File No. 33-
File No. 811-
As Filed with the Securities and Exchange Commission on July 3, 1995.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /_X__/
----
Pre-Effective Amendment No. ___ /____/
----
Post-Effective Amendment No. ___ /_ __/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT ____
OF 1940 /_X__/
Amendment No. _ _ /_ __/
(Check appropriate box or boxes)
TOMORROW FUNDS RETIREMENT TRUST
(Exact name of Registrant as Specified in Charter)
ONE NEW YORK PLAZA, NEW YORK, NEW YORK 10004
(Address of Principal Executive Office) Zip Code
(212) 223-3332
(Registrant's Telephone Number, including Area Code)
JAY C. NADEL, WEISS, PECK & GREER, L.L.C.
ONE NEW YORK PLAZA, NEW YORK, NEW YORK 10004
(Name and Address of Agent for Service)
Copy to:
Ernest V. Klein, Esq.
Hale and Dorr
60 State Street
Boston, MA 02109
Approximate Date of Proposed Public Offering: As soon as
practicable after the effectiveness of the registration under the
Securities Act of 1933.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states
that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Securities and Exchange Commission, acting pursuant to Section 8(a),
may determine.
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, as
amended, Registrant hereby elects to register an indefinite number of
shares of Registrant and any series thereof.
<PAGE>
ADVISER CLASS SHARES OF
TOMORROW FUNDS RETIREMENT TRUST
Tomorrow Long-Term Retirement Fund
Tomorrow Mid-Term Retirement Fund
Tomorrow Short-Term Retirement Fund
Tomorrow Post-Retirement Fund
Core Large-Cap Stock Fund
Core Small-Cap Stock Fund
Cross-Reference Sheet Showing Location in Prospectuses
and Statements of Additional Information of
Information Required by Items of the Registration Form
N-1A Item No. and Caption Location:
Part A Prospectus
1. Cover Page............................ Cover Page
2. Synopsis.............................. Expense Information
3. Condensed Financial Information....... Not Applicable
4. General Description of Registrant..... Investment Objectives
and Policies; Risk
Considerations and
Other Practices and
Policies; Management
of the Tomorrow
Funds; How Each
Tomorrow Fund's Share
Price is Determined;
How to Buy Shares;
How to Sell Shares;
How to Exchange
Shares; The Trust
5. Management of the Fund................ Management of the
Tomorrow Funds;
Additional
Information
<PAGE>
6. Capital Stock and Other Securities.... Investment Objectives
and Policies; How
Each Tomorrow Fund's
Share Price is
Determined; How to
Buy Shares; How to
Sell Shares; How to
Exchange Shares; The
Trust
7. Purchase of Securities Being
Offered............................. How Each Tomorrow
Fund's Share Price is
Determined; How to
Sell Shares; How to
Exchange Shares; The
Trust; Distribution
Plans
8. Redemption or Repurchase.............. How Each Tomorrow
Fund's Share Price is
Determined; How to
Buy Shares; How to
Sell Shares; How to
Exchange Shares; The
Trust
9. Pending Legal Proceedings.............. Not Applicable
Statement of
Part B Additional Information
10. Cover Page............................ Cover Page
11. Table of Contents..................... Table of Contents
12. General Information
and History......................... Organization
13. Investment Objectives and
Policies............................ The Funds' Investment
Objectives and
Policies; Investment
Techniques;
Investment
Restrictions
- 2 -
<PAGE>
14. Management of the Fund................ Advisory and
Administrative
Services; Trustees
and Officers;
Custodian; Transfer
Agent; Independent
Auditors
15. Control Persons and Principal
Holders of Securities............... Trustees and Officers
16. Investment Advisory and Other
Services............................ Advisory and
Administrative
Services;
Distribution Plans;
Investor Services
17. Brokerage Allocation and
Other Practices..................... Portfolio Brokerage;
Portfolio Turnover
18. Capital Stock and Other
Securities.......................... Organization
19. Purchase, Redemption and
Pricing of Securities
Being Offered....................... How to Purchase
Shares: Investor
Services; Redemption
of Shares; Net Asset
Value; Calculation of
the Funds' Returns
20. Tax Status............................ Dividends,
Distributions and Tax
Status
21. Underwriters.......................... Advisory and
Administrative
Services
22. Calculation of Performance Data....... Calculation of the
Funds' Return
23. Financial Statements.................. Not Applicable
- 3 -
<PAGE>
INSTITUTIONAL CLASS SHARES OF
TOMORROW FUNDS RETIREMENT TRUST
Tomorrow Long-Term Retirement Fund
Tomorrow Mid-Term Retirement Fund
Tomorrow Short-Term Retirement Fund
Tomorrow Post-Retirement Fund
Core Large-Cap Stock Fund
Core Small-Cap Stock Fund
Cross-Reference Sheet Showing Location in Prospectuses
and Statements of Additional Information of
Information Required by Items of the Registration Form
N-1A Item No. and Caption Location:
Part A Prospectus
1. Cover Page............................ Cover Page
2. Synopsis.............................. Expense Information
3. Condensed Financial Information....... Not Applicable
4. General Description of Registrant..... Investment Objectives
and Policies; Risk
Considerations and
Other Practices and
Policies; Management
of the Tomorrow
Funds; How Each
Tomorrow Fund's Share
Price is Determined;
How to Buy Shares;
How to Sell Shares;
How to Exchange
Shares; The Trust
5. Management of the Fund................ Management of the
Tomorrow Funds;
Additional
Information
<PAGE>
6. Capital Stock and Other Securities.... Investment Objectives
and Policies; How
Each Tomorrow Fund's
Share Price is
Determined; How to
Buy Shares; How to
Sell Shares; How to
Exchange Shares; The
Trust
7. Purchase of Securities Being
Offered............................. How Each Tomorrow
Fund's Share Price is
Determined; How to
Sell Shares; How to
Exchange Shares; The
Trust; Service Plans
8. Redemption or Repurchase.............. How Each Tomorrow
Fund's Share Price is
Determined; How to
Buy Shares; How to
Sell Shares; How to
Exchange Shares; The
Trust
9. Pending Legal Proceedings.............. Not Applicable
Statement of
Part B Additional Information
10. Cover Page............................ Cover Page
11. Table of Contents..................... Table of Contents
12. General Information
and History......................... Organization
13. Investment Objectives and
Policies............................ The Funds' Investment
Objectives and
Policies; Investment
Techniques;
Investment
Restrictions
- 2 -
<PAGE>
14. Management of the Fund................ Advisory and
Administrative
Services; Trustees
and Officers;
Custodian; Transfer
Agent; Independent
Auditors
15. Control Persons and Principal
Holders of Securities............... Trustees and Officers
16. Investment Advisory and Other
Services............................ Advisory and
Administrative
Services; Service
Plans; Investor
Services
17. Brokerage Allocation and
Other Practices..................... Portfolio Brokerage;
Portfolio Turnover
18. Capital Stock and Other
Securities.......................... Organization
19. Purchase, Redemption and
Pricing of Securities
Being Offered....................... How to Purchase
Shares: Investor
Services; Redemption
of Shares; Net Asset
Value; Calculation of
the Funds' Returns
20. Tax Status............................ Dividends,
Distributions and Tax
Status
21. Underwriters.......................... Advisory and
Administrative
Services
22. Calculation of Performance Data....... Calculation of the
Funds' Return
23. Financial Statements.................. Not Applicable
- 3 -
<PAGE>
Subject to Completion: Dated July 3, 1995
WEISS, PECK & GREER INVESTMENTS
TOMORROW FUNDS RETIREMENT TRUST
One New York Plaza
New York, New York 10004
TOMORROW LONG-TERM RETIREMENT FUND ("Long-Term Fund")
Seeks to satisfy the retirement goals of investors who are currently
between 22 and 35 years of age and with an average remaining life
expectancy of 50 years or more.
TOMORROW MID-TERM RETIREMENT FUND ("Mid-Term Fund")
Seeks to satisfy the retirement goals of investors who are currently
between 36 and 50 years of age and with an average remaining life
expectancy in the range of 35-50 years.
TOMORROW SHORT-TERM RETIREMENT FUND ("Short-Term Fund")
Seeks to satisfy the retirement goals of investors who are currently
between 51 and 65 years of age and with an average remaining life
expectancy in the range of 20-30 years.
TOMORROW POST-RETIREMENT FUND ("Post-Retirement Fund")
Seeks to satisfy the goals of investors who seek to maximize total return,
with an emphasis on current income, consistent with capital preservation
as appropriate for persons who have retired.
PROSPECTUS -- Adviser Class Shares
September __, 1995
This Prospectus describes Adviser Class shares of four mutual funds - the
Long-Term Fund, Mid-Term Fund, Short-Term Fund and Post-Retirement Fund
(together, the "Tomorrow Funds"). Adviser Class shares of the Tomorrow Funds
may be purchased only by "qualified" pension or retirement plans, including
trustees of such plans for individuals funding their individual retirement
accounts or other qualified plans. Each Tomorrow Fund is a diversified asset
allocation mutual fund advised by Weiss, Peck & Greer, L.L.C. (the "Adviser"
or "WPG").
Please read this Prospectus before investing, and keep it on file for
future reference. It contains important information, including how the
Tomorrow Funds invest and the services available to shareholders. To learn
more about the Tomorrow Funds, you can obtain a copy of the Statement of
Additional Information (the "SAI"), also dated September __, 1995. The SAI
has been filed with the Securities and Exchange Commission (the "SEC") and
is incorporated by reference into this Prospectus. A free copy of the SAI or
a copy of the Prospectus describing the Institutional Class shares of the
Tomorrow Funds is available upon request by calling Weiss, Peck & Greer,
L.L.C. at 1-800-223-3332 (toll free). Adviser Class shares of a Tomorrow
Fund may not be available in your state due to various insurance or other
regulations. Please check with your qualified plan fiduciary for Tomorrow
Funds that are available in your state. Inclusion of a Tomorrow Fund in this
Prospectus which is not available in your state is not to be considered a
solicitation.
ADVISER CLASS SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, BANK OR OTHER INSURED DEPOSITORY INSTITUTION, AND
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN ADVISER CLASS
SHARES OF THE FUNDS INVOLVES INVESTMENT 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.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
<PAGE>
The Tomorrow Funds seek to provide investors of all ages who
participate in qualified retirement plans with an asset allocation
strategy designed to address their retirement funding needs. Each
Tomorrow Fund invests its assets, in varying amounts, in equity and
fixed-income securities of all types. The Long-Term, Mid-Term and
Short-Term Funds seek to maximize total return while also increasingly
emphasizing current income and capital preservation as the average age
of the target class of investors in that particular Tomorrow Fund
increases. As the average age of the target class of investors in a
Tomorrow Fund increases over time, the particular Tomorrow Fund adjusts
the mix of its assets invested in equity and fixed-income securities to
reflect a level of risk that the Adviser considers appropriate for
investors in that target age class, in general, given their investment
time horizon. The Post-Retirement Fund seeks to provide investors with
an asset allocation strategy designed to maximize total return, with an
emphasis on current income, consistent with capital preservation.
You are encouraged to select a particular Tomorrow Fund based on
your current age and the length of the period during which you expect
to maintain your investment. You may select more than one Tomorrow Fund
in order to achieve a personalized investment program. For example, an
investor in the Long-Term, Mid-Term or Short-Term Funds may also select
the Post-Retirement Fund to seek additional current income.
Because the investment portfolio of each Tomorrow Fund will change
over time to reflect the investment needs of a target class of
investors with an increasing average age, it will normally not be
necessary for you to change your Tomorrow Fund selection as you grow
older. However, if your investment needs change other than by reason of
the passage of time, you should consider whether your particular
Tomorrow Fund remains an appropriate selection.
In addition to the Adviser Class shares offered through this
Prospectus, the Tomorrow Funds offer a class of shares known as the
Institutional Class through a separate prospectus. Institutional Class
shares of the Tomorrow Funds are available only to certain eligible
investors.
TABLE OF CONTENTS
Page
Expense Information................................
Investment Objectives and Policies.................
How to Buy Shares..................................
How to Sell Shares.................................
How to Exchange Shares.............................
How Each Tomorrow Fund's Share Price is Determined.
Management of the Tomorrow Funds...................
Distribution Plans.................................
Dividends and Taxes................................
Portfolio Brokerage................................
The Trust..........................................
Investment Performance.............................
Risk Considerations and Other
Practices and Policies............................
Additional Information.............................
<PAGE>
EXPENSE INFORMATION
Operating a mutual fund, such as each Tomorrow Fund, involves a
variety of expenses for portfolio management, shareholder statements,
tax reporting and other services. These costs are paid from a fund's
assets and their effect is factored into any quoted share price or
performance information.
Shareholder Transaction Expenses are charges you pay when you buy or
sell Adviser Class shares of a Tomorrow Fund.
<TABLE>
<S> <C> <C> <C> <C>
Post-
Long-Term Mid-Term Short-Term Retire-
Fund Fund Fund ment Fund
Maximum Sales Load Imposed on Purchases None None None None
Maximum Sales Load Imposed on
Reinvested Dividends None None None None
Deferred Sales Load None None None None
Redemption Fees None None None None
Exchange Fees None None None None
</TABLE>
Annual Fund Operating Expenses are paid out of the Tomorrow Funds'
assets. Each Tomorrow Fund's expenses are factored into its share price
or dividends and are not charged directly to shareholder accounts. The
following are estimates and are calculated as a percentage of average
net assets.
<TABLE>
<S> <C> <C> <C> <C>
Post-
Long-Term Mid-Term Short-Term Retire-
Fund Fund Fund ment Fund
Management Fee
(after expense limitation) 0.00%* 0.00%* 0.00%* 0.00%*
12-B1 Fee 1 0.50% 0.50% 0.50% 0.50%
Other Expenses
(after expense limitation) 1.25%* 1.25%* 1.25%* 1.15%*
Total Fund Operating Expenses
(after expense limitation) 1.75%* 1.75%* 1.75%* 1.65%*
</TABLE>
Example: Hypothetically assume that each Tomorrow Fund's annual return
is 5% and that its operating expenses are exactly as just described.
For every $1,000 you invested, you would have paid the following
expenses if you closed your account after the number or years
indicated:
<TABLE>
<S> <C> <C> <C> <C>
Post-
Long-Term Mid-Term Short-Term Retire-
Fund Fund Fund ment Fund
After 1 Year $18 $18 $18 $17
After 3 Years $56 $56 $56 $52
-3-
<PAGE>
The purpose of the above table and Example is to assist you in
understanding the various costs and expenses of the Adviser Class
shares of the Tomorrow Funds that an investor will bear directly or
indirectly. See page __. The Tomorrow Funds are newly organized and
have no operating history. The figures shown in the table under the
caption "Other Expenses" and in the hypothetical example are based on
estimates of the Tomorrow Funds' expenses for the fiscal year ending
December 31, 1995. The expenses set forth above do not reflect charges
and expenses that may be applicable to a participant in a qualified
plan. Please refer to your qualified plan documents.
---------------
<FN>
1 Rule 12b-1 Fees consist of a 0.25% distribution fee and a 0.25%
service fee.
* The Adviser has voluntarily agreed to limit temporarily the
operating expenses (excluding Rule 12b-1 fees applicable to Adviser
Class shares, service fees applicable to Institutional Class shares,
any other class-specific expenses, litigation, indemnification and
other extraordinary expenses) of the Long-Term, Mid-Term and Short-Term
Funds to 1.25% of their respective average daily net assets and such
operating expenses of the Post-Retirement Fund to 1.15% of its average
daily net assets. See page __. In the absence of this agreement,
Management Fees would be 0.75%, 0.75%, 0.75% and 0.65%, respectively,
Other Expenses are estimated to be approximately 2.87%, 1.77%, 1.59%
and 4.35%, respectively, and Total Fund Operating Expenses are
estimated to be approximately 4.12%, 3.02%, 2.84% and 5.50%,
respectively, of the average daily net assets attributable to the
Adviser Class shares of the Long-Term Fund, Mid-Term Fund, Short-Term
Fund and Post-Retirement Fund.
</FN>
</TABLE>
THE INFORMATION IN THE TABLE AND HYPOTHETICAL EXAMPLE ABOVE SHOULD NOT
BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
-4-
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
What are the Investment Objectives and Policies of the Tomorrow Funds?
The Tomorrow Funds seek to provide investors of all ages who
participate in qualified retirement plans with an asset allocation
strategy designed to address their retirement funding needs. Each
Tomorrow Fund other than the Post-Retirement Fund seeks to maximize
total return while also increasingly emphasizing current income and
capital preservation as the average age of the target class of
investors in that particular Tomorrow Fund increases. The
Post-Retirement Fund seeks to provide investors with an asset
allocation strategy designed to maximize current income, consistent
with capital preservation.
LONG-TERM FUND seeks to satisfy the retirement goals of
investors who are currently between 22 and 35 years of
age and with an average remaining life expectancy of
50 years or more.
MID-TERM FUND seeks to satisfy the retirement goals of
investors who are currently between 36 and 50 years of
age and with an average remaining life expectancy in
the range of 35-50 years.
SHORT-TERM FUND seeks to satisfy the retirement goals of
investors who are currently between 51 and 65 years of
age and with an average remaining life expectancy in
the range of 20-30 years.
POST-RETIREMENT seeks to satisfy the goals of investors who seek to
FUND maximize total return, with an emphasis on current
income, Consistent with capital preservation.
Each Tomorrow Fund invests its assets, in varying amounts, in
equity and fixed-income securities of all types (the "Categories"). The
amount of assets allocated to equity securities is currently invested,
in varying amounts, among large capitalization stocks, medium
capitalization stocks, small capitalization stocks and foreign stocks
(the "Subcategories"). From time to time, the Adviser may select
Subcategories for the fixed-income Category. Further Subcategories may
be selected in addition to or as a substitute for any of the current
Subcategories.
As the average age of the target class of investors in a Tomorrow
Fund increases over time, the particular Tomorrow Fund adjusts the mix
of its assets allocated between equity and fixed-income securities, and
among large, medium and small capitalization and foreign stocks, to
reflect a level of risk that the Adviser considers appropriate for
investors in that target age class, in general, given their investment
time horizon. The Post-Retirement Fund maintains a stable mix of its
assets invested (within defined ranges) in equity and fixed-income
securities based on the current outlook for such securities.
Typically, the longer the average life expectancy of the target
class of investors in a Tomorrow Fund, the greater the allocation of
assets of that Tomorrow Fund to securities with higher growth potential
and, correspondingly, more risk, such as small capitalization stocks.
Conversely, the shorter the average life expectancy of the target class
of investors in a Tomorrow Fund, the greater the emphasis on current
income and capital preservation of assets and, therefore, the greater
the allocation of assets of that Tomorrow Fund to fixed-income
securities. Each Tomorrow Fund will be managed more conservatively as
the average age of its target class of investors increases. For
example, assuming that current market conditions remain the same, at a
point fifteen years from now, the strategic asset composition of the
Long-Term Fund could be expected to look like the current strategic
asset composition of the Mid-Term Fund. On the date of this Prospectus,
the anticipated strategic asset allocation mix within the Tomorrow
Funds' portfolios would be approximately as follows:
-5-
<PAGE>
[Graphic Material Omitted: Four pie charts demonstrating the asset
allocations of each Tomorrow Fund. The pie chart applicable to the
Long-Term Fund reflects the following asset allocations: large
capitalization stocks - 30%, medium capitalization stocks - 20%, small
capitalization stocks - 25%, foreign equities - 5%, and fixed-income
securities - 20%. The pie chart applicable to the Mid-Term Fund
reflects the following asset allocations: large capitalization stocks -
35%, medium capitalization stocks - 15%, small capitalization stocks -
15%, foreign equities - 5%, and fixed-income securities - 30%. The pie
chart applicable to the Short-Term Fund reflects the following asset
allocations: large capitalization stocks - 40%, medium capitalization
stocks - 10%, small capitalization stocks - 10%, and fixed-income
securities - 40%. The pie chart applicable to the Post-Retirement Fund
reflects the following asset allocations: large capitalization stocks -
30%, and fixed-income securities - 70%.]
The strategic asset allocation mix represents the way that the
Tomorrow Funds' investments will generally be allocated in the
near-term. A Tomorrow Fund's actual asset allocation mix between equity
and fixed-income securities and among large, medium and small
capitalization and foreign stocks are expected to vary based on the
Adviser's evaluation of anticipated relative returns and risks between
and among such securities in the near-term future. The Adviser will
review strategic asset allocations at least semiannually and will
adjust the asset allocations, if necessary, at that time. Additionally,
the strategic asset allocation mix of each Tomorrow Fund (other than
the Post-Retirement Fund) will be adjusted as necessary to reflect a
level of risk that the Adviser considers appropriate for investors in
that target class, in general, given their investment time horizon.
As the average age of the target class of investors in a Tomorrow
Fund approaches that of the Post-Retirement Fund, it is anticipated
that each Tomorrow Fund's assets may begin to decrease as a result of
investor withdrawals. At such time, the Trustees of the Trust will
consider what action would be appropriate to protect the interests of
remaining shareholders, including a combination with the
Post-Retirement Fund.
-6-
<PAGE>
You are encouraged to select a particular Tomorrow Fund for
investment based on your current age and the length of the period
during which you expect to maintain your investment. You may invest in
more than one Tomorrow Fund in order to achieve a personalized
investment program. For example, an investor in the Long-Term, Mid-Term
or Short-Term Funds may also select the Post-Retirement Fund to seek
additional current income. Before investing in the Tomorrow Funds, you
should consider your personal tolerance for risk recognizing that each
Tomorrow Fund is designed and managed to satisfy the retirement goals
of investors in a target age group with a corresponding average life
expectancy who anticipate retiring at approximately age 65. Because the
Tomorrow Funds are managed to satisfy retirement goals based upon
average life expectancy, the Tomorrow Funds may invest their assets in
higher risk/higher reward securities than mutual funds designed for
investors based solely on retirement dates. For example, investors
seeking higher current income or planning to make substantial
withdrawals from their investments shortly after retirement should
consider allocating more of their investment to the Post-Retirement
Fund which seeks to maximize total return, with an emphasis on current
income, consistent with capital preservation. In addition, you should
recognize that each Tomorrow Fund is managed with the goal of achieving
a different risk/reward ratio, with the Long-Term Fund seeking the
highest risk/reward ratio and the Post-Retirement Fund seeking the
lowest risk/reward ratio among the Tomorrow Funds. Each Tomorrow Fund
(other than the Post-Retirement Fund) will be managed to achieve an
increasingly conservative risk/reward ratio as the average age of the
target class of investors in that particular Tomorrow Fund increases.
Risk/Reward Ratio
Higher Lower
----------------------------------------------------------------------
Long-Term Mid-Term Short-Term Post-Retirement
Fund Fund Fund Fund
In what types of securities do the Tomorrow Funds invest?
Each Tomorrow Fund allocates its assets between equity and
fixed-income securities. The equity Category includes equity securities
of all types. The fixed-income Category includes all varieties of
fixed-income instruments (including adjustable rate preferred stocks).
Some types of securities can be considered as both equity and
fixed-income securities. The Tomorrow Funds may also make other
investments that are not considered either an equity or fixed-income
security, such as options and futures.
While each Tomorrow Fund invests in substantially the same equity
and fixed-income securities, the amount of each Tomorrow Fund's assets
allocated to equity and fixed-income securities, and thus in particular
securities, differs. However, it is expected that the relative
percentage that a particular equity or fixed-income security represents
within the equity and fixed-income Categories and the large, medium and
small capitalization and foreign stock Subcategories ordinarily will
remain substantially the same.
Each Tomorrow Fund may, but is not required to, utilize various
investment strategies and techniques to hedge various market risks
(such as broad or specific equity or fixed-income market movements and
interest rate risk), to manage the effective maturity or duration of
fixed-income securities, or to enhance potential gain. Such strategies
and techniques are generally accepted as part of modern portfolio
management and are regularly utilized by many mutual funds. The
investment strategies and
-7-
<PAGE>
techniques used by the Tomorrow Funds and the instruments in which they
invest may change over time as new techniques, strategies and
instruments are developed or regulatory changes occur.
In the course of pursuing their investment objectives, the
Tomorrow Funds may: (i) purchase and write (sell) put and call options
on securities and indices; (ii) purchase and sell financial futures
contracts and options thereon; (iii) lend portfolio securities; (iv)
enter into repurchase agreements; (v) purchase securities on a forward
commitment, when issued or delayed delivery basis; (vi) invest in
restricted and illiquid securities; (vii) invest in other investment
companies; and (viii) invest in securities of unseasoned issuers. For
further information concerning the securities in which the Tomorrow
Funds may invest and the investment strategies and techniques they may
employ, see "Risk Considerations and Other Investment Practices and
Policies" below in this Prospectus.
Equity Securities
A Tomorrow Fund's assets allocated to equity securities is
currently invested, in varying amounts, among large capitalization
stocks, medium capitalization stocks, small capitalization stocks and
foreign stocks. Please refer to the charts on the previous page for the
current strategic allocation of a Tomorrow Fund's assets among these
securities.
Large, Medium and Small Capitalization Stocks.
With respect to the assets of each Tomorrow Fund allocated to
large, medium and small capitalization stocks, the Adviser seeks to
provide, using a quantitative methodology, investment results that
exceed the performance of an appropriate "Benchmark Index." To seek to
achieve this objective, the assets that are allocated separately to
large, medium and small capitalization stocks will, under normal market
conditions, be invested in a portfolio of securities that is considered
more "efficient" than the applicable Benchmark. An efficient portfolio
is one that has the maximum expected return for any level of risk. The
efficient mix of securities is established mathematically, taking into
account the expected return and volatility of returns for each security
in a given universe, as well as the historical price relationships
between different securities in the universe.
Subcategory Benchmark
Large Capitalization Stocks Standard & Poor's 500 Composite
Stock Price Index
Medium Capitalization Stocks Standard & Poor's 400 MidCap Index
Small Capitalization Stocks Russell 2000 Index
To implement this strategy with respect to a Subcategory, the
Adviser compiles the historical price data of all securities which
comprise the applicable Benchmark. The Adviser may eliminate a security
from consideration if it considers the security to have an inadequate
or misleading price history. Using historical price data, the Adviser
constructs and analyzes a complete matrix of all the possible price
relationships between the securities in the applicable Benchmark.
Using a sophisticated software program that incorporates risk
reduction techniques developed by investment professionals of the
Adviser, the Adviser constructs a number of portfolios separately with
respect to each Tomorrow Fund's assets that are allocated to large,
medium and small capitalization stocks, which portfolios are believed
to have optimized risk/reward ratios. From these alternative
portfolios, the Adviser selects the combination of securities, together
with their appropriate weightings, that the Adviser believes will
comprise the optimal portfolio for each Subcategory. The optimal
portfolio for each
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Subcategory is designed to have a return greater than, but highly
correlated with, the return of its Benchmark. Please see "Quantitative
Methodology" in the SAI for a further description of how the Adviser
constructs and maintains an optimal portfolio for the large, medium and
small capitalization Subcategories.
Foreign Stocks.
The Adviser intends to invest each Tomorrow Fund's assets
allocated to the foreign stocks in shares of other open-end and/or
closed-end investment companies. Such other investment companies will
invest their assets in securities of foreign issuers. The Adviser will
select for investment other investment companies whose underlying
securities, when aggregated, resemble the composition of the Morgan
Stanley Europe, Australia, Far East Index ("EAFE Index"). There can be
no assurance that the Adviser will be successful in selecting such
investment companies. See "Risk Considerations and Other Investment
Practices and Policies - Other Investment Companies" below.
Fixed-Income Securities
Each Tomorrow Fund will invest those assets which are allocated to
fixed-income securities in a broad range of fixed-income securities,
including bonds, notes, mortgaged-backed and asset-based securities,
preferred stock and convertible debt securities issued by U.S.
corporations or other entities or by the U.S. Government or its
agencies, authorities, instrumentalities or sponsored enterprises. The
Tomorrow Funds limit their investments in fixed-income securities to
those that are rated, at the time of purchase, investment grade or, if
not rated, determined by the Adviser to be of equivalent credit quality
to securities so rated. Fixed-income securities may pay interest on a
fixed, variable, floating (including inverse floating), contingent,
in-kind or deferred basis. In general, the value of fixed-income
securities rises when interest rates fall, and vice versa. Fixed-income
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term fixed-income
securities are generally more sensitive to interest changes than
shorter-term fixed-income securities. There is no limit on the average
dollar-weighted maturity of a Tomorrow Fund's portfolio or on the
maturity of any individual fixed-income security purchased by a
Tomorrow Fund. See "Risk Considerations and Other Investment Practices
and Policies - Fixed-Income Securities" below.
HOW TO BUY SHARES
Who is eligible to purchase Adviser Class shares of the Tomorrow Funds?
Adviser Class shares of the Tomorrow Funds may be purchased only
for the account of pension or retirement plans ("Qualified Plans") that
satisfy the qualification requirements of Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Internal Revenue
Code"). Qualified Plans include: 401(k) plans, 403(b) plans, 457 plans,
governmental plans, tax-sheltered annuity plans and individual
retirement accounts (IRAs).
Should you have any questions as to whether you are an eligible
investor, please call WPG at 1-800-___________.
Through whom may Adviser Class shares of the Tomorrow Funds be
purchased?
Because you may not purchase Adviser Class shares of the Tomorrow
Funds directly, all orders to purchase Adviser Class shares must be
made through the trustee, custodian, plan administrator or other
fiduciary (each a "Plan Fiduciary") of your Qualified Plan. If the
monies you wish to invest in the Tomorrow
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<PAGE>
Funds are maintained in a Qualified Plan sponsored by your employer,
please consult with your employer for information about how to purchase
shares of the Tomorrow Funds. If the monies you wish to invest in the
Tomorrow Funds are maintained by your Plan Fiduciary in an IRA or other
self-administered Qualified Plan, please consult with your Plan
Fiduciary for information about how to purchase shares of the Tomorrow
Funds.
You may establish an IRA with the Trust's custodian, Boston Safe
Deposit and Trust Company ("Boston Safe"), through which you may invest
in the Tomorrow Funds. Additionally, you may invest in the Tomorrow
Funds by "rolling over" an existing IRA into an IRA maintained by
Boston Safe. Please call WPG at 1-800-_____ for information regarding
how to establish an IRA with Boston Safe.
Plan Fiduciaries may purchase shares of the Tomorrow Funds for a
Qualified Plan through any investment dealer or financial service firm
("Authorized Firm") approved by WPG. Authorized Firms include
broker-dealers, banks and financial planners.
What is the minimum investment in shares of the Tomorrow Funds?
Plan Fiduciaries may invest in the Tomorrow Funds with as little
as $2,000 ($250 for a spousal IRA). There is no minimum amount required
for subsequent investments.
How may Plan Fiduciaries invest in the Tomorrow Funds for the account
of their Qualified Plans?
In order to make an initial investment in a Tomorrow Fund for a
Qualified Plan, Plan Fiduciaries must open an account with the Tomorrow
Funds by furnishing to an Authorized Firm the information in the
Account Information Form attached to this Prospectus. Shares of the
Tomorrow Funds may be purchased on any day during which the New York
Stock Exchange is open for business (a "Business Day").
At what price are Adviser Class shares of the Tomorrow Funds offered?
Adviser Class shares of the Tomorrow Funds are sold at the net
asset value (NAV) of such shares next determined after the Transfer
Agent receives and accepts a purchase order. Purchase orders received
by Authorized Firms by the close of regular trading on the New York
Stock Exchange on any Business Day and transmitted to the Transfer
Agent by the close of its business day (normally [5]:00 p.m. New York
City time) will be effected as of the close of regular trading on the
New York Stock Exchange on that day. Otherwise, orders will be effected
at the NAV determined on the next Business Day. It is the
responsibility of Authorized Firms to transmit orders so that they will
be received by the Transfer Agent before the close of its business day.
Plan Fiduciaries: To Make an Initial Investment for a Qualified Plan
By Mail: 1. Make a check payable to the Tomorrow Fund in which you
wish to or are instructed to invest.
2. Deliver the completed Account Information Form and check
to an Authorized Firm or mail to the Transfer Agent at
the address indicated on the back cover of this
Prospectus.
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By Wire: 1. Call 1-800-________ to open an account and to arrange
for a wire transaction.
2. Instruct your bank to wire funds to:
Boston Safe Deposit and Trust Company
WPG Deposit Account No. _________
Bank Routing No. __________
Specify:
Name of Tomorrow Fund
Adviser Class shares
Account Number
Name(s) in which account is to be registered
3. Deliver the completed Account Information Form to an
Authorized Firm or mail to the Transfer Agent at the
address indicated on the back cover of this Prospectus.
Plan Fiduciaries: To Make Further Investments for a Qualified Plan
Automatically: 1. Use the Automatic Investment Plan. Sign up for this
service when opening an account, or call 1-800-_____
to add it. Plan Fiduciaries must designate the bank
or credit union account from which funds will be
drawn.
2. The amount to be invested will automatically be with-
drawn from the designated bank or credit union account
on or about the first Business Day of the month or
quarter selected.
By Telephone: 1. Sign up for this service when opening an account, or
call 1-800-_______ to add it. Plan Fiduciaries must
designate the bank or credit union account from which
funds will be drawn. Note that in order to invest by
phone, the account must be in a bank or credit union
that is a member of the Automated Clearing House
system (ACH).
2. Once this service has been selected, Plan Fiduciaries
may purchase additional shares for the account of
Qualified Plans by calling the Tomorrow Funds' Transfer
Agent, The Shareholder Services Group, Inc., toll-free
at 1-800-_________.
3. Give the Transfer Agent representative the name(s) in
which the account is registered, the Tomorrow Fund
name, Adviser Class shares, the account number, and the
amount of the investment.
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4. An investment will normally be credited to the Qualified
Plan account the Business Day following the phone
request.
During periods of extreme economic conditions or market
changes, requests by telephone may be difficult to make
due to heavy volume. During such times please consider
placing purchase orders by mail.
By Mail: 1. Include a note with the investment specifying:
Name of the Tomorrow Fund
Adviser Class shares
Account Number
Name(s) in which account is registered
2. Make the check payable to the Tomorrow Fund in which
you wish to or are instructed to invest. Indicate the
account number on the check.
3. Deliver the account information and check to an
Authorized Firm or mail to the Transfer Agent at the
address indicated on the back cover of this Prospectus.
By Wire: Instruct the bank to wire funds to:
Boston Safe Deposit and Trust Company
WPG Deposit Account No. _________
ABA Routing No. __________
For credit to:
Name of Tomorrow Fund
Adviser Class shares
Your Account Number
Name(s) in which account is registered
Other Purchase Information. Each Tomorrow Fund reserves the right
to reject any purchase for any reason and to cancel any purchase due to
nonpayment. As a condition of this offering, if your purchase is
cancelled due to nonpayment or because your check does not clear (and,
therefore, your account is required to be redeemed), you will be
responsible for any loss incurred by the Tomorrow Fund(s) affected. All
purchases must be made in U.S. dollars. Checks drawn on foreign banks
will delay purchases until U.S. funds are received and a collection
charge may be imposed. In such cases, Adviser Class shares of the
Tomorrow Funds are priced at the net asset value computed after the
Transfer Agent receives notification of the dollar equivalent from the
Tomorrow Funds' custodian bank. Wire purchases normally take two or
more hours to complete and, to be accepted the same day, must be
received by 4:00 p.m. New York City time. Your bank may charge a fee to
wire funds. Telephone transactions are recorded to verify information.
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<PAGE>
Acquiring Shares of the Tomorrow Funds in Exchange for Securities.
Shares of the Tomorrow Funds may be purchased in whole or in part for
the account of Qualified Plans by delivering to the Tomorrow Funds'
custodian, Boston Safe, securities acceptable to WPG. Please see
"In-Kind Purchases" in the SAI for the terms and conditions of these
transactions.
HOW TO SELL SHARES
How may Adviser Class shares of the Tomorrow Funds be redeemed?
Subject to the restrictions (if any) imposed by your Qualified
Plan, you can arrange to sell or "redeem" some or all of your shares on
any Business Day. All orders to redeem Adviser Class shares must be
made through your Plan Fiduciary. If the Adviser Class shares you wish
to redeem are held for the account of a Qualified Plan sponsored by
your employer, please consult with your employer for information about
how to redeem shares of the Tomorrow Funds. If the Adviser Class shares
you wish to redeem are maintained by your Plan Fiduciary in an IRA or
other self-administered Qualified Plan, please consult with your Plan
Fiduciary for information about how to redeem shares of the Tomorrow
Funds. Please note that shares may not be redeemed by telephone or
telegram, except for exchanges which can be requested by Plan
Fiduciaries by telephone or in writing.
At what price are Adviser Class shares of the Tomorrow Funds redeemed?
Adviser Class shares of the Tomorrow Funds will be redeemed at the
share price (NAV) of such shares next calculated after a redemption
order is received in good order by the Transfer Agent. Once shares are
redeemed, sale proceeds generally are available the next Business Day,
but may take up to three Business Days. For your protection, redemption
proceeds will not be released until a shareholder's account has been
opened and payment for the shares to be redeemed have been received by
the Tomorrow Fund, which may take up to fifteen days.
The net asset value per share received upon redemption or
repurchase may be more or less than the original cost of the shares,
depending on the market value of the portfolio at the time of
redemption or repurchase.
Plan Fiduciaries: To Redeem Shares for a Qualified Plan
By Mail: 1. In a written request specify:
Name of the Tomorrow Fund
Adviser Class shares
Account Number
Name(s) in which account is registered
The dollar amount or the number of shares to be
redeemed
2. Deliver the redemption request to an Authorized Firm
or mail to the Transfer Agent at the address
indicated on the back cover of this Prospectus.
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Automatically: 1. Use the Automatic Withdrawal Plan if the Qualified
Plan account has a total value of at least $[_____].
Sign up for this service when opening an account, or
call 1-800-_______ to add it.
2. The redemption proceeds of $[______] or more will
automatically be transferred from the Qualified Plan
account to the designated address or bank account on
or about the first Business Day of the month or
quarter selected.
General Redemption Information. Authorized Firms must receive
redemption requests before the close of business on the New York Stock
Exchange and transmit them to the Transfer Agent prior to the Transfer
Agent's close of business to receive that day's share price (NAV). A
written redemption request must be signed by all registered
shareholders for the account using the exact names in which the account
is registered or accompanied by executed power(s) of attorney. Unless
otherwise specified, redemption proceeds will be sent by check to the
record address. Plan Fiduciaries may elect to have redemption proceeds
wired to a checking or bank account if wire redemptions were authorized
when the account was opened or have subsequently been authorized.
Redemptions may be suspended or postponed during any period in
which any of the following conditions exist: the New York Stock
Exchange is closed or trading on the Exchange is restricted; an
emergency exists during which it is not reasonably practicable for a
Tomorrow Fund to dispose of its portfolio securities or to fairly
determine its net asset value; or the SEC, by order, so permits.
Certain requests must include a signature guarantee. A signature
guarantee is a widely accepted way to protect you and the Tomorrow
Funds from fraud by verifying the signature on your request. A
signature guarantee is required if the redemption proceeds are to be
sent to an address other than the address of record or to a person
other than the registered shareholder(s) for the account [or if the net
asset value of the shares redeemed is $100,000 or more].
The following institutions may provide a signature guarantee,
provided that the institution meets credit standards established by the
Transfer Agent: (i) a bank; (ii) a securities broker or dealer,
including a government or municipal securities broker or dealer, that
is a member of a clearing corporation or has net capital of at least
$100,000; (iii) a credit union having authority to issue signature
guarantees; (iv) a savings and loan association, a building and loan
association, a cooperative bank, a federal savings bank or association;
or (v) a national securities exchange, a registered securities exchange
or a clearing agency.
Signature guarantees may not be provided by a notary public.
Small Accounts. In order to reduce the expense of maintaining
numerous small accounts, the Trust reserves the right to redeem any
shareholder account (other than an IRA) if, as a result of redemptions,
the value of the account is less than $100. Plan Fiduciaries will be
allowed at least 60 days, after written notice by the Trust, to make an
additional investment to bring the account value up to at least $100
before the redemption is processed.
Change in Tax Status. Plan Fiduciaries are required to notify the
Trust through the Transfer Agent if the tax status of their Qualified
Plan is revoked or challenged by the Internal Revenue Service. The
Trust reserves the right to redeem any fund account of any shareholder
whose qualification as a
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<PAGE>
qualified pension or retirement plan satisfying the requirements of
Treasury Regulation 1.817-5 is revoked or challenged.
HOW TO EXCHANGE SHARES
May Adviser Class shares be exchanged for shares of other mutual funds?
Subject to the terms of your Qualified Plan Adviser Class shares
of a Tomorrow Fund may be exchanged for Adviser Class shares of any
other Tomorrow Fund or for Adviser Class shares of Core Large-Cap Stock
Fund and Core Small-Cap Stock Fund. To obtain a current prospectus for
the Adviser Class shares of Core Large-Cap Stock Fund and Core
Small-Cap Stock Fund, please call 1-800-___-____. Please consider the
differences in investment objectives and expenses of a Tomorrow Fund as
described in its prospectus before making an exchange.
Do sales charges apply to exchanges?
As is the case with initial purchases of Adviser Class shares,
exchanges of Adviser Class shares are made without the imposition of a
sales charge.
How may I make an exchange?
Because shares of the Tomorrow Funds are held for the account of
Qualified Plans, all orders to exchange shares must be made through
your Plan Fiduciary. If the Adviser Class shares you wish to exchange
are held for the account of a Qualified Plan sponsored by your
employer, please consult with your employer for information about how
to exchange shares of the Tomorrow Funds. If the Adviser Class shares
you wish to exchange are maintained by your Plan Fiduciary in an IRA or
other self-administered Qualified Plan, please consult with your Plan
Fiduciary for information about how to exchange shares of the Tomorrow
Funds.
Plan Fiduciaries: To Exchange Shares
By Phone: 1. Use the telephone exchange privilege. The telephone
exchange privilege is not available automatically. It
is necessary to sign up for this privilege on the
Account Application Form when opening an account, or
call 1-800-______ to add it.
2. Once this privilege has been selected, simply call the
Transfer Agent toll free at 1-800-223-3332 between
9:00 a.m. and 4:00 p.m. New York City time on any
Business Day.
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<PAGE>
3. Give the following information to the Transfer Agent
representative:
Name of current Tomorrow Fund
Adviser Class shares
Name of the fund into which the current Tomorrow
Fund shares will be exchanged
Account Number
Name(s) in which your account is registered
The dollar amount or the number of shares to be
exchanged
By Mail: 1. Deliver a written request to an Authorized Firm or mail
to the Transfer Agent at the address listed on the back
cover of this Prospectus specifying:
Name of current Tomorrow Fund
Adviser Class shares
Name of the fund into which the current
Tomorrow Fund shares will be exchanged
Account Number
Name(s) in which your account is registered
The dollar amount or the number of shares to be
exchanged
2. The exchange request must be signed by all registered
holders for the account using the exact names in which
the account is registered or accompanied by executed
power(s) of attorney.
General Exchange Information. Shares exchanged are valued at their
respective net asset values next determined after the exchange request
is received by the Transfer Agent. All exchanges are subject to the
following exchange restrictions: (i) the fund into which shares are
being exchanged must be registered for sale in your state; (ii)
exchanges may be made only between funds that are registered in the
same name, address and taxpayer identification number; and (iii) the
minimum amount for exchanging from one fund into another fund is $100
or the total value of your fund account (if less than $100) and must
satisfy the minimum account size of the fund to be exchanged into.
To confirm that telephone exchange requests are genuine, the Trust
employs reasonable procedures, such as providing written confirmation
of telephone exchange transactions and tape recording of telephone
exchange requests. If the Trust does not employ such reasonable
procedures, it may be liable for any loss incurred by a shareholder due
to a fraudulent or unauthorized telephone exchange request. Otherwise,
neither the Trust nor its agents will be liable for any loss incurred
by a shareholder as the result of following instructions communicated
by telephone that they reasonably believed to be genuine. The Trust
reserves the right to refuse any request made by telephone and may
limit the dollar amount involved or the number of telephone requests
made by any shareholder. During periods of extreme economic conditions
or market changes, requests by telephone may be difficult to make due
to heavy volume. During such times please consider placing your order
by mail.
To prevent abuse of the exchange privilege to the detriment of
other shareholders, the Trust limits the number of exchanges and
purchase/redemption transactions by any one shareholder account (or
group
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of accounts under common management) to a total of six transactions per
year. This policy applies to exchanges into or out of any series of the
Trust and any pair of transactions involving a purchase of shares of
any series of the Trust followed by a redemption of an offsetting or
substantially equivalent dollar amount of shares of that same series.
If a Plan Fiduciary violates this policy, his/her future purchases of,
or exchanges into, the series of the Trust may be permanently refused.
This policy does not prohibit redemptions of shares of any series. This
policy may be waived by WPG in its discretion. Further, the exchange
privilege may be changed or discontinued and may be subject to
additional limitations upon sixty (60) days' notice to shareholders,
including certain restrictions on purchases by market-timer accounts.
HOW EACH TOMORROW FUND'S SHARE PRICE IS DETERMINED
The net asset value per share of a class of a Tomorrow Fund is
determined by dividing the value of its assets, less liabilities
attributable to that class, by the number of shares of that class
outstanding. The net asset value is normally calculated as of the close
of regular trading of the New York Stock Exchange (currently 4:00 p.m.
New York City time) on each Business Day. Different classes of shares
of the Tomorrow Funds may have different net asset values.
Portfolio securities (other than certain money market instruments)
are valued primarily based on market quotations or, if market
quotations are not available, at fair market value as determined in
good faith by a valuation committee appointed by the Trustees. In
accordance with procedures adopted by the Trustees, each Tomorrow Fund
may use pricing services to value fixed-income investments.
MANAGEMENT OF THE TOMORROW FUNDS
Trustees
Each Tomorrow Fund is a separate investment series of Tomorrow
Funds Retirement Trust, a Delaware business trust (the "Trust"). Under
the terms of the Agreement and Declaration of Trust establishing the
Trust, the Trustees of the Trust are ultimately responsible for the
management of its business and affairs.
Investment Adviser
Weiss, Peck & Greer, L.L.C., One New York Plaza, New York, New
York 10004 serves as the investment adviser to each Tomorrow Fund
pursuant to an investment advisory agreement. Subject to the
supervision and direction of the Trustees, the Adviser manages each
Tomorrow Fund's portfolio in accordance with its stated investment
objective and policies, recommends investment decisions for the
Tomorrow Fund and places orders to purchase and sell securities on
behalf of the Tomorrow Fund. For these services, Post-Retirement Fund
pays the Adviser a monthly fee equal on an annual basis to 0.65% of its
average daily net assets and the other Tomorrow Funds each pay the
Adviser a monthly fee equal on an annual basis to 0.75% of the Tomorrow
Fund's average daily net assets.
The Adviser supervises the portfolio management of the Tomorrow
Funds through the Adviser's Asset Allocation Committee, which meets on
a regular basis to evaluate, among other things, the strategic asset
allocation mix between equity and fixed-income securities and among
large, medium and small capitalization and foreign stocks. Joseph N.
Pappo has been primarily responsible since the Tomorrow
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Funds' inception for the day-to-day management of the assets of each
Tomorrow Fund allocated to large, medium and small capitalization
stocks. Mr. Pappo has been a principal of the Adviser since 1994. Prior
to joining WPG, Mr. Pappo was the founder and president of Eden
Financial Group which was acquired by WPG in 1991. Daniel S. Vandivort
has been primarily responsible since the Tomorrow Funds' inception for
the day-to-day management of the assets of each Tomorrow Fund allocated
to fixed-income securities. Mr. Vandivort has been a principal of the
Adviser since November, 1994. Prior thereto, Mr. Vandivort served in
various capacities with CS First Boston Investment Management,
including Managing Director and Head of U.S. Fixed Income and Senior
Portfolio Manager and Director, Global Product Development and
Marketing.
The Adviser has voluntarily agreed to limit temporarily the
operating expenses (excluding Rule 12b-1 fees applicable to the Adviser
Class shares, service fees applicable to the Institutional Class
shares, any other class-specific expenses, litigation, indemnification
and other extraordinary expenses) of the Long-Term, Mid-Term and
Short-Term Funds to 1.25% of their respective average daily net assets
and such operating expenses of the Post-Retirement Fund to 1.15% of its
average daily net assets. The Adviser may discontinue or modify such
limitation in the future at its discretion, although it has no current
intention to do so.
Administrator
Pursuant to an administration agreement with each Tomorrow Fund,
WPG provides personnel for supervisory, administrative, accounting,
shareholder services and clerical functions; oversees the performance
of administrative and professional services to the Tomorrow Funds by
others; provides office facilities, furnishings and office equipment;
and prepares, but does not pay for, reports to shareholders, the SEC
and other regulatory authorities. As compensation for the services
rendered to the Tomorrow Funds as Administrator, WPG is entitled to a
fee, computed daily and payable monthly, at an annual rate equal to
0.09% of each Tomorrow Fund's average daily net assets. The
administrative fee for each Tomorrow Fund is reviewed and approved
annually by the Trustees.
Expenses
Each Tomorrow Fund bears all expenses of its operation, subject to
the expense limitation agreement described above. In particular, each
Tomorrow Fund pays: investment advisory fees; administration fees;
service fees with respect to the Institutional Class shares;
distribution and service fees with respect to the Adviser Class shares;
custodian and transfer agent expenses; legal and accounting fees and
expenses; expenses of preparing, printing, and distributing
Prospectuses and SAIs to existing shareholders, and shareholder
communications and reports; expenses of computing its net asset value
per share; federal and state registration fees and expenses with
respect to its shares; proxy and shareholder meeting expenses; expenses
of issuing and redeeming its shares; independent trustee fees and
expenses; expenses of bond, liability, and other insurance coverage;
brokerage commissions; taxes; trade association fees; and certain
non-recurring and extraordinary expenses. In addition, the expense of
organizing the Tomorrow Funds and initially registering and qualifying
their shares under federal and state securities laws are being charged
to the Tomorrow Funds' operations, as an expense, over a period not to
exceed 60 months from the Tomorrow Funds' inception date.
Each Tomorrow Fund will reimburse the Adviser for fees foregone or
other expenses paid by the Adviser pursuant to this expense limitation
in later years in which operating expenses for that Tomorrow Fund are
less than the expense limitations set forth above for any such year. No
interest, carrying or finance charge will be paid by a Tomorrow Fund
with respect to the amounts representing fees foregone or
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other expenses paid. In addition, no Tomorrow Fund will pay any
unreimbursed amounts to the Adviser upon termination of its investment
advisory agreement.
DISTRIBUTION PLANS
The Trust, on behalf of each Tomorrow Fund, has adopted a
Distribution Plan pursuant to Rule 12b-1 under the Investment Company
Act (the "Distribution Plans"). Under the Distribution Plans, each
Tomorrow Fund pays distribution and service fees at an aggregate annual
rate of up to 1.00% of a Tomorrow Fund's average daily net assets
attributable to Adviser Class shares. Up to 0.25% is for service fees
and the remaining amount is for distribution expenses. The distribution
fee is intended to compensate WPG for its services and expenses
associated with serving as principal underwriter of the Adviser Class
shares of the Tomorrow Funds, including the payment of commissions by
WPG to Authorized Firms. The service fee is intended to be compensation
for personal services and/or account maintenance services with respect
to the Adviser Class shares.
WPG makes monthly payments to Authorized Firms based on the
average net asset value of the Adviser Class shares which are
attributable to Qualified Plans for whom the Authorized Firms are
designated as the dealer of record. WPG makes such payments in amounts
up to the distribution fee it receives with respect to such Adviser
Class shares. WPG may suspend or modify such payments to Authorized
Firms. WPG and the Authorized Firms also share any sales charge imposed
on purchases of Adviser Class shares.
DIVIDENDS AND TAXES
Each Tomorrow Fund is treated as a separate entity for federal
income tax purposes and intends to elect to be treated as a "regulated
investment company" under the Code and to qualify for such treatment
for each taxable year. To qualify as such, each Tomorrow Fund must
satisfy certain requirements relating to the sources of its income,
diversification of its assets and distribution of its income to
shareholders. Each Tomorrow Fund also intends to satisfy certain
additional diversification requirements applicable under Section 817(h)
of the Internal Revenue Code in order to permit investments in
Institutional Class shares of the Tomorrow Funds by insurance company
segregated asset accounts that fund variable annuity or variable life
insurance products, which are subject to such requirements. It is
possible that in order to satisfy the applicable diversification
requirements, investment decisions may be made which would affect
either positively or negatively the investment performance of a
Tomorrow Fund. As a regulated investment company, each Tomorrow Fund
will not be subject to federal income tax on any net investment income
and net realized capital gains that are distributed to its shareholders
in accordance with certain timing requirements of the Code.
Participants in Qualified Plans may be eligible for tax deferral
on distributions a Qualified Plan receives from a Tomorrow Fund and
gains that arise from a Qualified Plan's dispositions of Fund shares.
This Prospectus does not describe in any respect such tax treatment.
Please consult your Plan Fiduciary or tax adviser. It is suggested that
participants in Qualified Plans keep all statements received from their
Qualified Plans to assist in personal recordkeeping.
Each Tomorrow Fund intends to distribute all of its net investment
income and net capital gains each year. Income dividends, if any, will
be declared and distributed monthly for Post-Retirement Fund. Income
dividends, if any, will be declared and distributed at least annually
by each other Tomorrow Fund. Net short-term and long-term capital gains
of each Tomorrow Fund, if any, realized during the taxable year
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will be distributed no less frequently then annually. Dividends derived
from each Tomorrow Fund's net investment income (including dividends,
interest and recognized market discount income), and net short-term
capital gains received by a Tomorrow Fund are treated as ordinary
income under the Code. Distributions from each Tomorrow Fund's net
long-term capital gains are treated as long-term capital gains under
the Code, regardless of how long shares of the Tomorrow Funds have been
held.
Reinvestment of Income Dividends and Capital Gains Distributions
Unless a Plan Fiduciary elects otherwise, as permitted in the
Account Information Form, income dividends and capital gains
distributions with respect to a Tomorrow Fund will be reinvested in
additional Adviser Class shares of that Tomorrow Fund and will be
credited to the Qualified Plan's account with that Tomorrow Fund at the
net asset value per share next determined as of the ex-dividend date.
Both income dividends and capital gains distributions are paid by the
Tomorrow Fund on a per share basis. As a result, at the time of such
payment, the net asset value per share of a Tomorrow Fund will be
reduced by the amount of such payment. Although income dividends and
capital gains distributions by the Tomorrow Funds may not give rise to
current tax liability for the categories of shareholders permitted to
invest in the Tomorrow Funds, participants in Qualified Plans may be
subject to tax on all or a portion of their distributions from such
Plans or upon the failure of such Plans to maintain their qualified
status under complex Code provisions concerning which a tax adviser
should be consulted. Participants in Qualified Plans who wish to change
the manner in which income dividends and capital gains distributions
are received by their Qualified Plans should contact their Plan
Fiduciaries. Written notification of such change must be received by
the Transfer Agent at least ten days before the next scheduled
distribution.
PORTFOLIO BROKERAGE
In effecting securities transactions, the Tomorrow Funds generally
seek to obtain the best price and execution of orders. Commission rates
are a component of price and are considered along with other factors,
including the ability of the broker to effect the transaction, and the
broker's facilities, reliability and financial responsibility. Subject
to the foregoing, the Tomorrow Funds intend to utilize WPG as their
primary broker in connection with the purchase and sale of
exchange-traded portfolio securities. As the Tomorrow Funds' primary
broker, WPG will receive brokerage commissions from the Tomorrow Funds,
limited to the "usual and customary broker's commission" specified by
the 1940 Act. The Tomorrow Funds intend to continue to use WPG as their
primary broker on exchange-traded securities, provided WPG is able to
provide execution at least as favorable as that provided by other
qualified brokers.
The Trustees of the Trust have developed procedures to limit the
commissions received by WPG to the "usual and customary broker's
commission" standard specified by the 1940 Act. On a quarterly basis,
the Trustees review the securities transactions of each Tomorrow Fund
effected by WPG to assure their compliance with such procedures.
The Tomorrow Funds will also execute their portfolio transactions
through qualified brokers other than WPG. In selecting such other
brokers, WPG considers the quality and reliability of brokerage
services, including execution capability and performance and financial
responsibility, and may consider the research and other investment
information provided by such brokers. Accordingly, the commissions paid
to any such broker may be greater than the amount another firm might
charge, provided WPG determines in good faith that the amount of such
commission is reasonable in relation to the value of the brokerage
services and research information provided by such broker. Such
information may be used by WPG (and its affiliates) in managing all of
its accounts and not all of such information may be used by WPG in
managing the Tomorrow Funds. In selecting other brokers for a Tomorrow
Fund, WPG may also consider
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the sale of shares of the Tomorrow Fund effected through such other
brokers as a factor in its selection, provided that Tomorrow Fund
obtains the best price and execution of orders.
Money market securities and other fixed-income securities, as well
as certain equity securities, in which the Tomorrow Funds invest are
traded primarily in the over-the-counter ("OTC") market. For
transactions effected in the OTC market, financial intermediaries
(i.e., dealers) act as principal rather than as agent and receive a
"spread" rather than a commission. The Tomorrow Funds intend to deal
with the primary market-makers with respect to OTC securities, unless a
more favorable result is obtainable elsewhere.
THE TRUST
Tomorrow Funds Retirement Trust is an open-end management
investment company (commonly referred to as a mutual fund) organized as
a Delaware business trust under an Agreement and Declaration of Trust
dated June 21, 1995 (the "Declaration"). The Trust has authorized an
unlimited number of shares of beneficial interest.
As of the date of this Prospectus, the shares of the Trust are
divided into six series: Tomorrow Long-Term Retirement Fund, Tomorrow
Mid-Term Retirement Fund, Tomorrow Short-Term Retirement Fund, Tomorrow
Post-Retirement Fund, Core Large-Cap Stock Fund and Core Small-Cap
Stock Fund. The Trust reserves the right to create and issue additional
series of shares. No series is entitled to share in the assets of any
other series or is liable for the expenses or liabilities of any other
series. Shares of a particular series vote separately on matters
affecting only that series, including the approval of an investment
advisory agreement and changes in fundamental policies or restrictions
of a particular series.
As of the date of this Prospectus, the Trustees have authorized
the issuance of two classes of shares for each series, designated
Adviser Class and Institutional Class. The shares of each Class
represent an interest in the same portfolio of investments of that
series. Each Class has equal rights as to voting, redemption, dividends
and liquidation, except that each Class bears different distribution
fees and may bear other expenses properly attributable to the
particular Class. Adviser Class shareholders of a Tomorrow Fund have
exclusive voting rights with respect to the Rule 12b-1 distribution
plan adopted by holders of Adviser Class shares of that Tomorrow Fund.
The Trustees have the authority, without further shareholder approval,
to classify and reclassify the shares of a series of the Trust into
additional classes. In addition, subject to Trustee approval and
shareholder approval (if then required), each Tomorrow Fund may pursue
its investment objective by investing all of its investable assets in a
pooled fund. See "Risk Considerations and Other Investment Practices
and Policies" below.
When issued and paid for in accordance with the terms of the
Prospectus and Statement of Additional Information, shares of the Trust
are fully paid and non-assessable. The Trust is not required, and does
not intend, to hold annual shareholder meetings. Shareholders have
certain rights, as set forth in the Declaration, including the right to
call a meeting of shareholders for the purpose of voting on the removal
of one or more Trustees. Such removal can be effected upon the action
of two-thirds of the outstanding shares of the Trust.
In addition to the requirements under Delaware law, the
Declaration provides that a shareholder of the Trust may bring a
derivative action on behalf of the Trust only if the following
conditions are met: (a) shareholders eligible to bring such derivative
action under Delaware law who hold at least 10% of the outstanding
shares of the Trust, or 10% of the outstanding shares of the series or
class to which such action relates, shall join in the request for the
Trustees to commence such action; and (b) the Trustees must be afforded
a reasonable amount of time to consider such shareholder request and
investigate the
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basis of such claim. The Trustees shall be entitled to retain counsel
or other advisers in considering the merits of the request and shall
require an undertaking by the shareholders making such request to
reimburse the Trust for the expense of any such advisers in the event
that the Trustees determine not to bring such action
The Trustees of the Trust do not foresee any disadvantages to
investors arising out of the fact that each Tomorrow Fund may offer a
class of its shares to insurance company segregated asset accounts that
serve as investment medium for variable annuity and variable life
insurance products or that each Tomorrow Fund may offer its shares to
Qualified Plans. Nevertheless, the Trustees intend to monitor events in
order to identify any material irreconcilable conflicts which may
possibly arise, and to determine what action, if any, should be taken
in response to such conflicts. If such a conflict were to occur, one or
more separate accounts or Qualified Plans might be required to withdraw
their investments in one or more Tomorrow Funds and shares of another
series of the Trust may be substituted. This might force a Tomorrow
Fund to sell securities at disadvantageous prices.
In the interests of economy and convenience, the Trust does not
issue certificates representing the Tomorrow Funds' shares. Instead,
the Transfer Agent maintains a record of each shareholder's ownership.
Although each Tomorrow Fund is offering only its own shares, since the
Tomorrow Funds use this combined Prospectus, it is possible that one
Tomorrow Fund might become liable for a misstatement or omission in
this Prospectus regarding another Tomorrow Fund. The Trustees have
considered this factor in approving the use of this combined
Prospectus.
INVESTMENT PERFORMANCE
Each Tomorrow Fund may illustrate in advertisements and sales
literature the average annual total return of its Adviser Class shares,
which is the rate of growth of the Tomorrow Fund that would be
necessary to achieve the ending value of an assumed initial investment
of $1,000 kept in Adviser Class shares of the Tomorrow Fund for the
period specified and is based on the following assumptions: (1) all
dividends and distributions by the Tomorrow Fund are reinvested in
Adviser Class shares of the Tomorrow Fund at net asset value; and (2)
all recurring fees are included for applicable periods.
Each Tomorrow Fund may also illustrate in advertisements the
cumulative total return for several time periods throughout the
Tomorrow Fund's life based on an assumed initial investment of $1,000.
Any such cumulative total return for a Tomorrow Fund will assume the
reinvestment of all income dividends and capital gains distributions in
Adviser Class for the indicated periods and will include all recurring
fees.
Each Tomorrow Fund may also illustrate in advertisements and sales
literature the yield and effective yield of its Adviser Class shares.
Yield is based on income generated by an investment in Adviser Class
shares of the Tomorrow Fund during a 30-day (or one-month) period. To
calculate yield, this income is annualized, that is, the amount of
income generated during the 30-day (or one-month) period is assumed to
be generated each 30-day (or one-month) period over a one-year period,
and expressed as an annual percentage rate. Effective yield for Adviser
Class shares of the Tomorrow Funds is calculated in a similar manner
but, when annualized, the income earned from an investment is assumed
to be reinvested. Effective yield for each Tomorrow Fund will be
slightly higher than its current yield because of the compounding
effect of this assumed reinvestment.
Yields and total returns quoted for the Tomorrow Funds include the
effect of deducting each Tomorrow Fund's expenses but may not include
charges and expenses attributable to any particular Qualified Plan. You
should consult with your Plan Fiduciary for information on relevant
charges and
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expenses. Because these charges and expenses are excluded from a
Tomorrow Fund's quoted performance, the investment return received by a
participant in a Qualified Plan investing in the Tomorrow Fund may be
lower than the quoted performance of the Tomorrow Fund. You should bear
in mind the effect of these charges when comparing a Tomorrow Fund's
performance to that of other mutual funds.
The performance of the Adviser Class shares of the Tomorrow Funds
will vary from time to time and past results are not necessarily
representative of future results. Performance is a function of the type
and quality of a Tomorrow Fund's portfolio securities and is affected
by operating expenses. Performance information may not provide a basis
for comparison with other investments or other mutual funds using a
different method of calculating performance. An investment in any
Tomorrow Fund involves the risk of loss.
RISK CONSIDERATIONS AND OTHER INVESTMENT PRACTICES AND POLICIES
Because each Tomorrow Fund owns different types of investments,
its performance is affected by a variety of factors. The value of a
Tomorrow Fund's investments and the income they generate will vary from
day to day, and generally reflect interest rates, market conditions,
and other company, political and economic news. Performance also
depends of the Adviser's skill in allocating assets. When you sell your
shares, they may be worth more or less than what you paid for them.
Fixed-Income Securities. Each Tomorrow Fund may invest in a broad
range of fixed-income securities, including bonds, notes, mortgage-
backed and asset-backed securities, preferred stock and convertible
debt securities issued by U.S. corporations or other entities or by
the U.S. Government or its agencies,
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authorities, instrumentalities or sponsored enterprises. The interest
payable on so-called fixed-income securities purchased by a Tomorrow
Fund is not necessarily paid at a fixed rate and may be payable on a
variable, floating (including inverse floating), contingent, in-kind or
deferred basis.
Fixed-income securities are subject to the risk of the issuers'
inability to meet principal and interest payments on the obligations
(credit risk) and may also be subject to price volatility due to such
factors as interest rate sensitivity, market perception of the credit
worthiness of the issuer and general market liquidity (market risk).
Generally, when interest rates decline, the value of fixed-income
securities can be expected to rise. Conversely, when interest rates
rise the value of fixed-income securities can be expected to decline.
Corporate Debt Obligations. Each Tomorrow Fund may invest in corporate
debt obligations, including obligations of industrial, utility and
financial issuers. In addition to obligations of corporations,
corporate debt obligations include bank obligations and zero coupon
securities, issued by financial institutions and corporations.
The debt securities in which the Tomorrow Funds may invest will be
rated investment grade at the time of purchase. Investment grade
securities are securities rated within the four highest grades as
determined by Moody's Investors Service, Inc. ("Moody's") (Aaa, Aa, A
or Baa) or by Standard & Poor's Ratings Group ("Standard & Poor's")
(AAA, AA, A or BBB) or their respective equivalent ratings or, if not
rated, determined by the Adviser to be of equivalent credit quality to
securities so rated. A security will be deemed to have met a rating
requirement if it receives the minimum required rating from at least
one such rating organization even though it has been rated below the
minimum rating by one or more other rating organizations, or if unrated
by such rating organizations, determined by the Adviser to be of
comparable credit quality. Securities rated Baa by Moody's or BBB by
Standard & Poor's and unrated securities of equivalent credit quality
are considered medium grade obligations with speculative
characteristics. Adverse changes in economic conditions or other
circumstances are more likely to weaken the issuer's capacity to pay
interest and repay principal on these securities than is the case for
issuers of higher rated securities. In the event that the rating on a
security held in a Tomorrow Fund's portfolio is downgraded below
investment grade by a rating service, such action will be considered by
the Adviser in its evaluation of the overall investment merits of that
security, but will not necessarily result in the sale of the security.
Convertible Securities and Preferred Stocks. Each Tomorrow Fund may
invest in debt securities or preferred stocks that are convertible into
or exchangeable for common stock. Preferred stocks are securities that
represent an ownership interest in a company and provide their owner
with claims on the company's earnings and assets prior to the claims of
owners of common stock but after those of bond owners. Preferred stocks
in which the Tomorrow Funds may invest include sinking fund,
convertible, perpetual fixed and adjustable rate (including auction
rate) preferred stocks.
U.S. Government Securities. Each Tomorrow Fund may invest in all types
of U.S. Government securities, including obligations issued or
guaranteed by the U.S. Government or its agencies, authorities,
instrumentalities or sponsored enterprises. Some U.S. Government
securities, such as Treasury bills, notes and bonds, which differ only
in their interest rates, maturities and times of issuance, are
supported by the full faith and credit of the United States of America.
Others, such as obligations issued or guaranteed by U.S. Government
agencies, authorities, instrumentalities or sponsored enterprises are
supported either by (a) the full faith and credit of the U.S.
Government (such as securities of the Small Business Administration),
(b) the right of the issuer to borrow from the U.S. Treasury (such as
securities of the Federal Home Loan Banks), (c) the discretionary
authority of the U.S. Government to purchase the agency's obligations
(such as securities of the Federal National Mortgage Association), or
(d) only the credit of the issuer.
