/ / PLEASE WIRE REDEMPTION PROCEEDS TO MY BANK. (I UNDERSTAND THE MINIMUM FOR WIRES IS $1,000.) MY VOIDED CHECK IS ATTACHED.
</TABLE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
FEBRUARY 28, 1996
NORTHSTAR International Value Fund
Two Pickwick Plaza
Greenwich, Connecticut 06830
(203) 863-6200
(800) 595-7827
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of the
Fund dated February 28, 1997, as each may be revised from time to time. To
obtain a copy of the Fund's Prospectus, please contact Northstar Investment
Management Corporation at the address or phone number listed above.
Northstar Investment Management Corporation ("Northstar" or the
"Adviser") serves as the Fund's investment adviser. Northstar has engaged
Brandes Investment Partners, Inc. ("Brandes" or the "Subadviser") to serve as
subadviser to the Northstar International Value Fund, subject to the
supervision of Northstar. Northstar Distributors, Inc. (the "Underwriter") is
the underwriter to the Fund. Northstar Administrators Corporation (the
"Administrator") is the Fund's administrator. The Underwriter and the
Administrator are affiliates of Northstar.
-------------------------------------
TABLE OF CONTENTS
INVESTMENT RESTRICTIONS................................................. 2
INVESTMENT TECHNIQUES................................................... 3
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION......................... 7
SERVICES OF NORTHSTAR, THE SUBADVISER
AND THE ADMINISTRATOR....................................... 9
NET ASSET VALUE......................................................... 11
PURCHASES AND REDEMPTIONS............................................... 13
DIVIDENDS, DISTRIBUTIONS AND TAXES...................................... 14
UNDERWRITER AND DISTRIBUTION SERVICES................................... 20
TRUSTEES AND OFFICERS................................................... 22
OTHER INFORMATION....................................................... 25
PERFORMANCE INFORMATION................................................. 26
FINANCIAL STATEMENTS.................................................... 29
<PAGE>
INVESTMENT RESTRICTIONS
- ------------------------------------------------------------------------------
Northstar International Value Fund. The Fund has adopted investment
restrictions numbered 1 through 6 as fundamental policies. These restrictions
cannot be changed without approval by the holders of a majority (as defined in
the Investment Company Act of 1940, as amended) of the Fund's outstanding voting
shares. Investment restrictions numbered 7 through 12 are not fundamental
policies and may be changed by vote of a majority of the Trust's Board members
at any time. The Fund may not:
1. Issue senior securities, except to the extent permitted under the
Investment Company Act of 1940, borrow money or pledge its assets, except that
the Fund may borrow on an unsecured basis from banks for temporary or emergency
purposes or for the clearance of transactions in amounts not exceeding 10% of
its total assets (not including the amount borrowed), provided that it will not
make investments while borrowings in excess of 5% of the value of its total
assets are outstanding;
2. Act as underwriter (except to the extent the Fund may be deemed
to be an underwriter in connection with the sale of securities in its
investment portfolio);
3. Invest 25% or more of its total assets, calculated at the time of
purchase and taken at market value, in any one industry (other than U.S.
Government securities), except that the Fund reserves the right to invest all of
its assets in shares of another investment company;
4. Purchase or sell real estate or interests in real estate or real estate
limited partnerships (although the Fund may purchase and sell securities which
are secured by real estate, securities of companies which invest or deal in real
estate and securities issued by real estate investment trusts);
5. Purchase or sell commodities or commodity futures contracts, except
that the Fund may purchase and sell stock index futures contracts for hedging
purposes to the extent permitted under applicable federal and state laws and
regulations and except that the Fund may engage in foreign exchange forward
contracts;
6. Make loans (except for purchases of debt securities consistent with the
investment policies of the Fund and except for repurchase agreements);
7. Make short sales of securities or maintain a short position, except for
short sales against the box;
8. Purchase securities on margin, except such short-term credits as may
be necessary for the clearance of transactions;
9. Write put or call options, except that the Fund may (i) write covered
call options on individual securities and on stock indices; (ii) purchase put
and call options on securities which are eligible for purchase by the Fund and
on stock indices; and (iii) engage in closing transactions with respect to its
<PAGE>
options writing and purchases, in all cases subject to applicable federal and
state laws and regulations;
10. Purchase any security if as a result the Fund would then hold more
than 10% of any class of voting securities of an issuer (taking all common stock
issues as a single class, all preferred stock issues as a single class, and all
debt issues as a single class), except that the Fund reserves the right to
invest all of its assets in a class of voting securities of another investment
company;
11. Invest more than 10% of its assets in the securities of other
investment companies or purchase more than 3% of any other investment company's
voting securities or make any other investment in other investment companies
except as permitted by federal and state law, except that the Fund reserves the
right to invest all of its assets in another investment company;
12. Invest more than 15% of its total assets in illiquid securities.
INVESTMENT TECHNIQUES
- ------------------------------------------------------------------------------
Derivative Instruments. The Fund may invest in Derivative Instruments (as
defined in the Fund's Prospectus) for a variety of reasons, including to hedge
certain market risks, to provide a substitute for purchasing or selling
particular securities or to increase potential income gain. Derivatives may
provide a cheaper, quicker or more specifically focused way for the Fund to
invest than "traditional" securities would.
Derivatives can be volatile and involve various types and degrees of risk,
depending upon the characteristics of the particular Derivative and the
portfolio as a whole. Derivatives permit a Fund to increase or decrease the
level of risk, or change the character of the risk, to which its portfolio is
exposed in much the same way as the Fund can increase or decrease the level of
risk, or change the character of the risk, of its portfolio by making
investments in specific securities.
Derivatives may be purchased on established exchanges or through privately
negotiated transactions referred to as over-the-counter Derivatives.
Exchange-traded Derivatives generally are guaranteed by the clearing agency
which is the issuer or counterparty to such Derivatives. This guarantee usually
is supported by a daily payment system (i.e., margin requirements) operated by
the clearing agency in order to reduce overall credit risk. As a result, unless
the clearing agency defaults, there is relatively little counterparty credit
risk associated with Derivatives purchased on an exchange. By contrast, no
clearing agency guarantees over-the-counter Derivatives. Therefore, each party
to an over-the-counter Derivative bears the risk that the counterparty will
default. Accordingly, Northstar and the Subadviser will consider the
creditworthiness of counterparties to over-the-counter Derivatives in the same
manner as it would review the credit quality of a security to be purchased by
the Fund. Over-the-counter Derivatives are less liquid than exchange-traded
Derivatives since the other party to the transaction may be the only investor
with sufficient understanding of the Derivative to be interested in bidding for
it.
<PAGE>
Futures Transactions - In General. The Fund may enter into futures
contracts in U.S. domestic markets, such as the Chicago Board of Trade and the
International Monetary Market of the Chicago Mercantile Exchange, or on
exchanges located outside the United States, such as the London International
Financial Futures Exchange and the Sydney Futures Exchange Limited. Foreign
markets may offer advantages such as trading opportunities or arbitrage
possibilities not available in the United States. Foreign markets, however, may
have greater risk potential than domestic markets. For example, some foreign
exchanges are principal markets so that no common clearing facility exists and
an investor may look only to the broker for performance of the contract. In
addition, any profits that the Fund might realize in trading could be eliminated
by adverse changes in the exchange rate, or the Fund could incur losses as a
result of those changes. Transactions on foreign exchanges may include both
commodities which are traded on domestic exchanges and those which are not.
Unlike trading on domestic commodity exchanges, trading on foreign commodity
exchanges is not regulated by the Commodity Futures Trading Commission.
Engaging in these transactions involves risk of loss to the Fund which
could adversely affect the value of the Fund's net assets. Although the Fund
intends to purchase or sell futures contracts only if there is an active market
for such contracts, no assurance can be given that a liquid market will exist
for any particular contract at any particular time. Many futures exchanges and
boards of trade limit the amount of fluctuation permitted in futures contract
prices during a single trading day. Once the daily limit has been reached in a
particular contract, no trades may be made that day at a price beyond that limit
or trading may be suspended for specified periods during the trading day.
Futures contract prices could move to the limit for several consecutive trading
days with little or no trading, thereby preventing prompt liquidation of futures
positions and potentially subjecting the Fund to substantial losses.
Successful use of futures by the Fund also is subject to the Manager's
ability to predict correctly movements in the direction of the relevant market,
and, to the extent the transaction is entered into for hedging purposes, to
ascertain the appropriate correlation between the transaction being hedged and
the price movements of the futures contract. For example, if the Fund uses
futures to hedge against the possibility of a decline in the market value of
securities held in its portfolio and the prices of such securities instead
increase, the Fund will lose part or all of the benefit of the increased value
of securities which it has hedged because it will have offsetting losses in its
futures positions. Furthermore, if in such circumstances the Fund has
insufficient cash, it may have to sell securities to meet daily variation margin
requirements. The Fund may have to sell such securities at a time when it may be
disadvantageous to do so.
Pursuant to regulations and/or published positions of the Securities and
Exchange Commission, the Fund may be required to segregate cash or high quality
money market instruments in connection with its commodities transactions in an
amount generally equal to the value of the underlying commodity. The segregation
of such assets will have the effect of limiting the Fund's ability otherwise to
invest those assets.
Specific Futures Transactions. The Fund may purchase and sell stock index
futures contracts. A stock index future obligates the Fund to pay or receive an
amount of cash equal to a fixed dollar amount specified in the futures contract
<PAGE>
multiplied by the difference between the settlement price of the contract on the
contract's last trading day and the value of the index based on the stock prices
of the securities that comprise it at the opening of trading in such securities
on the next business day.
The Fund will engage in futures transactions only as a hedge against the
risk of unexpected changes in the values of securities held or intended to be
held by the Fund. As a general rule, the Fund will not purchase or sell futures
if, immediately thereafter, more than 25% of its net assets would be hedged. In
addition, the Fund will not purchase or sell futures or related options if,
immediately thereafter, the sum of the amount of margin deposits on the Fund's
existing futures positions and premiums paid for such options would exceed 5% of
the market value of the Fund's net assets.
Options - In General. The Fund may purchase and write (i.e., sell) call or
put options with respect to specific securities. A call option gives the
purchaser of the option the right to buy, and obligates the writer to sell, the
underlying security or securities at the exercise price at any time during the
option period, or at a specific date. Conversely, a put option gives the
purchaser of the option the right to sell, and obligates the writer to buy, the
underlying security or securities at the exercise price at any time during the
option period.
A covered call option written by the Fund is a call option with respect to
which the Fund owns the underlying security or otherwise covers the transaction
by segregating cash or other securities. A put option written by the Fund is
covered when, among other things, cash or liquid securities having a value equal
to or greater than the exercise price of the option are placed in a segregated
account with the Fund's custodian to fulfill the obligation undertaken. The
principal reason for writing covered call and put options is to realize, through
the receipt of premiums, a greater return than would be realized on the
underlying securities alone. The Fund receives a premium from writing covered
call or put options which it retains whether or not the option is exercised.
There is no assurance that sufficient trading interest to create a liquid
secondary market on a securities exchange will exist for any particular option
or at any particular time, and for some options no such secondary market may
exist. A liquid secondary market in an option may cease to exist for a variety
of reasons. In the past, for example, higher than anticipated trading activity
or order flow, or other unforeseen events, at times have rendered certain of the
clearing facilities inadequate and resulted in the institution of special
procedures, such as trading rotations, restrictions on certain types of orders
or trading halts or suspensions in one or more options. There can be no
assurance that similar events, or events that may otherwise interfere with the
timely execution of customers' orders, will not recur. In such event, it might
not be possible to effect closing transactions in particular options. If, as a
covered call option writer, the Fund is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or it delivers the underlying security upon
exercise or it otherwise covers its position.
<PAGE>
Specific Options Transactions. The Fund may purchase and sell call and put
options in respect of specific securities (or groups or "baskets" of specific
securities) or stock indices listed on national securities exchanges or traded
in the over-the-counter market. An option on a stock index is similar to an
option in respect of specific securities, except that settlement does not occur
by delivery of the securities comprising the index. Instead, the option holder
receives an amount of cash if the closing level of the stock index upon which
the option is based is greater than, in the case of a call, or less than, in the
case of a put, the exercise price of the option. Thus, the effectiveness of
purchasing or writing stock index options will depend upon price movements in
the level of the index rather than the price of a particular stock.
The Fund may purchase and sell call and put options on foreign currency.
These options convey the right to buy or sell the underlying currency at a price
which is expected to be lower or higher than the spot price of the currency at
the time the option is exercised or expires.
The Fund may purchase cash-settlement options on interest rate swaps,
interest rate swaps denominated in foreign currency and equity index swaps in
pursuit of its investment objective. Interest rate swaps involve the exchange by
the Fund with another party of their respective commitments to pay or receive
interest (for example, an exchange of floating-rate payments for fixed-rate
payments) denominated in U.S. dollars or foreign currency. Equity index swaps
involve the exchange by the Fund with another party of cash flows based upon the
performance of an index or a portion of an index of securities which usually
includes dividends. A cash-settled option on a swap gives the purchaser the
right, but not the obligation, in return for the premium paid, to receive an
amount of cash equal to the value of the underlying swap as of the exercise
date. These options typically are purchased in privately negotiated transactions
from financial institutions, including securities brokerage firms.
Successful use by the Fund of options will be subject to the ability of
Northstar and the Subadviser to predict correctly movements in the prices of
individual stocks, the stock market generally, foreign currencies or interest
rates. To the extent the Manager's predictions are incorrect, the Fund may incur
losses.
SHORT SALES. The Fund may make short sales "against the box." A short-sale
is a transaction in which a party sells a security it does not own in
anticipation of decline in the market value of that security. A short sale is
"against the box" to the extent that the Fund contemporaneously owns or has the
right to obtain securities identical to those sold short. When the Fund makes a
short sale, it must borrow the security sold short and deliver it to the
broker-dealer through which it made the short sale as collateral for its
obligation to deliver the security upon conclusion of the sale. The Fund may
have to pay a fee to borrow particular securities, and is often obligated to pay
over any accrued interest on such borrowed securities.
REPURCHASE AGREEMENTS. Repurchase agreements are agreements under which a
Fund buys a money market instrument and obtains a simultaneous commitment from
the seller to repurchase the instrument at a specified time and at an agreed
upon yield. Northstar will use standards set by the Fund's Trustees in reviewing
the creditworthiness of parties to repurchase agreements with the Fund. In
<PAGE>
addition, no more than an aggregate of 15% of the Fund's net assets, at the time
of investment, will be invested in illiquid investments, including repurchase
agreements having maturities longer than seven days. In the event of failure of
the executing bank or broker-dealer, the Fund could experience some delay in
obtaining direct ownership of the underlying collateral and might incur a loss
if the value of the security should decline, as well as costs in disposing of
the security.
LENDING PORTFOLIO SECURITIES. The Fund may lend portfolio securities to
broker-dealers and other financial institutions in an amount up to 30% of the
value of its total assets, provided that such loans are callable at any time by
the Fund and are at all times secured by collateral held by the Fund at least
equal to the market value, determined daily, of the loaned securities. The Fund
will continue to receive any income on the loaned securities, while
simultaneously earning interest on cash collateral (which will be invested in
short-term debt obligations) or a securities lending fee (in the case of
collateral in the form of U.S. Government Securities).
There may be risks of delay in recovery of the loaned securities and, in
some cases, loss of rights in the collateral should the borrower of the
securities fail financially. Loans of portfolio securities will only be made to
firms considered by Northstar to be creditworthy under guidelines adopted by the
Trustees.
WHEN-ISSUED SECURITIES. The Fund may purchase securities on a when-issued
or delayed delivery basis. In such transactions, the price is fixed at the time
the commitment to purchase is made, but delivery and payment for the securities
take place at a later date, normally within one month. The value of the security
on the settlement date may be more or less than the price paid as a result of,
among other things, changes in the level of interest rates or other market
factors. Accordingly, there is a risk of loss, which is in addition to the risk
of decline in the value of the Fund's other assets. The Fund will establish a
segregated account with its custodian in which it will maintain cash and
marketable securities equal in value to commitments for when-issued or delayed
delivery securities. While when-issued or delayed delivery securities may be
sold prior to the settlement date, it is intended that the Fund will purchase
such securities with the purpose of actually acquiring them, unless a sale
appears desirable for investment reasons.
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION
------------------------------------------------------------------------------
Northstar or the Sub-adviser may place orders for the purchase and sale of
the Fund's securities, supervise their execution and negotiate brokerage
commissions on behalf of the Fund. For purposes of the remainder of this
section, "Portfolio Transactions and Brokerage Allocation," discussion of
Northstar includes the Subadviser. It is the practice of Northstar to seek the
best prices and best execution of orders and to negotiate brokerage commissions
that in the Adviser's opinion, are reasonable in relation to the value of the
brokerage services provided by the executing broker. Brokers who have executed
orders for the Fund are asked to quote a fair commission for their services. If
the execution is satisfactory and if the requested rate approximates rates
<PAGE>
currently being quoted by the other brokers selected by Northstar, the rate is
deemed by Northstar to be reasonable. Brokers may ask for higher rates of
commission if all or a portion of the securities involved in the transaction are
positioned by the broker, if the broker believes it has brought the Fund an
unusually favorable trading opportunity, or if the broker regards its research
services as being of special value and payment of such commissions is authorized
by Northstar after the transaction has been consummated. If Northstar more than
occasionally differs with the broker's appraisal of opportunity or value, the
broker would not be selected to execute trades in the future. Northstar believes
that the Fund benefits with a securities industry comprised of many and diverse
firms and that the long-term interest of shareholders of the Fund is best served
by its brokerage policies that include paying a fair commission, rather than
seeking to exploit its leverage to force the lowest possible commission rate.
Over-the-counter purchases and sales are transacted directly with principal
market-makers, except in those circumstances where, in the opinion of Northstar,
better prices and execution are available elsewhere.
In general terms, the nature of research services provided by brokers
encompasses statistical and background information, and forecasts and
interpretations with respect to U.S. and foreign economies, U.S. and foreign
money markets, fixed income markets and equity markets, specific industry groups
and individual issues. Research services will vary from firm to firm, with
broadest coverage generally from the large full-line firms. Smaller firms, in
general, tend to provide information and interpretations on a smaller scale,
frequently with a regional emphasis. In addition, several firms monitor federal,
state, local and foreign political developments; many of the brokers also
provide access to outside consultants. The outside research assistance is
particularly useful to Northstar's staff, since the brokers, as a group, tend to
monitor a broader universe of securities and other matters than Northstar's
staff can follow. In addition, the outside research provides Northstar with a
diverse perspective on financial markets. Research and investment information is
provided by these and other brokers at no cost to Northstar and is available for
the benefit of other accounts advised by Northstar and its affiliates; and not
all of this information will be used in connection with the Fund. While this
information may be useful in varying degrees and may tend to reduce Northstar's
expenses, it is not possible to estimate its value, and, in the opinion of
Northstar, it does not reduce Northstar's expenses by a determinable amount. The
extent to which Northstar makes use of statistical, research and other services
furnished by brokers is considered by Northstar in the allocation of brokerage
business, but there is no formula by which such business is allocated. Northstar
does so in accordance with its judgment of the best interests of the Fund and
its shareholders.
