SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. __)
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
Check the appropriate box:
( ) Preliminary Proxy Statement
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
( ) Confidential, for Use of the Commission Only (as permitted by Rule
14c-6(e)(2)
________________________________________________________________________________
Capital Management Investment Trust
________________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
(X) No fee required.
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined.):
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( ) Fee paid with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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<PAGE>
CAPITAL MANAGEMENT INVESTMENT TRUST
Capital Management Mid-Cap Fund
105 North Washington Street
Post Office Box 69
Rocky Mount, North Carolina 27802-0069
July 17, 2000
Dear Shareholder:
Capital Management Investment Trust ("Trust") and the Board of Trustees of the
Trust are asking Investor Shares shareholders to vote on the approval of a Plan
of Distribution Pursuant to Rule 12b-1 ("Proposed 12b-1 Plan") for the Investor
Shares of the Capital Management Mid-Cap Fund ("Mid-Cap Fund"). Because the
previous Amended and Restated Plan of Distribution Pursuant to Rule 12b-1 (the
"Previous 12b-1 Plan") lapsed on November 10, 1999 due to the Trust's Board of
Trustees being unable to meet in-person on one common date to approve the
continuation of the Previous 12b-1 Plan, it is necessary for you to approve the
Proposed 12b-1 Plan in order to continue a distribution plan for the Mid-Cap
Fund. If the Proposed 12b-1 Plan is approved, the Proposed Distribution Plan
will be reinstated at the previous annual rate of 0.75% of the average daily net
assets of the Mid-Cap Fund's Investor Shares. The continuation of a distribution
plan will allow the Fund to continue to market the Mid-Cap Fund to investors in
a variety of places. The Trust and the Board of Trustees of the Trust are also
asking each Investor Shares shareholder of the Mid-Cap Fund to vote on the
approval of the reimbursement of expenses that would otherwise be paid with
12b-1 fees and that have accrued at the rate of 0.75% of the Mid-Cap Fund's
Investor Shares' average daily net assets from the time the Previous 12b-1 Plan
expired, November 10, 1999, until approval of the Proposed 12b-1 Plan, which is
expected to occur at the August 17, 2000 meeting.
The Trust and the Board of Trustees are also asking the shareholders of the
Mid-Cap Fund to vote on the approval of an Investment Advisory Agreement
("Proposed Advisory Agreement"). The previous Investment Advisory Agreement
between the Trust and the Mid-Cap Fund's investment adviser ("Previous Advisory
Agreement") lapsed on November 10, 1999 due to the Trust's Board of Trustees
being unable to meet in-person on one common date to approve the continuation of
the Previous 12b-1 Plan. The approval of the Proposed Advisory Agreement will
allow shareholders of the Mid-Cap Fund to continue to receive the investment
advisory services from the Mid-Cap Fund's investment adviser, Capital Management
Associates, Inc.
As you review the enclosed materials, please keep in mind that the Proposed
12b-1 Plan is essentially the same as the Previous 12b-1 Plan and will not
result in an increase in the fees payable by the Mid-Cap Fund and its
shareholders. Similarly, you should keep in mind that the Proposed Advisory
Agreement is essentially the same as Previous Advisory Agreement and will not
result in an increase in the fees payable by the Mid-Cap Fund and its
shareholders.
THE BOARD OF TRUSTEES, INCLUDING THE TRUST'S INDEPENDENT TRUSTEES, HAS APPROVED
THE PROPOSALS AND RECOMMENDS THEM FOR YOUR APPROVAL.
If you have any questions about the proposals, please feel free to call me
directly at (212) 320-2033.
Sincerely,
Joseph A. Zock
President
Capital Management Associates, Inc.
<PAGE>
CAPITAL MANAGEMENT INVESTMENT TRUST
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
Capital Management Mid-Cap Fund
To the shareholders of the Capital Management Mid-Cap Fund.
A special meeting of the shareholders of the Mid-Cap Fund ("Mid-Cap Fund"), a
series of the Capital Management Investment Trust ("Trust"), will be held at the
offices of NC Shareholder Services (the Trust's Dividend Disbursing and Transfer
Agent), 107 North Washington Street, Rocky Mount, North Carolina, on Thursday,
August 17, 2000, at 10:00 a.m. for the purposes of:
1. Approving a Plan of Distribution Pursuant to Rule 12b-1 for the Mid-Cap
Fund's Investor Shares (only Investor Shares shareholders vote);
2. Approving the reimbursement of Rule 12b-1 fees for the period November 10,
1999 to August 17, 2000 (only Investor Shares shareholders vote);
3. Approving an Investment Advisory Agreement for the shareholders of the
Mid-Cap Fund (all shareholders vote); and
4. Transacting such other business as may properly come before the meeting.
Shareholders of record at the close of business on June 30, 2000 are entitled to
vote at the meeting.
For the Board of Trustees,
C. Frank Watson, III
Secretary
July 17, 2000
<PAGE>
* * * YOUR VOTE IS IMPORTANT * * *
PLEASE SIGN AND MAIL THE ENCLOSED PROXY CARD
PROXY STATEMENT
The Board of Trustees of the Capital Management Investment Trust ("Trust") is
soliciting proxies from the shareholders of the Capital Management Mid-Cap Fund
("Mid-Cap Fund") for use at a special meeting of shareholders to be held on
August 17, 2000, and at any adjournment of that meeting. A proxy may be revoked
at any time before it is voted, either in person or by written notice to the
Trust or by delivery of a later-dated proxy.
Shareholders of record of the Trust at the close of business on June 30, 2000
("Record Date") are entitled to participate in the meeting and to cast one vote
for each share held. As of the Record Date, the Mid-Cap Fund had 46,293.879 and
369,947.065 shares of beneficial interest outstanding of the Investor Shares and
Institutional Shares, respectively. The Mid-Cap Fund is one of two existing
series of the Trust. This proxy statement is first being mailed to shareholders
on or about July 17, 2000. Any shareholder who desires a copy of the previously
mailed Annual Report may obtain it upon request, without charge, by writing or
calling the Trust as indicated below:
Capital Management Mid-Cap Fund
c/o NC Shareholder Services, LLC
107 North Washington Street
Post Office Box 4365
Rocky Mount, North Carolina 27803-0365
Toll-Free Telephone: (888) 626-3863
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INTRODUCTION
Capital Management Associates, Inc. ("CMA"), 140 Broadway, New York, New York
10005, is the investment advisor ("Adviser") for the Mid-Cap Fund. Shields &
Company ("Distributor"), 140 Broadway, New York, New York 10005, is the Fund's
distributor. The Nottingham Company, 105 North Washington Street, Post Office
Box 69, Rocky Mount, North Carolina 27802-0069, is the Mid-Cap Fund's
administrator.