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Each Tomorrow Fund may also invest in separately traded principal
and interest components of securities guaranteed or issued by the U.S.
Government or its agencies, instrumentalities or sponsored enterprises
if such components are traded independently under the Separate Trading
of Registered Interest and Principal of Securities program ("STRIPS")
or any similar program sponsored by the U.S. Government. The Tomorrow
Funds may invest in U.S. Government securities which are zero coupon or
deferred interest securities.
Zero Coupon and Capital Appreciation Bonds. The Tomorrow Funds may
invest in zero coupon and capital appreciation bonds. Zero coupon and
capital appreciation bonds are debt securities issued or sold at a
discount from their face value that do not entitle the holder to any
payment of interest prior to maturity or a specified redemption date
(or cash payment date). The amount of the discount varies depending on
the time remaining until maturity or cash payment date, prevailing
interest rates, the liquidity of the security and the perceived credit
quality of the issuer. These securities also may take the form of debt
securities that have been stripped of their unmatured interest coupons,
the coupons themselves or receipts or certificates representing
interests in such stripped debt obligations or coupons. The market
prices of zero coupon and capital appreciation bonds generally are more
volatile than the market prices of interest-bearing securities and are
likely to respond to a greater degree to changes in interest rates than
interest-bearing securities having similar maturities and credit
quality.
Mortgage-Backed Securities. Each Tomorrow Fund may invest in mortgage
pass-through certificates and multiple-class pass-through securities,
such as real estate mortgage investment conduits ("REMIC") pass-through
certificates and collateralized mortgage obligations ("CMOs").
Guaranteed Mortgage Pass-Through Securities. Guaranteed mortgage
pass-through securities represent participation interests in pools of
residential mortgage loans and are issued by U.S. Governmental or
private lenders and guaranteed by the U.S. Government National Mortgage
Association ("Ginnie Mae"), the Federal National Mortgage Association
("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie
Mac"). Ginnie Mae certificates are guaranteed by the full faith and
credit of the U.S. Government for timely payment of principal and
interest on the certificates. Fannie Mae certificates are guaranteed by
Fannie Mae, a federally chartered and privately owned corporation, for
full and timely payment of principal and interest on the certificates.
Freddie Mac certificates are guaranteed by Freddie Mac, a corporate
instrumentality of the U.S. Government, for timely payment of interest
and the ultimate collection of all principal of the related mortgage
loans.
Multiple-Class Pass-through Securities and Collateralized Mortgage
Obligations. CMOs and REMIC pass-through or participation certificates
may be issued by, among others, U.S. Government agencies and
instrumentalities as well as private lenders. CMOs and REMIC
certificates are issued in multiple classes and the principal of and
interest on the mortgage assets may be allocated among the several
classes of CMOs or REMIC certificates in various ways. Each class of
CMOs or REMIC certificates, often referred to as a "tranche," is issued
at a specific adjustable or fixed interest rate and must be fully
retired no later than its final distribution date. Generally, interest
is paid or accrues on all classes of CMOs or REMIC certificates on a
monthly basis.
Typically, CMOs are collateralized by Ginnie Mae, Fannie Mae or
Freddie Mac certificates but also may be collateralized by other
mortgage assets such as whole loans or private mortgage pass-through
securities. Debt service on CMOs is provided from payments of principal
and interest on collateral of mortgaged assets and any reinvestment
income thereon.
A REMIC is a CMO that qualifies for special tax treatment under
the Code and invests in certain mortgages primarily secured by
interests in real property and other permitted investments. Investors
may
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purchase "regular" and "residual" interest shares of beneficial
interest in REMIC trusts although the Tomorrow Funds do not intend to
invest in residual interests.
Risk Factors Associated with Mortgage-Backed Securities. Investing in
Mortgage-Backed Securities involves certain risks, including the
failure of a counter-party to meet its commitments, adverse interest
rate changes and the effects of prepayments on mortgage cash flows.
Further, the yield characteristics of Mortgage-Backed Securities differ
from those of traditional fixed-income securities. The major
differences typically include more frequent interest and principal
payments (usually monthly), the adjustability of interest rates, and
the possibility that prepayments of principal may be made substantially
earlier than their final distribution dates.
Prepayment rates are influenced by changes in current interest
rates and a variety of economic, geographic, social and other factors
and cannot be predicted with certainty. Both adjustable rate mortgage
loans and fixed rate mortgage loans may be subject to a greater rate of
principal prepayments in a declining interest rate environment and to a
lesser rate of principal prepayments in an increasing interest rate
environment. Under certain interest rate and prepayment rate scenarios,
a Tomorrow Fund may fail to recoup fully its investment in
Mortgage-Backed Securities notwithstanding any direct or indirect
governmental or agency guarantee. When a Tomorrow Fund reinvests
amounts representing payments and unscheduled prepayments of principal,
it may receive a rate of interest that is lower than the rate on
existing adjustable rate mortgage pass-through securities. Thus,
Mortgage-Backed Securities, and adjustable rate mortgage pass-through
securities in particular, may be less effective than other types of
U.S. Government securities as a means of "locking in" interest rates.
Conversely, in a rising interest rate environment, a declining
prepayment rate will extend the average life of many Mortgage-Backed
Securities. This possibility is often referred to as extension risk.
Extending the average life of a Mortgage-Backed Security increases the
risk of depreciation due to future increases in market interest rates.
Risks Associated with Specific Types of Derivative Debt Securities.
Different types of derivative debt securities are subject to different
combinations of prepayment, extension and/or interest rate risk.
Conventional mortgage pass-through securities and sequential pay CMOs
are subject to all of these risks, but are typically not leveraged.
Thus, the magnitude of exposure may be less than for more leveraged
Mortgage-Backed Securities.
Planned amortization class ("PAC") and target amortization class
("TAC") CMO bonds involve less exposure to prepayment, extension and
interest rate risk than other Mortgage-Backed Securities, provided that
prepayment rates remain within expected prepayment ranges or "collars."
To the extent that prepayment rates remain within these prepayment
ranges, the residual or support tranches of PAC and TAC CMOs assume the
extra prepayment, extension and interest rate risk associated with the
underlying mortgage assets.
Asset-Backed Securities. Each Tomorrow Fund may invest in asset-backed
securities, which represent participations in, or are secured by and
payable from, pools of assets such as motor vehicle installment sale
contracts, installment loan contracts, leases of various types of real
and personal property, receivables from revolving credit (credit card)
agreements and other categories of receivables. Asset-backed securities
may also be collateralized by a portfolio of U.S. Government
securities, but are not direct obligations of the U.S. Government, its
agencies or instrumentalities. Such asset pools are securitized through
the use of privately-formed trusts or special purpose corporations.
Payments or distributions of principal and interest on asset-backed
securities may be guaranteed up to certain amounts and for a certain
time period by a letter of credit or a pool insurance policy issued by
a financial institution unaffiliated with the trust or
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<PAGE>
corporation, or other credit enhancements may be present; however,
privately issued obligations collateralized by a portfolio of privately
issued asset-backed securities do not involve any government-related
guarantee or insurance. In addition to risks similar to those
associated with Mortgage-Backed Securities, asset-backed securities
present further risks that are not presented by Mortgage-Backed
Securities because asset-backed securities generally do not have the
benefit of a security interest in collateral that is comparable to
mortgage assets.
Real Estate Investment Trusts. Each Tomorrow Fund may invest in shares
of real estate investment trusts ("REITs"). REITs are pooled investment
vehicles which invest primarily in income producing real estate or real
estate related loans or interests. REITs are generally classified as
equity REITs, mortgage REITs or a combination of equity and mortgage
REITs. Equity REITs invest the majority of their assets directly in
real property and derive income primarily from the collection of rents.
Equity REITs can also realize capital gains by selling properties that
have appreciated in value. Mortgage REITs invest the majority of their
assets in real estate mortgages and derive income from the collection
of interest payments. Like investment companies such as the Tomorrow
Funds, REITs are not taxed on income distributed to shareholders
provided they comply with several requirements of the Internal Revenue
Code. Any Tomorrow Fund that invests in REITs will indirectly bear its
proportionate share of any expenses paid by such REITs in addition to
the expenses paid by the Tomorrow Fund.
Investing in REITs involves certain risks: equity REITs may be
affected by changes in the value of the underlying property owned by
the REITs, while mortgage REITs may be affected by the quality of any
credit extended. REITs are dependent upon management skills, are not
diversified, and are subject to the risks of financing projects. REITs
are subject to heavy cash flow dependency, default by borrowers,
self-liquidation, and the possibilities of failing to qualify for the
exemption from tax for distributed income under the Internal Revenue
Code and failing to maintain their exemptions from the 1940 Act. REITs
whose underlying assets include long-term health care properties, such
as nursing, retirement and assisted living homes, may be impacted by
federal regulations concerning the health care industry.
Investing in REITs may involve risks similar to those associated
with investing in small capitalization companies. REITs may have
limited financial resources, may trade less frequently and in a limited
volume and may be subject to more abrupt or erratic price movements
than larger company securities. Historically, small capitalization
stocks, such as REITs, have been more volatile in price than the larger
capitalization stocks included in the S&P 500 Index.
Investing in Small Capitalization Companies. Each Tomorrow Fund may
invest in varying degrees in smaller, lesser known companies which the
Adviser believes offer a greater growth potential than larger, more
mature, better known firms. Investing in the securities of such
companies, however, involves greater risk and a possibility of greater
portfolio price volatility. Historically, small capitalization stocks
and stocks of recently organized companies have been more volatile in
price than the larger capitalization stocks, such as those included in
the S&P 500. Among the reasons for the greater price volatility of
these small company and unseasoned stocks are the less certain growth
prospects of smaller firms and the lower degree of liquidity in the
markets for such stocks.
Other Investment Companies. Each Tomorrow Fund may invest up to 10% of
its total assets in the securities of other investment companies but
may not invest more than 5% of its total assets in the securities of
any one investment company or acquire more than 3% of the voting
securities of any other investment company. A Tomorrow Fund will
indirectly bear its proportionate share of any management fees and
other expenses paid by investment companies in which it invests in
addition to the advisory and administration fees paid by the Tomorrow
Fund. However, to the extent that a Tomorrow Fund invests in a
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registered open-end investment company, the Adviser will waive its
advisory fees on the portion of the Tomorrow Fund's assets so invested.
Each Tomorrow Fund is authorized to invest all of its assets in
the securities of a single open-end investment company (a "pooled
fund") having substantially identical investment objectives, policies
and restrictions as such Fund, notwithstanding any other investment
restriction or policy. Such a structure is commonly referred to as
"master/feeder." If authorized by the Trustees and subject to
shareholder approval (if then required by applicable law), a Tomorrow
Fund would seek to achieve its investment objective by investing in a
pooled fund which would invest in a portfolio of securities that
complies with the Tomorrow Fund's investment objective, policies and
restrictions. The Trustees currently do not intend to authorize
investing in a pooled fund in connection with a master/feeder
structure.
Short-Term Debt Securities. Each Tomorrow Fund may establish and
maintain cash balances for temporary purposes in order to maintain
liquidity to meet shareholder redemptions. Each Tomorrow Fund may also
establish and maintain cash balances for defensive purposes without
limitation to hedge against potential stock market declines. A Tomorrow
Fund's cash balances, including uncommitted cash balances, may be
invested in investment grade money market instruments and short-term
interest-bearing securities. These securities consist of U.S.
Government securities, instruments of U.S. banks (including negotiable
certificates of deposit, non-negotiable fixed-time deposits and
bankers' acceptances), repurchase agreements, prime commercial paper of
U.S. companies and debt securities that make periodic interest payments
at variable or floating rates.
Structured Securities. Each Tomorrow Fund may invest in "structured"
notes, bonds or debentures. The distinguishing feature of a structured
security is that the value of the principal of and/or interest payable
on the security is determined by reference to the value of a benchmark
or the relative change in two or more benchmarks. Examples of these
benchmarks include stock prices, currency exchange rates and physical
commodity prices. Structured securities may be positively or negatively
indexed, so that appreciation of the benchmark may produce an increase
or decrease in the interest rate or value of the structured security at
maturity. Certain structured securities may also be leveraged to the
extent that the magnitude of any change in the interest rate or
principal payable on the benchmark asset is a multiple of the change in
the reference price. Leverage enhances the price volatility of the
security and, therefore, the Fund's net asset value. Further, certain
structured or hybrid notes may be illiquid for purposes of the Fund's
limitation on investments in illiquid securities.
Mortgage Dollar Rolls. Each Tomorrow Fund may enter into mortgage
dollar roll transactions. In a mortgage dollar roll, a Tomorrow Fund
sells securities for delivery in the current month and simultaneously
contracts with the same counterparty to repurchase similar (same type,
coupon and maturity), but not identical securities on a specified
future date. During the roll period, the Tomorrow Fund will not receive
principal and interest paid on the securities sold. However, the
Tomorrow Fund would benefit to the extent of any difference between the
price received for the securities sold and the lower forward price for
the future purchase (often referred to as the "drop") or fee income
plus the interest on the cash proceeds of the securities sold until the
settlement date of the forward purchase. Unless such benefits exceed
the income, capital appreciation and gain or loss due to mortgage
prepayments that would have been realized on the securities sold as
part of the mortgage dollar roll, the use of this technique will
diminish the investment performance of a Tomorrow Fund compared with
what such performance would have been without the use of mortgage
dollar rolls. The Tomorrow Funds will hold and maintain in a segregated
account until the settlement date cash or liquid, high grade debt
securities in an amount equal to the forward purchase price. Any
benefits derived from the use of mortgage dollar rolls may depend upon
mortgage prepayment assumptions, which will be affected by changes in
interest rates. There is no assurance that mortgage dollar rolls can be
successfully employed.
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Writing and Purchasing Put and Call Options on Securities and
Securities Indices. To seek additional income or to minimize
anticipated declines in the value of its securities, each Tomorrow Fund
may purchase and write (i.e., sell) call and put options on securities
and securities indices. Option transactions in which the Tomorrow Funds
may engage may be traded on securities exchanges or in the
over-the-counter market. Each Tomorrow Fund currently intends to limit
its option transactions during the current fiscal year so that no more
than 5% of the Tomorrow Fund's net assets will be at risk as a result
of such transactions. Please see the SAI for a further discussion of
option transactions and associated risks.
Futures Contracts and Options on Futures Contracts. Each Tomorrow Fund
may engage in futures transactions and related options. Future
contracts may be based on various securities (such as U.S. Government
securities), securities indices and other financial instruments and
indices. A Tomorrow Fund will engage in futures and related options
transactions only for bona fide hedging and non-hedging purposes to the
extent permitted by regulations of the Commodity Futures Trading
Commission. A Tomorrow Fund will not enter into futures contracts or
options thereon for non-hedging purposes if, immediately thereafter,
the aggregate initial margin and premiums required to establish
non-hedging positions in futures contracts and options on futures would
exceed 5% of the Tomorrow Fund's net assets, after taking into account
unrealized profits and losses on any such positions and excluding the
amount by which such options were in-the-money at the time of purchase.
Each Tomorrow Fund may also enter into closing purchase and sale
transactions with respect to any of futures contracts and related
options.
The use of futures contracts entails certain risks, including but
not limited to the following: no assurance that futures contracts
transactions can be offset at favorable prices; possible reduction of
the Tomorrow Fund's income due to the use of hedging; possible
reduction in value of the both the securities hedged and the hedging
instrument; possible lack of liquidity due to daily limits on price
fluctuations; imperfect correlation between the contract and the
securities being hedged; and potential losses in excess of the amount
initially invested in the futures contracts themselves. If the
expectations of the Adviser regarding movements in securities prices or
interest rates are incorrect, the Tomorrow Fund may have experienced
better investments results without hedging. The use of futures
contracts and options on futures contracts requires special skills in
addition to those needed to select portfolio securities. A further
discussion of futures contracts and their associated risks is contained
in the SAI.
Forward Commitments, Delayed Delivery and When-Issued Securities. Each
Tomorrow Fund may purchase securities on a when-issued, delayed
delivery, or forward commitment basis. When such transactions are
negotiated, the price of such securities is fixed at the time of the
commitment, but delivery and payment for the securities may take place
up to 90 days after the date of the commitment to purchase. The
securities so purchased are subject to market fluctuation, and no
interest accrues to the purchaser during this period. When-issued
securities or forward commitments involve a risk of loss if the value
of the security to be purchased declines prior to the settlement date.
When a Tomorrow Fund purchases securities on a forward commitment or
when-issued basis, the Tomorrow Fund's custodian will maintain in a
segregated account cash or liquid, high grade debt securities having a
value (determined daily) at least equal to the amount of the Tomorrow
Fund's purchase commitment. A Tomorrow Fund may close out a position in
securities purchased on a when-issued, delayed delivery or forward
commitment basis prior to the settlement date.
Lending of Portfolio Securities. Each Tomorrow Fund may also seek to
increase its income by lending portfolio securities. Such loans may be
made to institutions, such as certain broker-dealers, and are required
to be secured continuously by collateral in cash, cash equivalents or
U.S. Government securities maintained on a current basis at an amount
at least equal to the market value of the securities loaned. If the
Adviser determines to make securities loans, the value of the
securities loaned would not exceed 33 1/ 3% of the value of the total
assets of the Tomorrow Fund. A Tomorrow Fund may experience a loss or
-29-
<PAGE>
delay in the recovery of its securities if the borrowing institution
breaches its agreement with the Tomorrow Fund.
Restricted and Illiquid Securities. Each Tomorrow Fund may invest up to
15% of its total assets in "restricted securities" (i.e., securities
that would be required to be registered under the Securities Act of
1933, as amended ("1933 Act"), prior to distribution to the general
public) including restricted securities eligible for resale to
"qualified institutional buyers" under Rule 144A under the 1933 Act.
Each Tomorrow Fund may also invest up to 15% of its net assets in
illiquid investments, which includes repurchase agreements maturing in
more than seven days, securities that are not readily marketable,
certain over-the-counter options and restricted securities, unless the
Trustees determine, based upon a continuing review of the trading
markets for the specific restricted security, that such restricted
securities are liquid. Each Tomorrow Fund may agree to adhere to more
restrictive limits on investments in restricted and illiquid
investments as a condition of the registration of its shares in various
states. The Trustees have adopted guidelines and delegated to the
Advisor the daily function of determining and monitoring the liquidity
of restricted securities. The Trustees, however, retain sufficient
oversight and are ultimately responsible for the determinations. Since
it is not possible to predict with assurance exactly how this market
for restricted securities sold and offered under Rule 144A will
develop, the Trustees carefully monitor each Tomorrow Fund's
investments in these securities, focusing on such important factors,
among others, as valuation, liquidity and availability of information.
This investment practice could have the effect of increasing the level
of illiquidity in a Tomorrow Fund to the extent that qualified
institutional buyers become for a time uninterested in purchasing these
restricted securities.
Repurchase Agreements. Each Tomorrow Fund may enter into repurchase
agreements through which the Tomorrow Fund purchases a security (the
"underlying security") from a domestic securities dealer or bank that
is a member of the Federal Reserve System. Under the agreement, the
seller of the repurchase agreement (i.e., the securities dealer or
bank) agrees to repurchase the underlying security at a mutually agreed
upon time and price. In repurchase transactions, the underlying
security, which must be a high-quality debt security, is held by the
Tomorrow Fund's custodian through the federal book-entry system as
collateral and marked-to-market on a daily basis to ensure full
collateralization of the repurchase agreement. In the event of
bankruptcy or default of certain sellers of repurchase agreements, a
Tomorrow Fund could experience costs and delays in liquidating the
underlying security held as collateral and might incur a loss if such
collateral declines in value during this period.
Market Changes. The market value of the Tomorrow Fund's investments,
and thus each Tomorrow Fund's net asset value, will change in response
to market conditions affecting the value of its portfolio securities.
When interest rates decline, the value of fixed rate obligations can be
expected to decline. In contrast, as interest rates on adjustable rate
loans are reset periodically, yields on investments in such loans will
gradually align themselves to reflect changes in market interest rates,
causing the value of such investments to fluctuate less dramatically in
response to interest rate fluctuations than would investments in fixed
rate obligations.
Portfolio Turnover. Although no Tomorrow Fund purchases securities with
a view to rapid turnover, there are no limitations on the length of
time that securities must be held by a Tomorrow Fund and a Tomorrow
Fund's annual portfolio turnover rate may vary significantly from year
to year. A high rate of portfolio turnover (100% or more) involves
correspondingly greater transaction costs which must be borne by the
applicable Tomorrow Fund and its shareholders and may, under certain
circumstances, make it more difficult for such Tomorrow Fund to qualify
as a regulated investment company under the Code. The estimated
portfolio turnover rates of the Tomorrow Funds for the current fiscal
year are as follows: Long-Term Fund 57%; Mid-Term Fund 63%; Short-Term
Fund 65%; and Post-Retirement Fund 82%.
-30-
<PAGE>
Diversification. Each Tomorrow Fund is diversified, as defined in the
1940 Act. As such, each Tomorrow Fund has a fundamental policy that
limits its investments so that, with respect to 75% of its assets (i)
no more than 5% of the Tomorrow Fund's total assets will be invested in
the securities of a single issuer and (ii) each Tomorrow Fund will
purchase no more than 10% of the outstanding voting securities of a
single issuer. These limitations do not apply to obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities,
repurchase agreements collateralized by U.S. Government securities or
investments in other investment companies. In addition to the
diversification requirements under the 1940 Act, the Tomorrow Funds
must satisfy the diversification requirements under the Internal
Revenue Code applicable to regulated investment companies and the
additional diversification requirements applicable under Section 817(h)
of the Internal Revenue Code to the underlying assets of insurance
company segregated asset accounts that fund variable annuity or
variable life insurance products. These requirements place certain
limitations on the assets of a Tomorrow Fund that may be invested in
securities of a single issuer or interests in the same commodity. More
specific information on these diversification requirements is contained
in the SAI.
Investment Restrictions. Each Tomorrow Fund is subject to further
investment policies and restrictions that are described in the SAI. The
foregoing investment policies, including each Tomorrow Fund's
investment objective, are non-fundamental policies which may be changed
by the Trustees without the approval of shareholders. If there is a
change in a Tomorrow Fund's investment objective, shareholders should
consider whether that Tomorrow Fund remains an appropriate investment
in light of their then current financial positions and needs. Each
Tomorrow Fund has adopted certain fundamental policies which may not be
changed without the approval of the applicable Tomorrow Fund's
shareholders. See "Investment Restrictions" in the Statement of
Additional Information.
If any percentage restriction described above or in the SAI is
adhered to at the time of investment, a subsequent increase or decrease
in the percentage resulting from a change in the value of a Tomorrow
Fund's assets will not constitute a violation of the restriction.
ADDITIONAL INFORMATION
Reports to Shareholders
As shareholders in the Tomorrow Funds, Qualified Plans will
receive an annual report containing audited financial statements and
semi-annual and quarterly reports. Each Qualified Plan will also be
provided with a printed confirmation for each transaction in their
shareholder account. Participants in Qualified Plans may receive
additional reports from their Plan Fiduciary.
Principal Underwriter
WPG serves as the Tomorrow Funds' principal underwriter.
Transfer Agent and Dividend Disbursing Agent
The Shareholder Services Group, Inc. (the "Transfer Agent"), P.O.
Box 9037, Boston, MA 02205 serves as transfer agent and dividend
disbursing agent for the Tomorrow Funds. The Tomorrow Funds may also
enter into agreements with and compensate other transfer agents and
financial institutions who process shareholder transactions and
maintain shareholder accounts.
-31-
<PAGE>
Independent Accountants
KPMG Peat Marwick LLP, 345 Park Avenue, New York, New York 10154,
serves as the independent accountants for the Trust and will audit each
Tomorrow Fund's financial statements annually.
Legal Counsel
Hale and Dorr, 60 State Street, Boston, Massachusetts 02109, is
legal counsel to the Trust.
----------------------
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained
in this Prospectus and the SAI, and, if given or made, such other
information or representation must not be relied upon as having been
authorized by the Trust. This Prospectus does not constitute an
offering in any jurisdiction in which such offering may not be lawfully
made.
-32-
<PAGE>
Subject to Completion: Dated July 3, 1995
WEISS, PECK & GREER INVESTMENTS
TOMORROW FUNDS RETIREMENT TRUST
One New York Plaza
New York, New York 10004
TOMORROW LONG-TERM RETIREMENT FUND ("Long-Term Fund")
Seeks to satisfy the retirement goals of investors who are currently
between 22 and 35 years of age and with an average remaining life
expectancy of 50 years or more.
TOMORROW MID-TERM RETIREMENT FUND ("Mid-Term Fund")
Seeks to satisfy the retirement goals of investors who are currently
between 36 and 50 years of age and with an average remaining life
expectancy in the range of 35-50 years.
TOMORROW SHORT-TERM RETIREMENT FUND ("Short-Term Fund")
Seeks to satisfy the retirement goals of investors who are currently
between 51 and 65 years of age and with an average remaining life
expectancy in the range of 20-30 years.
TOMORROW POST-RETIREMENT FUND ("Post-Retirement Fund")
Seeks to satisfy the goals of investors who seek to maximize total return,
with an emphasis on current income, consistent with capital preservation.
PROSPECTUS -- Institutional Class Shares
September __, 1995
This Prospectus describes Institutional Class shares of four mutual funds
- the Long-Term Fund, Mid-Term Fund, Short-Term Fund and Post-Retirement
Fund (together, the "Tomorrow Funds"). Institutional Class shares of the
Tomorrow Funds of the Funds are designed to provide investment vehicles for
variable annuity and variable life insurance contracts ("Variable
Contracts") of various insurance companies. Institutional Class shares of
the Tomorrow Funds may also be purchased by "qualified" pension or
retirement plans, including trustees of such plans for individuals funding
their individual retirement accounts or other qualified plans. Each Tomorrow
Fund is a diversified asset allocation mutual fund advised by Weiss, Peck &
Greer, L.L.C. (the "Adviser" or "WPG").
Please read this Prospectus before investing, and keep it on file for
future reference. It contains important information, including how the
Tomorrow Funds invest and the services available to shareholders. If
applicable, this Prospectus should be read in conjunction with the separate
account prospectus of the specific insurance product which accompanies this
Prospectus. To learn more about the Tomorrow Funds, you can obtain a copy of
the Statement of Additional Information (the "SAI"), also dated September
__, 1995. The SAI has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated by reference into this Prospectus. A free
copy of the SAI or a copy of the Prospectus describing the Adviser Class
shares of the Tomorrow Funds is available upon request by calling Weiss,
Peck & Greer, L.L.C. at 1-800- 223-3332 (toll free). Institutional Class
shares of a Tomorrow Fund may not be available in your state due to various
insurance or other regulations. Please check with your insurance company or
qualified plan fiduciary for Tomorrow Funds that are available in your
state. Inclusion of a Tomorrow Fund in this Prospectus which is not
available in your state is not to be considered a solicitation.
ADVISER CLASS SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, BANK OR OTHER INSURED DEPOSITORY INSTITUTION, AND
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN ADVISER CLASS
SHARES OF THE FUNDS INVOLVES INVESTMENT 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.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
<PAGE>
The Tomorrow Funds seek to provide investors of all ages who
participate in qualified retirement plans or who are holders of
Variable Contracts with an asset allocation strategy designed to
address their retirement funding needs. Each Tomorrow Fund invests its
assets, in varying amounts, in equity and fixed-income securities of
all types. The Long-Term, Mid-Term and Short-Term Funds seek to
maximize total return while also increasingly emphasizing current
income and capital preservation as the average age of the target class
of investors in that particular Tomorrow Fund increases. As the average
age of the target class of investors in a Tomorrow Fund increases over
time, the particular Tomorrow Fund adjusts the mix of its assets
invested in equity and fixed-income securities to reflect a level of
risk that the Adviser considers appropriate for investors in that
target age class, in general, given their investment time horizon. The
Post-Retirement Fund seeks to provide investors with an asset
allocation strategy designed to maximize total return, with an emphasis
on current income, consistent with capital preservation.
You are encouraged to select a particular Tomorrow Fund based on
your current age and the length of the period during which you expect
to maintain your investment. You may select more than one Tomorrow Fund
in order to achieve a personalized investment program. For example, an
investor in the Long-Term, Mid-Term or Short-Term Funds may also select
the Post-Retirement Fund to seek additional current income.
Because the investment portfolio of each Tomorrow Fund will change
over time to reflect the investment needs of a target class of
investors with an increasing average age, it will normally not be
necessary for you to change your Tomorrow Fund selection as you grow
older. However, if your investment needs change other than by reason of
the passage of time, you should consider whether your particular
Tomorrow Fund remains an appropriate selection.
In addition to the Institutional Class shares offered through this
Prospectus, the Tomorrow Funds offer a class of shares known as the
Adviser Class through a separate prospectus. Adviser Class shares of
the Tomorrow Funds are available only to certain eligible investors.
TABLE OF CONTENTS
Page
Expense Information................................
Investment Objectives and Policies.................
Eligible Investors.................................
Insurance Company Separate Accounts................
Qualified Plans....................................
How to Buy Shares.............................
How to Sell Shares............................
How to Exchange Shares........................
How Each Tomorrow Fund's Share Price is Determined.
Management of the Tomorrow Funds...................
Service Plans......................................
Dividends and Taxes................................
Portfolio Brokerage................................
The Trust..........................................
Investment Performance.............................
Risk Considerations and Other
Practices and Policies............................
Additional Information.............................
-2-
<PAGE>
EXPENSE INFORMATION
Operating a mutual fund, such as each Tomorrow Fund, involves a
variety of expenses for portfolio management, shareholder statements,
tax reporting and other services. These costs are paid from a fund's
assets and their effect is factored into any quoted share price or
performance information.
Shareholder Transaction Expenses are charges you pay when you buy or
sell Institutional Class shares of a Tomorrow Fund.
<TABLE>
<S> <C> <C> <C> <C>
Post-
Long-Term Mid-Term Short-Term Retire-
Fund Fund Fund ment Fund
Maximum Sales Load Imposed on Purchases None None None None
Maximum Sales Load Imposed on
Reinvested Dividends None None None None
Deferred Sales Load None None None None
Redemption Fees None None None None
Exchange Fees None None None None
</TABLE>
Annual Fund Operating Expenses are paid out of the Tomorrow Funds'
assets. Each Tomorrow Fund's expenses are factored into its share price
or dividends and are not charged directly to shareholder accounts. The
following are estimates and are calculated as a percentage of average
net assets.
<TABLE>
<S> <C> <C> <C> <C>
Post-
Long-Term Mid-Term Short-Term Retire-
Fund Fund Fund ment Fund
Management Fee
(after expense limitation) 0.00%* 0.00%* 0.00%* 0.00*%
Service Fee1 0.25% 0.25% 0.25% 0.25%
Other Expenses
(after expense limitation) 1.25%* 1.25%* 1.25%* 1.15%*
Total Fund Operating Expenses
(after expense limitation) 1.50%* 1.50%* 1.50%* 1.40%*
</TABLE>
Example: Hypothetically assume that each Tomorrow Fund's annual return
is 5% and that its operating expenses are exactly as just described.
For every $1,000 you invested, you would have paid the following
expenses if you closed your account after the number or years
indicated:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Post-
Long-Term Mid-Term Short-Term Retire-
Fund Fund Fund ment Fund
After 1 Year $15 $15 $15 $14
After 3 Years $48 $48 $48 $45
-3-
<PAGE>
The purpose of the above table and Example is to assist you in
understanding the various costs and expenses of the Institutional Class
shares of the Tomorrow Funds that an investor will bear directly or
indirectly. See page __. The Tomorrow Funds are newly organized and
have no operating history. The figures shown in the table under the
caption "Other Expenses" and in the hypothetical example are based on
estimates of the Tomorrow Funds' expenses for the fiscal year ending
December 31, 1995. The expenses set forth above do not reflect changes
and expenses that may be applicable to a holder of a Variable Contract
or participant in a qualified plan. Please refer to your separate
account prospectus or qualified plan documents, as the case may be.
---------------
<FN>
1 Service Fees are payable under a non-Rule 12b-1 service plan.
See "Service Plans."
* The Adviser has voluntarily agreed to limit temporarily the
operating expenses (excluding Rule 12b-1 fees applicable to Adviser
Class shares, service fees applicable to Institutional Class shares,
any other class-specific expenses, litigation, indemnification and
other extraordinary expenses) of the Long-Term, Mid-Term and Short-Term
Funds to 1.25% of their respective average daily net assets and such
operating expenses of the Post-Retirement Fund to 1.15% of its average
daily net assets. See page __. In the absence of this agreement,
Management Fees would be 0.75%, 0.75%, 0.75% and 0.65%, respectively,
Other Expenses are estimated to be approximately 2.71%, 1.70%, 1.51%
and 4.24%, respectively, and Total Fund Operating Expenses are
estimated to be approximately 3.71%, 2.70%, 2.51% and 5.14%,
respectively, of the average daily net assets attributable to the
Institutional Class shares of the Long-Term Fund, Mid-Term Fund,
Short-Term Fund and Post-Retirement Fund.
</FN>
</TABLE>
THE INFORMATION IN THE TABLE AND HYPOTHETICAL EXAMPLE ABOVE SHOULD NOT
BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
-4-
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
What are the Investment Objectives and Policies of the Tomorrow Funds?
The Tomorrow Funds seek to provide investors of all ages who
participate in qualified retirement plans with an asset allocation
strategy designed to address their retirement funding needs. Each
Tomorrow Fund other than the Post-Retirement Fund seeks to maximize
total return while also increasingly emphasizing current income and
capital preservation as the average age of the target class of
investors in that particular Tomorrow Fund increases. The
Post-Retirement Fund seeks to provide investors with an asset
allocation strategy designed to maximize current income, consistent
with capital preservation.
LONG-TERM FUND seeks to satisfy the retirement goals of
investors who are currently between 22 and 35 years of
age and with an average remaining life expectancy of
50 years or more.
MID-TERM FUND seeks to satisfy the retirement goals of
investors who are currently between 36 and 50 years of
age and with an average remaining life expectancy in
the range of 35-50 years.
SHORT-TERM FUND seeks to satisfy the retirement goals of
investors who are currently between 51 and 65 years of
age and with an average remaining life expectancy in
the range of 20-30 years.
POST-RETIREMENT seeks to satisfy the goals of investors who seek to
FUND maximize total return, with an emphasis on current
income, consistent with capital preservation.
Each Tomorrow Fund invests its assets, in varying amounts, in
equity and fixed-income securities of all types (the "Categories"). The
amount of assets allocated to equity securities is currently invested,
in varying amounts, among large capitalization stocks, medium
capitalization stocks, small capitalization stocks and foreign stocks
(the "Subcategories"). From time to time, the Adviser may select
Subcategories for the fixed-income Category. Further Subcategories may
be selected in addition to or as a substitute for any of the current
Subcategories.
As the average age of the target class of investors in a Tomorrow
Fund increases over time, the particular Tomorrow Fund adjusts the mix
of its assets allocated between equity and fixed-income securities, and
among large, medium and small capitalization and foreign stocks, to
reflect a level of risk that the Adviser considers appropriate for
investors in that target age class, in general, given their investment
time horizon. The Post-Retirement Fund maintains a stable mix of its
assets invested (within defined ranges) in equity and fixed-income
securities based on the current outlook for such securities.
Typically, the longer the average life expectancy of the target
class of investors in a Tomorrow Fund, the greater the allocation of
assets of that Tomorrow Fund to securities with higher growth potential
and, correspondingly, more risk, such as small capitalization stocks.
Conversely, the shorter the average life expectancy of the target class
of investors in a Tomorrow Fund, the greater the emphasis on current
income and capital preservation of assets and, therefore, the greater
the allocation of assets of that Tomorrow Fund to fixed-income
securities. Each Tomorrow Fund will be managed more conservatively as
the average age of its target class of investors increases. For
example, assuming that current market conditions remain the same, at a
point fifteen years from now, the strategic asset composition of the
Long-Term Fund could be expected to look like the current strategic
asset composition of the Mid-Term Fund. On the date of this Prospectus,
the anticipated strategic asset allocation mix within the Tomorrow
Funds' portfolios would be approximately as follows:
-5-
<PAGE>
[Graphic Material Omitted: Four pie charts demonstrating the asset
allocations of each Tomorrow Fund. The pie chart applicable to the
Long-Term Fund reflects the following asset allocations: large
capitalization stocks - 30%, medium capitalization stocks - 20%, small
capitalization stocks - 25%, foreign equities - 5%, and fixed-income
securities - 20%. The pie chart applicable to the Mid-Term Fund
reflects the following asset allocations: large capitalization stocks -
35%, medium capitalization stocks - 15%, small capitalization stocks -
15%, foreign equities - 5%, and fixed-income securities - 30%. The pie
chart applicable to the Short-Term Fund reflects the following asset
allocations: large capitalization stocks - 40%, medium capitalization
stocks - 10%, small capitalization stocks - 10%, and fixed-income
securities - 40%. The pie chart applicable to the Post-Retirement Fund
reflects the following asset allocations: large capitalization stocks -
30%, and fixed-income securities - 70%.]
The strategic asset allocation mix represents the way that the
Tomorrow Funds' investments will generally be allocated in the
near-term. A Tomorrow Fund's actual asset allocation mix between equity
and fixed-income securities and among large, medium and small
capitalization and foreign stocks are expected to vary based on the
Adviser's evaluation of anticipated relative returns and risks between
and among such securities in the near-term future. The Adviser will
review strategic asset allocations at least semiannually and will
adjust the asset allocations, if necessary, at that time. Additionally,
the strategic asset allocation mix of each Tomorrow Fund (other than
the Post-Retirement Fund) will be adjusted as necessary to reflect a
level of risk that the Adviser considers appropriate for investors in
that target class, in general, given their investment time horizon.
As the average age of the target class of investors in a Tomorrow
Fund approaches that of the Post-Retirement Fund, it is anticipated
that each Tomorrow Fund's assets may begin to decrease as a result of
investor withdrawals. At such time, the Trustees of the Trust will
consider what action would be appropriate to protect the interests of
remaining shareholders, including a combination with the
Post-Retirement Fund.
-6-
<PAGE>
You are encouraged to select a particular Tomorrow Fund for
investment based on your current age and the length of the period
during which you expect to maintain your investment. You may invest in
more than one Tomorrow Fund in order to achieve a personalized
investment program. For example, an investor in the Long-Term, Mid-Term
or Short-Term Funds may also select the Post-Retirement Fund to seek
additional current income. Before investing in the Tomorrow Funds, you
should consider your personal tolerance for risk recognizing that each
Tomorrow Fund is designed and managed to satisfy the retirement goals
of investors in a target age group with a corresponding average life
expectancy who anticipate retiring at approximately age 65. Because the
Tomorrow Funds are managed to satisfy retirement goals based upon
average life expectancy, the Tomorrow Funds may invest their assets in
higher risk/higher reward securities than mutual funds designed for
investors based solely on retirement dates. For example, investors
seeking higher current income or planning to make substantial
withdrawals from their investments shortly after retirement should
consider allocating more of their investment to the Post-Retirement
Fund which seeks to maximize total return, with an emphasis on current
income, consistent with capital preservation. In addition, you should
recognize that each Tomorrow Fund is managed with the goal of achieving
a different risk/reward ratio, with the Long-Term Fund seeking the
highest risk/reward ratio and the Post-Retirement Fund seeking the
lowest risk/reward ratio among the Tomorrow Funds. Each Tomorrow Fund
(other than the Post-Retirement Fund) will be managed to achieve an
increasingly conservative risk/reward ratio as the average age of the
target class of investors in that particular Tomorrow Fund increases.
Risk/Reward Ratio
Higher Lower
-----------------------------------------------------------------------
Long-Term Mid-Term Short-Term Post-Retirement
Fund Fund Fund Fund
In what types of securities do the Tomorrow Funds invest?
Each Tomorrow Fund allocates its assets between equity and
fixed-income securities. The equity Category includes equity securities
of all types. The fixed-income Category includes all varieties of
fixed-income instruments (including adjustable rate preferred stocks).
Some types of securities can be considered as both equity and
fixed-income securities. The Tomorrow Funds may also make other
investments that are not considered either an equity or fixed-income
security, such as options and futures.
While each Tomorrow Fund invests in substantially the same equity
and fixed-income securities, the amount of each Tomorrow Fund's assets
allocated to equity and fixed-income securities, and thus in particular
securities, differs. However, it is expected that the relative
percentage that a particular equity or fixed-income security represents
within the equity and fixed-income Categories and the large, medium and
small capitalization and foreign stock Subcategories ordinarily will
remain substantially the same.
Each Tomorrow Fund may, but is not required to, utilize various
investment strategies and techniques to hedge various market risks
(such as broad or specific equity or fixed-income market movements and
interest rate risk), to manage the effective maturity or duration of
fixed-income securities, or to enhance potential gain. Such strategies
and techniques are generally accepted as part of modern portfolio
management and are regularly utilized by many mutual funds. The
investment strategies and
-7-
<PAGE>
techniques used by the Tomorrow Funds and the instruments in which they
invest may change over time as new techniques, strategies and
instruments are developed or regulatory changes occur.
In the course of pursuing their investment objectives, the
Tomorrow Funds may: (i) purchase and write (sell) put and call options
on securities and indices; (ii) purchase and sell financial futures
contracts and options thereon; (iii) lend portfolio securities; (iv)
enter into repurchase agreements; (v) purchase securities on a forward
commitment, when issued or delayed delivery basis; (vi) invest in
restricted and illiquid securities; (vii) invest in other investment
companies; and (viii) invest in securities of unseasoned issuers. For
further information concerning the securities in which the Tomorrow
Funds may invest and the investment strategies and techniques they may
employ, see "Risk Considerations and Other Investment Practices and
Policies" below in this Prospectus.
Equity Securities
A Tomorrow Fund's assets allocated to equity securities is
currently invested, in varying amounts, among large capitalization
stocks, medium capitalization stocks, small capitalization stocks and
foreign stocks. Please refer to the charts on the previous page for the
current strategic allocation of a Tomorrow Fund's assets among these
securities.
Large, Medium and Small Capitalization Stocks.
With respect to the assets of each Tomorrow Fund allocated to
large, medium and small capitalization stocks, the Adviser seeks to
provide, using a quantitative methodology, investment results that
exceed the performance of an appropriate "Benchmark Index." To seek to
achieve this objective, the assets that are allocated separately to
large, medium and small capitalization stocks will, under normal market
conditions, be invested in a portfolio of securities that is considered
more "efficient" than the applicable Benchmark. An efficient portfolio
is one that has the maximum expected return for any level of risk. The
efficient mix of securities is established mathematically, taking into
account the expected return and volatility of returns for each security
in a given universe, as well as the historical price relationships
between different securities in the universe.
Subcategory Benchmark
Large Capitalization Stocks Standard & Poor's 500 Composite
Stock Price Index
Medium Capitalization Stocks Standard & Poor's 400 MidCap Index
Small Capitalization Stocks Russell 2000 Index
To implement this strategy with respect to a Subcategory, the
Adviser compiles the historical price data of all securities which
comprise the applicable Benchmark. The Adviser may eliminate a security
from consideration if it considers the security to have an inadequate
or misleading price history. Using historical price data, the Adviser
constructs and analyzes a complete matrix of all the possible price
relationships between the securities in the applicable Benchmark.
Using a sophisticated software program that incorporates risk
reduction techniques developed by investment professionals of the
Adviser, the Adviser constructs a number of portfolios separately with
respect to each Tomorrow Fund's assets that are allocated to large,
medium and small capitalization stocks, which portfolios are believed
to have optimized risk/reward ratios. From these alternative
portfolios, the Adviser selects the combination of securities, together
with their appropriate weightings, that the Adviser believes will
comprise the optimal portfolio for each Subcategory. The optimal
portfolio for each
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Subcategory is designed to have a return greater than, but highly
correlated with, the return of its Benchmark. Please see "Quantitative
Methodology" in the SAI for a further description of how the Adviser
constructs and maintains an optimal portfolio for the large, medium and
small capitalization Subcategories.
Foreign Stocks.
The Adviser intends to invest each Tomorrow Fund's assets
allocated to the foreign stocks in shares of other open-end and/or
closed-end investment companies. Such other investment companies will
invest their assets in securities of foreign issuers. The Adviser will
select for investment other investment companies whose underlying
securities, when aggregated, resemble the composition of the Morgan
Stanley Europe, Australia, Far East Index ("EAFE Index"). There can be
no assurance that the Adviser will be successful in selecting such
investment companies. See "Risk Considerations and Other Investment
Practices and Policies - Other Investment Companies" below.
Fixed-Income Securities
Each Tomorrow Fund will invest those assets which are allocated to
fixed-income securities in a broad range of fixed-income securities,
including bonds, notes, mortgaged-backed and asset-based securities,
preferred stock and convertible debt securities issued by U.S.
corporations or other entities or by the U.S. Government or its
agencies, authorities, instrumentalities or sponsored enterprises. The
Tomorrow Funds limit their investments in fixed-income securities to
those that are rated, at the time of purchase, investment grade or, if
not rated, determined by the Adviser to be of equivalent credit quality
to securities so rated. Fixed-income securities may pay interest on a
fixed, variable, floating (including inverse floating), contingent,
in-kind or deferred basis. In general, the value of fixed-income
securities rises when interest rates fall, and vice versa. Fixed-income
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term fixed-income
securities are generally more sensitive to interest changes than
shorter-term fixed-income securities. There is no limit on the average
dollar-weighted maturity of a Tomorrow Fund's portfolio or on the
maturity of any individual fixed-income security purchased by a
Tomorrow Fund. See "Risk Considerations and Other Investment Practices
and Policies - Fixed-Income Securities" below.
ELIGIBLE INVESTORS
Institutional Class shares of the Funds are designed to provide
investment vehicles for variable annuity and variable life insurance
contracts ("Variable Contracts") of various insurance companies'
separate accounts ("Separate Accounts"). Institutional Class shares of
the Tomorrow Funds may also be purchased for the account of pension or
retirement plans ("Qualified Plans") that satisfy the qualification
requirements of Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Internal Revenue Code"). Qualified Plans include: 401(k)
plans, 403(b) plans, 457 plans, governmental plans, tax-sheltered
annuity plans and individual retirement accounts (IRAs).
Should you have any questions as to whether you are an eligible
investor in Institutional Class shares of the Tomorrow Funds, please
call WPG at 1-800-___________.
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INSURANCE COMPANY SEPARATE ACCOUNTS
Because holders of Variable Contracts may not purchase or redeem
Institutional Class shares of the Tomorrow Funds directly, you should
read the prospectus of your insurance company Separate Account to
obtain instructions for purchasing a Variable Contract. Variable
Contracts may or may not make investments in all the Tomorrow Funds
described in this Prospectus.
Separate Accounts purchase and redeem Institutional Class shares
of the Tomorrow Funds at their respective net asset values. Redemptions
will be effected by Separate Accounts to meet obligations under
Variable Contracts. Insurance companies who wish to designate
Institutional Class shares of the Tomorrow Funds as investment vehicles
for their Separate Accounts should contact WPG at 1-800-___-____.
QUALIFIED PLANS
The following information describes how participants in Qualified
Plans may arrange to buy, sell (redeem) and exchange Institutional
Class shares of the Tomorrow Funds for the account of their Qualified
Plans.
A. HOW TO BUY SHARES
Through whom may Institutional Class shares of the Tomorrow Funds be
purchased for Qualified Plans?
Because you may not purchase Institutional Class shares of the
Tomorrow Funds directly, all orders to purchase Institutional Class
shares must be made through the trustee, custodian, plan administrator
or other fiduciary (each a "Plan Fiduciary") of your Qualified Plan. If
the monies you wish to invest in the Tomorrow Funds are maintained in a
Qualified Plan sponsored by your employer, please consult with your
employer for information about how to purchase shares of the Tomorrow
Funds. If the monies you wish to invest in the Tomorrow Funds are
maintained by your Plan Fiduciary in an IRA or other self-administered
Qualified Plan, please consult with your Plan Fiduciary for information
about how to purchase shares of the Tomorrow Funds.
You may establish an IRA with the Trust's custodian, Boston Safe
Deposit and Trust Company ("Boston Safe"), through which you may invest
in the Tomorrow Funds. Additionally, you may invest in the Tomorrow
Funds by "rolling over" an existing IRA into an IRA maintained by
Boston Safe. Please call WPG at 1-800-_____ for information regarding
how to establish an IRA with Boston Safe.
What is the minimum investment by Qualified Plans in Institutional
Class shares of the Tomorrow Funds?
Plan Fiduciaries may invest in the Tomorrow Funds for the account
of Qualified Plans with as little as $2,000 ($250 for a spousal IRA).
There is no minimum amount required for subsequent investments.
At what price are Institutional Class shares of the Tomorrow Funds
offered?
Institutional Class shares of the Tomorrow Funds are sold at the
net asset value (NAV) of such shares next determined after the Transfer
Agent receives and accepts a purchase order. Purchase orders received
and accepted by the Transfer Agent by the close of regular trading on
the New York Stock
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Exchange on any Business Day (currently 4:00 p.m. New York City time)
will be effected as of the close of regular trading on the New York
Stock Exchange on that day. Otherwise, orders will be effected at the
NAV determined on the next Business Day.
How may Plan Fiduciaries invest in the Tomorrow Funds for the account
of their Qualified Plans?
In order to make an initial investment in a Tomorrow Fund for a
Qualified Plan, Plan Fiduciaries must open an account with the Tomorrow
Funds by furnishing to WPG the information in the Account Information
Form attached to this Prospectus. Shares of the Tomorrow Funds may be
purchased by Plan Fiduciaries for the account of Qualified Plans on any
day during which the New York Stock Exchange is open for business (a
"Business Day").
Plan Fiduciaries: To Make an Initial Investment for a Qualified Plan
By Mail: 1. Make a check payable to the Tomorrow Fund in which you
wish to or are instructed to invest.
2. Mail the completed Account Information Form and check to
the Transfer Agent at the address indicated on the back
cover of this Prospectus.
By Wire: 1. Call 1-800-________ to open an account and to arrange
for a wire transaction.
2. Instruct your bank to wire funds to:
Boston Safe Deposit and Trust Company
WPG Deposit Account No. _________
Bank Routing No. __________
Specify:
Name of Tomorrow Fund
Institutional Class shares
Account Number
Name(s) in which account is to be registered
3. Mail the completed Account Information Form to the
Transfer Agent at the address indicated on the back
cover of this Prospectus.
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Plan Fiduciaries: To Make Further Investments for a Qualified Plan
Automatically: 1. Use the Automatic Investment Plan. Sign up for this
service when opening an account, or call 1-800-_____
to add it. Designate the bank or credit union
account from which funds will be drawn.
2. The amount to be invested will automatically be with-
drawn from the designated bank or credit union account
on or about the first Business Day of the month or
quarter selected.
By Telephone: 1. Sign up for this service when opening an account, or
call 1-800-_______ to add it. Designate the bank or
credit union account from which funds will be drawn.
Note that in order to invest by phone, the account
must be in a bank or credit union that is a member of
the Automated Clearing House system (ACH).
2. Once this service has been selected, Plan Fiduciaries
may purchase additional shares for the account of their
Qualified Plans by calling the Tomorrow Funds' Transfer
Agent, The Shareholder Services Group, Inc., Toll-free
at 1-800-_________.
3. Give the Transfer Agent representative the name(s) in
which the account is registered, the Tomorrow Fund name,
Institutional Class shares, the account number, and the
amount of the investment.
4. An investment will normally be credited to the Qualified
Plan account the Business Day following the phone
request.
During periods of extreme economic conditions or market
changes, requests by telephone may be difficult to make
due to heavy volume. During such times please consider
placing purchase orders by mail.
By Mail: 1. Include a note with the investment specifying:
Name of the Tomorrow Fund
Institutional Class shares
Account Number
Name(s) in which account is registered
2. Make the check payable to the Tomorrow Fund in which you
wish to or are instructed to invest. Indicate the
account number on the check.
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<PAGE>
3. Mail the account information and check to the Transfer
Agent at the address indicated on the back cover of this
Prospectus.
By Wire: Instruct the bank to wire funds to:
Boston Safe Deposit and Trust Company
WPG Deposit Account No. _________
ABA Routing No. __________
For credit to:
Name of Tomorrow Fund
Institutional Class shares
Your Account Number
Name(s) in which account is registered
Other Purchase Information. Each Tomorrow Fund reserves the right
to reject any purchase for any reason and to cancel any purchase due to
nonpayment. As a condition of this offering, if your purchase is
cancelled due to nonpayment or because your check does not clear (and,
therefore, your account is required to be redeemed), you will be
responsible for any loss incurred by the Tomorrow Fund(s) affected. All
purchases must be made in U.S. dollars. Checks drawn on foreign banks
will delay purchases until U.S. funds are received and a collection
charge may be imposed. In such cases, Institutional Class shares of the
Tomorrow Funds are priced at the net asset value computed after the
Transfer Agent receives notification of the dollar equivalent from the
Tomorrow Funds' custodian bank. Wire purchases normally take two or
more hours to complete and, to be accepted the same day, must be
received by 4:00 p.m. New York City time. Your bank may charge a fee to
wire funds. Telephone transactions are recorded to verify information.
Acquiring Shares of the Tomorrow Funds in Exchange for Securities.
Shares of the Tomorrow Funds may be purchased in whole or in part by
delivering to the Tomorrow Funds' custodian, Boston Safe, securities
acceptable to WPG. Please see "In-Kind Purchases" in the SAI for the
terms and conditions of these transactions.
B. HOW TO SELL SHARES
How may Institutional Class shares of the Tomorrow Funds be redeemed
for Qualified Plans?
Subject to the restrictions (if any) imposed by your Qualified
Plan, you can arrange to sell or "redeem" some or all of your shares on
any Business Day. All orders to redeem Institutional Class shares of
the Tomorrow Funds held for the account of Qualified Plans must be made
through your Plan Fiduciary. If the Institutional Class shares you wish
to redeem are held for the account of a Qualified Plan sponsored by
your employer, please consult with your employer for information about
how to redeem shares of the Tomorrow Funds. If the Institutional Class
shares you wish to redeem are maintained by your Plan Fiduciary in an
IRA or other self-administered Qualified Plan, please consult with your
Plan Fiduciary for information about how to redeem shares of the
Tomorrow Funds. Please note that shares may not be redeemed by
telephone or telegram, except for exchanges which can be requested by
Plan Fiduciaries by telephone or in writing.
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At what price are Institutional Class shares of the Tomorrow Funds
redeemed?
Institutional Class shares of the Tomorrow Funds will be redeemed
at the share price (NAV) of such shares next calculated after a
redemption order is received in good order by the Transfer Agent. Once
shares are redeemed, sale proceeds generally are available the next
Business Day, but may take up to three Business Days. For your
protection, redemption proceeds will not be released until a
shareholder's account has been opened and payment for the shares to be
redeemed have been received by the Tomorrow Fund, which may take up to
fifteen days.
The net asset value per share received upon redemption or
repurchase may be more or less than the original cost of the shares,
depending on the market value of the portfolio at the time of
redemption or repurchase.
Plan Fiduciaries: To Redeem Shares for a Qualified Plan
By Mail: 1. In a written request specify:
Name of the Tomorrow Fund
Institutional Class shares
Account Number
Name(s) in which account is registered
The dollar amount or the number of shares to be
redeemed
2. Mail the redemption request to the Transfer Agent at the
address indicated on the back cover of this Prospectus.
Automatically 1. Use the Automatic Withdrawal Plan if the Qualified
Plan account has a (Post-Retirement total value of at
least $[_______]. Sign up for this service when
opening Fund Only): an account, or call 1-800-____
to add it.
2. The redemption proceeds of $[______] or more will
automatically be transferred from the shareholder
account to the designated address or bank account on or
about the first Business Day of the month or quarter
selected.
General Redemption Information. Redemption requests must be
received by the Transfer Agent before the close of business on the New
York Stock Exchange to receive that day's share price (NAV). A written
redemption request must be signed by all registered shareholders for
the account using the exact names in which the account is registered or
accompanied by executed power(s) of attorney. Unless otherwise
specified, redemption proceeds will be sent by check to the record
address. Plan Fiduciaries may elect to have redemption proceeds wired
to a checking or bank account if wire redemptions were authorized when
the account was opened or have subsequently been authorized.
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Redemptions may be suspended or postponed during any period in
which any of the following conditions exist: the New York Stock
Exchange is closed or trading on the Exchange is restricted; an
emergency exists during which it is not reasonably practicable for a
Tomorrow Fund to dispose of its portfolio securities or to fairly
determine its net asset value; or the SEC, by order, so permits.
Certain requests must include a signature guarantee. A signature
guarantee is a widely accepted way to protect you and the Tomorrow
Funds from fraud by verifying the signature on your request. A
signature guarantee is required if the redemption proceeds are to be
sent to an address other than the address of record or to a person
other than the registered shareholder(s) for the account [or if the net
asset value of the shares redeemed is $100,000 or more].
The following institutions may provide a signature guarantee,
provided that the institution meets credit standards established by the
Transfer Agent: (i) a bank; (ii) a securities broker or dealer,
including a government or municipal securities broker or dealer, that
is a member of a clearing corporation or has net capital of at least
$100,000; (iii) a credit union having authority to issue signature
guarantees; (iv) a savings and loan association, a building and loan
association, a cooperative bank, a federal savings bank or association;
or (v) a national securities exchange, a registered securities exchange
or a clearing agency.
Signature guarantees may not be provided by a notary public.
Small Accounts. In order to reduce the expense of maintaining
numerous small accounts, the Trust reserves the right to redeem any
shareholder account (other than an IRA) if, as a result of redemptions,
the value of the account is less than $100. Shareholders will be
allowed at least 60 days, after written notice by the Trust, to make an
additional investment to bring the account value up to at least $100
before the redemption is processed.
Change in Tax Status. Insurance companies and Plan Fiduciaries are
required to notify the Trust through the Transfer Agent if the tax
status of their Separate Account or Qualified Plan is revoked or
challenged by the Internal Revenue Service. The Trust reserves the
right to redeem any fund account of any shareholder whose qualification
as a diversified segregated asset account or a qualified pension or
retirement plan satisfying the requirements of Treasury Regulation
1.817-5 is revoked or challenged.
C. HOW TO EXCHANGE SHARES
May Institutional Class shares be exchanged for shares of other mutual
funds?
Subject to the terms of your Qualified Plan, Institutional Class
shares of a Tomorrow Fund may be exchanged for Institutional Class
shares of any other Tomorrow Fund or for Institutional Class shares of
Core Large Cap Stock Fund and Core Small Cap Stock Fund. To obtain a
current prospectus for the Institutional Class shares of Core Large Cap
Stock Fund and Core Small Cap Stock Fund, please call 1- 800-___-____.
Please consider the differences in investment objectives and expenses
of a fund as described in its prospectus before making an exchange.
Do sales charges apply to exchanges?
As is the case with initial purchases of Institutional Class
shares of the Tomorrow Funds, exchanges of Institutional Class shares
are made without the imposition of a sales charge.
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How may I make an exchange for my Qualified Plan?
Because shares of the Tomorrow Funds are held for the account of
Qualified Plans, all orders to exchange shares must be made through
your Plan Fiduciary. If the Institutional Class shares you wish to
exchange are held for the account of a Qualified Plan sponsored by your
employer, please consult with your employer for information about how
to exchange shares of the Tomorrow Funds. If the Institutional Class
shares you wish to exchange are maintained by your Plan Fiduciary in an
IRA or other self-administered Qualified Plan, please consult with your
Plan Fiduciary for information about how to exchange shares of the
Tomorrow Funds.
Plan Fiduciaries: To Exchange Shares
By Phone: 1. Use the telephone exchange privilege. The telephone
exchange privilege is not available automatically. It
is necessary to sign up for this privilege on the
Account Application Form when opening an account, or
call 1-800-______ to add it.
2. Once this privilege has been selected, simply call the
Transfer Agent toll free at 1-800-223-3332 between
9:00 a.m. and 4:00 p.m. New York City time on any
Business Day.
3. Give the following information to the Transfer Agent
representative:
Name of current Tomorrow Fund
Institutional Class shares
Name of the fund into which the current Tomorrow
Fund shares will be exchanged
Account Number
Name(s) in which your account is registered
The dollar amount or the number of shares to be
exchanged
By Mail: 1. Mail a written request to the Transfer Agent at the
address listed on the back cover of this Prospectus
specifying:
Name of current Tomorrow Fund
Institutional Class shares
Name of the fund into which the current Tomorrow
Fund shares will be exchanged
Account Number
Name(s) in which your account is registered
The dollar amount or the number of shares to be
exchanged
2. The exchange request must be signed by all registered
holders for the account using the exact names in which
the account is registered or accompanied by executed
power(s) of attorney.
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<PAGE>
General Exchange Information. Shares exchanged are valued at their
respective net asset values next determined after the exchange request
is received by the Transfer Agent. All exchanges are subject to the
following exchange restrictions: (i) the fund into which shares are
being exchanged must be registered for sale in your state; (ii)
exchanges may be made only between funds that are registered in the
same name, address and taxpayer identification number; and (iii) the
minimum amount for exchanging from one fund into another fund is $100
or the total value of your fund account (if less than $100) and must
satisfy the minimum account size of the fund to be exchanged into.
To confirm that telephone exchange requests are genuine, the Trust
employs reasonable procedures, such as providing written confirmation
of telephone exchange transactions and tape recording of telephone
exchange requests. If the Trust does not employ such reasonable
procedures, it may be liable for any loss incurred by a shareholder due
to a fraudulent or unauthorized telephone exchange request. Otherwise,
neither the Trust nor its agents will be liable for any loss incurred
by a shareholder as the result of following instructions communicated
by telephone that they reasonably believed to be genuine. The Trust
reserves the right to refuse any request made by telephone and may
limit the dollar amount involved or the number of telephone requests
made by any shareholder. During periods of extreme economic conditions
or market changes, requests by telephone may be difficult to make due
to heavy volume. During such times please consider placing your order
by mail.
To prevent abuse of the exchange privilege to the detriment of
other shareholders, the Trust limits the number of exchanges and
purchase/redemption transactions by any one shareholder account (or
group of accounts under common management) to a total of six
transactions per year. This policy applies to exchanges into or out of
any series of the Trust and any pair of transactions involving a
purchase of shares of any series of the Trust followed by a redemption
of an offsetting or substantially equivalent dollar amount of shares of
that same series. If a Plan Fiduciary violates this policy, his/her
future purchases of, or exchanges into, the series of the Trust may be
permanently refused. This policy does not prohibit redemptions of
shares of any series. This policy may be waived by WPG in its
discretion. Further, the exchange privilege may be changed or
discontinued and may be subject to additional limitations upon sixty
(60) days' notice to shareholders, including certain restrictions on
purchases by market-timer accounts.
HOW EACH TOMORROW FUND'S SHARE PRICE IS DETERMINED
The net asset value per share of a class of a Tomorrow Fund is
determined by dividing the value of its assets, less liabilities
attributable to that class, by the number of shares of that class
outstanding. The net asset value is normally calculated as of the close
of regular trading of the New York Stock Exchange (currently 4:00 p.m.
New York City time) on each Business Day. Different classes of shares
of the Tomorrow Funds may have different net asset values.
Portfolio securities (other than certain money market instruments)
are valued primarily based on market quotations or, if market
quotations are not available, at fair market value as determined in
good faith by a valuation committee appointed by the Trustees. In
accordance with procedures adopted by the Trustees, each Tomorrow Fund
may use pricing services to value fixed-income investments.
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MANAGEMENT OF THE TOMORROW FUNDS
Trustees
Each Tomorrow Fund is a separate investment series of Tomorrow
Funds Retirement Trust, a Delaware business trust (the "Trust"). Under
the terms of the Agreement and Declaration of Trust establishing the
Trust, the Trustees of the Trust are ultimately responsible for the
management of its business and affairs.
Investment Adviser
Weiss, Peck & Greer, L.L.C., One New York Plaza, New York, New
York 10004 serves as the investment adviser to each Tomorrow Fund
pursuant to an investment advisory agreement. Subject to the
supervision and direction of the Trustees, the Adviser manages each
Tomorrow Fund's portfolio in accordance with its stated investment
objective and policies, recommends investment decisions for the
Tomorrow Fund and places orders to purchase and sell securities on
behalf of the Tomorrow Fund. For these services, Post-Retirement Fund
pays the Adviser a monthly fee equal on an annual basis to 0.65% of its
average daily net assets and the other Tomorrow Funds each pay the
Adviser a monthly fee equal on an annual basis to 0.75% of the Tomorrow
Fund's average daily net assets.
The Adviser supervises the portfolio management of the Tomorrow
Funds through the Adviser's Asset Allocation Committee, which meets on
a regular basis to evaluate, among other things, the strategic asset
allocation mix between equity and fixed-income securities and among
large, medium and small capitalization and foreign stocks. Joseph N.
Pappo has been primarily responsible since the Tomorrow Funds'
inception for the day-to-day management of the assets of each Tomorrow
Fund allocated to large, medium and small capitalization stocks. Mr.
Pappo has been a principal of the Adviser since 1994. Prior to joining
WPG, Mr. Pappo was the founder and president of Eden Financial Group
which was acquired by WPG in 1991. Daniel S. Vandivort has been
primarily responsible since the Tomorrow Funds' inception for the
day-to-day management of the assets of each Tomorrow Fund allocated to
fixed-income securities. Mr. Vandivort has been a principal of the
Adviser since November, 1994. Prior thereto, Mr. Vandivort served in
various capacities with CS First Boston Investment Management,
including Managing Director and Head of U.S. Fixed Income and Senior
Portfolio Manager and Director, Global Product Development and
Marketing.
The Adviser has voluntarily agreed to limit temporarily the
operating expenses (excluding Rule 12b-1 fees applicable to the Adviser
Class shares, service fees applicable to the Institutional Class
shares, any other class-specific expenses, litigation, indemnification
and other extraordinary expenses) of the Long-Term, Mid-Term and
Short-Term Funds to 1.25% of their respective average daily net assets
and such operating expenses of the Post-Retirement Fund to 1.15% of its
average daily net assets. The Adviser may discontinue or modify such
limitation in the future at its discretion, although it has no current
intention to do so.
Administrator
Pursuant to an administration agreement with each Tomorrow Fund,
WPG provides personnel for supervisory, administrative, accounting,
shareholder services and clerical functions; oversees the performance
of administrative and professional services to the Tomorrow Funds by
others; provides office facilities, furnishings and office equipment;
and prepares, but does not pay for, reports to shareholders, the SEC
and other regulatory authorities. As compensation for the services
rendered to the Tomorrow Funds as Administrator, WPG is entitled to a
fee, computed daily and payable monthly, at an annual rate equal to
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<PAGE>
0.09% of each Tomorrow Fund's average daily net assets. The
administrative fee for each Tomorrow Fund is reviewed and approved
annually by the Trustees.
Expenses
Each Tomorrow Fund bears all expenses of its operation, subject to
the expense limitation agreement described above. In particular, each
Tomorrow Fund pays: investment advisory fees; administration fees;
service fees with respect to the Institutional Class shares;
distribution and service fees with respect to the Adviser Class shares;
custodian and transfer agent expenses; legal and accounting fees and
expenses; expenses of preparing, printing, and distributing
Prospectuses and SAIs to existing shareholders, and shareholder
communications and reports; expenses of computing its net asset value
per share; federal and state registration fees and expenses with
respect to its shares; proxy and shareholder meeting expenses; expenses
of issuing and redeeming its shares; independent trustee fees and
expenses; expenses of bond, liability, and other insurance coverage;
brokerage commissions; taxes; trade association fees; and certain
non-recurring and extraordinary expenses. In addition, the expense of
organizing the Tomorrow Funds and initially registering and qualifying
their shares under federal and state securities laws are being charged
to the Tomorrow Funds' operations, as an expense, over a period not to
exceed 60 months from the Tomorrow Funds' inception date.