Purchases and sales of fixed income securities will usually be principal
transactions. Such securities often will be purchased or sold from or to dealers
serving as market makers for the securities at a net price. The Fund will also
purchase such securities in underwritten offerings and will, on occasion,
purchase securities directly from the issuer. Generally, fixed income securities
are traded on a net basis and do not involve brokerage commissions. The cost of
executing fixed income securities transactions consists primarily of dealer
spreads and underwriting commissions.
<PAGE>
In purchasing and selling fixed income securities, it is the policy of the
Fund to obtain the best results, while taking into account the dealer's general
execution and operational facilities, the type of transaction involved and other
factors, such as the dealer's risk in positioning the securities involved. While
Northstar generally seeks reasonably competitive spreads or commissions, the
Fund will not necessarily pay the lowest spread or commission available.
The Fund may, under circumstances in which two or more dealers are in a
position to offer comparable results, give preference to a dealer that has
provided statistical or other research services to the Fund. By allocating
transactions in this manner, Northstar is able to supplement its research and
analysis with the views and information of other securities firms.
A change in securities held in the portfolio of the Fund is known as
"Portfolio Turnover" and may involve the payment by the Fund of dealer mark-ups
or brokerage or underwriting commissions and other transaction costs on the sale
of securities, as well as on the reinvestment of the proceeds in other
securities. Portfolio turnover rate for a fiscal year is the percentage
determined by dividing the lesser of the cost of purchases or proceeds from
sales of portfolio securities by the average of the value of portfolio
securities during such year, all excluding securities whose maturities at
acquisition were one year or less. The Fund cannot accurately predict its
portfolio turnover rate, but Northstar anticipates that the Fund's rate will not
exceed 100% under normal market conditions. A 100% annual turnover rate would
occur, for example, if all the securities in the portfolio were replaced once in
a period of one year. The Fund's portfolio turnover rate may be higher than that
described above if the Fund finds it necessary to significantly change its
portfolio to adopt a temporary defensive position or respond to economic or
market events. A high turnover rate would increase commission expenses and may
involve realization of gains that would be taxable to shareholders. The ability
of the Fund to make purchases and sales of securities and to engage in options
and futures transactions will be limited by certain requirements of the Code,
including a requirement that less than 30% of the Fund's annual gross income be
derived from gains on the sale of securities and certain other assets held for
less than three months.
The placement of portfolio transactions with broker-dealers who sell
shares of the Fund is subject to rules adopted by the National Association of
Securities Dealers, Inc. ("NASD"). Provided the Trust's officers are satisfied
that the Fund is receiving the most favorable price and execution available,
Northstar may also consider the sale of the Fund's shares as a factor in the
selection of broker-dealers to execute its portfolio transactions.
The Fund does not effect securities transactions through broker-dealers in
accordance with any formula, nor does it effect securities transactions through
such broker-dealers solely for selling shares of the Fund. However, as stated
above, broker-dealers who execute transactions for the Fund may from time to
time effect purchases of shares of the Fund for their customers.
<PAGE>
SERVICES OF NORTHSTAR, THE SUBADVISER AND THE ADMINISTRATOR
------------------------------------------------------------------------------
Pursuant to an Investment Advisory Agreement with the Fund, Northstar
Investment Management Corporation acts as the investment adviser to the Fund. In
this capacity, Northstar, subject to the authority of the Trustees of the Fund,
and subject to delegation of certain responsibilities to Brandes Investment
Partners, Inc. as the Subadviser for the Fund, is responsible for furnishing
continuous investment supervision to the Fund and is responsible for the
management of the Fund's portfolio.
Northstar is an indirect, majority-owned subsidiary of ReliaStar Financial
Corp. ("ReliaStar"). ReliaStar's address is 20 Washington Avenue South,
Minneapolis, Minnesota 55401. Combined minority interests in Northstar held by
members of senior management currently equal 20%. ReliaStar is a publicly traded
holding company whose subsidiaries specialize in the life insurance business.
Through ReliaStar Life Insurance Company and other subsidiaries, ReliaStar
issues and distributes individual life insurance and annuities, group life and
health insurance and life and health reinsurance, and provides related
investment management services.
Northstar charges a fee under the advisory agreement to the Fund at an
annual rate of 1.00% of the Fund's average daily net assets. This fee is accrued
daily and payable monthly. Northstar has agreed that if, in any fiscal year, the
aggregate expenses of the Fund, exclusive of taxes, distribution fees,
brokerage, interest and (with the prior consent of any necessary state
securities commissions) extraordinary expenses, but including the management
fee, exceed the most restrictive expense limitations applicable to the Fund
under state securities laws or published regulations thereunder, Northstar will
refund on a proportionate basis to the Fund the excess over such amount up to
the total fee received by Northstar. Currently, the most restrictive of such
limitations would require Northstar to reimburse the Fund to the extent that in
any fiscal year such aggregate expenses exceed 2.5% of the first $30,000,000 of
the average net assets, 2.0% of the next $70,000,000 of the average net assets
and 1.5% of any amount of the average net assets in excess of $100,000,000.
The Investment Advisory Agreement for the Fund was originally approved by
the Trustees of the Northstar Trust on January 23, 1997, and by the sole
Shareholder of the Fund on January 23, 1997. The Investment Advisory Agreement
will continue in effect until January 23, 1999 and then will continue in effect
from year to year if specifically approved annually by (a) the Trustees, acting
on behalf of the Fund, including a majority of the Disinterested Trustees, or
(b) a majority of the outstanding voting securities of each class of the Fund as
defined in the 1940 Act.
The Fund's Investment Advisory Agreement may be terminated as to any
class, without penalty and at any time, by a similar vote upon not more than 60
days' nor less than 30 days' written notice by Northstar, the Trustees, or a
majority of the outstanding voting securities of such class of the Fund as
defined in the 1940 Act. Such agreement will automatically terminate in the
event of its assignment, as defined in Section 2(a)(4) of the 1940 Act.
<PAGE>
Pursuant to a Subadvisory Agreement between Northstar and Brandes
Investment Partners, Inc. ("Brandes"), dated January 23, 1997, Brandes acts as
Subadviser to the Fund. In this capacity, Brandes, subject to the supervision
and control of Northstar and the Trustees of the Fund, will manage the Fund's
portfolio investments, consistently with their investment objective, and will
execute any of the Fund's investment policies that it deems appropriate to
utilize from time to time. Fees payable under the Subadvisory Agreement will
accrue daily and be paid monthly by Northstar. As compensation for its services,
Northstar will pay Brandes at the annual rate of 0.50% of the management fee
that the Fund pays Northstar. Brandes' address is 12750 High Bluff Drive, San
Diego, California 92130. Charles Brandes, who owns more than 25% of Brandes
common stock, serves as one of the managing directors of Brandes. The
Subadvisory Agreement for the Fund was approved by the Trustees of the Fund on
January 23, 1997. The Subadvisory Agreement may be terminated without payment of
any penalty by Northstar, Brandes, the Trustees of the Fund, or the shareholders
of the Fund on not more than 60 days' and not less than 30 days' prior written
notice. Otherwise, the Subadvisory Agreement will remain in effect for two years
and will, thereafter, continue in effect from year to year, subject to the
annual approval of the Trustees of the Fund, or the vote of a majority of the
outstanding voting securities of the Fund, and the vote, cast in person at a
meeting duly called and held, of a majority of the Trustees of the Fund who are
not parties to the Subadvisory Agreement or "interested persons" (as defined in
the 1940 Act) of any such Party.
Northstar Administrators Corporation serves as administrator for the Fund,
pursuant to an Administrative Services Agreement with the Fund. Subject to the
supervision of the Board of Trustees, the Administrator provides the overall
business management and administrative services necessary to the proper conduct
of the Fund's business, except for those services performed by Northstar under
the Investment Advisory Agreement, the custodian for the Fund under the
Custodian Agreement, the transfer agent for the Fund under the Transfer Agency
Agreement, and such other service providers as may be retained by the Fund from
time to time. The Administrator acts as liaison among these service providers to
the Fund. The Administrator is also responsible for ensuring that the Fund
operates in compliance with applicable legal requirements and for monitoring
Northstar for compliance with requirements under applicable law and with the
investment policies and restrictions of the Fund. The Administrator is an
affiliate of Northstar. The address of the Administrator is Two Pickwick Plaza,
Greenwich, Connecticut 06830.
The Administrative Services Agreement was approved by the Trustees on
January 23, 1997 and will continue in effect from year to year thereafter,
provided such continuance is approved annually by a majority of the Trustees.
The Administrator's fee is accrued daily against the value of the Fund's net
assets and is payable by the Fund monthly at an annual rate of .10% of the
Fund's average daily net assets. In addition, the Administrator charges an
annual account fee of $5.00 for each account of beneficial owners of shares in
the Fund for providing certain shareholder services and assisting broker-dealer
shareholder accounts.
NET ASSET VALUE
------------------------------------------------------------------------------
Equity securities are valued at the last sale price on the exchange or in
the principal OTC market in which such securities are being valued, or lacking
any sales, at the last available bid price. Prices of long-term debt securities
<PAGE>
are valued on the basis of last reported sales price, or if no sales are
reported, the value is determined based upon the mean of representative quoted
bid or asked prices for such securities obtained from a quotation reporting
system or from established market makers, or at prices for securities of
comparable maturity, quality and type. Securities (including OTC options) for
which market quotations are not readily available and other assets are valued at
their fair value as determined by or under the direction of the Trustees. Such
fair value may be determined by various methods, including utilizing information
furnished by pricing services that determine calculations for such securities
using methods based, among other things, upon market transactions for comparable
securities and various relationships between securities that are generally
recognized as relevant.
Trading in securities in foreign securities markets is normally completed
well before the close of the New York Stock Exchange. In addition foreign
securities trading may not take place on all days on which the New York Stock
Exchange is open for trading, and may occur in certain foreign markets on days
on which the Fund's net asset value is not calculated. Events affecting the
values of portfolio securities that occur between the time their prices are
determined and the close of the New York Stock Exchange will not be reflected in
the calculation of net asset value unless the Board of Trustees deems that the
particular event would materially affect net asset value, in which case an
adjustment will be made. Assets or liabilities expressed in foreign currencies
are translated , in determining net asset value, into U.S. dollars based on the
spot exchange rates at 1:00 p.m., EST, or at such other rates as Northstar may
determine to be appropriate.
The net asset value of the Fund's shares fluctuates and is determined
separately for each class as of the close of regular trading on the New York
Stock Exchange (currently 4:00 p.m. EST), on each business day that the Exchange
is open. Net asset value per share is computed by determining the value of the
Fund's assets (securities held plus cash and other assets, including dividend
and interest accrued but not received) less all liabilities of the Fund
(including accrued expenses other than class specific expenses), and dividing
the result by the total number of shares outstanding at such time. The specific
expenses borne by each class of shares will be deducted from that class and will
result in different net asset values and dividends. The net asset value per
share of the Class B and Class C shares of the Fund will generally be lower than
that of the Class A shares because of the higher class-specific expenses borne
by each of the Class B and Class C shares. Under normal market conditions, daily
prices for securities are obtained from independent pricing services, determined
by them in accordance with the registration statement for the Fund. Securities
are valued at market value or, if a market quotation is not readily available,
at their fair value, determined in good faith under procedures established by
and under the supervision of the Trustees. Money market instruments maturing
within 60 days are valued using the amortized cost method of valuation. This
involves valuing a security at cost on the date of acquisition and thereafter
assuming a constant accretion of a discount or amortization of a premium to
maturity, regardless of the impact of fluctuating interest rates on the market
value of the instrument. While this method provides certainty in valuation, it
may result in periods during which value, as determined by amortized cost, is
higher or lower than the price the Fund would receive if it sold the instrument.
See "How Net Asset Value is Determined" in the Prospectus.
<PAGE>
PURCHASES AND REDEMPTIONS
------------------------------------------------------------------------------
Shares issued pursuant to the automatic reinvestment of income dividends
or capital gains distributions are not subject to a front-end or contingent
deferred sales load. There is no sales charge for qualified persons. "Qualified
Persons" are the following (a) active or retired Trustees, Directors, Officers,
Partners or Employees (including immediate family) of (i) Northstar or any of
its affiliated companies, (ii) the Fund or any Northstar affiliated investment
company or (iii) dealers having a sales agreement with the Underwriter, (b)
trustees or custodians of any qualified retirement plan or IRA established for
the benefit of a person in (a) above; (c) dealers, brokers or registered
investment advisers that have entered into an agreement with the Underwriter
providing for the use of shares of the Fund in particular investment products
such as "wrap accounts" or other similar managed accounts for the benefit of the
clients of such brokers, dealers and registered investment advisers, and (d)
pension, profit sharing or other benefit plans created pursuant to a plan
qualified under Section 401 of the Code or plans under Section 457 of the Code,
provided that such shares are purchased by an employer sponsored plan with at
least 100 eligible employees. Class A shares of the Fund may be purchased at net
asset value, through a dealer, where the amount invested represents redemption
proceeds from another open-end fund sold with a sales load and the same or
similar investment objective, and provided the following conditions are met:
such redemption occurred no more than 60 days prior to the purchase of shares of
the Fund, the redeemed shares were held for at least six months prior to
redemption, and the proceeds of the redemption are sent directly to Northstar or
its agent, or maintained in cash or a money market fund. No commissions will be
paid to dealers in connection with such purchases. There is also no initial
sales charge for "Purchasers" (defined below) if the initial amount invested in
the Fund is at least $1,000,000 or the Purchaser signs a $1,000,000 Letter of
Intent, as hereinafter defined.
REDUCED SALES CHARGES ON CLASS A SHARES. Investors choosing the initial
sales alternative may under certain circumstances be entitled to pay reduced
sales charges. The sales charge varies with the size of the purchase and reduced
charges apply to the aggregate of purchases of the Fund made at one time by any
"Purchaser," which term includes (i) an individual and his/her spouse and their
children under the age of 21, (ii) a trustee or fiduciary purchasing for a
single trust, estate or single fiduciary account (including IRAs, pension,
profit-sharing or other employee benefit trusts created pursuant to a plan
qualified under Section 401 of the Code, a Simplified Employee Pension ("SEP"),
Salary Reduction and other Elective Simplified Employee Pension Accounts
("SARSEP")) and 403(b) and 457 plans, although more than one beneficiary or
participant is involved; and (iii) any other organized group of persons, whether
incorporated or not, provided the organization has been in existence for at
least six months and has some purpose other than the purchase at a discount of
redeemable securities of a registered investment company. The circumstances
under which "Purchasers" may pay reduced sales charges are described in the
Prospectus.
REDEMPTIONS. The right to redeem shares may be suspended and payment
therefor postponed during periods when the New York Stock Exchange is closed,
other than customary weekend and holiday closings, or, if permitted by rules of
the SEC, during periods when trading on the Exchange is restricted, or during
<PAGE>
any emergency that makes it impracticable for the Fund to dispose of its
securities or to determine fairly the value of its net assets or during any
other period permitted by order of the SEC for the protection of investors.
Furthermore, the Transfer Agent will not mail redemption proceeds until checks
received for shares purchased have cleared, but payment will be forwarded
immediately upon the funds becoming available. Class B and Class C shareholders
will be subject to the applicable deferred sales charge, if any, for their
shares at the time of redemption.
EXCHANGES. The following conditions must be met for all exchanges among
the Funds and the Money Market Portfolio: (i) the shares that will be acquired
in the exchange (the "Acquired Shares") are available for sale in the
shareholder's state of residence; (ii) the Acquired shares will be registered to
the same shareholder account as the shares to be surrendered (the "Exchanged
Shares"); (iii) the Exchanged Shares must have been held in the shareholder's
account for at least 30 days prior to the exchange; (iv) except for exchanges
into the Money Market Portfolios, the account value of the Fund whose shares are
to be acquired must equal or exceed the minimum initial investment amount
required by that Fund after the exchange is implemented; and (v) a properly
executed exchange request has been received by the Transfer Agent.
The Fund reserves the right to delay the actual purchase of the Acquired
Shares for up to five business days if it determines that it would be
disadvantaged by an immediate transfer of proceeds from the redemption of
Exchanged Shares. Normally, however, the redemption of Exchanged Shares and the
purchase of Acquired Shares will take place on the day that the exchange request
is received in proper form. The Fund reserves the right to terminate or modify
its exchange privileges at any time upon prominent notice to shareholders. Such
notice will be given at least 60 days in advance. It is the policy of Northstar
to discourage and prevent frequent trading by shareholders among the Northstar
Funds in response to market fluctuations. Accordingly, in order to maintain a
stable asset base in each Fund and to reduce administrative expenses borne by
each Fund, Northstar generally restricts shareholders to a maximum of six
exchanges out of a Fund each calendar year. If a shareholder exceeds this limit,
future exchange requests may be denied.
Conversion Feature. Class B shares of the Fund will automatically convert
to Class A shares without a sales charge at the relative net asset values of
each of the classes after eight years from the acquisition of the Class B
shares, and as a result, will thereafter be subject to the lower distribution
fee (but same service fee) under the Class A Rule 12b-1 plan for the Fund.
DIVIDENDS, DISTRIBUTIONS AND TAXES
______________________________________________________________________________
The Fund intends to qualify each year as a regulated investment company
under Subchapter M of the Code. In order to so qualify, the Fund must, among
other things, (i) derive each taxable year at least 90% of its gross income from
dividends, interest, payments with respect to certain securities loans, gains
from the sale of securities or foreign currencies, or other income (including
but not limited to gains from options, futures or forward contracts) derived
<PAGE>
with respect to its business of investing in stock, securities or currencies;
(ii) derive less than 30% of its gross income each taxable year from the sale or
other disposition of certain assets, including securities, held for less than
three months (the "30% Limitation"); and (iii) at the end of each quarter of the
taxable year maintain at least 50% of the value of its total assets in cash,
government securities, securities of other regulated investment companies, and
other securities of issuers that represent, with respect to each issuer, no more
than 5% the value of the Fund's total assets and 10% of the outstanding voting
securities of such issuer, and with no more than 25% of its assets invested in
the securities (other than those of the U.S. Government or other regulated
investment companies) of any one issuer or of two or more issuers that the Fund
controls and that are engaged in the same, similar or related trades and
businesses. As a regulated investment company, the Fund generally will not be
subject to federal income tax on its income and gains that it distributes to
shareholders, if at least 90% of its investment company taxable income (which
includes dividends, interest and the excess of any short-term capital gains over
long-term capital losses) for the taxable year is distributed.