This proxy statement is furnished in connection with the solicitation by the
Board of Trustees ("Board") of the Capital Management Investment Trust with
respect to the Mid-Cap Fund, a series of the Trust, of proxies to be voted at
the Special Meeting of Shareholders ("Meeting") of the Mid-Cap Fund to be held
at the offices of NC Shareholder Services on August 17, 2000 at 10:00 a.m., and
at any adjournments thereof, for the purposes set forth in the accompanying
Notice of Special Meeting of Shareholders. Any such adjournment will require the
affirmative vote of a majority of the shares present in person or by proxy at
the Meeting. The persons named as proxies will vote in favor of any such
adjournment those proxies that instruct them to vote in favor of the proposals.
Conversely, they will vote against any such adjournment any proxies that
instruct them to vote against the proposals.
The Meeting is called for the purpose of:
1. Approving a Plan of Distribution
Pursuant to Rule 12b-1 for the Mid-Cap
Fund's Investor Shares;
2. Approving the reimbursement of Rule
12b-1 fees by the Mid-Cap Fund's
Investor Shares class for the period
November 10, 1999 to August 17, 2000;
3. Approving an Investment Advisory
Agreement for the shareholders of the
Mid-Cap Fund; and
4. Transacting such other business as may
properly come before the meeting.
1. APPROVAL OF DISTRIBUTION PLAN PURSUANT TO RULE 12b-1
As a result of an inadvertent failure of the Board to renew the 12b-1 Plan
("Previous 12b-1 Plan") under which the Mid-Cap Fund used a portion of its
assets to pay for, among other things, the promotion and distribution of the
Fund's Investor Shares, the Previous 12b-1 Plan lapsed on November 10, 1999.
Accordingly, pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended ("1940 Act"), Investor Shares shareholders of the Mid-Cap Fund are
required to approve the Proposed 12b-1 Plan, if they want the Mid-Cap Fund to
have a distribution plan.
On January 5, 2000, the Board of Trustees, including a majority of the Trustees
who are not interested persons of the Trust and have no direct or indirect
financial interest in the operation of the Proposed 12b-1 Plan or any agreement
related thereto ("Rule 12b-1 Trustees"), approved the Proposed 12b-1 Plan having
found that a Rule 12b-1 Plan would be in the best interest of the Mid-Cap Fund
and its Investor Shares shareholders. The following discussion is qualified in
its entirety by reference to the form of the Proposed 12b-1 Plan, a copy of
which is enclosed herewith as Exhibit A. The Proposed 12b-1 Plan is identical to
the Previous 12b-1 Plan that lapsed except that it will be effective as of
August 17, 2000. The Previous 12b-1 Plan was last approved by shareholders of
the Mid-Cap Fund Investor Shares on April 3, 1995.
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In considering whether to approve the Proposed 12b-1 Plan and recommend its
approval to Investor Shares shareholders of the Mid-Cap Fund, the Board
determined that the Proposed 12b-1 Plan was reasonably likely to benefit the
Mid-Cap Fund and its Investor Shares shareholders and was in the best interests
of the shareholders to approve the Proposed 12b-1 Plan. The Board identified and
considered a number of potential benefits from adoption of the Proposed 12b-1
Plan, including that the Proposed 12b-1 Plan is likely to assist the Mid-Cap
Fund in increasing its Investor Shares assets and that the lack of a Rule 12b-1
plan would likely adversely affect the asset level of the Mid-Cap Fund.
Increased assets could benefit the Mid-Cap Fund and its Investor Shares
shareholders by reducing the per share operating expenses of the Investor Shares
of the Mid-Cap Fund as the Fund's fixed expenses would be spread over a larger
asset base. The Board also believes that the Fund's Distributor would have
little or no incentive to incur promotional expenses on behalf of the Fund if
the Proposed 12b-1 Plan is not approved by shareholders.
The Proposed 12b-1 Plan authorizes payments by the Investor Shares of the
Mid-Cap Fund in connection with the distribution of those shares at an annual
rate, as determined from time to time by the Board, of up to 0.75% of the
average daily net assets of the Fund's Investor Shares. Payments will be accrued
daily and paid quarterly or at such other intervals as the Board may determine
and may be paid in advance of actual billing, based on estimates of actual
expenditures incurred during the period. Payments may be made in subsequent
years for expenses incurred in prior years if such payment is separately
authorized by the Board. The Board, however, has no legal obligation to
authorize such payments in the future and thus may not authorize them.
Payments may be made by the Mid-Cap Fund under the Proposed 12b-1 Plan for the
purpose of financing any activity primarily intended to result in the sale of
the Investor Shares of the Fund, as determined by the Board. Such activities
typically include: advertising; compensation for sales and marketing activities
of the Distributor and banks, broker-dealers and service providers; shareholder
account servicing; production and dissemination of prospectus and sales and
marketing materials; and capital or other expenses of associated equipment, rent
salaries, bonuses, interest and other overhead. To the extent any activity is
one that the Fund may finance without a plan of distribution, the Fund may also
make payments to finance such activity outside of the Proposed 12b-1 Plan, which
payments would not be subject to its limitations.
The Proposed 12b-1 Plan of the Mid-Cap Fund will be implemented by a written
agreement between the Fund and the Distributor. Administration of the Proposed
12b-1 Plan is regulated by Rule 12b-1 under the 1940 Act, which requires that
the Board receive and review, at least quarterly, reports concerning the nature
and qualification of expenses for which payments are made and that the Board
approve all agreements relating to the Proposed 12b-1 Plan. The Proposed 12b-1
Plan, or any agreement related thereto, may be terminated, by either a majority
of the Rule 12b-1 Trustees or by a vote of a majority of the outstanding voting
securities of the Investor Shares class of the Fund.
2. APPROVAL OF REIMBURSEMENT OF RULE 12b-1 FEES
The Board has approved, subject to approval of the Proposed 12b-1 Plan by
Investor Shares shareholders, reimbursement of expenses that would otherwise be
paid with 12b-1 fees, at the rate of 0.75% of the Mid-Cap Fund's Investor
Shares' average daily net assets through August 17, 2000. If the Proposed 12b-1
Plan and reimbursement of Rule 12b-1 fees are approved by Investor Shares
shareholders of the Mid-Cap Fund, the Mid-Cap Fund will reimburse or pay the
Distributor an estimated $5,519 in accrued Rule 12b-1 fees for the period
November 10, 1999 through August 17, 2000. For the portion of the fiscal year
ended November 30, 1999 during which the Previous 12b-1 Plan was in effect, the
Distributor received from the Mid-Cap Fund $10,519, pursuant to such Previous
12b-1 Plan.