Each Tomorrow Fund will reimburse the Adviser for fees foregone or
other expenses paid by the Adviser pursuant to this expense limitation
in later years in which operating expenses for that Tomorrow Fund are
less than the expense limitations set forth above for any such year. No
interest, carrying or finance charge will be paid by a Tomorrow Fund
with respect to the amounts representing fees foregone or other
expenses paid. In addition, no Tomorrow Fund will pay any unreimbursed
amounts to the Adviser upon termination of its investment advisory
agreement.
SERVICE PLANS
The Trust, on behalf of each Tomorrow Fund, has adopted a service
plan pursuant to which each Tomorrow Fund pays service fees at an
aggregate annual rate of up to 0.25% of a Tomorrow Fund's average daily
net assets attributable to Institutional Class shares (the "Service
Plans"). The service fee is intended to be compensation to Plan
Fiduciaries for providing personal services and/or account maintenance
services to the underlying beneficial owners of the Institutional Class
shares or to insurance companies or their affiliates for providing
similar services for which they are not otherwise compensated by the
Variable Contract holders. The Trust, on behalf of the applicable
Tomorrow Fund, will make monthly payments to insurance companies and
Plan Fiduciaries based on the average net asset value of the
Institutional Class shares which are attributable to the Qualified Plan
or Separate Account, as the case may be.
DIVIDENDS AND TAXES
Each Tomorrow Fund is treated as a separate entity for federal
income tax purposes and intends to elect to be treated as a "regulated
investment company" under the Code and to qualify for such treatment
for each taxable year. To qualify as such, each Tomorrow Fund must
satisfy certain requirements relating to the sources of its income,
diversification of its assets and distribution of its income to
shareholders. Each Tomorrow Fund also intends to satisfy certain
additional diversification requirements applicable under Section 817(h)
of the Internal Revenue Code in order to permit investments in
Institutional Class shares of the Tomorrow Funds by insurance company
Separate Accounts that fund Variable Contracts, which are
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subject to such requirements. It is possible that in order to satisfy
the applicable diversification requirements, investment decisions may
be made which would affect either positively or negatively the
investment performance of a Tomorrow Fund. As a regulated investment
company, each Tomorrow Fund will not be subject to federal income tax
on any net investment income and net realized capital gains that are
distributed to its shareholders in accordance with certain timing
requirements of the Code.
Participants in Qualified Plans may be eligible for tax deferral
on distributions a Qualified Plan receives from a Tomorrow Fund and
gains that arise from a Qualified Plan's dispositions of Fund shares.
This Prospectus does not describe in any respect such tax treatment.
Please consult your Plan Fiduciary or tax adviser.
Under current tax law, dividends or capital gain distributions
from a Tomorrow Fund are not currently taxable if properly allocable to
reserves for a Variable Contract. For a discussion of the tax status of
a Variable Contract, including the tax consequences of withdrawals or
other payments, refer to the prospectus of the insurance company
Separate Account.
It is suggested that holders of Variable Contracts and
participants in Qualified Plans keep all statements received from their
insurance company or Qualified Plan to assist in personal
recordkeeping.
Each Tomorrow Fund intends to distribute all of its net investment
income and net capital gains each year. Income dividends, if any, will
be declared and distributed monthly for Post-Retirement Fund. Income
dividends, if any, will be declared and distributed at least annually
by each other Tomorrow Fund. Net short-term and long-term capital gains
of each Tomorrow Fund, if any, realized during the taxable year will be
distributed no less frequently then annually. Dividends derived from
each Tomorrow Fund's net investment income (including dividends,
interest and recognized market discount income), and net short-term
capital gains received by a Tomorrow Fund are treated as ordinary
income under the Code. Distributions from each Tomorrow Fund's net
long-term capital gains are treated as long-term capital gains under
the Code, regardless of how long shares of the Tomorrow Funds have been
held.
Reinvestment of Income Dividends and Capital Gains Distributions
Unless a Plan Fiduciary elects otherwise, as permitted in the
Account Information Form, income dividends and capital gains
distributions with respect to a Tomorrow Fund will be reinvested in
additional Institutional Class shares of that Tomorrow Fund and will be
credited to the Qualified Plan's account with that Tomorrow Fund at the
net asset value per share next determined as of the ex-dividend date.
Both income dividends and capital gains distributions are paid by the
Tomorrow Fund on a per share basis. As a result, at the time of such
payment, the net asset value per share of a Tomorrow Fund will be
reduced by the amount of such payment. Although income dividends and
capital gains distributions by the Tomorrow Funds may not give rise to
current tax liability for the categories of shareholders permitted to
invest in the Tomorrow Funds, participants in Qualified Plans may be
subject to tax on all or a portion of their distributions from such
Plans or upon the failure of such Plans to maintain their qualified
status under complex Code provisions concerning which a tax adviser
should be consulted. Withdrawals or other payments to Variable Contract
holders from insurance company Separate Accounts may also be taxable.
Participants in Qualified Plans who wish to change the manner in which
income dividends and capital gains distributions are received by their
Qualified Plans should contact their Plan Fiduciaries. Written
notification of such change must be received by the Transfer Agent at
least ten days before the next scheduled distribution.
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PORTFOLIO BROKERAGE
In effecting securities transactions, the Tomorrow Funds generally
seek to obtain the best price and execution of orders. Commission rates
are a component of price and are considered along with other factors,
including the ability of the broker to effect the transaction, and the
broker's facilities, reliability and financial responsibility. Subject
to the foregoing, the Tomorrow Funds intend to utilize WPG as their
primary broker in connection with the purchase and sale of
exchange-traded portfolio securities. As the Tomorrow Funds' primary
broker, WPG will receive brokerage commissions from the Tomorrow Funds,
limited to the "usual and customary broker's commission" specified by
the 1940 Act. The Tomorrow Funds intend to continue to use WPG as their
primary broker on exchange-traded securities, provided WPG is able to
provide execution at least as favorable as that provided by other
qualified brokers.
The Trustees of the Trust have developed procedures to limit the
commissions received by WPG to the "usual and customary broker's
commission" standard specified by the 1940 Act. On a quarterly basis,
the Trustees review the securities transactions of each Tomorrow Fund
effected by WPG to assure their compliance with such procedures.
The Tomorrow Funds will also execute their portfolio transactions
through qualified brokers other than WPG. In selecting such other
brokers, WPG considers the quality and reliability of brokerage
services, including execution capability and performance and financial
responsibility, and may consider the research and other investment
information provided by such brokers. Accordingly, the commissions paid
to any such broker may be greater than the amount another firm might
charge, provided WPG determines in good faith that the amount of such
commission is reasonable in relation to the value of the brokerage
services and research information provided by such broker. Such
information may be used by WPG (and its affiliates) in managing all of
its accounts and not all of such information may be used by WPG in
managing the Tomorrow Funds. In selecting other brokers for a Tomorrow
Fund, WPG may also consider the sale of shares of the Tomorrow Fund
effected through such other brokers as a factor in its selection,
provided that Tomorrow Fund obtains the best price and execution of
orders.
Money market securities and other fixed-income securities, as well
as certain equity securities, in which the Tomorrow Funds invest are
traded primarily in the over-the-counter ("OTC") market. For
transactions effected in the OTC market, financial intermediaries
(i.e., dealers) act as principal rather than as agent and receive a
"spread" rather than a commission. The Tomorrow Funds intend to deal
with the primary market-makers with respect to OTC securities, unless a
more favorable result is obtainable elsewhere.
THE TRUST
Tomorrow Funds Retirement Trust is an open-end management
investment company (commonly referred to as a mutual fund) organized as
a Delaware business trust under an Agreement and Declaration of Trust
dated June 21, 1995 (the "Declaration"). The Trust has authorized an
unlimited number of shares of beneficial interest.
As of the date of this Prospectus, the shares of the Trust are
divided into six series: Tomorrow Long-Term Retirement Fund, Tomorrow
Mid-Term Retirement Fund, Tomorrow Short-Term Retirement Fund, Tomorrow
Post-Retirement Fund, Core Large-Cap Stock Fund and Core Small-Cap
Stock Fund. The Trust reserves the right to create and issue additional
series of shares. No series is entitled to share in the assets of any
other series or is liable for the expenses or liabilities of any other
series. Shares of a particular series vote separately on matters
affecting only that series, including the approval of an investment
advisory agreement and changes in fundamental policies or restrictions
of a particular series.
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As of the date of this Prospectus, the Trustees have authorized
the issuance of two classes of shares for each series, designated
Institutional Class and Adviser Class. The shares of each Class
represent an interest in the same portfolio of investments of that
series. Each Class has equal rights as to voting, redemption, dividends
and liquidation, except that each Class bears different distribution
fees and may bear other expenses properly attributable to the
particular Class. Adviser Class shareholders of a Tomorrow Fund have
exclusive voting rights with respect to the Rule 12b-1 distribution
plan adopted by holders of Adviser Class shares of that Tomorrow Fund.
The Trustees have the authority, without further shareholder approval,
to classify and reclassify the shares of a series of the Trust into
additional classes. In addition, subject to Trustee approval and
shareholder approval (if then required), each Tomorrow Fund may pursue
its investment objective by investing all of its investable assets in a
pooled fund. See "Risk Considerations and Other Investment Practices
and Policies" below.
An insurance company issuing a Variable Contract that participates
in Institutional Class shares of a Tomorrow Fund will vote such shares
held by the insurance company Separate Accounts as required by law. In
accordance with current law and interpretations thereof, participating
insurance companies are required to request voting instructions from
policy owners and must vote shares of the Tomorrow Funds in proportion
to the voting instructions received. For a further discussion of voting
rights, please refer to your insurance company Separate Account
prospectus.
When issued and paid for in accordance with the terms of the
Prospectus and Statement of Additional Information, shares of the Trust
are fully paid and non-assessable. The Trust is not required, and does
not intend, to hold annual shareholder meetings. Shareholders have
certain rights, as set forth in the Declaration, including the right to
call a meeting of shareholders for the purpose of voting on the removal
of one or more Trustees. Such removal can be effected upon the action
of two-thirds of the outstanding shares of the Trust.
In addition to the requirements under Delaware law, the
Declaration provides that a shareholder of the Trust may bring a
derivative action on behalf of the Trust only if the following
conditions are met: (a) shareholders eligible to bring such derivative
action under Delaware law who hold at least 10% of the outstanding
shares of the Trust, or 10% of the outstanding shares of the series or
class to which such action relates, shall join in the request for the
Trustees to commence such action; and (b) the Trustees must be afforded
a reasonable amount of time to consider such shareholder request and
investigate the basis of such claim. The Trustees shall be entitled to
retain counsel or other advisers in considering the merits of the
request and shall require an undertaking by the shareholders making
such request to reimburse the Trust for the expense of any such
advisers in the event that the Trustees determine not to bring such
action.
The Trustees of the Trust do not foresee any disadvantages to
investors arising out of the fact that each Tomorrow Fund may offer a
class of its shares to Separate Accounts that serve as investment
medium for Variable Contracts or that each Tomorrow Fund may offer its
shares to Qualified Plans. Nevertheless, the Trustees intend to monitor
events in order to identify any material irreconcilable conflicts which
may possibly arise, and to determine what action, if any, should be
taken in response to such conflicts. If such a conflict were to occur,
one or more Separate Accounts or Qualified Plans might be required to
withdraw their investments in one or more Tomorrow Funds and shares of
another series of the Trust may be substituted. This might force a
Tomorrow Fund to sell securities at disadvantageous prices.
In the interests of economy and convenience, the Trust does not
issue certificates representing the Tomorrow Funds' shares. Instead,
the Transfer Agent maintains a record of each shareholder's ownership.
Although each Tomorrow Fund is offering only its own shares, since the
Tomorrow Funds use this combined Prospectus, it is possible that one
Tomorrow Fund might become liable for a misstatement or
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omission in this Prospectus regarding another Tomorrow Fund. The
Trustees have considered this factor in approving the use of this
combined Prospectus.
INVESTMENT PERFORMANCE
Each Tomorrow Fund may illustrate in advertisements and sales
literature the average annual total return of its Institutional Class
shares, which is the rate of growth of the Tomorrow Fund that would be
necessary to achieve the ending value of an assumed initial investment
of $1,000 kept in Institutional Class shares of the Tomorrow Fund for
the period specified and is based on the following assumptions: (1) all
dividends and distributions by the Tomorrow Fund are reinvested in
Institutional Class shares of the Tomorrow Fund at net asset value; and
(2) all recurring fees are included for applicable periods.
Each Tomorrow Fund may also illustrate in advertisements the
cumulative total return for several time periods throughout the
Tomorrow Fund's life based on an assumed initial investment of $1,000.
Any such cumulative total return for a Tomorrow Fund will assume the
reinvestment of all income dividends and capital gains distributions in
Institutional Class for the indicated periods and will include all
recurring fees.
Each Tomorrow Fund may also illustrate in advertisements and sales
literature the yield and effective yield of its Institutional Class
shares. Yield is based on income generated by an investment in
Institutional Class shares of the Tomorrow Fund during a 30-day (or
one-month) period. To calculate yield, this income is annualized, that
is, the amount of income generated during the 30-day (or one-month)
period is assumed to be generated each 30-day (or one-month) period
over a one-year period, and expressed as an annual percentage rate.
Effective yield for Institutional Class shares of the Tomorrow Funds is
calculated in a similar manner but, when annualized, the income earned
from an investment is assumed to be reinvested. Effective yield for
each Tomorrow Fund will be slightly higher than its current yield
because of the compounding effect of this assumed reinvestment.
Yields and total returns quoted for the Tomorrow Funds include the
effect of deducting each Tomorrow Fund's expenses, but may not include
charges and expenses attributable to any particular Qualified Plan or
Variable Contract. You should carefully review the prospectus of the
insurance product you have chosen or consult with your Plan Fiduciary
for information on relevant charges and expenses. Because these charges
and expenses are excluded from a Tomorrow Fund's quoted performance,
the investment return received by a participant in a Qualified Plan or
a holder of a Variable Contract, investing in the Tomorrow Fund may be
lower than the quoted performance of the Tomorrow Fund. You should bear
in mind the effect of these charges when comparing a Tomorrow Fund's
performance to that of other mutual funds.
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The performance of the Institutional Class shares of the Tomorrow
Funds will vary from time to time and past results are not necessarily
representative of future results. Performance is a function of the type
and quality of a Tomorrow Fund's portfolio securities and is affected
by operating expenses. Performance information may not provide a basis
for comparison with other investments or other mutual funds using a
different method of calculating performance. An investment in any
Tomorrow Fund involves the risk of loss.
RISK CONSIDERATIONS AND OTHER INVESTMENT PRACTICES AND POLICIES
Because each Tomorrow Fund owns different types of investments,
its performance is affected by a variety of factors. The value of a
Tomorrow Fund's investments and the income they generate will vary from
day to day, and generally reflect interest rates, market conditions,
and other company, political and economic news. Performance also
depends of the Adviser's skill in allocating assets. When you sell your
shares, they may be worth more or less than what you paid for them.
Fixed-Income Securities. Each Tomorrow Fund may invest in a broad range
of fixed-income securities, including bonds, notes, mortgage-backed and
asset-backed securities, preferred stock and convertible debt
securities issued by U.S. corporations or other entities or by the U.S.
Government or its agencies, authorities, instrumentalities or sponsored
enterprises. The interest payable on so-called fixed-income securities
purchased by a Tomorrow Fund is not necessarily paid at a fixed rate
and may be payable on a variable, floating (including inverse
floating), contingent, in-kind or deferred basis.
Fixed-income securities are subject to the risk of the issuers'
inability to meet principal and interest payments on the obligations
(credit risk) and may also be subject to price volatility due to such
factors as interest rate sensitivity, market perception of the credit
worthiness of the issuer and general market liquidity (market risk).
Generally, when interest rates decline, the value of fixed-income
securities can be expected to rise. Conversely, when interest rates
rise the value of fixed-income securities can be expected to decline.
Corporate Debt Obligations. Each Tomorrow Fund may invest in corporate
debt obligations, including obligations of industrial, utility and
financial issuers. In addition to obligations of corporations,
corporate debt obligations include bank obligations and zero coupon
securities, issued by financial institutions and corporations.
The debt securities in which the Tomorrow Funds may invest will be
rated investment grade at the time of purchase. Investment grade
securities are securities rated within the four highest grades as
determined by Moody's Investors Service, Inc. ("Moody's") (Aaa, Aa, A
or Baa) or by Standard & Poor's Ratings Group ("Standard & Poor's")
(AAA, AA, A or BBB) or their respective equivalent ratings or, if not
rated, determined by the Adviser to be of equivalent credit quality to
securities so rated. A security will be
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deemed to have met a rating requirement if it receives the minimum
required rating from at least one such rating organization even though
it has been rated below the minimum rating by one or more other rating
organizations, or if unrated by such rating organizations, determined
by the Adviser to be of comparable credit quality. Securities rated Baa
by Moody's or BBB by Standard & Poor's and unrated securities of
equivalent credit quality are considered medium grade obligations with
speculative characteristics. Adverse changes in economic conditions or
other circumstances are more likely to weaken the issuer's capacity to
pay interest and repay principal on these securities than is the case
for issuers of higher rated securities. In the event that the rating on
a security held in a Tomorrow Fund's portfolio is downgraded below
investment grade by a rating service, such action will be considered by
the Adviser in its evaluation of the overall investment merits of that
security, but will not necessarily result in the sale of the security.
Convertible Securities and Preferred Stocks. Each Tomorrow Fund may
invest in debt securities or preferred stocks that are convertible into
or exchangeable for common stock. Preferred stocks are securities that
represent an ownership interest in a company and provide their owner
with claims on the company's earnings and assets prior to the claims of
owners of common stock but after those of bond owners. Preferred stocks
in which the Tomorrow Funds may invest include sinking fund,
convertible, perpetual fixed and adjustable rate (including auction
rate) preferred stocks.
U.S. Government Securities. Each Tomorrow Fund may invest in all types
of U.S. Government securities, including obligations issued or
guaranteed by the U.S. Government or its agencies, authorities,
instrumentalities or sponsored enterprises. Some U.S. Government
securities, such as Treasury bills, notes and bonds, which differ only
in their interest rates, maturities and times of issuance, are
supported by the full faith and credit of the United States of America.
Others, such as obligations issued or guaranteed by U.S. Government
agencies, authorities, instrumentalities or sponsored enterprises are
supported either by (a) the full faith and credit of the U.S.
Government (such as securities of the Small Business Administration),
(b) the right of the issuer to borrow from the U.S. Treasury (such as
securities of the Federal Home Loan Banks), (c) the discretionary
authority of the U.S. Government to purchase the agency's obligations
(such as securities of the Federal National Mortgage Association), or
(d) only the credit of the issuer.
Each Tomorrow Fund may also invest in separately traded principal
and interest components of securities guaranteed or issued by the U.S.
Government or its agencies, instrumentalities or sponsored enterprises
if such components are traded independently under the Separate Trading
of Registered Interest and Principal of Securities program ("STRIPS")
or any similar program sponsored by the U.S. Government. The Tomorrow
Funds may invest in U.S. Government securities which are zero coupon or
deferred interest securities.
Zero Coupon and Capital Appreciation Bonds. The Tomorrow Funds may
invest in zero coupon and capital appreciation bonds. Zero coupon and
capital appreciation bonds are debt securities issued or sold at a
discount from their face value that do not entitle the holder to any
payment of interest prior to maturity or a specified redemption date
(or cash payment date). The amount of the discount varies depending on
the time remaining until maturity or cash payment date, prevailing
interest rates, the liquidity of the security and the perceived credit
quality of the issuer. These securities also may take the form of debt
securities that have been stripped of their unmatured interest coupons,
the coupons themselves or receipts or certificates representing
interests in such stripped debt obligations or coupons. The market
prices of zero coupon and capital appreciation bonds generally are more
volatile than the market prices of interest-bearing securities and are
likely to respond to a greater degree to changes in interest rates than
interest-bearing securities having similar maturities and credit
quality.
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Mortgage-Backed Securities. Each Tomorrow Fund may invest in mortgage
pass-through certificates and multiple-class pass-through securities,
such as real estate mortgage investment conduits ("REMIC") pass-through
certificates and collateralized mortgage obligations ("CMOs").
Guaranteed Mortgage Pass-Through Securities. Guaranteed mortgage
pass-through securities represent participation interests in pools of
residential mortgage loans and are issued by U.S. Governmental or
private lenders and guaranteed by the U.S. Government National Mortgage
Association ("Ginnie Mae"), the Federal National Mortgage Association
("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie
Mac"). Ginnie Mae certificates are guaranteed by the full faith and
credit of the U.S. Government for timely payment of principal and
interest on the certificates. Fannie Mae certificates are guaranteed by
Fannie Mae, a federally chartered and privately owned corporation, for
full and timely payment of principal and interest on the certificates.
Freddie Mac certificates are guaranteed by Freddie Mac, a corporate
instrumentality of the U.S. Government, for timely payment of interest
and the ultimate collection of all principal of the related mortgage
loans.
Multiple-Class Pass-through Securities and Collateralized Mortgage
Obligations. CMOs and REMIC pass-through or participation certificates
may be issued by, among others, U.S. Government agencies and
instrumentalities as well as private lenders. CMOs and REMIC
certificates are issued in multiple classes and the principal of and
interest on the mortgage assets may be allocated among the several
classes of CMOs or REMIC certificates in various ways. Each class of
CMOs or REMIC certificates, often referred to as a "tranche," is issued
at a specific adjustable or fixed interest rate and must be fully
retired no later than its final distribution date. Generally, interest
is paid or accrues on all classes of CMOs or REMIC certificates on a
monthly basis.
Typically, CMOs are collateralized by Ginnie Mae, Fannie Mae or
Freddie Mac certificates but also may be collateralized by other
mortgage assets such as whole loans or private mortgage pass-through
securities. Debt service on CMOs is provided from payments of principal
and interest on collateral of mortgaged assets and any reinvestment
income thereon.
A REMIC is a CMO that qualifies for special tax treatment under
the Code and invests in certain mortgages primarily secured by
interests in real property and other permitted investments. Investors
may purchase "regular" and "residual" interest shares of beneficial
interest in REMIC trusts although the Tomorrow Funds do not intend to
invest in residual interests.
Risk Factors Associated with Mortgage-Backed Securities. Investing in
Mortgage-Backed Securities involves certain risks, including the
failure of a counter-party to meet its commitments, adverse interest
rate changes and the effects of prepayments on mortgage cash flows.
Further, the yield characteristics of Mortgage-Backed Securities differ
from those of traditional fixed-income securities. The major
differences typically include more frequent interest and principal
payments (usually monthly), the adjustability of interest rates, and
the possibility that prepayments of principal may be made substantially
earlier than their final distribution dates.
Prepayment rates are influenced by changes in current interest
rates and a variety of economic, geographic, social and other factors
and cannot be predicted with certainty. Both adjustable rate mortgage
loans and fixed rate mortgage loans may be subject to a greater rate of
principal prepayments in a declining interest rate environment and to a
lesser rate of principal prepayments in an increasing interest rate
environment. Under certain interest rate and prepayment rate scenarios,
a Tomorrow Fund may fail to recoup fully its investment in
Mortgage-Backed Securities notwithstanding any direct or indirect
governmental or agency guarantee. When a Tomorrow Fund reinvests
amounts representing payments and unscheduled prepayments of principal,
it may receive a rate of interest that is lower than the rate on
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existing adjustable rate mortgage pass-through securities. Thus,
Mortgage-Backed Securities, and adjustable rate mortgage pass-through
securities in particular, may be less effective than other types of
U.S. Government securities as a means of "locking in" interest rates.
Conversely, in a rising interest rate environment, a declining
prepayment rate will extend the average life of many Mortgage-Backed
Securities. This possibility is often referred to as extension risk.
Extending the average life of a Mortgage-Backed Security increases the
risk of depreciation due to future increases in market interest rates.
Risks Associated with Specific Types of Derivative Debt Securities.
Different types of derivative debt securities are subject to different
combinations of prepayment, extension and/or interest rate risk.
Conventional mortgage pass-through securities and sequential pay CMOs
are subject to all of these risks, but are typically not leveraged.
Thus, the magnitude of exposure may be less than for more leveraged
Mortgage-Backed Securities.
Planned amortization class ("PAC") and target amortization class
("TAC") CMO bonds involve less exposure to prepayment, extension and
interest rate risk than other Mortgage-Backed Securities, provided that
prepayment rates remain within expected prepayment ranges or "collars."
To the extent that prepayment rates remain within these prepayment
ranges, the residual or support tranches of PAC and TAC CMOs assume the
extra prepayment, extension and interest rate risk associated with the
underlying mortgage assets.
Asset-Backed Securities. Each Tomorrow Fund may invest in asset-backed
securities, which represent participations in, or are secured by and
payable from, pools of assets such as motor vehicle installment sale
contracts, installment loan contracts, leases of various types of real
and personal property, receivables from revolving credit (credit card)
agreements and other categories of receivables. Asset-backed securities
may also be collateralized by a portfolio of U.S. Government
securities, but are not direct obligations of the U.S. Government, its
agencies or instrumentalities. Such asset pools are securitized through
the use of privately-formed trusts or special purpose corporations.
Payments or distributions of principal and interest on asset-backed
securities may be guaranteed up to certain amounts and for a certain
time period by a letter of credit or a pool insurance policy issued by
a financial institution unaffiliated with the trust or corporation, or
other credit enhancements may be present; however, privately issued
obligations collateralized by a portfolio of privately issued
asset-backed securities do not involve any government-related guarantee
or insurance. In addition to risks similar to those associated with
Mortgage-Backed Securities, asset-backed securities present further
risks that are not presented by Mortgage-Backed Securities because
asset-backed securities generally do not have the benefit of a security
interest in collateral that is comparable to mortgage assets.
Real Estate Investment Trusts. Each Tomorrow Fund may invest in shares
of real estate investment trusts ("REITs"). REITs are pooled investment
vehicles which invest primarily in income producing real estate or real
estate related loans or interests. REITs are generally classified as
equity REITs, mortgage REITs or a combination of equity and mortgage
REITs. Equity REITs invest the majority of their assets directly in
real property and derive income primarily from the collection of rents.
Equity REITs can also realize capital gains by selling properties that
have appreciated in value. Mortgage REITs invest the majority of their
assets in real estate mortgages and derive income from the collection
of interest payments. Like investment companies such as the Tomorrow
Funds, REITs are not taxed on income distributed to shareholders
provided they comply with several requirements of the Internal Revenue
Code. Any Tomorrow Fund that invests in REITs will indirectly bear its
proportionate share of any expenses paid by such REITs in addition to
the expenses paid by the Tomorrow Fund.
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Investing in REITs involves certain risks: equity REITs may be
affected by changes in the value of the underlying property owned by
the REITs, while mortgage REITs may be affected by the quality of any
credit extended. REITs are dependent upon management skills, are not
diversified, and are subject to the risks of financing projects. REITs
are subject to heavy cash flow dependency, default by borrowers,
self-liquidation, and the possibilities of failing to qualify for the
exemption from tax for distributed income under the Internal Revenue
Code and failing to maintain their exemptions from the 1940 Act. REITs
whose underlying assets include long-term health care properties, such
as nursing, retirement and assisted living homes, may be impacted by
federal regulations concerning the health care industry.
Investing in REITs may involve risks similar to those associated
with investing in small capitalization companies. REITs may have
limited financial resources, may trade less frequently and in a limited
volume and may be subject to more abrupt or erratic price movements
than larger company securities. Historically, small capitalization
stocks, such as REITs, have been more volatile in price than the larger
capitalization stocks included in the S&P 500 Index.
Investing in Small Capitalization Companies. Each Tomorrow Fund may
invest in varying degrees in smaller, lesser known companies which the
Adviser believes offer a greater growth potential than larger, more
mature, better known firms. Investing in the securities of such
companies, however, involves greater risk and a possibility of greater
portfolio price volatility. Historically, small capitalization stocks
and stocks of recently organized companies have been more volatile in
price than the larger capitalization stocks, such as those included in
the S&P 500. Among the reasons for the greater price volatility of
these small company and unseasoned stocks are the less certain growth
prospects of smaller firms and the lower degree of liquidity in the
markets for such stocks.
Other Investment Companies. Each Tomorrow Fund may invest up to 10% of
its total assets in the securities of other investment companies but
may not invest more than 5% of its total assets in the securities of
any one investment company or acquire more than 3% of the voting
securities of any other investment company. A Tomorrow Fund will
indirectly bear its proportionate share of any management fees and
other expenses paid by investment companies in which it invests in
addition to the advisory and administration fees paid by the Tomorrow
Fund. However, to the extent that a Tomorrow Fund invests in a
registered open-end investment company, the Adviser will waive its
advisory fees on the portion of the Tomorrow Fund's assets so invested.
Each Tomorrow Fund is authorized to invest all of its assets in
the securities of a single open-end investment company (a "pooled
fund") having substantially identical investment objectives, policies
and restrictions as such Fund, notwithstanding any other investment
restriction or policy. Such a structure is commonly referred to as
"master/feeder." If authorized by the Trustees and subject to
shareholder approval (if then required by applicable law), a Tomorrow
Fund would seek to achieve its investment objective by investing in a
pooled fund which would invest in a portfolio of securities that
complies with the Tomorrow Fund's investment objective, policies and
restrictions. The Trustees currently do not intend to authorize
investing in a pooled fund in connection with a master/feeder
structure.
Short-Term Debt Securities. Each Tomorrow Fund may establish and
maintain cash balances for temporary purposes in order to maintain
liquidity to meet shareholder redemptions. Each Tomorrow Fund may also
establish and maintain cash balances for defensive purposes without
limitation to hedge against potential stock market declines. A Tomorrow
Fund's cash balances, including uncommitted cash balances, may be
invested in investment grade money market instruments and short-term
interest-bearing securities. These securities consist of U.S.
Government securities, instruments of U.S. banks (including negotiable
certificates of deposit, non-negotiable fixed-time deposits and
bankers' acceptances), repurchase
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agreements, prime commercial paper of U.S. companies and debt
securities that make periodic interest payments at variable or
floating rates.
Structured Securities. Each Tomorrow Fund may invest in "structured"
notes, bonds or debentures. The distinguishing feature of a structured
security is that the value of the principal of and/or interest payable
on the security is determined by reference to the value of a benchmark
or the relative change in two or more benchmarks. Examples of these
benchmarks include stock prices, currency exchange rates and physical
commodity prices. Structured securities may be positively or negatively
indexed, so that appreciation of the benchmark may produce an increase
or decrease in the interest rate or value of the structured security at
maturity. Certain structured securities may also be leveraged to the
extent that the magnitude of any change in the interest rate or
principal payable on the benchmark asset is a multiple of the change in
the reference price. Leverage enhances the price volatility of the
security and, therefore, the Fund's net asset value. Further, certain
structured or hybrid notes may be illiquid for purposes of the Fund's
limitation on investments in illiquid securities.
Mortgage Dollar Rolls. Each Tomorrow Fund may enter into mortgage
dollar roll transactions. In a mortgage dollar roll, a Tomorrow Fund
sells securities for delivery in the current month and simultaneously
contracts with the same counterparty to repurchase similar (same type,
coupon and maturity), but not identical securities on a specified
future date. During the roll period, the Tomorrow Fund will not receive
principal and interest paid on the securities sold. However, the
Tomorrow Fund would benefit to the extent of any difference between the
price received for the securities sold and the lower forward price for
the future purchase (often referred to as the "drop") or fee income
plus the interest on the cash proceeds of the securities sold until the
settlement date of the forward purchase. Unless such benefits exceed
the income, capital appreciation and gain or loss due to mortgage
prepayments that would have been realized on the securities sold as
part of the mortgage dollar roll, the use of this technique will
diminish the investment performance of a Tomorrow Fund compared with
what such performance would have been without the use of mortgage
dollar rolls. The Tomorrow Funds will hold and maintain in a segregated
account until the settlement date cash or liquid, high grade debt
securities in an amount equal to the forward purchase price. Any
benefits derived from the use of mortgage dollar rolls may depend upon
mortgage prepayment assumptions, which will be affected by changes in
interest rates. There is no assurance that mortgage dollar rolls can be
successfully employed.
Writing and Purchasing Put and Call Options on Securities and
Securities Indices. To seek additional income or to minimize
anticipated declines in the value of its securities, each Tomorrow Fund
may purchase and write (i.e., sell) call and put options on securities
and securities indices. Option transactions in which the Tomorrow Funds
may engage may be traded on securities exchanges or in the
over-the-counter market. Each Tomorrow Fund currently intends to limit
its option transactions during the current fiscal year so that no more
than 5% of the Tomorrow Fund's net assets will be at risk as a result
of such transactions. Please see the SAI for a further discussion of
option transactions and associated risks.
Futures Contracts and Options on Futures Contracts. Each Tomorrow Fund
may engage in futures transactions and related options. Future
contracts may be based on various securities (such as U.S. Government
securities), securities indices and other financial instruments and
indices. A Tomorrow Fund will engage in futures and related options
transactions only for bona fide hedging and non-hedging purposes to the
extent permitted by regulations of the Commodity Futures Trading
Commission. A Tomorrow Fund will not enter into futures contracts or
options thereon for non-hedging purposes if, immediately thereafter,
the aggregate initial margin and premiums required to establish
non-hedging positions in futures contracts and options on futures would
exceed 5% of the Tomorrow Fund's net assets, after taking into account
unrealized profits and losses on any such positions and excluding the
amount by
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<PAGE>
which such options were in-the-money at the time of purchase. Each
Tomorrow Fund may also enter into closing purchase and sale
transactions with respect to any of futures contracts and related
options.
The use of futures contracts entails certain risks, including but
not limited to the following: no assurance that futures contracts
transactions can be offset at favorable prices; possible reduction of
the Tomorrow Fund's income due to the use of hedging; possible
reduction in value of the both the securities hedged and the hedging
instrument; possible lack of liquidity due to daily limits on price
fluctuations; imperfect correlation between the contract and the
securities being hedged; and potential losses in excess of the amount
initially invested in the futures contracts themselves. If the
expectations of the Adviser regarding movements in securities prices or
interest rates are incorrect, the Tomorrow Fund may have experienced
better investments results without hedging. The use of futures
contracts and options on futures contracts requires special skills in
addition to those needed to select portfolio securities. A further
discussion of futures contracts and their associated risks is contained
in the SAI.
Forward Commitments, Delayed Delivery and When-Issued Securities. Each
Tomorrow Fund may purchase securities on a when-issued, delayed
delivery, or forward commitment basis. When such transactions are
negotiated, the price of such securities is fixed at the time of the
commitment, but delivery and payment for the securities may take place
up to 90 days after the date of the commitment to purchase. The
securities so purchased are subject to market fluctuation, and no
interest accrues to the purchaser during this period. When-issued
securities or forward commitments involve a risk of loss if the value
of the security to be purchased declines prior to the settlement date.
When a Tomorrow Fund purchases securities on a forward commitment or
when-issued basis, the Tomorrow Fund's custodian will maintain in a
segregated account cash or liquid, high grade debt securities having a
value (determined daily) at least equal to the amount of the Tomorrow
Fund's purchase commitment. A Tomorrow Fund may close out a position in
securities purchased on a when-issued, delayed delivery or forward
commitment basis prior to the settlement date.
Lending of Portfolio Securities. Each Tomorrow Fund may also seek to
increase its income by lending portfolio securities. Such loans may be
made to institutions, such as certain broker-dealers, and are required
to be secured continuously by collateral in cash, cash equivalents or
U.S. Government securities maintained on a current basis at an amount
at least equal to the market value of the securities loaned. If the
Adviser determines to make securities loans, the value of the
securities loaned would not exceed 33 1/ 3% of the value of the total
assets of the Tomorrow Fund. A Tomorrow Fund may experience a loss or
delay in the recovery of its securities if the borrowing institution
breaches its agreement with the Tomorrow Fund.
Restricted and Illiquid Securities. Each Tomorrow Fund may invest up to
15% of its total assets in "restricted securities" (i.e., securities
that would be required to be registered under the Securities Act of
1933, as amended ("1933 Act"), prior to distribution to the general
public) including restricted securities eligible for resale to
"qualified institutional buyers" under Rule 144A under the 1933 Act.
Each Tomorrow Fund may also invest up to 15% of its net assets in
illiquid investments, which includes repurchase agreements maturing in
more than seven days, securities that are not readily marketable,
certain over-the-counter options and restricted securities, unless the
Trustees determine, based upon a continuing review of the trading
markets for the specific restricted security, that such restricted
securities are liquid. Each Tomorrow Fund may agree to adhere to more
restrictive limits on investments in restricted and illiquid
investments as a condition of the registration of its shares in various
states. The Trustees have adopted guidelines and delegated to the
Advisor the daily function of determining and monitoring the liquidity
of restricted securities. The Trustees, however, retain sufficient
oversight and are ultimately responsible for the determinations. Since
it is not possible to predict with assurance exactly how this market
for restricted securities sold and offered under Rule 144A will
develop, the Trustees carefully monitor each Tomorrow
-30-
<PAGE>
Fund's investments in these securities, focusing on such important
factors, among others, as valuation, liquidity and availability of
information. This investment practice could have the effect of
increasing the level of illiquidity in a Tomorrow Fund to the extent
that qualified institutional buyers become for a time uninterested in
purchasing these restricted securities.
Repurchase Agreements. Each Tomorrow Fund may enter into repurchase
agreements through which the Tomorrow Fund purchases a security (the
"underlying security") from a domestic securities dealer or bank that
is a member of the Federal Reserve System. Under the agreement, the
seller of the repurchase agreement (i.e., the securities dealer or
bank) agrees to repurchase the underlying security at a mutually agreed
upon time and price. In repurchase transactions, the underlying
security, which must be a high-quality debt security, is held by the
Tomorrow Fund's custodian through the federal book-entry system as
collateral and marked-to-market on a daily basis to ensure full
collateralization of the repurchase agreement. In the event of
bankruptcy or default of certain sellers of repurchase agreements, a
Tomorrow Fund could experience costs and delays in liquidating the
underlying security held as collateral and might incur a loss if such
collateral declines in value during this period.
Market Changes. The market value of the Tomorrow Fund's investments,
and thus each Tomorrow Fund's net asset value, will change in response
to market conditions affecting the value of its portfolio securities.
When interest rates decline, the value of fixed rate obligations can be
expected to decline. In contrast, as interest rates on adjustable rate
loans are reset periodically, yields on investments in such loans will
gradually align themselves to reflect changes in market interest rates,
causing the value of such investments to fluctuate less dramatically in
response to interest rate fluctuations than would investments in fixed
rate obligations.
Portfolio Turnover. Although no Tomorrow Fund purchases securities with
a view to rapid turnover, there are no limitations on the length of
time that securities must be held by a Tomorrow Fund and a Tomorrow
Fund's annual portfolio turnover rate may vary significantly from year
to year. A high rate of portfolio turnover (100% or more) involves
correspondingly greater transaction costs which must be borne by the
applicable Tomorrow Fund and its shareholders and may, under certain
circumstances, make it more difficult for such Tomorrow Fund to qualify
as a regulated investment company under the Code. The estimated
portfolio turnover rates of the Tomorrow Funds for the current fiscal
year are as follows: Long-Term Fund 57%; Mid-Term Fund 63%; Short-Term
Fund 65%; and Post-Retirement Fund 82%.
Diversification. Each Tomorrow Fund is diversified, as defined in the
1940 Act. As such, each Tomorrow Fund has a fundamental policy that
limits its investments so that, with respect to 75% of its assets (i)
no more than 5% of the Tomorrow Fund's total assets will be invested in
the securities of a single issuer and (ii) each Tomorrow Fund will
purchase no more than 10% of the outstanding voting securities of a
single issuer. These limitations do not apply to obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities,
repurchase agreements collateralized by U.S. Government securities or
investments in other investment companies. In addition to the
diversification requirements under the 1940 Act, the Tomorrow Funds
must satisfy the diversification requirements under the Internal
Revenue Code applicable to regulated investment companies and the
additional diversification requirements applicable under Section 817(h)
of the Internal Revenue Code to Separate Accounts that fund Variable
Contracts. These requirements place certain limitations on the assets
of a Tomorrow Fund that may be invested in securities of a single
issuer or interests in the same commodity. More specific information on
these diversification requirements is contained in the SAI.
Investment Restrictions. Each Tomorrow Fund is subject to further
investment policies and restrictions that are described in the SAI.
The foregoing investment policies, including each Tomorrow Fund's
investment objective, are non-fundamental policies which may be
changed by the Trustees without the
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<PAGE>
approval of shareholders. If there is a change in a Tomorrow Fund's
investment objective, shareholders should consider whether that
Tomorrow Fund remains an appropriate investment in light of their then
current financial positions and needs. Each Tomorrow Fund has adopted
certain fundamental policies which may not be changed without the
approval of the applicable Tomorrow Fund's shareholders. See
"Investment Restrictions" in the Statement of Additional Information.
If any percentage restriction described above or in the SAI is
adhered to at the time of investment, a subsequent increase or decrease
in the percentage resulting from a change in the value of a Tomorrow
Fund's assets will not constitute a violation of the restriction.
ADDITIONAL INFORMATION
Reports to Shareholders
As shareholders in the Tomorrow Funds, Separate Accounts and
Qualified Plans will receive an annual report containing audited
financial statements and semi-annual and quarterly reports. Each
Separate Account and Qualified Plan will also be provided with a
printed confirmation for each transaction in their shareholder account.
Holders of Variable Contracts and participants in Qualified Plans may
receive additional reports from their insurance company or Plan
Fiduciary, as the case may be.
Principal Underwriter
WPG serves as the Tomorrow Funds' principal underwriter.
Transfer Agent and Dividend Disbursing Agent
The Shareholder Services Group, Inc. (the "Transfer Agent"), P.O.
Box 9037, Boston, MA 02205 serves as transfer agent and dividend
disbursing agent for the Tomorrow Funds. The Tomorrow Funds may also
enter into agreements with and compensate other transfer agents and
financial institutions who process shareholder transactions and
maintain shareholder accounts.
Independent Accountants
KPMG Peat Marwick LLP, 345 Park Avenue, New York, New York 10154,
serves as the independent accountants for the Trust and will audit each
Tomorrow Fund's financial statements annually.
Legal Counsel
Hale and Dorr, 60 State Street, Boston, Massachusetts 02109, is
legal counsel to the Trust.
----------------------
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained
in this Prospectus and the SAI, and, if given or made, such other
information or representation must not be relied upon as having been
authorized by the Trust. This Prospectus does not constitute an
offering in any jurisdiction in which such offering may not be lawfully
made.
-32-
<PAGE>
SUBJECT TO COMPLETION: Dated July 3, 1995
WEISS, PECK & GREER INVESTMENTS
TOMORROW FUNDS RETIREMENT TRUST
One New York Plaza
New York, New York 10004
CORE LARGE-CAP STOCK FUND ("Large-Cap Fund")
Seeks to exceed the performance of publicly traded large
capitalization stocks in the aggregate, as represented by the
Standard & Poor's Index of 500 Common Stocks (the "S&P 500").
CORE SMALL-CAP STOCK FUND ("Small-Cap Fund")
Seeks to exceed the performance of publicly traded small
capitalization stocks in the aggregate, as represented by the
Russell 2000 Index (the "Russell 2000").
PROSPECTUS -- Adviser Class Shares
September __, 1995
This Prospectus describes Adviser Class shares of two mutual funds
- the Large-Cap Fund and the Small-Cap Fund (together, the "Funds").
Adviser Class shares of the Funds may be purchased only by "qualified"
pension or retirement plans, including trustees of such plans for
individuals funding their individual retirement accounts or other
qualified plans. Each Fund is a diversified mutual fund advised by
Weiss, Peck & Greer, L.L.C. (the "Adviser" or "WPG").
Please read this Prospectus before investing, and keep it on file
for future reference. It contains important information, including how
the Funds invest and the services available to shareholders. To learn
more about the Funds, you can obtain a copy of the Statement of
Additional Information (the "SAI"), also dated September __, 1995. The
SAI has been filed with the Securities and Exchange Commission (the
"SEC") and is incorporated by reference into this Prospectus. A free
copy of the SAI or a copy of the Prospectus describing the
Institutional Class shares of the Funds is available upon request by
calling Weiss, Peck & Greer, L.L.C. at 1-800-223-3332 (toll free).
Adviser Class shares of a Fund may not be available in your state due
to various insurance or other regulations. Please check with your
qualified plan fiduciary for Funds that are available in your state.
Inclusion of a Fund in this Prospectus which is not available in your
state is not to be considered a solicitation.
ADVISER CLASS SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF,
OR GUARANTEED OR ENDORSED BY, BANK OR OTHER INSURED DEPOSITORY
INSTITUTION, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT
AGENCY. AN INVESTMENT IN ADVISER CLASS SHARES OF THE FUNDS INVOLVES
INVESTMENT 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.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE
SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
STATE.
<PAGE>
Each Fund seeks, using quantitative methodology, to provide
investors who participate in qualified retirement plans with investment
results that exceed the performance of a "Benchmark Index." The
Benchmark for the Large-Cap Fund is the S&P 500 and the Benchmark for
the Small-Cap Fund is the Russell 2000. Each Fund primarily invests its
assets in equity securities of all types which comprise the applicable
Benchmark.
In addition to the Adviser Class shares offered through this
Prospectus, the Funds offer a class of shares known as the
Institutional Class through a separate prospectus. Institutional Class
shares of the Funds are available only to certain eligible investors.
TABLE OF CONTENTS
Page
Expense Information................................
Investment Objectives and Policies.................
How to Buy Shares..................................
How to Sell Shares.................................
How to Exchange Shares.............................
How Each Fund's Share Price is Determined..........
Management of the Funds............................
Distribution Plans.................................
Dividends and Taxes................................
Portfolio Brokerage................................
The Trust..........................................
Investment Performance.............................
Risk Considerations and Other
Practices and Policies............................
Additional Information.............................
<PAGE>
EXPENSE INFORMATION
Operating a mutual fund, such as each Fund, involves a variety of
expenses for portfolio management, shareholder statements, tax
reporting and other services. These costs are paid from a fund's assets
and their effect is factored into any quoted share price or performance
information.
Shareholder Transaction Expenses are charges you pay when you buy or
sell Adviser Class shares of a Fund.
<TABLE>
<S> <C> <C>
Large-Cap Small-Cap
Fund Fund
Maximum Sales Load Imposed on Purchases None None
Maximum Sales Load Imposed on
Reinvested Dividends None None
Deferred Sales Load None None
Redemption Fees None None
Exchange Fees None None
</TABLE>
Annual Fund Operating Expenses are paid out of the Funds' assets. Each
Fund's expenses are factored into its share price or dividends and are
not charged directly to shareholder accounts. The following are
estimates and are calculated as a percentage of average net assets.
<TABLE>
<S> <C> <C>
Large-Cap Small-Cap
Fund Fund
Management Fee (after expense limitation) 0.00%* 0.00%*
12b-1 Fee 1 0.50% 0.50%
Other Expenses (after expense limitation) 1.25%* 1.25%*
Total Fund Operating Expenses
(after expense limitation) 1.75%* 1.75%*
</TABLE>
Example: Hypothetically assume that each Fund's annual return is 5% and
that its operating expenses are exactly as just described. For every
$1,000 you invested, you would have paid the following expenses if you
closed your account after the number or years indicated:
<TABLE>
<S> <C> <C>
Large-Cap Small-Cap
Fund Fund
After 1 Year $18 $18
After 3 Years $56 $56
The purpose of the above table and Example is to assist you in
understanding the various costs and expenses of the Adviser Class
shares of the Funds that an investor will bear directly or indirectly.
See page __. The Funds are newly organized and have no operating
history. The figures shown in the table
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<PAGE>
under the caption "Other Expenses" and in the hypothetical example are
based on estimates of the Funds' expenses for the fiscal year ending
December 31, 1995. The expenses set forth above do not reflect charges
and expenses that may be applicable to a participant in a qualified
plan. Please refer to your qualified plan documents.
---------------
<FN>
1 Rule 12b-1 Fees consist of a 0.25% distribution fee and a
0.25% service fee.
* The Adviser has voluntarily agreed to limit temporarily each
Fund's operating expenses (excluding Rule 12b-1 fees applicable to
Adviser Class shares, service fees applicable to Institutional Class
shares, any other class-specific expenses, litigation, indemnification
and other extraordinary expenses) to 1.00% of its average daily net
assets. See page __. In the absence of this agreement, Management Fees
would be 0.75% of each Fund's average daily net assets and Other
Expenses and Total Fund Operating Expenses are estimated to be
approximately 3.75% and 5.00%, respectively, of the average daily net
assets attributable to the Adviser Class shares of the Large-Cap Fund
and 4.35% and 5.60%, respectively, of the average daily net assets
attributable to the Adviser Class shares of the Small-Cap Fund.
</FN>
</TABLE>
THE INFORMATION IN THE TABLE AND HYPOTHETICAL EXAMPLE ABOVE SHOULD NOT
BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
-4-
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
What are the Investment Objectives of the Funds?
Each Fund seeks to provide investors who participate in qualified
retirement plans with investment results that exceed the performance of
a "Benchmark Index." The Benchmark for the Large-Cap Fund is the S&P
500 and the Benchmark for the Small-Cap Fund is the Russell 2000.
LARGE-CAP FUND seeks to exceed the performance of publicly
traded large capitalization stocks in the aggregate,
as represented by the S&P 500. The S&P 500 is an
unmanaged index of 500 common stocks. The S&P 500
represents approximately 70% of the total domestic
U.S. equity market capitalization.
SMALL-CAP FUND seeks to exceed the performance of publicly
traded small capitalization stocks in the aggregate,
as represented by the Russell 2000. The Russell 2000
is an unmanaged index of 2000 common stocks of small
capitalization companies.
How will the Funds invest their assets?
To seek to achieve its objective, each Fund, under normal market
conditions, invests in a portfolio of securities that is considered
more "efficient" than the applicable Benchmark. An efficient portfolio
is one that has the maximum expected return for any level of risk. The
efficient mix of securities is established mathematically, taking into
account the expected return and volatility of returns for each security
in a given universe, as well as the historical price relationships
between the different securities in the universe.
To implement this strategy with respect to the Funds, the Adviser
compiles the historical price data of all securities which comprise the
S&P 500 in the case of the Large-Cap Fund and the Russell 2000 in the
case of the Small-Cap Fund. The Adviser may eliminate a security from
consideration if it considers the security to have an inadequate or
misleading price history. Using this historical price data, the Adviser
constructs and analyzes a complete matrix of all the possible price
relationships between the securities in the applicable Benchmark.
Using a sophisticated software program that incorporates risk
reduction techniques developed by investment professionals of the
Adviser, the Adviser constructs a number of portfolios with respect to
each Fund, which portfolios are believed to have optimized risk/reward
ratios. From these alternative portfolios, the Adviser selects the
combination of securities, together with their appropriate weightings,
that the Adviser believes will comprise the optimal portfolio for each
Fund. The optimal portfolio for a Fund is designed to have a return
greater than, but highly correlated with, the return of its Benchmark.
Please see "Quantitative Methodology" in the SAI for a further
description of how the Adviser constructs and maintains an optimal
portfolio for each Fund.
While each Fund will generally be substantially fully invested in
equity securities which comprise the applicable Benchmark, each Fund
may invest up to 10% of its total assets in fixed-income securities
that are rated at least AA by Standard & Poor's Ratings Group ("S&P")
or Aa by Moody's Investors Service, Inc. ("Moody's") or their
respective equivalents or, if not rated, determined to be of equivalent
credit quality to securities so rated.
Each Fund may, but is not required to, utilize various investment
strategies and techniques to hedge various market risks (such as broad
or specific equity or fixed-income market movements and interest rate
risk) or to enhance potential gain. Such strategies and techniques are
generally accepted as part of modern portfolio management and are
regularly utilized by many mutual funds. The investment
-5-
<PAGE>
strategies and techniques used by the Funds and the instruments in
which they invest may change over time as new techniques, strategies
and instruments are developed or regulatory changes occur.
In the course of pursuing their investment objectives, the Funds
may: (i) purchase and write (sell) put and call options on securities
and indices; (ii) purchase and sell financial futures contracts and
options thereon; (iii) lend portfolio securities; (iv) enter into
repurchase agreements; (v) purchase securities on a forward commitment,
when issued or delayed delivery basis; and (vi) invest in restricted
and illiquid securities. For further information concerning the
securities in which the Funds may invest and the investment strategies
and techniques they may employ, see "Risk Considerations and Other
Investment Practices and Policies" below in this Prospectus.
HOW TO BUY SHARES
Who is eligible to purchase Adviser Class shares of the Funds?
Adviser Class shares of the Funds may be purchased only for the
account of pension or retirement plans ("Qualified Plans") that satisfy
the qualification requirements of Section 401(a) of the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code").
Qualified Plans include: 401(k) plans, 403(b) plans, 457 plans,
governmental plans, tax-sheltered annuity plans and individual
retirement accounts (IRAs).
Should you have any questions as to whether you are an eligible
investor, please call WPG at 1-800-___________.
Through whom may Adviser Class shares of the Funds be purchased?
Because you may not purchase Adviser Class shares of the Funds
directly, all orders to purchase Adviser Class shares must be made
through the trustee, custodian, plan administrator or other fiduciary
(each a "Plan Fiduciary") of your Qualified Plan. If the monies you
wish to invest in the Funds are maintained in a Qualified Plan
sponsored by your employer, please consult with your employer for
information about how to purchase shares of the Funds. If the monies
you wish to invest in the Funds are maintained by your Plan Fiduciary
in an IRA or other self-administered Qualified Plan, please consult
with your Plan Fiduciary for information about how to purchase shares
of the Funds.
You may establish an IRA with the Trust's custodian, Boston Safe
Deposit and Trust Company ("Boston Safe"), through which you may invest
in the Funds. Additionally, you may invest in the Funds by "rolling
over" an existing IRA into an IRA maintained by Boston Safe. Please
call WPG at 1-800-_____ for information regarding how to establish an
IRA with Boston Safe.
Plan Fiduciaries may purchase shares of the Funds for a Qualified
Plan through any investment dealer or financial service firm
("Authorized Firm") approved by WPG. Authorized Firms include
broker-dealers, banks and financial planners.
What is the minimum investment in shares of the Funds?
Plan Fiduciaries may invest in the Funds with as little as $2,000
($250 for a spousal IRA). There is no minimum amount required for
subsequent investments.
-6-
<PAGE>
How may Plan Fiduciaries invest in the Funds for the account of their
Qualified Plans?
In order to make an initial investment in a Fund for a Qualified
Plan, Plan Fiduciaries must open an account with the Funds by
furnishing to an Authorized Firm the information in the Account
Information Form attached to this Prospectus. Shares of the Funds may
be purchased on any day during which the New York Stock Exchange is
open for business (a "Business Day").
At what price are Adviser Class shares of the Funds offered?
Adviser Class shares of the Funds are sold at the net asset value
(NAV) of such shares next determined after the Transfer Agent receives
and accepts a purchase order. Purchase orders received by Authorized
Firms by the close of regular trading on the New York Stock Exchange on
any Business Day and transmitted to the Transfer Agent by the close of
its business day (normally [5]:00 p.m. New York City time) will be
effected as of the close of regular trading on the New York Stock
Exchange on that day. Otherwise, orders will be effected at the NAV
determined on the next Business Day. It is the responsibility of
Authorized Firms to transmit orders so that they will be received by
the Transfer Agent before the close of its business day.
Plan Fiduciaries: To Make an Initial Investment for a Qualified Plan
By Mail: 1. Make a check payable to the Fund in which you wish to or
are instructed to invest.
2. Deliver the completed Account Information Form and
check to an Authorized Firm or mail to the Transfer
Agent at the address indicated on the back cover of
this Prospectus.
By Wire: 1. Call 1-800-________ to open an account and to arrange
for a wire transaction.
2. Instruct your bank to wire funds to:
Boston Safe Deposit and Trust Company
WPG Deposit Account No. _________
Bank Routing No. __________
Specify:
Name of Fund
Adviser Class shares
Account Number
Name(s) in which account is to be registered
3. Deliver the completed Account Information Form to an
Authorized Firm or mail to the Transfer Agent at the
address indicated on the back cover of this Prospectus.
-7-
<PAGE>
Plan Fiduciaries: To Make Further Investments for a Qualified Plan
Automatically: 1. Use the Automatic Investment Plan. Sign up for this
service when opening an account, or call 1-800-_____
to add it. Plan Fiduciaries must designate the bank
or credit union account from which funds will be
drawn.
2. The amount to be invested will automatically be with-
drawn from the designated bank or credit union account
on or about the first Business Day of the month or
quarter selected.
By Telephone: 1. Sign up for this service when opening an account, or
call 1-800-_______ to add it. Plan Fiduciaries must
designate the bank or credit union account from which
funds will be drawn. Note that in order to invest by
phone, the account must be in a bank or credit union
that is a member of the Automated Clearing House
system (ACH).
2. Once this service has been selected, Plan Fiduciaries
may purchase additional shares for the account of
Qualified Plans by calling the Funds' Transfer Agent,
The Shareholder Services Group, Inc., toll-free at
1-800-_________.
3. Give the Transfer Agent representative the name(s) in
which the account is registered, the Fund name, Adviser
Class shares, the account number, and the amount of the
investment.
4. An investment will normally be credited to the
Qualified Plan account the Business Day following
the phone request.
During periods of extreme economic conditions or market
changes, requests by telephone may be difficult to make
due to heavy volume. During such times please consider
placing purchase orders by mail.
By Mail: 1. Include a note with the investment specifying:
Name of the Fund
Adviser Class shares
Account Number
Name(s) in which account is registered
2. Make the check payable to the Fund in which you wish to
or are instructed to invest. Indicate the account
number on the check.
3. Deliver the account information and check to an
Authorized Firm or mail to the Transfer Agent at the
address indicated on the back cover of this Prospectus.
-8-
<PAGE>
By Wire: Instruct the bank to wire funds to:
Boston Safe Deposit and Trust Company
WPG Deposit Account No. _________
ABA Routing No. __________
For credit to:
Name of Fund
Adviser Class shares
Your Account Number
Name(s) in which account is registered
Other Purchase Information. Each Fund reserves the right to reject
any purchase for any reason and to cancel any purchase due to
nonpayment. As a condition of this offering, if your purchase is
cancelled due to nonpayment or because your check does not clear (and,
therefore, your account is required to be redeemed), you will be
responsible for any loss incurred by the Fund(s) affected. All
purchases must be made in U.S. dollars. Checks drawn on foreign banks
will delay purchases until U.S. funds are received and a collection
charge may be imposed. In such cases, Adviser Class shares of the Funds
are priced at the net asset value computed after the Transfer Agent
receives notification of the dollar equivalent from the Funds'
custodian bank. Wire purchases normally take two or more hours to
complete and, to be accepted the same day, must be received by 4:00
p.m. New York City time. Your bank may charge a fee to wire funds.
Telephone transactions are recorded to verify information.
Acquiring Shares of the Funds in Exchange for Securities. Shares
of the Funds may be purchased in whole or in part for the account of
Qualified Plans by delivering to the Funds' custodian, Boston Safe,
securities acceptable to WPG. Please see "In-Kind Purchases" in the SAI
for the terms and conditions of these transactions.
HOW TO SELL SHARES
How may Adviser Class shares of the Funds be redeemed?
Subject to the restrictions (if any) imposed by your Qualified
Plan, you can arrange to sell or "redeem" some or all of your shares on
any Business Day. All orders to redeem Adviser Class shares must be
made through your Plan Fiduciary. If the Adviser Class shares you wish
to redeem are held for the account of a Qualified Plan sponsored by
your employer, please consult with your employer for information about
how to redeem shares of the Funds. If the Adviser Class shares you wish
to redeem are maintained by your Plan Fiduciary in an IRA or other
self-administered Qualified Plan, please consult with your Plan
Fiduciary for information about how to redeem shares of the Funds.
Please note that shares may not be redeemed by telephone or telegram,
except for exchanges which can be requested by Plan Fiduciaries by
telephone or in writing.
At what price are Adviser Class shares of the Funds redeemed?
Adviser Class shares of the Funds will be redeemed at the share
price (NAV) of such shares next calculated after a redemption order is
received in good order by the Transfer Agent. Once shares are redeemed,
sale proceeds generally are available the next Business Day, but may
take up to three Business Days. For your protection, redemption
proceeds will not be released until a shareholder's account has
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been opened and payment for the shares to be redeemed have been
received by the Fund, which may take up to fifteen days.
The net asset value per share received upon redemption or
repurchase may be more or less than the original cost of the shares,
depending on the market value of the portfolio at the time of
redemption or repurchase.
Plan Fiduciaries: To Redeem Shares for a Qualified Plan
By Mail: 1. In a written request specify:
Name of the Fund
Adviser Class shares
Account Number
Name(s) in which account is registered
The dollar amount or the number of shares to
be redeemed
2. Deliver the redemption request to an Authorized Firm
or mail to the Transfer Agent at the address
indicated on the back cover of this Prospectus.
Automatically: 1. Use the Automatic Withdrawal Plan if the Qualified
Plan account has a total value of at least $[______].
Sign up for this service when opening an account,
or call 1-800-_______ to add it.
2. The redemption proceeds of $[______] or more will
automatically be transferred from the Qualified Plan
account to the designated address or bank account on
or about the first Business Day of the month or
quarter selected.
General Redemption Information. Authorized Firms must receive
redemption requests before the close of business on the New York Stock
Exchange and transmit them to the Transfer Agent prior to the Transfer
Agent's close of business to receive that day's share price (NAV). A
written redemption request must be signed by all registered
shareholders for the account using the exact names in which the account
is registered or accompanied by executed power(s) of attorney. Unless
otherwise specified, redemption proceeds will be sent by check to the
record address. Plan Fiduciaries may elect to have redemption proceeds
wired to a checking or bank account if wire redemptions were authorized
when the account was opened or have subsequently been authorized.
Redemptions may be suspended or postponed during any period in
which any of the following conditions exist: the New York Stock
Exchange is closed or trading on the Exchange is restricted; an
emergency exists during which it is not reasonably practicable for a
Fund to dispose of its portfolio securities or to fairly determine its
net asset value; or the SEC, by order, so permits.
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Certain requests must include a signature guarantee. A signature
guarantee is a widely accepted way to protect you and the Funds from
fraud by verifying the signature on your request. A signature guarantee
is required if the redemption proceeds are to be sent to an address
other than the address of record or to a person other than the
registered shareholder(s) for the account [or if the net asset value of
the shares redeemed is $100,000 or more].
The following institutions may provide a signature guarantee,
provided that the institution meets credit standards established by the
Transfer Agent: (i) a bank; (ii) a securities broker or dealer,
including a government or municipal securities broker or dealer, that
is a member of a clearing corporation or has net capital of at least
$100,000; (iii) a credit union having authority to issue signature
guarantees; (iv) a savings and loan association, a building and loan
association, a cooperative bank, a federal savings bank or association;
or (v) a national securities exchange, a registered securities exchange
or a clearing agency.
Signature guarantees may not be provided by a notary public.
Small Accounts. In order to reduce the expense of maintaining
numerous small accounts, the Trust reserves the right to redeem any
shareholder account (other than an IRA) if, as a result of redemptions,
the value of the account is less than $100. Plan Fiduciaries will be
allowed at least 60 days, after written notice by the Trust, to make an
additional investment to bring the account value up to at least $100
before the redemption is processed.
Change in Tax Status. Plan Fiduciaries are required to notify the
Trust through the Transfer Agent if the tax status of their Qualified
Plan is revoked or challenged by the Internal Revenue Service. The
Trust reserves the right to redeem any fund account of any shareholder
whose qualification as a qualified pension or retirement plan
satisfying the requirements of Treasury Regulation 1.817-5 is revoked
or challenged.
HOW TO EXCHANGE SHARES
May Adviser Class shares be exchanged for shares of other mutual funds?
Subject to the terms of your Qualified Plan, Adviser Class shares
of a Fund may be exchanged for Adviser Class shares of the other Fund
or for Adviser Class shares of Tomorrow Long-Term Retirement Fund,
Tomorrow Mid-Term Retirement Fund, Tomorrow Short-Term Retirement Fund
and Tomorrow Post-Retirement Fund (collectively, the Tomorrow Funds").
To obtain a current prospectus for the Adviser Class shares of the
other Tomorrow Funds, please call 1-800-___-____. Please consider the
differences in investment objectives and expenses of a Tomorrow Fund as
described in its prospectus before making an exchange.
Do sales charges apply to exchanges?
As is the case with initial purchases of Adviser Class shares,
exchanges of Adviser Class shares are made without the imposition of a
sales charge.
How may I make an exchange?
Because shares of the Funds are held for the account of Qualified
Plans, all orders to exchange shares must be made through your Plan
Fiduciary. If the Adviser Class shares you wish to exchange are held
for the account of a Qualified Plan sponsored by your employer, please
consult with your employer for information about how to exchange shares
of the Funds. If the Adviser Class shares you wish to exchange are
maintained by your Plan Fiduciary in an IRA or other self-administered
Qualified Plan, please consult with your Plan Fiduciary for information
about how to exchange shares of the Funds.
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Plan Fiduciaries: To Exchange Shares
By Phone: 1. Use the telephone exchange privilege. The telephone
exchange privilege is not available automatically. It
is necessary to sign up for this privilege on the
Account Application Form when opening an account, or
call 1-800-______ to add it.
2. Once this privilege has been selected, simply call the
Transfer Agent toll free at 1-800-223-3332 between
9:00 a.m. and 4:00 p.m. New York City time on any
Business Day.
3. Give the following information to the Transfer Agent
representative:
Name of current Fund
Adviser Class shares
Name of the Tomorrow Fund into which the current
Fund shares will be exchanged
Account Number
Name(s) in which your account is registered
The dollar amount or the number of shares to be
exchanged
By Mail: 1. Deliver a written request to an Authorized Firm or mail
to the Transfer Agent at the address listed on the back
cover of this Prospectus specifying:
Name of current Fund
Adviser Class shares
Name of the Tomorrow Fund into which the current
Fund shares will be exchanged
Account Number
Name(s) in which your account is registered
The dollar amount or the number of shares to be
exchanged
2. The exchange request must be signed by all registered
holders for the account using the exact names in which
the account is registered or accompanied by executed
power(s) of attorney.
General Exchange Information. Shares exchanged are valued at their
respective net asset values next determined after the exchange request
is received by the Transfer Agent. All exchanges are subject to the
following exchange restrictions: (i) the fund into which shares are
being exchanged must be registered for sale in your state; (ii)
exchanges may be made only between funds that are registered in the
same name, address and taxpayer identification number; and (iii) the
minimum amount for exchanging from one fund into another fund is $100
or the total value of your fund account (if less than $100) and must
satisfy the minimum account size of the fund to be exchanged into.
To confirm that telephone exchange requests are genuine, the Trust
employs reasonable procedures, such as providing written confirmation
of telephone exchange transactions and tape recording
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of telephone exchange requests. If the Trust does not employ such
reasonable procedures, it may be liable for any loss incurred by a
shareholder due to a fraudulent or unauthorized telephone exchange
request. Otherwise, neither the Trust nor its agents will be liable for
any loss incurred by a shareholder as the result of following
instructions communicated by telephone that they reasonably believed to
be genuine. The Trust reserves the right to refuse any request made by
telephone and may limit the dollar amount involved or the number of
telephone requests made by any shareholder. During periods of extreme
economic conditions or market changes, requests by telephone may be
difficult to make due to heavy volume. During such times please
consider placing your order by mail.
To prevent abuse of the exchange privilege to the detriment of
other shareholders, the Trust limits the number of exchanges and
purchase/redemption transactions by any one shareholder account (or
group of accounts under common management) to a total of six
transactions per year. This policy applies to exchanges into or out of
any Tomorrow Fund and any pair of transactions involving a purchase of
shares of any Tomorrow Fund followed by a redemption of an offsetting
or substantially equivalent dollar amount of shares of that same
Tomorrow Fund. If a Plan Fiduciary violates this policy, his/her future
purchases of, or exchanges into, the Tomorrow Funds may be permanently
refused. This policy does not prohibit redemptions of shares of any
series. This policy may be waived by WPG in its discretion. Further,
the exchange privilege may be changed or discontinued and may be
subject to additional limitations upon sixty (60) days' notice to
shareholders, including certain restrictions on purchases by
market-timer accounts.