An excise tax at the rate of 4% will be imposed on the excess, if any, of
the Fund's "required distribution" over actual distributions in any calendar
year. Generally, the "required distribution" is 98% of a Fund's ordinary income
for the calendar year plus 98% of its capital gain net income recognized during
the one-year period ending on October 31 plus undistributed amounts from prior
years. The Fund intends to make distributions sufficient to avoid imposition of
the excise tax. A distribution will be treated as paid on December 31 of the
current calendar year if it is declared by the Fund during October, November or
December of the year with a record date in such a month and paid by the Fund
during January of the following year. Such distributions will be taxable as if
received on December 31 in the year they are declared by the Fund, rather than
the year in which they are received.
The taxation of equity options and OTC options on debt securities is
governed by Code section 1234. Pursuant to Code section 1234, the premium
received by the Fund for selling a put or call option is not included in income
at the time of receipt. If the option expires, the premium is short-term capital
gain to the Fund. If the Fund enters into a closing transaction, the difference
between the amount paid to close out its position and the premium received is
short-term capital gain or loss. If a call option written by the Fund is
exercised, thereby requiring the Fund to sell the underlying security, the
premium will increase the amount realized upon the sale of such security and any
resulting gain or loss will be a capital gain or loss, and will be long-term or
short-term depending upon the holding period of the security. With respect to a
put or call option that is purchased by the Fund, if the option is sold, any
resulting gain or loss will be a capital gain or loss, and will be long-term or
short-term, depending upon the holding period of the option. If the option
expires, the resulting loss is a capital loss and is long-term or short-term,
depending upon the holding period of the option. If the option is exercised, the
cost of the option, in the case of a call option, is added to the basis of the
purchased security and, in the case of a put option, reduces the amount realized
on the underlying security in determining gain or loss.
Certain options, futures contracts and forward contracts in which a Fund
may invest are "section 1256 contracts." Gains or losses on section 1256
contracts are generally considered 60% long-term and 40% short-term capital
<PAGE>
gains or losses ("60/40 gains or losses"); however, foreign currency gains or
losses (as discussed below) arising from certain section 1256 contracts may be
treated as ordinary income or loss. Also, section 1256 contracts held by a Fund
at the end of each taxable year (and, generally, for purposes of the 4% excise
tax, on October 31 of each year) are treated as sold on such date at fair market
value, resulting in unrealized gains or losses being treated as though they were
realized.
Hedging transactions undertaken by the Fund may result in straddles for
U.S. federal income tax purposes. The straddle rules may accelerate income to
the Fund, defer losses to the Fund, and affect the character of gains (or
losses) realized by the Fund. Hedging transactions may increase the amount of
short-term capital gain realized by the Fund that is taxed as ordinary income
when distributed to shareholders. The Fund may make one or more of the various
elections available under the Code with respect to hedging transactions. If the
Fund makes any of the elections, the amount, character and timing of the
recognition of gains or losses from the affected positions will be determined
under rules that vary according to the elections made. The 30% limitation may
limit the extent to which the Fund will be able to engage in transactions in
options, futures contracts and forward contracts.
Under the Code, gains or losses attributable to fluctuations in exchange
rates that occur between the time the Fund accrues interest or other
receivables, or accrues expenses or other liabilities, denominated in a foreign
currency and the time the Fund actually collects such receivables, or pays such
liabilities, generally are treated as ordinary income or ordinary loss.
Similarly, on disposition of debt securities denominated in a foreign currency
and certain options, futures and forward contracts, gains or losses attributable
to fluctuations in the value of foreign currency between the date of acquisition
of the security or contract and the date of disposition also are treated as
ordinary gain or loss. These gains or losses, referred to under the Code as
"section 988" gains or losses, may increase or decrease the amount of the Fund's
investment company taxable income to be distributed to its shareholders as
ordinary income.
The Fund will not realize gain or loss on a short sale of a security until
it closes the transaction by delivering the borrowed security to the lender. All
or a portion of any gain arising from a short sale may be treated as short-term
capital gain, regardless of the period for which the Fund held the security used
to close the short sale. In addition, the Fund's holding period for any security
that is substantially identical to that which is sold short may be reduced or
eliminated as a result of the short sale.
Investments by the Fund in zero coupon securities will result in income to
the Fund equal to a portion of the excess of the face value of the securities
over their issue price (the "original issue discount") each year that the
securities are held, even though the Fund receives no cash interest payments.
This income is included in determining the amount of income that the Fund must
distribute to maintain its status as a regulated investment company and to avoid
the payment of federal income tax and the 4% excise tax. If the Fund invests in
certain high yield original issue discount obligations issued by corporations, a
portion of the original issue discount accruing on the obligations may be
eligible for the deduction for dividends received by corporations. In such
event, a portion of the dividends of investment company taxable income received
from the Fund by its corporate shareholders may be eligible for this deduction.
<PAGE>
Gain derived by the Fund from the disposition of any market discount bonds
(i.e., bonds purchased other than at original issue, where the face value of the
bonds exceeds their purchase price) held by the Fund will be taxed as ordinary
income to the extent of the accrued market discount on the bonds, unless the
Fund elects to include the market discount in income as it accrues.
If the Fund invests in stock of certain foreign corporations that generate
largely passive investment-type income, or which hold a significant percentage
of assets that generate such income (referred to as "passive foreign investment
companies" or "PFICs"), these investments would be subject to special tax rules
designed to prevent deferral of U.S. taxation of the Fund's share of the PFIC's
earnings. In the absence of certain elections to report these earnings on a
current basis, regardless of whether the Fund actually receives any
distributions from the PFIC, investors in the Fund would be required to report
certain "excess distributions" from, and any gain from the disposition of stock
of, the PFIC as ordinary income. This ordinary income would be allocated ratably
to the Fund's holding period for the stock. Any amounts allocated to prior years
would be taxable at the highest rate of tax applicable in that year, increased
by an interest charge determined as though the amounts were underpayments of
tax.
Income received by the Fund from sources within foreign countries may be
subject to withholding and other taxes imposed by such countries. If more than
50% of the value of the Fund's total assets at the close of its taxable year
consists of securities of foreign corporations, the Fund will be eligible and
may elect to "pass through" to the Fund's shareholders the amount of foreign
taxes paid by the Fund. Pursuant to this election, a shareholder will be
required to include in gross income (in addition to dividends actually received)
its pro rata share of the foreign taxes paid by the Fund, and may be entitled
either to deduct its pro rata share of the foreign taxes in computing its
taxable income or to use the amount as a foreign tax credit against its U.S.
Federal income tax liability, subject to limitations. Each shareholder will be
notified within 60 days after the close of the Fund's taxable year whether the
foreign taxes paid by the Fund will "pass through" for that year. If the Fund is
not eligible to make the election to "pass through" to its shareholders its
foreign taxes, the foreign taxes it pays will reduce its investment company
taxable income and distributions by the Fund will be treated as U.S. source
income.
Generally, a credit for foreign taxes is subject to the limitation that it
may not exceed the shareholder's U.S. tax attributable to its foreign source
taxable income. For this purpose, if the pass-through election is made, the
source of the Fund's income flows through to its shareholders. With respect to
the Funds, gains from the sale of securities will be treated as derived from
U.S. sources and certain currency fluctuation gains, including fluctuation gains
from foreign currency denominated debt securities, receivables and payables, and
options, futures and forward transactions, will be treated as ordinary income
derived from U.S. sources. The limitation on the foreign tax credit is applied
separately to foreign source passive income (as defined for purposes of the
foreign tax credit), including the foreign source passive income passed through
by the Fund.
<PAGE>
The current position of the Internal Revenue Service (the "IRS") generally
is to treat a regulated investment company as owning its proportionate share of
the income and assets of any partnership in which it is a partner, in applying
the 90% qualifying income requirement, the 30% Limitation and the asset
diversification requirements that, as described above, the Fund must satisfy to
qualify as a regulated investment company under the Code.
Dividends paid out of the Fund's investment company taxable income will be
taxable to a U.S. shareholder as ordinary income. If a portion of the Fund's
income consists of dividends paid by U.S. corporations, a portion of the
dividends paid by the Fund may be eligible for the corporate dividends-received
deduction. Distributions of net capital gains (the excess of net long-term
capital gains over net short-term capital losses), if any, designated as capital
gain dividends are taxable as long-term capital gains, regardless of how long
the shareholder has held the Fund's shares, and are not eligible for the
dividends-received deduction. Shareholders receiving distributions in the form
of additional shares, rather than cash, generally will have a cost basis in each
such share equal to the net asset value of a share of the relevant Fund on the
reinvestment date. A distribution of an amount in excess of the Fund's current
and accumulated earnings and profits will be treated by a shareholder as a
return of capital that is applied against and reduces the shareholder's basis in
his or her shares. To the extent that the amount of any such distribution
exceeds the shareholder's basis in his or her shares, the excess will be treated
by the shareholder as gain from a sale or exchange of the shares. Shareholders
will be notified annually as to the U.S. federal tax status of distributions,
and shareholders receiving distributions in the form of additional shares will
receive a report as to the net asset value of those shares.
Upon the sale or other disposition of shares of the Fund, a shareholder
may realize a capital gain or loss that will be long-term or short-term,
generally depending upon the shareholder's holding period for the shares. Any
loss realized on a sale or exchange will be disallowed to the extent the shares
disposed of are replaced within a period of 61 days beginning 30 days before and
ending 30 days after disposition of the shares. In such a case, the basis of the
shares acquired will be adjusted to reflect the disallowed loss. Any loss
realized by a shareholder on a disposition of Fund shares held by the
shareholder for six months or less will be treated as a long-term capital loss
to the extent of any distributions of net capital gains received by the
shareholder with respect to such shares.
Under certain circumstances, the sales charge incurred in acquiring shares
of the Fund may not be taken into account in determining the gain or loss on the
disposition of those shares. This rule applies where shares of a Fund originally
acquired with a sales charge are disposed of within 90 days after the date on
which they were acquired and new shares of a regulated investment company are
acquired without a sales charge or at a reduced sales charge. In that case, the
gain or loss realized on the disposition will be determined by excluding from
the tax basis of the shares all or a portion of the sales charge incurred in
acquiring those shares. This exclusion applies to the extent that the otherwise
applicable sales charge with respect to the newly acquired shares is reduced as
a result of the shareholder having incurred a sales charge paid for the new
shares. This rule may be applied to successive acquisitions of shares of stock.
<PAGE>
Distributions by the Fund reduce the net asset value of the Fund's shares.
Should a distribution reduce the net asset value of a share below a
shareholder's cost for the share, such a distribution nevertheless generally
would be taxable to the shareholder as ordinary income or long-term capital
gain, even though, from an investment standpoint, it may constitute a partial
return of capital. In particular, investors should be careful to consider the
tax implications of buying shares just prior to a distribution by the Fund. The
price of shares purchased at that time may include the amount of the forthcoming
distribution, but the distribution generally would be taxable to them.
Some shareholders may be subject to withholding of Federal income tax on
dividends and redemption payments from the Fund ("backup withholding") at the
rate of 31%. Corporate shareholders and certain other shareholders specified in
the Code generally are exempt from such backup withholding. Generally,
shareholders subject to backup withholding will be (i) those for whom a
certified taxpayer identification number is not on file with the Fund, (ii)
those about whom notification has been received (either by the shareholder or by
the Fund) from the IRS that they are subject to backup withholding or (iii)
those who, to the Fund's knowledge, have furnished an incorrect taxpayer
identification number. Generally, to avoid backup withholding, an investor must,
at the time an account is opened, certify under penalties of perjury that the
taxpayer identification number furnished is correct and that he or she is not
subject to backup withholding.
The foregoing discussion relates solely to U.S. Federal income tax law.
Dividends and distributions also may be subject to state, local and foreign
taxes. Dividends paid by the Fund from income attributable to interest on
obligations of the U.S. Government and certain of its agencies and
instrumentalities may be exempt from state and local taxes in certain states.
Shareholders should consult their tax advisers regarding the possible exclusion
of this portion of their dividends for state and local tax purposes. Non-U.S.
investors also should consult their tax advisers concerning the tax consequences
of ownership of shares of the Fund, including the possibility that distributions
may be subject to a 30% United States withholding tax (or a reduced rate of
withholding provided by treaty).
Shareholders of Class A, Class B and Class C shares may direct that income
dividends and capital gain distributions be paid to them through various options
listed in the "Dividends and Distributions Reinvestment Options" section of the
Fund's current Prospectus. If a shareholder selects either of two such options
(that: (a) income dividends be paid in cash and capital gain distributions be
paid in additional shares of the same class of the Fund at net asset value; or
(b) income dividends and capital gain distributions both be paid in cash), and
the dividend/distribution checks cannot be delivered, or, if such checks remain
uncashed for six months, the Fund reserves the right to reinvest the dividend or
distribution in the shareholder's account at the then-current net asset value
and to convert the shareholder's election to automatic reinvestment in shares of
the Fund from which the distributions were made. The Fund has received from the
IRS, rulings to the effect that (i) the implementation of the multiple class
purchase arrangement will not result in the Fund's dividends or distributions
constituting "preferential dividends" under the Code, and (ii) that any
conversion feature associated with a class of shares does not constitute a
taxable event under federal income tax law.
<PAGE>
UNDERWRITER AND DISTRIBUTION SERVICES
------------------------------------------------------------------------------
Pursuant to Underwriting Agreements, Northstar Distributors, Inc. is the
Underwriter for the Fund and as such conducts a continuous offering pursuant to
a "best efforts" arrangement requiring it to take and pay for only such
securities as may be sold to the public. The Underwriter is an affiliate of the
Adviser and the Administrator.
The Underwriting Agreements may be terminated at any time on not more than
60 days' written notice, without payment of a penalty, by the Underwriter, by
vote of a majority of the outstanding class of voting securities of the Fund, or
by vote of a majority of the Trustees of the Fund, who are not "interested
persons" of the Fund and who have no direct or indirect financial interest in
the operation of the Plan or in any agreements. The Underwriting Agreements will
terminate automatically in the event of their assignment.
In addition to the amount paid to dealers pursuant to the sales charge
table in the Prospectus, the Underwriter from time to time pays, from its own
resources or pursuant to the Plans, a bonus or other incentive to dealers (other
than the Underwriter) that employ a registered representative who sells a
minimum dollar amount of the shares of the Fund during a specific period of
time. Dealers may not use sales of any of the Fund's shares to qualify for or
participate in such programs to the extent such may be prohibited by a dealer's
internal procedures or by the laws of any state or any self-regulatory agency,
such as the National Association of Securities Dealers, Inc. Such bonuses or
other incentives take the form of payment for travel expenses, including
lodging, incurred in connection with trips taken by qualifying registered
representatives and members of their families to places within or without the
United States, or other bonuses such as certificates for airline tickets, dining
establishments or the cash equivalent of such bonuses. The Underwriter, from
time to time, reallows all or a portion of the sales charge on Class A shares,
which it normally reallows to individual selling dealers. However, such
additional reallowance generally will be made only when the selling dealer
commits to substantial marketing support such as internal wholesaling through
dedicated personnel, internal communications and mass mailings.
The Fund has adopted separate distribution plans under Rule 12b-1 of the
1940 Act for each class of shares of the Fund (collectively the "Plans"). The
Plans permit the Fund to compensate the Underwriter in connection with
activities intended to promote the sale of shares of each class of shares of the
Fund.
Pursuant to the Plan for Class A shares, the Fund may compensate the
Underwriter up to 0.30% of average daily net assets of the Fund's Class A
shares. Under the Plans for Class B and Class C shares, the Fund may compensate
the Underwriter up to 1.00% of the average daily net assets attributable to the
respective class of the Fund. Expenditures by the Underwriter under the Plans
shall consist of: (i) commissions to sales personnel for selling shares of the
Fund (including underwriting fees and financing expenses incurred in connection
with the sale of Class B and Class C shares); (ii) compensation, sales
incentives and payments to sales, marketing and service personnel; (iii)
<PAGE>
payments to broker-dealers and other financial institutions that have entered
into agreements with the Underwriter in the form of a Dealer Agreement for
Northstar Funds for services rendered in connection with the sale and
distribution of shares of the Fund; (iv) payment of expenses incurred in sales
and promotional activities, including advertising expenditures related to the
Fund; (v) the costs of preparing and distributing promotional materials; (vi)
the cost of printing the Fund's Prospectus and SAI for distribution to potential
investors; and (vii) other activities that are reasonably calculated to result
in the sale of shares of the Fund.
A portion of the fees paid to the Underwriter pursuant to the 12b-1 plans
not exceeding 0.25% annually of the average daily net assets of the Fund's
shares may be paid as compensation for providing services to the Fund's
shareholders, including assistance in connection with inquiries related to
shareholder accounts (the "Service Fee"). In order to receive Service Fees under
the Plans, participants must meet such qualifications as are established in the
sole discretion of the Underwriter, such as services to the Fund's shareholders;
or services providing the Fund with more efficient methods of offering shares to
coherent groups of clients, members or prospects of a participant; or services
permitting purchases or sales of shares, or transmission of such purchases or
sales by computerized tape or other electronic equipment; or other processing.
If the Plans are terminated in accordance with their terms, the
obligations of the Fund to compensate the Underwriter for distribution related
services pursuant to the Plans will cease; however, subject to approval by the
Trustees, including a majority of the independent Trustees, the Fund may
continue to make payments past the date on which each Plan terminates up to the
annual limits set forth in each Plan for the purpose of compensating the
Underwriter for services that were incurred during the term of the Plan.
The Trustees have concluded that there is a reasonable likelihood that the
Plans will benefit the Fund and its shareholders and that the Plans should
result in greater sales and/or fewer redemptions of Fund shares. On a quarterly
basis, the Trustees will review a report on expenditures under the Plans and the
purposes for which expenditures were made. The Trustees will conduct an
additional, more extensive review annually in determining whether the Plans
shall be continued. By their terms, continuation of the Plans from year to year
is contingent on annual approval by a majority of the Trustees acting on behalf
of the Fund and by a majority of the Trustees who are not "interested persons"
(as defined in the 1940 Act) and who have no direct or indirect financial
interest in the operation of the Plans or any related agreements (the "Plan
Trustees"). The Plans provide that they may not be amended to increase
materially the costs that the Fund may bear pursuant to the applicable Plan
without approval of the shareholders of the Fund and that other material
amendments to the Plans must be approved by a majority of the Plan Trustees
acting on behalf of the Fund, by vote cast in person at a meeting called for the
purpose of considering such amendments. The Plans further provide that while
each plan is in effect, the selection and nomination of Trustees who are not
"interested persons" shall be committed to the discretion of the Trustees who
are not "interested persons." A Plan may be terminated at any time by vote of a
majority of the Plan Trustees or a majority of the outstanding Class of shares
of the Fund.