THE BOARD OF TRUSTEES, INCLUDING A MAJORITY OF THE RULE 12b-1 TRUSTEES, OF THE
TRUST HAS UNANIMOUSLY APPROVED PROPOSALS NO. 1 AND NO. 2 AND RECOMMENDS THEM FOR
YOUR APPROVAL.
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3. APPROVAL OF INVESTMENT ADVISORY AGREEMENT
As a result of an inadvertent failure of the Board to renew the investment
advisory agreement between the Trust and CMA, with respect to the Mid-Cap Fund
("Previous Advisory Agreement"), under which CMA provided advisory services to
the Mid-Cap Fund, the Previous Advisory Agreement lapsed on November 10,1999.
Accordingly, if shareholders want CMA to continue to provide investment advisory
services to the Fund, in compliance with the requirements in Section 15(a) of
the 1940 Act, shareholders of the Mid-Cap Fund are required to approve the
Proposed Advisory Agreement between the Trust and CMA. The Previous Advisory
Agreement, with respect to the Mid-Cap Fund, was last approved by shareholders
on December 30, 1994.
On January 5, 2000, the Board of Trustees, including a majority of the Trustees
who are not parties to the Proposed Advisory Agreement or interested persons of
any such party ("Independent Trustees"), approved the Proposed Advisory
Agreement after determining that the Agreement would be in the best interest of
the Mid-Cap Fund and its shareholders. The following discussion is qualified in
its entirety by reference to the form of the Proposed Advisory Agreement, a copy
of which is enclosed herewith as Exhibit B.
The terms of the Proposed Advisory Agreement, including the fees payable to CMA,
are identical to the Previous Advisory Agreement that lapsed on November
10, 1999, with respect to the Mid-Cap Fund. As required by the 1940 Act, the
Proposed Advisory Agreement provides for its automatic termination in the event
of its assignment. The Proposed Advisory Agreement, if approved by shareholders,
will be in effect for an initial two year term ending August 17, 2002.
Thereafter, the Proposed Advisory Agreement may continue, in effect, so long as
its continuance is approved at least annually by (a) the Board of Trustees of
the Trust or a vote of a "majority of the outstanding voting securities" of the
Mid-Cap Fund, as defined in the1940 Act, and, in either event, (b) the vote of a
majority of the Independent Trustees, cast in person, at a meeting called for
such purpose.
Under the Proposed Advisory Agreement, and subject to the authority of the
Trustees, CMA will provide guidance and policy direction and will manage the day
to day investment and reinvestment of the Mid-Cap Fund's assets. Under the
Proposed Advisory Agreement, CMA is also responsible for the selection of
broker-dealers through which the Mid-Cap Fund executes portfolio transactions,
subject to the brokerage policies established by the Trustees. CMA also provides
certain executive personnel to the Mid-Cap Fund.
As full compensation for the investment advisory services provided to the
Mid-Cap Fund under the Proposed Advisory Agreement, the Mid-Cap Fund will pay
CMA monthly compensation based on the Mid-Cap Fund's daily average net assets at
the annual rate of 1.00% of the first $100 million of the Mid-Cap Fund's net
assets, 0.90% of the next $150 million, 0.85% of the next $250 million, and
0.80% of all assets over $500 million. For the fiscal year ended November 30,
1999, CMA waived all of its advisory fees with respect to the Mid-Cap Fund.
During the period since the lapse of the Previous Advisory Agreement, November
10, 1999, CMA has continued to provide the same investment advisory services to
the Mid-Cap Fund as prior to the lapse of the Previous Advisory Agreement and
has not received any advisory fees or other compensation from the Mid-Cap Fund
for those services.
In considering the Proposed Advisory Agreement, the Board took into account the
services to be provided under the Agreement, and the fees and expenses payable
by the Mid-Cap Fund, as well as the Expense Limitation Agreement between the
Trust, on behalf of the Mid-Cap Fund, and CMA, which is described directly
below. The Board also considered a number of other factors including the
investment advisory fees and expense ratios of the Mid-Cap Fund and competitive
mutual funds.
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In the interest of limiting expenses of the Mid-Cap Fund, CMA has entered into
an expense limitation agreement with the Trust, with respect to the Mid-Cap Fund
("Expense Limitation Agreement"), pursuant to which CMA has agreed to waive or
limit its fees and to assume other expenses so that the total annual operating
expenses of the Mid-Cap Fund (other than interest, taxes, brokerage commissions,
other expenditures which are capitalized in accordance with generally accepted
accounting principles, other extraordinary expenses not incurred in the ordinary
course of the Mid-Cap Fund's business, and amounts, if any, payable pursuant to
a Rule 12b-1 Plan) are limited to 1.50% of the average daily net assets of each
class of shares of the Mid-Cap Fund for the fiscal year ending November 30,
2000. The Expense Limitation Agreement shall continue from year-to-year
thereafter provided such continuance is specifically approved by a majority of
the Trustees of the Trust who (i) are not "interested persons" of the Trust or
any other party to this agreement, as defined in the 1940 Act, and (ii) have no
direct or indirect financial interest in the operation of the Expense Limitation
Agreement. The Mid-Cap Fund may, at a later date, reimburse CMA the management
fees waived or limited and other expenses assumed and paid by CMA pursuant to
the Expense Limitation Agreement during any of the previous five (5) fiscal
years, provided the Mid-Cap Fund has reached a sufficient asset size to permit
such reimbursement to be made without causing the total annual expense ratio of
the Mid-Cap Fund to exceed the percentage limits stated above. Consequently, no
reimbursement by the Mid-Cap Fund will be made unless: (i) the Mid-Cap Fund's
assets exceed $10 million; (ii) the Mid-Cap Fund's total annual expense ratio is
less than the percentage stated above; and (iii) the payment of such
reimbursement has been approved by the Trust's Board of Trustees on a quarterly
basis.
As a result of its review and consideration of these matters, the Board voted to
approve the Proposed Advisory Agreement and to recommend it to shareholders of
the Mid-Cap Fund for their approval of the Proposed Advisory Agreement.
THE BOARD OF TRUSTEES, INCLUDING A MAJORITY OF THE INDEPENDENT TRUSTEES, OF THE
TRUST HAS UNANIMOUSLY APPROVED PROPOSAL NO. 3 AND RECOMMENDS IT FOR YOUR
APPROVAL.
4. OTHER MATTERS
Management is not aware of any other matters that will come before the meeting.
If any other business should come before the meeting, however, your proxy, if
signed and returned, will give discretionary authority to the persons designated
in it to vote according to their best judgment.