HOW EACH FUND'S SHARE PRICE IS DETERMINED
The net asset value per share of a class of a Fund is determined
by dividing the value of its assets, less liabilities attributable to
that class, by the number of shares of that class outstanding. The net
asset value is normally calculated as of the close of regular trading
of the New York Stock Exchange (currently 4:00 p.m. New York City time)
on each Business Day. Different classes of shares of the Funds may have
different net asset values.
Portfolio securities (other than certain money market instruments)
are valued primarily based on market quotations or, if market
quotations are not available, at fair market value as determined in
good faith by a valuation committee appointed by the Trustees. In
accordance with procedures adopted by the Trustees, each Fund may use
pricing services to value fixed-income investments. Money market
instruments with a remaining maturity of 60 days or less at the time of
purchase are generally valued at amortized cost when the Trustees
believe that amortized cost approximates market value.
MANAGEMENT OF THE FUNDS
Trustees
Each Fund is a separate investment series of Tomorrow Funds
Retirement Trust, a Delaware business trust (the "Trust"). Under the
terms of the Agreement and Declaration of Trust establishing the Trust,
the Trustees of the Trust are ultimately responsible for the management
of its business and affairs.
Investment Adviser
Weiss, Peck & Greer, L.L.C., One New York Plaza, New York, New
York 10004 serves as the investment adviser to each Fund pursuant to an
investment advisory agreement. Subject to the supervision and direction
of the Trustees, the Adviser manages each Fund's portfolio in
accordance with its stated investment objective and policies,
recommends investment decisions for the Fund and places orders
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to purchase and sell securities on behalf of the Fund. For these
services, each Fund pays the Adviser a monthly fee equal on an annual
basis to 0.75% of its average daily net assets.
Joseph N. Pappo has been primarily responsible for the day-to-day
management of each Fund's portfolio since the Funds' inception. Mr.
Pappo has been a principal of the Adviser since 1994. Prior to joining
WPG, Mr. Pappo was the founder and president of Eden Financial Group
which was acquired by WPG in 1991.
The Adviser has voluntarily agreed to limit temporarily each
Fund's operating expenses (excluding Rule 12b-1 fees applicable to the
Adviser Class shares, service fees applicable to the Institutional
Class shares, any other class-specific expenses, litigation,
indemnification and other extraordinary expenses) to 1.25% of its
average daily net assets. The Adviser may discontinue or modify such
limitation in the future at its discretion, although it has no current
intention to do so.
Administrator
Pursuant to an administration agreement with each Fund, WPG
provides personnel for supervisory, administrative, accounting,
shareholder services and clerical functions; oversees the performance
of administrative and professional services to the Funds by others;
provides office facilities, furnishings and office equipment; and
prepares, but does not pay for, reports to shareholders, the SEC and
other regulatory authorities. As compensation for the services rendered
to the Funds as Administrator, WPG is entitled to a fee, computed daily
and payable monthly, at an annual rate equal to 0.09% of each Fund's
average daily net assets. The administrative fee for each Fund is
reviewed and approved annually by the Trustees.
Expenses
Each Fund bears all expenses of its operation, subject to the
expense limitation agreement described above. In particular, each Fund
pays: investment advisory fees; administration fees; service fees with
respect to the Institutional Class shares; distribution and service
fees with respect to the Adviser Class shares; custodian and transfer
agent expenses; legal and accounting fees and expenses; expenses of
preparing, printing, and distributing Prospectuses and SAIs to existing
shareholders, and shareholder communications and reports; expenses of
computing its net asset value per share; federal and state registration
fees and expenses with respect to its shares; proxy and shareholder
meeting expenses; expenses of issuing and redeeming its shares;
independent trustee fees and expenses; expenses of bond, liability, and
other insurance coverage; brokerage commissions; taxes; trade
association fees; and certain non-recurring and extraordinary expenses.
In addition, the expense of organizing the Funds and initially
registering and qualifying their shares under federal and state
securities laws are being charged to the Funds' operations, as an
expense, over a period not to exceed 60 months from the Funds'
inception date.
Each Fund will reimburse the Adviser for fees foregone or other
expenses paid by the Adviser pursuant to this expense limitation in
later years in which operating expenses for that Fund are less than the
expense limitations set forth above for any such year. No interest,
carrying or finance charge will be paid by a Fund with respect to the
amounts representing fees foregone or other expenses paid. In addition,
no Fund will pay any unreimbursed amounts to the Adviser upon
termination of its investment advisory agreement.
DISTRIBUTION PLANS
The Trust, on behalf of each Fund, has adopted a Distribution Plan
pursuant to Rule 12b-1 under the Investment Company Act (the
"Distribution Plans"). Under the Distribution Plans, each Fund pays
distribution and service fees at an aggregate annual rate of up to
0.50% of a Fund's average daily net
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assets attributable to Adviser Class shares. Up to 0.25% is for service
fees and the remaining amount is for distribution expenses. The
distribution fee is intended to compensate WPG for its services and
expenses associated with serving as principal underwriter of the
Adviser Class shares of the Funds, including the payment of commissions
by WPG to Authorized Firms. The service fee is intended to be
compensation for personal services and/or account maintenance services
with respect to the Adviser Class shares.
WPG makes monthly payments to Authorized Firms based on the
average net asset value of the Adviser Class shares which are
attributable to Qualified Plans for whom the Authorized Firms are
designated as the dealer of record. WPG makes such payments in amounts
up to the distribution fee it receives with respect to such Adviser
Class shares. WPG may suspend or modify such payments to Authorized
Firms. WPG and the Authorized Firms also share any sales charge imposed
on purchases of Adviser Class shares.
DIVIDENDS AND TAXES
Each Fund is treated as a separate entity for federal income tax
purposes and intends to elect to be treated as a "regulated investment
company" under the Code and to qualify for such treatment for each
taxable year. To qualify as such, each Fund must satisfy certain
requirements relating to the sources of its income, diversification of
its assets and distribution of its income to shareholders. Each Fund
also intends to satisfy certain additional diversification requirements
applicable under Section 817(h) of the Internal Revenue Code in order
to permit investments in Institutional Class shares of the Funds by
insurance company segregated asset accounts that fund variable annuity
or variable life insurance products, which are subject to such
requirements. It is possible that in order to satisfy the applicable
diversification requirements, investment decisions may be made which
would affect either positively or negatively the investment performance
of a Fund. As a regulated investment company, each Fund will not be
subject to federal income tax on any net investment income and net
realized capital gains that are distributed to its shareholders in
accordance with certain timing requirements of the Code.
Participants in Qualified Plans may be eligible for tax deferral
on distributions a Qualified Plan receives from a Fund and gains that
arise from a Qualified Plan's dispositions of Fund shares. This
Prospectus does not describe in any respect such tax treatment. Please
consult your Plan Fiduciary or tax adviser. It is suggested that
participants in Qualified Plans keep all statements received from their
Qualified Plans to assist in personal recordkeeping.
Each Fund intends to distribute all of its net investment income
and net capital gains each year. Income dividends, if any, will be
declared and distributed at least annually by each Fund. Net short-term
and long-term capital gains of each Fund, if any, realized during the
taxable year will be distributed no less frequently then annually.
Dividends derived from each Fund's net investment income (including
dividends, interest and recognized market discount income), and net
short-term capital gains received by a Fund are treated as ordinary
income under the Code. Distributions from each Fund's net long-term
capital gains are treated as long-term capital gains under the Code,
regardless of how long shares of the Funds have been held.
Reinvestment of Income Dividends and Capital Gains Distributions
Unless a Plan Fiduciary elects otherwise, as permitted in the
Account Information Form, income dividends and capital gains
distributions with respect to a Fund will be reinvested in additional
Adviser Class shares of that Fund and will be credited to the Qualified
Plan's account with that Fund at the net asset value per share next
determined as of the ex-dividend date. Both income dividends and
capital gains distributions are paid by the Fund on a per share basis.
As a result, at the time of such payment, the net
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asset value per share of a Fund will be reduced by the amount of such
payment. Although income dividends and capital gains distributions by
the Funds may not give rise to current tax liability for the categories
of shareholders permitted to invest in the Funds, participants in
Qualified Plans may be subject to tax on all or a portion of their
distributions from such Plans or upon the failure of such Plans to
maintain their qualified status under complex Code provisions
concerning which a tax adviser should be consulted. Participants in
Qualified Plans who wish to change the manner in which income dividends
and capital gains distributions are received by their Qualified Plans
should contact their Plan Fiduciaries. Written notification of such
change must be received by the Transfer Agent at least ten days before
the next scheduled distribution.
PORTFOLIO BROKERAGE
In effecting securities transactions, the Funds generally seek to
obtain the best price and execution of orders. Commission rates are a
component of price and are considered along with other factors,
including the ability of the broker to effect the transaction, and the
broker's facilities, reliability and financial responsibility. Subject
to the foregoing, the Funds intend to utilize WPG as their primary
broker in connection with the purchase and sale of exchange-traded
portfolio securities. As the Funds' primary broker, WPG will receive
brokerage commissions from the Funds, limited to the "usual and
customary broker's commission" specified by the 1940 Act. The Funds
intend to continue to use WPG as their primary broker on
exchange-traded securities, provided WPG is able to provide execution
at least as favorable as that provided by other qualified brokers.
The Trustees of the Trust have developed procedures to limit the
commissions received by WPG to the "usual and customary broker's
commission" standard specified by the 1940 Act. On a quarterly basis,
the Trustees review the securities transactions of each Fund effected
by WPG to assure their compliance with such procedures.
The Funds will also execute their portfolio transactions through
qualified brokers other than WPG. In selecting such other brokers, WPG
considers the quality and reliability of brokerage services, including
execution capability and performance and financial responsibility, and
may consider the research and other investment information provided by
such brokers. Accordingly, the commissions paid to any such broker may
be greater than the amount another firm might charge, provided WPG
determines in good faith that the amount of such commission is
reasonable in relation to the value of the brokerage services and
research information provided by such broker. Such information may be
used by WPG (and its affiliates) in managing all of its accounts and
not all of such information may be used by WPG in managing the Funds.
In selecting other brokers for a Fund, WPG may also consider the sale
of shares of the Fund effected through such other brokers as a factor
in its selection, provided that Fund obtains the best price and
execution of orders.
Money market securities and other fixed-income securities, as well
as certain equity securities, in which the Funds invest are traded
primarily in the over-the-counter ("OTC") market. For transactions
effected in the OTC market, financial intermediaries (i.e., dealers)
act as principal rather than as agent and receive a "spread" rather
than a commission. The Funds intend to deal with the primary
market-makers with respect to OTC securities, unless a more favorable
result is obtainable elsewhere.
THE TRUST
Tomorrow Funds Retirement Trust is an open-end management
investment company (commonly referred to as a mutual fund) organized as
a Delaware business trust under an Agreement and Declaration of Trust
dated June 21, 1995 (the "Declaration"). The Trust has authorized an
unlimited number of shares of beneficial interest.
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As of the date of this Prospectus, the shares of the Trust are
divided into six series: Tomorrow Long-Term Retirement Fund, Tomorrow
Mid-Term Retirement Fund, Tomorrow Short-Term Retirement Fund, Tomorrow
Post-Retirement Fund, Core Large-Cap Stock Fund and Core Small-Cap
Stock Fund. The Trust reserves the right to create and issue additional
series of shares. No series is entitled to share in the assets of any
other series or is liable for the expenses or liabilities of any other
series. Shares of a particular series vote separately on matters
affecting only that series, including the approval of an investment
advisory agreement and changes in fundamental policies or restrictions
of a particular series.
As of the date of this Prospectus, the Trustees have authorized
the issuance of two classes of shares for each series, designated
Adviser Class and Institutional Class. The shares of each Class
represent an interest in the same portfolio of investments of that
series. Each Class has equal rights as to voting, redemption, dividends
and liquidation, except that each Class bears different distribution
fees and may bear other expenses properly attributable to the
particular Class. Adviser Class shareholders of a Fund have exclusive
voting rights with respect to the Rule 12b-1 distribution plan adopted
by holders of Adviser Class shares of that Fund. The Trustees have the
authority, without further shareholder approval, to classify and
reclassify the shares of a series of the Trust into additional classes.
In addition, subject to Trustee approval and shareholder approval (if
then required), each Fund may pursue its investment objective by
investing all of its investable assets in a pooled fund. See "Risk
Considerations and Other Investment Practices and Policies" below.
When issued and paid for in accordance with the terms of the
Prospectus and Statement of Additional Information, shares of the Trust
are fully paid and non-assessable. The Trust is not required, and does
not intend, to hold annual shareholder meetings. Shareholders have
certain rights, as set forth in the Declaration, including the right to
call a meeting of shareholders for the purpose of voting on the removal
of one or more Trustees. Such removal can be effected upon the action
of two-thirds of the outstanding shares of the Trust.
In addition to the requirements under Delaware law, the
Declaration provides that a shareholder of the Trust may bring a
derivative action on behalf of the Trust only if the following
conditions are met: (a) shareholders eligible to bring such derivative
action under Delaware law who hold at least 10% of the outstanding
shares of the Trust, or 10% of the outstanding shares of the series or
class to which such action relates, shall join in the request for the
Trustees to commence such action; and (b) the Trustees must be afforded
a reasonable amount of time to consider such shareholder request and
investigate the basis of such claim. The Trustees shall be entitled to
retain counsel or other advisers in considering the merits of the
request and shall require an undertaking by the shareholders making
such request to reimburse the Trust for the expense of any such
advisers in the event that the Trustees determine not to bring such
action.
The Trustees of the Trust do not foresee any disadvantages to
investors arising out of the fact that each Fund may offer a class of
its shares to insurance company segregated asset accounts that serve as
investment medium for variable annuity and variable life insurance
products or that each Fund may offer its shares to Qualified Plans.
Nevertheless, the Trustees intend to monitor events in order to
identify any material irreconcilable conflicts which may possibly
arise, and to determine what action, if any, should be taken in
response to such conflicts. If such a conflict were to occur, one or
more separate accounts or Qualified Plans might be required to withdraw
their investments in either or both Funds and shares of another series
of the Trust may be substituted. This might force a Fund to sell
securities at disadvantageous prices.
In the interests of economy and convenience, the Trust does not
issue certificates representing the Funds' shares. Instead, the
Transfer Agent maintains a record of each shareholder's ownership.
Although each Fund is offering only its own shares, since the Funds use
this combined Prospectus, it is possible that
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one Fund might become liable for a misstatement or omission in this
Prospectus regarding the other Fund. The Trustees have considered this
factor in approving the use of this combined Prospectus.
INVESTMENT PERFORMANCE
Each Fund may illustrate in advertisements and sales literature
the average annual total return of its Adviser Class shares, which is
the rate of growth of the Fund that would be necessary to achieve the
ending value of an assumed initial investment of $1,000 kept in Adviser
Class shares of the Fund for the period specified and is based on the
following assumptions: (1) all dividends and distributions by the Fund
are reinvested in Adviser Class shares of the Fund at net asset value;
and (2) all recurring fees are included for applicable periods.
Each Fund may also illustrate in advertisements the cumulative
total return for several time periods throughout the Fund's life based
on an assumed initial investment of $1,000. Any such cumulative total
return for a Fund will assume the reinvestment of all income dividends
and capital gains distributions in Adviser Class for the indicated
periods and will include all recurring fees.
Total returns quoted for the Funds include the effect of deducting
each Fund's expenses but may not include charges and expenses
attributable to any particular Qualified Plan. You should consult with
your Plan Fiduciary for information on relevant charges and expenses.
Because these charges and expenses are excluded from a Fund's quoted
performance, the investment return received by a participant in a
Qualified Plan investing in the Fund may be lower than the quoted
performance of the Fund. You should bear in mind the effect of these
charges when comparing a Fund's performance to that of other mutual
funds.
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The performance of the Adviser Class shares of the Funds will vary
from time to time and past results are not necessarily representative
of future results. Performance is a function of the type and quality of
a Fund's portfolio securities and is affected by operating expenses.
Performance information may not provide a basis for comparison with
other investments or other mutual funds using a different method of
calculating performance. An investment in any Fund involves the risk
of loss.
RISK CONSIDERATIONS AND OTHER INVESTMENT PRACTICES AND POLICIES
Because each Fund owns different types of investments, its
performance is affected by a variety of factors. The value of a Fund's
investments and the income they generate will vary from day to day, and
generally reflect interest rates, market conditions, and other company,
political and economic news. When you sell your shares, they may be
worth more or less than what you paid for them.
Investing in Small Capitalization Companies. The Small-Cap Fund will
invest in equity securities of small capitalization companies included
within the Russell 2000 and the Large-Cap Fund may invest in such
securities to the extent that they are included in the S&P 500. Small
capitalization companies may offer a greater growth potential than
larger, more mature, better known firms. Investing in the securities of
such companies, however, involves greater risk and a possibility of
greater portfolio price volatility. Historically, small capitalization
stocks and stocks of recently organized companies have been more
volatile in price than the larger capitalization stocks, such as those
included in the S&P 500. Among the reasons for the greater price
volatility of these small company and unseasoned stocks are the less
certain growth prospects of smaller firms and the lower degree of
liquidity in the markets for such stocks.
Fixed-Income Securities. Each Fund may invest up to 10% of its assets
in a broad range of fixed-income securities, including bonds, notes,
mortgage-backed and asset-backed securities, preferred stock and
convertible debt securities issued by U.S. corporations or other
entities or by the U.S. Government or its agencies, authorities,
instrumentalities or sponsored enterprises. The interest payable on
so-called fixed-income securities purchased by a Fund is not
necessarily paid at a fixed rate and may be payable on a variable,
floating (including inverse floating), contingent, in-kind or deferred
basis.
Fixed-income securities are subject to the risk of the issuers'
inability to meet principal and interest payments on the obligations
(credit risk) and may also be subject to price volatility due to such
factors as interest rate sensitivity, market perception of the credit
worthiness of the issuer and general market liquidity (market risk).
Generally, when interest rates decline, the value of fixed-income
securities can be expected to rise. Conversely, when interest rates
rise the value of fixed-income securities can be expected to decline.
-19-
<PAGE>
Corporate Debt Obligations. Each Fund may invest in corporate debt
obligations, including obligations of industrial, utility and financial
issuers. In addition to obligations of corporations, corporate debt
obligations include bank obligations and zero coupon securities, issued
by financial institutions and corporations.
The debt securities in which the Funds may invest will be rated,
at the time of purchase, within the top two categories of investment
grade securities or, if not rated, determined by the Adviser to be of
equivalent credit quality to securities so rated. The top two
categories of investment grade securities are Aaa and Aa for Moody's
and AAA and AA for S&P. A security will be deemed to have met a rating
requirement if it receives the minimum required rating from at least
one nationally recognized statistical rating organization even though
it has been rated below the minimum rating by one or more other rating
organizations, or if unrated by such rating organizations, determined
by the Adviser to be of comparable credit quality. In the event that
the rating on a security held in a Fund's portfolio is downgraded below
the minimum rating requirement by a rating service, such action will be
considered by the Adviser in its evaluation of the overall investment
merits of that security, but will not necessarily result in the sale of
the security.
Convertible Securities and Preferred Stocks. Each Fund may invest in
debt securities or preferred stocks that are convertible into or
exchangeable for common stock. Preferred stocks are securities that
represent an ownership interest in a company and provide their owner
with claims on the company's earnings and assets prior to the claims of
owners of common stock but after those of bond owners. Preferred stocks
in which the Funds may invest include sinking fund, convertible,
perpetual fixed and adjustable rate (including auction rate) preferred
stocks.
U.S. Government Securities. Each Fund may invest in all types of U.S.
Government securities, including obligations issued or guaranteed by
the U.S. Government or its agencies, authorities, instrumentalities or
sponsored enterprises. Some U.S. Government securities, such as
Treasury bills, notes and bonds, which differ only in their interest
rates, maturities and times of issuance, are supported by the full
faith and credit of the United States of America. Others, such as
obligations issued or guaranteed by U.S. Government agencies,
authorities, instrumentalities or sponsored enterprises are supported
either by (a) the full faith and credit of the U.S. Government (such as
securities of the Small Business Administration), (b) the right of the
issuer to borrow from the U.S. Treasury (such as securities of the
Federal Home Loan Banks), (c) the discretionary authority of the U.S.
Government to purchase the agency's obligations (such as securities of
the Federal National Mortgage Association), or (d) only the credit of
the issuer.
Each Fund may also invest in separately traded principal and
interest components of securities guaranteed or issued by the U.S.
Government or its agencies, instrumentalities or sponsored enterprises
if such components are traded independently under the Separate Trading
of Registered Interest and Principal of Securities program ("STRIPS")
or any similar program sponsored by the U.S. Government. The Funds may
invest in U.S. Government securities which are zero coupon or deferred
interest securities.
Real Estate Investment Trusts. Each Fund may invest in shares of real
estate investment trusts ("REITs"). REITs are pooled investment
vehicles which invest primarily in income producing real estate or real
estate related loans or interests. REITs are generally classified as
equity REITs, mortgage REITs or a combination of equity and mortgage
REITs. Equity REITs invest the majority of their assets directly in
real property and derive income primarily from the collection of rents.
Equity REITs can also realize capital gains by selling properties that
have appreciated in value. Mortgage REITs invest the majority of their
assets in real estate mortgages and derive income from the collection
of interest payments. Like investment companies such as the Funds,
REITs are not taxed on income distributed to shareholders provided they
comply with several requirements of the Internal Revenue Code. Any Fund
that invests in REITs will indirectly bear its proportionate share of
any expenses paid by such REITs in addition to the expenses paid by the
Fund.
-20-
<PAGE>
Investing in REITs involves certain risks: equity REITs may be
affected by changes in the value of the underlying property owned by
the REITs, while mortgage REITs may be affected by the quality of any
credit extended. REITs are dependent upon management skills, are not
diversified, and are subject to the risks of financing projects. REITs
are subject to heavy cash flow dependency, default by borrowers,
self-liquidation, and the possibilities of failing to qualify for the
exemption from tax for distributed income under the Internal Revenue
Code and failing to maintain their exemptions from the 1940 Act. REITs
whose underlying assets include long-term health care properties, such
as nursing, retirement and assisted living homes, may be impacted by
federal regulations concerning the health care industry.
Investing in REITs may involve risks similar to those associated
with investing in small capitalization companies. REITs may have
limited financial resources, may trade less frequently and in a limited
volume and may be subject to more abrupt or erratic price movements
than larger company securities. Historically, small capitalization
stocks, such as REITs, have been more volatile in price than the larger
capitalization stocks included in the S&P 500 Index.
Other Investment Companies. Each Fund is authorized to invest all of
its assets in the securities of a single open-end investment company (a
"pooled fund") having substantially identical investment objectives,
policies and restrictions as such Fund, notwithstanding any other
investment restriction or policy. Such a structure is commonly referred
to as "master/feeder." If authorized by the Trustees and subject to
shareholder approval (if then required by applicable law), a Fund would
seek to achieve its investment objective by investing in a pooled fund
which would invest in a portfolio of securities that complies with the
Fund's investment objective, policies and restrictions. The Trustees
currently do not intend to authorize investing in a pooled fund in
connection with a master/feeder structure.
Short-Term Debt Securities. Each Fund may establish and maintain cash
balances for temporary purposes in order to maintain liquidity to meet
shareholder redemptions. Each Fund may also establish and maintain cash
balances for defensive purposes without limitation to hedge against
potential stock market declines. A Fund's cash balances, including
uncommitted cash balances, may be invested in investment grade money
market instruments and short-term interest-bearing securities. These
securities consist of U.S. Government securities, instruments of U.S.
banks (including negotiable certificates of deposit, non-negotiable
fixed-time deposits and bankers' acceptances), repurchase agreements,
prime commercial paper of U.S. companies and debt securities that make
periodic interest payments at variable or floating rates.
Structured Securities. Each Fund may invest in "structured" notes,
bonds or debentures. The distinguishing feature of a structured
security is that the value of the principal of and/or interest payable
on the security is determined by reference to the value of a benchmark
or the relative change in two or more benchmarks. Examples of these
benchmarks include stock prices, currency exchange rates and physical
commodity prices. Structured securities may be positively or negatively
indexed, so that appreciation of the benchmark may produce an increase
or decrease in the interest rate or value of the structured security at
maturity. Certain structured securities may also be leveraged to the
extent that the magnitude of any change in the interest rate or
principal payable on the benchmark asset is a multiple of the change in
the reference price. Leverage enhances the price volatility of the
security and, therefore, the Fund's net asset value. Further, certain
structured or hybrid notes may be illiquid for purposes of the Fund's
limitation on investments in illiquid securities.
Writing and Purchasing Put and Call Options on Securities and
Securities Indices. To seek additional income or to minimize
anticipated declines in the value of its securities, each Fund may
purchase and write (i.e., sell) call and put options on securities and
securities indices. Option transactions in which the Funds may engage
may be traded on securities exchanges or in the over-the-counter
market. Each Fund currently intends to limit its option transactions
during the current fiscal year so that no more than 5%
-21-
<PAGE>
of the Fund's net assets will be at risk as a result of such
transactions. Please see the SAI for a further discussion of option
transactions and associated risks.
Futures Contracts and Options on Futures Contracts. Each Fund may
engage in futures transactions and related options. Future contracts
may be based on various securities (such as U.S. Government
securities), securities indices and other financial instruments and
indices. A Fund will engage in futures and related options transactions
only for bona fide hedging and non-hedging purposes to the extent
permitted by regulations of the Commodity Futures Trading Commission. A
Fund will not enter into futures contracts or options thereon for
non-hedging purposes if, immediately thereafter, the aggregate initial
margin and premiums required to establish non-hedging positions in
futures contracts and options on futures would exceed 5% of the Fund's
net assets, after taking into account unrealized profits and losses on
any such positions and excluding the amount by which such options were
in-the-money at the time of purchase. Each Fund may also enter into
closing purchase and sale transactions with respect to any of futures
contracts and related options.
The use of futures contracts entails certain risks, including but
not limited to the following: no assurance that futures contracts
transactions can be offset at favorable prices; possible reduction of
the Fund's income due to the use of hedging; possible reduction in
value of the both the securities hedged and the hedging instrument;
possible lack of liquidity due to daily limits on price fluctuations;
imperfect correlation between the contract and the securities being
hedged; and potential losses in excess of the amount initially invested
in the futures contracts themselves. If the expectations of the Adviser
regarding movements in securities prices or interest rates are
incorrect, the Fund may have experienced better investments results
without hedging. The use of futures contracts and options on futures
contracts requires special skills in addition to those needed to select
portfolio securities. A further discussion of futures contracts and
their associated risks is contained in the SAI.
Forward Commitments, Delayed Delivery and When-Issued Securities. Each
Fund may purchase securities on a when-issued, delayed delivery, or
forward commitment basis. When such transactions are negotiated, the
price of such securities is fixed at the time of the commitment, but
delivery and payment for the securities may take place up to 90 days
after the date of the commitment to purchase. The securities so
purchased are subject to market fluctuation, and no interest accrues to
the purchaser during this period. When-issued securities or forward
commitments involve a risk of loss if the value of the security to be
purchased declines prior to the settlement date. When a Fund purchases
securities on a forward commitment or when-issued basis, the Fund's
custodian will maintain in a segregated account cash or liquid, high
grade debt securities having a value (determined daily) at least equal
to the amount of the Fund's purchase commitment. A Fund may close out a
position in securities purchased on a when-issued, delayed delivery or
forward commitment basis prior to the settlement date.
Lending of Portfolio Securities. Each Fund may also seek to increase
its income by lending portfolio securities. Such loans may be made to
institutions, such as certain broker-dealers, and are required to be
secured continuously by collateral in cash, cash equivalents or U.S.
Government securities maintained on a current basis at an amount at
least equal to the market value of the securities loaned. If the
Adviser determines to make securities loans, the value of the
securities loaned would not exceed 33 1/3% of the value of the total
assets of the Fund. A Fund may experience a loss or delay in the
recovery of its securities if the borrowing institution breaches its
agreement with the Fund.
Restricted and Illiquid Securities. Each Fund may invest up to 15% of
its total assets in "restricted securities" (i.e., securities that
would be required to be registered under the Securities Act of 1933, as
amended ("1933 Act"), prior to distribution to the general public)
including restricted securities eligible for resale to "qualified
institutional buyers" under Rule 144A under the 1933 Act. Each Fund may
also invest up to 15% of its net assets in illiquid investments, which
includes repurchase agreements maturing in more than seven days,
securities that are not readily marketable, certain over-the-counter
options and restricted
-22-
<PAGE>
securities, unless the Trustees determine, based upon a continuing
review of the trading markets for the specific restricted security,
that such restricted securities are liquid. Each Fund may agree to
adhere to more restrictive limits on investments in restricted and
illiquid investments as a condition of the registration of its shares
in various states. The Trustees have adopted guidelines and delegated
to the Advisor the daily function of determining and monitoring the
liquidity of restricted securities. The Trustees, however, retain
sufficient oversight and are ultimately responsible for the
determinations. Since it is not possible to predict with assurance
exactly how this market for restricted securities sold and offered
under Rule 144A will develop, the Trustees carefully monitor each
Fund's investments in these securities, focusing on such important
factors, among others, as valuation, liquidity and availability of
information. This investment practice could have the effect of
increasing the level of illiquidity in a Fund to the extent that
qualified institutional buyers become for a time uninterested in
purchasing these restricted securities.
Repurchase Agreements. Each Fund may enter into repurchase agreements
through which the Fund purchases a security (the "underlying security")
from a domestic securities dealer or bank that is a member of the
Federal Reserve System. Under the agreement, the seller of the
repurchase agreement (i.e., the securities dealer or bank) agrees to
repurchase the underlying security at a mutually agreed upon time and
price. In repurchase transactions, the underlying security, which must
be a high-quality debt security, is held by the Fund's custodian
through the federal book-entry system as collateral and
marked-to-market on a daily basis to ensure full collateralization of
the repurchase agreement. In the event of bankruptcy or default of
certain sellers of repurchase agreements, a Fund could experience costs
and delays in liquidating the underlying security held as collateral
and might incur a loss if such collateral declines in value during this
period.
Market Changes. The market value of the Fund's investments, and thus
each Fund's net asset value, will change in response to market
conditions affecting the value of its portfolio securities. When
interest rates decline, the value of fixed rate obligations can be
expected to decline. In contrast, as interest rates on adjustable rate
loans are reset periodically, yields on investments in such loans will
gradually align themselves to reflect changes in market interest rates,
causing the value of such investments to fluctuate less dramatically in
response to interest rate fluctuations than would investments in fixed
rate obligations.
Portfolio Turnover. Although neither Fund purchases securities with a
view to rapid turnover, there are no limitations on the length of time
that securities must be held by a Fund and a Fund's annual portfolio
turnover rate may vary significantly from year to year. A high rate of
portfolio turnover (100% or more) involves correspondingly greater
transaction costs which must be borne by the applicable Fund and its
shareholders and may, under certain circumstances, make it more
difficult for such Fund to qualify as a regulated investment company
under the Code. The estimated portfolio turnover rates of the Funds for
the current fiscal year are as follows: Large-Cap Fund 40% and
Small-Cap Fund 45%.
Diversification. Each Fund is diversified, as defined in the 1940 Act.
As such, each Fund has a fundamental policy that limits its investments
so that, with respect to 75% of its assets (i) no more than 5% of the
Fund's total assets will be invested in the securities of a single
issuer and (ii) each Fund will purchase no more than 10% of the
outstanding voting securities of a single issuer. These limitations do
not apply to obligations issued or guaranteed by the U.S. Government,
its agencies or instrumentalities, repurchase agreements collateralized
by U.S. Government securities or investments in other investment
companies. In addition to the diversification requirements under the
1940 Act, the Funds must satisfy the diversification requirements under
the Internal Revenue Code applicable to regulated investment companies
and the additional diversification requirements applicable under
Section 817(h) of the Internal Revenue Code to the underlying assets of
insurance company segregated asset accounts that fund variable annuity
or variable life insurance products. These requirements place certain
limitations on the assets of a Fund that may be invested in securities
of a single issuer or interests in the same commodity. More specific
information on these diversification requirements is contained in the
SAI.
-23-
<PAGE>
Investment Restrictions. Each Fund is subject to further investment
policies and restrictions that are described in the SAI. The foregoing
investment policies, including each Fund's investment objective, are
non-fundamental policies which may be changed by the Trustees without
the approval of shareholders. If there is a change in a Fund's
investment objective, shareholders should consider whether that Fund
remains an appropriate investment in light of their then current
financial positions and needs. Each Fund has adopted certain
fundamental policies which may not be changed without the approval of
the applicable Fund's shareholders. See "Investment Restrictions" in
the Statement of Additional Information.
If any percentage restriction described above or in the SAI is
adhered to at the time of investment, a subsequent increase or decrease
in the percentage resulting from a change in the value of a Fund's
assets will not constitute a violation of the restriction.
ADDITIONAL INFORMATION
Reports to Shareholders
As shareholders in the Funds, Qualified Plans will receive an
annual report containing audited financial statements and semi-annual
and quarterly reports. Each Qualified Plan will also be provided with a
printed confirmation for each transaction in their shareholder account.
Participants in Qualified Plans may receive additional reports from
their Plan Fiduciary.
Principal Underwriter
WPG serves as the Funds' principal underwriter.
Transfer Agent and Dividend Disbursing Agent
The Shareholder Services Group, Inc. (the "Transfer Agent"), P.O.
Box 9037, Boston, MA 02205 serves as transfer agent and dividend
disbursing agent for the Funds. The Funds may also enter into
agreements with and compensate other transfer agents and financial
institutions who process shareholder transactions and maintain
shareholder accounts.
Independent Accountants
KPMG Peat Marwick LLP, 345 Park Avenue, New York, New York 10154,
serves as the independent accountants for the Trust and will audit each
Fund's financial statements annually.
Legal Counsel
Hale and Dorr, 60 State Street, Boston, Massachusetts 02109, is
legal counsel to the Trust.
----------------------
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained
in this Prospectus and the SAI, and, if given or made, such other
information or representation must not be relied upon as having been
authorized by the Trust. This Prospectus does not constitute an
offering in any jurisdiction in which such offering may not be lawfully
made.
-24-
<PAGE>
SUBJECT TO COMPLETION: Dated July 3, 1995
WEISS, PECK & GREER INVESTMENTS
TOMORROW FUNDS RETIREMENT TRUST
One New York Plaza
New York, New York 10004
CORE LARGE-CAP STOCK FUND ("Large-Cap Fund")
Seeks to exceed the performance of publicly traded large
capitalization stocks in the aggregate, as represented by the
Standard & Poor's Index of 500 Common Stocks (the "S&P 500").
CORE SMALL-CAP STOCK FUND ("Small-Cap Fund")
Seeks to exceed the performance of publicly traded small
capitalization stocks in the aggregate, as represented by the
Russell 2000 Index (the "Russell 2000").
PROSPECTUS -- Institutional Class Shares
September __, 1995
This Prospectus describes Institutional Class shares of two mutual
funds - the Large-Cap Fund and the Small-Cap Fund (together, the
"Funds"). Institutional Class shares of the Funds are designed to
provide investment vehicles for variable annuity and variable life
insurance contracts ("Variable Contracts") of various insurance
companies. Institutional Class shares of the Funds may also be
purchased by "qualified" pension or retirement plans, including
trustees of such plans for individuals funding their individual
retirement accounts or other qualified plans. Each Fund is a
diversified mutual fund advised by Weiss, Peck & Greer, L.L.C. (the
"Adviser" or "WPG").
Please read this Prospectus before investing, and keep it on file
for future reference. It contains important information, including how
the Funds invest and the services available to shareholders. If
applicable, this Prospectus should be read in conjunction with the
separate account prospectus of the specific insurance product which
accompanies this Prospectus. To learn more about the Funds, you can
obtain a copy of the Statement of Additional Information (the "SAI"),
also dated September __, 1995. The SAI has been filed with the
Securities and Exchange Commission (the "SEC") and is incorporated by
reference into this Prospectus. A free copy of the SAI or a copy of the
Prospectus describing the Adviser Class shares of the Funds is
available upon request by calling Weiss, Peck & Greer, L.L.C. at
1-800-223- 3332 (toll free). Institutional Class shares of a Fund may
not be available in your state due to various insurance or other
regulations. Please check with your insurance company or qualified plan
fiduciary for Funds that are available in your state. Inclusion of a
Fund in this Prospectus which is not available in your state is not to
be considered a solicitation.
INSTITUTIONAL SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF,
OR GUARANTEED OR ENDORSED BY, BANK OR OTHER INSURED DEPOSITORY
INSTITUTION, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT
AGENCY. AN INVESTMENT IN INSTITUTIONAL CLASS SHARES OF THE FUNDS
INVOLVES INVESTMENT 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.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE
SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
STATE.
<PAGE>
Each Fund seeks, using quantitative methodology, to provide
investors who participate in qualified retirement plans or who are
holders of Variable Contracts with investment results that exceed the
performance of a "Benchmark Index." The Benchmark for the Large-Cap
Fund is the S&P 500 and the Benchmark for the Small-Cap Fund is the
Russell 2000. Each Fund primarily invests its assets in equity
securities of all types which comprise the applicable Benchmark.
In addition to the Institutional Class shares offered through this
Prospectus, the Funds offer a class of shares known as the Adviser
Class through a separate prospectus. Adviser Class shares of the Funds
are available only to certain eligible investors.
TABLE OF CONTENTS
Page
Expense Information................................
Investment Objectives and Policies.................
Eligible Investors.................................
Insurance Company Separate Accounts................
Qualified Plans....................................
How to Buy Shares.............................
How to Sell Shares............................
How to Exchange Shares........................
How Each Fund's Share Price is Determined..........
Management of the Funds............................
Service Plans......................................
Dividends and Taxes................................
Portfolio Brokerage................................
The Trust..........................................
Investment Performance.............................
Risk Considerations and Other
Practices and Policies............................
Additional Information.............................
-2-
<PAGE>
EXPENSE INFORMATION
Operating a mutual fund, such as each Fund, involves a variety of
expenses for portfolio management, shareholder statements, tax
reporting and other services. These costs are paid from a fund's assets
and their effect is factored into any quoted share price or performance
information.
Shareholder Transaction Expenses are charges you pay when you buy or
sell Institutional Class shares of a Fund.
<TABLE>
<S> <C> <C>
Large-Cap Small-Cap
Fund Fund
Maximum Sales Load Imposed on Purchases None None
Maximum Sales Load Imposed on
Reinvested Dividends None None
Deferred Sales Load None None
Redemption Fees None None
Exchange Fees None None
</TABLE>
Annual Fund Operating Expenses are paid out of the Funds' assets. Each
Fund's expenses are factored into its share price or dividends and are
not charged directly to shareholder accounts. The following are
estimates and are calculated as a percentage of average net assets.
<TABLE>
<S> <C> <C>
Large-Cap Small-Cap
Fund Fund
Management Fee
(after expense limitation) 0.00%* 0.00%*
Service Fee 1 0.25% 0.25%
Other Expenses
(after expense limitation) 1.25%* 1.25%*
Total Fund Operating Expenses
(after expense limitation) 1.50%* 1.50%*
</TABLE>
Example: Hypothetically assume that each Fund's annual return is 5% and
that its operating expenses are exactly as just described. For every
$1,000 you invested, you would have paid the following expenses if you
closed your account after the number or years indicated:
<TABLE>
<S> <C> <C>
Large-Cap Small-Cap
Fund Fund
After 1 Year $15 $15
After 3 Years $48 $48
The purpose of the above table and Example is to assist you in
understanding the various costs and expenses of the Institutional Class
shares of the Funds that an investor will bear directly or indirectly.
See page __. The Funds are newly organized and have no operating
history. The figures shown in the
-3-
<PAGE>
table under the caption "Other Expenses" and in the hypothetical
example are based on estimates of the Funds' expenses for the fiscal
year ending December 31, 1995. The expenses set forth above do not
reflect charges and expenses that may be applicable to a holder of a
Variable Contract or participant in a qualified plan. Please refer to
your separate account prospectus or qualified plan documents, as the
case may be.
---------------
<FN>
1 Service Fees are payable under a non-Rule 12b-1 service plan.
See "Service Plans."
* The Adviser has voluntarily agreed to limit temporarily each
Fund's operating expenses (excluding Rule 12b-1 fees applicable to
Adviser Class shares, service fees applicable to Institutional Class
shares, any other class-specific expenses, litigation, indemnification
and other extraordinary expenses) to 1.00% of its average daily net
assets. See page __. In the absence of this agreement, Management Fees
would be 0.75% of each Fund's average daily net assets and Other
Expenses and Total Fund Operating Expenses are estimated to be
approximately 3.65% and 4.65%, respectively, of the average daily net
assets attributable to the Institutional Class shares of the Large-Cap
Fund and 4.24% and 5.24%, respectively, of the average daily net assets
attributable to the Institutional Class shares of the Small-Cap Fund.
</FN>
</TABLE>
THE INFORMATION IN THE TABLE AND HYPOTHETICAL EXAMPLE ABOVE SHOULD NOT
BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
-4-
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
What are the Investment Objectives of the Funds?
Each Fund seeks to provide investors who participate in qualified
retirement plans with investment results that exceed the performance of
a "Benchmark Index." The Benchmark for the Large-Cap Fund is the S&P
500 and the Benchmark for the Small-Cap Fund is the Russell 2000.
LARGE-CAP FUND seeks to exceed the performance of publicly
traded large capitalization stocks in the aggregate,
as represented by the S&P 500. The S&P 500 is an
unmanaged index of 500 common stocks. The S&P 500
represents approximately 70% of the total domestic
U.S. equity market capitalization.
SMALL-CAP FUND seeks to exceed the performance of publicly
traded small capitalization stocks in the aggregate,
as represented by the Russell 2000. The Russell 2000
is an unmanaged index of 2000 common stocks of small
capitalization companies.
How will the Funds invest their assets?
To seek to achieve its objective, each Fund, under normal market
conditions, invests in a portfolio of securities that is considered
more "efficient" than the applicable Benchmark. An efficient portfolio
is one that has the maximum expected return for any level of risk. The
efficient mix of securities is established mathematically, taking into
account the expected return and volatility of returns for each security
in a given universe, as well as the historical price relationships
between the different securities in the universe.
To implement this strategy with respect to the Funds, the Adviser
compiles the historical price data of all securities which comprise the
S&P 500 in the case of the Large-Cap Fund and the Russell 2000 in the
case of the Small-Cap Fund. The Adviser may eliminate a security from
consideration if it considers the security to have an inadequate or
misleading price history. Using this historical price data, the Adviser
constructs and analyzes a complete matrix of all the possible price
relationships between the securities in the applicable Benchmark.
Using a sophisticated software program that incorporates risk
reduction techniques developed by investment professionals of the
Adviser, the Adviser constructs a number of portfolios with respect to
each Fund, which portfolios are believed to have optimized risk/reward
ratios. From these alternative portfolios, the Adviser selects the
combination of securities, together with their appropriate weightings,
that the Adviser believes will comprise the optimal portfolio for each
Fund. The optimal portfolio for a Fund is designed to have a return
greater than, but highly correlated with, the return of its Benchmark.
Please see "Quantitative Methodology" in the SAI for a further
description of how the Adviser constructs and maintains an optimal
portfolio for each Fund.
While each Fund will generally be substantially fully invested in
equity securities which comprise the applicable Benchmark, each Fund
may invest up to 10% of its total assets in fixed-income securities
that are rated at least AA by Standard & Poor's Ratings Group ("S&P")
or Aa by Moody's Investors Service, Inc. ("Moody's") or their
respective equivalents or, if not rated, determined to be of equivalent
credit quality to securities so rated.
Each Fund may, but is not required to, utilize various investment
strategies and techniques to hedge various market risks (such as broad
or specific equity or fixed-income market movements and interest rate
risk) or to enhance potential gain. Such strategies and techniques are
generally accepted as part of modern portfolio management and are
regularly utilized by many mutual funds. The investment
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strategies and techniques used by the Funds and the instruments in
which they invest may change over time as new techniques, strategies
and instruments are developed or regulatory changes occur.
In the course of pursuing their investment objectives, the Funds
may: (i) purchase and write (sell) put and call options on securities
and indices; (ii) purchase and sell financial futures contracts and
options thereon; (iii) lend portfolio securities; (iv) enter into
repurchase agreements; (v) purchase securities on a forward commitment,
when issued or delayed delivery basis; and (vi) invest in restricted
and illiquid securities. For further information concerning the
securities in which the Funds may invest and the investment strategies
and techniques they may employ, see "Risk Considerations and Other
Investment Practices and Policies" below in this Prospectus.
ELIGIBLE INVESTORS
Institutional Class shares of the Funds are designed to provide
investment vehicles for variable annuity and variable life insurance
contracts ("Variable Contracts") of various insurance companies'
separate accounts ("Separate Accounts"). Institutional Class shares of
the Funds may also be purchased for the account of pension or
retirement plans ("Qualified Plans") that satisfy the qualification
requirements of Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Internal Revenue Code"). Qualified Plans include: 401(k)
plans, 403(b) plans, 457 plans, governmental plans, tax-sheltered
annuity plans and individual retirement accounts (IRAs).
Should you have any questions as to whether you are an eligible
investor in Institutional Class shares of the Funds, please call WPG at
1-800-___________.
INSURANCE COMPANY SEPARATE ACCOUNTS
Because holders of Variable Contracts may not purchase or redeem
Institutional Class shares of the Funds directly, you should read the
prospectus of your insurance company Separate Account to obtain
instructions for purchasing a Variable Contract. Variable Contracts may
or may not make investments in both the Funds described in this
Prospectus.
Separate Accounts purchase and redeem Institutional Class shares
of the Funds at their respective net asset values. Redemptions will be
effected by Separate Accounts to meet obligations under Variable
Contracts. Insurance companies who wish to designate Institutional
Class shares of the Funds as investment vehicles for their Separate
Accounts should contact WPG at 1-800-___-____.
QUALIFIED PLANS
The following information describes how participants in Qualified
Plans may arrange to buy, sell (redeem) and exchange Institutional
Class shares of the Funds for the account of their Qualified Plans.
A. HOW TO BUY SHARES
Through whom may Institutional Class shares of the Funds be purchased
for Qualified Plans?
Because you may not purchase Institutional Class shares of the
Funds directly, all orders to purchase Institutional Class shares must
be made through the trustee, custodian, plan administrator or other
fiduciary (each a "Plan Fiduciary") of your Qualified Plan. If the
monies you wish to invest in the Funds are maintained in a Qualified
Plan sponsored by your employer, please consult with your employer
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for information about how to purchase shares of the Funds. If the
monies you wish to invest in the Funds are maintained by your Plan
Fiduciary in an IRA or other self-administered Qualified Plan, please
consult with your Plan Fiduciary for information about how to purchase
shares of the Funds.
You may establish an IRA with the Trust's custodian, Boston Safe
Deposit and Trust Company ("Boston Safe"), through which you may invest
in the Funds. Additionally, you may invest in the Funds by "rolling
over" an existing IRA into an IRA maintained by Boston Safe. Please
call WPG at 1-800-_____ for information regarding how to establish an
IRA with Boston Safe.
What is the minimum investment by Qualified Plans in Institutional
Class shares of the Funds?
Plan Fiduciaries may invest in the Funds for the account of
Qualified Plans with as little as $2,000 ($250 for a spousal IRA).
There is no minimum amount required for subsequent investments.
At what price are Institutional Class shares of the Funds offered?
Institutional Class shares of the Funds are sold at the net asset
value (NAV) of such shares next determined after the Transfer Agent
receives and accepts a purchase order. Purchase orders received and
accepted by the Transfer Agent by the close of regular trading on the
New York Stock Exchange on any Business Day (currently 4:00 p.m. New
York City time) will be effected as of the close of regular trading on
the New York Stock Exchange on that day. Otherwise, orders will be
effected at the NAV determined on the next Business Day.
How may Plan Fiduciaries invest in the Funds for the account of their
Qualified Plans?
In order to make an initial investment in a Fund for a Qualified
Plan, Plan Fiduciaries must open an account with the Funds by
furnishing to WPG the information in the Account Information Form
attached to this Prospectus. Shares of the Funds may be purchased by
Plan Fiduciaries for the account of Qualified Plans on any day during
which the New York Stock Exchange is open for business (a "Business
Day").
Plan Fiduciaries: To Make an Initial Investment for a Qualified Plan
By Mail: 1. Make a check payable to the Fund in which you wish to
or are instructed to invest.
2. Mail the completed Account Information Form and check
to the Transfer Agent at the address indicated on the
back cover of this Prospectus.
By Wire: 1. Call 1-800-________ to open an account and to arrange
for a wire transaction.
2. Instruct your bank to wire funds to:
Boston Safe Deposit and Trust Company
WPG Deposit Account No. _________
Bank Routing No. __________
Specify:
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Name of Fund
Institutional Class shares
Account Number
Name(s) in which account is to be registered
3. Mail the completed Account Information Form to the
Transfer Agent at the address indicated on the back
cover of this Prospectus.
Plan Fiduciaries: To Make Further Investments for a Qualified Plan
Automatically: 1. Use the Automatic Investment Plan. Sign up for this
service when opening an account, or call 1-800-_____
to add it. Designate the bank or credit union
account from which funds will be drawn.
2. The amount to be invested will automatically be with-
drawn from the designated bank or credit union account
on or about the first Business Day of the month or
quarter selected.
By Telephone: 1. Sign up for this service when opening an account, or
call 1-800-_______ to add it. Designate the bank or
credit union account from which funds will be drawn.
Note that in order to invest by phone, the account
must be in a bank or credit union that is a member of
the Automated Clearing House system (ACH).
2. Once this service has been selected, Plan Fiduciaries
may purchase additional shares for the account of their
Qualified Plans by calling the Funds' Transfer Agent,
The Shareholder Services Group, Inc., toll-free at
1-800-_________.
3. Give the Transfer Agent representative the name(s) in
which the account is registered, the Fund name,
Institutional Class shares, the account number, and the
amount of the investment.
4. An investment will normally be credited to the
Qualified Plan account the Business Day following the
phone request.
During periods of extreme economic conditions or market
changes, requests by telephone may be difficult to make
due to heavy volume. During such times please consider
placing purchase orders by mail.
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<PAGE>
By Mail: 1. Include a note with the investment specifying:
Name of the Fund
Institutional Class shares
Account Number
Name(s) in which account is registered
2. Make the check payable to the Fund in which you wish to
or are instructed to invest. Indicate the account
number on the check.
3. Mail the account information and check to the Transfer
Agent at the address indicated on the back cover of
this Prospectus.
By Wire: Instruct the bank to wire funds to:
Boston Safe Deposit and Trust Company
WPG Deposit Account No. _________
ABA Routing No. __________
For credit to:
Name of Fund
Institutional Class shares
Your Account Number
Name(s) in which account is registered
Other Purchase Information. Each Fund reserves the right to reject
any purchase for any reason and to cancel any purchase due to
nonpayment. As a condition of this offering, if your purchase is
cancelled due to nonpayment or because your check does not clear (and,
therefore, your account is required to be redeemed), you will be
responsible for any loss incurred by the Fund(s) affected. All
purchases must be made in U.S. dollars. Checks drawn on foreign banks
will delay purchases until U.S. funds are received and a collection
charge may be imposed. In such cases, Institutional Class shares of the
Funds are priced at the net asset value computed after the Transfer
Agent receives notification of the dollar equivalent from the Funds'
custodian bank. Wire purchases normally take two or more hours to
complete and, to be accepted the same day, must be received by 4:00
p.m. New York City time. Your bank may charge a fee to wire funds.
Telephone transactions are recorded to verify information.
Acquiring Shares of the Funds in Exchange for Securities. Shares
of the Funds may be purchased in whole or in part by delivering to the
Funds' custodian, Boston Safe, securities acceptable to WPG. Please see
"In-Kind Purchases" in the SAI for the terms and conditions of these
transactions.
B. HOW TO SELL SHARES
How may Institutional Class shares of the Funds be redeemed for
Qualified Plans?
Subject to the restrictions (if any) imposed by your Qualified
Plan, you can arrange to sell or "redeem" some or all of your shares on
any Business Day. All orders to redeem Institutional Class shares of
the Funds held for the account of Qualified Plans must be made through
your Plan Fiduciary. If the Institutional Class shares you wish to
redeem are held for the account of a Qualified Plan sponsored by
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your employer, please consult with your employer for information about
how to redeem shares of the Funds. If the Institutional Class shares
you wish to redeem are maintained by your Plan Fiduciary in an IRA or
other self-administered Qualified Plan, please consult with your Plan
Fiduciary for information about how to redeem shares of the Funds.
Please note that shares may not be redeemed by telephone or telegram,
except for exchanges which can be requested by Plan Fiduciaries by
telephone or in writing.
At what price are Institutional Class shares of the Funds redeemed?
Institutional Class shares of the Funds will be redeemed at the
share price (NAV) of such shares next calculated after a redemption
order is received in good order by the Transfer Agent. Once shares are
redeemed, sale proceeds generally are available the next Business Day,
but may take up to three Business Days. For your protection, redemption
proceeds will not be released until a shareholder's account has been
opened and payment for the shares to be redeemed have been received by
the Fund, which may take up to fifteen days.
The net asset value per share received upon redemption or
repurchase may be more or less than the original cost of the shares,
depending on the market value of the portfolio at the time of
redemption or repurchase.
Plan Fiduciaries: To Redeem Shares for a Qualified Plan
By Mail: 1. In a written request specify:
Name of the Fund
Institutional Class shares
Account Number
Name(s) in which account is registered
The dollar amount or the number of shares to be
redeemed
2. Mail the redemption request to the Transfer Agent at
the address indicated on the back cover of this
Prospectus.
Automatically 1. Use the Automatic Withdrawal Plan if the Qualified
Plan account has a (Post-Retirement total value of
at least $[_______]. Sign up for this service when
opening Fund Only): an account, or call 1-800-____
to add it.
2. The redemption proceeds of $[______] or more will
automatically be transferred from the shareholder
account to the designated address or bank account on or
about the first Business Day of the month or quarter
selected.
General Redemption Information. Redemption requests must be
received by the Transfer Agent before the close of business on the New
York Stock Exchange to receive that day's share price (NAV). A
written redemption request must be signed by all registered share-
holders for the account using the exact names in which the account is
registered or accompanied by executed power(s) of attorney. Unless
otherwise specified, redemption proceeds will be sent by check to the
record address. Plan Fiduciaries
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<PAGE>
may elect to have redemption proceeds wired to a checking or bank
account if wire redemptions were authorized when the account was opened
or have subsequently been authorized.
Redemptions may be suspended or postponed during any period in
which any of the following conditions exist: the New York Stock
Exchange is closed or trading on the Exchange is restricted; an
emergency exists during which it is not reasonably practicable for a
Fund to dispose of its portfolio securities or to fairly determine its
net asset value; or the SEC, by order, so permits.
Certain requests must include a signature guarantee. A signature
guarantee is a widely accepted way to protect you and the Funds from
fraud by verifying the signature on your request. A signature guarantee
is required if the redemption proceeds are to be sent to an address
other than the address of record or to a person other than the
registered shareholder(s) for the account [or if the net asset value of
the shares redeemed is $100,000 or more].
The following institutions may provide a signature guarantee,
provided that the institution meets credit standards established by the
Transfer Agent: (i) a bank; (ii) a securities broker or dealer,
including a government or municipal securities broker or dealer, that
is a member of a clearing corporation or has net capital of at least
$100,000; (iii) a credit union having authority to issue signature
guarantees; (iv) a savings and loan association, a building and loan
association, a cooperative bank, a federal savings bank or association;
or (v) a national securities exchange, a registered securities exchange
or a clearing agency.
Signature guarantees may not be provided by a notary public.
Small Accounts. In order to reduce the expense of maintaining
numerous small accounts, the Trust reserves the right to redeem any
shareholder account (other than an IRA) if, as a result of redemptions,
the value of the account is less than $100. Shareholders will be
allowed at least 60 days, after written notice by the Trust, to make an
additional investment to bring the account value up to at least $100
before the redemption is processed.
Change in Tax Status. Insurance companies and Plan Fiduciaries are
required to notify the Trust through the Transfer Agent if the tax
status of their Separate Account or Qualified Plan is revoked or
challenged by the Internal Revenue Service. The Trust reserves the
right to redeem any fund account of any shareholder whose qualification
as a diversified segregated asset account or a qualified pension or
retirement plan satisfying the requirements of Treasury Regulation
1.817-5 is revoked or challenged.
C. HOW TO EXCHANGE SHARES
May Institutional Class shares be exchanged for shares of other mutual
funds?
Subject to the terms of your Qualified Plan, Institutional Class
shares of a Fund may be exchanged for Institutional Class shares of the
other Fund or for Institutional Class shares of Tomorrow Long-Term
Retirement Fund, Tomorrow Mid-Term Retirement Fund, Tomorrow Short-Term
Retirement Fund and Tomorrow Post-Retirement Fund (collectively, the
Tomorrow Funds"). To obtain a current prospectus for the Institutional
Class shares of the other Tomorrow Funds, please call 1-800-___-____.
Please consider the differences in investment objectives and expenses
of a Tomorrow Fund as described in its prospectus before making an
exchange.
Do sales charges apply to exchanges?
As is the case with initial purchases of Institutional Class
shares of the Funds, exchanges of Institutional Class shares are made
without the imposition of a sales charge.
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How may I make an exchange for my Qualified Plan?
Because shares of the Funds are held for the account of Qualified
Plans, all orders to exchange shares must be made through your Plan
Fiduciary. If the Institutional Class shares you wish to exchange are
held for the account of a Qualified Plan sponsored by your employer,
please consult with your employer for information about how to exchange
shares of the Funds. If the Institutional Class shares you wish to
exchange are maintained by your Plan Fiduciary in an IRA or other
self-administered Qualified Plan, please consult with your Plan
Fiduciary for information about how to exchange shares of the Funds.
Plan Fiduciaries: To Exchange Shares
By Phone: 1. Use the telephone exchange privilege. The telephone
exchange privilege is not available automatically. It
is necessary to sign up for this privilege on the
Account Application Form when opening an account, or
call 1-800-______ to add it.
2. Once this privilege has been selected, simply call the
Transfer Agent toll free at 1-800-223-3332 between
9:00 a.m. and 4:00 p.m. New York City time on any
Business Day.
3. Give the following information to the Transfer Agent
representative:
Name of current Fund
Institutional Class shares
Name of the Tomorrow Fund into which the current
Fund shares will be exchanged
Account Number
Name(s) in which your account is registered
The dollar amount or the number of shares to be
exchanged
By Mail: 1. Mail a written request to the Transfer Agent at the
address listed on the back cover of this Prospectus
specifying:
Name of current Fund
Institutional Class shares
Name of the Tomorrow Fund into which the current
Fund shares will be exchanged
Account Number
Name(s) in which your account is registered
The dollar amount or the number of shares to be
exchanged
2. The exchange request must be signed by all registered
holders for the account using the exact names in which
the account is registered or accompanied by executed
power(s) of attorney.
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General Exchange Information. Shares exchanged are valued at their
respective net asset values next determined after the exchange request
is received by the Transfer Agent. All exchanges are subject to the
following exchange restrictions: (i) the fund into which shares are
being exchanged must be registered for sale in your state; (ii)
exchanges may be made only between funds that are registered in the
same name, address and taxpayer identification number; and (iii) the
minimum amount for exchanging from one fund into another fund is $100
or the total value of your fund account (if less than $100) and must
satisfy the minimum account size of the fund to be exchanged into.
To confirm that telephone exchange requests are genuine, the Trust
employs reasonable procedures, such as providing written confirmation
of telephone exchange transactions and tape recording of telephone
exchange requests. If the Trust does not employ such reasonable
procedures, it may be liable for any loss incurred by a shareholder due
to a fraudulent or unauthorized telephone exchange request. Otherwise,
neither the Trust nor its agents will be liable for any loss incurred
by a shareholder as the result of following instructions communicated
by telephone that they reasonably believed to be genuine. The Trust
reserves the right to refuse any request made by telephone and may
limit the dollar amount involved or the number of telephone requests
made by any shareholder. During periods of extreme economic conditions
or market changes, requests by telephone may be difficult to make due
to heavy volume. During such times please consider placing your order
by mail.
To prevent abuse of the exchange privilege to the detriment of
other shareholders, the Trust limits the number of exchanges and
purchase/redemption transactions by any one shareholder account (or
group of accounts under common management) to a total of six
transactions per year. This policy applies to exchanges into or out of
any Tomorrow Fund and any pair of transactions involving a purchase of
shares of any Tomorrow Fund followed by a redemption of an offsetting
or substantially equivalent dollar amount of shares of that same
Tomorrow Fund. If a Plan Fiduciary violates this policy, his/her future
purchases of, or exchanges into, the Tomorrow Funds may be permanently
refused. This policy does not prohibit redemptions of shares of any
series. This policy may be waived by WPG in its discretion. Further,
the exchange privilege may be changed or discontinued and may be
subject to additional limitations upon sixty (60) days' notice to
shareholders, including certain restrictions on purchases by
market-timer accounts.
HOW EACH FUND'S SHARE PRICE IS DETERMINED
The net asset value per share of a class of a Fund is determined
by dividing the value of its assets, less liabilities attributable to
that class, by the number of shares of that class outstanding. The net
asset value is normally calculated as of the close of regular trading
of the New York Stock Exchange (currently 4:00 p.m. New York City time)
on each Business Day. Different classes of shares of the Funds may have
different net asset values.
Portfolio securities (other than certain money market instruments)
are valued primarily based on market quotations or, if market
quotations are not available, at fair market value as determined in
good faith by a valuation committee appointed by the Trustees. In
accordance with procedures adopted by the Trustees, each Fund may use
pricing services to value fixed-income investments. Money market
instruments with a remaining maturity of 60 days or less at the time of
purchase are generally valued at amortized cost when the Trustees
believe that amortized cost approximates market value.
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<PAGE>
MANAGEMENT OF THE FUNDS
Trustees
Each Fund is a separate investment series of Tomorrow Funds
Retirement Trust, a Delaware business trust (the "Trust"). Under the
terms of the Agreement and Declaration of Trust establishing the Trust,
the Trustees of the Trust are ultimately responsible for the management
of its business and affairs.
Investment Adviser
Weiss, Peck & Greer, L.L.C., One New York Plaza, New York, New
York 10004 serves as the investment adviser to each Fund pursuant to an
investment advisory agreement. Subject to the supervision and direction
of the Trustees, the Adviser manages each Fund's portfolio in
accordance with its stated investment objective and policies,
recommends investment decisions for the Fund and places orders to
purchase and sell securities on behalf of the Fund. For these services,
each Fund pays the Adviser a monthly fee equal on an annual basis to
0.75% of its average daily net assets.
Joseph N. Pappo has been primarily responsible for the day-to-day
management of each Fund's portfolio since the Funds' inception. Mr.
Pappo has been a principal of the Adviser since 1994. Prior to joining
WPG, Mr. Pappo was the founder and president of Eden Financial Group
which was acquired by WPG in 1991.
The Adviser has voluntarily agreed to limit temporarily each
Fund's operating expenses (excluding Rule 12b-1 fees applicable to the
Adviser Class shares, service fees applicable to the Institutional
Class shares, any other class-specific expenses, litigation,
indemnification and other extraordinary expenses) to 1.25% of its
average daily net assets. The Adviser may discontinue or modify such
limitation in the future at its discretion, although it has no current
intention to do so.
Administrator
Pursuant to an administration agreement with each Fund, WPG
provides personnel for supervisory, administrative, accounting,
shareholder services and clerical functions; oversees the performance
of administrative and professional services to the Funds by others;
provides office facilities, furnishings and office equipment; and
prepares, but does not pay for, reports to shareholders, the SEC and
other regulatory authorities. As compensation for the services rendered
to the Funds as Administrator, WPG is entitled to a fee, computed daily
and payable monthly, at an annual rate equal to 0.09% of each Fund's
average daily net assets. The administrative fee for each Fund is
reviewed and approved annually by the Trustees.
Expenses
Each Fund bears all expenses of its operation, subject to the
expense limitation agreement described above. In particular, each Fund
pays: investment advisory fees; administration fees; service fees with
respect to the Institutional Class shares; distribution and service
fees with respect to the Adviser Class shares; custodian and transfer
agent expenses; legal and accounting fees and expenses; expenses of
preparing, printing, and distributing Prospectuses and SAIs to existing
shareholders, and shareholder communications and reports; expenses of
computing its net asset value per share; federal and state registration
fees and expenses with respect to its shares; proxy and shareholder
meeting expenses; expenses of issuing and redeeming its shares;
independent trustee fees and expenses; expenses of bond, liability, and
other insurance coverage; brokerage commissions; taxes; trade
association fees; and certain non-recurring and extraordinary expenses.
In addition, the expense of organizing the Funds and initially
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registering and qualifying their shares under federal and state
securities laws are being charged to the Funds' operations, as an
expense, over a period not to exceed 60 months from the Funds'
inception date.
Each Fund will reimburse the Adviser for fees foregone or other
expenses paid by the Adviser pursuant to this expense limitation in
later years in which operating expenses for that Fund are less than the
expense limitations set forth above for any such year. No interest,
carrying or finance charge will be paid by a Fund with respect to the
amounts representing fees foregone or other expenses paid. In addition,
no Fund will pay any unreimbursed amounts to the Adviser upon
termination of its investment advisory agreement.
SERVICE PLANS
The Trust, on behalf of each Fund, has adopted a service plan
pursuant to which each Fund pays service fees at an aggregate annual
rate of up to 0.25% of a Fund's average daily net assets attributable
to Institutional Class shares (the "Service Plans"). The service fee is
intended to be compensation to Plan Fiduciaries for providing personal
services and/or account maintenance services to the underlying
beneficial owners of the Institutional Class shares or to insurance
companies or their affiliates for providing similar services for which
they are not otherwise compensated by the Variable Contract holders.
The Trust, on behalf of the applicable Fund, will make monthly payments
to insurance companies and Plan Fiduciaries based on the average net
asset value of the Institutional Class shares which are attributable to
the Qualified Plan or Separate Account, as the case may be.
DIVIDENDS AND TAXES
Each Fund is treated as a separate entity for federal income tax
purposes and intends to elect to be treated as a "regulated investment
company" under the Code and to qualify for such treatment for each
taxable year. To qualify as such, each Fund must satisfy certain
requirements relating to the sources of its income, diversification of
its assets and distribution of its income to shareholders. Each Fund
also intends to satisfy certain additional diversification requirements
applicable under Section 817(h) of the Internal Revenue Code in order
to permit investments in Institutional Class shares of the Funds by
insurance company Separate Accounts that fund Variable Contracts, which
are subject to such requirements. It is possible that in order to
satisfy the applicable diversification requirements, investment
decisions may be made which would affect either positively or
negatively the investment performance of a Fund. As a regulated
investment company, each Fund will not be subject to federal income tax
on any net investment income and net realized capital gains that are
distributed to its shareholders in accordance with certain timing
requirements of the Code.
Participants in Qualified Plans may be eligible for tax deferral
on distributions a Qualified Plan receives from a Fund and gains that
arise from a Qualified Plan's dispositions of Fund shares. This
Prospectus does not describe in any respect such tax treatment. Please
consult your Plan Fiduciary or tax adviser.
Under current tax law, dividends or capital gain distributions
from a Fund are not currently taxable if properly allocable to reserves
for a Variable Contract. For a discussion of the tax status of a
Variable Contract, including the tax consequences of withdrawals or
other payments, refer to the prospectus of the insurance company
Separate Account.