<PAGE>
TRUSTEES AND OFFICERS
------------------------------------------------------------------------------
The Trustees and principal Officers of the Fund and their business
affiliations for the past five years are set forth below. Unless otherwise
noted, the mailing address of the Trustees and Officers is Two Pickwick Plaza,
Greenwich, Connecticut 06830.
ROBERT B. GOODE, JR., Trustee. Age: 66. Currently retired. From 1990 to
1991, Chairman of The First Reinsurance Company of Hartford. From 1987
to 1989, President and Director of American Skandia Life Assurance
Company. Since October 1993, Trustee of the Northstar affiliated
investment companies.
PAUL S. DOHERTY, Trustee. Age: 62. President, Doherty, Wallace,
Pillsbury and Murphy, P.C., Attorneys. Director, Tambrands, Inc. Since
October 1993, Trustee of the Northstar affiliated investment companies.
DAVID W. WALLACE, Trustee. Age: 72. Chairman of Putnam Trust
Company, Lone Star Industries and FECO Engineered Systems, Inc. He
is also President and Trustee of Robert R. Young Foundation and Governor
of the New York Hospital. Director of UMC Electronics and Zurn
Industries, Inc. Former Chairman and Chief Executive Officer, Todd
Shipyards and Bangor Punta Corporation, and former Chairman and Chief
Executive Officer of National Securities & Research Corporation. Since
October 1993, Trustee of the Northstar affiliated investment companies.
*MARK L. LIPSON, Trustee and President. Age: 47. Director, Chairman
and Chief Executive Officer of Northstar and Northstar, Inc. Director
and President of Northstar Administrators Corporation and Director and
Chairman of Northstar Distributors, Inc., President and Trustee of the
Northstar affiliated investment companies since October 1993. Prior to
August, 1993, Director, President and Chief Executive Officer of
National Securities & Research Corporation and President and
Director/Trustee of the National Affiliated Investment Companies and
certain of National's subsidiaries.
*JOHN G. TURNER, Trustee. Age: 57. Since May 1993, Chairman and CEO of
ReliaStar Financial Corporation and ReliaStar Life Insurance Co.
and Chairman of other ReliaStar Affiliated Insurance Companies since
1995. Since October 1993, Director of Northstar and affiliates. Prior to
May 1993, President and CEO of ReliaStar and Northwestern National.
ALAN L. GOSULE, Trustee. Age: 55. Partner, Rogers & Wells. Director,
F.L. Putnam Investment Management Co., Inc.
DAVID W.C. PUTNAM, Trustee. Age: 67. President, Clerk and Director of
F.L. Putnam Securities Company, Inc., F.L. Putnam Investment
Management Company, Inc., Interstate Power Company, Inc., Trust Realty
Corp. and Bow Ridge Mining Co.; Director of Anchor Investment Management
Corporation; President and Trustee of Anchor Capital Accumulation Trust,
Anchor International Bond Trust, Anchor Gold and Currency Trust, Anchor
Resources and Commodities Trust and Anchor Strategic Assets Trust.
<PAGE>
JOHN R. SMITH, Trustee. Age: 73. From 1970-1991, Financial Vice
President of Boston College; President of New England Fiduciary
Company (financial planning) since 1991; Chairman of Massachusetts
Educational Financing Authority since 1987; Vice Chairman of
Massachusetts Health and Education Authority.
WALTER H. MAY, Trustee. Age: 60. Retired. Former Senior Executive for
Piper Jaffrey, Inc.
THOMAS OLE DIAL, Vice President. Age: 40. Executive Vice President and
Chief Investment Officer - Fixed Income of Northstar and Principal, T.D.
& Associates, Inc. From 1989 to August 1993, Executive Vice President
and Chief Investment Officer - Fixed Income of National Securities and
Research Corporation, Vice President of National Affiliated Investment
Companies, and Vice President of NSR Asset Management Corporation. From
1988 to 1989, President of Dial Captial Management.
MARGARET D. PATEL, Vice President. Age: 52. Vice President and Managing
Director of Northstar. From 1988 to May 1995, Senior Vice President
of BSC. From 1986 to 1988, President and Portfolio Manager at Fixed
Income Asset Management, Inc. Prior to 1988, Portfolio Manager at American
Capital and The Dreyfus Corporation.
GEOFFREY WADSWORTH, Vice President. Age: 53. Vice President of
Northstar. Former Vice President and Portfolio Manager with National
Securities & Research Corporation.
AGNES MULLADY, Vice President and Treasurer. Age: 38. Senior Vice
President and Chief Financial Officer of Northstar, Senior Vice
President and Treasurer of Northstar Administrators corporation, and Vice
President and Treasurer of Northstar Distributors, Inc. From 1987 to 1993,
Vice President and Treasurer of National Securities & Research
Corporation.
- --------------------
*Deemed to be an "interested person" of the Trust, as defined by the 1940 Act.
Northstar and Northstar Administrators Corporation make their personnel
available to serve as Officers and "Interested Trustees" of the Funds. All
Officers and Interested Trustees of the Funds are compensated by Northstar or
Northstar Administrators Corporation. Trustees who are not "interested persons"
of the Adviser are paid an annual retainer fee of $7,500 for their combined
services as Trustees to the Funds and to retail funds sponsored or advised by
the Adviser, and a per meeting fee of $1,750 for attendance at each joint
meeting of the Funds and the other Northstar retail funds. The Funds also
reimburse Trustees for expenses incurred by them in connection with such
meetings.
<PAGE>
As of November 30, 1996, all Trustees and executive officers of the Fund
as a group owned beneficially or of record less than 1% of the outstanding
securities of the Fund. To the knowledge of the Fund, as of November 30, 1996,
no shareholder owned beneficially (b) or of record (r) more than 5% of the
Fund's outstanding shares.
<TABLE>
<CAPTION>
COMPENSATION TABLE
Period ended December 31, 1995
- ---------------------------------------------------------------------------------------
Pension Benefits Total
Accrued as Part of Estimated Annual Compensation
Fund Expenses Benefits upon from All Funds in
Compensation Retirement Northstar
from Fund Complex(b)
- ---------------------------------------------------------------------------------------
<S> <C>
Robert B. Goode, Jr. (a) 0 0 13,750
- ---------------------------------------------------------------------------------------
Paul S. Doherty (a) 0 0 15,250
- ---------------------------------------------------------------------------------------
David W. Wallace (a) 0 0 15,250
- ---------------------------------------------------------------------------------------
Mark L. Lipson (a) 0 0 0
- ---------------------------------------------------------------------------------------
John G. Turner (a) 0 0 0
- ---------------------------------------------------------------------------------------
Alan L. Gosule (a) 0 0 14,950
- ---------------------------------------------------------------------------------------
David W.C. Putnam (a) 0 0 22,750
- ---------------------------------------------------------------------------------------
John R. Smith (a) 0 0 15,350
- ---------------------------------------------------------------------------------------
</TABLE>
- --------------------
(a) See table below for Fund specific compensation.
(b) Compensation paid by the Northstar Trust funds, the Northstar
Variable Trust funds and the remaining six funds, Northstar Special, Growth,
Balance Sheet Opportunities, Government Securities, Strategic Income and High
Yield Funds, formerly advised by BSC.
INDIVIDUAL FUND
FISCAL YEAR COMPENSATION TABLES
- -------------------------------------------------------------------------------
Income and High Total Return Special(c) Growth(c)
Growth
- ------------------------------------------------------------------------------
Robert B. Goode, Jr. 2,063 1,563 708 708
- ------------------------------------------------------------------------------
Paul S. Doherty 2,313 1,813 2,208 708
- ------------------------------------------------------------------------------
David W. Wallace 2,313 1,813 2,208 708
- ------------------------------------------------------------------------------
Mark L. Lipson 0 0 0 0
- ------------------------------------------------------------------------------
John G. Turner 0 0 0 0
- ------------------------------------------------------------------------------
Alan L. Gosule 2,313 1,813 3,409 1,909
- ------------------------------------------------------------------------------
David W.C. Putnam 2,063 1,563 3,366 2,985
- ------------------------------------------------------------------------------
John R. Smith 2,313 1,813 3,433 1,934
- ------------------------------------------------------------------------------
Walter H. May 2,000 1,500 0 0
- ------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Balance Sheet Government Strategic High Yield(c)
Opportunities(c) Securities (c) Income (c)
- --------------------------------------------------------------------------------
Robert B. Goode, Jr. 708 708 708 708
- --------------------------------------------------------------------------------
Paul S. Doherty 708 708 708 708
- --------------------------------------------------------------------------------
David W. Wallace 708 708 708 708
- --------------------------------------------------------------------------------
Mark L. Lipson 0 0 0 0
- --------------------------------------------------------------------------------
John G. Turner 0 0 0 0
- --------------------------------------------------------------------------------
Alan L. Gosule 1,908 1,908 1,908 1,908
- --------------------------------------------------------------------------------
David W.C. Putnam 2,906 5,258 4,775 1,460
- --------------------------------------------------------------------------------
John R. Smith 1,933 1,933 1,933 1,933
- --------------------------------------------------------------------------------
Walter H. May 0 0 0 0
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
(c) Prior to June 2, 1995 the Trustees who were not interested persons,
other than David Putnam, were paid a per fund fee of $500 for each full calendar
year during which services were rendered to the Funds. In addition, they were
paid a per fund fee of $250 for attending each of the Trustees' meetings, $100
per fund for attending each audit committee meeting, $100 audit committee
retainer per fund and were reimbursed for out-of-pocket expenses. Mr. Putnam,
former Chairman of these Funds, received a fee of $30,000 per annum.
OTHER INFORMATION
------------------------------------------------------------------------------
Independent Accountants. Coopers & Lybrand L.L.P. has been selected as
the independent accountants of the Fund. Coopers & Lybrand L.L.P. audits the
Fund's annual financial statements and expresses an opinion thereon.
Custodian. State Street Bank and Trust Company, 225 Franklin Street,
Boston, Massachusetts 02110, acts as custodian, and fund accounting agent for
the Fund.
Transfer Agent. First Data Investor Services Group, Inc., 4400 Computer
Drive, Westborough, Massachusetts 01581-5120, acts as the transfer agent for the
Fund.
Reports to Shareholders. The fiscal year of the Fund ends on October 31.
The Fund will send financial statements to its shareholders at least
semi-annually. An annual report containing financial statements audited by the
independent accountants will be sent to shareholders each year.
Organizational and Related Information. Northstar Trust (formerly
"Northstar Advantage Trust"), and two of its series, Northstar Income and Growth
Fund (formerly "Northstar Advantage Income and Growth Fund") and Northstar High
Total Return Fund (formerly "Northstar Advantage High Total Return Fund"), were
organized in 1993. Northstar Growth + Value Fund was organized in 1996.
The shares of the Fund, when issued, will be fully paid and
non-assessable, have no preference, preemptive, or similar rights, and will be
freely transferable. There will normally be no meetings of shareholders for the
purpose of electing Trustees unless and until such time as less than a majority
of the Trustees holding office have been elected by shareholders, at which time
the Trustees then in office will call a shareholders' meeting for the election
of Trustees. Shareholders may, in accordance with the Declaration of Trust,
cause a meeting of shareholders to be held for the purpose of voting on the
removal of Trustees. Meetings of the shareholders will be called upon written
request of shareholders holding in the aggregate not less than 10% of the
outstanding shares of the Fund or class having voting rights. Except as set
forth above and subject to the 1940 Act, the Trustees will continue to hold
office and appoint successor Trustees.
<PAGE>
Under Massachusetts law, there is a remote possibility that shareholders
of a business trust could, under certain circumstances, be held personally
liable as partners for the obligations of such trust. The Amended and Restated
Declaration of Trust for the Fund contains provisions intended to limit such
liability and to provide indemnification out of Fund property of any shareholder
charged or held personally liable for obligations or liabilities of the Fund
solely by reason of being or having been a shareholder of the Fund and not
because of such shareholder's acts or omissions or for some other reason. Thus,
the risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which the Fund itself would be unable
to meet its obligations.
PERFORMANCE INFORMATION
------------------------------------------------------------------------------
Performance information for the Fund may be compared in reports and
promotional literature to (i) the S&P 500, Dow Jones Industrial Average
("DJIA"), or other unmanaged indices, so that investors may compare the Fund's
results to those of a group of unmanaged securities that are widely regarded by
investors as representative of the securities markets in general; (ii) other
groups of mutual funds tracked by Lipper Analytical Services, Inc., a widely
used independent research firm that ranks mutual funds by overall performance,
investment objectives, and assets, or tracked by other services, companies,
publications or persons who rank mutual funds on overall performance or other
criteria; (iii) the Consumer Price Index (measure for inflation) to assess the
real rate of return from an investment in the Fund; and (iv) well known
monitoring sources of CD performance rates, such as Solomon Brothers, Federal
Reserve Bulletin, American Bankers and Tower Data/The Wall Street Journal.
Unmanaged indices may assume the reinvestment of dividends, but generally do not
reflect deductions for administrative and management costs and expenses.
Performance rankings are based on historical information and are not intended to
indicate future performance.
In addition, the Fund may, from time to time, include various measures of
the Fund's performance, including the current yield, the tax-equivalent yield
and the average annual total return of shares of the Fund in advertisements,
promotional literature or reports to shareholders or prospective investors. Such
materials may occasionally cite statistics to reflect the Fund's volatility
risk.
Average Annual Total Return. Standardized quotations of average annual
total return ("Standardized Return") for each class of shares will be expressed
in terms of the average annual compounded rate of return for a hypothetical
investment in such class of shares over periods of 1, 5 and 10 years or up to
the life of the class of shares, calculated for each class separately pursuant
to the following formula:
Average Annual Total Return = P(1+T) to the power of n = ERV
Where:
P = a hypothetical initial payment of $1,000
T = the average annual total return
<PAGE>
n = the number of years, and
ERV = the ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period).
All total return figures reflect the deduction of a proportional share of
each Class's expenses (on an annual basis), the deduction of the maximum initial
sales load (in the case of Class A shares) and the maximum contingent deferred
sales charge applicable to a complete redemption of the investment (in the case
of Class B and Class C shares), and assume that all dividends and distributions
are reinvested when paid.
Yield. Quotations of yield for a specific class of shares of the Fund will
be based on all investment income attributable to that class earned during a
particular 30-day (or one month) period (including dividends and interest), less
expenses accrued during the period ("net investment income"), and will be
computed by dividing the net investment income per share of that class earned
during the period by the maximum offering price per share on the last day of the
month, according to the following formula:
Yield = 2[(a-b + 1) to the power of 6 -1]
---------------------------------
cd
Where:
a = dividends and interest earned during the period attributable to
a specific class of shares
b = expenses accrued for the period attributable to that class (net
of reimbursements)
c = the average daily number of shares of that class outstanding
during the period that were entitled to receive dividends,
and
d = the maximum offering price per share on the last day of the
period
The maximum offering price includes a maximum contingent deferred sales
load of 5% for Class B shares and 1% for Class C shares.
All accrued expenses are taken into account as follows. Accrued expenses
include all recurring expenses that are charged to all shareholder accounts in
proportion to the length of the base period, including but not limited to
expenses under the Fund's distribution plans. Except as noted, the performance
results take the contingent deferred sales load into account.
<PAGE>
Non-Standardized Return. In addition to the performance information
described above, the Fund may provide total return information that is not
calculated according to the formula set forth above ("Non-Standardized Return").
Neither initial nor contingent deferred sales charges are taken into account in
calculating Non-Standardized Return. Excluding a Fund's sales charge from a
total return calculation produces a higher total return figure.
The Fund may quote its performance in various ways, using various types of
comparisons to market indices, other funds or investment alternatives, or to
general increases in the cost of living. All performance information supplied by
the Fund in advertising is historical and is not intended to indicate future
returns. The Fund's share prices and total returns fluctuate in response to
market conditions and other factors, and the value of the Fund's shares when
redeemed may be more or less than their original cost.
Evaluations of Fund performance made by independent sources may also be
used in advertisements concerning the Fund, including reprints of, or selections
from, editorials or articles about the Fund. These editorials or articles may
include quotations of performance from other sources, such as Lipper or
Morningstar. Sources for Fund performance information and articles about the
Fund may include the following: BANXQUOTE, BARRON'S, BUSINESS WEEK, CDA
INVESTMENT TECHNOLOGIES, INC., CHANGING TIMES, CONSUMER DIGEST, FINANCIAL WORLD,
FORBES, FORTUNE, IBC/DONOGHUES'S MONEY FUND REPORT, IBBOTSON ASSOCIATES, INC.,
INVESTMENT COMPANY DATA, INC., INVESTOR'S DAILY, LIPPER ANALYTICAL SERVICES,
INC.'S MUTUAL FUND PERFORMANCE ANALYSIS, MONEY, MUTUAL FUND VALUES, THE NEW YORK
TIMES, PERSONAL INVESTING NEWS, PERSONAL INVESTOR, SUCCESS, USA TODAY, U.S. NEWS
AND WORLD REPORT, WALL STREET JOURNAL, WIESENBERGER INVESTMENT COMPANIES
SERVICES, and WORKING WOMAN.
When comparing total return, yield and investment risk of shares of a Fund
with other investments, investors should understand that certain other
investments have different risk characteristics than an investment in shares of
the Fund. For example, certificates of deposit may have fixed rates of return
and may be insured as to principal and interest by the FDIC, while a Fund's
returns will fluctuate and its share values and returns are not guaranteed.
Money market accounts offered by banks also may be insured by the FDIC and may
offer stability of principal. U.S. Treasury securities are guaranteed as to
principal and interest by the full faith and credit of the U.S. government.
Money market mutual funds may seek to offer a fixed price per share.
The performance of a Fund is not fixed or guaranteed. Performance
quotations should not be considered to be representative of performance of the
Fund for any period in the future. The performance of a Fund is a function of
many factors including its earnings, expenses and number of outstanding shares.
Fluctuating market conditions; purchases, sales and maturities of portfolio
securities; sales and redemptions of shares of beneficial interest, and changes
in operating expenses are all examples of items that can increase or decrease
the Fund's performance.
<PAGE>
FINANCIAL STATEMENTS
------------------------------------------------------------------------------
The Northstar Trust's audited financial statements dated October 31, 1995
and the report of the independent accountants, Coopers & Lybrand L.L.P. with
respect to such financial statements, are hereby incorporated by reference to
the Annual Report to Shareholders of the Northstar Trust for the fiscal year
ended October 31, 1995.