Executive Officers of the Trust. The officers of the Trust, their principal
occupations during the past five years, other business affiliations and ages as
of March 31, 2000, are set forth below:
-------------------------- --------------- -------------------------------------
Position(s)
Name (Age) with Trust Principal Occupation(s)
-------------------------- --------------- -------------------------------------
Joseph A. Zock, 46 Vice-President Managing Director
Capital Management Associates, Inc.
(Adviser to the Fund)
New York, New York
-------------------------- --------------- -------------------------------------
C. Frank Watson, III, 29 Secretary President and Chief Operating Officer
The Nottingham Company
(Administrator to the Fund)
Rocky Mount, North Carolina
-------------------------- --------------- -------------------------------------
Julian G. Winters, 31 Treasurer Legal and Compliance Director
The Nottingham Company
(Administrator to the Fund)
Rocky Mount, North Carolina since
1996; previously Operations Manager,
Tar Heel Medical,
Nashville, North Carolina
-------------------------- --------------- -------------------------------------
5
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Capital Management Associates, Inc. CMA, organized as a New York corporation in
1982, is controlled by its officers and directors, with the principal
shareholders being J.V. Shields, Jr., David V. Shields; and Joseph A. Zock. Mr.
Zock and seven full-time analysts serve as the Portfolio Management Team that
selects the investments for the Mid-Cap Fund. The Shields brothers and Mr. Zock
have been affiliated with CMA since 1982. CMA has been managing the Mid-Cap Fund
since its inception and has been providing investment advice to investment
companies, individuals, corporations, pension and profit-sharing plans,
endowments, and other business and private accounts since 1982. CMA currently
has approximately $1 billion in assets under management. The employees of CMA
control CMA. Affiliates of CMA also control the Distributor, Shields & Company.
The name and address of the principle executive officer and each director of CMA
is set forth in the table below:
Name and Address* Principal Occupation
================ ====================
Joseph V. Shields, Jr. Chairman, Director
Joseph A. Zock Managing Director, Treasurer
Dimitri H. Kuriloff Senior Vice President
David V. Shields Director
* Unless otherwise indicated, the address of each person noted
above is that of CMA, 140 Broadway, New York, New York 10005.
Brokerage Practices. In selecting brokers and dealers to execute portfolio
transactions, CMA may consider research and brokerage services furnished to CMA
or its affiliates. Subject to seeking the most favorable net price and execution
available, CMA may also consider sales of shares of the Mid-Cap Fund as a factor
in the selection of brokers and dealers. Certain securities trades will be
cleared through Shields & Company, a registered broker-dealer affiliate of CMA
and the Distributor of the Fund. The 1940 Act generally prohibits the Mid-Cap
Fund from engaging in principal securities transactions with an affiliate of
CMA. Thus, the Mid-Cap Fund does not engage in principal transactions with any
affiliate of CMA. However, the Fund has adopted procedures, pursuant to Rule
17e-1 under the 1940 Act, that are reasonably designed to ensure that any
brokerage commission the Fund pays to an affiliate of CMA does not exceed the
usual and customary broker's commission. In addition, the Fund will adhere to
Section 11(a) of the Securities Exchange Act of 1934, as amended ("1934 Act")
and any applicable rules thereunder governing floor trading. During the most
recently completed fiscal year, the aggregate amount of commissions paid to the
Distributor was $29,212 for the Mid-Cap Fund. As a percentage of aggregate
brokerage commissions paid, the Mid-Cap Fund paid 100% to the Distributor.
Principal Shareholders. As of June 30, 2000, the following persons were known by
the Trust to own beneficially five percent (5%) or more of the outstanding
shares of the Mid-Cap Fund, as determined in accordance with Rule 13d-3 under
the 1934 Act:
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Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent
=================== ===================== =======
Institutional Shares
--------------------
BT Alex Brown, Inc. 136,253.471 shares 36.831%*
FBO 873-20604-16
P.O. Box 1346
Baltimore, Maryland 21203
BT Alex Brown, Inc. 32,895.321 shares 8.892%
FBO 874-21261-16
P.O. Box 1346
Baltimore, Maryland 21203
BT Alex Brown, Inc. 32,895.321 shares 8.892%
FBO 874-21262-15
P.O. Box 1346
Baltimore, Maryland 21203
BT Alex Brown, Inc. 26,766.123 shares 7.235%
FBO 876-01389-10
P.O. Box 1346
Baltimore, Maryland 21203
BT Alex Brown, Inc. 21,353.901 shares 5.772%
FBO 876-01174-19
P.O. Box 1346
Baltimore, Maryland 21203
BT Alex Brown, Inc. 19,872.711 shares 5.372%
FBO 876-01128-16
P.O. Box 1346
Baltimore, Maryland 21203
Investor Shares
---------------
BT Alex Brown, Inc. 4,691.318 shares 10.134%
FBO 873-22426-18
P.O. Box 1346
Baltimore, Maryland 21203
BT Alex Brown, Inc. 3,133.496 shares 6.769%
FBO J. Kelly
P.O. Box 1346
Baltimore, Maryland 21203
BT Alex Brown, Inc. 3,063.338 shares 6.617%
FBO 873-23548-19
P.O. Box 1346
Baltimore, Maryland 21203
* Deemed a "control person" of the Fund under the 1940 Act.
Solicitation of Proxies. Proxies will be solicited by the Board, and the cost of
solicitation will be paid by CMA. Additional solicitation may be made by mail,
personal interview, telephone, and telegraph by personnel of CMA or the
Distributor who will not receive any additionally compensation for such
activities.
Shareholder Proposals. The Trust does not hold regular or annual meetings of its
shareholders. Proposals of shareholders that are intended to be presented at a
future shareholders' meeting must be received by the Trust by a reasonable time
prior to the Trust's solicitation of proxies relating to such future meeting.
Shareholder proposals must meet certain requirements, and there is no guarantee
that any proposal will be presented at a shareholder's meeting.
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Annual Report. The Trust's Annual Report to shareholders of the Mid-Cap Fund for
the fiscal year ended November 30, 1999, was mailed to shareholders on January
24, 2000. Any shareholder who desires an additional copy of the Annual Report
may obtain it upon request (without charge) by contacting NC Shareholder
Services, 107 North Washington Street, Post Office Box 4365, Rocky Mount, North
Carolina, 27803-0365, or by calling (888) 626-3863.