It is suggested that holders of Variable Contracts and
participants in Qualified Plans keep all statements received from their
insurance company or Qualified Plan to assist in personal
recordkeeping.
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Each Fund intends to distribute all of its net investment income
and net capital gains each year. Income dividends, if any, will be
declared and distributed at least annually by each Fund. Net short-term
and long-term capital gains of each Fund, if any, realized during the
taxable year will be distributed no less frequently then annually.
Dividends derived from each Fund's net investment income (including
dividends, interest and recognized market discount income), and net
short-term capital gains received by a Fund are treated as ordinary
income under the Code. Distributions from each Fund's net long-term
capital gains are treated as long-term capital gains under the Code,
regardless of how long shares of the Funds have been held.
Reinvestment of Income Dividends and Capital Gains Distributions
Unless a Plan Fiduciary elects otherwise, as permitted in the
Account Information Form, income dividends and capital gains
distributions with respect to a Fund will be reinvested in additional
Institutional Class shares of that Fund and will be credited to the
Qualified Plan's account with that Fund at the net asset value per
share next determined as of the ex-dividend date. Both income dividends
and capital gains distributions are paid by the Fund on a per share
basis. As a result, at the time of such payment, the net asset value
per share of a Fund will be reduced by the amount of such payment.
Although income dividends and capital gains distributions by the Funds
may not give rise to current tax liability for the categories of
shareholders permitted to invest in the Funds, participants in
Qualified Plans may be subject to tax on all or a portion of their
distributions from such Plans or upon the failure of such Plans to
maintain their qualified status under complex Code provisions
concerning which a tax adviser should be consulted. Withdrawals or
other payments to Variable Contract holders from insurance company
Separate Accounts may also be taxable. Participants in Qualified Plans
who wish to change the manner in which income dividends and capital
gains distributions are received by their Qualified Plans should
contact their Plan Fiduciaries. Written notification of such change
must be received by the Transfer Agent at least ten days before the
next scheduled distribution.
PORTFOLIO BROKERAGE
In effecting securities transactions, the Funds generally seek to
obtain the best price and execution of orders. Commission rates are a
component of price and are considered along with other factors,
including the ability of the broker to effect the transaction, and the
broker's facilities, reliability and financial responsibility. Subject
to the foregoing, the Funds intend to utilize WPG as their primary
broker in connection with the purchase and sale of exchange-traded
portfolio securities. As the Funds' primary broker, WPG will receive
brokerage commissions from the Funds, limited to the "usual and
customary broker's commission" specified by the 1940 Act. The Funds
intend to continue to use WPG as their primary broker on
exchange-traded securities, provided WPG is able to provide execution
at least as favorable as that provided by other qualified brokers.
The Trustees of the Trust have developed procedures to limit the
commissions received by WPG to the "usual and customary broker's
commission" standard specified by the 1940 Act. On a quarterly basis,
the Trustees review the securities transactions of each Fund effected
by WPG to assure their compliance with such procedures.
The Funds will also execute their portfolio transactions through
qualified brokers other than WPG. In selecting such other brokers, WPG
considers the quality and reliability of brokerage services, including
execution capability and performance and financial responsibility, and
may consider the research and other investment information provided by
such brokers. Accordingly, the commissions paid to any such broker may
be greater than the amount another firm might charge, provided WPG
determines in good faith that the amount of such commission is
reasonable in relation to the value of the brokerage services and
research information provided by such broker. Such information may be
used by WPG (and its affiliates) in
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managing all of its accounts and not all of such information may be
used by WPG in managing the Funds. In selecting other brokers for a
Fund, WPG may also consider the sale of shares of the Fund effected
through such other brokers as a factor in its selection, provided that
Fund obtains the best price and execution of orders.
Money market securities and other fixed-income securities, as well
as certain equity securities, in which the Funds invest are traded
primarily in the over-the-counter ("OTC") market. For transactions
effected in the OTC market, financial intermediaries (i.e., dealers)
act as principal rather than as agent and receive a "spread" rather
than a commission. The Funds intend to deal with the primary
market-makers with respect to OTC securities, unless a more favorable
result is obtainable elsewhere.
THE TRUST
Tomorrow Funds Retirement Trust is an open-end management
investment company (commonly referred to as a mutual fund) organized as
a Delaware business trust under an Agreement and Declaration of Trust
dated June 21, 1995 (the "Declaration"). The Trust has authorized an
unlimited number of shares of beneficial interest.
As of the date of this Prospectus, the shares of the Trust are
divided into six series: Tomorrow Long-Term Retirement Fund, Tomorrow
Mid-Term Retirement Fund, Tomorrow Short-Term Retirement Fund, Tomorrow
Post-Retirement Fund, Core Large-Cap Stock Fund and Core Small-Cap
Stock Fund. The Trust reserves the right to create and issue additional
series of shares. No series is entitled to share in the assets of any
other series or is liable for the expenses or liabilities of any other
series. Shares of a particular series vote separately on matters
affecting only that series, including the approval of an investment
advisory agreement and changes in fundamental policies or restrictions
of a particular series.
As of the date of this Prospectus, the Trustees have authorized
the issuance of two classes of shares for each series, designated
Adviser Class and Institutional Class. The shares of each Class
represent an interest in the same portfolio of investments of that
series. Each Class has equal rights as to voting, redemption, dividends
and liquidation, except that each Class bears different distribution
fees and may bear other expenses properly attributable to the
particular Class. Adviser Class shareholders of a Fund have exclusive
voting rights with respect to the Rule 12b-1 distribution plan adopted
by holders of Adviser Class shares of that Fund. The Trustees have the
authority, without further shareholder approval, to classify and
reclassify the shares of a series of the Trust into additional classes.
In addition, subject to Trustee approval and shareholder approval (if
then required), each Fund may pursue its investment objective by
investing all of its investable assets in a pooled fund. See "Risk
Considerations and Other Investment Practices and Policies" below.
An insurance company issuing a Variable Contract that participates
in Institutional Class shares of a Fund will vote such shares held by
the insurance company Separate Accounts as required by law. In
accordance with current law and interpretations thereof, participating
insurance companies are required to request voting instructions from
policy owners and must vote shares of the Funds in proportion to the
voting instructions received. For a further discussion of voting
rights, please refer to your insurance company Separate Account
prospectus.
When issued and paid for in accordance with the terms of the
Prospectus and Statement of Additional Information, shares of the Trust
are fully paid and non-assessable. The Trust is not required, and does
not intend, to hold annual shareholder meetings. Shareholders have
certain rights, as set forth in the Declaration, including the right to
call a meeting of shareholders for the purpose of voting on the removal
of one or more Trustees. Such removal can be effected upon the action
of two-thirds of the outstanding shares of the Trust.
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In addition to the requirements under Delaware law, the
Declaration provides that a shareholder of the Trust may bring a
derivative action on behalf of the Trust only if the following
conditions are met: (a) shareholders eligible to bring such derivative
action under Delaware law who hold at least 10% of the outstanding
shares of the Trust, or 10% of the outstanding shares of the series or
class to which such action relates, shall join in the request for the
Trustees to commence such action; and (b) the Trustees must be afforded
a reasonable amount of time to consider such shareholder request and
investigate the basis of such claim. The Trustees shall be entitled to
retain counsel or other advisers in considering the merits of the
request and shall require an undertaking by the shareholders making
such request to reimburse the Trust for the expense of any such
advisers in the event that the Trustees determine not to bring such
action
The Trustees of the Trust do not foresee any disadvantages to
investors arising out of the fact that each Fund may offer a class of
its shares to Separate Accounts that serve as investment medium for
Variable Contracts or that each Fund may offer its shares to Qualified
Plans. Nevertheless, the Trustees intend to monitor events in order to
identify any material irreconcilable conflicts which may possibly
arise, and to determine what action, if any, should be taken in
response to such conflicts. If such a conflict were to occur, one or
more Separate Accounts or Qualified Plans might be required to withdraw
their investments in either or both Funds and shares of another series
of the Trust may be substituted. This might force a Fund to sell
securities at disadvantageous prices.
In the interests of economy and convenience, the Trust does not
issue certificates representing the Funds' shares. Instead, the
Transfer Agent maintains a record of each shareholder's ownership.
Although each Fund is offering only its own shares, since the Funds use
this combined Prospectus, it is possible that one Fund might become
liable for a misstatement or omission in this Prospectus regarding the
other Fund. The Trustees have considered this factor in approving the
use of this combined Prospectus.
INVESTMENT PERFORMANCE
Each Fund may illustrate in advertisements and sales literature
the average annual total return of its Institutional Class shares,
which is the rate of growth of the Fund that would be necessary to
achieve the ending value of an assumed initial investment of $1,000
kept in Institutional Class shares of the Fund for the period specified
and is based on the following assumptions: (1) all dividends and
distributions by the Fund are reinvested in Institutional Class shares
of the Fund at net asset value; and (2) all recurring fees are included
for applicable periods.
Each Fund may also illustrate in advertisements the cumulative
total return for several time periods throughout the Fund's life based
on an assumed initial investment of $1,000. Any such cumulative total
return for a Fund will assume the reinvestment of all income dividends
and capital gains distributions in Institutional Class for the
indicated periods and will include all recurring fees.
Total returns quoted for the Funds include the effect of deducting
each Fund's expenses, but may not include charges and expenses
attributable to any particular Qualified Plan or Variable Contract. You
should carefully review the prospectus of the insurance product you
have chosen or consult with your Plan Fiduciary for information on
relevant charges and expenses. Because these charges and expenses are
excluded from a Fund's quoted performance, the investment return
received by a participant in a Qualified Plan or a holder of a Variable
Contract investing in the Fund may be lower than the quoted performance
of the Fund. You should bear in mind the effect of these charges when
comparing a Fund's performance to that of other mutual funds.
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The performance of the Institutional Class shares of the Funds
will vary from time to time and past results are not necessarily
representative of future results. Performance is a function of the type
and quality of a Fund's portfolio securities and is affected by
operating expenses. Performance information may not provide a basis
for comparison with other investments or other mutual funds using a
different method of calculating performance. An investment in any Fund
involves the risk of loss.
RISK CONSIDERATIONS AND OTHER INVESTMENT PRACTICES AND POLICIES
Because each Fund owns different types of investments, its
performance is affected by a variety of factors. The value of a Fund's
investments and the income they generate will vary from day to day, and
generally reflect interest rates, market conditions, and other company,
political and economic news. When you sell your shares, they may be
worth more or less than what you paid for them.
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Investing in Small Capitalization Companies. The Small-Cap Fund will
invest in equity securities of small capitalization companies included
within the Russell 2000 and the Large-Cap Fund may invest in such
securities to the extent that they are included in the S&P 500. Small
capitalization companies may offer a greater growth potential than
larger, more mature, better known firms. Investing in the securities of
such companies, however, involves greater risk and a possibility of
greater portfolio price volatility. Historically, small capitalization
stocks and stocks of recently organized companies have been more
volatile in price than the larger capitalization stocks, such as those
included in the S&P 500. Among the reasons for the greater price
volatility of these small company and unseasoned stocks are the less
certain growth prospects of smaller firms and the lower degree of
liquidity in the markets for such stocks.
Fixed-Income Securities. Each Fund may invest up to 10% of its assets
in a broad range of fixed-income securities, including bonds, notes,
mortgage-backed and asset-backed securities, preferred stock and
convertible debt securities issued by U.S. corporations or other
entities or by the U.S. Government or its agencies, authorities,
instrumentalities or sponsored enterprises. The interest payable on
so-called fixed-income securities purchased by a Fund is not
necessarily paid at a fixed rate and may be payable on a variable,
floating (including inverse floating), contingent, in-kind or deferred
basis.
Fixed-income securities are subject to the risk of the issuers'
inability to meet principal and interest payments on the obligations
(credit risk) and may also be subject to price volatility due to such
factors as interest rate sensitivity, market perception of the credit
worthiness of the issuer and general market liquidity (market risk).
Generally, when interest rates decline, the value of fixed-income
securities can be expected to rise. Conversely, when interest rates
rise the value of fixed-income securities can be expected to decline.
Corporate Debt Obligations. Each Fund may invest in corporate debt
obligations, including obligations of industrial, utility and financial
issuers. In addition to obligations of corporations, corporate debt
obligations include bank obligations and zero coupon securities, issued
by financial institutions and corporations.
The debt securities in which the Funds may invest will be rated,
at the time of purchase, within the top two categories of investment
grade securities or, if not rated, determined by the Adviser to be of
equivalent credit quality to securities so rated. The top two
categories of investment grade securities are Aaa and Aa for Moody's
and AAA and AA for S&P. A security will be deemed to have met a rating
requirement if it receives the minimum required rating from at least
one nationally recognized statistical rating organization even though
it has been rated below the minimum rating by one or more other rating
organizations, or if unrated by such rating organizations, determined
by the Adviser to be of comparable credit quality. In the event that
the rating on a security held in a Fund's portfolio is downgraded below
the minimum rating requirement by a rating service, such action will be
considered by the Adviser in its evaluation of the overall investment
merits of that security, but will not necessarily result in the sale of
the security.
Convertible Securities and Preferred Stocks. Each Fund may invest in
debt securities or preferred stocks that are convertible into or
exchangeable for common stock. Preferred stocks are securities that
represent an ownership interest in a company and provide their owner
with claims on the company's earnings and assets prior to the claims of
owners of common stock but after those of bond owners. Preferred stocks
in which the Funds may invest include sinking fund, convertible,
perpetual fixed and adjustable rate (including auction rate) preferred
stocks.
U.S. Government Securities. Each Fund may invest in all types of U.S.
Government securities, including obligations issued or guaranteed by
the U.S. Government or its agencies, authorities, instrumentalities or
sponsored enterprises. Some U.S. Government securities, such as
Treasury bills, notes and bonds, which differ only in their interest
rates, maturities and times of issuance, are supported by the full
faith and credit of the United States of America. Others, such as
obligations issued or guaranteed by U.S. Government
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agencies, authorities, instrumentalities or sponsored enterprises are
supported either by (a) the full faith and credit of the U.S.
Government (such as securities of the Small Business Administration),
(b) the right of the issuer to borrow from the U.S. Treasury (such as
securities of the Federal Home Loan Banks), (c) the discretionary
authority of the U.S. Government to purchase the agency's obligations
(such as securities of the Federal National Mortgage Association), or
(d) only the credit of the issuer.
Each Fund may also invest in separately traded principal and
interest components of securities guaranteed or issued by the U.S.
Government or its agencies, instrumentalities or sponsored enterprises
if such components are traded independently under the Separate Trading
of Registered Interest and Principal of Securities program ("STRIPS")
or any similar program sponsored by the U.S. Government. The Funds may
invest in U.S. Government securities which are zero coupon or deferred
interest securities.
Real Estate Investment Trusts. Each Fund may invest in shares of real
estate investment trusts ("REITs"). REITs are pooled investment
vehicles which invest primarily in income producing real estate or real
estate related loans or interests. REITs are generally classified as
equity REITs, mortgage REITs or a combination of equity and mortgage
REITs. Equity REITs invest the majority of their assets directly in
real property and derive income primarily from the collection of rents.
Equity REITs can also realize capital gains by selling properties that
have appreciated in value. Mortgage REITs invest the majority of their
assets in real estate mortgages and derive income from the collection
of interest payments. Like investment companies such as the Funds,
REITs are not taxed on income distributed to shareholders provided they
comply with several requirements of the Internal Revenue Code. Any Fund
that invests in REITs will indirectly bear its proportionate share of
any expenses paid by such REITs in addition to the expenses paid by the
Fund.
Investing in REITs involves certain risks: equity REITs may be
affected by changes in the value of the underlying property owned by
the REITs, while mortgage REITs may be affected by the quality of any
credit extended. REITs are dependent upon management skills, are not
diversified, and are subject to the risks of financing projects. REITs
are subject to heavy cash flow dependency, default by borrowers,
self-liquidation, and the possibilities of failing to qualify for the
exemption from tax for distributed income under the Internal Revenue
Code and failing to maintain their exemptions from the 1940 Act. REITs
whose underlying assets include long-term health care properties, such
as nursing, retirement and assisted living homes, may be impacted by
federal regulations concerning the health care industry.
Investing in REITs may involve risks similar to those associated
with investing in small capitalization companies. REITs may have
limited financial resources, may trade less frequently and in a limited
volume and may be subject to more abrupt or erratic price movements
than larger company securities. Historically, small capitalization
stocks, such as REITs, have been more volatile in price than the larger
capitalization stocks included in the S&P 500 Index.
Other Investment Companies. Each Fund is authorized to invest all of
its assets in the securities of a single open-end investment company (a
"pooled fund") having substantially identical investment objectives,
policies and restrictions as such Fund, notwithstanding any other
investment restriction or policy. Such a structure is commonly referred
to as "master/feeder." If authorized by the Trustees and subject to
shareholder approval (if then required by applicable law), a Fund would
seek to achieve its investment objective by investing in a pooled fund
which would invest in a portfolio of securities that complies with the
Fund's investment objective, policies and restrictions. The Trustees
currently do not intend to authorize investing in a pooled fund in
connection with a master/feeder structure.
Short-Term Debt Securities. Each Fund may establish and maintain cash
balances for temporary purposes in order to maintain liquidity to meet
shareholder redemptions. Each Fund may also establish and maintain cash
balances for defensive purposes without limitation to hedge against
potential stock market declines. A Fund's cash balances, including
uncommitted cash balances, may be invested in
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investment grade money market instruments and short-term
interest-bearing securities. These securities consist of U.S.
Government securities, instruments of U.S. banks (including negotiable
certificates of deposit, non-negotiable fixed-time deposits and
bankers' acceptances), repurchase agreements, prime commercial paper of
U.S. companies and debt securities that make periodic interest payments
at variable or floating rates.
Structured Securities. Each Fund may invest in "structured" notes,
bonds or debentures. The distinguishing feature of a structured
security is that the value of the principal of and/or interest payable
on the security is determined by reference to the value of a benchmark
or the relative change in two or more benchmarks. Examples of these
benchmarks include stock prices, currency exchange rates and physical
commodity prices. Structured securities may be positively or negatively
indexed, so that appreciation of the benchmark may produce an increase
or decrease in the interest rate or value of the structured security at
maturity. Certain structured securities may also be leveraged to the
extent that the magnitude of any change in the interest rate or
principal payable on the benchmark asset is a multiple of the change in
the reference price. Leverage enhances the price volatility of the
security and, therefore, the Fund's net asset value. Further, certain
structured or hybrid notes may be illiquid for purposes of the Fund's
limitation on investments in illiquid securities.
Writing and Purchasing Put and Call Options on Securities and
Securities Indices. To seek additional income or to minimize
anticipated declines in the value of its securities, each Fund may
purchase and write (i.e., sell) call and put options on securities and
securities indices. Option transactions in which the Funds may engage
may be traded on securities exchanges or in the over-the-counter
market. Each Fund currently intends to limit its option transactions
during the current fiscal year so that no more than 5% of the Fund's
net assets will be at risk as a result of such transactions. Please see
the SAI for a further discussion of option transactions and associated
risks.
Futures Contracts and Options on Futures Contracts. Each Fund may
engage in futures transactions and related options. Future contracts
may be based on various securities (such as U.S. Government
securities), securities indices and other financial instruments and
indices. A Fund will engage in futures and related options transactions
only for bona fide hedging and non-hedging purposes to the extent
permitted by regulations of the Commodity Futures Trading Commission. A
Fund will not enter into futures contracts or options thereon for
non-hedging purposes if, immediately thereafter, the aggregate initial
margin and premiums required to establish non-hedging positions in
futures contracts and options on futures would exceed 5% of the Fund's
net assets, after taking into account unrealized profits and losses on
any such positions and excluding the amount by which such options were
in-the-money at the time of purchase. Each Fund may also enter into
closing purchase and sale transactions with respect to any of futures
contracts and related options.
The use of futures contracts entails certain risks, including but
not limited to the following: no assurance that futures contracts
transactions can be offset at favorable prices; possible reduction of
the Fund's income due to the use of hedging; possible reduction in
value of the both the securities hedged and the hedging instrument;
possible lack of liquidity due to daily limits on price fluctuations;
imperfect correlation between the contract and the securities being
hedged; and potential losses in excess of the amount initially invested
in the futures contracts themselves. If the expectations of the Adviser
regarding movements in securities prices or interest rates are
incorrect, the Fund may have experienced better investments results
without hedging. The use of futures contracts and options on futures
contracts requires special skills in addition to those needed to select
portfolio securities. A further discussion of futures contracts and
their associated risks is contained in the SAI.
Forward Commitments, Delayed Delivery and When-Issued Securities.
Each Fund may purchase securities on a when-issued, delayed delivery,
or forward commitment basis. When such transactions are negotiated,
the price of such securities is fixed at the time of the commitment,
but delivery and payment for
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the securities may take place up to 90 days after the date of the
commitment to purchase. The securities so purchased are subject to
market fluctuation, and no interest accrues to the purchaser during
this period. When-issued securities or forward commitments involve a
risk of loss if the value of the security to be purchased declines
prior to the settlement date. When a Fund purchases securities on a
forward commitment or when-issued basis, the Fund's custodian will
maintain in a segregated account cash or liquid, high grade debt
securities having a value (determined daily) at least equal to the
amount of the Fund's purchase commitment. A Fund may close out a
position in securities purchased on a when-issued, delayed delivery or
forward commitment basis prior to the settlement date.
Lending of Portfolio Securities. Each Fund may also seek to increase
its income by lending portfolio securities. Such loans may be made to
institutions, such as certain broker-dealers, and are required to be
secured continuously by collateral in cash, cash equivalents or U.S.
Government securities maintained on a current basis at an amount at
least equal to the market value of the securities loaned. If the
Adviser determines to make securities loans, the value of the
securities loaned would not exceed 33 1/3% of the value of the total
assets of the Fund. A Fund may experience a loss or delay in the
recovery of its securities if the borrowing institution breaches its
agreement with the Fund.
Restricted and Illiquid Securities. Each Fund may invest up to 15% of
its total assets in "restricted securities" (i.e., securities that
would be required to be registered under the Securities Act of 1933, as
amended ("1933 Act"), prior to distribution to the general public)
including restricted securities eligible for resale to "qualified
institutional buyers" under Rule 144A under the 1933 Act. Each Fund may
also invest up to 15% of its net assets in illiquid investments, which
includes repurchase agreements maturing in more than seven days,
securities that are not readily marketable, certain over-the-counter
options and restricted securities, unless the Trustees determine, based
upon a continuing review of the trading markets for the specific
restricted security, that such restricted securities are liquid. Each
Fund may agree to adhere to more restrictive limits on investments in
restricted and illiquid investments as a condition of the registration
of its shares in various states. The Trustees have adopted guidelines
and delegated to the Advisor the daily function of determining and
monitoring the liquidity of restricted securities. The Trustees,
however, retain sufficient oversight and are ultimately responsible for
the determinations. Since it is not possible to predict with assurance
exactly how this market for restricted securities sold and offered
under Rule 144A will develop, the Trustees carefully monitor each
Fund's investments in these securities, focusing on such important
factors, among others, as valuation, liquidity and availability of
information. This investment practice could have the effect of
increasing the level of illiquidity in a Fund to the extent that
qualified institutional buyers become for a time uninterested in
purchasing these restricted securities.
Repurchase Agreements. Each Fund may enter into repurchase agreements
through which the Fund purchases a security (the "underlying security")
from a domestic securities dealer or bank that is a member of the
Federal Reserve System. Under the agreement, the seller of the
repurchase agreement (i.e., the securities dealer or bank) agrees to
repurchase the underlying security at a mutually agreed upon time and
price. In repurchase transactions, the underlying security, which must
be a high-quality debt security, is held by the Fund's custodian
through the federal book-entry system as collateral and
marked-to-market on a daily basis to ensure full collateralization of
the repurchase agreement. In the event of bankruptcy or default of
certain sellers of repurchase agreements, a Fund could experience costs
and delays in liquidating the underlying security held as collateral
and might incur a loss if such collateral declines in value during this
period.
Market Changes. The market value of the Fund's investments, and thus
each Fund's net asset value, will change in response to market
conditions affecting the value of its portfolio securities. When
interest rates decline, the value of fixed rate obligations can be
expected to decline. In contrast, as interest rates on adjustable rate
loans are reset periodically, yields on investments in such loans will
gradually align themselves to reflect changes in market interest rates,
causing the value of such investments to fluctuate less dramatically in
response to interest rate fluctuations than would investments in fixed
rate obligations.
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Portfolio Turnover. Although neither Fund purchases securities with a
view to rapid turnover, there are no limitations on the length of time
that securities must be held by a Fund and a Fund's annual portfolio
turnover rate may vary significantly from year to year. A high rate of
portfolio turnover (100% or more) involves correspondingly greater
transaction costs which must be borne by the applicable Fund and its
shareholders and may, under certain circumstances, make it more
difficult for such Fund to qualify as a regulated investment company
under the Code. The estimated portfolio turnover rates of the Funds for
the current fiscal year are as follows: Large-Cap Fund 40% and
Small-Cap Fund 45%.
Diversification. Each Fund is diversified, as defined in the 1940 Act.
As such, each Fund has a fundamental policy that limits its investments
so that, with respect to 75% of its assets (i) no more than 5% of the
Fund's total assets will be invested in the securities of a single
issuer and (ii) each Fund will purchase no more than 10% of the
outstanding voting securities of a single issuer. These limitations do
not apply to obligations issued or guaranteed by the U.S. Government,
its agencies or instrumentalities, repurchase agreements collateralized
by U.S. Government securities or investments in other investment
companies. In addition to the diversification requirements under the
1940 Act, the Funds must satisfy the diversification requirements under
the Internal Revenue Code applicable to regulated investment companies
and the additional diversification requirements applicable under
Section 817(h) of the Internal Revenue Code to Separate Accounts that
fund Variable Contracts. These requirements place certain limitations
on the assets of a Fund that may be invested in securities of a single
issuer or interests in the same commodity. More specific information on
these diversification requirements is contained in the SAI.
Investment Restrictions. Each Fund is subject to further investment
policies and restrictions that are described in the SAI. The foregoing
investment policies, including each Fund's investment objective, are
non-fundamental policies which may be changed by the Trustees without
the approval of shareholders. If there is a change in a Fund's
investment objective, shareholders should consider whether that Fund
remains an appropriate investment in light of their then current
financial positions and needs. Each Fund has adopted certain
fundamental policies which may not be changed without the approval of
the applicable Fund's shareholders. See "Investment Restrictions" in
the Statement of Additional Information.
If any percentage restriction described above or in the SAI is
adhered to at the time of investment, a subsequent increase or decrease
in the percentage resulting from a change in the value of a Fund's
assets will not constitute a violation of the restriction.
ADDITIONAL INFORMATION
Reports to Shareholders
As shareholders in the Funds, Separate Accounts and Qualified
Plans will receive an annual report containing audited financial
statements and semi-annual and quarterly reports. Each Separate Account
and Qualified Plan will also be provided with a printed confirmation
for each transaction in their shareholder account. Holders of Variable
Contracts and participants in Qualified Plans may receive additional
reports from their insurance company or Plan Fiduciary, as the case may
be.
Principal Underwriter
WPG serves as the Funds' principal underwriter.
Transfer Agent and Dividend Disbursing Agent
The Shareholder Services Group, Inc. (the "Transfer Agent"), P.O.
Box 9037, Boston, MA 02205 serves as transfer agent and dividend
disbursing agent for the Funds. The Funds may also enter into
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agreements with and compensate other transfer agents and financial
institutions who process shareholder transactions and maintain
shareholder accounts.
Independent Accountants
KPMG Peat Marwick LLP, 345 Park Avenue, New York, New York 10154,
serves as the independent accountants for the Trust and will audit each
Fund's financial statements annually.
Legal Counsel
Hale and Dorr, 60 State Street, Boston, Massachusetts 02109, is
legal counsel to the Trust.
----------------------
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained
in this Prospectus and the SAI, and, if given or made, such other
information or representation must not be relied upon as having been
authorized by the Trust. This Prospectus does not constitute an
offering in any jurisdiction in which such offering may not be lawfully
made.
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SUBJECT TO COMPLETION DATED: JULY 3, 1995
PART B
WEISS, PECK & GREER INVESTMENTS
TOMORROW FUNDS RETIREMENT TRUST
Tomorrow Long-Term Retirement Fund
Tomorrow Mid-Term Retirement Fund
Tomorrow Short-Term Retirement Fund
Tomorrow Post-Retirement Fund
Core Large-Cap Stock Fund
Core Small-Cap Stock Fund
(each a "Fund" and collectively, the "Funds")
STATEMENT OF ADDITIONAL INFORMATION
ADVISER CLASS SHARES
September __, 1995
This Statement of Additional Information is not a prospectus and
should be read in conjunction with the Adviser Class prospectuses of
the Funds, each dated September __, 1995, as amended and/or
supplemented from time to time (collectively, the "Prospectuses"),
copies of which may be obtained without charge by writing to Tomorrow
Funds Retirement Trust (the "Trust"), One New York Plaza, New York
10004 or by calling 1-800-_______.
THE STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED
OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS
BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE
SECURITIES MAY NOT BE SOLD NOR MAY ANY OFFERS TO BUY BE ACCEPTED PRIOR
TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
STATEMENT OF ADDITIONAL INFORMATION DOES NOT CONSTITUTE A PROSPECTUS.
<PAGE>
TABLE OF CONTENTS
Page
THE FUNDS' INVESTMENT OBJECTIVES AND POLICIES.......... 1
Quantitative Methodology.......................... 1
INVESTMENT TECHNIQUES.................................. 3
Repurchase Agreements............................. 3
Forward Commitment and When-Issued Transactions... 4
Loans of Portfolio Securities..................... 5
Options........................................... 6
Futures Transactions.............................. 9
Limitations on the Use of Futures Contracts
and Options on Futures.......................... 11
Special Considerations and Risks
Related to Options and Futures Transactions..... 12
Privately Issued Mortgage-Backed Securities....... 15
Risks Associated with Specific Types
of Derivative Securities........................ 16
Inverse Floating Rate Instruments................. 16
Participation Interests........................... 16
Constant Duration Methodology..................... 17
Restricted and Illiquid Securities................ 17
Other Investment Companies........................ 17
CALCULATION OF THE FUNDS' RETURNS...................... 18
Total Return...................................... 18
Yield............................................. 19
Other Quotations, Comparisons and
General Information............................. 19
INVESTMENT RESTRICTIONS................................ 21
ADVISORY AND ADMINISTRATIVE SERVICES................... 26
Investment Adviser................................ 26
Administrator..................................... 30
Principal Underwriter............................. 31
DISTRIBUTION PLANS..................................... 32
TRUSTEES AND OFFICERS.................................. 34
HOW TO PURCHASE SHARES................................. 37
Acquiring Shares of the Funds in Exchange
for Shares...................................... 37
REDEMPTION OF SHARES................................... 38
Systematic Withdrawal Plan........................ 38
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NET ASSET VALUE........................................ 39
INVESTOR SERVICES...................................... 40
Automatic Investment Plan......................... 41
Prototype Retirement Plan for Employers
and Self-Employed Individuals................... 41
Individual Retirement Account..................... 43
Simplified Employee Pension Plans (SEP-IRA)....... 44
DIVIDENDS, DISTRIBUTIONS AND TAX STATUS................ 46
PORTFOLIO BROKERAGE.................................... 52
PORTFOLIO TURNOVER..................................... 56
ORGANIZATION........................................... 57
CUSTODIAN.............................................. 60
TRANSFER AGENT......................................... 60
INDEPENDENT AUDITORS................................... 60
APPENDIX............................................... 61
GLOSSARY............................................... 64
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THE FUNDS' INVESTMENT OBJECTIVE AND POLICIES
(See "Investment Objectives and Policies," and "Risk
Considerations and Other Investment Practices and Policies" in the
Prospectuses.)
All capitalized terms not defined herein shall have the meanings
set forth in the Prospectuses.
The securities in which each Fund may invest and certain other
investment policies are described in the Funds' Prospectuses. This
Statement of Additional Information should be read in conjunction with
the Prospectuses.
The Appendix to this Statement of Additional Information contains
a description of the quality categories of corporate bonds in which the
Funds may invest, and a Glossary describing some of the Funds'
investments.
Quantitative Methodology
To seek to achieve their respective investment objectives, each of
the Core Large-Cap Stock Fund ("Large-Cap Fund") and the Core Small-Cap
Stock Fund ("Small-Cap Fund") under normal market conditions, invests
in a portfolio of securities that are considered more "efficient" than
the Standard & Poor's 500 Stock Index (the "S&P 500") in the case of
the Large-Cap Fund and the Russell 2000 Index (the "Russell 2000") in
the case of the Small-Cap Fund. The other Funds seek to achieve similar
results with respect to the amount of their assets allocated to
Large-Cap, Medium-Cap and Small-Cap securities (as described in the
Prospectus applicable to such Funds). The Benchmarks for the Large-Cap,
Medium-Cap and Small-Cap Subcategories are the S&P 500, the Standard &
Poor's 400 MidCap Index (the "S&P 400") and the Russell 2000,
respectively.
An efficient portfolio is one that has the maximum expected return
for any level of risk. The efficient mix of securities is established
mathematically, taking into account the expected return and volatility
of returns for each security in a given universe, as well as the
historical price relationships between the different securities in the
universe.
To implement this strategy with respect to the Large-Cap and
Small-Cap Funds and the Subcategories of the other Funds, Weiss, Peck &
Greer, L.L.C. (the "Adviser" or "WPG") compiles the historical price
data of all securities which comprise the applicable Benchmark. The
Adviser may eliminate a security from consideration if it considers the
security to have an inadequate or misleading price history. Using this
historical price data,
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the Adviser constructs and analyzes a complete matrix of all the
possible price relationships between the securities in the applicable
Benchmark.
Using a sophisticated software program that incorporates risk
reduction techniques developed by investment professionals of the
Adviser, the Adviser constructs a number of portfolios with respect to
the Large-Cap and Small-Cap Funds and the Subcategories, which
portfolios are believed to have optimized risk/reward ratios. From
these alternative portfolios, the Adviser selects the combination of
securities, together with their appropriate weightings, that the
Adviser believes will comprise the optimal portfolio for the Large-Cap
and Small-Cap Funds and the Subcategories. The respective optimal
portfolios for the Large-Cap and Small-Cap Funds and the Subcategories
are designed to have returns greater than, but highly correlated with,
the return of the applicable Benchmarks.
After each optimal portfolio is constructed, it may be rebalanced
to maintain the original optimal weights. The Adviser will sell a
security when the security's weight within an actual portfolio becomes
significantly greater than its optimal weight. The Adviser will buy a
security when the security's weight within an actual portfolio becomes
significantly less than its optimal weight. The Adviser repeats the
entire optimization process at least semi-annually, at which point a
new portfolio is constructed with respect to the Large-Cap and
Small-Cap Funds and the Subcategories adding the most recent historical
data, and deleting the oldest data. When a security is removed from a
Benchmark, it will not necessarily be removed from the Funds'
portfolios within a predetermined length of time.
The Adviser's research personnel will monitor and occasionally
make changes in the way the optimal portfolios are constructed or
traded. Such changes may include determining better ways to eliminate
issues from consideration in the matrix, improving the manner in which
the matrix is calculated, altering constraints in the optimization
process and effecting changes in trading procedure (to reduce
transaction costs or to enhance the effects of rebalancing). Any such
changes are intended to be consistent with the basic philosophy of
seeking higher returns with respect to each of the Large-Cap and
Small-Cap Funds and each Subcategory than those that could be obtained
by investing directly in all the stocks of each Benchmark. Investors
should be aware that no quantitative methodology or technical analysis,
including the Adviser's, has ever been proven to provide enhanced
investment return and reduced investment risk in actual long-term
portfolio results.
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INVESTMENT TECHNIQUES
The following description of the Funds' investment techniques
supplements the discussion contained in the Prospectuses. (See
"Risk Considerations and Other Investment Practices and Policies"
in the Prospectuses).
Repurchase Agreements
Each Fund may enter into repurchase agreements with banks,
broker-dealers or other financial institutions in order to generate
additional current income. A repurchase agreement is an agreement under
which a Fund acquires a security from a seller subject to resale to the
seller at an agreed upon price and date. The resale price reflects an
agreed upon interest rate effective for the time period the security is
held by a Fund. The repurchase price may be higher than the purchase
price, the difference being income to the Fund, or the purchase and
repurchase price may be the same, with interest at a stated rate due to
the Fund together with the repurchase price on repurchase. In either
case, the income to the Fund is unrelated to the interest rate on the
security. Typically, repurchase agreements are in effect for one week
or less, but may be in effect for longer periods of time. Repurchase
agreements of more than one week's duration are subject to each Fund's
limitation on investments in illiquid securities.
Repurchase agreements are considered by the Securities and
Exchange Commission (the "SEC") to be loans by the purchaser
collateralized by the underlying securities. In an attempt to reduce
the risk of incurring a loss on a repurchase agreement, the Funds will
generally enter into repurchase agreements only with domestic banks
with total assets in excess of one billion dollars, primary dealers in
U.S. Government securities reporting to the Federal Reserve Bank of New
York or broker-dealers approved by the Trust's Board of Trustees, with
respect to securities of the type in which the Funds may invest. The
Adviser will monitor the value of the underlying securities throughout
the term of the agreement to ensure that their market value always
equals or exceeds the agreed-upon repurchase price to be paid to a
Fund. Each Fund will maintain a segregated account with its custodian,
Boston Safe Deposit and Trust Company (the "Custodian"), or a
subcustodian for the securities and other collateral, if any, acquired
under a repurchase agreement for the term of the agreement.
In addition to the risk of the seller's default or a decline in
value of the underlying security (see "Risk Considerations and Other
Investment Practices and Policies -- Repurchase Agreements" in the
Prospectuses), a Fund also might incur disposition costs in connection
with liquidating the underlying securities. If the
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seller becomes insolvent and subject to liquidation or reorganization
under the Bankruptcy Code or other laws, a court may determine that the
underlying security is collateral for a loan by a Fund not within the
control of that Fund and therefore subject to sale by the seller's
trustee in bankruptcy. Finally, it is possible that a Fund may not be
able to perfect its interest in the underlying security and may be
deemed an unsecured creditor of the seller. While the Trust
acknowledges these risks, it is expected that they can be controlled
through careful monitoring procedures.
Forward Commitment, Delayed Delivery and When-Issued Transactions
Each Fund may purchase securities on a when-issued, delayed
delivery or forward commitment basis. Forward commitment and
when-issued transactions involve a commitment by the Fund to purchase
or sell securities at a future date (ordinarily one or two months
later). The price of the underlying securities (usually expressed in
terms of yield) and the date when the securities will be delivered and
paid for (the settlement date) are fixed at the time the transaction is
negotiated. When-issued purchases and forward commitments are
negotiated directly with the other party, and such commitments are not
traded on exchanges. A Fund will not enter into such transactions for
the purpose of leverage.
When-issued purchases and forward commitments enable a Fund to
lock in what is believed to be an attractive price or yield on a
particular security for a period of time, regardless of future changes
in interest rates. For instance, in periods of rising interest rates
and falling prices, a Fund might sell securities it owns on a forward
commitment basis to limit its exposure to falling prices. In periods of
falling interest rates and rising prices, a Fund might sell securities
it owns and purchase the same or a similar security on a when-issued or
forward commitment basis, thereby obtaining the benefit of currently
higher yields.
The value of securities purchased on a when-issued or forward
commitment basis and any subsequent fluctuations in their value are
reflected in the computation of the Fund's net asset value starting on
the date of the agreement to purchase the securities, and the Fund is
subject to the rights and risks of ownership of the securities on that
date. The Fund does not earn interest on the securities it has
committed to purchase until they are paid for and delivered on the
settlement date. When the Fund makes a forward commitment to sell
securities it owns, the proceeds to be received upon settlement are
included in the Fund's assets. Fluctuations in the market value of the
underlying securities are not reflected in the Fund's net asset value
as long as the commitment to sell remains in effect. Settlement of
when-issued
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purchases and forward commitment transactions generally takes place
within two months after the date of the transaction, but the Fund may
agree to a longer settlement period.
A Fund will make commitments to purchase securities on a
when-issued basis or to purchase or sell securities on a forward
commitment basis only with the intention of completing the transaction
and actually purchasing or selling the securities. If deemed advisable
as a matter of investment strategy, however, a Fund may dispose of or
renegotiate a commitment after it is entered into. A Fund also may sell
securities it has committed to purchase before those securities are
delivered to the Fund on the settlement date. The Funds may realize a
capital gain or loss in connection with these transactions.
When a Fund purchases securities on a when-issued or forward
commitment basis, the Custodian will maintain in a segregated account
securities having a value (determined daily) at least equal to the
amount of the Fund's purchase commitments. In the case of a forward
commitment to sell portfolio securities, the Custodian will hold the
portfolio securities themselves in a segregated account while the
commitment is outstanding. These procedures are designed to ensure that
the Fund will maintain sufficient assets at all times to cover its
obligations under when-issued purchases and forward commitments.
Loans of Portfolio Securities
Each Fund may seek to increase its income by lending portfolio
securities. Under present regulatory policies, such loans may be made
to financial institutions, such as broker-dealers, and would be
required to be secured continuously by collateral in cash, cash
equivalents or U.S. Government securities maintained on a current basis
at an amount at least equal to the market value of the securities
loaned. See "Risk Considerations and Other Investment Practices and
Policies --Lending of Portfolio Securities" in the Prospectuses. The
rules of the New York Stock Exchange ("NYSE") give the Fund the right
to call a loan and obtain the securities loaned at any time on five
days' notice. For the duration of a loan, the Fund would receive the
equivalent of the interest or dividends paid by the issuer on the
securities loaned and would also receive compensation from the
investment of the collateral. The Fund would not, however, have the
right to vote any securities having voting rights during the existence
of the loan, but the Fund would call the loan in anticipation of an
important vote to be taken among holders of the securities or of the
giving or withholding of their consent on a material matter affecting
the investment. As with other extensions of credit, there are risks of
delay in recovery or even loss of rights in the collateral should the
borrower of the
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securities fail financially. However, the loans would be made only to
firms deemed by the Adviser to be of good standing, and when, in the
judgment of the Adviser, the consideration which can be earned
currently from securities loans of this type justifies the attendant
risk. If the Adviser determines to make securities loans, it is
intended that the value of the securities loaned would not exceed 33
1/3% of the value of the total assets of the Fund.
At the present time the staff of the SEC does not object if an
investment company pays reasonable negotiated fees to its custodian in
connection with loaned securities as long as such fees are pursuant to
a contract approved by the investment company's trustees.
Options
Each Fund currently intends to limit its options transactions
during the current fiscal year so that no more than 5% of the Fund's
net assets will be at risk as a result of such transactions.
Writing Covered Call Options on Securities. Each Fund may write
(sell) covered call options on securities ("calls") at such time or
times as the Adviser shall determine to be appropriate. When a Fund
writes a call, it receives a premium and sells to the purchaser the
right to buy the underlying security at any time during the call period
(usually between three and nine months) at a fixed exercise price
regardless of market price changes during the call period. If the call
is exercised, the Fund forgoes any gain but is not subject to any loss
on any change in the market price of the underlying security relative
to the exercise price. A Fund will write such options subject to any
applicable limitations or restrictions imposed by law.
Purchasing Call Options. Each Fund may purchase a call option when
the Adviser believes the value of the underlying security will rise or
to effect a "closing purchase transaction." A Fund will realize a
profit (or loss) from a closing purchase transaction if the amount paid
to purchase a call is less (or more) than the amount received from the
sale thereof.
Put Options. Each Fund may also write and purchase put options on
securities ("puts"). A put written by a Fund obligates it to purchase
the specified security at a specified price if the option is exercised
at any time before the expiration date. All put options written by a
Fund would be covered. A Fund may purchase a put option when the
Adviser believes the value of the underlying security will decline. A
Fund may purchase put options
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on securities in its portfolio in order to hedge against a decline in
the value of such securities ("protective puts").
The purpose of writing covered put and call options is to hedge
against fluctuations in the market value of a Fund's portfolio
securities. Each Fund may purchase or sell call and put options on
securities indices for a similar purpose. Such a hedge is limited to
the degree that the price change of the underlying security is in an
amount which is less than the difference between the option premium
received by the Fund and the option strike price. To the extent that
the underlying security's price change exceeds this amount, written put
and call options will not provide an effective hedge.
A written call option would be covered if the Fund owns the
security underlying the option. A written put option may be covered by
maintaining in a segregated account cash or liquid securities rated
within one of the top three ratings categories by Moody's Investors
Service, Inc. ("Moody's") or Standard & Poor's Ratings Group ("Standard
& Poor's"), or, if unrated, deemed by the Adviser to be of comparable
credit quality ("High-Grade Debt Securities"). While this will ensure
that the Fund will have sufficient assets to meet its obligations under
the option contract should it be exercised, it does not reduce the
potential loss to the Fund should the value of the underlying security
decrease and the option be exercised. A written call option or put
option may also be covered by purchasing an offsetting option or any
other option which, by virtue of its exercise price or otherwise,
reduces the Fund's net exposure on its written option position.
Further, instead of "covering" a written call option, the Fund may
simply maintain cash or High-Grade Debt Securities in a segregated
account in amounts sufficient to ensure that it is able to meet its
obligations under the written call should it be exercised. This method
does not reduce the potential loss to the Fund should the value of the
underlying security increase and the option be exercised.
Options on Securities Indices. Each Fund may purchase call and put
options on securities 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 or to seek
to increase total return. Such Fund's net assets will be at risk as a
result of such transactions. Unlike a stock option, which gives the
holder the right to purchase or sell a specified stock at a specified
price, an option on a securities index gives the holder the right to
receive a cash "exercise settlement amount" equal to (i) the difference
between the exercise price of the option and the value of the
underlying securities index on the exercise date multiplied by (ii) a
fixed "index multiplier."
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A securities index fluctuates with changes in the market values of
the stocks included in the index. For example, some securities index
options are based on a broad market index such as the S&P 500 or the
Value Line Composite Index, or a narrower market index such as the
Standard & Poor's 100 Stock Index ("S&P 100"). Indices may also be
based on an industry or market segment such as the AMEX Oil and Gas
Index or the Computer and Business Equipment Index. Options on
securities indices are currently traded on the Chicago Board Options
Exchange, the NYSE and the American Stock Exchange.
The Funds may purchase put options in order to hedge against an
anticipated decline in stock market prices that might adversely affect
the value of a Fund's portfolio securities. If a Fund purchases a put
option on a securities index, the amount of the payment it would
receive upon exercising the option would depend on the extent of any
decline in the level of the securities index below the exercise price.
Such payments would tend to offset a decline in the value of the Fund's
portfolio securities. However, if the level of the securities index
increases and remains above the exercise price while the put option is
outstanding, a Fund will not be able to profitably exercise the option
and will lose the amount of the premium and any transaction costs. Such
loss may be partially or wholly offset by an increase in the value of a
Fund's portfolio securities.
The Funds may purchase call options on securities indices in order
to participate in an anticipated increase in stock market prices or to
offset anticipated price increases on securities that it intends to buy
in the future. If a Fund purchases a call option on a securities index,
the amount of the payment it receives upon exercising the option
depends on the extent of any increase in the level of the securities
index above the exercise price. Such payments would in effect allow the
Fund to benefit from stock market appreciation even though it may not
have had sufficient cash to purchase the underlying stocks. Such
payments may also offset increases in the price of stocks that the Fund
intends to purchase. If, however, the level of the securities index
declines and remains below the exercise price while the call option is
outstanding, a Fund will not be able to exercise the option profitably
and will lose the amount of the premium and transaction costs. Such
loss may be partially or wholly offset by a reduction in the price a
Fund pays to buy additional securities for its portfolio.
The Funds may cover call options on a securities index by owning
securities whose price changes are expected to be similar to those of
the underlying index or by having an absolute and immediate right to
acquire such securities without additional cash consideration (or for
additional cash consideration held in a
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segregated account by its custodian) upon conversion or exchange of
other securities in their respective portfolio. The Funds may also
cover call and put options on a securities index by maintaining cash or
High-Grade Debt Securities with a value equal to the exercise price in
a segregated account with its custodian or by using the other methods
described above. When purchased, options on securities indices may not
enable the Fund to hedge effectively against interest rate or stock
market risk if the stocks comprising the index subject to the option
are not highly correlated with the composition of the Fund's portfolio.
Moreover, the ability to hedge effectively depends upon the ability to
predict movements in interest rates or the stock market. Some options
on securities indices may not have a broad and liquid secondary market,
in which case options purchased by the Fund may not be closed out and
the Fund could lose more than its option premium when the option
expires.
The purchase and sale of option contracts is a highly specialized
activity which involves investment techniques and risks different from
those ordinarily associated with investment companies. It should be
noted that transaction costs relating to options transactions may tend
to be higher than the transaction costs with respect to transactions in
securities. In addition, if a Fund were to write a substantial number
of option contracts which are exercised, the portfolio turnover rate of
that Fund could increase.
Securities for each Fund's portfolio will continue to be bought
and sold solely on the basis of appropriateness to fulfill the
applicable Fund's investment objective. Option transactions can be
used, among other things, to increase the return on portfolio
positions.
Futures Transactions
Each Fund may purchase and sell futures contracts for hedging
purposes and to seek to increase total return. A futures contract is an
agreement between two parties to buy and sell a security for a set
price at a future time. Each Fund may also enter into index-based
futures contracts and interest rate futures contracts. Futures
contracts on indices provide for a final cash settlement on the
expiration date based on changes in the relevant index. All futures
contracts are traded on designated "contract markets" licensed and
regulated by the Commodity Futures Trading Commission (the "CFTC")
which, through their clearing corporations, guarantee performance of
the contracts.
Generally, if market interest rates increase, the value of
outstanding debt securities declines (and vice versa). If a Fund holds
long-term U.S. Government securities and the Adviser
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anticipates a rise in long-term interest rates, it could, in lieu of
disposing of its portfolio securities, enter into futures contracts for
the sale of similar long-term securities. If rates increased and the
value of a Fund's portfolio securities declined, the value of that
Fund's futures contract would increase, thereby protecting that Fund by
preventing net asset value from declining as much as it otherwise would
have. If the Adviser expects long-term interest rates to decline, a
Fund might enter into futures contracts for the purchase of long-term
securities, so that it could offset anticipated increases in the cost
of such securities it intends to purchase while continuing to hold
higher-yielding short-term securities or waiting for the long-term
market to stabilize. Similar techniques may be used by the Funds to
hedge stock market risk.
Each Fund also may purchase and sell listed put and call options
on futures contracts. An option on a futures contract gives the
purchaser the right, in return for the premium paid, to assume a
position in a futures contract (a long position if the option is a call
and a short position if the option is a put), at a specified exercise
price at any time during the option period. When an option on a futures
contract is exercised, settlement is effected by the payment of cash
representing the difference between the current market price of the
futures contract and the exercise price of the option. The risk of loss
to a Fund purchasing an option on a futures contract is limited to the
premium paid for the option. A Fund may purchase put options on
interest rate futures contracts in lieu of, and for the same purpose
as, its sale of a futures contract: to hedge a long position in the
underlying futures contract.
The purchase of call options on interest rate futures contracts is
intended to serve the same purpose as the actual purchase of the
futures contract.
A Fund would write a call option on a futures contract in order to
hedge against a decline in the prices of the securities underlying the
futures contracts. If the price of the futures contract at expiration
is below the exercise price, the applicable Fund would retain the
option premium, which would offset, in part, any decline in the value
of its portfolio securities.
The writing of a put option on a futures contract is similar to
the purchase of the futures contract, except that, if market price
declines, a Fund would pay more than the market price for the
underlying securities. The net cost to a Fund will be reduced, however,
by the premium received on the sale of the put, less any transaction
costs. See "Dividends, Distributions and Tax Status" below.
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Each Fund may engage in "straddle" transactions, which involve the
purchase or sale of combinations of call and put options on the same
underlying securities or futures contracts. A Fund will not purchase
calls or puts, in connection with such straddle transactions, if the
aggregate premiums paid for such options will exceed 10% of its total
assets.
In purchasing and selling futures contracts and related options,
each Fund intends to comply with rules and interpretations of the CFTC
and of the SEC.
Limitations on the Use of Futures Contracts and Options on Futures.
Each Fund will engage in futures and related options transactions only
for hedging purposes in accordance with CFTC regulations or to seek to
increase total return to the extent permitted by such regulations. The
Fund will determine that the price fluctuations in the futures
contracts and options on futures contracts used for hedging purposes
are substantially related to price fluctuations in securities held by
the Fund or which it expects to purchase. Except as stated below, a
Fund's futures transactions will be entered into for traditional
hedging purposes - that is, futures contracts will be sold to protect
against a decline in the price of securities that the Fund owns, or
futures contracts will be purchased to protect the Fund against an
increase in the price of securities it intends to purchase. As evidence
of this hedging intent, the Fund expects that on 75% or more of the
occasions on which it takes a long futures (or option) position
(involving the purchase of futures contracts), a Fund will have
purchased, or will be in the process of purchasing, equivalent amounts
of related securities in the cash market at the time when the futures
(or option) position is closed out. However, in particular cases, when
it is economically advantageous for a Fund to do so, a long futures
position may be terminated (or an option may expire) without the
corresponding purchase of securities. As an alternative to compliance
with the bona fide hedging definition, a CFTC regulation permits a Fund
to elect to comply with a different test, under which the sum of the
amounts of initial margin deposits on its existing futures positions
and premiums paid for options on futures entered into for the purpose
of seeking to increase total return (net of the amount the positions
were "in the money" at the time of purchase) would not exceed 5% of
that Fund's net assets, after taking into account unrealized gains and
losses on such positions. A Fund will engage in transactions in futures
contracts and related options only to the extent such transactions are
consistent with the requirements of the Internal Revenue Code of 1986,
as amended (the "Code"), for maintaining its qualification as a
regulated investment company for Federal income tax purposes (see
"Dividends, Distributions, and Tax Status").
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A Fund will be required, in connection with transactions in
futures contracts and the writing of options on futures contracts, to
make margin deposits, which will be held by a Fund's custodian for the
benefit of the merchant through whom a Fund engages in such futures and
options transactions. In the case of futures contracts or options
thereon requiring the Fund to purchase securities, the Fund must
segregate cash or High-Grade Debt Securities in an account maintained
by the Custodian to cover such contracts and options. Cash or
High-Grade Debt Securities required to be in a segregated account will
be marked to market daily.
Special Considerations and Risks Related to Options and Futures
Transactions
Exchange markets in options on certain securities are a relatively
new and untested concept. It is impossible to predict the amount of
trading interest that may exist in such options, and there can be no
assurance that viable exchange markets will develop or continue.
The exchanges will not continue indefinitely to introduce new
expirations to replace expiring options on particular issues because
trading interest in many issues of longer duration tends to center on
the most recently auctioned issues. The expirations introduced at the
commencement of options trading on a particular issue will be allowed
to run out, with the possible addition of a limited number of new
expirations as the original expirations expire. Options trading on each
issue of securities with longer durations will thus be phased out as
new options are listed on more recent issues, and a full range of
expirations will not ordinarily be available for every issue on which
options are traded.
In the event of a shortage of the underlying securities
deliverable on exercise of an option, the Options Clearing Corporation
has the authority to permit other, generally comparable, securities to
be delivered in fulfillment of option exercise obligations. If the
Options Clearing Corporation exercises its discretionary authority to
allow such other securities to be delivered, it may also adjust the
exercise prices of the affected options by setting different prices at
which otherwise ineligible securities may be delivered. As an
alternative to permitting such substitute deliveries, the Options
Clearing Corporation may impose special exercise settlement procedures.
The hours of trading for options on securities may not conform to
the hours during which the underlying securities are traded. To the
extent that the markets for underlying securities
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close before the options markets, significant price and rate movements
can take place in the options markets that cannot be reflected in the
underlying markets. In addition, to the extent that the options markets
close before the markets for the underlying securities, price and rate
movements can take place in the underlying markets that cannot be
reflected in the options markets.
Prior to exercise or expiration, an option position can be
terminated only by entering into a closing purchase or sale
transaction. This requires a secondary market on an exchange for call
or put options of the same series. Similarly, positions in futures may
be closed out only on an exchange which provides a secondary market for
such futures. A Fund will enter into an option or futures position only
if there appears to be a liquid secondary market for such options or
futures. However, there can be no assurance that a liquid secondary
market will exist for any particular call or put option or futures
contract at any specific time. Thus, it may not be possible to close an
option or futures position. In the event of adverse price movements, a
Fund would continue to be required to make daily cash payments of
maintenance margin for futures contracts or options on futures
contracts position written by that Fund. A Fund may have to sell
portfolio securities at a time when it may be disadvantageous to do so
if it had insufficient cash to meet the daily maintenance margin
requirements. In addition, a Fund may be required to take or make
delivery of the instruments underlying interest rate futures contracts
it holds. The inability to close options and futures positions also
could have an adverse impact on a Fund's ability to effectively hedge
its portfolios.
Each of the exchanges has established limitations governing the
maximum number of call or put options on the same underlying security
(whether or not covered) which may be written by a single investor,
whether acting alone or in concert with others (regardless of whether
such options are written on the same or different exchanges or are held
or written on one or more accounts or through one or more brokers). An
exchange may order the liquidation of positions found to be in
violation of applicable trading limits and it may impose other
sanctions or restrictions. The Trust and other clients advised by the
Adviser and its affiliates may be deemed to constitute a group for
these purposes. In light of these limits, the Trustees of the Trust
(the "Trustees") may determine at any time to restrict or terminate the
Funds' transactions in options. The Adviser does not believe that these
trading and position limits will have any adverse impact on the
investment techniques for hedging the Trust's portfolios.
Over-the-counter ("OTC") options are purchased from or sold to
securities dealers, financial institutions or other parties
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("Counterparties") through direct agreement with the Counterparty. In
contrast to exchange listed options, which generally have standardized
terms and performance mechanics, all the terms of an OTC option,
including such terms as method of settlement, term, exercise price,
premium, guarantees and security, are set by negotiation of the
parties.
Unless the parties provide for it, there is no central clearing or
guaranty function in the OTC option market. As a result, if the
Counterparty fails to make delivery of the security or other instrument
underlying an OTC option it has entered into with the Fund or fails to
make a cash settlement payment due in accordance with the terms of that
option, the Fund will lose any premium it paid for the option as well
as any anticipated benefit of the transaction. Accordingly, the Adviser
must assess the creditworthiness of each such Counterparty or any
guarantor or credit enhancement of the Counterparty's credit to
determine the likelihood that the terms of the OTC option will be
satisfied. The Fund will engage in OTC option transactions only with
U.S. Government securities dealers recognized by the Federal Reserve
Bank of New York as "primary dealers", or broker dealers, domestic or
foreign banks or other financial institutions which have received,
combined with any credit enhancements, a long-term debt rating of A
from Standard & Poor's or Moody's or an equivalent rating from any
other nationally recognized statistical rating organization ("NRSRO")
or that issue long-term debt determined to be of equivalent credit
quality by the Adviser. The staff of the SEC currently takes the
position that OTC options purchased by a Fund, and portfolio securities
"covering" the amount of a Fund's obligation pursuant to an OTC option
sold by it (the cost of the sell-back plus the in-the-money amount, if
any) are illiquid, and are subject to each Fund's limitation on
investing no more than 15% of its assets in illiquid securities.
However, for options written with "primary dealers" in U.S. Government
securities pursuant to an agreement requiring a closing transaction at
a formula price, the amount which is considered to be illiquid may be
calculated by reference to a formula price.
Utilization of futures transactions involves the risk of imperfect
correlation in movements in the price of futures contracts and
movements in the price of the securities which are the subject of the
hedge. If the price of the futures contract moves more or less than the
price of the security, a Fund will experience a gain or loss which will
not be completely offset by movements in the price of the securities
which are the subject of the hedge. There is also a risk of imperfect
correlation where the securities underlying futures contracts have
different maturities than the portfolio securities being hedged.
Transactions in options on futures contracts involve similar risks.
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<PAGE>
Privately Issued Mortgage-Backed Securities
Each of the Tomorrow Post-Retirement Fund (the "Post-Retirement
Fund"), Tomorrow Long-Term Retirement Fund (the "Long-Term Fund"),
Tomorrow Mid-Term Retirement Fund (the "Mid-Term Fund") and Tomorrow
Short-Term Retirement Fund (the "Short-Term Fund") may invest in
mortgage-backed securities issued by trusts or other entities formed or
sponsored by private originators of and institutional investors in
mortgage loans and other non-governmental entities (or representing
custodial arrangements administered by such institutions). These
private originators and institutions include savings and loan
associations, mortgage bankers, commercial banks, insurance companies,
investment banks and special purpose subsidiaries of the foregoing.
Privately issued mortgage-backed securities are generally backed
by pools of conventional (i.e., non-government guaranteed or insured)
mortgage loans. Since such mortgage-backed securities normally are not
guaranteed by an entity having the credit standing of Ginnie Mae,
Fannie Mae or Freddie Mac, in order to receive a high quality rating
from the rating organizations (e.g., Standard & Poor's or Moody's),
they often are structured with one or more types of "credit
enhancement." Such credit enhancement falls into two categories: (1)
liquidity protection and (2) protection against losses resulting after
default by a borrower and liquidation of the collateral (e.g., sale of
a house after foreclosure). Liquidity protection refers to the payment
of cash advances to holders of mortgage-backed securities when a
borrower or an underlying mortgage fails to make its monthly payment on
time. Protection against losses resulting after default and liquidation
is designed to cover losses resulting when, for example, the proceeds
of a foreclosure sale are insufficient to cover the outstanding amount
on the mortgage. Such protection may be provided through guarantees,
insurance policies or letters of credit, through various means of
structuring the securities or through a combination of such approaches.
Examples of credit enhancement arising out of the structure of the
transaction include "senior-subordinated securities" (multiple class
securities with one or more classes entitled to receive payment before
other classes, with the result that defaults on the underlying
mortgages are borne first by the holders of the subordinated class),
creation of "spread accounts" or "reserve funds" (where cash or
investments are held in reserve against future losses) and
"over-collateralization" (where the scheduled payments on the
underlying mortgages in a pool exceeds the amount required to be paid
on the mortgage-backed securities). The degree of credit enhancement
for a particular issue of mortgage-backed securities is based on the
level of credit risk
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<PAGE>
associated with the particular mortgages in the related pool. Losses on
a pool in excess of anticipated levels could nevertheless result in
losses to security holders since credit enhancement rarely covers every
dollar owed on a pool. See the Funds' Prospectuses for a further
description of mortgage-backed securities.
Risks Associated with Specific Types of Derivative Securities
Each of the Post-Retirement Fund, Long-Term Fund, Mid-Term Fund
and Short-Term Fund may invest in floating rate securities based on the
Cost of Funds Index ("COFI floaters"), other "lagging rate" floating
rate securities, floating rate securities that are subject to a maximum
interest rate ("capped floaters"), and Mortgage-Backed Securities
purchased at a discount. The primary risks associated with these
derivative debt securities are the potential extension of average life
and/or depreciation due to rising interest rates.
Inverse Floating Rate Instruments
Each of the Post-Retirement Fund, Long-Term Fund, Mid-Term Fund
and Short-Term Fund may invest in specific types of inverse floating
rate municipal bonds. The interest rate on inverse floaters resets in
the opposite direction from the market rate of interest to which the
inverse floater is indexed. An inverse floater may be considered to be
leveraged to the extent that its interest rate varies by a magnitude
that exceeds the magnitude of the change in the index rate of interest.
The higher degree of leverage inherent in inverse floaters is
associated with greater volatility in their market values.
Participation Interests
Each Fund may purchase from banks participation interests in all
or part of specific holdings of debt obligations. Each participation
interest is backed by an irrevocable letter of credit or guarantee of
the selling bank that the Adviser has determined meets the prescribed
quality standards of each Fund. Thus, even if the credit of the issuer
of the debt obligation does not meet the quality standards of a Fund,
the credit of the selling bank will. Each Fund will have the right to
sell the participation interest back to the bank after seven days'
notice for the full principal amount of a Fund's interest in the debt
obligation plus accrued interest, but only (1) as required to provide
liquidity to that Fund, (2) to maintain the quality standards of each
Fund's investment portfolio or (3) upon a default under the terms of
the debt obligation. The selling bank may receive a fee from a Fund in
connection with the arrangement.
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<PAGE>
Constant Duration Methodology
The Adviser may utilize constant duration methodology in
purchasing and selling U.S. Government and other fixed-income
securities on behalf of the Funds. This methodology consists of taking
advantage of interest rate increases by purchasing a precise amount of
longer maturity securities in order to keep portfolio risk constant.
Conversely, as interest rates fall, the Adviser takes advantage of
increases in prices by selling a precise quantity of securities
purchased when rates were higher. This methodology permits interest
rate volatility to benefit the portfolio while avoiding the risk
involved in attempting to forecast interest rates.
Restricted and Illiquid Securities
Each Fund may invest up to 15% of its total assets in "restricted
securities" (i.e., securities that would be required to be registered
prior to distribution to the public), including restricted securities
eligible for resale to certain institutional investors pursuant to Rule
144A of the 1933 Act. In addition, each Fund may invest up to 15% of
its net assets in illiquid investments, which includes securities that
are not readily marketable, repurchase agreements maturing in more than
seven days and privately issued stripped mortgage-backed securities.
The Trustees have adopted guidelines and delegated to the Adviser the
daily function of determining and monitoring the liquidity of
restricted securities. The Trustees, however, retain sufficient
oversight and are ultimately responsible for the determinations.
See "Investment Restrictions."
Since it is not possible to predict with assurance exactly how the
market for restricted securities sold and offered under Rule 144A will
develop, the Trustees will carefully monitor each Fund's investments in
these securities, focusing on such important factors, among others, as
valuation, liquidity and availability of information. This investment
practice could have the effect of increasing the level of illiquidity
in the Funds to the extent that qualified institutional buyers become
for a time uninterested in purchasing these restricted securities.
Notwithstanding the foregoing investment restrictions and as further
described below, each Fund may invest all or part of its assets in an
open-end investment company with substantially the same investment
objective, policies and restrictions as each Fund.
Other Investment Companies
Each Fund, subject to authorization by the Trustees, may invest
all of its investable assets in the securities of a single open-end
investment company (a "Portfolio"). If authorized by the Trustees, a
Fund would seek to achieve its investment objective by investing in a
Portfolio, which Portfolio would invest in a portfolio of securities
that complies with the Fund's investment
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<PAGE>
objectives, policies and restrictions. The Trustees do not intend
to authorize investing in this manner at this time.
Each Fund may invest up to 10% of its total assets, calculated at
the time of purchase, in the securities of other investment companies
(other than those affiliated with WPG) but may not invest more than 5%
of its total assets in the securities of any one investment company or
acquire more than 3% of the voting securities of any investment
company. Investments in investment companies will result in duplication
of certain expenses, since the Fund will indirectly bear its
proportionate share of any expenses paid by investment companies in
which it invests in addition to the expenses paid by the Fund. However,
to the extent that a Fund invests in an open-end registered investment
company, the Adviser will not impose its advisory fees on the portion
of the Fund's assets so invested.
CALCULATION OF THE FUNDS' RETURNS
Total Return
The average annual total return with respect to Adviser Class
shares of each Fund is determined for a particular period by
calculating the actual dollar amount of the investment return on a
$1,000 investment in Adviser Class shares of the Fund made at the net
asset value of such shares at the beginning of the period, and then
calculating the annual compounded rate of return which would produce
that amount. Total return for a period of one year is equal to the
actual return of the Fund during that period. The following formula
describes the calculation:
n
ERV = P(1+T)
Where:
P = a hypothetical initial investment of $1,000.
T = average annual total return with respect to Adviser
Shares.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000
investment made at the beginning of the indicated
period.
This calculation assumes that (i) all dividends and distributions are
reinvested at net asset value on the reinvestment dates during the
period and (ii) all recurring fees are included for applicable periods.