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements: Not Applicable
(b) Exhibits:
(1) Declaration of Trust*
(2) By-Laws*
(3) N/A
(4) N/A
(5) Form of Investment Advisory Agreement
(6) Forms of Underwriting Agreements
(7) N/A
(8) Custody Agreement**
(9) Administrative Services Agreement
(10) Opinion of Counsel**
(11) N/A
(12) N/A
(13) N/A
(14 N/A
(15) Form of Distribution and Service Plan
(16) Performance Information*
(17) N/A
(18) N/A
* Filed as part of PEA No. 8 and incorporated herein by reference.
** To be filed by amendment.
Item 25. Persons Controlled by or under Common Control with Registrant
There are no persons controlled by or under common control with Registrant.
Item 26. Number of Holders of Securities
As of January 31, 1996, the Registrant had no security holders.
Item 27. Indemnification
Section 4.3 of Registrant's Declaration of Trust provides the following:
(a) Subject to the exceptions and limitations contained in paragraph (b) below:
(i) every person who is, or has been, a Trustee or officer of the
Trust shall be indemnified by the Trust to the fullest extent
permitted by law against all liability and against all expenses
reasonably incurred or paid by him in connection with any claim,
action, suit or proceeding in which he becomes involved as a party
or otherwise by virtue of his being or having been a Trustee or
officer and against amounts paid or incurred by him in the
settlement thereof; and
<PAGE>
(ii) the word "claim", "action", "suit" or "proceeding" shall apply
to all claims, actions or suits or proceedings (civil, criminal,
administrative or other including appeals), actual or threatened;
and the words "liability" and "expenses" shall include without
limitation, attorneys fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Trustee or officer:
(i) against any liability to the Trust, a series thereof, or the
Shareholders by reason of a final adjudication by a court or
other body before which a proceeding was brought or that he
engaged in willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct
of his office;
(ii) with respect to any matter as to which he shall have been
finally adjudicated not to have acted in good faith in
reasonable belief that his action was in the best interest
of the Trust; and
(iii) in the event of a settlement or other disposition not
involving a final adjudication as provided in paragraph (b)
(i) or (b) (ii) resulting in a payment by a Trustee or
officer, unless there has been a determination that such
Trustee or officer did not engage in willful misfeasance,
bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office:
(A) by the court or other body approving the settlement
or other disposition; or
(B) based upon the review of readily available facts (as
opposed to full trial-type inquiry) by (x) vote of a
majority of the Disinterested Trustees acting on the
matter (provided that a majority of the
Disinterested Trustees then in office act on the
matter) or (y) written opinion of independent legal
counsel.
(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not affect any
other rights to which any Trustee or officer may now or hereafter be
entitled, shall continue as to a person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors,
administrators and assigns of such a person. Nothing contained herein shall
affect any rights to indemnification to which personnel of the Trust other
than Trustees and officers may be entitled by contract or otherwise under
law.
(d) Expenses of preparation and presentation of a defense to any claim, action,
suit or proceeding of the character described in paragraph (a) of this
Section 4.3 may be advanced by the Trust prior to final disposition thereof
upon receipt of an undertaking by or on behalf of the recipient to repay
such amount if it is ultimately determined that he is not entitled to
indemnification under this Section 4.3, provided that either:
<PAGE>
(i) such undertaking is secured by a surety bond or some other
appropriate security provided by the recipient or the Trust
shall be insured against losses arising out of any such
advances; or
(ii) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees act on
the matter) or an independent legal counsel in a written
opinion shall determine, based upon a review of readily
available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the recipient ultimately
will be found entitled to indemnification.
As used in this Section 4.3, a "Disinterested Trustee" is one who is not (i) an
Interested Person of the Trust (including anyone who has been exempted from
being an Interested Person by any rule, regulation or order of the Commission),
or (ii) involved in the claim, action, suit or proceeding.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to Trustees, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a Trustee, officer or controlling person of the Registrant in
connection with the successful defense of any action suit or proceeding) is
asserted by such Trustee, officer or controlling person in connection with the
shares being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy, as expressed in the Act and be governed by final
adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
See "Management of the Fund" in the Prospectus and "Services of Northstar, the
Subadviser and the Administrator" and "Trustees and Officers" in the Statement
of Additional Information, each of which is included in the Registration
Statement.
Set forth is a list of each officer and director of the Adviser indicating each
business, profession, vocation or employment of a substantial nature in which
each such person has been engaged since July 31, 1994.
<TABLE>
<CAPTION>
Position with Other Substantial
Investment Business, Profession
Name Adviser Vocation or Employment
- ----------------------------------------------------------------------------
<S> <C>
John Turner Director Chairman and CEO, ReliaStar Financial
Corp; Director of Northstar Affiliates;
Trustee and Chairman, Northstar
Affiliated Investment Companies.
<PAGE>
John Flittie Director President, ReliaStar Financial Corp.
Director, Northstar Affiliates.
Mark L. Lipson Chairman/CEO Director and Officer of Northstar
Director Distributors, Inc., Northstar Administrators
Corp. and Northstar, Inc. Trustee
and President, Northstar Affiliated
Investment Companies.
Robert J. Adler Executive Vice President, Northstar Distributors, Inc.
President, Sales
& Marketing
Thomas Ole Dial Executive Vice Vice President, Northstar Affiliated
President - Chief Investment Companies, and Principal, TD
Investment Officer, Associates Inc.
Fixed Income
Margaret Patel Vice President/ Vice President, Northstar Affiliate Invest-
Managing Director ment Cos. Former Vice President and Port-
folio Manager for Boston Security
Counsellors, Inc.
Geoffrey Wadsworth Vice President/ Vice President - Northstar Affiliated
Investments and Investment Companies.
Portfolio Manager
Peter Bakst Vice President- Vice President - Northstar Affiliated
Investments Investment Companies. Former Director -
High Yield Sales of CS First Boston.
Former President of Presidio Capital
Management. Former Managing Director -
High Yield Sales of BT Securities.
Jeffrey Aurigemma Vice President - Vice President - Northstar Affiliated
Investments Investment Companies.
Michael Graves Vice President Vice President - Northstar Affiliated
Investments Investment Companies
Agnes Mullady Sr. Vice President Vice President & Treasurer of Northstar
and CFO Affiliates and the Northstar Affiliated
Investment Companies.
Gertrude Purus Vice President Vice President Northstar Distributors and
Operations Northstar Administrators Corp.
<PAGE>
Stephen Vondrak Vice President Vice President - Northstar Distributors, Inc.
Sales/Marketing Former Regional Marketing
Manager with Roger Engemann
and Associates from 1991-1994.
Mark Sfarra Vice President - Vice President - Northstar Distributors, Inc.
Marketing
</TABLE>
Item 29 . Principal Underwriter
(a) See "Management of the Fund - The Investment Adviser and Affiliated Service
Providers" and "How to Purchase Shares" in the Prospectus and "Underwriter and
Distribution Services" in the Statement of Additional Information, both of which
are included in this Post-Effective Amendment to the Registration Statement.
Unless otherwise indicated, the principal business address for each person is
c/o Northstar, Two Pickwick Plaza, Greenwich, CT 06830.
(b) (1) (2) (3)
Name and Principal Position and Offices Position and Offices
Address with Underwriter with Registrant
- -------------------------------------------------------------------------------
John Turner Director Trustee, Chairman
20 Washington Ave. South
Minneapolis, MN
John Flittie Director None
20 Washington Ave. South
Minneapolis, MN
Mark L. Lipson Chairman & Director Trustee and President
Robert J. Adler President None
Mark Blinder Reg. Vice President None
Richard Francis Reg. Vice President None
Daniel Leonard Reg. Vice President None
Stephen O'Brien Reg. Vice President None
David Linton Reg. Vice President None
Charles Dolce Reg. Vice President None
Hyman Glasman Reg. Vice President None
<PAGE>
Scott Casselberry Reg. Vice President None
Richard Galloway Reg. Vice President None
Stephen Vondrak Vice President None
Mark Sfarra Vice President None
Gertrude Purus Vice President None
Agnes Mullady Vice President Vice President
& Treasurer & Treasurer
Item 30. Location of Accounts and Records
State Street Bank and Trust Company maintains the following records at 225
Franklin Street, Boston, Massachusetts 02110, as Custodian and Fund Accounting
Agent for the Fund:
(1) Receipts and delivery of securities including
certificate numbers;
(2) Receipts and disbursement of cash;
(3) Records of securities in transfer, securities in physical
possession, securities owned and securities loaned; and
(4) Fund Accounting Records.
First Data Investor Services Group ("First Data") maintains the following
records at One Exchange Place, 11 Floor, Boston, Massachusetts 02109, as
Transfer Agent and Blue Sky Administrator for the Fund:
(1) Shareholder Records;
(2) Share accumulation accounts: Details as to dates and number of
shares of each accumulation, price of each accumulation;
(3) Fund Accounting Records; and
(4) State Securities Registration Records.
All other records required by item 30(a) are maintained at the office of the
Administrator, Two Pickwick Plaza, Greenwich, CT 06830.
Item 31. Management Services
Not Applicable
Item 32. Undertakings
(a) Registrant hereby undertakes to call a meeting of shareholders for the
purpose of voting upon the question of removal of a Trustee or Trustees when
requested in writing to do so by the holders of at least 10% of the Trusts'
outstanding shares of beneficial interest and in connection with such meeting to
comply with the provisions of Section 16(c) of the Investment Company Act of
1940 relating to shareholder communications.
<PAGE>
(b) Registrant hereby undertakes to furnish each person to whom a prospectus is
delivered with a copy of Registrant's latest annual report to shareholders upon
request and without charge.
(c) Registrant undertakes to file a post-effective amendment, using financial
statements which need not be certified, within four to six months from the
effective date of the Fund's registration statement.
<PAGE>
SIGNATURE PAGE
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Post-Effective
Amendment to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Greenwich and State of
Connecticut on the 12th day of December, 1996.
NORTHSTAR TRUST
/s/Mark L. Lipson
---------------------------
Mark L. Lipson, President*
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
/s/John G. Turner Chairman/Trustee December 12, 1996
-----------------
John G. Turner*
/s/Mark L. Lipson President/Trustee December 12, 1996
-----------------
Mark L. Lipson*
/s/Paul S. Doherty Trustee December 12, 1996
------------------
Paul S. Doherty*
/s/David W. Wallace Trustee December 12, 1996
-------------------
David W. Wallace*
/s/Robert B. Goode, Jr. Trustee December 12, 1996
-----------------------
Robert B. Goode, Jr.*
/s/Walter H. May Trustee December 12, 1996
----------------
Walter H. May*
/s/Alan L. Gosule Trustee December 12, 1996
-----------------
Alan L. Gosule*
/s/David W.C. Putnam Trustee December 12, 1996
--------------------
David W. C. Putnam*
/s/John R. Smith Trustee December 12, 1996
-----------------
John R. Smith*
/s/Agnes Mullady Principal Financial December 12, 1996
---------------- and Accounting Officer
Agnes Mullady
By:/s/Agnes Mullady
----------------
*Agnes Mullady - Attorney-in-Fact. Executed pursuant to powers of
attorney filed with PEA Nos. 6 and 7
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Under
Part C of Form N-1A Name of Exhibit
- -------------------- ---------------
5 Form of Investment Advisory Agreement
6 Forms of Underwriting Agreements
9 Administrative Services Agreement
15 Form of Distribution and Service Plan
Exhibit 5
NORTHSTAR TRUST
INVESTMENT ADVISORY AGREEMENT
As Amended January 23, 1997
AGREEMENT made this 8th day of November 1993, by and between
NORTHSTAR TRUST, a Massachusetts business trust, (the "Trust") and NORTHSTAR
INVESTMENT MANAGEMENT CORPORATION., a Delaware business corporation (the
"Adviser").
The Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"), consisting of the series named on schedule 1 hereto (each "Fund" and
collectively the "Funds"), as such schedule may be revised from time to time.
The Trust desires to retain the Adviser to render investment
advisory services to the Funds, and the Adviser is willing to render such
investment advisory on the terms set forth below.
The parties agree as follows:
1. The Trust hereby appoints the Adviser to act as investment
adviser to the Trust and the Funds for the period and on the terms set forth in
this Agreement. The Adviser accepts such appointment and agrees to render the
services described, for the compensation provided, in this Agreement.
2. Subject to the supervision of the Trustees, the Adviser shall
manage the investment operations of the Funds and the composition of each Fund's
portfolio, including the purchase and retention and disposition of portfolio
securities, in accordance with each Fund's investment objectives, policies and
restrictions as stated in the Trust's Prospectus and Statement of Additional
Information (as defined below) subject to the following understandings:
(a) The Adviser shall provide supervision of each Fund's investments
and determine from time to time what investments will be made, held or disposed
of or what securities will be purchased and retained, sold or loaned by each
Fund, and what portion of the assets will be invested or held uninvested as
cash.
(b) The Adviser shall use its best judgment in the performance of
its duties under this Agreement.
(c) The Adviser, in the performance of its duties and obligations
under this Agreement, shall (i) act in conformity with the Declaration of Trust,
By- Laws, Prospectus and Statement of Additional Information of the Trust, with
the instructions and directions of the Trustees and (ii) conform to and comply
with the requirements of the Investment Company Act and all other applicable
federal and state laws and regulations.
<PAGE>
(d) (i) The Adviser shall determine the securities to be purchased
or sold by each Fund and will place orders pursuant to its determinations with
or through such persons, brokers or dealers to carry out the policy with respect
to brokerage as set forth in the Trust's Prospectus and Statement of Additional
Information or as the Trustees may direct from time to time. In providing each
Fund with investment supervision, the Adviser will give primary consideration to
securing the most favorable price and efficient execution. The Adviser may also
consider the financial responsibility, research and investment information and
other services and research related products provided by brokers or dealers who
may effect or be a party to any such transactions or other transactions to which
other clients of the Adviser may be a party. The Funds recognize that the
services and research related products provided by such brokers may be useful to
the Adviser in connection with its services to other clients.
(ii) When the Adviser deems the purchase or sale of a security to be
in the best interest of a Fund as well as other clients, the Adviser, to the
extent permitted by applicable laws and regulations, may aggregate the
securities to be sold or purchased in order to obtain the most favorable price
or lower brokerage commissions and efficient execution. In such event,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transactions, will be made by the Adviser in the manner it
considers to be the most equitable and consistent with its fiduciary obligations
to each Fund and to such other clients.
(e) The Adviser shall maintain, or cause to be maintained, all books
and records required under the Investment Company Act to the extent not
maintained by the custodian of the Trust. The Adviser shall render to the
Trustees such periodic and special reports as the Trustees may reasonably
request.
(f) The Adviser shall provide the Trust's custodian on each business
day information relating to all transactions concerning each Fund's assets.
(g) The investment management services of the Adviser to the Trust
and to each Fund under this Agreement are not to be deemed exclusive, and the
Adviser shall be free to render similar services to others.
3. The Trust has delivered to the Adviser copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:
(a) Declaration of Trust, as amended, as filed with the Secretary of
the Commonwealth of Massachusetts (such Declaration of Trust, as in effect on
the date hereof and as further amended from time to time, are herein called the
"Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date
hereof and as amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Trustees authorizing the
appointment of the Adviser and approving this Agreement on behalf of the Trust
and each Fund;
<PAGE>
(d) Registration Statement on Form N-lA under the Investment Company
Act and the Securities Act of 1933, as amended from time to time (the
"Registration Statement"), as filed with the Securities and Exchange Commission
(the "Commission"), relating to the Trust and shares of beneficial interest of
each Fund and all amendments thereto.
(e) Notification of Registration of the Trust under the
Investment Company Act on Form N-8A as filed with the Commission and all
amendments thereto;
(f) Prospectus and Statement of Additional Information included in
the Registration Statement, as amended from time to time. All references to this
Agreement, the Prospectus and the Statement of Additional Information shall be
to such documents as most recently amended or supplemented and in effect.
4. The Adviser shall authorize and permit any of its directors,
officers and employees who may be elected as trustees or officers of the Trust
and/ or the Funds to serve in the capacities in which they are elected. All
services to be furnished by the Adviser under this Agreement may be furnished
through such directors, officers or employees of the Adviser.
5. The Adviser agrees that all records which it maintains for the
Trust and/or the Funds are property of the Trust and/or the Funds. The Adviser
will surrender promptly to the Trust and/or the Funds any such records upon
either the Trust's or the Fund's request. The Adviser further agrees to preserve
such records for the periods prescribed in Rule 3la-2 of the Commission under
the Investment Company Act.
6. (i) In connection with the services rendered by the Adviser under
this Agreement, the Adviser will pay all of the following expenses:
(a) the salaries and expenses of all personnel of the Trust, the
Funds and the Adviser required to perform the services to be
provided pursuant to this Agreement, except the fees of the
trustees who are not affiliated persons of the Adviser, and
(b) all expenses incurred by the Adviser, the Trust or by the Funds
in connection the performance of the Adviser's responsibilities
hereunder, other than brokers' commissions and any issue or
transfer taxes chargeable to each respective Fund in connection
with its securities transactions.
7. In the event the expenses of each Fund for any fiscal year
(including the fees payable to the Adviser but excluding interest, taxes,
brokerage commissions, distribution fees and litigation and indemnification
expenses and other extraordinary expenses not incurred in the ordinary course of
the Fund's business) exceed the lowest applicable annual expense limitation
established pursuant to the statutes or regulations of any jurisdictions in
which shares of each respective Fund are then qualified for offer and sale, the
compensation due the Adviser will be reduced by the amount of such excess, or,
if such reduction exceeds the compensation payable to the Adviser, the Adviser
will pay each Fund, whose expenses exceed such expense limitation, the amount of
such reduction which exceeds the amount of such compensation.
<PAGE>
8. For the services provided and the expenses assumed pursuant to
this Agreement, each Fund will pay to the Adviser as compensation a at the rate
set forth opposite each Funds' name on Schedule 1 hereto, such fee to be accrued
daily and paid monthly..
9. The Adviser may rely on information reasonably believed by it to
be accurate and reliable. Neither the Adviser nor its officers, directors,
employees or agents or controlling persons shall be liable for any error or
judgment or mistake of law, or for any loss suffered by the Trust and/or a Fund
in connection with or arising out of the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.