Quorum Voting. With respect to each item to be voted on, the holders of a
majority of the shares issued and outstanding and entitled to vote concerning
each item, present in person or represented by proxy, shall be required to
constitute a quorum of the Meeting for the transaction of business. If such
quorum is not present or represented by proxy at the Meeting, the shareholders
entitled to vote, present in person or represented by proxy, may adjourn the
Meeting from time to time without notice other than announcement at the meeting,
until a quorum is present or represented. At such adjourned meeting at which a
quorum is present or represented, any business may be transacted which might
have been transacted at the Meeting as originally notified. The persons named as
proxies will vote in favor of any such adjournment if they determine that such
adjournment and additional solicitation are reasonable and in the interest of
the shareholders of the Mid-Cap Fund.
Each valid proxy will be voted in accordance with the instructions on the proxy
and as the persons named in the proxy determine on such other business as may
come before the meeting. If no instructions are given on the proxy (but the
proxy is executed), it will be voted "FOR" the each of the items. Voting
instructions given by telephone or electronically transmitted instruments may be
counted if obtained pursuant to procedures designed to verify that such
instructions have been authorized. Any shareholder may revoke his or her proxy
at any time prior to exercise thereof by giving written notice to the Secretary
of the Trust at the offices of The Nottingham Company at 105 North Washington
Street, Post Office Box 69, Rocky Mount, North Carolina 27801-0069, or by
signing another proxy of a later date and submitting the later proxy before the
Meeting or by personally casting his or her vote at the Meeting.
Required Vote. Items No. 1 and No. 2 must be approved by a "majority of the
outstanding voting securities" of the Mid-Cap Fund's Investor Shares, which
means the affirmative vote of the lesser of: (i) a majority of the outstanding
Investor Shares of the Mid-Cap Fund, or (ii) 67% of the shares of the Investor
Shares of the Mid-Cap Fund, voting at the Meeting, provided a majority of such
shares are present in person or by proxy at the Meeting. Items No. 1 and No. 2
only apply to the shareholders of the Investor Shares of the Fund.
Item No. 3 must be approved by a "majority of the outstanding voting securities"
of Mid-Cap Fund, which means the affirmative vote of the lesser of: (i) a
majority of the outstanding shares of the Mid-Cap Fund or (iii) 67 % of the
shares of the Mid-Cap Fund voting at the Meeting, provided a majority of the
shares are present in person or by proxy at the Meeting.
In tallying shareholder votes, abstentions and "broker non-votes" (i.e. shares
held by brokers or nominees as to which (i) instructions have not been received
from the beneficial owners or person entitled to vote and (ii) the broker or
nominee does not have discretionary voting power on a particular matter) will be
counted for purposes of determining whether a quorum is present for purposes of
convening the Meeting. Abstentions and broker non-votes will be considered to be
both present at the Meeting and issued and outstanding and, as a result, will
have the effect of being counted as voted against the Items.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
BY ORDER OF THE BOARD OF TRUSTEES:
C. Frank Watson, III
Secretary
8
<PAGE>
EXHIBIT A
---------
FORM OF PROPOSED AMENDED AND RESTATED
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
CAPITAL MANAGEMENT MID-CAP FUND
WHEREAS, Capital Management Investment Trust, an unincorporated business trust
organized and existing under the laws of the Commonwealth of Massachusetts (the
"Trust"), engages in business as an open-end management investment company and
is registered as such under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust is authorized to issue an unlimited number of shares of
beneficial interest (the "Shares"), in separate series representing the
interests in separate funds of securities and other assets; and
WHEREAS, the Trust offers a series of such Shares representing interests in the
CAPITAL MANAGEMENT MID-CAP FUND as listed in Appendix A (the "Fund") of the
Trust;
WHEREAS, the Trustees of the Trust as a whole, and the Trustees who are not
interested persons of the Trust (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement relating hereto (the "Non-Interested Trustees"), having determined, in
the exercise of reasonable business judgment and in light of their fiduciary
duties under state law and under Section 36(a) and (b) of the 1940 Act, that
there is a reasonable likelihood that this Plan will benefit the Fund and its
shareholders, have approved this Plan by votes cast at a meeting held in person
and called for the purpose of voting hereon and on any agreements related
hereto; and
NOW, THEREFORE, the Trust hereby adopts this Plan in accordance with Rule 12b-1
under the 1940 Act, on the following terms and conditions:
1. Distribution and Servicing Activities. Subject to the supervision of
the Trustees of the Trust, the Trust may, directly or indirectly, engage in any
activities primarily intended to result in the sale of Investor Class Shares of
the Fund, which activities may include, but are not limited to, the following:
(a) payments to the Trust's Distributor and to securities dealers and others in
respect of the sale of Investor Class Shares of the Fund; (b) payment of
compensation to and expenses of personnel (including personnel of organizations
with which the Trust has entered into agreements related to this Plan) who
engage in or support distribution of Investor Class Shares of the Fund or who
render shareholder support services not otherwise provided by the Trust's
transfer agent, administrator, or custodian, including but not limited to,
answering inquiries regarding the Trust, processing shareholder transactions,
providing personal services and/or the maintenance of shareholder accounts,
providing other shareholder liaison services, responding to shareholder
inquiries, providing information on shareholder investments in the Fund, and
providing such other shareholder services as the Trust may reasonably request;
(c) formulation and implementation of marketing and promotional activities,
including, but not limited to, direct mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (d) preparation, printing
and distribution of sales literature; (e) preparation, printing and distribution
of prospectuses and statements of additional information and reports of the
Trust for recipients other than existing shareholders of the Trust; and (f)
obtaining such information, analyses and reports with respect to marketing and
promotional activities as the Trust may, from time to time, deem advisable. The
Trust is authorized to engage in the activities listed above, and in any other
activities primarily intended to result in the sale of Investor Class Shares of
the Fund, either directly or through other persons with which the Trust has
entered into agreements related to this Plan.
<PAGE>
2. Maximum Expenditures. The expenditures to be made by the Fund
pursuant to this Plan and the basis upon which payment of such expenditures will
be made shall be determined by the Trustees of the Trust, but in no event may
such expenditures exceed an amount calculated at the rate of 0.75% per annum of
the average daily net asset value of the Investor Class Shares of the Fund for
each year or portion thereof included in the period for which the computation is
being made, elapsed since the inception of this Plan to the date of such
expenditures. Notwithstanding the foregoing, in no event may such expenditures
paid by the Fund as service fees exceed an amount calculated at the rate of
0.75% of the average annual net assets of the Shares of the Fund, nor may such
expenditures paid as service fees to any person who sells Shares of the Fund
exceed an amount calculated at the rate of 0.25% of the average annual net asset
value of such shares. Such payments for distribution and shareholder servicing
activities may be made directly by the Trust or to other persons with which the
Trust has entered into agreements related to this Plan.