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<PAGE>
Each Fund may illustrate in advertisements and sales literature
the average annual total return and cumulative total return for several
time periods throughout the Fund's life based on an assumed initial
investment of $1,000. Any such cumulative total return for a Fund will
assume the reinvestment of all income dividends and capital gains
distributions in Adviser Class shares for the indicated periods and
will include all recurring fees.
Yield
The 30 day yield quotation with respect to Adviser Class shares of
each of the Long-Term Fund, Mid-Term Fund, Short-Term Fund and
Post-Retirement Fund is computed by dividing the net investment income
for the period with respect to Adviser Class shares of that Fund by the
net asset value of each Adviser Class share on the last day of the
period, according to the following formula:
YIELD = 2[(a-b + 1)6-1]
---
cd
Where:
a = dividends and interest earned during the period.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of Adviser Class shares
outstanding during the period that were entitled to
receive dividends.
d = the offering price per Adviser Class share (net asset
value per share) on the last day of the period.
Return for a Fund is not fixed or guaranteed and will fluctuate
from time to time, unlike bank deposits or other investments which pay
a fixed yield or return for a stated period of time, and do not provide
a basis for determining future returns. Return is a function of
portfolio quality, composition, maturity and market conditions as well
as the expenses allocated each Fund. The return of a Fund may not be
comparable to other investment alternatives because of differences in
the foregoing variables and differences in the methods used to value
portfolio securities, compute expenses and calculate return.
Other Quotations, Comparisons, and General Information
From time to time, in advertisements, in sales literature, or in
reports to shareholders, the past performance of a Fund may be
illustrated and/or compared with that of other mutual funds with
similar investment objectives, and to stock or other relevant indices.
For example, total return of a Fund's classes may be compared to
averages or rankings prepared by Lipper Analytical Services, Inc., a
widely recognized independent service which
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<PAGE>
monitors mutual fund performance; the Morgan Stanley Europe, Australia,
Far East Index ("EAFE"), an unmanaged index of international stock
markets, the S&P 400, an unmanaged index of common stocks; the S&P 500,
an unmanaged index of common stocks; the Russell 2000, an unmanaged
index of common stocks; the Russell 3000 Index (the "Russell 3000"), an
unmanaged index of common stocks; or the Dow Jones Industrial Average,
an unmanaged index of common stocks of 30 industrial companies listed
on the New York Stock Exchange.
The S&P 500 is an unmanaged index of 500 common stocks which are
traded on the New York Stock Exchange, American Stock Exchange and the
Nasdaq National Market. The S&P 500 represents approximately 70% of the
total domestic U.S. equity market capitalization. The S&P 400 is an
unmanaged index of common stocks of 400 companies with mid-size market
capitalizations - $300 million to $5 billion. The S&P 500 and the S&P
400 are market value-weighted indices (shares outstanding times stock
price) in which each company's influence on the respective index is
directly proportional to its market value. The companies in the S&P 500
and the S&P 400 are selected from four major industry sectors:
industrials, utilities, financials and transportation. The 500
companies chosen for the S&P 500 are not the 500 largest companies in
terms of market value. Rather, the companies chosen by S&P for
inclusion in the S&P 500 tend to be leaders in important industries
within the U.S. economy. The Russell 2000 is an unmanaged index of 2000
common stocks of small capitalization companies. The Russell 2000 is
composed of the 2000 smallest companies with respect to capitalization
in the Russell 3000 and represents approximately 7% of the Russell 3000
total market capitalization. The Russell 3000 is an unmanaged index of
3000 common stocks of large United States companies with market
capitalizations ranging from approximately $60 million to $80 billion.
The Russell 3000 represents approximately 98% of the United States
equity market.
In addition, the performance of the classes of a Fund may be
compared to alternative investment or savings vehicles and/or to
indexes or indicators of economic activity, e.g., inflation or interest
rates. Performance rankings and listings reported in newspapers or
national business and financial publications, such as Barron's,
Business Week, Consumer's Digest, Consumer Reports, Financial World,
Forbes, Fortune, Investors Business Daily, Kiplinger's Personal Finance
Magazine, Money Magazine, the New York Times, Smart Money, USA Today,
U.S. News and World Report, The Wall Street Journal and Worth may also
be cited (if a Fund is listed in any such publication) or used for
comparison, as well as performance listings and rankings from various
other sources including Bloomberg Financial Systems, CDA/Wiesenberger
Investment Companies Service, Donoghue's Mutual Fund Almanac,
Investment
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<PAGE>
Company Data, Inc., Johnson's Charts, Kanon Bloch Carre & Co.,
Micropal, Inc., Morningstar, Inc., Schabacker Investment
Management and Towers Data Systems.
In addition, from time to time, quotations from articles from
financial publications, such as those listed above, may be used in
advertisements, in sales literature or in reports to shareholders of
the Funds.
The Funds may also present, from time to time, historical
information depicting the value of a hypothetical account in one or
more classes of a Fund since the Fund's inception.
In presenting investment results, the Funds may also include
references to certain financial planning concepts, including (a) an
investor's need to evaluate his financial assets and obligations to
determine how much to invest; (b) his need to analyze the objectives of
various investments to determine where and when to invest; and (c) his
need to analyze his time frame for future capital needs to determine
how long to invest. The investor controls these three factors, all of
which affect the use of investments in building assets. The Adviser's
agreement to limit each Fund's operating expenses will increase
investment performance.
INVESTMENT RESTRICTIONS
Each Fund has adopted the following fundamental investment
restrictions which may not be changed without approval of a majority of
the applicable Fund's outstanding voting securities. Under the 1940
Act, and as used in the Prospectuses and this SAI, a "majority of the
outstanding voting securities" requires the approval of the lesser of
(1) the holders of 67% or more of the shares of a Fund represented at a
meeting of the holders if more than 50% of the outstanding shares of
the Fund are present in person or by proxy or (2) the holders of more
than 50% of the outstanding shares of the Fund.
A Fund may not:
1. Issue senior securities, except as permitted by paragraphs 2,
5, and 6 below. For purposes of this restriction, the
issuance of shares of beneficial interest in multiple classes
or series, the deferral of trustees' fees, the purchase or
sale of options, futures contracts, forward commitments and
repurchase agreements entered into in accordance with the
Fund's investment policies or within the meaning of paragraph
5 below, are not deemed to be senior securities.
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<PAGE>
2. Borrow money, except (i) from banks for temporary or short-
term purposes or for the clearance of transactions in amounts
not to exceed 33 1/3% of the value of the Fund's total assets
(including the amount borrowed) taken at market value, (ii)
in connection with the redemption of Fund shares or to
finance failed settlements of portfolio trades without
immediately liquidating portfolio securities or other assets;
(iii) in order to fulfill commitments or plans to purchase
additional securities pending the anticipated sale of other
portfolio securities or assets and (iv) the Fund may enter
into reverse repurchase agreements and forward roll
transactions, but only if after each such borrowing there is
asset coverage of at least 300% as defined in the 1940 Act.
For purposes of this investment restriction, the deferral of
trustees' fees and investments in short sales, futures
contracts, options on futures contracts, securities or
indices and forward commitments shall not constitute
borrowing.
3. Act as an underwriter with respect to the securities of other
issuers, except to the extent that in connection with the
disposition of portfolio securities, the Fund may be deemed
to be an underwriter for purposes of the 1933 Act; provided,
however, that the Fund may invest all or part of its
investable assets in an open-end investment company with
substantially the same investment objective, policies and
restrictions as the Fund.
4. Purchase or sell real estate except that the Fund may (i) acquire
or lease office space for its own use, (ii) invest in securities
of issuers that invest in real estate or interests therein, (iii)
invest in securities that are secured by real estate or interests
therein, (iv) purchase and sell mortgage-related securities and
(v) hold and sell real estate acquired by the Fund as a result of
the ownership of securities.
5. Invest in commodities, except the Fund may purchase and sell
options on securities, securities indices and currency, futures
contracts on securities, securities indices and currency and
options on such futures, forward foreign currency exchange
contracts, forward commitments, securities index put or call
warrants and repurchase agreements entered into in accordance with
the Fund's investment policies.
6. Make loans, except that the Fund may (1) lend portfolio securities
in accordance with the Fund's investment policies up to 33 1/3% of
the Fund's total assets taken at market value, (2) enter into
repurchase agreements, and (3) purchase all or a portion of an
issue of debt securities, bank loan participation interests, bank
certificates of deposit,
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<PAGE>
bankers' acceptances, debentures or other securities, whether or
not the purchase is made upon the original issuance of the
securities.
7. Purchase the securities of issuers conducting their principal
activity in the same industry if, immediately after such
purchase, the value of its investments in such industry would
exceed 25% of its total assets taken at market value at the
time of such investment (except investments in obligations of
the U.S. Government or any of its agencies, instrumentalities
or authorities and except that the Large-Cap Fund and the
Small-Cap Fund may concentrate their assets in securities of
issuers in any industry to the extent that the S&P 500 Index
or the Russell 2,000 Index, respectively, are so
concentrated); provided, however, that the Fund may invest
all or part of its investable assets in an open-end
investment company with substantially the same investment
objective, policies and restrictions as the Fund.
8. For each Fund, with respect to 75% of its total assets, purchase
securities of an issuer (other than the U.S. Government, its
agencies, instrumentalities or authorities or repurchase
agreements collateralized by U.S. Government securities and other
investment companies), if:
(a) such purchase would cause more than 5% of the Fund's total
assets taken at market value to be invested in the securities
of such issuer; or
(b) such purchase would at the time result in more than 10% of
the outstanding voting securities of such issuer being held
by the Fund;
provided, however, that the Fund may invest all or part of its
investable assets in an open-end investment company with substantially
the same investment objective, policies and restrictions as the Fund.
For purposes of the above fundamental investment restrictions
regarding senior securities, the Adviser generally classifies issuers
by industry in accordance with classifications set forth in the
Standard & Poor's Stock Guide. In the absence of such classification or
if the Adviser determines in good faith based on its own information
that the economic characteristics affecting a particular issuer make it
more appropriately considered to be engaged in a different industry,
the Adviser may classify an issuer according to its own sources.
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<PAGE>
The following restrictions are designated as non-fundamental and
may be changed by the Trustees without the approval of shareholders.
A Fund may not:
a. Pledge, mortgage or hypothecate its assets, except to secure
permitted borrowings and then only if such pledging,
mortgaging or hypothecating does not exceed 33 1/3% of the
Fund's total assets taken at market value. Collateral
arrangements with respect to margin, option and other risk
management and when-issued and forward commitment
transactions are not deemed to be pledges or other
encumbrances for purposes of this restriction.
b. Participate on a joint or joint-and-several basis in any
securities trading account. The "bunching" of orders for the sale
or purchase of marketable portfolio securities with other accounts
under the management of the Adviser or any subadviser to save
commissions or to average prices among them is not deemed to
result in a joint securities trading account.
c. Knowingly purchase or retain securities of an issuer if one or
more of the Trustees or officers of the Trust or principals or
officers of the Adviser, any subadviser or any investment
management subsidiary of the Adviser individually owns
beneficially more than 0.5% and together own beneficially more
than 5% of the securities of such issuer.
d. Purchase a security if, as a result, (i) more than 10% of the
Fund's assets would be invested in securities of other
investment companies, (ii) more than 3% of the total
outstanding voting securities of any one such investment
company would be held by the Fund or (iii) more than 5% of
the Fund's assets would be invested in any one such
investment company; provided, however, that the Fund may
invest all or part of its investable assets in an open-end
investment company with substantially the same investment
objective, policies and restrictions as the Fund.
e. Invest more than 10% of its total assets in the securities of
any issuer which, together with its predecessors, has been in
operation for less than three years (including the operation
of any predecessor), excluding obligations issued or
guaranteed by the U.S. Government or its agencies and
instrumentalities and securities fully collateralized by such
securities; provided, however, the Fund may invest all or
part of its investable assets in an open-end investment
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<PAGE>
company with substantially the same investment objective,
policies and restrictions as the Fund.
f. Invest more than 15% of its total assets in restricted securities
including those eligible for resale under Rule 144A; provided that
the Fund may invest all or part of its investable assets in an
open-end investment company with substantially the same investment
objective, policies and restrictions as the Fund.
g. Invest in securities which are illiquid if, as a result, more
than 15% of its net assets would consist of such securities,
including repurchase agreements maturing in more than seven
days, securities that are not readily marketable, restricted
securities not eligible for resale pursuant to Rule 144A
under the 1933 Act, purchased OTC options, certain assets
used to cover written OTC options, and privately issued
stripped mortgage-backed securities, unless the Trustees
determine that such restricted securities are liquid;
provided, however, that the Fund may invest all or part of
its investable assets in an open-end investment company with
substantially the same investment objectives, policies and
restrictions as the Fund.
h. Purchase securities while outstanding borrowings exceed 5% of
the Fund's total assets.
i. Invest in real estate limited partnership interests.
j. Purchase warrants of any issuer, if, as a result of such
purchase, more than 2% of the value of the Fund's total
assets would be invested in warrants which are not listed on
an exchange or more than 5% of the value of the total assets
of the Fund would be invested in warrants generally, whether
or not so listed. For these purposes, warrants are to be
valued at the lesser of cost or market, but warrants acquired
by the Fund in units with or attached to debt securities
shall be deemed to be without value.
k. Purchase interests in oil, gas, or other mineral exploration
programs or mineral leases; however, this policy will not prohibit
the acquisition of securities of companies engaged in the
production or transmission of oil, gas or other minerals.
l. Invest for the purposes of exercising control over or management
of any company, but it may do so where it is deemed advisable to
protect or enhance the value of an existing investment, provided,
however, that the Fund may invest all or part of its investable
assets in an open-end
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<PAGE>
investment company with substantially the same investment
objective, policies and restrictions as the Fund.
m. Purchase securities on margin or make short sales, unless, by
virtue of its ownership of other securities, the Fund has the
right to obtain securities equivalent in kind and amount to
the securities sold and, if the right is conditional, the
sale is made upon the same conditions, except (i) in
connection with arbitrage transactions, (ii) for hedging the
Fund's exposure to an actual or anticipated market decline in
the value of its securities, (iii) to profit from an
anticipated decline in the value of a security, and (iv) to
obtain such short-term credits as may be necessary for the
clearance of purchases and sales of securities.
Each Fund may, notwithstanding any other fundamental or
non-fundamental investment restriction or policy, invest all of its
assets in the securities of a single open-end investment company with
substantially the same fundamental investment objectives, restrictions
and policies as the Fund.
Except with respect to the 300% asset coverage required by
fundamental restriction number 2, if a percentage restriction on
investment or utilization of assets as set forth above is adhered to at
the time an investment is made, a later change in percentage resulting
from changes in the values of a Fund's assets will not be considered a
violation of the restriction.
In order to permit the sale of shares of the Funds in certain
states, the Trustees may, in their sole discretion, adopt restrictions
on investment policy more restrictive than those described above.
Should the Trustees determine that any such more restrictive policy is
no longer in the best interest of a Fund and its shareholders, the Fund
may cease offering shares in the state involved and the Trustees may
revoke such restrictive policy. Moreover, if the states involved shall
no longer require any such restrictive policy, the Trustees may, in
their sole discretion, revoke such policy.
ADVISORY AND ADMINISTRATIVE SERVICES
Investment Adviser
As stated in the Prospectuses, WPG, One New York Plaza, New York,
New York 10004, serves as investment adviser and administrator to each
Fund. See "Management of the Tomorrow Funds -- Investment Adviser",
"Management of the Tomorrow Funds ---Administrator" and "Portfolio
Brokerage" in the Prospectuses for a description of the duties of WPG
as investment adviser and administrator to the Funds.
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<PAGE>
The Funds' investment advisory agreements with the Adviser (the
"Advisory Agreements") were initially approved by the Trustees of the
Trust, including a majority of the Trustees of the Trust who are not
parties to such agreements or "interested persons" (as such term is
defined in the 1940 Act) of any party thereto (the "Independent
Trustees"), on July 19, 1995 and became effective _______ __, 1995. The
Advisory Agreements were approved by the sole initial shareholder of
each Fund on ___, 1995.
Pursuant to the Advisory Agreements, the Adviser supervises and
assists in the management of the assets of each Fund and furnishes each
Fund with research, statistical and advisory services. In managing the
assets of the Funds, the Adviser furnishes continuously an investment
program for each Fund consistent with the investment objectives and
policies of that Fund. More specifically, the Adviser determines from
time to time what securities shall be purchased for the Fund, what
securities shall be held or sold by the Fund and what portion of the
Fund's assets shall be held uninvested as cash, subject always to the
provisions of the Trust's Agreement and Declaration of Trust, By-Laws
and its registration statement under the 1940 Act and under the 1933
Act covering the Trust's shares, as filed with the SEC, and to the
investment objectives, policies and restrictions of the Fund, as each
of the same shall be from time to time in effect, and subject, further,
to such policies and instructions as the Board of Trustees of the Trust
may from time to time establish. To carry out such determinations, the
Adviser places orders for the investment and reinvestment of each
Fund's assets (see "Portfolio Brokerage").
For its investment advisory services under the Advisory
Agreements, the Adviser receives an annual fee from each Fund, payable
monthly, equal to 0.75% (on an annual basis) of the Fund's average
daily net assets, except for the Post-Retirement Fund, which pays the
Adviser on a monthly basis an annual fee equal to 0.65% of such Fund's
average daily net assets.
The Adviser has voluntarily agreed to limit temporarily each
Fund's operating expenses (excluding Rule 12b-1 fees with respect to
the Adviser Class shares, service fees with respect to the
Institutional Class shares, any other class-specfic expenses,
litigation, indemnification and other extraordinary expenses) to 1.00%
of its average daily net assets, except for the Post-Retirement Fund,
for which the Adviser has voluntarily agreed to temporarily limit
operating expenses (with the same exclusions as listed above) to 1.15%
of its average daily net assets. The Adviser may discontinue or modify
such limitation in the future at its discretion, although it has no
current intention to do so. Each Fund will reimburse the Adviser for
fees foregone or other expenses paid by the Adviser pursuant to this
expense limitation
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in later years in which operating expenses for the Fund are less than
the expense limitations set forth above for any such year. No interest,
carrying or finance charge will be paid by a Fund with respect to the
amounts representing fees foregone or other expenses paid. In addition,
no Fund will pay any unreimbursed amounts to the Adviser upon
termination of its Advisory Agreement.
The advisory fees are accrued daily and will be prorated with
respect to any Fund if the Adviser shall not have acted as that Fund's
investment adviser during any entire monthly period. The Advisory and
the Administration Agreements (as defined below) provide that if the
operating expenses of a Fund in any year, including the investment
advisory fee and the administration fee, but excluding taxes, brokerage
commissions, interest, dividends paid on securities sold short and
extraordinary legal fees and expenses exceed the expense limits set by
state securities law administrators in states in which that Fund's
shares are sold, the amount payable to WPG, in its capacity as Adviser
and Administrator, will be reduced (but not below zero) by the amount
of such excess. The most restrictive state securities law expense limit
presently in effect requires such reduction if expenses exceed 2.5% of
the first $30 million, 2.0% of the next $70 million and 1.5% of the
remainder of the average daily net assets of a Fund during such year.
Each Advisory Agreement provides that the Adviser will not be
liable for any loss sustained by the Trust or any Fund by reason of the
adoption or implementation of any investment policy or the purchase,
sale or retention of any security, whether or not such purchase, sale
or retention shall have been based upon the investigation and research
of the Adviser, or upon investigation and research made by any other
individual, firm or corporation if such recommendation shall have been
made and such other individual, firm or corporation shall have been
selected with due care and in good faith, except for a loss resulting
from willful misfeasance, bad faith, or gross negligence in the
performance by the Adviser of its duties or by reason of the Adviser's
reckless disregard of its obligations and duties thereunder.
Each Advisory Agreement may be modified or amended only with the
approval of the holders of a majority of the applicable Fund's
outstanding shares and by a vote of the majority of the Independent
Trustees of the Trust. Unless terminated as provided below, each
Advisory Agreement continues in full force and effect until September
__, 1997 and for successive periods of one year thereafter, but only as
long as each such continuance after September __, 1997 is approved
annually by a majority vote of the Board or by a vote of the holders of
a majority of the outstanding shares of the applicable Fund, but in
either event it also must be
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approved by a vote of a majority of the Independent Trustees of the
Trust, cast in person at a meeting called for the purpose of voting on
such approval. Each Advisory Agreement may be terminated without
penalty, by either party upon 60 days' written notice and automatically
will terminate in the event of its assignment.
Officers and Trustees of the Trust who are also principals in and
employees of WPG may receive indirect compensation by reason of
investment advisory and administration fees paid by the Trust to WPG,
in its capacity as the Adviser and Administrator.
As of June 30, 1994, WPG had capital in excess of $48 million. WPG
consists of 44 general principals, one of whom is a member of the NYSE,
and certain associate principals. WPG has approximately 240 full-time
employees in addition to its principals. WPG together with its
wholly-owned subsidiary, Weiss, Peck & Greer, Inc., act as investment
adviser or manager for approximately $13 billion of institutional and
private investment accounts.
Roger J. Weiss is a Senior Managing Principal of WPG and
Chairman of the Board, President and Trustee of the Trust.
Stephen H. Weiss, brother of Roger J. Weiss, is also a Senior
Managing Principal of WPG. Francis H. Powers is a principal of
WPG, and Executive Vice President and Treasurer of the Trust.
Jay C. Nadel is a principal of WPG and an Executive Vice President
and Secretary of the Trust. The principals of WPG who serve on
WPG's executive committee are Stephen H. Weiss (Chairman),
Roger J. Weiss, Phillip Greer, Melville Straus, Ronald M. Hoffner
and Wesley W. Lang, Jr.
In addition to the members of the Adviser's Asset Allocation
Committee and Messrs. Pappo and Vandivort, Messrs. Stephen H. Weiss and
Roger J. Weiss may participate in each Fund's investment decisions and
all of the principals in WPG consult on a regular basis among
themselves about general market conditions, as well as specific
securities and industries.
In the management of the Trust and their other accounts, WPG and
its subsidiaries allocate investment opportunities to all accounts for
which they are appropriate subject to the availability of cash in any
particular account and the final decision of the individual or
individuals in charge of such accounts. Where market supply is
inadequate for a distribution to all such accounts, securities are
allocated on a pro rata basis. In some cases this procedure may have an
adverse effect on the price or volume of the security as far as the
Funds are concerned. However, it is the judgment of the Trustees that
the desirability of continuing the Trust's advisory arrangements with
the Adviser
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outweighs any disadvantages that may result from contemporaneous
transactions. See "Portfolio Brokerage."
In an attempt to avoid any potential conflict with portfolio
transactions for the Funds, the Adviser and the Trust, on behalf of
each Fund, have adopted extensive restrictions on personal securities
trading by personnel of the Adviser and its affiliates. These
restrictions include: pre-clearance of all personal securities
transactions and a prohibition of purchasing initial public offerings
of securities. These restrictions are a continuation of the basic
principle that the interests of the Funds and their shareholders come
before those of the Adviser and its principals and employees.
In the event that neither the Adviser nor any of its affiliates
acts as investment adviser to the Trust, the name of the Trust will be
changed to one that does not contain the name "Weiss, Peck & Greer" or
the initials "WPG" or otherwise suggest an affiliation with the Adviser
or contain the name "Tomorrow" or any connotation or derivative of such
name.
Administrator
WPG, in its capacity of Administrator of each Fund, performs
administrative, transfer agency related and shareholder relations
services and certain clerical and accounting services for each Fund
under separate administration agreements (the "Administration
Agreements"). More specifically, these obligations pursuant to the
Administration Agreements include, subject to the general supervision
of the Trustees of the Trust, (a) providing supervision of all aspects
of the Funds' non-investment operations (the parties giving due
recognition to the fact that certain of such operations are performed
by others pursuant to agreements with the Funds), (b) providing the
Funds, to the extent not provided pursuant to their custodian and
transfer agency agreements or agreements with other institutions, with
personnel to perform such executive, administrative, accounting and
clerical services as are reasonably necessary to provide effective
administration of the Funds, (c) arranging, to the extent not provided
pursuant to such agreements, for the preparation, at the Funds'
expense, of its tax returns, reports to shareholders, periodic updating
of the prospectuses and reports filed with the SEC and other regulatory
authorities, (d) providing the Funds, to the extent not provided
pursuant to such agreements, with adequate office space and certain
related office equipment and services, (e) maintaining all of the
Funds' records other than those maintained pursuant to such agreements
or the Advisory Agreements, and (f) providing to the Funds transfer
agency-related and shareholder relations services and facilities and
the services of one or more of its employees or officers, or employees
or officers
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of its affiliates, relating to such functions (including salaries and
benefits, office space and supplies, equipment and teaching).
For its services under the Administration Agreements, the
Administrator is entitled to receive a fee, computed daily and payable
monthly at an annual rate equal to 0.09% of each Fund's average daily
net assets.
Each Fund bears all expenses of its own operation (subject to the
expense limitations described above), which expenses include: (i) fees
and expenses of any investment adviser or administrator of the Fund;
(ii) organization expenses of the Trust; (iii) fees and expenses
incurred by the Fund in connection with membership in investment
company organizations; (iv) brokers' commissions; (v) payment for
portfolio pricing services to a pricing agent, if any; (vi) legal,
accounting or auditing expenses (including an allocable portion of the
cost of its employees rendering legal services to the Fund); (vii)
interest, insurance premiums, taxes or governmental fees; (viii) the
fees and expenses of the transfer agent of the Fund; (ix) the cost of
preparing stock certificates or any other expenses, including, without
limitation, clerical expenses of issue, redemption or repurchase of
shares of the Fund; (x) the expenses of and fees for registering or
qualifying shares of the Funds for sale and of maintaining the
registration of the Funds; (xi) a portion of the fees and expenses of
Trustees of the Trust who are not affiliated with the Adviser; (xii)
the cost of preparing and distributing reports and notices to existing
shareholders, the SEC and other regulatory authorities; (xiii) the fees
or disbursements of custodians of the Fund's assets, including expenses
incurred in the performance of any obligations enumerated by the
Declaration of Trust or By-Laws of the Trust insofar as they govern
agreements with any such custodian; (xiv) costs in connection with
annual or special meetings of shareholders, including proxy material
preparation, printing and mailing; (xv) litigation and indemnification
expenses and other extraordinary expenses not incurred in the ordinary
course of the Fund's business; and (xvi) distribution fees and service
fees applicable to Adviser Class shares and service fees applicable to
Institutional Class shares.
The Funds' Advisory and Administration Agreements each provide
that WPG, in its capacities as investment adviser and administrator,
may render similar services to others so long as the services provided
thereunder are not impaired thereby.
Principal Underwriter
WPG serves as the principal underwriter in connection with
the continuous offering of the shares of the Trust pursuant to an
Underwriting Agreement, dated _____, 1995. The Trustees,
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including the non-interested Trustees, approved the Underwriting
Agreement on July 19, 1995, which will continue in effect from year to
year, if annually approved by the Trustees, including the
non-interested Trustees, in conjunction with the continuance of the
Plans of Distribution. See "Distribution Plans" below. The Underwriting
Agreement provides that WPG will bear certain distribution expenses not
borne by the Funds.
WPG bears all expenses it incurs in providing services under the
Underwriting Agreement. Such expenses include compensation to its
employees and representatives and to any investment dealers and
financial firms ("Authorized Firms") for distribution related services.
WPG also pays certain expenses in connection with the distribution of
the Funds' shares, including the cost of preparing, printing and
distributing advertising or promotional materials, and the cost of
printing and distributing prospectuses and supplements to prospective
shareholders. WPG receives compensation under a Rule 12b-1 Plan for
providing such services with respect to Adviser Class shares. Each Fund
bears the cost of registering its shares under federal, state and
foreign securities law. See "Distribution Plans" below.
The Trust and WPG have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act of
1933, as amended. Under the Underwriting Agreement, WPG will use its
best efforts in rendering services to the Trust.
DISTRIBUTION PLANS
Each Fund, with respect to its Adviser class shares, has adopted a
plan of distribution pursuant to Rule 12b-1 promulgated by the
Commission under the 1940 Act (the "Plans").
Each Plan provides that a Fund shall pay WPG, as the Fund's
distributor for its Adviser Class shares, a daily distribution fee
equal on an annual basis to 0.25% of the Fund's average daily net
assets attributable to Adviser Class shares and will pay WPG a service
fee equal on an annual basis to 0.25% of the Fund's average daily net
assets attributable to Adviser Class shares (which WPG will in turn pay
to Authorized Firms which enter into a sales agreement with WPG at a
rate of up to 0.25% of the Fund's average daily net assets attributable
to Adviser Class shares owned by investors for whom that Authorized
Firm is the holder or dealer of record). This service fee is intended
to be consideration for personal services and/or account maintenance
services rendered by the Authorized Firm with respect to Adviser Class
shares. Authorized Firms may from time to time be required to meet
certain other criteria in order to receive service fees. WPG or its
affiliates are entitled to retain all service fees payable under the
Plans for which there is no Authorized Firm of
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record or for which qualification standards have not been met as
partial consideration for personal services and/or account maintenance
services performed by WPG or its affiliates for shareholder accounts.
The purpose of distribution payments to WPG under the Plans is to
compensate WPG for its distribution services related to the Adviser
Class shares of the Funds. WPG pays commissions to Authorized Firms as
well as expenses of printing prospectuses and reports used for sales
purposes, expenses with respect to the preparation and printing of
sales literature and other distribution related expenses, including,
without limitation, the cost necessary to provide distribution-related
services or personnel, travel, office expenses and equipment. (See
"Distribution Plans" in the Prospectus.)
In accordance with the terms of the Plans, WPG provides to the
Trust for review by the Trustees a quarterly written report of the
amounts expended under the Plans and the purpose for which such
expenditures were made. In the Trustees' quarterly review of the Plans,
they will consider the continued appropriateness and the level of
compensation that the Plans provide.
No interested person of the Trust, nor any Trustee of the Trust
who is not an independent Trustee, has any direct or indirect financial
interest in the operation of the Plans except to the extent that WPG
and certain of its employees may be deemed to have such an interest as
a result of receiving a portion of the amounts expended under the Plans
by the Funds and except to the extent the principals of WPG may be
deemed to receive a benefit under the Advisory and Administration
Agreements under the Plans.
The Plans were adopted with respect to the Adviser Class shares of
each Fund by a majority vote of the Board of Trustees, including all of
the Independent Trustees, cast in person at a meeting called for the
purpose of voting on the Plans. In approving the Plans, the Trustees
identified and considered a number of potential benefits which the
Plans may provide. The number of potential benefits which the Plans may
provide. The Trustees believe that there is a reasonable likelihood
that the Plans will benefit the Funds and their respective Adviser
Class shareholders. Under their terms, the Plans remain in effect from
year to year provided such continuance is approved annually by vote of
the Trustees in the manner described above. The Plans may not be
amended to increase materially the annual percentage limitation of
average net assets which may be spent for the services described
therein without approval of the shareholders of the Adviser Class
shares, and material amendments of the Plans must also be approved by
the Trustees in the manner described above. A Plan may be terminated at
any time, without payment of
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any penalty, by vote of the majority of the Independent Trustees or by
a vote of a majority of the outstanding voting securities of the
Adviser Class of the applicable Fund. A Plan will automatically
terminate in the event of its assignment (as defined in the 1940 Act).
TRUSTEES AND OFFICERS
The Trustees have responsibility for management of the business of
the Trust. The executive officers of the Trust are responsible for its
day to day operation. Set forth below is certain information concerning
the Trustees and officers.
Name, Address,
Age and Title Principal Occupations During Past Five Years
Roger J. Weiss* Senior Managing Principal, Weiss, Peck &
One New York Plaza Greer, L.L.C.
New York, NY 10004 Chairman of the Board of all WPG Funds
Age: __ President, Weiss, Peck & Greer International
Fund
Chairman of the Executive Vice President and Director,
Board, President WPG Advisers, Inc.
and Trustee Former Executive Vice President and Director,
Tudor Management Company
Raymond R.
Herrmann, Jr.** Chairman of the Board, Sunbelt Beverage
654 Madison Avenue Corporation (distributor of wines and
Suite 1400 liquors)
New York, NY 10017 Former Vice Chairman and Director, McKesson
Age: __ Corporation (U.S. distributor of
drugs and health care products, wine and
Trustee spirits)
Life Member, Board of Overseers of Cornell
Medical College
Member of Board and Executive Committee, Sky
Ranch for Boys
Member, Evaluation Advisory Board,
Biotechnology Investments, Ltd.
Harvey E. Sampson** Chief Executive Officer and Chairman of Harvey
600 Secaucus Road Group, Inc. (retail sales of consumer
Secaucus, NJ 07094 electronics)
Age: __ Trustee, Cornell University
Joint Board of The New York Hospital -
Trustee Cornell Medical Center
Trustee, North Shore University Hospital
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Lawrence J. Israel** Private Investor
200 Broadway Director and Trustee of the Touro Infirmary
Suite 249 Member of the Intercollegiate Athletics
New Orleans, LA 70118 Committee of the Administrators of the
Age: __ Tulane Educational Fund
Trustee
Francis H. Powers* Principal, Weiss, Peck & Greer, L.L.C.
One New York Plaza Vice President and Secretary, Weiss, Peck &
New York, NY 10004 Greer Advisers, Inc.
Age: __ Executive Vice President and Treasurer of all
WPG Funds
Executive Former Vice President and Secretary, Tudor
Vice President Management Company
and Treasurer
Jay C. Nadel* Principal, Weiss, Peck & Greer, L.L.C.
One New York Plaza Director of Operating Departments
New York, NY 10004 Executive Vice President and Secretary of all
Age: __ WPG Funds
Executive
Vice President
and Secretary
Gerald Murphy* Vice President, Mutual Fund
One New York Plaza Operations, Weiss, Peck & Greer, L.L.C.
New York, NY 10004 since December, 1991
Age: __ Vice President of all WPG Funds
Manager, Mutual Funds from May,
Vice President 1990 to December, 1991
Arlen S. Oransky* Vice President, Mutual Fund
One New York Plaza Operations, Weiss, Peck & Greer, L.L.C.
New York, NY 10004 since December, 1991
Age: __ Assistant Vice President of all
WPG Funds since April, 1991
Assistant Manager of Investment Services
Vice President Weiss, Peck & Greer, L.L.C. from July,
1990 to December, 1991
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Joseph J. Reardon* Vice President, Mutual Fund
One New York Plaza Operations, Weiss, Peck & Greer, L.L.C.
New York, NY 10004 since December, 1993
Age: __ Assistant Manager, Mutual Fund
Operations, Weiss, Peck & Greer, L.L.C.
Assistant from February, 1990 to December, 1993
Vice President Assistant Vice President of all
WPG Funds since April, 1991
-----------------------
* "Interested Person" within the meaning of the 1940 Act.
** Each of the non-interested Trustees is a trustee of each of the
other WPG Funds and a Member of the Trust's Audit Committee and
Special Nominating Committee.
Compensation of Trustees and Officers
The Funds pay no compensation to the Trust's Trustees affiliated
with the Adviser or its officers. None of the Trust's Trustees or
officers have engaged in any financial transactions with any Fund or
the Adviser.
[Chart omitted. The following is a description of the chart: It is
estimated that for the current fiscal year ending December 31, 1995,
each of Raymond R. Hermann, Jr., Harvey E. Sampson and Lawrence J.
Israel (collectively, the "Compensated Trustees") will receive $1,667
from each Fund as compensation for serving as Trustees of the Trust.
Each Fund, therefore, will pay an aggregate of $5,000 in compensation
to the Compensated Trustees. Roger J. Weiss will receive no
compensation from any of the Funds for serving as a Trustee of the
Trust. Total compensation paid by the Trust and each of the fifteen
funds (including the Funds) in the WPG fund complex to each of the
Compensated Trustees and to Roger J. Weiss for the current fiscal year
ending December 31, 1995 is estimated to equal $37,250 and $0,
respectively. The Trustees fees paid with respect to the other funds in
the WPG fund complex are based on actual fees paid by such funds for
the fiscal year ended December 31, 1994. Each of the Trustees is also
reimbursed for out-of-pocket expenses associated with attending Trustee
meetings. No pension or retirement benefits will accrue as part of the
Trust's expenses with respect to the Funds.]
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Certain Shareholders
Immediately prior to the commencement of a Fund's operations, it
is expected that WPG will own 100% of the outstanding shares of that
Fund. As of the date of this Statement of Additional Information, the
Trustees and officers of the Trust as a group beneficially owned (i.e.,
had voting or investing power) less than 1% of the outstanding shares
of each Fund.
HOW TO PURCHASE SHARES
(See "How to Buy Shares" in the Prospectuses.)
The Trust continuously offers shares of each Fund. The Trust may
terminate the continuous offering of its shares with respect to any
Fund at any time at the discretion of the Trustees.
In the case of telephone subscriptions, if full payment for
telephone subscriptions is not received by the Trust within the
customary time period for settlement then in effect after the
acceptance of the order by the Trust, the order is subject to
cancellation and the purchaser will be liable to the affected Fund for
any loss suffered as a result of such cancellation. To recoup such loss
each Fund reserves the right to redeem shares owned by any shareholder
whose purchase order is cancelled for non-payment, and such purchaser
may be prohibited from placing further telephone orders.
If a subscription or redemption of Fund shares is arranged and
settlement made through a member of the NASD, then that member may, in
its discretion, charge a fee for this service.
Acquiring Shares of the Funds in Exchange for Securities
Shares of the Funds may be purchased in whole or in part by
delivering to the Funds' Custodian securities acceptable to WPG. If the
securities are not suitable for a Fund's portfolio, the securities will
be sold by the Custodian as agent for the account of their owner on the
day of their receipt by the Custodian or as soon thereafter as
possible. The number of shares of a class of a Fund to be issued in
exchange for securities will be the aggregate proceeds from the sale of
such securities, divided by the net asset value per share of the
applicable class of the applicable Fund on the day such proceeds are
received. WPG will use reasonable efforts to obtain the current market
price for such securities but does not guarantee the best available
price. WPG will absorb any transaction costs, such as commissions, on
the sale of securities.
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Securities determined by WPG to be acceptable should be
transferred by book entry or physically delivered, in proper form for
transfer. Please contact WPG for transfer instructions.
Investors who are contemplating an exchange of securities for
shares of a Fund must contact WPG to determine whether the securities
are acceptable before forwarding such securities to the Custodian. WPG
reserves the right to reject any securities. Exchanging securities for
shares of the Funds may create a taxable gain or loss. Please consult
your tax adviser with respect to the particular Federal, state and
local tax consequences of exchanging securities for Fund shares.
REDEMPTION OF SHARES
(See "How to Sell Shares" and "How to Exchange Shares" in the
Prospectuses.)
Systematic Withdrawal Plan
A Systematic Withdrawal Plan is available only for the
Post-Retirement Fund, Large-Cap Fund and Small-Cap Fund without expense
to any shareholder with a minimum investment of [$10,000] in value in
such Funds' shares (at the then current offering price). The Transfer
Agent may be directed, as agent of the purchaser, to redeem without a
redemption charge shares of such Funds held in his account as may be
required so that the shareholder or any person designated by him will
receive a monthly or quarterly check in a stated amount not to be less
than [$_______] although such amount is not necessarily a recommended
amount. Dividends and capital gains distributions will be reinvested in
additional shares of the same class of the same Fund at net asset value
as of the reinvestment date.
Redemption of shares of a Fund under the Systematic Withdrawal
Plan may reduce or even liquidate the account, particularly in a
declining market. Such payments paid to a shareholder cannot be
considered a yield or income on the investment. Payments to a
shareholder in excess of distributions of investment income will
constitute a return of his invested principal, and the liquidation of
Fund shares pursuant to this Plan is a taxable transaction which may
result in gain or loss to the shareholder depending upon the cost of
the shares when acquired.
Withdrawals at the same time as regular purchases of Adviser Class
shares of the Post-Retirement Fund, Large-Cap Fund or Small-Cap Fund
ordinarily will not be permitted since purchases are intended to
accumulate capital and the Systematic Withdrawal Plan
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is designed for the regular withdrawal of monies, except that a
shareholder may make lump sum investments, of [$5,000] or more. The
Systematic Withdrawal Plan may be terminated by the shareholder,
without penalty, at any time and the Trust may terminate the Plan at
will. There are no contractual rights on the part of either party with
respect to the Plan.
NET ASSET VALUE
(See "How Each Tomorrow Fund's Share Price is Determined" in the
Prospectuses)
Under the 1940 Act, the Trustees are responsible for determining
in good faith the fair value of securities of the Funds. The net asset
value per share of each class of each Fund is determined once daily,
Monday through Friday as of the close of regular trading on the NYSE
(normally 4:00 P.M. New York City time) on each Business Day (as
defined in the Prospectuses) in which there is a sufficient degree of
trading in that Fund's portfolio securities that the current net asset
value of that Fund's shares might be materially affected. A Fund may
not determine its net asset value on any day during which its shares
were not tendered for redemption and the Trust did not receive any
order to purchase or sell shares of that Fund. In accordance with
procedures approved by the Trustees, the net asset value per share of
each class of each Fund is calculated by determining the value of the
net assets attributable to each class of that Fund and dividing by the
number of outstanding shares of that class. The NYSE is not open for
trading on weekends or on New Year's Day (January 1), Presidents' Day
(the third Monday in February), Good Friday, Memorial Day (the last
Monday in May), Independence Day (July 4), Labor Day (the first Monday
in September), Thanksgiving Day (the fourth Thursday in November) and
Christmas Day (December 25).
The public offering price per Adviser Class share of a class of a
Fund is the net asset value per share of that class of that Fund next
determined after receipt of an order. Orders for Adviser Class shares
which have been received by the Trust or the Transfer Agent prior to
the close of regular trading of the NYSE are confirmed at the offering
price effective at the close of regular trading of the NYSE on that
day, while orders received subsequent to the close of regular trading
of the NYSE will be confirmed at the offering price effective at the
close of regular trading of the NYSE on the next day on which the net
asset value is calculated.
Bonds and other fixed-income securities (other than short-term
obligations but including listed issues) in a Fund's portfolio are
valued on the basis of valuations furnished by a
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pricing service which utilizes both dealer-supplied valuations and
electronic data processing techniques which take into account
appropriate factors such as institutional-size trading in similar
groups of securities, yield, quality, coupon rate, maturity, type of
issue, trading characteristics and other market data, without exclusive
reliance upon quoted prices or exchange or over-the-counter prices,
when such valuations are believed to reflect the fair value of such
securities.
In determining the net asset value, unlisted securities for which
market quotations are available are valued at the mean between the most
recent bid and asked prices. Securities, options on securities, futures
contracts and options thereon which are listed or admitted to trading
on a national exchange, are valued at their last sale on such exchange
prior to the time of determining net asset value; or if no sales are
reported on such exchange on that day, at the mean between the most
recent bid and asked price. Securities listed on more than one exchange
shall be valued on the exchange the security is most extensively
traded. Other securities and assets for which market quotations are not
readily available are valued at their fair value as determined in good
faith by the Valuation Committee as authorized by the Trustees.
For purposes of determining the net asset value of the Funds'
shares, options transactions will be treated as follows: When a Fund
sells an option, an amount equal to the premium received by that Fund
will be included in that Fund's accounts as an asset and a deferred
liability will be created in the amount of the option. The amount of
the liability will be marked to the market to reflect the current
market value of the option. If the option expires or if that Fund
enters into a closing purchase transaction, that Fund will realize a
gain (or a loss if the cost of the closing purchase exceeds the premium
received), and the related liability will be extinguished. If a call
option contract sold by a Fund is exercised, that Fund will realize the
gain or loss from the sale of the underlying security and the sale
proceeds will be increased by the premium originally received.
INVESTOR SERVICES
(See "How to Buy Shares," "How to Sell Shares" and "How to
Exchange Shares" in the Prospectuses.)
The Trust offers a variety of services, described in the sections
that follow, designed to meet the needs of its shareholders. The costs
of providing such services are borne by the Funds.
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Automatic Investment Plan
The Automatic Investment Plan enables shareholders to make regular
(monthly or quarterly) investments of [$___] or more in shares of any
of the Funds through an automatic withdrawal from a designated bank
account by simply completing the Automatic Investment Plan application.
Please call 1-800-[__________] or write to WPG to receive this form. By
completing the form, the shareholder authorizes the Trust's Custodian
to periodically draw money from a designated bank or federal credit
union account, and to invest such amounts in account(s) of the Fund(s)
specified. The transaction will be automatically processed to the
mutual fund account on or about the first business day of the month or
quarter designated.
Please be aware that: (1) the Automatic Investment Plan privilege
may be revoked without prior notice if any check is not paid upon
presentation; (2) the Custodian is under no obligation to notify the
shareholder as to the non-payment of any check, and (3) this service
may be modified or discontinued by the Custodian upon thirty (30) days'
written notice prior to any payment date, or may be discontinued by you
by written notice to TSSG, at least ten (10) days before the next
payment date.
Prototype Retirement Plan for Employers and Self-Employed
Individuals
Prototype retirement plans (the "Retirement Plan") are available
for those entities or self-employed individuals who wish to purchase
shares of a Fund in connection with a money purchase plan or a profit
sharing plan maintained by their employer. The Retirement Plans were
designed to conform to the requirements of the Code and the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). The
Retirement Plans received opinion letters from the Internal Revenue
Service (the "IRS") on March 29, 1990 that the form of the Retirement
Plans is acceptable under Section 401 of the Code.
Annual tax-deductible contributions to the Retirement Plan may be
made up to the lesser of $30,000 or 25% of the participant's earned
income (disregarding any compensation in excess of $150,000 (as
adjusted by the IRS for inflation). Under the terms of the Retirement
Plan, contributions by or on behalf of participants may be invested in
a Fund with the designated custodian under the Retirement Plan (the
"Retirement Plan's Custodian"). Investment in other mutual funds
advised by the Adviser or one of its affiliates may also be available.
Employers adopting the Retirement Plan may elect either that a
participant shall specify the investments to be made with contributions
by or on behalf of such participant or that the employer shall specify
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the investments to be made with all such contributions. Since no Fund
is intended as a complete investment program it is important, in
connection with such election, that employers give careful
consideration to the fiduciary obligation requirements of ERISA.
All dividends and distributions received by the Retirement Plan's
Custodian on the Funds' shares held by the Plan's Custodian will be
reinvested in the applicable Fund's shares of the same class at net
asset value. Distributions of benefits to participants, when made, will
be paid first in cash, to the extent that any amount credited to a
participant's account is not invested in the applicable Fund's shares
and then in full Fund shares of the applicable class (and cash in lieu
of fractional shares).
Boston Safe Deposit and Trust Company serves as the Retirement
Plan's Custodian under a Custodial Agreement. Custodian fees which are
payable by the employer to the Retirement Plan's Custodian under such
Custodial Agreement are a $10 application fee for processing the
Retirement Plan application, an annual maintenance fee of $15 per
participant, and a distribution fee of $10 for each distribution from a
participant's account. Such fees may be altered from time to time by
agreement of the employer and the Retirement Plan's Custodian. For
further details see the terms of the Retirement Plan which are
available from the Trust.
Distributions must be made pursuant to the terms of the Retirement
Plan and generally may not commence before retirement, disability,
death, termination of employment, or termination of the Retirement Plan
and must commence no later than April 1 of the year following the year
in which the participant attains age 70 (the "required beginning
date"). Distributions are taxed as ordinary income when received,
except the portion, if any, considered a return of a participant's
nondeductible contributions. Certain distributions before age 59 may be
subject to a 10% nondeductible penalty on the taxable portion of the
distribution. Failure to make minimum required distributions by the
required beginning date may be subject to a 50% excise tax.
It should be noted that the Retirement Plan is a retirement
investment program involving commitments covering future years. In
deciding whether to utilize the Retirement Plan, it is important that
the employer consider his or her needs and those of the Retirement Plan
participants and whether the investment objectives of the Funds are
likely to fulfill such needs. Termination or curtailment of the
Retirement Plan for other than business reasons within a few years
after its adoption may result in adverse tax consequences.
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Employers who contemplate adoption of the Retirement Plan should
consult an attorney or financial adviser regarding all aspects of the
Retirement Plan as a retirement plan vehicle (including fiduciary
obligations under ERISA).
Individual Retirement Account
Persons with earned income, whether or not they are active
participants in a pension, profit-sharing or stock bonus plan described
in Code 401(a), Federal, state or local pension plan, an annuity plan
described in Code 403(a), an annuity contract or custodial account
described in Code 403(b), a simplified employee pension plan described
in Code 408(k), or a trust described in Code 501(c)(18) ("active
participant"), generally are eligible to establish an Individual
Retirement Account ("IRA"). An individual may make a deductible
contribution to an IRA only if (i) neither the individual nor his or
her spouse (unless living apart for the entire year and filing separate
returns) is an active participant, or (ii) the individual (and his or
her spouse, if applicable) has an adjusted gross income below a certain
level ($40,000 for married individuals filing a joint return, with a
phase-out for adjusted gross income between $40,000 and $50,000;
$25,000 for a single individual, with a phase-out for adjusted gross
income between $25,000 and $35,0000). However, an individual who is not
permitted to make a deductible contribution to an IRA for a taxable
year may nonetheless make annual nondeductible contributions to an IRA
up to the lesser of 100% of the individual's earned income or $2,000 to
an IRA (up to $2,250 to IRAs for an individual and his or her
non-earning spouse) for that year. There are special rules for
determining how withdrawals are to be taxed if an IRA contains both
deductible and nondeductible amounts. In general, a proportionate
amount of each withdrawal will be deemed to be made from nondeductible
contributions; amounts treated as a return of nondeductible
contributions will not be taxable. Also, annual contributions may be
made to a spousal IRA even if the spouse has earnings in a given year
if the spouse elects to be treated as having no earnings (for IRA
contribution purposes) for the year.
Withdrawals from the IRA (other than the portion treated as a
return of nondeductible contributions) are taxed as ordinary income
when received, may be made without penalty after the participant
reaches age 59 and must commence no later than the required beginning
date (see discussion of "Prototype Retirement Plans" above).
Withdrawals before age 59 may involve the payment of a 10%
nondeductible penalty on the taxable portion of the amount withdrawn.
The time and rate of withdrawal must conform with Code requirements in
order to avoid adverse tax consequences. All dividends and
distributions on shares of a Fund held in IRA accounts are reinvested
in full and fractional shares of the same
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class of the same Fund and are not subject to federal income tax until
withdrawn from the IRA. Investors should consult their tax advisers for
further tax information, including information with respect to the
imposition of state and local income taxes and the effects of tax law
changes.
The Trust has arranged for Boston Safe Deposit and Trust Company
to furnish the required custodial services for IRAs using any of the
Fund's shares as the underlying investment. The Bank will charge an
acceptance fee of $10 for each new IRA and an annual maintenance fee of
$15 for each year that an IRA is in existence. There is a $10 fee for
processing a premature distribution. These fees will be deducted from
the IRA account and may be changed by the Plan's Custodian upon 30
days' prior notice.
To establish an IRA for investment in a Fund, an investor must
complete an application and a custodial agreement on IRS Form 5305-A
(which has been supplemented to provide certain additional custodial
provisions) and must make an initial cash contribution to the IRA,
subject to the limitation on contributions described above. Pursuant to
IRS regulations, an investor may for seven days following establishment
of an IRA revoke the IRA. Detailed information on IRAs, together with
the necessary form of application and custodial agreement, is available
from the Trust and should be studied carefully by persons interested in
utilizing a Fund for IRA investments. Such persons should also consult
their own advisers regarding all aspects of the Funds as an appropriate
IRA investment vehicle.
Simplified Employee Pension Plans (SEP-IRA)
A simplified employee pension (SEP) allows an employer to make
contributions toward his or her own (if a self-employed individual) and
his or her employees' retirement and/or permits the employees to make
elective deferrals by salary reduction. A SEP requires an Individual
Retirement Account (a SEP-IRA) to be established for each "qualifying
employee," although the employer may include additional employees if it
wishes. A qualifying employee is one who: (a) is at least age 21, (b)
has worked for the employer during at least 3 of 5 years immediately
preceding the tax year, and (c) has received at least $400 (as indexed
for inflation) in compensation in the tax year.
An employer is not required to make any contribution to the
SEP-IRA. However, if the employer does make a contribution, the
contribution must be based on a written allocation formula and must not
discriminate in favor of highly compensated employees, as defined in
Code Section 414(q). The employer may make annual contributions on
behalf of each qualifying employee, provided that
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the contributions, when combined with the employee's elective
deferrals, do not exceed 15% of the employee's compensation or $30,000,
whichever is less.
A SEP-IRA may include a salary reduction arrangement under which
the employee can choose to have the employer make contributions
("elective deferrals") to his or her SEP-IRA out of his or her salary.
However, employees may make elective deferrals only if (i) at least 50%
of the employer's eligible employees choose elective deferrals; (ii)
the employer did not have more than 25 eligible employees at any time
during the preceding year; and (iii) the amount deferred each year by
each eligible highly compensated employee as a percentage of pay is no
more than 125% of the average deferral percentage of all other eligible
employees. An elective deferral arrangement is not available for a SEP
maintained by a state or local government, or any of their political
subdivisions, agencies, or instrumentalities, or to exempt
organizations.
In general, the total income which an employee can defer under a
salary reduction arrangement included in a SEP and certain other
elective deferral arrangements is limited to $9,240 (indexed annually
for inflation). This dollar limit applies only to the elective
deferrals, not to any contributions from employer funds. The Code may
require that contributions be further limited to prevent discrimination
in favor of highly compensated employees. An employee may also make
regular IRA contributions to his or her SEP-IRA (see discussion of
IRAs, above).
Under the terms of the SEP-IRA, contributions by or on behalf of
participants may be invested in shares of the Funds (or shares of other
funds designated by the Adviser as eligible investments), as specified
by the participant. All dividends and distributions on shares held in
SEP-IRAs are reinvested in full and fractional shares of the same class
of the same Fund. Since no Fund is intended as a complete investment
program it is important, in connection with the adoption of a SEP-IRA,
that employers give careful consideration to the fiduciary obligation
requirements of ERISA, particularly those pertaining to diversification
of investments.
Withdrawals before age 59 may involve the payment of a 10%
nondeductible penalty on the amount withdrawn. Withdrawals must
commence no later than the required beginning date (see discussions of
"Prototype Retirement Plans" above). The time and rate of withdrawal
must conform with Code requirements in order to avoid adverse tax
consequences. Contributions to a SEP-IRA by an employer are excluded
from the employee's income rather than deducted from it. Elective
deferrals made to an employee's SEP-IRA generally are excluded from his
income in the year of
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deferral, but are included in wages for social security (FICA) and
unemployment (FUTA) tax purposes. However, if the employee makes
regular IRA contributions to his SEP-IRA (other than elective
deferrals), he can deduct them the same way as contributions to a
regular IRA, up to the amount of his deduction limit. Investors should
consult their tax advisers for further tax information including
information with respect to the imposition of state and local income
taxes and the effects of tax law changes.
The Fund has arranged for Boston Safe Deposit and Trust Company to
furnish the required custodial services for SEP-IRAs using the Funds as
the underlying investment. Boston Safe Deposit and Trust Company will
charge an acceptance fee of $10 for each new SEP-IRA and an annual
maintenance fee of $15 for each year that a SEP-IRA is in existence.
There is a $10 fee for each premature distribution. These fees will be
deducted from the SEP-IRA account and may be changed by the Custodian
upon 30 days' prior written notice.
To establish a SEP-IRA, an employer and employee should complete
the WPG IRA application materials, as well as either IRS Form 5305A-SEP
(if employees will make elective deferrals) and/or IRS Form 5305-SEP
(only if employer contributions will be made). Pursuant to IRS
regulations, an investor may for seven days following establishment of
a SEP-IRA revoke the SEP-IRA. Detailed information on SEP-IRAs,
together with the necessary form of application and custodial
agreement, is available from the Fund and should be studied carefully
by persons interested in utilizing the Fund for SEP-IRA investments.
Such persons should also consult their own advisers regarding all
aspects of the Fund as an appropriate SEP-IRA investment vehicle.
DIVIDENDS, DISTRIBUTIONS AND TAX STATUS
Each Fund within the Trust is separate for investment and
accounting purposes and is treated as a separate entity for federal
income tax purposes.
A regulated investment company qualifying under Subchapter M of
the Code is not subject to federal income tax on distributed amounts to
the extent that it distributes annually its taxable and, if any,
tax-exempt net investment income and net realized capital gains in
accordance with the timing requirements of the Code. Each Fund intends
to elect and to qualify to be treated as a regulated investment company
and intends to continue to so qualify for each taxable year.
Qualification of a Fund for treatment as a regulated investment
company under the Code requires, among other things,
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that (a) at least 90% of a Fund's annual gross income, without offset
for losses from the sale or other disposition of stock or securities or
other transactions, be derived from interest, payments with respect to
securities loans, dividends and gains from the sale or other
disposition of stock or securities or foreign currencies, or other
income (including but not limited to gains from options, futures, or
forward contracts) derived with respect to its business of investing in
such stock, securities or currencies; (b) the Fund derive less than 30%
of its annual gross income from gains (without deduction for losses)
from the sale or other disposition of any of the following held (for
tax purposes) for less than three months: (i) stock or securities; (ii)
options, futures or forward contracts (not on foreign currencies) or
(iii) foreign currencies (or options, futures or forward contracts on
foreign currencies) not directly related to the Fund's principal
business of investing in stock or securities and related options or
futures; (c) the Fund distribute at least annually to its shareholders
as dividends at least 90% of its taxable and tax-exempt net investment
income, the excess of net short-term capital gain over net long-term
capital loss earned in each year and any other net income (except for
the excess, if any, of net long-term capital gain over net short-term
capital loss, which need not be distributed in order for the Fund to
qualify as a regulated investment company but is taxed to the Fund if
it is not distributed); and (d) the Fund diversify its assets so that,
at the close of each quarter of its taxable year, (i) at least 50% of
the fair market value of its total (gross) assets is comprised of cash,
cash items, U.S. Government securities, securities of other regulated
investment companies and other securities limited in respect of any one
issuer to no more than 5% of the fair market value of the Fund's total
assets and 10% of the outstanding voting securities of such issuer and
(ii) no more than 25% of the fair market value of its total assets is
invested in the securities of any one issuer (other than U.S.
Government securities and securities of other regulated investment
companies) or of two or more issuers controlled by the Fund and engaged
in the same, similar, or related trades or businesses.
It is expected that separate accounts of insurance companies will
be purchasing Institutional Class shares of the Funds. As such, each
Fund must, and intends to, comply with the diversification requirements
imposed by Section 817(h) of the Code and the regulations thereunder.
These requirements, which are in addition to the diversification
requirements imposed on a Fund by the 1940 Act and Subchapter M of the
Code, place certain limitations on the assets of each separate account
and, because Section 817(h) and those regulations treat the assets of
the Fund as assets of the related separate account, the assets of a
Fund, that may be invested in securities of a single issuer.
Specifically, the regulations provide that, except as permitted by
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the "safe harbor" described below, as of the end of each calendar
quarter or within 30 days thereafter no more than 55% of the total
assets of a Fund may be represented by any one investment, no more than
70% by any two investments, no more than 80% by any three investments
and no more than 90% by any four investments. For this purpose, all
securities of the same issuer are considered a single investment, and
each U.S. Government agency and instrumentality is considered a
separate issuer. Section 817(h) provides, as a safe harbor, that a
separate account will be treated as being adequately diversified if the
diversification requirements under Subchapter M of the Code are
satisfied and no more than 55% of the value of the account's total
assets are cash and cash items (including receivables), U.S. Government
securities and securities of other regulated investment companies.
Failure by a Fund to both qualify as a regulated investment company and
satisfy the Section 817(h) requirements would generally result in
treatment of the variable contract holders other than as described in
the Institutional Class shares Prospectus, including inclusion in
ordinary income of income accrued under the contracts for the current
and all prior taxable years. Any such failure may also result in
adverse tax consequences for the insurance company issuing the
contracts.
Unless its only shareholders are life insurance company segregated
asset accounts held in connection with variable contracts, trusts that
are described in section 401(a) of the Code and exempt from tax under
section 501(a) of the Code, and investors of "seed money" not in excess
of $250,000, each Fund is subject to a 4% nondeductible federal excise
tax on amounts required to be but not distributed under a prescribed
formula. The formula requires that a Fund distribute (or be deemed to
have distributed) to shareholders during a calendar year at least 98%
of the Fund's ordinary income (not including tax-exempt interest) for
the calendar year, at least 98% of the excess of its capital gains over
the capital losses realized during the one-year period ending October
31 during such year, as well as any income or gain (as so computed)
from the prior calendar year that was not distributed for such year and
on which the Fund paid no federal income tax. Each Fund has
distribution policies that should generally enable it to avoid
liability for this tax.
Net investment income for each Fund is the Fund's investment
income less its expenses. Dividends from taxable net investment income
and the excess, if any, of net short-term capital gain over net
long-term capital loss of a Fund will be treated under the Code as
ordinary income, and dividends from net long-term capital gain in
excess of net short-term capital loss ("capital gain dividends") will
be treated under the Code as long-term capital gain, for federal income
tax purposes. These dividends are paid after taking into account, and
reducing the distribution to the
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extent of, any available capital loss carryforwards. Distributions from
a Fund's current or accumulated earnings and profits, as computed for
Federal income tax purposes, will be treated as described above whether
taken in shares or in cash. Certain distributions received in January
may be treated as if paid by a Fund and received by a shareholder on
December 31 of the prior year.
Dividends, including capital gain dividends, paid by a Fund
shortly after a shareholder's purchase of shares have the effect of
reducing the net asset value per share of his shares by the amount per
share of the dividend distribution. Although such dividends are, in
effect, a partial return of the shareholder's purchase price to the
shareholder, they may be characterized as ordinary income or capital
gain as described above.
Equity options (including options on stock and options on
narrow-based stock indices) and over-the-counter options on debt
securities written or purchased by a Fund will be subject to tax under
Section 1234 of the Code. In general, no loss is recognized by a Fund
upon payment of a premium in connection with the purchase of a put or
call option. The character of any gain or loss recognized (i.e.,
long-term or short-term) will generally depend, in the case of a lapse
or sale of the option, on the Fund's holding period for the option, and
in the case of an exercise of the option, on the Fund's holding period
for the underlying security. The purchase of a put option may
constitute a short sale for federal income tax purposes, causing an
adjustment in the holding period of the underlying stock or security or
a substantially identical stock or security in the Fund's portfolio. If
a Fund writes a put or call option, no gain is recognized upon its
receipt of a premium. If the option lapses or is closed out, any gain
or loss is treated as a short-term capital gain or loss. If a call
option is exercised, whether the gain or loss is long-term or
short-term depends on the holding period of the underlying stock or
security. The exercise of a put option written by a Fund is not a
taxable transaction for the Fund.
All futures contracts entered into by a Fund and all listed
nonequity options written or purchased by a Fund (including options on
debt securities, options on futures contracts, options on securities
indices and options on broad-based stock indices) will be governed by
Section 1256 of the Code. Absent a tax election to the contrary, gain
or loss attributable to the lapse, exercise or closing out of any such
position will be treated as 60% long-term and 40% short-term capital
gain or loss, and on the last trading day of a Fund's taxable year, all
outstanding Section 1256 positions will be marked to market (i.e.,
treated as
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if such positions were closed out at their closing price on such day),
and any resulting gain or loss will be recognized as 60% long-term and
40% short-term capital gain or loss. Under certain circumstances, entry
into a futures contract to sell a security may constitute a short sale
for federal income tax purposes, causing an adjustment in the holding
period of the underlying security or a substantially identical security
in a Fund's portfolio.
Because options and futures activities of a Fund may increase the
amount of gains from the sale of securities or investments held or
treated as held for less than three months, the Funds may have to limit
their options and futures transactions in order to comply with the 30%
limitation described above.
Positions of a Fund which consist of at least one stock and at
least one stock option or other position with respect to a related
security which substantially diminishes the Fund's risk of loss with
respect to such stock could be treated as a "straddle" which is
governed by Section 1092 of the Code, the operation of which may cause
deferral of losses, adjustments in the holding periods of stock or
securities and conversion of short-term capital losses into long-term
capital losses. An exception to these straddle rules exists for any
"qualified covered call options" on stock written by a Fund.
Positions of a Fund which consist of at least one debt security
not governed by Section 1256 and at least one futures contract or
listed nonequity option governed by Section 1256 which substantially
diminishes the Fund's risk of loss with respect to such debt security
will be treated as a "mixed straddle." Although mixed straddles are
subject to the straddle rules of Section 1092 of the Code, certain tax
elections exist for them which reduce or eliminate the operation of
these rules. Each Fund will monitor its transactions in options and
futures and may make certain tax elections in order to mitigate the
operation of these rules and prevent disqualification of the Fund as a
regulated investment company for federal income tax purposes.
These special tax rules applicable to options and futures
transactions could affect the amount, timing and character of a Fund's
income or loss and hence of its distributions to shareholders by
causing holding period adjustments, converting short-term capital
losses into long-term capital losses, and accelerating a Fund's income
or deferring its losses.
A Fund's investment in zero coupon securities or other securities
having original issue discount (or market discount, if the Fund elects
to include market discount in income currently) will generally cause it
to realize income prior to the receipt of
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cash payments with respect to these securities. The mark to market
rules described above may also require a Fund to recognize gains
without a concurrent receipt of cash. In order to distribute this
income or gains, maintain its qualification as a regulated investment
company, and avoid federal income or excise taxes, the Fund may be
required to liquidate portfolio securities that it might otherwise have
continued to hold.
The Funds may be subject to foreign withholding or other foreign
taxes with respect to income (possibly including, in some cases,
capital gains) derived from foreign securities. These taxes may be
reduced or eliminated under the terms of an applicable U.S. income tax
treaty. However, the Funds will not be eligible to pass through to
shareholders any foreign tax credits or deductions for foreign taxes
paid by the Funds that are not thus reduced or eliminated. Certain
foreign exchange gains and losses realized by the Funds with respect to
such securities or related currency transactions will generally be
treated as ordinary income and losses. Certain uses of foreign currency
and investments by the Funds in certain "passive foreign investment
companies" may be limited in order to avoid adverse tax consequences
for the Funds (or an election, if available, may be made with respect
to such investments).
Different tax treatment, including a penalty on certain
distributions, excess contributions or other transactions is accorded
to accounts maintained as IRAs or other retirement plans. Investors
should consult their tax advisers for more information. See "Prototype
Retirement Plan For Employers and Self-Employed Individuals,"
"Simplified Employee Pension Plans (SEP-IRA)," and "Individual
Retirement Accounts."
Redemptions, including exchanges, of shares may give rise to
realized gains or losses, recognizable for tax purposes except for
investors subject to tax provisions that do not require them to
recognize such gains or losses. All or a portion of a loss realized
upon the redemption of shares may be disallowed under "wash sale" rules
to the extent shares are purchased (including shares acquired by means
of reinvested dividends) within a 61-day period beginning 30 days
before and ending 30 days after such redemption. Any loss realized upon
a shareholder's sale, redemption or other disposition of shares with a
tax holding period of six months or less will be treated as a long-term
capital loss to the extent of any distribution of long-term capital
gains with respect to such shares. Exchanges and withdrawals under the
Systematic Withdrawal Plan are treated as redemptions for federal
income tax purposes.
The Trust is organized as a Delaware business trust, and neither
the Trust nor the Funds will be subject to any corporate
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excise or franchise tax in the State of Delaware, nor will they be
liable for Delaware income taxes provided that each Fund qualifies as a
regulated investment company for federal income tax purposes and
satisfies certain income source requirements of Delaware law. If each
Fund so qualifies and distributes all of its income and capital gains,
it will also be exempt from the New York State franchise tax and the
New York City general corporation tax, except for small minimum taxes.
The foregoing discussion of U.S. federal income tax law does not
address the special tax rules applicable to certain classes of
investors, such as insurance companies. Each shareholder who is not a
U.S. person should consider the U.S. and foreign tax consequences of
ownership of shares of the Funds, including the possibility that such a
shareholder may be subject to a U.S. withholding tax at a rate of 30%
(or at a lower rate under an applicable income tax treaty) on Fund
distributions treated as ordinary dividends.