10. As to each Fund, this Agreement shall continue until the date
set forth opposite such Fund's name on Schedule 1 hereto (the "Reapproval Date")
and shall continue automatically for successive annual periods ending on the day
of each year set forth opposite the Fund's name on Schedule 1 hereto (the
"Reapproval Day"), provided that such continuance is specifically approved at
least annually by the affirmative vote of (i) a majority of the Trustees of the
Trust acting separately on behalf of each Fund, who are not interested persons
of the Trust, cast in person at a meeting called for the purpose of voting on
such approval, and (ii) a majority of the Trustees of the Trust or the holders
of a majority of the outstanding voting securities of each respective Fund;
provided however, that this Agreement may be terminated by the Trust, on behalf
of a Fund at any time, without the payment of any penalty, by the Trustees
acting on behalf of a Fund or by vote of a majority of the outstanding voting
securities (as defined in the Investment Company Act) of a Fund, or by the
Adviser at any time, without the payment of any penalty, on not more than 60
days' nor less than 30 days' written notice to the other party. This Agreement
shall terminate automatically in the event of its assignment provided that a
transaction which does not, under the Investment Company Act, result in a change
of actual control or management of the Adviser's business shall not be deemed to
be an assignment for the purposes of this Agreement.
11. This agreement shall terminate automatically in the event of its
assignment; the term "assignment" for this purpose shall have the meaning
defined in Section 2(a)(4) of the Investment Company Act of 1940.
12. Nothing in this Agreement shall limit or restrict the right of
any director, officer or employee of the Adviser who may also be a trustee,
officer or employee of the Trust and/or the Funds to engage in any other
business or to devote his time and attention in part to the management or other
aspect of any business, whether of a similar or dissimilar nature, nor limit or
restrict the right of the Adviser to engage in any other business or to render
services of any kind to any other person or entity.
<PAGE>
13. During the term of this Agreement, the Trust and each Fund
agrees to furnish the Adviser at its principal office all prospectuses, proxy
statements, reports to shareholders, sales literature, or other material
prepared for distribution to shareholders of each Fund or the public, which
refer in any way to the Adviser, prior to use thereof and not to use such
material if the Adviser reasonably objects in writing within five business days
(or such other time as may be mutually agreed) after receipt. In the event of
termination of the Agreement, the Trust and/or each Fund will continue to
furnish to the Adviser such other information relating to the business affairs
of the Trust and/or each Fund as the Adviser at any time, or from time to time,
reasonably requests in order to discharge its obligations hereunder.
14. This Agreement may be amended by mutual agreement, but only
after authorization of such amendments by the affirmative vote of (i) the
holders of the majority of the outstanding voting securities of each Fund and (
ii) a majority of the members of the Trustees who are not interested persons of
the Trust or the Adviser, cast in person at a meeting called for the purpose of
voting on such approval.
15. The Adviser, the Trust and the Funds each agree that the name
"Northstar" is proprietary to, and a property right of, the Adviser. The Trusts
and the Funds agree and consent that (i) each will only use the name "Northstar"
as part of its name and for no other purpose, (ii) each will not purport to
grant any third party the right to use the name "Northstar" and (iii) upon the
termination of this Agreement, the Trust and the Funds shall, upon the request
of the Adviser, cease to use the name "Northstar", and shall use its best
efforts to cause its officers, trustees and shareholders to take any and all
actions which the Adviser may request to effect the foregoing.
16. Any notice or other communications required to be given pursuant
to this Agreement shall be deemed to be given if delivered or mailed by
registered mail, postage paid, (1) to the Adviser at Two Greenwich Plaza, Suite
100, Greenwich, CT 06830, Attention: Secretary; or (2) to the Trust and/or the
Funds, Two Greenwich Plaza, Suite 100, Greenwich, CT 06830, Attention:
Secretary.
17. This Agreement shall be governed by and construed in accordance
with the laws of the State of Connecticut. The terms "interested person",
"assignment", and "vote of the majority of the outstanding securities" shall
have the meaning set forth in the Investment Company Act.
18. The Declaration of Trust, establishing the Trust, dated August
18, 1993, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth of
Massachusetts, provides that the name "Northstar Series Trust" refers to the
Trustees under the Declaration collectively as trustees, but not individually or
personally; and no Trustee, shareholder, officer, employee or agent of the Trust
and/or the Funds may be held to any personal liability, nor may resort be had to
their private property for the satisfaction of any obligation or claim or
otherwise in connection with the affairs of the Trust, but the Trust property
only shall be liable.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year first
written above.
<PAGE>
NORTHSTAR TRUST
Attest: By:
----------------------- ----------------------------
President
NORTHSTAR INVESTMENT MANAGEMENT
CORPORATION
Attest: By:
----------------------- ----------------------------
Sr. Vice President
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Annual Fee as a
Percentage of Avg.
Name of Fund Daily Net Assets Reapproval Date Reapproval Day
- ------------------------------------------------------------------------------------------------------
<S> <C>
Northstar Income and .75 of 1% on first $250 million; .70% November 8, 1995 November 8th
Growth Fund on the next $250 million; .65% on the
next $250 million; .60% on the next
$250 million; and .55% on assets in
excess of $1 billion.
- ------------------------------------------------------------------------------------------------------
Northstar High Total .75 of 1% on first $250 million; .70% November 8, 1995 November 8th
Return Fund on the next $250 million; .65% on the
next $250 million; .60% on the next
$250 million; and .55% on assets in
excess of $1 billion
- ------------------------------------------------------------------------------------------------------
Northstar Growth + 1.00% July 31, 1998 July 31st
Value Fund
- ------------------------------------------------------------------------------------------------------
Northstar High Total .75% November 8, 1998 November 8th
Return Fund II
- ------------------------------------------------------------------------------------------------------
Northstar International 1.00% November 8, 1998 November 8th
Value Fund
- ------------------------------------------------------------------------------------------------------
</TABLE>
Exhibit 6
UNDERWRITING AGREEMENT FOR
CLASS A SHARES OF
NORTHSTAR TRUST
NORTHSTAR HIGH TOTAL RETURN FUND
NORTHSTAR INCOME AND GROWTH FUND
NORTHSTAR GROWTH + VALUE FUND
NORTHSTAR HIGH TOTAL RETURN FUND II
NORTHSTAR INTERNATIONAL VALUE FUND
AGREEMENT made and entered into by and between NORTHSTAR HIGH TOTAL
RETURN FUND, NORTHSTAR INCOME AND GROWTH FUND, NORTHSTAR GROWTH +
VALUE FUND, NORTHSTAR HIGH TOTAL RETURN FUND II and NORTHSTAR
INTERNATIONAL VALUE FUND (each a "Fund" and collectively the
"Funds"), each a series of NORTHSTAR TRUST, a Massachusetts business
trust (the "Trust"), and NORTHSTAR DISTRIBUTORS, INC., a Minnesota
corporation (the "Underwriter").
1. Each Fund hereby appoints the Underwriter as its exclusive agent
to promote the sale and to arrange for the sale of Class A shares of
beneficial interest of each Fund, including both unissued shares and
treasury shares, through broker-dealers of otherwise, in all parts
of the United States and elsewhere throughout the world. Each Fund
agrees to sell and deliver its Class A shares, upon the terms
hereinafter set forth, as long as it has unissued and/or treasury
Class A shares available for sale.
(a) Each Fund hereby authorizes the Underwriter, subject to law and
the Declaration of Trust, to accept, for the respective account of
each Fund, orders for the purchase of its Class A shares,
satisfactory to the Underwriter, as of the time of receipt of such
orders by the dealer-- or as otherwise described in the Prospectus
of the Trust.
(b) The public offering price of Class A shares shall be the net
asset value per share (as determined by each Fund) of the
outstanding Class A shares of each Fund. The net asset value shall
be regularly determined on every business day as of the time of the
regular closing of the New York Stock Exchange and the public
offering price based upon such net asset value shall become
effective as set forth from time to time in the Trust's Prospectus;
such net asset value shall also be regularly determined, and the
public offering price based thereon shall become effective, as of
such other times for the regular determination of net asset value as
may be required or permitted by rules of the National Association of
Securities Dealers, Inc. or of the Securities and Exchange
Commission. Each Fund shall furnish daily to the Underwriter, with
all possible promptness, a detailed computation of net asset value
of its Class A shares.
<PAGE>
The public offering price of such shares shall be equal to the net
asset value, as described above, plus a commission to be fixed from
time to time by the Underwriter not to exceed 6% of the public
offering price, except that such price per share may be adjusted to
the nearest cent. The Underwriter may fix quantity discounts and
other similar terms not inconsistent with the provisions of the
Investment Company Act of 1940. The Underwriter shall not impose any
commission, permit any quantity discounts or impose any other
similar terms in connection with the sale of Class A shares of each
Fund except as disclosed in the Prospectus of the Trust.
(c) The Underwriter shall be entitled to deduct a commission on all
Class A shares sold equal to the difference between the public
offering price and the net asset value on which such price is based.
If any such commission is received by a Fund, it will pay the
commission to the Underwriter. Out of such commission, the
Underwriter may allow to dealers such concessions as the Underwriter
may determine from time to time. Notwithstanding anything in the
Agreement, sales may be made at net asset value as provided in the
Trust's prospectus.
2. The Underwriter agrees to devote reasonable time and effort to
enlist investment dealers to sell Class A shares of each Fund and
otherwise promote the sale and distribution and act as Underwriter
for the sale and distribution of the Class A shares of each Fund as
such arrangements may profitably be made; but so long as its does
so, nothing herein contained shall prevent the Underwriter from
entering into similar arrangements with other funds and to engage in
other activities. Each Fund reserves the right to issue Class A
shares in connection with any merger or consolidation of a Fund with
any other investment company or any personal holding company or in
connection with offers of exchange exempted from Section 22(d) of
the Investment Company Act 1940.
3. To the extent a Fund shall offer (as set forth in the Trust's
Prospectus) to provide physical certificates evidencing ownership of
Class A shares, upon receipt by a Fund at its principal place of
business of a written order from the Underwriter, together with
delivery instructions, the Fund shall, as promptly as practicable,
cause certificates for the Class A shares called for in such order
to be delivered or credited in such amounts and in such names as
shall be specified by the Underwriter, against payment therefor in
such manner as may be acceptable to the Fund.
4. All sales literature and advertisements used by the Underwriter
in connection with sales of the Class A shares of each Fund shall be
subject to the approval of the respective Fund to which such
literature relates. Each Fund authorizes the Underwriter in
connection with the sale or arranging for the sale of its Class A
shares to give only such information and to make only such
statements or representations as are contained in the Prospectus or
in sales literature or advertisements approved by each respective
Fund or in such financial statements and reports as are furnished to
the Underwriter pursuant to paragraph 6 below. The Funds shall not
be responsible in any way for any information, statements or
representations given or made by the Underwriter or its
representatives or agents other than such information, statements
and representations.
<PAGE>
5. The Underwriter, as agent of each Fund, is authorized, subject to
the direction of each Fund, to accept Class A shares for redemption
at prices not in excess of their net asset value, determined as
prescribed in the Prospectus of the Trust. Each respective Fund
shall reimburse the Underwriter monthly for its out-of-pocket
expenses reasonably incurred on behalf of each Fund in carrying out
the foregoing authorization, but the Underwriter shall not be
entitled to any commissions or other compensation in respect to such
redemptions. The Underwriter shall report all redemptions promptly
to the respective Funds.
6. Each Fund shall keep the Underwriter fully informed with regard
to its affairs, shall furnish the Underwriter with a certified copy
of all financial statements, and a signed copy of each report,
prepared by independent public accountants and with such reasonable
number of printed copies of each annual and other periodic report of
each Fund as the Underwriter may request, and shall cooperate fully
in the efforts of the Underwriter to sell and arrange for the sale
of its Class A shares and in the performance by the Underwriter of
all its duties under this Agreement.
7. Each Fund will pay or cause to be paid expenses (including
counsel fees and disbursements) of any registration of its Class A
shares of beneficial interest under, but not limited to, Federal,
state or other regulatory authority, fees of filing periodic reports
with regulatory bodies and of preparing, setting in type and
printing the Prospectus and any amendments thereto prepared for use
in connection with the offering of Class A shares of each Fund, for
fees and expenses incident to the issuance of Class A shares of
beneficial interest, such as the cost of stock certificates (if
offered), issuance taxes, fees of the transfer agent, including the
cost of preparing and mailing notices to shareholders pertaining to
transactions with respect to shareholders' accounts, dividend
disbursing agent's costs, including the cost for preparing and
mailing notices confirming shares acquired by shareholders pursuant
to the reinvestment of dividends and distributions, and the mailing
to shareholders of prospectuses, and notices and reports as may be
required from time to time by regulatory bodies or for such other
purposes, except for purposes of sales by the Underwriter as
outlined in paragraph 8 hereof.
8. The Underwriter shall pay all of its own costs and expenses
(other than expenses and costs heretofore deemed payable by the
Funds and other than expenses which one or more dealers may bear
pursuant to any agreement with the Underwriter) incident to the sale
and distribution of the shares issued or sold hereunder including
(a) expenses of printing copies of the Prospectus to be used in
connection with the sale of Class A shares of each Fund at printer's
overrun costs; (b) expenses of printing and distributing or
disseminating any other literature, advertising or selling aids in
connection with the offering of Class A shares for sale (however,
the expenses referred to in (a) and (b) do not include expenses
incurred in connection with the preparation, printing and
distribution of the Prospectus or any report or other communication
to shareholders, to the extent that such expenses are necessarily
incurred to effect compliance by each Fund with any Federal or state
law or other regulatory bodies); and (c) expenses of advertising in
connection with such offering; provided, however, that the
Underwriter shall not be required to pay for any such expenses to
the extent that they are paid pursuant to a Fund's distribution plan
adopted pursuant to Rule 12b-1 under the Investment Company Act of
1940.
<PAGE>
9. Each Fund agrees to register, from time to time as necessary,
additional Class A shares with the Securities & Exchange Commission,
State and other regulatory bodies and to pay the related filing fees
therefor and to file such amendments, reports and other documents as
may be necessary in order that there may be no untrue statement of a
material fact in the Registration Statement or Prospectus or that
their may be no omission to state a material fact therein necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. As used in
this Agreement, the term " Registration Statement" shall mean the
Registration Statement most recently filed by the Trust with the
Securities & Exchange Commission and effective under the Securities
Act of 1933, as amended, as such Registration Statement is amended
from time to time, and the term "Prospectus" shall mean the most
recent form of prospectus authorized by the Trust for use by the
Underwriter and by dealers.
10. This Agreement may be terminated at any time on not more than 60
days written notice, without payment of a penalty, by the
Underwriter, by vote of a majority of the class of outstanding
voting securities of each respective Fund or by vote of a majority
of the Trustees, acting separately on behalf of each Fund, who are
not "interested persons" of the Funds and who have not direct or
indirect financial interest in the operation of the Plan or in any
agreements.
11. This Agreement shall terminate automatically in the event of its
assignment. The term "assignment" for this purpose shall have the
meaning defined in Section 2(a) (4) of the Investment Company Act of
1940.
12. This Agreement has been approved by the Trustees of the Trust on
behalf of the Funds and shall continue in effect for two years from
its effective date. Thereafter, this Agreement shall continue for
successive annual periods, provided that such continuance is
specifically approved annually by a majority of the Trustees who are
not interested persons of the parties hereto as defined in the
Investment Company Act of 1940 and either (a) by vote of the
Trustees of the Trust or (b) by vote of a majority or the
outstanding voting securities of each Fund, as defined in the
Investment Company Act of 1940.
13. The Declaration of Trust, establishing the Trust, dated August
18, 1993, a copy of which together with all amendments thereto (the
"Declaration") is on file in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name of the Trust
refers to the Trustees under the Declaration collectively as
trustees, but not individually or personally; and no Trustee,
shareholder officer, employee or agent of the Trust and/or the Funds
may be held to any personal liability, nor may resort be had to
their private property for the satisfaction of any obligation or
claim or otherwise in connection with affairs of the Trust, but the
Trust property only shall be liable.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers thereunto duly authorized and to
become effective as of this 8th day of November, 1993.
Attest: NORTHSTAR TRUST
By: ________________________ By: ________________________
Attest: NORTHSTAR DISTRIBUTORS, INC.
By: ________________________ By: ________________________
As Amended: January 23, 1997
<PAGE>
UNDERWRITING AGREEMENT FOR
CLASS B SHARES OF
NORTHSTAR TRUST
NORTHSTAR HIGH TOTAL RETURN FUND
NORTHSTAR INCOME AND GROWTH FUND
NORTHSTAR GROWTH + VALUE FUND
NORTHSTAR HIGH TOTAL RETURN FUND II
NORTHSTAR INTERNATIONAL VALUE FUND
AGREEMENT made and entered into by and between NORTHSTAR HIGH TOTAL
RETURN FUND, NORTHSTAR INCOME AND GROWTH FUND, NORTHSTAR GROWTH +
VALUE FUND, NORTHSTAR HIGH TOTAL RETURN FUND II and NORTHSTAR
INTERNATIONAL VALUE FUND (each a "Fund" and collectively the
"Funds"), each a series of NORTHSTAR TRUST, a Massachusetts business
trust (the "Trust"), and NORTHSTAR DISTRIBUTORS, INC., a Minnesota
corporation (the "Underwriter").
1. Each Fund hereby appoints the Underwriter as its exclusive agent
to promote the sale and to arrange for the sale of Class B shares of
beneficial interest of each Fund, including both unissued shares and
treasury shares, through broker-dealers of otherwise, in all parts
of the United States and elsewhere throughout the world. Each Fund
agrees to sell and deliver its Class B shares, upon the terms
hereinafter set forth, as long as it has unissued and/or treasury
Class B shares available for sale.
(a) Each Fund hereby authorizes the Underwriter, subject to law and
the Declaration of Trust, to accept, for the respective account of
each Fund, orders for the purchase of its Class B shares,
satisfactory to the Underwriter, as of the time of receipt of such
orders by the dealer-- or as otherwise described in the Prospectus
of the Trust.
(b) The public offering price of Class B shares shall be the net
asset value per share (as determined by each Fund) of the
outstanding Class B shares of each Fund. The net asset value shall
be regularly determined on every business day as of the time of the
regular closing of the New York Stock Exchange and the public
offering price shall become effective as set forth from time to time
in the Prospectus; such net asset value shall also be regularly
determined, and the public offering price shall become effective, as
of such other times for the regular determination of net asset value
as may be required or permitted by rules of the National Association
of Securities Dealers, Inc. or of the Securities and Exchange
Commission. Each Fund shall furnish daily to the Underwriter, with
all possible promptness, a detailed computation of net asset value
of its Class B shares.
(c) As compensation for providing services under this Agreement, (i)
the Underwriter shall receive from each Fund distribution and
service fees under the terms and conditions set forth in each
respective Distribution Plan for each Fund adopted under Rule 12b-1
<PAGE>
under the Investment Company Act of 1940, as amended, as that Plan
may be amended from time to time and subject to any further
limitations on such fees as the Trustees may impose, and (ii) the
Underwriter shall receive from each Fund all contingent deferred
sales charges applied on redemption of Class B shares of such Fund.
Whether and to what extent a contingent deferred sales charge will
be imposed with respect to a redemption shall be determined in
accordance with, and in a manner set forth in, the Trust's
Prospectus.