3. Term and Termination. (a) This Plan shall become effective for the
Fund with respect to its Investor Class Shares as specified in Appendix A
hereof. Unless terminated as herein provided, this Plan shall continue in effect
for one year from the effective date of the Plan for the Fund with respect to
its Investor Class Shares as specified in Appendix A hereof and shall continue
in effect for successive periods of one year thereafter, but only so long as
each such continuance is specifically approved by votes of a majority of both
(i) the Trustees of the Trust and (ii) the Non-Interested Trustees, cast at a
meeting called for the purpose of voting on such approval.
(b) This Plan may be terminated at any time with respect to the Fund by
a vote of a majority of the Non-Interested Trustees or by a vote of a majority
of the outstanding voting securities of the Fund as defined in the 1940 Act.
4. Amendments. This Plan may not be amended to increase materially the
maximum expenditures permitted by Section 2 hereof unless such amendment is
approved by a vote of the majority of the outstanding voting securities of the
Fund as defined in the 1940 Act with respect to which a material increase in the
amount of expenditures is proposed, and no material amendment to this Plan shall
be made unless approved in the manner provided for annual renewal of this Plan
in Section 3(a) hereof.
5. Selection and Nomination of Trustees. While this Plan is in effect,
the selection and nomination of the Non-Interested Trustees of the Trust shall
be committed to the discretion of such Non-Interested Trustees.
6. Quarterly Reports. The Treasurer of the Trust shall provide to the
Trustees of the Trust and the Trustees shall review quarterly a written report
of the amounts expended pursuant to this Plan and any related agreement and the
purposes for which such expenditures were made.
7. Recordkeeping. The Trust shall preserve copies of this Plan and any
related agreement and all reports made pursuant to Section 6 hereof, for a
period of not less than six years from the date of this Plan. Any such related
agreement or such reports for the first two years will be maintained in an
easily accessible place.
8. Limitation of Liability. Any obligations of the Trust hereunder
shall not be binding upon any of the Trustees, officers or shareholders of the
Trust personally, but shall bind only the assets and property of the Trust. The
term "Capital Management Investment Trust" means and refers to the Trustees from
time to time serving under the Agreement and Declaration of Trust of the Trust,
a copy of which is on file with the Secretary of The Commonwealth of
Massachusetts. The execution of this Plan has been authorized by the Trustees,
and this Plan has been signed on behalf of the Trust by an authorized officer of
the Trust, acting as such and not individually, and neither such authorization
by such Trustees nor such execution by such officer shall be deemed to have been
made by any of them individually or to impose any liability on any of them
personally, but shall bind only the assets and property of the Trust as provided
in the Agreement and Declaration of Trust.
2
<PAGE>
APPENDIX A
----------
The Effective Date of the Amended and Restated Plan of Distribution
Pursuant to Rule 12b-1 with respect to the Investor Class Shares of the Fund
shall be the later of either the date specified below or the date the Fund
commenced operations, whichever is later:
----------------------------------- -------------------------------------------
Fund Date Added to the Agreement
---- ---------------------------
----------------------------------- -------------------------------------------
Capital Management Mid-Cap Fund
Investor Class Shares o April 7, 1995
o Re-approved by shareholders of the Capital
Management Mid-Cap Fund Investor Class
Shares: August 17, 2000
----------------------------------- --------------------------------------------
3
<PAGE>
EXHIBIT B
---------
FORM OF AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, dated as of August 17, 2000 between CAPITAL MANAGEMENT
INVESTMENT TRUST (the "Trust"), a Massachusetts Business Trust, and CAPITAL
MANAGEMENT ASSOCIATES, INC., a New York corporation (the "Advisor"), registered
as an investment advisor under the Investment Advisors Act of 1940, as amended
(the "Advisors Act").
WHEREAS, the Trust is registered as an open-end management investment company of
the series type under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Trust desires to retain the Advisor to furnish investment advisory
and administrative services to the series of the Trust as described in the
attached Schedule A to this Agreement (each a "Fund"), and the Advisor is
willing to furnish such services;
NOW, THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints the Advisor to act as Investment
Advisor to each Fund for the period and on the terms set forth in this
Agreement. The Advisor accepts such appointment and agrees to furnish
the services set forth herein, for the compensation provided in the
attached Schedule A.
2. Delivery of Documents. The Trust has furnished the Investment Advisor
with copies properly certified or authenticated of each of the
following:
(a) The Trust's Declaration of Trust, as filed with the Commonwealth
of Massachusetts (the "Declaration");
(b) The Trust's By-Laws (the "By-Laws");
(c) Resolutions of the Trust's Board of Trustees and the resolution
approved by a majority of the outstanding shares of the Fund
authorizing the appointment of the Advisor and approving this
Agreement;
(d) The Trust's Registration Statement on Form N-1A under the 1940
Act and under the Securities Act of 1933 as amended, (the "1933
Act"), relating to shares of beneficial interest of the Fund
(the "Shares") as filed with the Securities and Exchange
Commission ("SEC") and all amendments thereto;
(e) The Fund's Prospectus (the "Prospectus").
The Trust will furnish the Advisor from time to time with copies,
properly certified or authenticated, of all amendments of or
supplements to the foregoing at the same time as such documents are
required to be filed with the SEC.
3. Management. Subject to the supervision of the Trust's Board of
Trustees, the Advisor will provide a continuous investment program for
the Fund, including investment research and management with respect to
all securities, investments, cash and cash equivalents in the Fund. The
Advisor will determine from time to time what securities and other
investments will be purchased, retained or sold by the Fund. The
Advisor will provide the services under this Agreement in accordance
with the Fund's investment objectives, policies and restrictions as
stated in its Prospectus. The Advisor further agrees that it:
<PAGE>
(a) Will conform its activities to all applicable Rules and
Regulations of the Securities and Exchange Commission and will,
in addition, conduct its activities under this Agreement in
accordance with regulations of any other Federal and State
agencies that may now or in the future have jurisdiction over
its activities under this Agreement;
(b) Will place orders pursuant to its investment determinations for
the Fund either directly with the issuer or with any broker or
dealer. In placing orders with brokers or dealers, the Advisor
will attempt to obtain the best net price and the most favorable
execution of its orders. Consistent with this obligation, when
the Advisor believes two or more brokers or dealers are
comparable in price and execution, the Advisor may prefer: (i)
brokers and dealers who provide the Fund with research advice
and other services, or who recommend or sell Trust shares, and
(ii) brokers who are affiliated with the Fund or its Advisor;
provided, however, that in no instance will portfolio securities
be purchased from or sold to the Advisor or any affiliated
person of the Advisor in principal transactions;
(c) Will provide certain executive personnel for the Fund as may be
mutually agreed upon from time to time with the Board of
Trustees, the salaries and expenses of such personnel to be
borne by the Advisor unless otherwise mutually agreed upon; and
(d) Will provide, at its own cost, all office space, facilities and
equipment necessary for the conduct of its advisory activities
on behalf of the Fund.