This discussion of the federal income tax treatment of the Funds
and their distributions is based on the federal income tax law in
effect as of the date of this Statement of Additional Information.
Shareholders should consult their tax advisers about the application of
the provisions of tax law described in this statement of additional
information and about the possible application of state, local and
foreign taxes in light of their particular tax situations.
PORTFOLIO BROKERAGE
(See "Portfolio Brokerage" in the Prospectuses.)
It is the general policy of the Trust not to employ any broker in
the purchase or sale of securities for a Fund's portfolio unless the
Trust believes that the broker will obtain the best results for the
Fund, taking into consideration such relevant factors as price, the
ability of the broker to effect the transaction and the broker's
facilities, reliability and financial responsibility. Commission rates,
being a component of price, are considered together with such factors.
Subject to the foregoing, where transactions are effected on securities
exchanges, the Trust intends to employ primarily WPG as its broker. The
Trust is not obligated to deal with any broker or group of brokers in
the execution of transactions in portfolio securities.
WPG acts as broker for the Funds on exchange transactions,
subject, however, to the general policy of the Trust set forth above
and the procedures adopted by the Trustees. Commissions paid to WPG
must be at least as favorable as those believed to be contemporaneously
charged by other brokers in connection with comparable transactions
involving similar securities being
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purchased or sold on a securities exchange. A transaction is not placed
with WPG if a Fund would have to pay a commission rate less favorable
than WPG's contemporaneous charges for comparable transactions for its
other most favored, but unaffiliated, customers except for accounts for
which WPG acts as a clearing broker for another brokerage firm, and any
customers of WPG determined by a majority of the Independent Trustees
not to be comparable to the Funds. With regard to comparable customers,
in isolated situations, subject to the approval of a majority of the
Independent Trustees, exceptions may be made. Since WPG has, as
investment adviser to the Funds, the obligation to provide management,
which includes elements of research and related skills, such research
and related skills will not be used by WPG as a basis for negotiating
commissions at a rate higher than that determined in accordance with
the above criteria.
The commission rate on all exchange orders is subject to
negotiation. Section 17(e) of the 1940 Act limits to "the usual and
customary broker's commission" the amount which can be paid by the
Trust to an affiliated person, such as WPG, acting as broker in
connection with transactions effected on a securities exchange. The
Trustees, including a majority of the Independent Trustees, have
adopted procedures designed to comply with the requirements of Section
17(e) of the 1940 Act and Rule 17e-1 thereunder to ensure a broker's
commission that is "reasonable and fair compared to the commission, fee
or other remuneration received by other brokers in connection with
comparable transactions involving similar securities being purchased or
sold on a securities exchange during a comparable period of time ...."
Rule 17e-1 also requires the Trustees, including a majority of the
Independent Trustees, to adopt procedures reasonably designed to
provide that the commission paid is consistent with the above standard,
review those procedures at least annually to determine that they
continue to be appropriate and determine at least quarterly that
transactions have been effected in compliance with those procedures.
The Trustees of the Trust, including a majority of the Independent
Trustees, have adopted procedures designed to comply with the
requirements of Rule 17e-1.
In selecting brokers other than WPG to effect transactions on
securities exchanges, the Trust considers the factors set forth in the
first paragraph under this heading and any investment products or
services provided by such brokers, subject to the criteria of Section
28(e) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Section 28(e) specifies that a person with investment discretion
shall not be "deemed to have acted unlawfully or to have breached a
fiduciary duty" solely because such person has caused the account to
pay a higher commission than the lowest rate available. To obtain the
benefit of Section 28(e), the person so exercising investment
discretion must
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make a good faith determination that the commissions paid are
"reasonable in relation to the value of the brokerage and research
services provided viewed in terms of either that particular transaction
or his overall responsibilities with respect to the accounts as to
which he exercises investment discretion." Accordingly, if the Trust
determines in good faith that the amount of commissions charged by a
broker is reasonable in relation to the value of the brokerage and
research products and services provided by such broker, the Trust may
pay commissions to such broker in an amount greater than the amount
another firm might charge. Research products and services provided to
the Trust include research reports on particular industries and
companies, economic surveys and analyses, recommendations as to
specific securities and other products or services (e.g., quotation
equipment and computer related costs and expenses) providing lawful and
appropriate assistance to WPG (and its subsidiaries) in the performance
of their decision-making responsibilities.
Each year, the Adviser considers the amount and nature of the
research products and services provided by other brokers as well as the
extent to which such products and services are relied upon, and
attempts to allocate a portion of the brokerage business of their
clients, such as the Trust, on the basis of that consideration. In
addition, brokers sometimes suggest a level of business they would like
to receive in return for the various services they provide. Actual
brokerage business received by any broker may be less than the
suggested allocations, but can (and often does) exceed the suggestions,
because total brokerage is allocated on the basis of all the
considerations described above. In no instance is a broker excluded
from receiving business because it has not been identified as providing
research services. As permitted by Section 28(e), the investment
information received from other brokers may be used by WPG (and its
subsidiaries) in servicing all its accounts and not all such
information may be used by WPG, in its capacity as the Adviser, in
connection with the Trust. Nonetheless, the Trust believes that such
investment information provides the Trust with benefits by
supplementing the research otherwise available to the Trust.
As set forth above, the Trust employs WPG, a member firm of the
NYSE, as its principal broker on U.S. exchange transactions. Section
11(a) of the Exchange Act provides that a member firm of a national
securities exchange (such as WPG) may not effect transactions on such
exchange for the account of an investment company (such as the Trust)
of which the member firm or its affiliate (such as the Adviser) is the
investment adviser unless certain conditions are met. These conditions
require that the investment company authorize the practice and that the
investment company receive from the member firm at least annually a
statement of all commissions paid in connection with such transactions.
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WPG's transactions on behalf of the Funds are effected in compliance
with these conditions.
WPG furnishes to the Trust at least quarterly a statement setting
forth the total amount of all compensation retained by WPG or any
associated person of WPG in connection with effecting transactions for
the account of the Trust, and the Trustees of the Trust review and
approve all the Trust's portfolio transactions and the compensation
received by WPG in connection therewith.
WPG does not knowingly participate in commissions paid by the
Trust to other brokers or dealers and does not seek or knowingly
receive any reciprocal business as the result of the payment of such
commissions. In the event WPG at any time learns that it has knowingly
received reciprocal business, it will so inform the Trustees.
To the extent that WPG receives brokerage commissions on Trust
portfolio transactions, officers and Trustees of the Trust who are also
principals in WPG may receive indirect compensation from the Trust
through their participation in such brokerage commissions.
In certain instances there may be securities which are suitable
for a Fund's portfolio as well as for that of another Fund or one or
more of the other clients of the Adviser. Investment decisions for a
Fund and for the Adviser's other clients are made with a view to
achieving their respective investment objectives. It may develop that a
particular security is bought or sold for only one client even though
it might be held by, or bought or sold for, other clients. Likewise, a
particular security may be bought for one or more clients when one or
more other clients are selling that same security. Some simultaneous
transactions are inevitable when several clients receive investment
advice from the same investment adviser, particularly when the same
security is suitable for the investment objectives of more than one
client. When two or more clients are simultaneously engaged in the
purchase or sale of the same security, the securities are allocated
among clients in a manner believed to be equitable to each. It is
recognized that in some cases this system could have a detrimental
effect on the price or volume of the security in a particular
transaction as far as a Fund is concerned. The Trust believes that over
time its ability to participate in volume transactions will produce
better executions for the Funds. When appropriate, orders for the
account of the Funds are combined with orders for other investment
companies or other clients advised by WPG in order to obtain a more
favorable commission rate. When the same security is purchased for a
Fund and one or more other funds or other clients on the same day, each
party pays the average price and commissions
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paid are allocated in direct proportion to the number of shares
purchased.
The U.S. Government and debt securities in which the Funds invest
are traded primarily in the over-the-counter market. Transactions in
the over-the-counter market are generally principal transactions with
dealers and the costs of such transactions involve dealer spreads
rather than brokerage commissions. With respect to over-the-counter
transactions, the Trust, where possible, deals directly with the
dealers who make a market in the securities involved except in those
circumstances where better prices and execution are available
elsewhere. Under the 1940 Act, persons affiliated with the Trust are
prohibited from dealing with the Trust as a principal in the purchase
and sale of securities. Since transactions in the over-the-counter
market usually involve transactions with dealers acting as principal
for their own account, affiliated persons of the Trust, including WPG,
may not serve as the Trust's dealer in connection with such
transactions. However, affiliated persons of the Trust may serve as its
broker in transactions conducted on an exchange or over-the-counter
transactions conducted on an agency basis. On occasion, certain money
market instruments may be purchased directly from an issuer, in which
case no commissions or discounts are paid.
Subject to the supervision of the Trustees, all investment
decisions of the Trust are executed through WPG's trading department.
PORTFOLIO TURNOVER
See "Risk Considerations and Other Investment Practices and
Policies -- Portfolio Turnover" in the Prospectus.
The annual portfolio turnover rate of a Fund is calculated by
dividing the lesser of the purchase or sales of a Fund's portfolio
securities for the year by the monthly average of the value of the
portfolio securities owned by that Fund during the year. The monthly
average is calculated by totalling the values of the portfolio
securities as of the beginning and end of the first month of the year
and as of the end of the succeeding 11 months and dividing the sum by
13. In determining portfolio turnover, securities (including options)
which have maturities at the time of acquisition of one year or less
("short-term securities"), are excluded. A turnover rate of 100% would
occur if all of a Fund's portfolio securities (other than short-term
securities) were replaced once in a period of one year. It should be
noted that if a Fund were to write a substantial number of options
which are exercised, the portfolio turnover rate of that Fund would
increase. Increased portfolio turnover results in
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increased brokerage costs which the Trust must pay and the possibility
of more short-term gains which may increase the difficulty of
qualifying as a regulated investment company.
To the extent that their portfolios are traded for short-term
market considerations and exceeds 100%, the annual portfolio turnover
rate of the Funds could be higher than most mutual funds. None of the
Funds will engage in short-term trading to an extent which would
disqualify them as regulated investment companies under Subchapter M of
the Code.
ORGANIZATION
(See "Management of the Tomorrow Funds" and "The Trust" in the
Prospectuses.)
As a Delaware business trust, the Trust's operations are governed
by its Agreement and Declaration of Trust dated June 21, 1995 (the
"Declaration of Trust"). A copy of the Trust's Certificate of Trust,
also dated June 21, 1995, is on file with the Office of the Secretary
of State of the State of Delaware. Upon the initial purchase of shares,
the shareholder agrees to be bound by the Trust's Declaration of Trust,
as amended from time to time. Generally, Delaware business trust
shareholders are not personally liable for obligations of the Delaware
business trust under Delaware law. The Delaware Business Trust Act (the
"Delaware Act") provides that a shareholder of a Delaware business
trust shall be entitled to the same limitation of liability extended to
shareholders of private for-profit corporations. The Trust's
Declaration of Trust expressly provides that the Trust has been
organized under the Delaware Act and that the Declaration of Trust is
to be governed by Delaware law. It is nevertheless possible that a
Delaware business trust, such as the Trust, might become a party to an
action in another state whose courts refused to apply Delaware law, in
which case the Trust's shareholders could be subject to personal
liability.
To guard against this risk, the Declaration of Trust (i) contains
an express disclaimer of shareholder liability for acts or obligations
of the Trust and provides that notice of such disclaimer may be given
in each agreement, obligation and instrument entered into or executed
by the Trust or its Trustees, (ii) provides for the indemnification out
of Trust property of any shareholders held personally liable for any
obligations of the Trust or any series of the Trust and (iii) provides
that the Trust shall, upon request, assume the defense of any claim
made against any shareholder for any act or obligation of the Trust and
satisfy any judgment thereon. Thus, the risk of a Trust shareholder
incurring financial loss beyond his or her investment because of
shareholder liability is limited to circumstances in which all of
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the following factors are present: (1) a court refused to apply
Delaware law; (2) the liability arose under tort law or, if not, no
contractual limitation of lability was in effect; and (3) the Trust
itself would be unable to meet its obligations. In the light of
Delaware law, the nature of the Trust's business and the nature of its
assets, the risk of personal liability to a Fund shareholder is remote.
The Declaration of Trust further provides that the Trust shall
indemnify each of its Trustees and officers against liabilities and
expenses reasonably incurred by them, in connection with, or arising
out of, any action, suit or proceeding, threatened against or otherwise
involving such Trustee or officer, directly or indirectly, by reason of
being or having been a Trustee or officer of the Trust. The Declaration
of Trust does not authorize the Trust to indemnify any Trustee or
officer against any liability to which he or she would otherwise be
subject by reason of or for willful misfeasance, bad faith, gross
negligence or reckless disregard of such person's duties.
Under the Declaration of Trust, the Trust is not required to hold
annual meetings to elect Trustees or for other purposes. It is not
anticipated that the Trust will hold shareholders' meetings unless
required by law or the Declaration of Trust. The Trust will be required
to hold a meeting to elect Trustees to fill any existing vacancies on
the Board if, at any time, fewer than a majority of the Trustees have
been elected by the shareholders of the Trust. The Board is required to
call a meeting for the purpose of considering the removal of persons
serving as Trustee if requested in writing to do so by the holders of
not less than 10% of the outstanding shares of the Trust.
Shares of the Trust do not entitle their holders to cumulative
voting rights, so that the holders of more than 50% of the outstanding
shares of the Trust may elect all of the Trustees, in which case the
holders of the remaining shares would not be able to elect any
Trustees. As determined by the Trustees, shareholders are entitled to
one vote for each full share held and fractional votes for fractional
shares held or one vote for each dollar of net asset value (number of
shares held times the net asset value of the applicable class of the
applicable Fund).
As it is expected that separate accounts of insurance companies
will be purchasing Institutional Class shares of each of the Funds, it
should be noted that the rights, if any, of variable contract holders
to vote the shares of a Fund beneficially owned by such variable
contract holders are governed by the relevant variable contract.
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Pursuant to the Declaration of Trust, the Trustees may create
additional funds by establishing additional series of shares in the
Trust. The establishment of additional series would not affect the
interests of current shareholders in the existing six Funds. As of the
date of this Statement of Additional Information, the Board does not
have any plan to establish another series of shares in the Trust.
Pursuant to the Declaration of Trust, the Board may establish and
issue multiple classes of shares for each Fund. As of the date of this
Statement of Additional Information, the Trustees have authorized the
issuance of two classes of shares for each series, designated Adviser
Class and Institutional Class. See "The Trust" in the Prospectuses for
a detailed description of the respective rights of the two classes of
shares. The Trustees do not have any plan to establish additional
classes of shares for any Fund.
Each share of each class of a Fund is entitled to such dividends
and distributions out of the income earned on the assets belonging to
that Fund which are attributable to such class as are declared in the
discretion of the Board. In the event of the liquidation or dissolution
of the Trust, shares of each class of each Fund are entitled to receive
their proportionate share of the assets which are attributable to such
class of such Fund and which are available for distribution as the
Trustees in their sole discretion may determine. Shareholders are not
entitled to any preemptive, conversion or subscription rights. All
shares, when issued, will be fully paid and non-assessable by the
Trust.
Pursuant to the Declaration of Trust and subject to shareholder
approval (if then required), the Trustees may authorize each Fund to
invest all or part of its investable assets in a single open-end
investment company that has substantially the same investment
objectives, policies and restrictions as the Fund. As of the date of
this Statement of Additional Information, the Board does not have any
plan to authorize any Fund to so invest its assets.
"Tomorrow Funds Retirement Trust" is the designation of the Trust
for the time being under the Declaration of Trust, and all persons
dealing with a Fund must look solely to the property of that Fund for
the enforcement of any claims against that Fund as neither the
Trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of a Fund or the
Trust. No Fund is liable for the obligations of any other Fund. Since
the Funds use combined prospectuses, however, it is possible that one
Fund might become liable for a misstatement or omission in its
prospectus regarding the other Fund with which its disclosure is
combined. The Trustees have
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considered this factor in approving the use of the combined
prospectuses.
CUSTODIAN
The Custodian for the Trust is Boston Safe Deposit and Trust
Company at One Exchange Place, Boston, Massachusetts 02109. In its
capacity as Custodian, Boston Safe Deposit and Trust Company performs
all accounting services, holds the assets of the Trust and is
responsible for calculating the net asset value per share.
TRANSFER AGENT
The Shareholder Services Group, Inc. acts as transfer agent for
the Trust and, in such capacity, processes purchases, transfers and
redemptions of shares, acts as dividend disbursing agent, and maintains
records and handles correspondence with respect to shareholder
accounts.
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP ("KPMG"), 345 Park Avenue, New York, New
York 10154, are the independent auditors for the Trust. Professional
services performed by KPMG include audits of the financial statements
of the Trust, consultation on financial, accounting and reporting
matters, review and consultation regarding various filings with the SEC
and attendance at the meetings of the Audit Committee and Board of
Trustees. KPMG also performs other professional services for the Trust
including preparation of income tax returns of the Funds.
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APPENDIX
Description of Bond Ratings Moody's Investors Service, Inc.
Aaa: Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can
be visualized are most unlikely to impair the fundamentally strong
position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities
or fluctuations of protective elements may be of greater amplitude or
there may be other elements present which make the long-term risks
appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for
the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Moody's also provides credit ratings for preferred stocks. It
should be borne in mind that preferred stock occupies a junior position
to bonds within a particular capital structure and that these
securities are rated within the universe of preferred stocks.
aaa: An issue which is rated "aaa" is considered to be a top-quality
preferred stock. This rating indicates good asset protection and the
least risk of dividend impairment within the universe of preferred
stocks.
aa: An issue which is rated "aa" is considered a high-grade
preferred stock. This rating indicates that there is a reasonable
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assurance that earnings and asset protection will remain relatively
well maintained in the foreseeable future.
a: An issue which is rated "a" is considered to be an upper-medium
grade preferred stock. While risks are judged to be somewhat greater
than in the "aaa" and "aa" classifications, earnings and asset
protections are, nevertheless, expected to be maintained at adequate
levels.
baa: An issue which is rated "baa" is considered to be a medium grade
preferred stock, neither highly protected nor poorly secured. Earnings
and asset protection appear adequate at present but may be questionable
over any great length of time.
Moody's ratings for municipal notes and other short-term loans are
designated Moody's Investment Grade (MIG). This distinction is in
recognition of the differences between short-term and long-term credit
risk. Loans bearing the designation MIG 1 are of the best quality,
enjoying strong protection by establishing cash flows of funds for
their servicing or by established and broad-based access to the market
for refinancing, or both. Loans bearing the designation MIG 2 are of
high quality, with margins of protection ample although not so large as
in the preceding group. A short term issue having a demand feature
(i.e. payment relying on external liquidity and usually payable on
demand rather than fixed maturity dates) is differentiated by Moody's
with the use of the Symbol VMIG, instead of MIG.
Moody's also provides credit ratings for tax-exempt commercial
paper. These are promissory obligations (1) not having an original
maturity in excess of nine months, and (2) backed by commercial banks.
Notes bearing the designation P-1 have a superior capacity for
repayment. Notes bearing the designation P-2 have a strong capacity for
repayment.
Standard & Poor's Ratings Group
AAA: Bonds rated AAA have the higher rating assigned by
Standard & Poor's. Capacity to pay interest and repay principal
is extremely strong.
AA: Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the higher rated issues only in small
degree.
A: Bonds rated A have a very strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than bonds
in higher rated categories.
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BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than in higher
rated categories.
S&P's top ratings for municipal notes issued after July 29, 1984
are SP-1 and SP-2. The designation SP-1 indicates a very strong
capacity to pay principal and interest. A "+" is added for those issues
determined to possess overwhelming safety characteristics. An "SP-2"
designation indicates a satisfactory capacity to pay principal and
interest.
Commercial paper rated A-2 or better by S&P is described as having
a very strong degree of safety regarding timeliness and capacity to
repay. Additionally, as a precondition for receiving an S&P commercial
paper rating, a bank credit line and/or liquid assets must be present
to cover the amount of commercial paper outstanding at all times.
The Moody's Prime-2 rating and above indicates a strong capacity
for repayment of short-term promissory obligations.
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GLOSSARY
Commercial Paper: Short-term promissory notes of large
corporations with excellent credit ratings issued to finance their
current operations.
Certificates of Deposit: Negotiable certificates representing a
commercial bank's obligations to repay funds deposited with it, earning
specified rates of interest over given periods.
Bankers' Acceptances: Negotiable obligations of a bank to pay a
draft which has been drawn on it by a customer. These obligations
are backed by large banks and usually are backed by goods in
international trade.
Time Deposits: Non-negotiable deposits in a banking institution
earning a specified interest rate over a given period of time.
Corporate Obligations: Bonds and notes issued by corporations and
other business organizations in order to finance their long-term
credit needs.
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SUBJECT TO COMPLETION: DATED JULY 3, 1995
PART B
WEISS, PECK & GREER INVESTMENTS
TOMORROW FUNDS RETIREMENT TRUST
Tomorrow Long-Term Retirement Fund
Tomorrow Mid-Term Retirement Fund
Tomorrow Short-Term Retirement Fund
Tomorrow Post-Retirement Fund
Core Large-Cap Stock Fund
Core Small-Cap Stock Fund
(each a "Fund" and collectively, the "Funds")
STATEMENT OF ADDITIONAL INFORMATION
INSTITUTIONAL CLASS SHARES
September __, 1995
This Statement of Additional Information is not a prospectus and
should be read in conjunction with the Institutional Class prospectuses
of the Funds, each dated September __, 1995, as amended and/or
supplemented from time to time (collectively, the "Prospectuses"),
copies of which may be obtained without charge by writing to Tomorrow
Funds Retirement Trust (the "Trust"), One New York Plaza, New York
10004 or by calling 1-800-_______.
THE STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED
OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS
BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE
SECURITIES MAY NOT BE SOLD NOR MAY ANY OFFERS TO BUY BE ACCEPTED PRIOR
TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
STATEMENT OF ADDITIONAL INFORMATION DOES NOT CONSTITUTE A PROSPECTUS.
<PAGE>
TABLE OF CONTENTS
Page
THE FUNDS' INVESTMENT OBJECTIVES AND POLICIES.......... 1
Quantitative Methodology.......................... 2
INVESTMENT TECHNIQUES.................................. 3
Repurchase Agreements............................. 4
Forward Commitment and When-Issued Transactions... 5
Loans of Portfolio Securities..................... 6
Options........................................... 7
Futures Transactions.............................. 10
Limitations on the Use of Futures Contracts
and Options on Futures.......................... 12
Special Considerations and Risks
Related to Options and Futures Transactions..... 13
Privately Issued Mortgage-Backed Securities....... 15
Risks Associated with Specific Types
of Derivative Securities........................ 17
Inverse Floating Rate Instruments................. 17
Participation Interests........................... 17
Constant Duration Methodology..................... 17
Restricted and Illiquid Securities................ 18
Other Investment Companies........................ 18
CALCULATION OF THE FUNDS' RETURNS...................... 19
Total Return...................................... 19
Yield............................................. 20
Other Quotations, Comparisons and
General Information............................. 20
INVESTMENT RESTRICTIONS................................ 22
ADVISORY AND ADMINISTRATIVE SERVICES................... 27
Investment Adviser................................ 27
Administrator..................................... 31
Principal Underwriter............................. 32
SERVICE PLANS.......................................... 33
TRUSTEES AND OFFICERS.................................. 35
HOW TO PURCHASE SHARES................................. 37
Acquiring Share of the Funds in
Exchange for Securities......................... 38
REDEMPTION OF SHARES................................... 38
Systematic Withdrawal Plan........................ 38
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NET ASSET VALUE........................................ 39
INVESTOR SERVICES...................................... 41
Automatic Investment Plan......................... 41
Prototype Retirement Plan for Employers
and Self-Employed Individuals................... 42
Individual Retirement Account..................... 43
Simplified Employee Pension Plans (SEP-IRA)....... 45
DIVIDENDS, DISTRIBUTIONS AND TAX STATUS................ 47
PORTFOLIO BROKERAGE.................................... 53
PORTFOLIO TURNOVER..................................... 57
ORGANIZATION........................................... 57
CUSTODIAN.............................................. 60
TRANSFER AGENT......................................... 60
INDEPENDENT AUDITORS................................... 61
APPENDIX............................................... 62
GLOSSARY............................................... 65
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THE FUNDS' INVESTMENT OBJECTIVE AND POLICIES
(See "Investment Objectives and Policies," and "Risk
Considerations and Other Investment Practices and Policies" in the
Prospectuses.)
All capitalized terms not defined herein shall have the meanings
set forth in the Prospectuses.
The Trust consists of separate Funds, the Institutional Class
shares of which are offered to separate accounts (the "Separate
Accounts" or Accounts") of various insurance companies ("Participating
Insurance Companies") to fund variable annuity and variable life
insurance contracts (the "Variable Contracts"). As described in the
Prospectuses, Institutional Class shares of the Funds also may be
offered to certain qualified pension and retirement plans (the
"Qualified Plans"). The terms and conditions of the Variable Contracts
and any limitations upon the Funds in which the Accounts may be
invested are set forth in a separate prospectus and statement of
additional information relating to the Variable Contracts. The terms
and conditions of a Qualified Plan and any limitations upon the Funds
in which such Qualified Plan may be invested are set forth in such
Qualified Plan's governing documents. The Trust reserves the right to
limit the types of Accounts and the types of Qualified Plans that may
invest in any Fund.
Qualified Plans and Participating Insurance Companies are the
record holders of shares of beneficial interest in each Fund. Subject
to the limitations set forth in their Variable Contracts and the
separate prospectus and statement of additional information relating to
the Variable Contracts, contract holders may direct through their
Participating Insurance Companies the allocation of amounts available
for investment among the Funds. Similarly, in accordance with any
limitations set forth in their Qualified Plans, Qualified Plan
participants may direct through their Qualified Plan fiduciaries the
allocation of amounts available for investment among the Funds.
Instructions for any such allocation, or for the purchase or redemption
of shares of a Fund, must be made by the investor's Participating
Insurance Company or Qualified Plan fiduciary, as the case may be, as
the record holder of the Fund's shares. The rights of Participating
Insurance Companies and Qualified Plans as record holders of shares of
a Fund are different from the rights of Variable Contract holders and
Qualified Plan participants. The term "shareholder" in this Statement
of Additional Information when used in the context of Institutional
Class shares refers only to Participating Insurance Companies and
Qualified Plans, and not to Variable Contract holders or Qualified Plan
participants.
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The securities in which each Fund may invest and certain other
investment policies are described in the Funds' Prospectuses. This
Statement of Additional Information should be read in conjunction with
the Prospectuses and, when applicable, with the separate prospectus and
statement of additional information related to the applicable Account.
The Appendix to this Statement of Additional Information contains
a description of the quality categories of corporate bonds in which the
Funds may invest, and a Glossary describing some of the Funds'
investments.
Quantitative Methodology
To seek to achieve their respective investment objectives, each of
the Core Large-Cap Stock Fund ("Large-Cap Fund") and the Core Small-Cap
Stock Fund ("Small-Cap Fund") under normal market conditions, invests
in a portfolio of securities that are considered more "efficient" than
the Standard & Poor's 500 Stock Index (the "S&P 500") in the case of
the Large-Cap Fund and the Russell 2000 Index (the "Russell 2000") in
the case of the Small-Cap Fund. The other Funds seek to achieve similar
results with respect to the amount of their assets allocated to
Large-Cap, Medium-Cap and Small-Cap securities (as described in the
Prospectus applicable to such Funds). The Benchmarks for the Large-Cap,
Medium-Cap and Small-Cap Subcategories are the S&P 500, the Standard &
Poor's 400 MidCap Index (the "S&P 400") and the Russell 2000,
respectively.
An efficient portfolio is one that has the maximum expected return
for any level of risk. The efficient mix of securities is established
mathematically, taking into account the expected return and volatility
of returns for each security in a given universe, as well as the
historical price relationships between the different securities in the
universe.
To implement this strategy with respect to the Large-Cap and
Small-Cap Funds and the Subcategories of the other Funds, Weiss, Peck &
Greer, L.L.C. (the "Adviser" or "WPG") compiles the historical price
data of all securities which comprise the applicable Benchmark. The
Adviser may eliminate a security from consideration if it considers the
security to have an inadequate or misleading price history. Using this
historical price data, the Adviser constructs and analyzes a complete
matrix of all the possible price relationships between the securities
in the applicable Benchmark.
Using a sophisticated software program that incorporates risk
reduction techniques developed by investment professionals of the
Adviser, the Adviser constructs a number of portfolios with
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respect to the Large-Cap and Small-Cap Funds and the Subcategories,
which portfolios are believed to have optimized risk/reward ratios.
From these alternative portfolios, the Adviser selects the combination
of securities, together with their appropriate weightings, that the
Adviser believes will comprise the optimal portfolio for the Large-Cap
and Small-Cap Funds and the Subcategories. The respective optimal
portfolios for the Large-Cap and Small-Cap Funds and the Subcategories
are designed to have returns greater than, but highly correlated with,
the return of the applicable Benchmarks.
After each optimal portfolio is constructed, it may be rebalanced
to maintain the original optimal weights. The Adviser will sell a
security when the security's weight within an actual portfolio becomes
significantly greater than its optimal weight. The Adviser will buy a
security when the security's weight within an actual portfolio becomes
significantly less than its optimal weight. The Adviser repeats the
entire optimization process at least semi-annually, at which point a
new portfolio is constructed with respect to the Large-Cap and
Small-Cap Funds and the Subcategories adding the most recent historical
data, and deleting the oldest data. When a security is removed from a
Benchmark, it will not necessarily be removed from the Funds'
portfolios within a predetermined length of time.
The Adviser's research personnel will monitor and occasionally
make changes in the way the optimal portfolios are constructed or
traded. Such changes may include determining better ways to eliminate
issues from consideration in the matrix, improving the manner in which
the matrix is calculated, altering constraints in the optimization
process and effecting changes in trading procedure (to reduce
transaction costs or to enhance the effects of rebalancing). Any such
changes are intended to be consistent with the basic philosophy of
seeking higher returns with respect to each of the Large-Cap and
Small-Cap Funds and each Subcategory than those that could be obtained
by investing directly in all the stocks of each Benchmark. Investors
should be aware that no quantitative methodology or technical analysis,
including the Adviser's, has ever been proven to provide enhanced
investment return and reduced investment risk in actual long-term
portfolio results.
INVESTMENT TECHNIQUES
The following description of the Funds' investment techniques
supplements the discussion contained in the Prospectuses. (See
"Risk Considerations and Other Investment Practices and Policies"
in the Prospectuses).
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Repurchase Agreements
Each Fund may enter into repurchase agreements with banks,
broker-dealers or other financial institutions in order to generate
additional current income. A repurchase agreement is an agreement under
which a Fund acquires a security from a seller subject to resale to the
seller at an agreed upon price and date. The resale price reflects an
agreed upon interest rate effective for the time period the security is
held by a Fund. The repurchase price may be higher than the purchase
price, the difference being income to the Fund, or the purchase and
repurchase price may be the same, with interest at a stated rate due to
the Fund together with the repurchase price on repurchase. In either
case, the income to the Fund is unrelated to the interest rate on the
security. Typically, repurchase agreements are in effect for one week
or less, but may be in effect for longer periods of time. Repurchase
agreements of more than one week's duration are subject to each Fund's
limitation on investments in illiquid securities.
Repurchase agreements are considered by the Securities and
Exchange Commission (the "SEC") to be loans by the purchaser
collateralized by the underlying securities. In an attempt to reduce
the risk of incurring a loss on a repurchase agreement, the Funds will
generally enter into repurchase agreements only with domestic banks
with total assets in excess of one billion dollars, primary dealers in
U.S. Government securities reporting to the Federal Reserve Bank of New
York or broker-dealers approved by the Trust's Board of Trustees, with
respect to securities of the type in which the Funds may invest. The
Adviser will monitor the value of the underlying securities throughout
the term of the agreement to ensure that their market value always
equals or exceeds the agreed-upon repurchase price to be paid to a
Fund. Each Fund will maintain a segregated account with its custodian,
Boston Safe Deposit and Trust Company (the "Custodian"), or a
subcustodian for the securities and other collateral, if any, acquired
under a repurchase agreement for the term of the agreement.
In addition to the risk of the seller's default or a decline in
value of the underlying security (see "Risk Considerations and Other
Investment Practices and Policies -- Repurchase Agreements" in the
Prospectuses), a Fund also might incur disposition costs in connection
with liquidating the underlying securities. If the seller becomes
insolvent and subject to liquidation or reorganization under the
Bankruptcy Code or other laws, a court may determine that the
underlying security is collateral for a loan by a Fund not within the
control of that Fund and therefore subject to sale by the seller's
trustee in bankruptcy. Finally, it is possible that a Fund may not be
able to perfect its interest in the underlying security and may be
deemed an unsecured creditor
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of the seller. While the Trust acknowledges these risks, it is expected
that they can be controlled through careful monitoring procedures.
Forward Commitment, Delayed Delivery and When-Issued Transactions
Each Fund may purchase securities on a when-issued, delayed
delivery or forward commitment basis. Forward commitment and
when-issued transactions involve a commitment by the Fund to purchase
or sell securities at a future date (ordinarily one or two months
later). The price of the underlying securities (usually expressed in
terms of yield) and the date when the securities will be delivered and
paid for (the settlement date) are fixed at the time the transaction is
negotiated. When-issued purchases and forward commitments are
negotiated directly with the other party, and such commitments are not
traded on exchanges. A Fund will not enter into such transactions for
the purpose of leverage.
When-issued purchases and forward commitments enable a Fund to
lock in what is believed to be an attractive price or yield on a
particular security for a period of time, regardless of future changes
in interest rates. For instance, in periods of rising interest rates
and falling prices, a Fund might sell securities it owns on a forward
commitment basis to limit its exposure to falling prices. In periods of
falling interest rates and rising prices, a Fund might sell securities
it owns and purchase the same or a similar security on a when-issued or
forward commitment basis, thereby obtaining the benefit of currently
higher yields.
The value of securities purchased on a when-issued or forward
commitment basis and any subsequent fluctuations in their value are
reflected in the computation of the Fund's net asset value starting on
the date of the agreement to purchase the securities, and the Fund is
subject to the rights and risks of ownership of the securities on that
date. The Fund does not earn interest on the securities it has
committed to purchase until they are paid for and delivered on the
settlement date. When the Fund makes a forward commitment to sell
securities it owns, the proceeds to be received upon settlement are
included in the Fund's assets. Fluctuations in the market value of the
underlying securities are not reflected in the Fund's net asset value
as long as the commitment to sell remains in effect. Settlement of
when-issued purchases and forward commitment transactions generally
takes place within two months after the date of the transaction, but
the Fund may agree to a longer settlement period.
A Fund will make commitments to purchase securities on a
when-issued basis or to purchase or sell securities on a forward
commitment basis only with the intention of completing the
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transaction and actually purchasing or selling the securities. If
deemed advisable as a matter of investment strategy, however, a Fund
may dispose of or renegotiate a commitment after it is entered into. A
Fund also may sell securities it has committed to purchase before those
securities are delivered to the Fund on the settlement date. The Funds
may realize a capital gain or loss in connection with these
transactions.
When a Fund purchases securities on a when-issued or forward
commitment basis, the Custodian will maintain in a segregated account
securities having a value (determined daily) at least equal to the
amount of the Fund's purchase commitments. In the case of a forward
commitment to sell portfolio securities, the Custodian will hold the
portfolio securities themselves in a segregated account while the
commitment is outstanding. These procedures are designed to ensure that
the Fund will maintain sufficient assets at all times to cover its
obligations under when-issued purchases and forward commitments.
Loans of Portfolio Securities
Each Fund may seek to increase its income by lending portfolio
securities. Under present regulatory policies, such loans may be made
to financial institutions, such as broker-dealers, and would be
required to be secured continuously by collateral in cash, cash
equivalents or U.S. Government securities maintained on a current basis
at an amount at least equal to the market value of the securities
loaned. See "Risk Considerations and Other Investment Practices and
Policies --Lending of Portfolio Securities" in the Prospectuses. The
rules of the New York Stock Exchange ("NYSE") give the Fund the right
to call a loan and obtain the securities loaned at any time on five
days' notice. For the duration of a loan, the Fund would receive the
equivalent of the interest or dividends paid by the issuer on the
securities loaned and would also receive compensation from the
investment of the collateral. The Fund would not, however, have the
right to vote any securities having voting rights during the existence
of the loan, but the Fund would call the loan in anticipation of an
important vote to be taken among holders of the securities or of the
giving or withholding of their consent on a material matter affecting
the investment. As with other extensions of credit, there are risks of
delay in recovery or even loss of rights in the collateral should the
borrower of the securities fail financially. However, the loans would
be made only to firms deemed by the Adviser to be of good standing, and
when, in the judgment of the Adviser, the consideration which can be
earned currently from securities loans of this type justifies the
attendant risk. If the Adviser determines to make securities loans, it
is intended that the value of the securities loaned
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would not exceed 33 1/3% of the value of the total assets of the
Fund.
At the present time the staff of the SEC does not object if an
investment company pays reasonable negotiated fees to its custodian in
connection with loaned securities as long as such fees are pursuant to
a contract approved by the investment company's trustees.
Options
Each Fund currently intends to limit its options transactions
during the current fiscal year so that no more than 5% of the Fund's
net assets will be at risk as a result of such transactions.
Writing Covered Call Options on Securities. Each Fund may write
(sell) covered call options on securities ("calls") at such time or
times as the Adviser shall determine to be appropriate. When a Fund
writes a call, it receives a premium and sells to the purchaser the
right to buy the underlying security at any time during the call period
(usually between three and nine months) at a fixed exercise price
regardless of market price changes during the call period. If the call
is exercised, the Fund forgoes any gain but is not subject to any loss
on any change in the market price of the underlying security relative
to the exercise price. A Fund will write such options subject to any
applicable limitations or restrictions imposed by law.
Purchasing Call Options. Each Fund may purchase a call option when
the Adviser believes the value of the underlying security will rise or
to effect a "closing purchase transaction." A Fund will realize a
profit (or loss) from a closing purchase transaction if the amount paid
to purchase a call is less (or more) than the amount received from the
sale thereof.
Put Options. Each Fund may also write and purchase put options on
securities ("puts"). A put written by a Fund obligates it to purchase
the specified security at a specified price if the option is exercised
at any time before the expiration date. All put options written by a
Fund would be covered. A Fund may purchase a put option when the
Adviser believes the value of the underlying security will decline. A
Fund may purchase put options on securities in its portfolio in order
to hedge against a decline in the value of such securities ("protective
puts").
The purpose of writing covered put and call options is to hedge
against fluctuations in the market value of a Fund's portfolio
securities. Each Fund may purchase or sell call and put options on
securities indices for a similar purpose. Such a hedge
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is limited to the degree that the price change of the underlying
security is in an amount which is less than the difference between the
option premium received by the Fund and the option strike price. To the
extent that the underlying security's price change exceeds this amount,
written put and call options will not provide an effective hedge.
A written call option would be covered if the Fund owns the
security underlying the option. A written put option may be covered by
maintaining in a segregated account cash or liquid securities rated
within one of the top three ratings categories by Moody's Investors
Service, Inc. ("Moody's") or Standard & Poor's Ratings Group ("Standard
& Poor's"), or, if unrated, deemed by the Adviser to be of comparable
credit quality ("High-Grade Debt Securities"). While this will ensure
that the Fund will have sufficient assets to meet its obligations under
the option contract should it be exercised, it does not reduce the
potential loss to the Fund should the value of the underlying security
decrease and the option be exercised. A written call option or put
option may also be covered by purchasing an offsetting option or any
other option which, by virtue of its exercise price or otherwise,
reduces the Fund's net exposure on its written option position.
Further, instead of "covering" a written call option, the Fund may
simply maintain cash or High-Grade Debt Securities in a segregated
account in amounts sufficient to ensure that it is able to meet its
obligations under the written call should it be exercised. This method
does not reduce the potential loss to the Fund should the value of the
underlying security increase and the option be exercised.
Options on Securities Indices. Each Fund may purchase call and put
options on securities 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 or to seek
to increase total return. Such Fund's net assets will be at risk as a
result of such transactions. Unlike a stock option, which gives the
holder the right to purchase or sell a specified stock at a specified
price, an option on a securities index gives the holder the right to
receive a cash "exercise settlement amount" equal to (i) the difference
between the exercise price of the option and the value of the
underlying securities index on the exercise date multiplied by (ii) a
fixed "index multiplier."
A securities index fluctuates with changes in the market values of
the stocks included in the index. For example, some securities index
options are based on a broad market index such as the S&P 500 or the
Value Line Composite Index, or a narrower market index such as the
Standard & Poor's 100 Stock Index ("S&P 100"). Indices may also be
based on an industry or market segment
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such as the AMEX Oil and Gas Index or the Computer and Business
Equipment Index. Options on securities indices are currently traded on
the Chicago Board Options Exchange, the NYSE and the American Stock
Exchange.
The Funds may purchase put options in order to hedge against an
anticipated decline in stock market prices that might adversely affect
the value of a Fund's portfolio securities. If a Fund purchases a put
option on a securities index, the amount of the payment it would
receive upon exercising the option would depend on the extent of any
decline in the level of the securities index below the exercise price.
Such payments would tend to offset a decline in the value of the Fund's
portfolio securities. However, if the level of the securities index
increases and remains above the exercise price while the put option is
outstanding, a Fund will not be able to profitably exercise the option
and will lose the amount of the premium and any transaction costs. Such
loss may be partially or wholly offset by an increase in the value of a
Fund's portfolio securities.
The Funds may purchase call options on securities indices in order
to participate in an anticipated increase in stock market prices or to
offset anticipated price increases on securities that it intends to buy
in the future. If a Fund purchases a call option on a securities index,
the amount of the payment it receives upon exercising the option
depends on the extent of any increase in the level of the securities
index above the exercise price. Such payments would in effect allow the
Fund to benefit from stock market appreciation even though it may not
have had sufficient cash to purchase the underlying stocks. Such
payments may also offset increases in the price of stocks that the Fund
intends to purchase. If, however, the level of the securities index
declines and remains below the exercise price while the call option is
outstanding, a Fund will not be able to exercise the option profitably
and will lose the amount of the premium and transaction costs. Such
loss may be partially or wholly offset by a reduction in the price a
Fund pays to buy additional securities for its portfolio.
The Funds may cover call options on a securities index by owning
securities whose price changes are expected to be similar to those of
the underlying index or by having an absolute and immediate right to
acquire such securities without additional cash consideration (or for
additional cash consideration held in a segregated account by its
custodian) upon conversion or exchange of other securities in their
respective portfolio. The Funds may also cover call and put options on
a securities index by maintaining cash or High-Grade Debt Securities
with a value equal to the exercise price in a segregated account with
its custodian or by using the other methods described above. When
purchased,
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options on securities indices may not enable the Fund to hedge
effectively against interest rate or stock market risk if the stocks
comprising the index subject to the option are not highly correlated
with the composition of the Fund's portfolio. Moreover, the ability to
hedge effectively depends upon the ability to predict movements in
interest rates or the stock market. Some options on securities indices
may not have a broad and liquid secondary market, in which case options
purchased by the Fund may not be closed out and the Fund could lose
more than its option premium when the option expires.
The purchase and sale of option contracts is a highly specialized
activity which involves investment techniques and risks different from
those ordinarily associated with investment companies. It should be
noted that transaction costs relating to options transactions may tend
to be higher than the transaction costs with respect to transactions in
securities. In addition, if a Fund were to write a substantial number
of option contracts which are exercised, the portfolio turnover rate of
that Fund could increase.
Securities for each Fund's portfolio will continue to be bought
and sold solely on the basis of appropriateness to fulfill the
applicable Fund's investment objective. Option transactions can be
used, among other things, to increase the return on portfolio
positions.
Futures Transactions
Each Fund may purchase and sell futures contracts for hedging
purposes and to seek to increase total return. A futures contract is an
agreement between two parties to buy and sell a security for a set
price at a future time. Each Fund may also enter into index-based
futures contracts and interest rate futures contracts. Futures
contracts on indices provide for a final cash settlement on the
expiration date based on changes in the relevant index. All futures
contracts are traded on designated "contract markets" licensed and
regulated by the Commodity Futures Trading Commission (the "CFTC")
which, through their clearing corporations, guarantee performance of
the contracts.
Generally, if market interest rates increase, the value of
outstanding debt securities declines (and vice versa). If a Fund holds
long-term U.S. Government securities and the Adviser anticipates a rise
in long-term interest rates, it could, in lieu of disposing of its
portfolio securities, enter into futures contracts for the sale of
similar long-term securities. If rates increased and the value of a
Fund's portfolio securities declined, the value of that Fund's futures
contract would increase, thereby protecting that Fund by preventing net
asset value from declining
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as much as it otherwise would have. If the Adviser expects long-term
interest rates to decline, a Fund might enter into futures contracts
for the purchase of long-term securities, so that it could offset
anticipated increases in the cost of such securities it intends to
purchase while continuing to hold higher-yielding short-term securities
or waiting for the long-term market to stabilize. Similar techniques
may be used by the Funds to hedge stock market risk.
Each Fund also may purchase and sell listed put and call options
on futures contracts. An option on a futures contract gives the
purchaser the right, in return for the premium paid, to assume a
position in a futures contract (a long position if the option is a call
and a short position if the option is a put), at a specified exercise
price at any time during the option period. When an option on a futures
contract is exercised, settlement is effected by the payment of cash
representing the difference between the current market price of the
futures contract and the exercise price of the option. The risk of loss
to a Fund purchasing an option on a futures contract is limited to the
premium paid for the option. A Fund may purchase put options on
interest rate futures contracts in lieu of, and for the same purpose
as, its sale of a futures contract: to hedge a long position in the
underlying futures contract.
The purchase of call options on interest rate futures contracts is
intended to serve the same purpose as the actual purchase of the
futures contract.
A Fund would write a call option on a futures contract in order to
hedge against a decline in the prices of the securities underlying the
futures contracts. If the price of the futures contract at expiration
is below the exercise price, the applicable Fund would retain the
option premium, which would offset, in part, any decline in the value
of its portfolio securities.
The writing of a put option on a futures contract is similar to
the purchase of the futures contract, except that, if market price
declines, a Fund would pay more than the market price for the
underlying securities. The net cost to a Fund will be reduced, however,
by the premium received on the sale of the put, less any transaction
costs. See "Dividends, Distributions and Tax Status" below.
Each Fund may engage in "straddle" transactions, which involve the
purchase or sale of combinations of call and put options on the same
underlying securities or futures contracts. A Fund will not purchase
calls or puts, in connection with such straddle transactions, if the
aggregate premiums paid for such options will exceed 10% of its total
assets.
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In purchasing and selling futures contracts and related options,
each Fund intends to comply with rules and interpretations of the CFTC
and of the SEC.
Limitations on the Use of Futures Contracts and Options on Futures.
Each Fund will engage in futures and related options transactions only
for hedging purposes in accordance with CFTC regulations or to seek to
increase total return to the extent permitted by such regulations. The
Fund will determine that the price fluctuations in the futures
contracts and options on futures contracts used for hedging purposes
are substantially related to price fluctuations in securities held by
the Fund or which it expects to purchase. Except as stated below, a
Fund's futures transactions will be entered into for traditional
hedging purposes - that is, futures contracts will be sold to protect
against a decline in the price of securities that the Fund owns, or
futures contracts will be purchased to protect the Fund against an
increase in the price of securities it intends to purchase. As evidence
of this hedging intent, the Fund expects that on 75% or more of the
occasions on which it takes a long futures (or option) position
(involving the purchase of futures contracts), a Fund will have
purchased, or will be in the process of purchasing, equivalent amounts
of related securities in the cash market at the time when the futures
(or option) position is closed out. However, in particular cases, when
it is economically advantageous for a Fund to do so, a long futures
position may be terminated (or an option may expire) without the
corresponding purchase of securities. As an alternative to compliance
with the bona fide hedging definition, a CFTC regulation permits a Fund
to elect to comply with a different test, under which the sum of the
amounts of initial margin deposits on its existing futures positions
and premiums paid for options on futures entered into for the purpose
of seeking to increase total return (net of the amount the positions
were "in the money" at the time of purchase) would not exceed 5% of
that Fund's net assets, after taking into account unrealized gains and
losses on such positions. A Fund will engage in transactions in futures
contracts and related options only to the extent such transactions are
consistent with the requirements of the Internal Revenue Code of 1986,
as amended (the "Code"), for maintaining its qualification as a
regulated investment company for Federal income tax purposes (see
"Dividends, Distributions, and Tax Status").
A Fund will be required, in connection with transactions in
futures contracts and the writing of options on futures contracts, to
make margin deposits, which will be held by a Fund's custodian for the
benefit of the merchant through whom a Fund engages in such futures and
options transactions. In the case of futures contracts or options
thereon requiring the Fund to purchase securities, the Fund must
segregate cash or High-Grade Debt
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Securities in an account maintained by the Custodian to cover such
contracts and options. Cash or High-Grade Debt Securities required to
be in a segregated account will be marked to market daily.
Special Considerations and Risks Related to Options and Futures
Transactions
Exchange markets in options on certain securities are a relatively
new and untested concept. It is impossible to predict the amount of
trading interest that may exist in such options, and there can be no
assurance that viable exchange markets will develop or continue.
The exchanges will not continue indefinitely to introduce new
expirations to replace expiring options on particular issues because
trading interest in many issues of longer duration tends to center on
the most recently auctioned issues. The expirations introduced at the
commencement of options trading on a particular issue will be allowed
to run out, with the possible addition of a limited number of new
expirations as the original expirations expire. Options trading on each
issue of securities with longer durations will thus be phased out as
new options are listed on more recent issues, and a full range of
expirations will not ordinarily be available for every issue on which
options are traded.
In the event of a shortage of the underlying securities
deliverable on exercise of an option, the Options Clearing Corporation
has the authority to permit other, generally comparable, securities to
be delivered in fulfillment of option exercise obligations. If the
Options Clearing Corporation exercises its discretionary authority to
allow such other securities to be delivered, it may also adjust the
exercise prices of the affected options by setting different prices at
which otherwise ineligible securities may be delivered. As an
alternative to permitting such substitute deliveries, the Options
Clearing Corporation may impose special exercise settlement procedures.
The hours of trading for options on securities may not conform to
the hours during which the underlying securities are traded. To the
extent that the markets for underlying securities close before the
options markets, significant price and rate movements can take place in
the options markets that cannot be reflected in the underlying markets.
In addition, to the extent that the options markets close before the
markets for the underlying securities, price and rate movements can
take place in the underlying markets that cannot be reflected in the
options markets.
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Prior to exercise or expiration, an option position can be
terminated only by entering into a closing purchase or sale
transaction. This requires a secondary market on an exchange for call
or put options of the same series. Similarly, positions in futures may
be closed out only on an exchange which provides a secondary market for
such futures. A Fund will enter into an option or futures position only
if there appears to be a liquid secondary market for such options or
futures. However, there can be no assurance that a liquid secondary
market will exist for any particular call or put option or futures
contract at any specific time. Thus, it may not be possible to close an
option or futures position. In the event of adverse price movements, a
Fund would continue to be required to make daily cash payments of
maintenance margin for futures contracts or options on futures
contracts position written by that Fund. A Fund may have to sell
portfolio securities at a time when it may be disadvantageous to do so
if it had insufficient cash to meet the daily maintenance margin
requirements. In addition, a Fund may be required to take or make
delivery of the instruments underlying interest rate futures contracts
it holds. The inability to close options and futures positions also
could have an adverse impact on a Fund's ability to effectively hedge
its portfolios.
Each of the exchanges has established limitations governing the
maximum number of call or put options on the same underlying security
(whether or not covered) which may be written by a single investor,
whether acting alone or in concert with others (regardless of whether
such options are written on the same or different exchanges or are held
or written on one or more accounts or through one or more brokers). An
exchange may order the liquidation of positions found to be in
violation of applicable trading limits and it may impose other
sanctions or restrictions. The Trust and other clients advised by the
Adviser and its affiliates may be deemed to constitute a group for
these purposes. In light of these limits, the Trustees of the Trust
(the "Trustees") may determine at any time to restrict or terminate the
Funds' transactions in options. The Adviser does not believe that these
trading and position limits will have any adverse impact on the
investment techniques for hedging the Trust's portfolios.
Over-the-counter ("OTC") options are purchased from or sold to
securities dealers, financial institutions or other parties
("Counterparties") through direct agreement with the Counterparty. In
contrast to exchange listed options, which generally have standardized
terms and performance mechanics, all the terms of an OTC option,
including such terms as method of settlement, term, exercise price,
premium, guarantees and security, are set by negotiation of the
parties.
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Unless the parties provide for it, there is no central clearing or
guaranty function in the OTC option market. As a result, if the
Counterparty fails to make delivery of the security or other instrument
underlying an OTC option it has entered into with the Fund or fails to
make a cash settlement payment due in accordance with the terms of that
option, the Fund will lose any premium it paid for the option as well
as any anticipated benefit of the transaction. Accordingly, the Adviser
must assess the creditworthiness of each such Counterparty or any
guarantor or credit enhancement of the Counterparty's credit to
determine the likelihood that the terms of the OTC option will be
satisfied. The Fund will engage in OTC option transactions only with
U.S. Government securities dealers recognized by the Federal Reserve
Bank of New York as "primary dealers", or broker dealers, domestic or
foreign banks or other financial institutions which have received,
combined with any credit enhancements, a long-term debt rating of A
from Standard & Poor's or Moody's or an equivalent rating from any
other nationally recognized statistical rating organization ("NRSRO")
or that issue long-term debt determined to be of equivalent credit
quality by the Adviser. The staff of the SEC currently takes the
position that OTC options purchased by a Fund, and portfolio securities
"covering" the amount of a Fund's obligation pursuant to an OTC option
sold by it (the cost of the sell-back plus the in-the-money amount, if
any) are illiquid, and are subject to each Fund's limitation on
investing no more than 15% of its assets in illiquid securities.
However, for options written with "primary dealers" in U.S. Government
securities pursuant to an agreement requiring a closing transaction at
a formula price, the amount which is considered to be illiquid may be
calculated by reference to a formula price.
Utilization of futures transactions involves the risk of imperfect
correlation in movements in the price of futures contracts and
movements in the price of the securities which are the subject of the
hedge. If the price of the futures contract moves more or less than the
price of the security, a Fund will experience a gain or loss which will
not be completely offset by movements in the price of the securities
which are the subject of the hedge. There is also a risk of imperfect
correlation where the securities underlying futures contracts have
different maturities than the portfolio securities being hedged.
Transactions in options on futures contracts involve similar risks.
Privately Issued Mortgage-Backed Securities
Each of the Tomorrow Post-Retirement Fund ("Post-Retirement
Fund"), Tomorrow Long-Term Retirement Fund ("Long-Term Fund"),
Tomorrow Mid-Term Retirement Fund ("Mid-Term Fund") and Tomorrow
Short-Term Retirement Fund ("Short-Term Fund") may invest in
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mortgage-backed securities issued by trusts or other entities formed or
sponsored by private originators of and institutional investors in
mortgage loans and other non-governmental entities (or representing
custodial arrangements administered by such institutions). These
private originators and institutions include savings and loan
associations, mortgage bankers, commercial banks, insurance companies,
investment banks and special purpose subsidiaries of the foregoing.
Privately issued mortgage-backed securities are generally backed
by pools of conventional (i.e., non-government guaranteed or insured)
mortgage loans. Since such mortgage-backed securities normally are not
guaranteed by an entity having the credit standing of Ginnie Mae,
Fannie Mae or Freddie Mac, in order to receive a high quality rating
from the rating organizations (e.g., Standard & Poor's or Moody's),
they often are structured with one or more types of "credit
enhancement." Such credit enhancement falls into two categories: (1)
liquidity protection and (2) protection against losses resulting after
default by a borrower and liquidation of the collateral (e.g., sale of
a house after foreclosure). Liquidity protection refers to the payment
of cash advances to holders of mortgage-backed securities when a
borrower or an underlying mortgage fails to make its monthly payment on
time. Protection against losses resulting after default and liquidation
is designed to cover losses resulting when, for example, the proceeds
of a foreclosure sale are insufficient to cover the outstanding amount
on the mortgage. Such protection may be provided through guarantees,
insurance policies or letters of credit, through various means of
structuring the securities or through a combination of such approaches.
Examples of credit enhancement arising out of the structure of the
transaction include "senior-subordinated securities" (multiple class
securities with one or more classes entitled to receive payment before
other classes, with the result that defaults on the underlying
mortgages are borne first by the holders of the subordinated class),
creation of "spread accounts" or "reserve funds" (where cash or
investments are held in reserve against future losses) and
"over-collateralization" (where the scheduled payments on the
underlying mortgages in a pool exceeds the amount required to be paid
on the mortgage-backed securities). The degree of credit enhancement
for a particular issue of mortgage-backed securities is based on the
level of credit risk associated with the particular mortgages in the
related pool. Losses on a pool in excess of anticipated levels could
nevertheless result in losses to security holders since credit
enhancement rarely covers every dollar owed on a pool. See the Funds'
Prospectuses for a further description of mortgage-backed securities.
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Risks Associated with Specific Types of Derivative Securities
Each of the Post-Retirement Fund, Long-Term Fund, Mid-Term Fund
and Short-Term Fund may invest in floating rate securities based on the
Cost of Funds Index ("COFI floaters"), other "lagging rate" floating
rate securities, floating rate securities that are subject to a maximum
interest rate ("capped floaters"), and Mortgage-Backed Securities
purchased at a discount. The primary risks associated with these
derivative debt securities are the potential extension of average life
and/or depreciation due to rising interest rates.
Inverse Floating Rate Instruments
Each of the Post-Retirement Fund, Long-Term Fund, Mid-Term Fund
and Short-Term Fund may invest in specific types of inverse floating
rate municipal bonds. The interest rate on inverse floaters resets in
the opposite direction from the market rate of interest to which the
inverse floater is indexed. An inverse floater may be considered to be
leveraged to the extent that its interest rate varies by a magnitude
that exceeds the magnitude of the change in the index rate of interest.
The higher degree of leverage inherent in inverse floaters is
associated with greater volatility in their market values.
Participation Interests
Each Fund may purchase from banks participation interests in all
or part of specific holdings of debt obligations. Each participation
interest is backed by an irrevocable letter of credit or guarantee of
the selling bank that the Adviser has determined meets the prescribed
quality standards of each Fund. Thus, even if the credit of the issuer
of the debt obligation does not meet the quality standards of a Fund,
the credit of the selling bank will. Each Fund will have the right to
sell the participation interest back to the bank after seven days'
notice for the full principal amount of a Fund's interest in the debt
obligation plus accrued interest, but only (1) as required to provide
liquidity to that Fund, (2) to maintain the quality standards of each
Fund's investment portfolio or (3) upon a default under the terms of
the debt obligation. The selling bank may receive a fee from a Fund in
connection with the arrangement.
Constant Duration Methodology
The Adviser may utilize constant duration methodology in
purchasing and selling U.S. Government and other fixed-income
securities on behalf of the Funds. This methodology consists of taking
advantage of interest rate increases by purchasing a precise amount of
longer maturity securities in order to keep
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portfolio risk constant. Conversely, as interest rates fall, the
Adviser takes advantage of increases in prices by selling a precise
quantity of securities purchased when rates were higher. This
methodology permits interest rate volatility to benefit the portfolio
while avoiding the risk involved in attempting to forecast interest
rates.
Restricted and Illiquid Securities
Each Fund may invest up to 15% of its total assets in "restricted
securities" (i.e., securities that would be required to be registered
prior to distribution to the public), including restricted securities
eligible for resale to certain institutional investors pursuant to Rule
144A of the 1933 Act. In addition, each Fund may invest up to 15% of
its net assets in illiquid investments, which includes securities that
are not readily marketable, repurchase agreements maturing in more than
seven days and privately issued stripped mortgage-backed securities.
The Trustees have adopted guidelines and delegated to the Adviser the
daily function of determining and monitoring the liquidity of
restricted securities. The Trustees, however, retain sufficient
oversight and are ultimately responsible for the determinations.
See "Investment Restrictions."
Since it is not possible to predict with assurance exactly how the
market for restricted securities sold and offered under Rule 144A will
develop, the Trustees will carefully monitor each Fund's investments in
these securities, focusing on such important factors, among others, as
valuation, liquidity and availability of information. This investment
practice could have the effect of increasing the level of illiquidity
in the Funds to the extent that qualified institutional buyers become
for a time uninterested in purchasing these restricted securities.
Notwithstanding the foregoing investment restrictions and as further
described below, each Fund may invest all or part of its assets in an
open-end investment company with substantially the same investment
objective, policies and restrictions as each Fund.
Other Investment Companies
Each Fund, subject to authorization by the Trustees, may invest
all of its investable assets in the securities of a single open-end
investment company (a "Portfolio"). If authorized by the Trustees, a
Fund would seek to achieve its investment objective by investing in a
Portfolio, which Portfolio would invest in a portfolio of securities
that complies with the Fund's investment objectives, policies and
restrictions. The Trustees do not intend to authorize investing in this
manner at this time.
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Each Fund may invest up to 10% of its total assets, calculated at
the time of purchase, in the securities of other investment companies
(other than those affiliated with WPG) but may not invest more than 5%
of its total assets in the securities of any one investment company or
acquire more than 3% of the voting securities of any investment
company. Investments in investment companies will result in duplication
of certain expenses, since the Fund will indirectly bear its
proportionate share of any expenses paid by investment companies in
which it invests in addition to the expenses paid by the Fund. However,
to the extent that a Fund invests in an open-end registered investment
company, the Adviser will not impose its advisory fees on the portion
of the Fund's assets so invested.
CALCULATION OF THE FUNDS' RETURNS
Total Return
The average annual total return with respect to Institutional
Class shares of each Fund is determined for a particular period by
calculating the actual dollar amount of the investment return on a
$1,000 investment in Institutional Class shares of the Fund made at the
net asset value of such shares at the beginning of the period, and then
calculating the annual compounded rate of return which would produce
that amount. Total return for a period of one year is equal to the
actual return of the Fund during that period. The following formula
describes the calculation:
n
ERV = P(1+T)
Where:
P = a hypothetical initial investment of $1,000.
T = average annual total return with respect to
Institutional Class shares.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000
investment made at the beginning of the indicated
period.
This calculation assumes that (i) all dividends and distributions are
reinvested at net asset value on the reinvestment dates during the
period and (ii) all recurring fees are included for applicable periods.
Each Fund may illustrate in advertisements and sales literature
the average annual total return and cumulative total
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return for several time periods throughout the Fund's life based on an
assumed initial investment of $1,000. Any such cumulative total return
for a Fund will assume the reinvestment of all income dividends and
capital gains distributions in Institutional Class shares for the
indicated periods and will include all recurring fees.
Yield
The 30 day yield quotation with respect to Institutional Class
shares of each of the Long-Term Fund, Medium-Term Fund, Short-Term Fund
and Post-Retirement Fund is computed by dividing the net investment
income for the period with respect to Institutional Class shares of
that Fund by the net asset value of each Institutional Class share on
the last day of the period, according to the following formula:
YIELD = 2[(a-b + 1)6-1]
---
cd
Where:
a = dividends and interest earned during the period.
b = net expenses accrued for the period.
c = the average daily number of Institutional Class
shares outstanding during the period that were
entitled to receive dividends.
d = the offering price per Institutional Class share (net
asset value per share) on the last day of the period.
Return for a Fund is not fixed or guaranteed and will fluctuate
from time to time, unlike bank deposits or other investments which pay
a fixed yield or return for a stated period of time, and do not provide
a basis for determining future returns. Return is a function of
portfolio quality, composition, maturity and market conditions as well
as the expenses allocated each Fund. The return of a Fund may not be
comparable to other investment alternatives because of differences in
the foregoing variables and differences in the methods used to value
portfolio securities, compute expenses and calculate return.
Other Quotations, Comparisons, and General Information
From time to time, in advertisements, in sales literature, or in
reports to shareholders, the past performance of a Fund may be
illustrated and/or compared with that of other mutual funds with
similar investment objectives, and to stock or other relevant indices.
For example, total return of a Fund's classes may be compared to
averages or rankings prepared by Lipper Analytical Services, Inc., a
widely recognized independent service which monitors mutual fund
performance; the Morgan Stanley Europe,
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Australia, Far East Index ("EAFE"), an unmanaged index of international
stock markets, the S&P 400, an unmanaged index of common stocks; the
S&P 500, an unmanaged index of common stocks; the Russell 2000, an
unmanaged index of common stocks; the Russell 3000 Index (the "Russell
3000"), an unmanaged index of common stocks; or the Dow Jones
Industrial Average, an unmanaged index of common stocks of 30
industrial companies listed on the New York Stock Exchange.
The S&P 500 is an unmanaged index of 500 common stocks which are
traded on the New York Stock Exchange, American Stock Exchange and the
Nasdaq National Market. The S&P 500 represents approximately 70% of the
total domestic U.S. equity market capitalization. The S&P 400 is an
unmanaged index of common stocks of 400 companies with mid-size market
capitalizations - $300 million to $5 billion. The S&P 500 and the S&P
400 are market value-weighted indices (shares outstanding times stock
price) in which each company's influence on the respective index is
directly proportional to its market value. The companies in the S&P 500
and the S&P 400 are selected from four major industry sectors:
industrials, utilities, financials and transportation. The 500
companies chosen for the S&P 500 are not the 500 largest companies in
terms of market value. Rather, the companies chosen by S&P for
inclusion in the S&P 500 tend to be leaders in important industries
within the U.S. economy. The Russell 2000 is an unmanaged index of 2000
common stocks of small capitalization companies. The Russell 2000 is
composed of the 2000 smallest companies with respect to capitalization
in the Russell 3000 and represents approximately 7% of the Russell 3000
total market capitalization. The Russell 3000 is an unmanaged index of
3000 common stocks of large United States companies with market
capitalizations ranging from approximately $60 million to $80 billion.
The Russell 3000 represents approximately 98% of the United States
equity market.
In addition, the performance of the classes of a Fund may be
compared to alternative investment or savings vehicles and/or to
indexes or indicators of economic activity, e.g., inflation or interest
rates. Performance rankings and listings reported in newspapers or
national business and financial publications, such as Barron's,
Business Week, Consumer's Digest, Consumer Reports, Financial World,
Forbes, Fortune, Investors Business Daily, Kiplinger's Personal Finance
Magazine, Money Magazine, the New York Times, Smart Money, USA Today,
U.S. News and World Report, The Wall Street Journal and Worth may also
be cited (if a Fund is listed in any such publication) or used for
comparison, as well as performance listings and rankings from various
other sources including Bloomberg Financial Systems, CDA/Wiesenberger
Investment Companies Service, Donoghue's Mutual Fund Almanac,
Investment Company Data, Inc., Johnson's Charts, Kanon Bloch Carre &
Co.,
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Micropal, Inc., Morningstar, Inc., Schabacker Investment
Management and Towers Data Systems.
In addition, from time to time, quotations from articles from
financial publications, such as those listed above, may be used in
advertisements, in sales literature or in reports to shareholders of
the Funds.
The Funds may also present, from time to time, historical
information depicting the value of a hypothetical account in one or
more classes of a Fund since the Fund's inception.
In presenting investment results, the Funds may also include
references to certain financial planning concepts, including (a) an
investor's need to evaluate his financial assets and obligations to
determine how much to invest; (b) his need to analyze the objectives of
various investments to determine where and when to invest; and (c) his
need to analyze his time frame for future capital needs to determine
how long to invest. The investor controls these three factors, all of
which affect the use of investments in building assets. The Adviser's
agreement to limit each Fund's operating expenses will increase
investment performance.