(d) The Underwriter may reallow any or all of the distribution and
services fees and contingent deferred sales charges which it is paid
under the Agreement to such dealers as the Underwriter may from time
to time determine.
(e) The Underwriter may fix quantity discounts and other similar
variances or waivers of the contingent deferred sales charge not
inconsistent with the provisions of the Investment Company Act of
1940; provided however, that the Underwriter shall not impose any
commission, permit any quantity discount, or impose any other
similar waiver or variance in connection with the sale of Class B
shares except as disclosed in the Prospectus of the Trust.
2. The Underwriter agrees to devote reasonable time and effort to
enlist investment dealers to sell Class B shares of each Fund and
otherwise promote the sale and distribution and act as Underwriter
for the sale and distribution of the Class B shares of each Fund as
such arrangements may profitably be made; but so long as its does
so, nothing herein contained shall prevent the Underwriter from
entering into similar arrangements with other funds and to engage in
other activities. Each Fund reserves the right to issue Class B
shares in connection with any merger or consolidation of a Fund with
any other investment company or any personal holding company or in
connection with offers of exchange exempted from Section 22(d) of
the Investment Company Act 1940.
3. To the extent a Fund shall offer (as set forth in the Trust's
Prospectus) to provide physical certificates evidencing ownership of
Class B shares, upon receipt by a Fund at its principal place of
business of a written order from the Underwriter, together with
delivery instructions, the Fund shall, as promptly as practicable,
cause certificates for the Class B shares called for in such order
to be delivered or credited in such amounts and in such names as
shall be specified by the Underwriter, against payment therefor in
such manner as may be acceptable to the Fund.
4. All sales literature and advertisements used by the Underwriter
in connection with sales of the Class B shares of each Fund shall be
subject to the approval of the respective Fund to which such
literature relates. Each Fund authorizes the Underwriter in
connection with the sale or arranging for the sale of its Class B
shares to give only such information and to make only such
statements or representations as are contained in the Prospectus or
in sales literature or advertisements approved by each respective
Fund or in such financial statements and reports as are furnished to
the Underwriter pursuant to paragraph 6 below. The Funds shall not
<PAGE>
be responsible in any way for any information, statements or
representations given or made by the Underwriter or its
representatives or agents other than such information, statements
and representations.
5. The Underwriter, as agent of each Fund, is authorized, subject to
the direction of each Fund, to accept Class B shares for redemption
at prices determined as prescribed in the Prospectus of the Trust.
Such price shall reflect the subtraction of the applicable
contingent deferred sales charge, if any, computed in accordance
with and in the manner set forth in the Trust's Prospectus. Each
respective Fund shall reimburse the Underwriter monthly for its
out-of-pocket expenses reasonably incurred on behalf of each Fund in
carrying out the foregoing authorization. The Underwriter shall
report all redemptions promptly to the respective Funds.
6. Each Fund shall keep the Underwriter fully informed with regard
to its affairs, shall furnish the Underwriter with a certified copy
of all financial statements, and a signed copy of each report,
prepared by independent public accountants and with such reasonable
number of printed copies of each annual and other periodic report of
each Fund as the Underwriter may request, and shall cooperate fully
in the efforts of the Underwriter to sell and arrange for the sale
of its Class B shares and in the performance by the Underwriter of
all its duties under this Agreement.
7. Each Fund will pay or cause to be paid expenses (including
counsel fees and disbursements) of any registration of its Class B
shares of beneficial interest under, but not limited to, Federal,
state or other regulatory authority, fees of filing periodic reports
with regulatory bodies and of preparing, setting in type and
printing the Prospectus and any amendments thereto prepared for use
in connection with the offering of Class B shares of each Fund, for
fees and expenses incident to the issuance of Class B shares of
beneficial interest, such as the cost of stock certificates (if
offered), issuance taxes, fees of the transfer agent, including the
cost of preparing and mailing notices to shareholders pertaining to
transactions with respect to shareholders' accounts, dividend
disbursing agent's costs, including the cost for preparing and
mailing notices confirming shares acquired by shareholders pursuant
to the reinvestment of dividends and distributions, and the mailing
to shareholders of prospectuses, and notices and reports as may be
required from time to time by regulatory bodies or for such other
purposes, except for purposes of sales by the Underwriter as
outlined in paragraph 8 hereof.
8. The Underwriter shall pay all of its own costs and expenses
(other than expenses and costs heretofore deemed payable by the
Funds and other than expenses which one or more dealers may bear
pursuant to any agreement with the Underwriter) incident to the sale
and distribution of the shares issued or sold hereunder including
(a) expenses of printing copies of the Prospectus to be used in
connection with the sale of Class B shares of each Fund at printer's
overrun costs; (b) expenses of printing and distributing or
disseminating any other literature, advertising or selling aids in
connection with the offering of Class B shares for sale (however,
the expenses referred to in (a) and (b) do not include expenses
incurred in connection with the preparation, printing and
<PAGE>
distribution of the Prospectus or any report or other communication
to shareholders, to the extent that such expenses are necessarily
incurred to effect compliance by each Fund with any Federal or state
law or other regulatory bodies); and (c) expenses of advertising in
connection with such offering; provided, however, that the
Underwriter shall not be required to pay for any such expenses to
the extent that they are paid pursuant to a Fund's distribution plan
adopted pursuant to Rule 12b-1 under the Investment Company Act of
1940.
9. Each Fund agrees to register, from time to time as necessary,
additional Class B shares with the Securities & Exchange Commission,
State and other regulatory bodies and to pay the related filing fees
therefor and to file such amendments, reports and other documents as
may be necessary in order that there may be no untrue statement of a
material fact in the Registration Statement or Prospectus or that
their may be no omission to state a material fact therein necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. As used in
this Agreement, the term " Registration Statement" shall mean the
Registration Statement most recently filed by the Trust with the
Securities & Exchange Commission and effective under the Securities
Act of 1933, as amended, as such Registration Statement is amended
from time to time, and the term "Prospectus" shall mean the most
recent form of prospectus authorized by the Trust for use by the
Underwriter and by dealers.
10. This Agreement may be terminated at any time on not more than 60
days written notice, without payment of a penalty, by the
Underwriter, by vote of a majority of the class of outstanding
voting securities of each respective Fund or by vote of a majority
of the Trustees, acting separately on behalf of each Fund, who are
not "interested persons" of the Funds and who have not direct or
indirect financial interest in the operation of the Plan or in any
agreements.
11. This Agreement shall terminate automatically in the event of its
assignment. The term "assignment" for this purpose shall have the
meaning defined in Section 2(a) (4) of the Investment Company Act of
1940.
12. This Agreement has been approved by the Trustees of the Trust on
behalf of the Funds and shall continue in effect for two years from
its effective date. Thereafter, this Agreement shall continue for
successive annual periods, provided that such continuance is
specifically approved annually by a majority of the Trustees who are
not interested persons of the parties hereto as defined in the
Investment Company Act of 1940 and either (a) by vote of the
Trustees of the Trust or (b) by vote of a majority or the
outstanding voting securities of each Fund, as defined in the
Investment Company Act of 1940.
13. The Declaration of Trust, establishing the Trust, dated August
18, 1993, a copy of which together with all amendments thereto (the
"Declaration") is on file in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name of the Trust
refers to the Trustees under the Declaration collectively as
trustees, but not individually or personally; and no Trustee,
<PAGE>
shareholder officer, employee or agent of the Trust and/or the Funds
may be held to any personal liability, nor may resort be had to
their private property for the satisfaction of any obligation or
claim or otherwise in connection with affairs of the Trust, but the
Trust property only shall be liable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers thereunto duly authorized and to
become effective as of this 8th day of November, 1993.
Attest: NORTHSTAR TRUST
By: ________________________ By: ________________________
Attest: NORTHSTAR DISTRIBUTORS, INC.
By: ________________________ By: ________________________
As Amended: January 23, 1997
<PAGE>
UNDERWRITING AGREEMENT FOR
CLASS C SHARES OF
NORTHSTAR TRUST
NORTHSTAR HIGH TOTAL RETURN FUND
NORTHSTAR INCOME AND GROWTH FUND
NORTHSTAR GROWTH + VALUE FUND
NORTHSTAR HIGH TOTAL RETURN FUND II
NORTHSTAR INTERNATIONAL VALUE FUND
AGREEMENT made and entered into by and between NORTHSTAR HIGH TOTAL
RETURN FUND, NORTHSTAR INCOME AND GROWTH FUND, NORTHSTAR GROWTH +
VALUE FUND, NORTHSTAR HIGH TOTAL RETURN FUND II and NORTHSTAR
INTERNATIONAL VALUE FUND (each a "Fund" and collectively the
"Funds"), series of NORTHSTAR TRUST, a Massachusetts business trust
(the "Trust"), and NORTHSTAR DISTRIBUTORS, INC., a Minnesota
corporation (the "Underwriter").
1. Each Fund hereby appoints the Underwriter as its exclusive agent
to promote the sale and to arrange for the sale of Class C shares of
beneficial interest of each Fund, including both unissued shares and
treasury shares, through broker-dealers of otherwise, in all parts
of the United States and elsewhere throughout the world. Each Fund
agrees to sell and deliver its Class C shares, upon the terms
hereinafter set forth, as long as it has unissued and/or treasury
Class C shares available for sale.
(a) Each Fund hereby authorizes the Underwriter, subject to law and
the Declaration of Trust, to accept, for the respective account of
each Fund, orders for the purchase of its Class C shares,
satisfactory to the Underwriter, as of the time of receipt of such
orders by the dealer-- or as otherwise described in the Prospectus
of the Trust.
(b) The public offering price of Class C shares shall be the net
asset value per share (as determined by each Fund) of the
outstanding Class C shares of each Fund. The net asset value shall
be regularly determined on every business day as of the time of the
regular closing of the New York Stock Exchange and the public
offering price shall become effective as set forth from time to time
in the Prospectus; such net asset value shall also be regularly
determined, and the public offering price shall become effective, as
of such other times for the regular determination of net asset value
as may be required or permitted by rules of the National Association
of Securities Dealers, Inc. or of the Securities and Exchange
Commission. Each Fund shall furnish daily to the Underwriter, with
all possible promptness, a detailed computation of net asset value
of its Class C shares.
(c) As compensation for providing services under this Agreement, (i)
the Underwriter shall receive from each Fund distribution and
service fees under the terms and conditions set forth in the Class C
Distribution Plan for each Fund adopted under Rule 12b-1 under the
<PAGE>
Investment Company Act of 1940, as amended, as that Plan may be
amended from time to time and subject to any further limitations on
such fees as the Trustees may impose, and (ii) the Underwriter shall
receive from each Fund all contingent deferred sales charges applied
on redemption of Class C shares of such Fund. Whether and to what
extent a contingent deferred sales charge will be imposed with
respect to a redemption shall be determined in accordance with, and
in a manner set forth in, the Trust's Prospectus.
(d) The Underwriter may reallow any or all of the distribution and
services fees and contingent deferred sales charges which it is paid
under the Agreement to such dealers as the Underwriter may from time
to time determine.
(e) The Underwriter may fix quantity discounts and other similar
variances or waivers of the contingent deferred sales charge not
inconsistent with the provisions of the Investment Company Act of
1940; provided however, that the Underwriter shall not impose any
commission, permit any quantity discount, or impose any other
similar waiver or variance in connection with the sale of Class C
shares except as disclosed in the Prospectus of the Trust.
2. The Underwriter agrees to devote reasonable time and effort to
enlist investment dealers to sell Class C shares of each Fund and
otherwise promote the sale and distribution and act as Underwriter
for the sale and distribution of the Class B shares of each Fund as
such arrangements may profitably be made; but so long as its does
so, nothing herein contained shall prevent the Underwriter from
entering into similar arrangements with other funds and to engage in
other activities. Each Fund reserves the right to issue Class C
shares in connection with any merger or consolidation of a Fund with
any other investment company or any personal holding company or in
connection with offers of exchange exempted from Section 22(d) of
the Investment Company Act 1940.
3. To the extent a Fund shall offer (as set forth in the Trust's
Prospectus) to provide physical certificates evidencing ownership of
Class C shares, upon receipt by a Fund at its principal place of
business of a written order from the Underwriter, together with
delivery instructions, the Fund shall, as promptly as practicable,
cause certificates for the Class C shares called for in such order
to be delivered or credited in such amounts and in such names as
shall be specified by the Underwriter, against payment therefor in
such manner as may be acceptable to the Fund.
4. All sales literature and advertisements used by the Underwriter
in connection with sales of the Class C shares of each Fund shall be
subject to the approval of the respective Fund to which such
literature relates. Each Fund authorizes the Underwriter in
connection with the sale or arranging for the sale of its Class C
shares to give only such information and to make only such
statements or representations as are contained in the Prospectus or
in sales literature or advertisements approved by each respective
Fund or in such financial statements and reports as are furnished to
the Underwriter pursuant to paragraph 6 below. The Funds shall not
<PAGE>
be responsible in any way for any information, statements or
representations given or made by the Underwriter or its
representatives or agents other than such information, statements
and representations.
5. The Underwriter, as agent of each Fund, is authorized, subject to
the direction of each Fund, to accept Class C shares for redemption
at prices determined as prescribed in the Prospectus of the Trust.
Such price shall reflect the subtraction of the applicable
contingent deferred sales charge, if any, computed in accordance
with and in the manner set forth in the Trust's Prospectus. Each
respective Fund shall reimburse the Underwriter monthly for its
out-of-pocket expenses reasonably incurred on behalf of each Fund in
carrying out the foregoing authorization. The Underwriter shall
report all redemptions promptly to the respective Funds.
6. Each Fund shall keep the Underwriter fully informed with regard
to its affairs, shall furnish the Underwriter with a certified copy
of all financial statements, and a signed copy of each report,
prepared by independent public accountants and with such reasonable
number of printed copies of each annual and other periodic report of
each Fund as the Underwriter may request, and shall cooperate fully
in the efforts of the Underwriter to sell and arrange for the sale
of its Class C shares and in the performance by the Underwriter of
all its duties under this Agreement.
7. Each Fund will pay or cause to be paid expenses (including
counsel fees and disbursements) of any registration of its Class C
shares of beneficial interest under, but not limited to, Federal,
state or other regulatory authority, fees of filing periodic reports
with regulatory bodies and of preparing, setting in type and
printing the Prospectus and any amendments thereto prepared for use
in connection with the offering of Class C shares of each Fund, for
fees and expenses incident to the issuance of Class C shares of
beneficial interest, such as the cost of stock certificates (if
offered), issuance taxes, fees of the transfer agent, including the
cost of preparing and mailing notices to shareholders pertaining to
transactions with respect to shareholders' accounts, dividend
disbursing agent's costs, including the cost for preparing and
mailing notices confirming shares acquired by shareholders pursuant
to the reinvestment of dividends and distributions, and the mailing
to shareholders of prospectuses, and notices and reports as may be
required from time to time by regulatory bodies or for such other
purposes, except for purposes of sales by the Underwriter as
outlined in paragraph 8 hereof.
8. The Underwriter shall pay all of its own costs and expenses
(other than expenses and costs heretofore deemed payable by the
Funds and other than expenses which one or more dealers may bear
pursuant to any agreement with the Underwriter) incident to the sale
and distribution of the shares issued or sold hereunder including
(a) expenses of printing copies of the Prospectus to be used in
connection with the sale of Class C shares of each Fund at printer's
overrun costs; (b) expenses of printing and distributing or
disseminating any other literature, advertising or selling aids in
connection with the offering of Class C shares for sale (however,
the expenses referred to in (a) and (b) do not include expenses
incurred in connection with the preparation, printing and
<PAGE>
distribution of the Prospectus or any report or other communication
to shareholders, to the extent that such expenses are necessarily
incurred to effect compliance by each Fund with any Federal or state
law or other regulatory bodies); and (c) expenses of advertising in
connection with such offering; provided, however, that the
Underwriter shall not be required to pay for any such expenses to
the extent that they are paid pursuant to a Fund's distribution plan
adopted pursuant to Rule 12b-1 under the Investment Company Act of
1940.
9. Each Fund agrees to register, from time to time as necessary,
additional Class C shares with the Securities & Exchange Commission,
State and other regulatory bodies and to pay the related filing fees
therefor and to file such amendments, reports and other documents as
may be necessary in order that there may be no untrue statement of a
material fact in the Registration Statement or Prospectus or that
their may be no omission to state a material fact therein necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. As used in
this Agreement, the term " Registration Statement" shall mean the
Registration Statement most recently filed by the Trust with the
Securities & Exchange Commission and effective under the Securities
Act of 1933, as amended, as such Registration Statement is amended
from time to time, and the term "Prospectus" shall mean the most
recent form of prospectus authorized by the Trust for use by the
Underwriter and by dealers.
10. This Agreement may be terminated at any time on not more than 60
days written notice, without payment of a penalty, by the
Underwriter, by vote of a majority of the class of outstanding
voting securities of each respective Fund or by vote of a majority
of the Trustees, acting separately on behalf of each Fund, who are
not "interested persons" of the Funds and who have not direct or
indirect financial interest in the operation of the Plan or in any
agreements.
11. This Agreement shall terminate automatically in the event of its
assignment. The term "assignment" for this purpose shall have the
meaning defined in Section 2(a) (4) of the Investment Company Act of
1940.
12. This Agreement has been approved by the Trustees of the Trust on
behalf of the Funds and shall continue in effect for two years from
its effective date. Thereafter, this Agreement shall continue for
successive annual periods, provided that such continuance is
specifically approved annually by a majority of the Trustees who are
not interested persons of the parties hereto as defined in the
Investment Company Act of 1940 and either (a) by vote of the
Trustees of the Trust or (b) by vote of a majority or the
outstanding voting securities of each Fund, as defined in the
Investment Company Act of 1940.
13. The Declaration of Trust, establishing the Trust, dated August
18, 1993, a copy of which together with all amendments thereto (the
"Declaration") is on file in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name of the Trust
<PAGE>
refers to the Trustees under the Declaration collectively as
trustees, but not individually or personally; and no Trustee,
shareholder officer, employee or agent of the Trust and/or the Funds
may be held to any personal liability, nor may resort be had to
their private property for the satisfaction of any obligation or
claim or otherwise in connection with affairs of the Trust, but the
Trust property only shall be liable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers thereunto duly authorized and to
become effective as of this 31st day of March, 1994.
Attest: NORTHSTAR TRUST
By: ________________________ By: ________________________
Attest: NORTHSTAR DISTRIBUTORS, INC.