4. Services Not Exclusive. The advisory services furnished by the Advisor
hereunder are not to be deemed exclusive, and the Advisor shall be free
to furnish similar services to others so long as its services under
this Agreement are not impaired thereby; provided, however, that
without the written consent of the Trustees, the Advisor will not serve
as investment advisor to any other investment company having a similar
investment objective to that of the Fund.
5. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Advisor hereby agrees that all records which it
maintains for the benefit of the Fund are the property of the Fund and
further agrees to surrender promptly to the Fund any of such records
upon the Fund's request. The Advisor further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by it pursuant to Rule 31a-1 under the 1940
Act that are not maintained by others on behalf of the Fund.
6. Expenses. During the term of this Agreement, the Advisor will pay all
expenses incurred by it in connection with its investment advisory
services pertaining to the Fund. The Advisor will pay, out of the
Advisor's resources, the entire cost of the promotion and sale of Trust
shares, including the preparation of the prospectus and other
documents. The Advisor will provide other information and services,
other than services of outside counsel or independent accountants or
investment advisory services to be provided by any Adviser under an
Advisory Agreement, required in connection with the preparation of all
registration statements and Prospectuses, Prospectus supplements, SAIs,
all annual, semiannual, and periodic reports to shareholders of the
Trust, regulatory authorities, or others, and all notices and proxy
solicitation materials, furnished to shareholders of the Trust or
regulatory authorities, and all tax returns.
Notwithstanding the foregoing, the Fund shall pay the expenses and
costs of the following:
(a) Taxes, interest charges and extraordinary expenses;
(b) Brokerage fees and commissions with regard to portfolio
transactions of the Fund;
(c) Fees and expenses of the custodian of the Fund's portfolio
securities;
(d) Fees and expenses of the Fund's administrator, transfer and
dividend disbursing agent and the Fund's fund accounting agent
or, if the Fund performs any such services without an agent, the
costs of the same;
2
<PAGE>
(e) Auditing and legal expenses;
(f) Cost of maintenance of the Fund's existence as a legal entity;
(g) Compensation of trustees who are not interested persons of the
Advisor as law defines that term;
(h) Costs of Trust meetings;
(i) Federal and State registration or qualification fees and
expenses;
(j) Costs of setting in type, printing and mailing Prospectuses,
reports and notices to existing shareholders;
(k) The investment advisory fee payable to the Advisor, as provided
in paragraph 7 herein; and
(l) Plan of Distribution expenses, but only in accordance with the
Plan of Distribution as approved by the shareholders of the
Fund.
7. Compensation. The Trust will pay the Advisor and the Advisor will
accept as full compensation an investment advisory fee, based upon the
daily average net assets of each Fund, computed at the end of each
month and payable within five (5) business days thereafter, based upon
Schedule A attached hereto.
8.(a) Limitation of Liability. The Advisor shall not be liable for any error
of judgment, mistake of law or for any other loss whatsoever suffered
by the Fund in connection with the performance of this Agreement,
except a loss resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services or a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of the
Advisor in the performance of its duties or from reckless disregard by
it of its obligations and duties under this Agreement.
8.(b) Indemnification of Advisor. Subject to the limitations set forth in
this Subsection 8(b), the Fund shall indemnify, defend and hold
harmless (from the assets of the Trust or Trusts to which the conduct
in question relates) the Advisor against all loss, damage and
liability, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses,
including reasonable accountants' and counsel fees, incurred by the
Advisor in connection with the defense or disposition of any action,
suit or other proceeding, whether civil or criminal, before any court
or administrative or legislative body, related to or resulting from
this Agreement or the performance of services hereunder, except with
respect to any matter as to which it has been determined that the loss,
damage or liability is a direct result of (i) a breach of fiduciary
duty with respect to the receipt of compensation for services; or (ii)
willful misfeasance, bad faith or gross negligence on the part of the
Advisor in the performance of its duties or from reckless disregard by
it of its duties under this Agreement (either and both of the conduct
described in clauses (i) and (ii) above being referred to hereinafter
as "Disabling Conduct"). A determination that the Advisor is entitled
to indemnification may be made by (i) a final decision on the merits by
a court or other body before whom the proceeding was brought that the
Advisor was not liable by reason of Disabling Conduct, (ii) dismissal
of a court action or an administrative proceeding against the Advisor
for insufficiency of evidence of Disabling Conduct, or (iii) a
reasonable determination, based upon a review of the facts, that the
Advisor was not liable by reason of Disabling Conduct by, (a) vote of a
majority of a quorum of Trustees who are neither "interested persons"
of the Fund as the quoted phrase is defined in Section 2(a)(19) of the
1940 Act nor parties to the action, suit or other proceeding on the
same or similar grounds that is then or has been pending or threatened
(such quorum of such Trustees being referred to hereinafter as the
"Independent Trustees"), or (b) an independent legal counsel in a
written opinion. Expenses, including accountants' and counsel fees so
incurred by the Advisor (but excluding amounts paid in satisfaction of
judgments, in compromise or as fines or penalties), may be paid from
time to time by the Fund or Trust to which the conduct in question
related in advance of the final disposition of any such action, suit or
proceeding; provided, that the Advisor shall have undertaken to repay
the amounts so paid if it is ultimately determined that indemnification
of such expenses is not authorized under this Subsection 8(b) and if
(i) the Advisor shall have provided security for such undertaking, (ii)
the Fund shall be insured against losses arising by reason of any
lawful advances, or (iii) a majority of the Independent Trustees, or an
independent legal counsel in a written opinion, shall have determined,
based on a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the Advisor
ultimately will be entitled to indemnification hereunder.
3
<PAGE>
As to any matter disposed of by a compromise payment by the Advisor
referred to in this Subsection 8(b), pursuant to a consent decree or
otherwise, no such indemnification either for said payment or for any
other expenses shall be provided unless such indemnification shall be
approved (i) by a majority of the Independent Trustees or (ii) by an
independent legal counsel in a written opinion. Approval by the
Independent Trustees pursuant to clause (i) shall not prevent the
recovery from the Advisor of any amount paid to the Advisor in
accordance with either of such clauses as indemnification of the
Advisor is subsequently adjudicated by a court of competent
jurisdiction not to have acted in good faith in the reasonable belief
that the Advisor's action was in or not opposed to the best interest of
the Fund or to have been liable to the Fund or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in its conduct under the Agreement.
The right of indemnification provided by this Subsection 8(b) shall not
be exclusive of or affect any of the rights to which the Advisor may be
entitled. Nothing contained in this Subsection 8(b) shall affect any
rights to indemnification to which Trustees, officers or other
personnel of the Fund, and other persons may be entitled by contract or
otherwise under law, nor the power of the Fund to purchase and maintain
liability insurance on behalf of any such person.
The Board of Trustees of the Trust shall take all such action as may be
necessary and appropriate to authorize the Fund hereunder to pay the
indemnification required by this Subsection 8(b) including, without
limitation, to the extent needed, to determine whether the Advisor is
entitled to indemnification hereunder and the reasonable amount of any
indemnity due it hereunder, or employ independent legal counsel for
that purpose.
8.(c) The provisions contained in Section 8 shall survive the expiration or
other termination of this Agreement, shall be deemed to include and
protect the Advisor and its directors, officers, employees and agents
and shall inure to the benefit of its/their respective successors,
assigns and personal representatives.
9. Duration and Termination. This Agreement shall become effective upon
the date written above and, unless sooner terminated as provided
herein, shall continue in effect for an initial two year period.
Thereafter, unless terminated as herein provided, this Agreement shall
continue in effect, for successive periods of one year each, provided
such continuance is specifically approved annually:
(a) By the vote of a majority of those members of the Board of
Trustees who are not parties to this Agreement or interested
persons of any such party (as that term is defined in the 1940
Act), cast in person at a meeting called for the purpose of
voting on such approval; and
(b) By vote of either the Board of Trustees or a majority (as that
term is defined in the 1940 Act) of the outstanding voting
securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated by the
Fund or by the Advisor at any time on sixty (60) days' written notice,
without the payment of any penalty, provided that termination by the
Fund must be authorized either by vote of the Board of Trustees or by
vote of a majority of the outstanding voting securities of the Fund.
This Agreement will automatically terminate in the event of its
assignment (as that term is defined in the 1940 Act).
10. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by a written
instrument signed by the party against which enforcement of the change,
waiver, discharge or termination is sought. No material amendment of
this Agreement shall be effective until approved by vote of the holders
of a majority of the Fund's outstanding voting securities (as defined
in the 1940 Act).
4
<PAGE>
11. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby. This Agreement shall be
binding and shall inure to the benefit of the parties hereto and their
respective successors.
12. Applicable Law. This Agreement shall be construed in accordance with,
and governed by, the laws of the State of North Carolina.
5
<PAGE>
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 above
written.
ATTEST: CAPITAL MANAGEMENT INVESTMENT TRUST
By: By:
_______________________________ ______________________________
Title: Title:
____________________________ ___________________________
ATTEST: CAPITAL MANAGEMENT ASSOCIATES, INC.
By: By:
_______________________________ ______________________________
Title: Title:
____________________________ ___________________________
6
<PAGE>
SCHEDULE A
----------
INVESTMENT ADVISOR'S COMPENSATION SCHEDULE
o For the services delineated in the AMENDED AND RESTATED INVESTMENT ADVISORY
AGREEMENT and rendered to the CAPITAL MANAGEMENT MID-CAP FUND, the Advisor
shall be compensated monthly, as of the last day of each month, within five
business days of the month end, a fee based upon the daily average net
assets of the Fund according to the following schedule:
Date added to this agreement: January 27, 1995
Date approved by shareholders of the Capital Management
Mid-Cap Fund: August 17, 2000
Annual
Net Assets Fee
-------------------- ------
On the first $100 million 1.00%
On the next $150 million 0.90%
On the next $250 million 0.85%
On all assets over $500 million 0.80%
7
<PAGE>
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and may help avoid the time and expense involved in validating
your vote if you fail to sign your proxy card properly.
1. INDIVIDUAL ACCOUNTS: sign your name exactly as it appears in the
registration on the proxy card.
2. JOINT ACCOUNTS: either party may sign, but the name of the party
signing should conform exactly to the name shown in the
registration on the proxy card.
3. ALL OTHER ACCOUNTS: the capacity of the individual signing the
proxy card should be indicated unless it is reflected in the form
of registration. For example:
Registration Valid Signature
------------ ---------------
CORPORATE ACCOUNTS
(1) ABC Corp............................... ABC Corp. John Doe, Treasurer
(2) ABC Corp............................... John Doe, Treasurer
(3) ABC Corp. c/o John Doe................. John Doe, Treasurer
(4) ABC Corp. Profit Sharing Plan.......... John Doe, Trustee
PARTNERSHIP ACCOUNTS
(1) The ABC Partnership.................... Jane B. Smith, Partner
(2) Smith and Jones, Limited Partnership... Jane B. Smith, General Partner
TRUST ACCOUNTS
(1) ABC Trust.............................. Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d 12/28/78.... Jane B. Doe, Trustee
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust. f/b/o John B.
Smith, Jr. UGMA/UTMA................... John B. Smith
(2) Estate of John B. Smith................ John B. Smith, Jr., Executor
<PAGE>
CAPITAL MANAGEMENT INVESTMENT TRUST
Capital Management Mid-Cap Fund
SPECIAL MEETING OF SHAREHOLDERS ON AUGUST 17, 2000
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
In order to vote your shares, please sign and date this card and return it in
the envelope provided. By returning this card, you authorize the proxies to vote
on the proposals as marked, or, if not marked, as indicated.
The Board of Trustees recommends voting "FOR" the proposals.
1. Approval of the Distribution Plan Pursuant to Rule 12b-1 (ONLY Investor
Shares shareholders vote)
FOR AGAINST ABSTAIN
( ) ( ) ( )
2. Approval of the reimbursement of Rule 12b-1 fees for the period November
10, 1999 to August 17, 2000 (ONLY Investor Shares shareholders vote)
FOR AGAINST ABSTAIN
( ) ( ) ( )
3. Approval of the Investment Advisory Agreement (ALL shareholders vote)
FOR AGAINST ABSTAIN
( ) ( ) ( )
[name / address here]
By signing and dating this card, you authorize C. Frank Watson, III with the
power of substitution to vote your shares of the Fund at the scheduled meeting
of shareholders of the Fund and at any adjournment of the meeting. MR. WATSON
SHALL VOTE AS RECOMMENDED BY THE BOARD, UNLESS OTHERWISE INDICATED, AND IN HIS
DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
x ___________________________________
x ___________________________________
Dated __________________, 2000
Please sign your name or names as they appear to authorize the voting
of your shares as indicated. Where shares are registered with joint
owners, all joint owners should sign. Persons signing as executors,
administrators, trustees, etc., should so indicate.