By: ________________________ By: _________________________
As Amended: January 23, 1997
Exhibit 9
ADMINISTRATIVE SERVICES AGREEMENT
As amended January 23, 1997
Agreement made this 8th day of November, 1993, between Northstar
Trust (the "Trust") on behalf of Northstar Income and Growth Fund, Northstar
High Total Return Fund, Northstar Growth + Value Fund, Northstar High Total
Return Fund II, and Northstar International Value Fund (each a "Fund,"
collectively the "Funds"), and Northstar Administrators Corporation (the
"Administrator").
WHEREAS, the Trust is a Massachusetts business trust authorized to
issue shares in series and is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act")
and the Funds are series of the Trust; and
WHEREAS, Northstar Investment Management Corporation (the "Adviser")
serves as investment adviser to the Funds, and the Trust wishes to retain the
Administrator to render administrative and other services to the Funds, and the
Administrator is willing to render such services to the Funds;
I. in consideration of the premises, promises and mutual covenants herein
contained, it is agreed between the parties as follows:
1. Appointment
The Trust hereby appoints the Administrator to serve as
administrator to the Funds for the periods and on the terms set forth herein.
The Administrator accepts this appointment and agrees to furnish the services
set forth herein for the compensation provided herein.
2. Services as Administrator
A. General Services
Subject to the supervision and direction of the Board of Trustees of
the Trust, the Administrator will (a) assist in supervising all aspects of the
Funds' operations except those performed by the Funds' Adviser under its
investment advisory agreement; (b) furnish such statistical or other factual
information, advice regarding economic factors and trends and advice and
guidelines as to transactions in specific securities (but without generally
furnishing advice or making recommendations regarding the purchase or sale of
securities); (c) maintain or supervise, as the case may be, the maintenance by
the Adviser or third parties approved by the Trust of such books and records of
the Funds as may be required by applicable federal or state law; (d) perform all
corporate secretarial functions on behalf of the Funds; (e) provide the Funds
with office facilities, assemble and provide statistical and research data,
provide data processing, clerical, internal legal, internal executive,
administrative and bookkeeping services, and provide stationary and office
supplies; (f) supervise the performance by third parties of Fund accounting and
portfolio pricing services, internal audits and audits by independent
accountants for the Funds; (g) prepare and arrange for the printing, filing and
distribution of prospectuses, proxy materials, and periodic reports to the
shareholders of the Funds as required by applicable law; (h)
<PAGE>
prepare or supervise the preparation of third parties approved by the Trust of
all federal, state, and local tax returns and reports of the funds required by
applicable law; (i) prepare, update, and arrange for the filing of the Funds'
registration statement and amendments thereto and other documents as the
Securities and Exchange Commission (the "Commission") and other federal
regulatory authorities may require by applicable law, and oversee compliance
under all state regulatory requirements to which the Funds are subject; (j)
render to the Board of Trustees of the Trust such periodic and special reports
respecting the Funds as the Board may reasonably request; (k) arrange, assemble
information and reports for, and attend meetings of the Trustees and the
shareholders of the Funds; (l) maintain a fidelity bond as required under the
1940 Act for the Trust and liability insurance for the Trustees and officers of
the Trust; and (m) make available its officers and employees to the Board of
Trustees and officers of the Trust for consultation and discussions regarding
the administration of the Funds.
B. Shareholder Servicing
Subject to the supervision and direction of the Board of Trustees,
the Administrator will (a) provide customer service to all shareholder accounts,
including responding to all telephone inquiries and written correspondence; and
(b) maintain records of all broker-dealers holding shareholder accounts in the
Funds; and (c) assist broker-dealers in servicing shareholder accounts,
including processing broker wire orders for purchases of shares of the Funds.
C. Performance of Duties
The Administrator, at its discretion, may enter into contracts with
third parties for the performance of the services to be provided by the
Administrator under this Agreement.
The Administrator, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Registration Statement,
as amended, of the Funds and with the instructions and directions of the Board
of Trustees of the Trust and will conform to, and comply with, the requirements
of the 1940 Act and all other applicable federal and state laws and regulations.
In performing its shareholder servicing duties listed in subparagraph B herein,
the Administrator shall not engage in any activities that would require it to
register as a transfer agent under the Securities Exchange Act of 1934.
3. Documents
The Trust has delivered to the Administrator copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:
(a) Declaration of Trust, as amended, as filed with the Secretary
of the Commonwealth of Massachusetts;
(b) By-laws of the Trust;
<PAGE>
(c) Certified resolutions of the Trustees authorizing the
appointment of the Administrator and approving this Agreement on behalf of the
Trust and each Fund;
(d) Registration Statement on Form N-1A under the 1940 Act and
the Securities Act of 1933, as amended from time to time (the "Registration
Statement"), as filed with the Commission, relating to the Trust and shares of
beneficial interest of each Fund and all amendments thereto;
(e) Notification of Registration of the Trust under the 1940 Act
on Form N-8A as filed with the Commission and all amendments thereto;
(f) Prospectus and Statement of Additional Information included
in the Registration Statement, as amended from time to time. All references to
this Agreement, the Prospectus and Statement of Additional Information shall be
to such documents as most recently amended or supplemented and in effect.
4. Directors, Officers and Employees
The Administrator shall authorize and permit any of its directors,
officers and employees who may be elected as trustees or officers of the Trust
and/or the Funds to serve in the capacities in which they are elected. All
services to be furnished by the Administrator under this Agreement may be
furnished through such directors, officers or employees of the Administrator.
5. Records
The Administrator agrees that all records which it maintains for the
Trust and/or the Funds are property of the Trust and/or the Funds. The
Administrator will surrender promptly to the Trust and/or the Funds of any such
records upon either the Trust's or the Fund's request. The Administrator further
agrees to preserve such records for the periods prescribed in Rule 31a-2 of the
Commission under the 1940 Act.
6. Compensation
In consideration of the services rendered pursuant to Section 2.A.
of this Agreement, the Funds will pay the Administrator a fee, computed and
accrued daily and payable monthly, at an annual rate of 0.10% of each Fund's
average daily net assets. For the purpose of determining fees payable to the
Administrator, the value of a Fund's average daily net assets shall be computed
at the times and in the manner specified in the Prospectus and Statement of
Additional Information of the Fund as from time to time in effect.
In consideration of the services rendered pursuant to Section 2.B.
of this Agreement, the Administrator shall receive a fee of $5.00 per year per
account of each beneficial holder of shares in a Fund, which shall be payable no
later than January 31 of the following year.
<PAGE>
7. Expenses
The Administrator will bear all expenses in connection with the
performance of its services under this Agreement, except that the Administrator
will be reimbursed by the Funds for the out-of-pocket costs incurred in
connection with this Agreement or by third parties who are performing services
as permitted by paragraph 2. The Funds will bear certain other expenses to be
incurred in their operation, including: taxes, interest, brokerage fees and
commissions, if any; fees of Trustees of the Trust who are not officers,
directors, or employees of the Adviser or Administrator; Securities and Exchange
Commission fees and state blue sky qualification fees; charges of custodians and
transfer and dividend disbursing agents; certain insurance premiums; outside
auditing and legal expenses; cost of maintenance of the Funds' existence; cost
attributable to investor services, including without limitation, telephone and
personnel expenses; charges of accounting, internal auditing, and pricing of
portfolio securities for the Funds, including the charges of an independent
pricing service; costs of preparing and printing prospectuses and statements of
additional information for regulatory purposes and for distribution to existing
shareholders; costs of shareholders' reports and meetings of the shareholders of
the Funds and of the officers or Board of Trustees of the Trust; and any
extraordinary expenses.
8. Reimbursement to the Funds
If in any fiscal year, the aggregate expense of the Funds (including
fees pursuant to this Agreement and the Funds' investment advisory agreement,
but excluding interest, taxes, brokerage and extraordinary expenses) exceed the
expense limitations of any state having jurisdiction over the Funds, the
Administrator will reduce its fees or reimburse the Funds for such excess
expense in the same proportion as its administration fee bears to the Funds'
combined fee for investment advice and administration. The expense reimbursement
obligation of the Administrator will be limited to the amount of its fees
received pursuant to this Agreement. Such fee reduction or reimbursement, if
any, will be estimated, reconciled and paid on a monthly basis.
9. Standard of Care
The Administrator shall exercise its best judgement in rendering the
services under this Agreement. The Administrator shall not be liable for any
error or judgement or mistake of law or for any loss suffered by the Funds or
the Funds' shareholders in connection with the matters to which this Agreement
relates, provided that nothing herein shall be deemed to protect or purport to
protect the Administrator against liability to the Funds or to their
shareholders to which the Administrator would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of its Administrator's reckless disregard
of its obligations and duties under this Agreement. As used in this Section 9,
the term "Administrator" shall include any officers, directors, employees, or
other affiliates of the Administrator performing services with respect to the
Funds.
<PAGE>
10. Duration and Termination
This Agreement shall continue in effect unless sooner terminated as
provided herein, for two years from the date hereof and shall continue from year
to year thereafter, provided each continuance is specifically approved at least
annually by a majority of the Board of Trustees of the Trust, including a
majority of the Board of Trustees who are not "interested persons" (as defined
in the 1940 Act) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting such approval. This Agreement is
terminable, without penalty, on 60 days' written notice by the Board of Trustees
of the Trust or by vote of holders of a majority of the Funds' shares, or upon
90 days' written notice by the Administrator.
11. Service to Other Companies or Accounts
The administrative services of the Administrator to the Funds under
this Agreement are not to be deemed exclusive, and the Administrator, or any
affiliate thereof, shall be free to render similar services to other investment
companies and other clients (whether or not their investment objectives and
policies are similar to those of the Funds) and to engage in other activities,
so long as its services hereunder are not impaired thereby.
12. Assignment
This Agreement may be assigned by either party only upon the prior
written consent of the other party.
13. Miscellaneous
(a) This Agreement constitutes the full and complete
agreement of the parties hereto with respect to the subject matter hereof.
(b) Titles or captions of Sections contained in this
Agreement are inserted only as a matter of convenience and for reference, and in
no way define, limit, extend or describe the scope of this Agreement or the
intent of any provisions thereof.
(c) This Agreement may be executed in several
counterparts, all of which together shall for all purposes constitute one
Agreement, binding on all the parties.
(d) This Agreement and the rights and obligations of the
parties hereunder shall be governed by, and interpreted, construed and enforced
in accordance with the laws of the State of Connecticut.
(e) If any provisions of this Agreement or the
application thereof to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid or unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstance, other than those as to which it is determined to be
invalid or
<PAGE>
unenforceable, shall not be affected thereby, and each provision hereof shall be
valid and shall be enforced to the fullest extent permitted by law.
(f) Notices of any kind to be given to the Administrator
by the Trust shall be in writing and shall duly given if mailed or delivered to
the Administrator at Two Pickwick Plaza, Greenwich, Connecticut 06830, or at
such other address or to such individual as shall be specified by the
Administrator to the Trust.
(g) The Administrator, the Trust and the Funds each
agree that the name "Northstar" is proprietary to, and a property right of, the
Administrator. The Trust and the Funds agree and consent that (i) each will only
use the name "Northstar" as part of its name and for no other purpose, (ii) each
will not purport to grant any third party the right to use the name "Northstar"
and (iii) upon the termination of this Agreement, the Trust and the Funds shall,
upon the request of the Administrator, cease to use the name "Northstar," and
shall use its best efforts to cause its officers, trustees and shareholders to
take any and all actions which the Administrator may request to effect the
foregoing.
(h) The Declaration of Trust, establishing the Trust,
dated August 18, 1993, a copy of which, together with all amendments thereto
(the "Declaration"), is on file in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name "NWNL Northstar Series
Trust" refers to the Trustees under the Declaration collectively as trustees,
but not individually or personally; and no Trustee, shareholder, officer,
employee or agent of the Trust and/or the Funds may be held to any personal
liability, nor may resort be had to their private property for the satisfaction
of any obligation or claim or otherwise in connection with the affairs of the
Trust, but the Trust property only shall be liable.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below on the day and year above
written.
Attest: NORTHSTAR TRUST
By:_________________________________ By:____________________________
Attest: NORTHSTAR ADMINISTRATORS
CORPORATION
By:_________________________________ By:____________________________
Dated: November 3, 1993
As Amended: January 23, 1997
Exhibit 15
NORTHSTAR TRUST
DISTRIBUTION AND SERVICE PLAN
As Amended January 23, 1997
The following is the Distribution Plan (the "Plan") for Northstar Trust (the
"Trust") consisting of the series named on Schedule 1 hereto, as such schedule
may be revised from time to time (each, a "Fund").
1. In connection with the sale and promotion of the shares of each Fund and the
furnishing of services to the shareholders of each Fund, each Fund shall pay
Northstar Distributors, Inc. (the "Distributor"), or any successor authorized to
act as underwriter, in respect of each class set forth on Schedule 1 (each, a
"Class"), at the end of each month, an annual fee not to exceed the amount set
forth in Schedule 1. With respect to each Class, such expenditures may consist
of: (i) commissions to sales personnel for selling the applicable Class of
shares of the Funds;(ii) compensation, sales incentives and payments to sales,
marketing and service personnel relating to the applicable Class; (iii) payments
to broker-dealers and other financial institutions which have entered into
agreements with the Distributor in the form of the Dealer Agreement for
Northstar Affiliated Investment Companies for services rendered in connection
with the sale and distribution of the applicable Class of shares; (iv) payment
of expenses incurred in sales and promotional activities, including advertising
expenditures related to the applicable Class of shares; (v) the costs of
preparing and distributing promotional materials relating to the applicable
Class of shares; (vi) the cost of printing the Trust's Prospectus and Statement
of Additional Information for distribution to potential investors; and (vii)
such other similar services that the Trustees determine are reasonably
calculated to result in the sale of the applicable Class of shares; provided,
however, a portion of such amount paid to the Distributor, which portion shall
be equal to or less than .25% annually of the average daily net assets of the
Fund shares may be paid for reimbursing the costs of providing services to the
shareholder, including assistance in connection with inquiries related to
shareholder accounts (the "Service Fee").
Amounts paid or payable by each Fund under this Plan or any agreement with any
person or entity relating to the implementation of this Plan ("related
agreement") shall only be used to pay for, or reimburse payment for, the
distribution expenditures described in the preceding paragraph and shall, given
all surrounding circumstances, represent charges within the range of what would
have been negotiated at arm's-length as payment for the specific sales or
promotional services and activities to be financed hereunder and any related
agreement, as determined by the Trustees, in the exercise of reasonable business
judgment, in light of their fiduciary duties under state law and Sections 36(a)
and (b) of the Investment Company Act of 1940, as amended (the "Act") and based
upon appropriate business estimates and projections.
2. At least quarterly in each year that this Plan remains in effect, each Fund's
Principal Accounting Officer or Treasurer, or such other person authorized to
direct the disposition of monies paid or payable by each Fund, shall prepare and
furnish to the Trustees for their review, and the Trustees shall review, a
<PAGE>
written report complying with the requirements of Rule 12b-1 under the Act
regarding the amounts expended by each Fund under the Plan and the purposes for
which such expenditures were made.
3. This Plan shall not take effect until it, together with any related
agreements, have been approved (a) by a vote of at least the majority of the
Trustees, acting separately on behalf of each Fund, as well as a vote of at
least a majority of the Trustees, acting separately on behalf of each Fund, who
are not interested persons (as defined in the Act) of each Fund and who have no
direct or indirect financial interest in the operation of the Plan or in any
related agreements (the "Disinterested Trustees"), cast in person at a meeting
called for the purpose of voting on the Plan or any related agreements, and if
required under the 1940 Act (b) by a vote of at least a majority (as defined in
the Act) of the outstanding Class A shares of each Fund.
4. This Plan shall remain in effect for one year from the date of its execution
and may be continued thereafter if specifically approved at least annually by
vote of at least a majority of the Trustees, acting separately on behalf of each
Fund, as well as a majority of the Disinterested Trustees. As to each Class,
this Plan may be amended at any time, provided that (a) the Plan may not be
amended to increase materially the amount of the distribution fees or Service
Fees payable hereunder pursuant to in Paragraph 1 hereof without the approval of
at least a majority (as defined in the Act) of the outstanding shares of the
applicable Class and (b) all material amendments to this Plan must be approved
by a vote of the Trustees, acting separately on behalf of each Fund, and of the
Disinterested Trustees.
5. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons (as defined in the Act) shall be committed to the
discretion of the Disinterested Trustees then in office.
6. With respect to each Class, any related agreements shall be in writing and
each shall provide that (a) such agreement shall be subject to termination,
without penalty, by vote of a majority (as defined in the Act) of the
outstanding voting shares of the applicable Class on not more than 60' days'
written notice to any other party to the agreement; and (b) such agreement shall
terminate automatically in the event of its assignment.
7. With respect to each Class, this Plan may be terminated at any time by a vote
of a majority of the Disinterested Trustees, acting separately on behalf of each
respective Fund, or by vote of a majority (as defined in the Act) of the
outstanding voting shares of the applicable Class of each Fund. In the event
this Plan is terminated or otherwise discontinued with respect to a Fund, the
Fund no longer will be obligated to reimburse the Distributor for distribution
related expenses incurred under the Plan, unless payment by the Fund of all or
any of such unreimbursed expenses shall be specifically approved by the
Trustees, including a majority of the Disinterested Trustees, of the Funds.
8. The Funds shall preserve copies of this Plan and any related agreements and
all reports made pursuant to paragraph 2 hereof, and any information, estimates,
<PAGE>
projections and other materials that serve as a basis therefor, considered by
the Trustees, for a period of not less than six years from the date of this
Plan, or the agreements or reports, as the case may be, the first two years in
an easily accessible place.
9. The Declaration of Trust, establishing the Trust, dated August 18, 1993, a
copy of which together with all amendments thereto (the "Declaration") is on
file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name "Northstar Trust" refers to the Trustees under the
Declaration collectively as trustees, but not individually or personally; and no
Trustee, shareholder, officer, employee or agent of the Trust and/or the Funds
may be held to any personal liability, nor may resort be had to their private
property for the satisfaction of any obligation or claim or otherwise in
connection with the affairs of the Trust, but the Trust property only shall be
liable.
Dated: November 8, 1993
As Amended: January 23, 1997
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Name of Fund Maximum Class A Fee Maximum Class B Fee Maximum Class C Fee
- ----------------------------------------------------------------------------------------------------------------
<S> <C>
Northstar High Total Return Fund .30 of 1% 1.00% 1.00%
- ----------------------------------------------------------------------------------------------------------------
Northstar Income and Growth Fund .30 of 1% 1.00% 1.00%
- ----------------------------------------------------------------------------------------------------------------
Northstar Growth + Value Fund .30 of 1% 1.00% 1.00%
- ----------------------------------------------------------------------------------------------------------------
Northstar High Total Return Fund II .30 of 1% 1.00% 1.00%
- ----------------------------------------------------------------------------------------------------------------
Northstar International Value Fund .30 of 1% 1.00% 1.00%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