INVESTMENT RESTRICTIONS
Each Fund has adopted the following fundamental investment
restrictions which may not be changed without approval of a majority of
the applicable Fund's outstanding voting securities. Under the 1940
Act, and as used in the Prospectuses and this SAI, a "majority of the
outstanding voting securities" requires the approval of the lesser of
(1) the holders of 67% or more of the shares of a Fund represented at a
meeting of the holders if more than 50% of the outstanding shares of
the Fund are present in person or by proxy or (2) the holders of more
than 50% of the outstanding shares of the Fund.
A Fund may not:
1. Issue senior securities, except as permitted by paragraphs 2,
5, and 6 below. For purposes of this restriction, the
issuance of shares of beneficial interest in multiple classes
or series, the deferral of trustees' fees, the purchase or
sale of options, futures contracts, forward commitments and
repurchase agreements entered into in accordance with the
Fund's investment policies or within the meaning of paragraph
5 below, are not deemed to be senior securities.
2. Borrow money, except (i) from banks for temporary or short-
term purposes or for the clearance of transactions in amounts
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not to exceed 33 1/3% of the value of the Fund's total assets
(including the amount borrowed) taken at market value, (ii) in
connection with the redemption of Fund shares or to finance failed
settlements of portfolio trades without immediately liquidating
portfolio securities or other assets; (iii) in order to fulfill
commitments or plans to purchase additional securities pending the
anticipated sale of other portfolio securities or assets and (iv)
the Fund may enter into reverse repurchase agreements and forward
roll transactions, but only if after each such borrowing there is
asset coverage of at least 300% as defined in the 1940 Act. For
purposes of this investment restriction, the deferral of trustees'
fees and investments in short sales, futures contracts, options on
futures contracts, securities or indices and forward commitments
shall not constitute borrowing.
3. Act as an underwriter with respect to the securities of other
issuers, except to the extent that in connection with the
disposition of portfolio securities, the Fund may be deemed
to be an underwriter for purposes of the 1933 Act; provided,
however, that the Fund may invest all or part of its
investable assets in an open-end investment company with
substantially the same investment objective, policies and
restrictions as the Fund.
4. Purchase or sell real estate except that the Fund may (i) acquire
or lease office space for its own use, (ii) invest in securities
of issuers that invest in real estate or interests therein, (iii)
invest in securities that are secured by real estate or interests
therein, (iv) purchase and sell mortgage-related securities and
(v) hold and sell real estate acquired by the Fund as a result of
the ownership of securities.
5. Invest in commodities, except the Fund may purchase and sell
options on securities, securities indices and currency, futures
contracts on securities, securities indices and currency and
options on such futures, forward foreign currency exchange
contracts, forward commitments, securities index put or call
warrants and repurchase agreements entered into in accordance with
the Fund's investment policies.
6. Make loans, except that the Fund may (1) lend portfolio securities
in accordance with the Fund's investment policies up to 33 1/3% of
the Fund's total assets taken at market value, (2) enter into
repurchase agreements, and (3) purchase all or a portion of an
issue of debt securities, bank loan participation interests, bank
certificates of deposit, bankers' acceptances, debentures or other
securities, whether
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<PAGE>
or not the purchase is made upon the original issuance of the
securities.
7. Purchase the securities of issuers conducting their principal
activity in the same industry if, immediately after such
purchase, the value of its investments in such industry would
exceed 25% of its total assets taken at market value at the
time of such investment (except investments in obligations of
the U.S. Government or any of its agencies, instrumentalities
or authorities and except that the Large-Cap Fund and the
Small-Cap Fund may concentrate their assets in securities of
issuers in any industry to the extent that the S&P 500 Index
or the Russell 2,000 Index, respectively, are so
concentrated); provided, however, that the Fund may invest
all or part of its investable assets in an open-end
investment company with substantially the same investment
objective, policies and restrictions as the Fund.
8. For each Fund, with respect to 75% of its total assets, purchase
securities of an issuer (other than the U.S. Government, its
agencies, instrumentalities or authorities or repurchase
agreements collateralized by U.S. Government securities and other
investment companies), if:
(a) such purchase would cause more than 5% of the Fund's total
assets taken at market value to be invested in the securities
of such issuer; or
(b) such purchase would at the time result in more than 10% of
the outstanding voting securities of such issuer being held
by the Fund;
provided, however, that the Fund may invest all or part of its
investable assets in an open-end investment company with substantially
the same investment objective, policies and restrictions as the Fund.
For purposes of the above fundamental investment restrictions
regarding senior securities, the Adviser generally classifies issuers
by industry in accordance with classifications set forth in the
Standard & Poor's Stock Guide. In the absence of such classification or
if the Adviser determines in good faith based on its own information
that the economic characteristics affecting a particular issuer make it
more appropriately considered to be engaged in a different industry,
the Adviser may classify an issuer according to its own sources.
The following restrictions are designated as non-fundamental and
may be changed by the Trustees without the approval of shareholders.
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<PAGE>
A Fund may not:
a. Pledge, mortgage or hypothecate its assets, except to secure
permitted borrowings and then only if such pledging,
mortgaging or hypothecating does not exceed 33 1/3% of the
Fund's total assets taken at market value. Collateral
arrangements with respect to margin, option and other risk
management and when-issued and forward commitment
transactions are not deemed to be pledges or other
encumbrances for purposes of this restriction.
b. Participate on a joint or joint-and-several basis in any
securities trading account. The "bunching" of orders for the sale
or purchase of marketable portfolio securities with other accounts
under the management of the Adviser or any subadviser to save
commissions or to average prices among them is not deemed to
result in a joint securities trading account.
c. Knowingly purchase or retain securities of an issuer if one or
more of the Trustees or officers of the Trust or principals or
officers of the Adviser, any subadviser or any investment
management subsidiary of the Adviser individually owns
beneficially more than 0.5% and together own beneficially more
than 5% of the securities of such issuer.
d. Purchase a security if, as a result, (i) more than 10% of the
Fund's assets would be invested in securities of other
investment companies, (ii) more than 3% of the total
outstanding voting securities of any one such investment
company would be held by the Fund or (iii) more than 5% of
the Fund's assets would be invested in any one such
investment company; provided, however, that the Fund may
invest all or part of its investable assets in an open-end
investment company with substantially the same investment
objective, policies and restrictions as the Fund.
e. Invest more than 10% of its total assets in the securities of
any issuer which, together with its predecessors, has been in
operation for less than three years (including the operation
of any predecessor), excluding obligations issued or
guaranteed by the U.S. Government or its agencies and
instrumentalities and securities fully collateralized by such
securities; provided, however, the Fund may invest all or
part of its investable assets in an open-end investment
company with substantially the same investment objective,
policies and restrictions as the Fund.
f. Invest more than 15% of its total assets in restricted
securities including those eligible for resale under Rule
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144A; provided that the Fund may invest all or part of its
investable assets in an open-end investment company with
substantially the same investment objective, policies and
restrictions as the Fund.
g. Invest in securities which are illiquid if, as a result, more
than 15% of its net assets would consist of such securities,
including repurchase agreements maturing in more than seven
days, securities that are not readily marketable, restricted
securities not eligible for resale pursuant to Rule 144A
under the 1933 Act, purchased OTC options, certain assets
used to cover written OTC options, and privately issued
stripped mortgage-backed securities, unless the Trustees
determine that such restricted securities are liquid;
provided, however, that the Fund may invest all or part of
its investable assets in an open-end investment company with
substantially the same investment objectives, policies and
restrictions as the Fund.
h. Purchase securities while outstanding borrowings exceed 5% of
the Fund's total assets.
i. Invest in real estate limited partnership interests.
j. Purchase warrants of any issuer, if, as a result of such
purchase, more than 2% of the value of the Fund's total
assets would be invested in warrants which are not listed on
an exchange or more than 5% of the value of the total assets
of the Fund would be invested in warrants generally, whether
or not so listed. For these purposes, warrants are to be
valued at the lesser of cost or market, but warrants acquired
by the Fund in units with or attached to debt securities
shall be deemed to be without value.
k. Purchase interests in oil, gas, or other mineral exploration
programs or mineral leases; however, this policy will not prohibit
the acquisition of securities of companies engaged in the
production or transmission of oil, gas or other minerals.
l. Invest for the purposes of exercising control over or management
of any company, but it may do so where it is deemed advisable to
protect or enhance the value of an existing investment, provided,
however, that the Fund may invest all or part of its investable
assets in an open-end investment company with substantially the
same investment objective, policies and restrictions as the Fund.
m. Purchase securities on margin or make short sales, unless, by
virtue of its ownership of other securities, the Fund has the
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<PAGE>
right to obtain securities equivalent in kind and amount to the
securities sold and, if the right is conditional, the sale is made
upon the same conditions, except (i) in connection with arbitrage
transactions, (ii) for hedging the Fund's exposure to an actual or
anticipated market decline in the value of its securities, (iii)
to profit from an anticipated decline in the value of a security,
and (iv) to obtain such short-term credits as may be necessary for
the clearance of purchases and sales of securities.
Each Fund may, notwithstanding any other fundamental or
non-fundamental investment restriction or policy, invest all of its
assets in the securities of a single open-end investment company with
substantially the same fundamental investment objectives, restrictions
and policies as the Fund.
Except with respect to the 300% asset coverage required by
fundamental restriction number 2, if a percentage restriction on
investment or utilization of assets as set forth above is adhered to at
the time an investment is made, a later change in percentage resulting
from changes in the values of a Fund's assets will not be considered a
violation of the restriction.
In order to permit the sale of shares of the Funds in certain
states, the Trustees may, in their sole discretion, adopt restrictions
on investment policy more restrictive than those described above.
Should the Trustees determine that any such more restrictive policy is
no longer in the best interest of a Fund and its shareholders, the Fund
may cease offering shares in the state involved and the Trustees may
revoke such restrictive policy. Moreover, if the states involved shall
no longer require any such restrictive policy, the Trustees may, in
their sole discretion, revoke such policy.
ADVISORY AND ADMINISTRATIVE SERVICES
Investment Adviser
As stated in the Prospectuses, WPG, One New York Plaza, New York,
New York 10004, serves as investment adviser and administrator to each
Fund. See "Management of the Funds --Investment Adviser", "Management
of the Funds --- Administrator" and "Portfolio Brokerage" in the
Prospectuses for a description of the duties of WPG as investment
adviser and administrator to the Funds.
The Funds' investment advisory agreements with the Adviser (the
"Advisory Agreements") were initially approved by the Trustees of the
Trust, including a majority of the Trustees of the Trust who are not
parties to such agreements or "interested
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<PAGE>
persons" (as such term is defined in the 1940 Act) of any party thereto
(the "Independent Trustees"), on July 19, 1995 and became effective
_______ __, 1995. The Advisory Agreements were approved by the sole
initial shareholder of each Fund on ___, 1995.
Pursuant to the Advisory Agreements, the Adviser supervises and
assists in the management of the assets of each Fund and furnishes each
Fund with research, statistical and advisory services. In managing the
assets of the Funds, the Adviser furnishes continuously an investment
program for each Fund consistent with the investment objectives and
policies of that Fund. More specifically, the Adviser determines from
time to time what securities shall be purchased for the Fund, what
securities shall be held or sold by the Fund and what portion of the
Fund's assets shall be held uninvested as cash, subject always to the
provisions of the Trust's Agreement and Declaration of Trust, By-Laws
and its registration statement under the 1940 Act and under the 1933
Act covering the Trust's shares, as filed with the SEC, and to the
investment objectives, policies and restrictions of the Fund, as each
of the same shall be from time to time in effect, and subject, further,
to such policies and instructions as the Board of Trustees of the Trust
may from time to time establish. To carry out such determinations, the
Adviser places orders for the investment and reinvestment of each
Fund's assets (see "Portfolio Brokerage").
For its investment advisory services under the Advisory
Agreements, the Adviser receives an annual fee from each Fund, payable
monthly, equal to 0.75% (on an annual basis) of the Fund's average
daily net assets, except for the Post-Retirement Fund, which pays the
Adviser on a monthly basis an annual fee equal to 0.65% of such Fund's
average daily net assets.
The Adviser has voluntarily agreed to limit temporarily each
Fund's operating expenses (excluding Rule 12b-1 fees with respect to
the Adviser Class shares, service fees with respect to the
Institutional Class shares, any other class-specific expenses,
litigation, indemnification and other extraordinary expenses) to 1.00%
of its average daily net assets, except for the Post-Retirement Fund,
for which the Adviser has voluntarily agreed to temporarily limit
operating expenses (with the same exclusions as listed above) to 0.90%
of its average daily net assets. The Adviser may discontinue or modify
such limitation in the future at its discretion, although it has no
current intention to do so. Each Fund will reimburse the Adviser for
fees foregone or other expenses paid by the Adviser pursuant to this
expense limitation in later years in which operating expenses for the
Fund are less than the expense limitations set forth above for any such
year. No interest, carrying or finance charge will be paid by a Fund
with respect to the amounts representing fees foregone or other
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expenses paid. In addition, no Fund will pay any unreimbursed
amounts to the Adviser upon termination of its Advisory Agreement.
The advisory fees are accrued daily and will be prorated with
respect to any Fund if the Adviser shall not have acted as that Fund's
investment adviser during any entire monthly period. The Advisory and
the Administration Agreements (as defined below) provide that if the
operating expenses of a Fund in any year, including the investment
advisory fee and the administration fee, but excluding taxes, brokerage
commissions, interest, dividends paid on securities sold short and
extraordinary legal fees and expenses exceed the expense limits set by
state securities law administrators in states in which that Fund's
shares are sold, the amount payable to WPG, in its capacity as Adviser
and Administrator, will be reduced (but not below zero) by the amount
of such excess. The most restrictive state securities law expense limit
presently in effect requires such reduction if expenses exceed 2.5% of
the first $30 million, 2.0% of the next $70 million and 1.5% of the
remainder of the average daily net assets of a Fund during such year.
Each Advisory Agreement provides that the Adviser will not be
liable for any loss sustained by the Trust or any Fund by reason of the
adoption or implementation of any investment policy or the purchase,
sale or retention of any security, whether or not such purchase, sale
or retention shall have been based upon the investigation and research
of the Adviser, or upon investigation and research made by any other
individual, firm or corporation if such recommendation shall have been
made and such other individual, firm or corporation shall have been
selected with due care and in good faith, except for a loss resulting
from willful misfeasance, bad faith, or gross negligence in the
performance by the Adviser of its duties or by reason of the Adviser's
reckless disregard of its obligations and duties thereunder.
Each Advisory Agreement may be modified or amended only with the
approval of the holders of a majority of the applicable Fund's
outstanding shares and by a vote of the majority of the Independent
Trustees of the Trust. Unless terminated as provided below, each
Advisory Agreement continues in full force and effect until September
__, 1997 and for successive periods of one year thereafter, but only as
long as each such continuance after September __, 1997 is approved
annually by a majority vote of the Board or by a vote of the holders of
a majority of the outstanding shares of the applicable Fund, but in
either event it also must be approved by a vote of a majority of the
Independent Trustees of the Trust, cast in person at a meeting called
for the purpose of voting on such approval. Each Advisory Agreement may
be terminated without penalty, by either party upon 60 days' written
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notice and automatically will terminate in the event of its
assignment.
Officers and Trustees of the Trust who are also principals in and
employees of WPG may receive indirect compensation by reason of
investment advisory and administration fees paid by the Trust to WPG,
in its capacity as the Adviser and Administrator.
As of June 30, 1994, WPG had capital in excess of $48 million. WPG
consists of 44 general principals, one of whom is a member of the NYSE,
and certain associate principals. WPG has approximately 240 full-time
employees in addition to its principals. WPG together with its
wholly-owned subsidiary, Weiss, Peck & Greer, Inc., act as investment
adviser or manager for approximately $13 billion of institutional and
private investment accounts.
Roger J. Weiss is a Senior Managing Principal of WPG and
Chairman of the Board, President and Trustee of the Trust.
Stephen H. Weiss, brother of Roger J. Weiss, is also a Senior
Managing Principal of WPG. Francis H. Powers is a principal of
WPG, and Executive Vice President and Treasurer of the Trust.
Jay C. Nadel is a principal of WPG and an Executive Vice President
and Secretary of the Trust. The principals of WPG who serve on
WPG's executive committee are Stephen H. Weiss (Chairman),
Roger J. Weiss, Phillip Greer, Melville Straus, Ronald M. Hoffner
and Wesley W. Lang, Jr.
In addition to the members of the Adviser's Asset Allocation
Committee and Messrs. Pappo and Vandivort, Messrs. Stephen H. Weiss and
Roger J. Weiss may participate in each Fund's investment decisions and
all of the principals in WPG consult on a regular basis among
themselves about general market conditions, as well as specific
securities and industries.
In the management of the Trust and their other accounts, WPG and
its subsidiaries allocate investment opportunities to all accounts for
which they are appropriate subject to the availability of cash in any
particular account and the final decision of the individual or
individuals in charge of such accounts. Where market supply is
inadequate for a distribution to all such accounts, securities are
allocated on a pro rata basis. In some cases this procedure may have an
adverse effect on the price or volume of the security as far as the
Funds are concerned. However, it is the judgment of the Trustees that
the desirability of continuing the Trust's advisory arrangements with
the Adviser outweighs any disadvantages that may result from
contemporaneous transactions. See "Portfolio Brokerage."
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In an attempt to avoid any potential conflict with portfolio
transactions for the Funds, the Adviser and the Trust, on behalf of
each Fund, have adopted extensive restrictions on personal securities
trading by personnel of the Adviser and its affiliates. These
restrictions include: pre-clearance of all personal securities
transactions and a prohibition of purchasing initial public offerings
of securities. These restrictions are a continuation of the basic
principle that the interests of the Funds and their shareholders come
before those of the Adviser and its principals and employees.
In the event that neither the Adviser nor any of its affiliates
acts as investment adviser to the Trust, the name of the Trust will be
changed to one that does not contain the name "Weiss, Peck & Greer" or
the initials "WPG" or otherwise suggest an affiliation with the Adviser
or contain the name "Tomorrow" or any connotation or derivative of such
name.
Administrator
WPG, in its capacity of Administrator of each Fund, performs
administrative, transfer agency related and shareholder relations
services and certain clerical and accounting services for each Fund
under separate administration agreements (the "Administration
Agreements"). More specifically, these obligations pursuant to the
Administration Agreements include, subject to the general supervision
of the Trustees of the Trust, (a) providing supervision of all aspects
of the Funds' non-investment operations (the parties giving due
recognition to the fact that certain of such operations are performed
by others pursuant to agreements with the Funds), (b) providing the
Funds, to the extent not provided pursuant to their custodian and
transfer agency agreements or agreements with other institutions, with
personnel to perform such executive, administrative, accounting and
clerical services as are reasonably necessary to provide effective
administration of the Funds, (c) arranging, to the extent not provided
pursuant to such agreements, for the preparation, at the Funds'
expense, of its tax returns, reports to shareholders, periodic updating
of the prospectuses and reports filed with the SEC and other regulatory
authorities, (d) providing the Funds, to the extent not provided
pursuant to such agreements, with adequate office space and certain
related office equipment and services, (e) maintaining all of the
Funds' records other than those maintained pursuant to such agreements
or the Advisory Agreements, and (f) providing to the Funds transfer
agency-related and shareholder relations services and facilities and
the services of one or more of its employees or officers, or employees
or officers of its affiliates, relating to such functions (including
salaries and benefits, office space and supplies, equipment and
teaching).
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For its services under the Administration Agreements, the
Administrator is entitled to receive a fee, computed daily and payable
monthly at an annual rate equal to 0.09% of each Fund's average daily
net assets.
Each Fund bears all expenses of its own operation (subject to the
expense limitations described above), which expenses include: (i) fees
and expenses of any investment adviser or administrator of the Fund;
(ii) organization expenses of the Trust; (iii) fees and expenses
incurred by the Fund in connection with membership in investment
company organizations; (iv) brokers' commissions; (v) payment for
portfolio pricing services to a pricing agent, if any; (vi) legal,
accounting or auditing expenses (including an allocable portion of the
cost of its employees rendering legal services to the Fund); (vii)
interest, insurance premiums, taxes or governmental fees; (viii) the
fees and expenses of the transfer agent of the Fund; (ix) the cost of
preparing stock certificates or any other expenses, including, without
limitation, clerical expenses of issue, redemption or repurchase of
shares of the Fund; (x) the expenses of and fees for registering or
qualifying shares of the Funds for sale and of maintaining the
registration of the Funds; (xi) a portion of the fees and expenses of
Trustees of the Trust who are not affiliated with the Adviser; (xii)
the cost of preparing and distributing reports and notices to existing
shareholders, the SEC and other regulatory authorities; (xiii) the fees
or disbursements of custodians of the Fund's assets, including expenses
incurred in the performance of any obligations enumerated by the
Declaration of Trust or By-Laws of the Trust insofar as they govern
agreements with any such custodian; (xiv) costs in connection with
annual or special meetings of shareholders, including proxy material
preparation, printing and mailing; (xv) litigation and indemnification
expenses and other extraordinary expenses not incurred in the ordinary
course of the Fund's business; and (xvi) distribution fees and service
fees applicable to Adviser Class shares and service fees applicable to
Institutional Class shares.
The Funds' Advisory and Administration Agreements each provide
that WPG, in its capacities as investment adviser and administrator,
may render similar services to others so long as the services provided
thereunder are not impaired thereby.
Principal Underwriter
WPG serves as the principal underwriter in connection with the
continuous offering of the shares of the Trust pursuant to an
Underwriting Agreement, dated _____, 1995. The Trustees, including the
non-interested Trustees, approved the Underwriting Agreement on July
19, 1995, which will continue in effect from year to year, if annually
approved by the Trustees, including the
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non-interested Trustees. The Underwriting Agreement provides that WPG
will bear certain distribution expenses not borne by the Funds.
WPG bears all expenses it incurs in providing services under the
Underwriting Agreement. Such expenses include compensation to its
employees and representatives and to any investment dealers and
financial firms ("Authorized Firms") for distribution related services.
WPG also pays certain expenses in connection with the distribution of
the Funds' shares, including the cost of preparing, printing and
distributing advertising or promotional materials, and the cost of
printing and distributing prospectuses and supplements to prospective
shareholders. WPG receives compensation under a Rule 12b-1 Plan for
providing such services with respect to Adviser Class shares. Each Fund
bears the cost of registering its shares under federal, state and
foreign securities law.
The Trust and WPG have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act of
1933, as amended. Under the Underwriting Agreement, WPG will use its
best efforts in rendering services to the Trust.
SERVICE PLANS
Each Fund, with respect to its Institutional Class shares, has
adopted a service plan (collectively, the "Plans").
Each Plan provides that a Fund shall compensate Participating
Insurance Companies, Plan Fiduciaries or other service providers (for
purposes of this section, collectively, "Service Organizations") for
providing certain personal, account administration and/or shareholder
liaison services to (i) in the case of Service Organizations for
accounts not relating to Variable Contracts, persons who are or may
become beneficial owners of Institutional Class shares or (ii) in the
case of Service Organizations for insurance company Separate Accounts,
to holders of Variable Contracts for which the Service Organizations
are not otherwise compensated. Pursuant to the Plans, the Funds may
enter into agreements with Service Organizations which purchase
Institutional Class shares of the Fund ("Service Agreements"). Under
such Service Agreements or otherwise, the Service Organizations may
perform some or all of the following services: (a) act as the sole
shareholder of record and nominee for all customers, (b) maintain
account records for each customer who beneficially owns Institutional
Class shares of the Funds in the case of Plan Fiduciaries or for
holders of Variable Contracts in the case of Participating Insurance
Companies, (c) answer questions and handle correspondence from
customers regarding their accounts, (d) process customer orders to
purchase, redeem and
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exchange Institutional Class shares of the Funds, and handle the
transmission of funds representing the customers' purchase price or
redemption proceeds, (e) issue confirmations for transactions in shares
by customers, (f) provide facilities to answer questions from
prospective and existing investors about Institutional Class shares of
the Funds, (g) receive and answer investor correspondence, including
requests for prospectuses and statements of additional information, (h)
display and make prospectuses available on the Service Organization's
premises, (i) assist customers in completing application forms,
selecting dividend and other account options and opening custody
accounts with the Service Organizations and (j) act as liaison between
customers and the Funds, including obtaining information from the
Funds, working with the Funds to correct errors and resolve problems
and providing statistical and other information to the Funds. As
compensation for such services, the Funds will pay each Service
Organization a service fee in an amount up to 0.25% (on an annualized
basis) of the Fund's average daily net assets attributable to
Institutional Class shares of the Funds that are attributable to or
held in the name of such Service Organization. Service Organizations
may from time to time be required to meet certain other criteria in
order to receive service fees.
Conflict of interest restrictions (including the Employee
Retirement Income Security Act of 1974) may apply to a Service
Organization's receipt of compensation paid by the Funds in connection
with the investment of fiduciary assets in Institutional Class shares
of the Funds. Service Organizations and investment advisers and other
money mangers subject to the jurisdiction of the SEC, the Department of
Labor or state securities commissions, are urged to consult legal
advisers before investing fiduciary assets in Institutional Class
shares of the Funds.
In accordance with the terms of the Plans, WPG provides to the
Trust for review by the Trustees a quarterly written report of the
amounts expended under the Plans and the purpose for which such
expenditures were made. In the Trustees' quarterly review of the Plans,
they will consider the continued appropriateness and the level of
compensation that the Plans provide.
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TRUSTEES AND OFFICERS
The Trustees have responsibility for management of the business of
the Trust. The executive officers of the Trust are responsible for its
day to day operation. Set forth below is certain information concerning
the Trustees and officers.
Name, Address,
Age and Title Principal Occupations During Past Five Years
Roger J. Weiss* Senior Managing Principal, Weiss, Peck &
One New York Plaza Greer, L.L.C.
New York, NY 10004 Chairman of the Board of all WPG Funds
Age: __ President, Weiss, Peck & Greer International
Fund
Chairman of the Executive Vice President and Director,
Board, President WPG Advisers, Inc.
and Trustee Former Executive Vice President and Director,
Tudor Management Company
Raymond R.
Herrmann, Jr.** Chairman of the Board, Sunbelt Beverage
654 Madison Avenue Corporation (distributor of wines and
Suite 1400 liquors)
New York, NY 10017 Former Vice Chairman and Director, McKesson
Age: __ Corporation (U.S. distributor of
drugs and health care products, wine and
Trustee spirits)
Life Member, Board of Overseers of Cornell
Medical College
Member of Board and Executive Committee, Sky
Ranch for Boys
Member, Evaluation Advisory Board,
Biotechnology Investments, Ltd.
Harvey E. Sampson** Chief Executive Officer and Chairman of Harvey
600 Secaucus Road Group, Inc. (retail sales of consumer
Secaucus, NJ 07094 electronics)
Age: __ Trustee, Cornell University
Joint Board of The New York Hospital -
Trustee Cornell Medical Center
Trustee, North Shore University Hospital
Lawrence J. Israel** Private Investor
200 Broadway Director and Trustee of the Touro Infirmary
Suite 249 Member of the Intercollegiate Athletics
New Orleans, LA 70118 Committee of the Administrators of the
Age: __ Tulane Educational Fund
Trustee
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Francis H. Powers* Principal, Weiss, Peck & Greer, L.L.C.
One New York Plaza Vice President and Secretary, Weiss, Peck &
New York, NY 10004 Greer Advisers, Inc.
Age: __ Executive Vice President and Treasurer of all
WPG Funds
Executive Former Vice President and Secretary, Tudor
Vice President Management Company
and Treasurer
Jay C. Nadel* Principal, Weiss, Peck & Greer, L.L.C.
One New York Plaza Director of Operating Departments
New York, NY 10004 Executive Vice President and Secretary of all
Age: __ WPG Funds
Executive
Vice President
and Secretary
Gerald Murphy* Vice President, Mutual Fund
One New York Plaza Operations, Weiss, Peck & Greer, L.L.C.
New York, NY 10004 since December, 1991
Age: __ Vice President of all WPG Funds
Manager, Mutual Funds from May,
Vice President 1990 to December, 1991
Arlen S. Oransky* Vice President, Mutual Fund
One New York Plaza Operations, Weiss, Peck & Greer, L.L.C.
New York, NY 10004 since December, 1991
Age: __ Assistant Vice President of all
WPG Funds since April, 1991
Assistant Manager of Investment Services
Vice President Weiss, Peck & Greer, L.L.C. from July,
1990 to December, 1991
Joseph J. Reardon* Vice President, Mutual Fund
One New York Plaza Operations, Weiss, Peck & Greer, L.L.C.
New York, NY 10004 since December, 1993
Age: __ Assistant Manager, Mutual Fund
Operations, Weiss, Peck & Greer, L.L.C.
Assistant from February, 1990 to December, 1993
Vice President Assistant Vice President of all
WPG Funds since April, 1991
-----------------------
* "Interested Person" within the meaning of the 1940 Act.
** Each of the non-interested Trustees is a trustee of each of the
other WPG Funds and a Member of the Trust's Audit Committee and
Special Nominating Committee.
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Compensation of Trustees and Officers
The Funds pay no compensation to the Trust's Trustees affiliated
with the Adviser or its officers. None of the Trust's Trustees or
officers have engaged in any financial transactions with any Fund or
the Adviser.
[Chart omitted. The following is a description of the chart: It is
estimated that for the current fiscal year ending December 31, 1995,
each of Raymond R. Hermann, Jr., Harvey E. Sampson and Lawrence J.
Israel (collectively, the "Compensated Trustees") will receive $1,667
from each Fund as compensation for serving as Trustees of the Trust.
Each Fund, therefore, will pay an aggregate of $5,000 in compensation
to the Compensated Trustees. Roger J. Weiss will receive no
compensation from any of the Funds for serving as a Trustee of the
Trust. Total compensation paid by the Trust and each of the fifteen
funds (including the Funds) in the WPG fund complex to each of the
Compensated Trustees and to Roger J. Weiss for the current fiscal year
ending December 31, 1995 is estimated to equal $37,250 and $0,
respectively. The Trustees fees paid with respect to the other funds in
the WPG fund complex are based on actual fees paid by such funds for
the fiscal year ended December 31, 1994. Each of the Trustees is also
reimbursed for out-of-pocket expenses associated with attending Trustee
meetings. No pension or retirement benefits will accrue as part of the
Trust's expenses with respect to the Funds.]
Certain Shareholders
Immediately prior to the commencement of a Fund's operations, it
is expected that WPG will own 100% of the outstanding shares of that
Fund. As of the date of this Statement of Additional Information, the
Trustees and officers of the Trust as a group beneficially owned (i.e.,
had voting or investing power) less than 1% of the outstanding shares
of each Fund.
HOW TO PURCHASE SHARES
(See "How to Buy Shares" in the Prospectuses.)
The Trust continuously offers shares of each Fund. The Trust may
terminate the continuous offering of its shares with respect to any
Fund at any time at the discretion of the Trustees.
In the case of telephone subscriptions, if full payment for
telephone subscriptions is not received by the Trust within the
customary time period for settlement then in effect after the
acceptance of the order by the Trust, the order is subject to
cancellation and the purchaser will be liable to the affected Fund
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for any loss suffered as a result of such cancellation. To recoup such
loss each Fund reserves the right to redeem shares owned by any
shareholder whose purchase order is cancelled for non-payment, and such
purchaser may be prohibited from placing further telephone orders.
If a subscription or redemption of Fund shares is arranged and
settlement made through a member of the NASD, then that member may, in
its discretion, charge a fee for this service.
Acquiring Shares of the Funds in Exchange for Securities
Shares of the Funds may be purchased in whole or in part by
delivering to the Funds' Custodian securities acceptable to WPG. If the
securities are not suitable for a Fund's portfolio, the securities will
be sold by the Custodian as agent for the account of their owner on the
day of their receipt by the Custodian or as soon thereafter as
possible. The number of shares of a class of a Fund to be issued in
exchange for securities will be the aggregate proceeds from the sale of
such securities, divided by the net asset value per share of the
applicable class of the applicable Fund on the day such proceeds are
received. WPG will use reasonable efforts to obtain the current market
price for such securities but does not guarantee the best available
price. WPG will absorb any transaction costs, such as commissions, on
the sale of securities.
Securities determined by WPG to be acceptable should be
transferred by book entry or physically delivered, in proper form for
transfer. Please contact WPG for transfer instructions.
Investors who are contemplating an exchange of securities for
shares of a Fund must contact WPG to determine whether the securities
are acceptable before forwarding such securities to the Custodian. WPG
reserves the right to reject any securities. Exchanging securities for
shares of the Funds may create a taxable gain or loss. Please consult
your tax adviser with respect to the particular Federal, state and
local tax consequences of exchanging securities for Fund shares.
REDEMPTION OF SHARES
(See "How to Sell Shares" and "How to Exchange Shares" in the
Prospectuses.)
Systematic Withdrawal Plan
A Systematic Withdrawal Plan is available only for the
Post-Retirement Fund, Large-Cap Fund and Small-Cap Fund without expense
to any shareholder with a minimum investment of [$10,000] in value
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in such Funds' shares (at the then current offering price). The
Transfer Agent may be directed, as agent of the purchaser, to redeem
without a redemption charge shares of such Funds held in his account as
may be required so that the shareholder or any person designated by him
will receive a monthly or quarterly check in a stated amount not to be
less than [$_______] although such amount is not necessarily a
recommended amount. Dividends and capital gains distributions will be
reinvested in additional shares of the same class of the same Fund at
net asset value as of the reinvestment date.
Redemption of shares of a Fund under the Systematic Withdrawal
Plan may reduce or even liquidate the account, particularly in a
declining market. Such payments paid to a shareholder cannot be
considered a yield or income on the investment. Payments to a
shareholder in excess of distributions of investment income will
constitute a return of his invested principal, and the liquidation of
Fund shares pursuant to this Plan is a taxable transaction which may
result in gain or loss to the shareholder depending upon the cost of
the shares when acquired.
Withdrawals at the same time as regular purchases of Institutional
Class shares of the Post-Retirement Fund, Large-Cap Fund or Small-Cap
Fund ordinarily will not be permitted since purchases are intended to
accumulate capital and the Systematic Withdrawal Plan is designed for
the regular withdrawal of monies, except that a shareholder may make
lump sum investments, of [$5,000] or more. The Systematic Withdrawal
Plan may be terminated by the shareholder, without penalty, at any time
and the Trust may terminate the Plan at will. There are no contractual
rights on the part of either party with respect to the Plan.
NET ASSET VALUE
(See "How Each Fund's Share Price is Determined" in the
Prospectuses)
Under the 1940 Act, the Trustees are responsible for determining
in good faith the fair value of securities of the Funds. The net asset
value per share of each class of each Fund is determined once daily,
Monday through Friday as of the close of regular trading on the NYSE
(normally 4:00 P.M. New York City time) on each Business Day (as
defined in the Prospectuses) in which there is a sufficient degree of
trading in that Fund's portfolio securities that the current net asset
value of that Fund's shares might be materially affected. A Fund may
not determine its net asset value on any day during which its shares
were not tendered for redemption and the Trust did not receive any
order to purchase or sell shares of that Fund. In accordance with
procedures approved by the Trustees, the net asset value per share
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of each class of each Fund is calculated by determining the value of
the net assets attributable to each class of that Fund and dividing by
the number of outstanding shares of that class. The NYSE is not open
for trading on weekends or on New Year's Day (January 1), Presidents'
Day (the third Monday in February), Good Friday, Memorial Day (the last
Monday in May), Independence Day (July 4), Labor Day (the first Monday
in September), Thanksgiving Day (the fourth Thursday in November) and
Christmas Day (December 25).
The public offering price per Institutional Class share of a class
of a Fund is the net asset value per share of that class of that Fund
next determined after receipt of an order. Orders for Institutional
Class shares which have been received by the Trust or the Transfer
Agent prior to the close of regular trading of the NYSE are confirmed
at the offering price effective at the close of regular trading of the
NYSE on that day, while orders received subsequent to the close of
regular trading of the NYSE will be confirmed at the offering price
effective at the close of regular trading of the NYSE on the next day
on which the net asset value is calculated.
Bonds and other fixed-income securities (other than short-term
obligations but including listed issues) in a Fund's portfolio are
valued on the basis of valuations furnished by a pricing service which
utilizes both dealer-supplied valuations and electronic data processing
techniques which take into account appropriate factors such as
institutional-size trading in similar groups of securities, yield,
quality, coupon rate, maturity, type of issue, trading characteristics
and other market data, without exclusive reliance upon quoted prices or
exchange or over-the-counter prices, when such valuations are believed
to reflect the fair value of such securities.
In determining the net asset value, unlisted securities for which
market quotations are available are valued at the mean between the most
recent bid and asked prices. Securities, options on securities, futures
contracts and options thereon which are listed or admitted to trading
on a national exchange, are valued at their last sale on such exchange
prior to the time of determining net asset value; or if no sales are
reported on such exchange on that day, at the mean between the most
recent bid and asked price. Securities listed on more than one exchange
shall be valued on the exchange the security is most extensively
traded. Other securities and assets for which market quotations are not
readily available are valued at their fair value as determined in good
faith by the Valuation Committee as authorized by the Trustees.
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For purposes of determining the net asset value of the Funds'
shares, options transactions will be treated as follows: When a Fund
sells an option, an amount equal to the premium received by that Fund
will be included in that Fund's accounts as an asset and a deferred
liability will be created in the amount of the option. The amount of
the liability will be marked to the market to reflect the current
market value of the option. If the option expires or if that Fund
enters into a closing purchase transaction, that Fund will realize a
gain (or a loss if the cost of the closing purchase exceeds the premium
received), and the related liability will be extinguished. If a call
option contract sold by a Fund is exercised, that Fund will realize the
gain or loss from the sale of the underlying security and the sale
proceeds will be increased by the premium originally received.
INVESTOR SERVICES
(See "How to Buy Shares," "How to Sell Shares" and "How to
Exchange Shares" in the Prospectuses.)
The Trust offers a variety of services, described in the sections
that follow, designed to meet the needs of its shareholders. The costs
of providing such services are borne by the Funds.
Automatic Investment Plan
The Automatic Investment Plan enables shareholders to make regular
(monthly or quarterly) investments of [$______] or more in shares of
any of the Funds through an automatic withdrawal from a designated bank
account by simply completing the Automatic Investment Plan application.
Please call 1-800-[__________] or write to WPG to receive this form. By
completing the form, the shareholder authorizes the Trust's Custodian
to periodically draw money from a designated bank or federal credit
union account, and to invest such amounts in account(s) of the Fund(s)
specified. The transaction will be automatically processed to the
mutual fund account on or about the first business day of the month or
quarter designated.
Please be aware that: (1) the Automatic Investment Plan privilege
may be revoked without prior notice if any check is not paid upon
presentation; (2) the Custodian is under no obligation to notify the
shareholder as to the non-payment of any check, and (3) this service
may be modified or discontinued by the Custodian upon thirty (30) days'
written notice prior to any payment date, or may be discontinued by you
by written notice to TSSG, at least ten (10) days before the next
payment date.
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Prototype Retirement Plan for Employers and Self-Employed
Individuals
Prototype retirement plans (the "Retirement Plan") are available
for those entities or self-employed individuals who wish to purchase
shares of a Fund in connection with a money purchase plan or a profit
sharing plan maintained by their employer. The Retirement Plans were
designed to conform to the requirements of the Code and the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). The
Retirement Plans received opinion letters from the Internal Revenue
Service (the "IRS") on March 29, 1990 that the form of the Retirement
Plans is acceptable under Section 401 of the Code.
Annual tax-deductible contributions to the Retirement Plan may be
made up to the lesser of $30,000 or 25% of the participant's earned
income (disregarding any compensation in excess of $150,000 (as
adjusted by the IRS for inflation). Under the terms of the Retirement
Plan, contributions by or on behalf of participants may be invested in
a Fund with the designated custodian under the Retirement Plan (the
"Retirement Plan's Custodian"). Investment in other mutual funds
advised by the Adviser or one of its affiliates may also be available.
Employers adopting the Retirement Plan may elect either that a
participant shall specify the investments to be made with contributions
by or on behalf of such participant or that the employer shall specify
the investments to be made with all such contributions. Since no Fund
is intended as a complete investment program it is important, in
connection with such election, that employers give careful
consideration to the fiduciary obligation requirements of ERISA.
All dividends and distributions received by the Retirement Plan's
Custodian on the Funds' shares held by the Plan's Custodian will be
reinvested in the applicable Fund's shares of the same class at net
asset value. Distributions of benefits to participants, when made, will
be paid first in cash, to the extent that any amount credited to a
participant's account is not invested in the applicable Fund's shares
and then in full Fund shares of the applicable class (and cash in lieu
of fractional shares).
Boston Safe Deposit and Trust Company serves as the Retirement
Plan's Custodian under a Custodial Agreement. Custodian fees which are
payable by the employer to the Retirement Plan's Custodian under such
Custodial Agreement are a $10 application fee for processing the
Retirement Plan application, an annual maintenance fee of $15 per
participant, and a distribution fee of $10 for each distribution from a
participant's account. Such fees may be altered from time to time by
agreement of the employer and the Retirement Plan's Custodian. For
further details
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see the terms of the Retirement Plan which are available from the
Trust.
Distributions must be made pursuant to the terms of the Retirement
Plan and generally may not commence before retirement, disability,
death, termination of employment, or termination of the Retirement Plan
and must commence no later than April 1 of the year following the year
in which the participant attains age 70 (the "required beginning
date"). Distributions are taxed as ordinary income when received,
except the portion, if any, considered a return of a participant's
nondeductible contributions. Certain distributions before age 59 may be
subject to a 10% nondeductible penalty on the taxable portion of the
distribution. Failure to make minimum required distributions by the
required beginning date may be subject to a 50% excise tax.
It should be noted that the Retirement Plan is a retirement
investment program involving commitments covering future years. In
deciding whether to utilize the Retirement Plan, it is important that
the employer consider his or her needs and those of the Retirement Plan
participants and whether the investment objectives of the Funds are
likely to fulfill such needs. Termination or curtailment of the
Retirement Plan for other than business reasons within a few years
after its adoption may result in adverse tax consequences.
Employers who contemplate adoption of the Retirement Plan should
consult an attorney or financial adviser regarding all aspects of the
Retirement Plan as a retirement plan vehicle (including fiduciary
obligations under ERISA).
Individual Retirement Account
Persons with earned income, whether or not they are active
participants in a pension, profit-sharing or stock bonus plan described
in Code 401(a), Federal, state or local pension plan, an annuity plan
described in Code 403(a), an annuity contract or custodial account
described in Code 403(b), a simplified employee pension plan described
in Code 408(k), or a trust described in Code 501(c)(18) ("active
participant"), generally are eligible to establish an Individual
Retirement Account ("IRA"). An individual may make a deductible
contribution to an IRA only if (i) neither the individual nor his or
her spouse (unless living apart for the entire year and filing separate
returns) is an active participant, or (ii) the individual (and his or
her spouse, if applicable) has an adjusted gross income below a certain
level ($40,000 for married individuals filing a joint return, with a
phase-out for adjusted gross income between $40,000 and $50,000;
$25,000 for a single individual, with a phase-out for adjusted gross
income between $25,000 and $35,0000). However, an
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individual who is not permitted to make a deductible contribution to an
IRA for a taxable year may nonetheless make annual nondeductible
contributions to an IRA up to the lesser of 100% of the individual's
earned income or $2,000 to an IRA (up to $2,250 to IRAs for an
individual and his or her non-earning spouse) for that year. There are
special rules for determining how withdrawals are to be taxed if an IRA
contains both deductible and nondeductible amounts. In general, a
proportionate amount of each withdrawal will be deemed to be made from
nondeductible contributions; amounts treated as a return of
nondeductible contributions will not be taxable. Also, annual
contributions may be made to a spousal IRA even if the spouse has
earnings in a given year if the spouse elects to be treated as having
no earnings (for IRA contribution purposes) for the year.
Withdrawals from the IRA (other than the portion treated as a
return of nondeductible contributions) are taxed as ordinary income
when received, may be made without penalty after the participant
reaches age 59 and must commence no later than the required beginning
date (see discussion of "Prototype Retirement Plans" above).
Withdrawals before age 59 may involve the payment of a 10%
nondeductible penalty on the taxable portion of the amount withdrawn.
The time and rate of withdrawal must conform with Code requirements in
order to avoid adverse tax consequences. All dividends and
distributions on shares of a Fund held in IRA accounts are reinvested
in full and fractional shares of the same class of the same Fund and
are not subject to federal income tax until withdrawn from the IRA.
Investors should consult their tax advisers for further tax
information, including information with respect to the imposition of
state and local income taxes and the effects of tax law changes.
The Trust has arranged for Boston Safe Deposit and Trust Company
to furnish the required custodial services for IRAs using any of the
Fund's shares as the underlying investment. The Bank will charge an
acceptance fee of $10 for each new IRA and an annual maintenance fee of
$15 for each year that an IRA is in existence. There is a $10 fee for
processing a premature distribution. These fees will be deducted from
the IRA account and may be changed by the Plan's Custodian upon 30
days' prior notice.
To establish an IRA for investment in a Fund, an investor must
complete an application and a custodial agreement on IRS Form 5305-A
(which has been supplemented to provide certain additional custodial
provisions) and must make an initial cash contribution to the IRA,
subject to the limitation on contributions described above. Pursuant to
IRS regulations, an investor may for seven days following establishment
of an IRA revoke the IRA. Detailed information on IRAs, together with
the necessary form of
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application and custodial agreement, is available from the Trust and
should be studied carefully by persons interested in utilizing a Fund
for IRA investments. Such persons should also consult their own
advisers regarding all aspects of the Funds as an appropriate IRA
investment vehicle.
Simplified Employee Pension Plans (SEP-IRA)
A simplified employee pension (SEP) allows an employer to make
contributions toward his or her own (if a self-employed individual) and
his or her employees' retirement and/or permits the employees to make
elective deferrals by salary reduction. A SEP requires an Individual
Retirement Account (a SEP-IRA) to be established for each "qualifying
employee," although the employer may include additional employees if it
wishes. A qualifying employee is one who: (a) is at least age 21, (b)
has worked for the employer during at least 3 of 5 years immediately
preceding the tax year, and (c) has received at least $400 (as indexed
for inflation) in compensation in the tax year.
An employer is not required to make any contribution to the
SEP-IRA. However, if the employer does make a contribution, the
contribution must be based on a written allocation formula and must not
discriminate in favor of highly compensated employees, as defined in
Code Section 414(q). The employer may make annual contributions on
behalf of each qualifying employee, provided that the contributions,
when combined with the employee's elective deferrals, do not exceed 15%
of the employee's compensation or $30,000, whichever is less.
A SEP-IRA may include a salary reduction arrangement under which
the employee can choose to have the employer make contributions
("elective deferrals") to his or her SEP-IRA out of his or her salary.
However, employees may make elective deferrals only if (i) at least 50%
of the employer's eligible employees choose elective deferrals; (ii)
the employer did not have more than 25 eligible employees at any time
during the preceding year; and (iii) the amount deferred each year by
each eligible highly compensated employee as a percentage of pay is no
more than 125% of the average deferral percentage of all other eligible
employees. An elective deferral arrangement is not available for a SEP
maintained by a state or local government, or any of their political
subdivisions, agencies, or instrumentalities, or to exempt
organizations.
In general, the total income which an employee can defer under a
salary reduction arrangement included in a SEP and certain other
elective deferral arrangements is limited to $9,240 (indexed annually
for inflation). This dollar limit applies only to the elective
deferrals, not to any contributions from employer funds.
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The Code may require that contributions be further limited to prevent
discrimination in favor of highly compensated employees. An employee
may also make regular IRA contributions to his or her SEP-IRA (see
discussion of IRAs, above).
Under the terms of the SEP-IRA, contributions by or on behalf of
participants may be invested in shares of the Funds (or shares of other
funds designated by the Adviser as eligible investments), as specified
by the participant. All dividends and distributions on shares held in
SEP-IRAs are reinvested in full and fractional shares of the same class
of the same Fund. Since no Fund is intended as a complete investment
program it is important, in connection with the adoption of a SEP-IRA,
that employers give careful consideration to the fiduciary obligation
requirements of ERISA, particularly those pertaining to diversification
of investments.
Withdrawals before age 59 may involve the payment of a 10%
nondeductible penalty on the amount withdrawn. Withdrawals must
commence no later than the required beginning date (see discussions of
"Prototype Retirement Plans" above). The time and rate of withdrawal
must conform with Code requirements in order to avoid adverse tax
consequences. Contributions to a SEP-IRA by an employer are excluded
from the employee's income rather than deducted from it. Elective
deferrals made to an employee's SEP-IRA generally are excluded from his
income in the year of deferral, but are included in wages for social
security (FICA) and unemployment (FUTA) tax purposes. However, if the
employee makes regular IRA contributions to his SEP-IRA (other than
elective deferrals), he can deduct them the same way as contributions
to a regular IRA, up to the amount of his deduction limit. Investors
should consult their tax advisers for further tax information including
information with respect to the imposition of state and local income
taxes and the effects of tax law changes.
The Fund has arranged for Boston Safe Deposit and Trust Company to
furnish the required custodial services for SEP-IRAs using the Funds as
the underlying investment. Boston Safe Deposit and Trust Company will
charge an acceptance fee of $10 for each new SEP-IRA and an annual
maintenance fee of $15 for each year that a SEP-IRA is in existence.
There is a $10 fee for each premature distribution. These fees will be
deducted from the SEP-IRA account and may be changed by the Custodian
upon 30 days' prior written notice.
To establish a SEP-IRA, an employer and employee should complete
the WPG IRA application materials, as well as either IRS Form 5305A-SEP
(if employees will make elective deferrals) and/or IRS Form 5305-SEP
(only if employer contributions will be made). Pursuant to IRS
regulations, an investor may for seven days
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following establishment of a SEP-IRA revoke the SEP-IRA. Detailed
information on SEP-IRAs, together with the necessary form of
application and custodial agreement, is available from the Fund and
should be studied carefully by persons interested in utilizing the Fund
for SEP-IRA investments. Such persons should also consult their own
advisers regarding all aspects of the Fund as an appropriate SEP-IRA
investment vehicle.
DIVIDENDS, DISTRIBUTIONS AND TAX STATUS
Each Fund within the Trust is separate for investment and
accounting purposes and is treated as a separate entity for federal
income tax purposes.
A regulated investment company qualifying under Subchapter M of
the Code is not subject to federal income tax on distributed amounts to
the extent that it distributes annually its taxable and, if any,
tax-exempt net investment income and net realized capital gains in
accordance with the timing requirements of the Code. Each Fund intends
to elect and to qualify to be treated as a regulated investment company
and intends to continue to so qualify for each taxable year.
Qualification of a Fund for treatment as a regulated investment
company under the Code requires, among other things, that (a) at least
90% of a Fund's annual gross income, without offset for losses from the
sale or other disposition of stock or securities or other transactions,
be derived from interest, payments with respect to securities loans,
dividends and gains from the sale or other disposition of stock or
securities or foreign currencies, or other income (including but not
limited to gains from options, futures, or forward contracts) derived
with respect to its business of investing in such stock, securities or
currencies; (b) the Fund derive less than 30% of its annual gross
income from gains (without deduction for losses) from the sale or other
disposition of any of the following held (for tax purposes) for less
than three months: (i) stock or securities; (ii) options, futures or
forward contracts (not on foreign currencies) or (iii) foreign
currencies (or options, futures or forward contracts on foreign
currencies) not directly related to the Fund's principal business of
investing in stock or securities and related options or futures; (c)
the Fund distribute at least annually to its shareholders as dividends
at least 90% of its taxable and tax-exempt net investment income, the
excess of net short-term capital gain over net long-term capital loss
earned in each year and any other net income (except for the excess, if
any, of net long-term capital gain over net short-term capital loss,
which need not be distributed in order for the Fund to qualify as a
regulated investment company but is taxed to the Fund if it is
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not distributed); and (d) the Fund diversify its assets so that, at the
close of each quarter of its taxable year, (i) at least 50% of the fair
market value of its total (gross) assets is comprised of cash, cash
items, U.S. Government securities, securities of other regulated
investment companies and other securities limited in respect of any one
issuer to no more than 5% of the fair market value of the Fund's total
assets and 10% of the outstanding voting securities of such issuer and
(ii) no more than 25% of the fair market value of its total assets is
invested in the securities of any one issuer (other than U.S.
Government securities and securities of other regulated investment
companies) or of two or more issuers controlled by the Fund and engaged
in the same, similar, or related trades or businesses.
It is expected that Separate Accounts of Participating Insurance
Companies will be purchasing Institutional Class shares of the Funds.
As such, each Fund must, and intends to, comply with the
diversification requirements imposed by Section 817(h) of the Code and
the regulations thereunder. These requirements, which are in addition
to the diversification requirements imposed on a Fund by the 1940 Act
and Subchapter M of the Code, place certain limitations on the assets
of each Separate Account and, because Section 817(h) and those
regulations treat the assets of the Fund as assets of the related
Separate Account, the assets of a Fund, that may be invested in
securities of a single issuer. Specifically, the regulations provide
that, except as permitted by the "safe harbor" described below, as of
the end of each calendar quarter or within 30 days thereafter no more
than 55% of the total assets of a Fund may be represented by any one
investment, no more than 70% by any two investments, no more than 80%
by any three investments and no more than 90% by any four investments.
For this purpose, all securities of the same issuer are considered a
single investment, and each U.S. Government agency and instrumentality
is considered a separate issuer. Section 817(h) provides, as a safe
harbor, that a Separate Account will be treated as being adequately
diversified if the diversification requirements under Subchapter M of
the Code are satisfied and no more than 55% of the value of the
Separate Account's total assets are cash and cash items (including
receivables), U.S. Government securities and securities of other
regulated investment companies. Failure by a Fund to both qualify as a
regulated investment company and satisfy the Section 817(h)
requirements would generally result in treatment of the Variable
Contract holders other than as described in the applicable Variable
Contract prospectus, including inclusion in ordinary income of income
accrued under the contracts for the current and all prior taxable
years. Any such failure may also result in adverse tax consequences for
the Participating Insurance Company issuing the Variable Contracts.
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Unless its only shareholders are life insurance company segregated
asset accounts held in connection with Variable Contracts, trusts that
are described in section 401(a) of the Code and exempt from tax under
section 501(a) of the Code, and investors of "seed money" not in excess
of $250,000, each Fund is subject to a 4% nondeductible federal excise
tax on amounts required to be but not distributed under a prescribed
formula. The formula requires that a Fund distribute (or be deemed to
have distributed) to shareholders during a calendar year at least 98%
of the Fund's ordinary income (not including tax-exempt interest) for
the calendar year, at least 98% of the excess of its capital gains over
the capital losses realized during the one-year period ending October
31 during such year, as well as any income or gain (as so computed)
from the prior calendar year that was not distributed for such year and
on which the Fund paid no federal income tax. Each Fund has
distribution policies that should generally enable it to avoid
liability for this tax.
Net investment income for each Fund is the Fund's investment
income less its expenses. Dividends from taxable net investment income
and the excess, if any, of net short-term capital gain over net
long-term capital loss of a Fund will be treated under the Code as
ordinary income, and dividends from net long-term capital gain in
excess of net short-term capital loss ("capital gain dividends") will
be treated under the Code as long-term capital gain, for federal income
tax purposes. These dividends are paid after taking into account, and
reducing the distribution to the extent of, any available capital loss
carryforwards. Distributions from a Fund's current or accumulated
earnings and profits, as computed for Federal income tax purposes, will
be treated as described above whether taken in shares or in cash.
Certain distributions received in January may be treated as if paid by
a Fund and received by a shareholder on December 31 of the prior year.
Dividends, including capital gain dividends, paid by a Fund
shortly after a shareholder's purchase of shares have the effect of
reducing the net asset value per share of his shares by the amount per
share of the dividend distribution. Although such dividends are, in
effect, a partial return of the shareholder's purchase price to the
shareholder, they may be characterized as ordinary income or capital
gain as described above.
Equity options (including options on stock and options on
narrow-based stock indices) and over-the-counter options on debt
securities written or purchased by a Fund will be subject to tax under
Section 1234 of the Code. In general, no loss is recognized by a Fund
upon payment of a premium in connection with the purchase of a put or
call option. The character of any gain or loss recognized (i.e.,
long-term or short-term) will generally
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depend, in the case of a lapse or sale of the option, on the Fund's
holding period for the option, and in the case of an exercise of the
option, on the Fund's holding period for the underlying security. The
purchase of a put option may constitute a short sale for federal income
tax purposes, causing an adjustment in the holding period of the
underlying stock or security or a substantially identical stock or
security in the Fund's portfolio. If a Fund writes a put or call
option, no gain is recognized upon its receipt of a premium. If the
option lapses or is closed out, any gain or loss is treated as a
short-term capital gain or loss. If a call option is exercised, whether
the gain or loss is long-term or short-term depends on the holding
period of the underlying stock or security. The exercise of a put
option written by a Fund is not a taxable transaction for the Fund.
All futures contracts entered into by a Fund and all listed
nonequity options written or purchased by a Fund (including options on
debt securities, options on futures contracts, options on securities
indices and options on broad-based stock indices) will be governed by
Section 1256 of the Code. Absent a tax election to the contrary, gain
or loss attributable to the lapse, exercise or closing out of any such
position will be treated as 60% long-term and 40% short-term capital
gain or loss, and on the last trading day of a Fund's taxable year, all
outstanding Section 1256 positions will be marked to market (i.e.,
treated as if such positions were closed out at their closing price on
such day), and any resulting gain or loss will be recognized as 60%
long-term and 40% short-term capital gain or loss. Under certain
circumstances, entry into a futures contract to sell a security may
constitute a short sale for federal income tax purposes, causing an
adjustment in the holding period of the underlying security or a
substantially identical security in a Fund's portfolio.
Because options and futures activities of a Fund may increase the
amount of gains from the sale of securities or investments held or
treated as held for less than three months, the Funds may have to limit
their options and futures transactions in order to comply with the 30%
limitation described above.
Positions of a Fund which consist of at least one stock and at
least one stock option or other position with respect to a related
security which substantially diminishes the Fund's risk of loss with
respect to such stock could be treated as a "straddle" which is
governed by Section 1092 of the Code, the operation of which may cause
deferral of losses, adjustments in the holding periods of stock or
securities and conversion of short-term capital losses into long-term
capital losses. An exception to
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these straddle rules exists for any "qualified covered call options" on
stock written by a Fund.
Positions of a Fund which consist of at least one debt security
not governed by Section 1256 and at least one futures contract or
listed nonequity option governed by Section 1256 which substantially
diminishes the Fund's risk of loss with respect to such debt security
will be treated as a "mixed straddle." Although mixed straddles are
subject to the straddle rules of Section 1092 of the Code, certain tax
elections exist for them which reduce or eliminate the operation of
these rules. Each Fund will monitor its transactions in options and
futures and may make certain tax elections in order to mitigate the
operation of these rules and prevent disqualification of the Fund as a
regulated investment company for federal income tax purposes.
These special tax rules applicable to options and futures
transactions could affect the amount, timing and character of a Fund's
income or loss and hence of its distributions to shareholders by
causing holding period adjustments, converting short-term capital
losses into long-term capital losses, and accelerating a Fund's income
or deferring its losses.
A Fund's investment in zero coupon securities or other securities
having original issue discount (or market discount, if the Fund elects
to include market discount in income currently) will generally cause it
to realize income prior to the receipt of cash payments with respect to
these securities. The mark to market rules described above may also
require a Fund to recognize gains without a concurrent receipt of cash.
In order to distribute this income or gains, maintain its qualification
as a regulated investment company, and avoid federal income or excise
taxes, the Fund may be required to liquidate portfolio securities that
it might otherwise have continued to hold.
The Funds may be subject to foreign withholding or other foreign
taxes with respect to income (possibly including, in some cases,
capital gains) derived from foreign securities. These taxes may be
reduced or eliminated under the terms of an applicable U.S. income tax
treaty. However, the Funds will not be eligible to pass through to
shareholders any foreign tax credits or deductions for foreign taxes
paid by the Funds that are not thus reduced or eliminated. Certain
foreign exchange gains and losses realized by the Funds with respect to
such securities or related currency transactions will generally be
treated as ordinary income and losses. Certain uses of foreign currency
and investments by the Funds in certain "passive foreign investment
companies" may be limited in order to avoid adverse tax consequences
for the Funds (or an election, if available, may be made with respect
to such investments).
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Different tax treatment, including a penalty on certain
distributions, excess contributions or other transactions is accorded
to accounts maintained as IRAs or other retirement plans. Investors
should consult their tax advisers for more information. See "Prototype
Retirement Plan For Employers and Self-Employed Individuals,"
"Simplified Employee Pension Plans (SEP-IRA)," and "Individual
Retirement Accounts."
Redemptions, including exchanges, of shares may give rise to
realized gains or losses, recognizable for tax purposes except for
investors subject to tax provisions that do not require them to
recognize such gains or losses. All or a portion of a loss realized
upon the redemption of shares may be disallowed under "wash sale" rules
to the extent shares are purchased (including shares acquired by means
of reinvested dividends) within a 61-day period beginning 30 days
before and ending 30 days after such redemption. Any loss realized upon
a shareholder's sale, redemption or other disposition of shares with a
tax holding period of six months or less will be treated as a long-term
capital loss to the extent of any distribution of long-term capital
gains with respect to such shares. Exchanges and withdrawals under the
Systematic Withdrawal Plan are treated as redemptions for federal
income tax purposes.
The Trust is organized as a Delaware business trust, and neither
the Trust nor the Funds will be subject to any corporate excise or
franchise tax in the State of Delaware, nor will they be liable for
Delaware income taxes provided that each Fund qualifies as a regulated
investment company for federal income tax purposes and satisfies
certain income source requirements of Delaware law. If each Fund so
qualifies and distributes all of its income and capital gains, it will
also be exempt from the New York State franchise tax and the New York
City general corporation tax, except for small minimum taxes.
The foregoing discussion of U.S. federal income tax law does not
address the special tax rules applicable to certain classes of
investors, such as insurance companies. Each shareholder who is not a
U.S. person should consider the U.S. and foreign tax consequences of
ownership of shares of the Funds, including the possibility that such a
shareholder may be subject to a U.S. withholding tax at a rate of 30%
(or at a lower rate under an applicable income tax treaty) on Fund
distributions treated as ordinary dividends.
This discussion of the federal income tax treatment of the Funds
and their distributions is based on the federal income tax law in
effect as of the date of this Statement of Additional Information.
Shareholders should consult their tax advisers about the application of
the provisions of tax law described in this
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statement of additional information and about the possible application
of state, local and foreign taxes in light of their particular tax
situations.
PORTFOLIO BROKERAGE
(See "Portfolio Brokerage" in the Prospectuses.)
It is the general policy of the Trust not to employ any broker in
the purchase or sale of securities for a Fund's portfolio unless the
Trust believes that the broker will obtain the best results for the
Fund, taking into consideration such relevant factors as price, the
ability of the broker to effect the transaction and the broker's
facilities, reliability and financial responsibility. Commission rates,
being a component of price, are considered together with such factors.
Subject to the foregoing, where transactions are effected on securities
exchanges, the Trust intends to employ primarily WPG as its broker. The
Trust is not obligated to deal with any broker or group of brokers in
the execution of transactions in portfolio securities.
WPG acts as broker for the Funds on exchange transactions,
subject, however, to the general policy of the Trust set forth above
and the procedures adopted by the Trustees. Commissions paid to WPG
must be at least as favorable as those believed to be contemporaneously
charged by other brokers in connection with comparable transactions
involving similar securities being purchased or sold on a securities
exchange. A transaction is not placed with WPG if a Fund would have to
pay a commission rate less favorable than WPG's contemporaneous charges
for comparable transactions for its other most favored, but
unaffiliated, customers except for accounts for which WPG acts as a
clearing broker for another brokerage firm, and any customers of WPG
determined by a majority of the Independent Trustees not to be
comparable to the Funds. With regard to comparable customers, in
isolated situations, subject to the approval of a majority of the
Independent Trustees, exceptions may be made. Since WPG has, as
investment adviser to the Funds, the obligation to provide management,
which includes elements of research and related skills, such research
and related skills will not be used by WPG as a basis for negotiating
commissions at a rate higher than that determined in accordance with
the above criteria.
The commission rate on all exchange orders is subject to
negotiation. Section 17(e) of the 1940 Act limits to "the usual and
customary broker's commission" the amount which can be paid by the
Trust to an affiliated person, such as WPG, acting as broker in
connection with transactions effected on a securities exchange. The
Trustees, including a majority of the Independent Trustees, have
adopted procedures designed to comply with the requirements
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of Section 17(e) of the 1940 Act and Rule 17e-1 thereunder to ensure a
broker's commission that is "reasonable and fair compared to the
commission, fee or other remuneration received by other brokers in
connection with comparable transactions involving similar securities
being purchased or sold on a securities exchange during a comparable
period of time ...." Rule 17e-1 also requires the Trustees, including a
majority of the Independent Trustees, to adopt procedures reasonably
designed to provide that the commission paid is consistent with the
above standard, review those procedures at least annually to determine
that they continue to be appropriate and determine at least quarterly
that transactions have been effected in compliance with those
procedures. The Trustees of the Trust, including a majority of the
Independent Trustees, have adopted procedures designed to comply with
the requirements of Rule 17e-1.
In selecting brokers other than WPG to effect transactions on
securities exchanges, the Trust considers the factors set forth in the
first paragraph under this heading and any investment products or
services provided by such brokers, subject to the criteria of Section
28(e) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Section 28(e) specifies that a person with investment discretion
shall not be "deemed to have acted unlawfully or to have breached a
fiduciary duty" solely because such person has caused the account to
pay a higher commission than the lowest rate available. To obtain the
benefit of Section 28(e), the person so exercising investment
discretion must make a good faith determination that the commissions
paid are "reasonable in relation to the value of the brokerage and
research services provided viewed in terms of either that particular
transaction or his overall responsibilities with respect to the
accounts as to which he exercises investment discretion." Accordingly,
if the Trust determines in good faith that the amount of commissions
charged by a broker is reasonable in relation to the value of the
brokerage and research products and services provided by such broker,
the Trust may pay commissions to such broker in an amount greater than
the amount another firm might charge. Research products and services
provided to the Trust include research reports on particular industries
and companies, economic surveys and analyses, recommendations as to
specific securities and other products or services (e.g., quotation
equipment and computer related costs and expenses) providing lawful and
appropriate assistance to WPG (and its subsidiaries) in the performance
of their decision-making responsibilities.
Each year, the Adviser considers the amount and nature of the
research products and services provided by other brokers as well as the
extent to which such products and services are relied upon, and
attempts to allocate a portion of the brokerage business of their
clients, such as the Trust, on the basis of that
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consideration. In addition, brokers sometimes suggest a level of
business they would like to receive in return for the various services
they provide. Actual brokerage business received by any broker may be
less than the suggested allocations, but can (and often does) exceed
the suggestions, because total brokerage is allocated on the basis of
all the considerations described above. In no instance is a broker
excluded from receiving business because it has not been identified as
providing research services. As permitted by Section 28(e), the
investment information received from other brokers may be used by WPG
(and its subsidiaries) in servicing all its accounts and not all such
information may be used by WPG, in its capacity as the Adviser, in
connection with the Trust. Nonetheless, the Trust believes that such
investment information provides the Trust with benefits by
supplementing the research otherwise available to the Trust.
As set forth above, the Trust employs WPG, a member firm of the
NYSE, as its principal broker on U.S. exchange transactions. Section
11(a) of the Exchange Act provides that a member firm of a national
securities exchange (such as WPG) may not effect transactions on such
exchange for the account of an investment company (such as the Trust)
of which the member firm or its affiliate (such as the Adviser) is the
investment adviser unless certain conditions are met. These conditions
require that the investment company authorize the practice and that the
investment company receive from the member firm at least annually a
statement of all commissions paid in connection with such transactions.
WPG's transactions on behalf of the Funds are effected in compliance
with these conditions.
WPG furnishes to the Trust at least quarterly a statement setting
forth the total amount of all compensation retained by WPG or any
associated person of WPG in connection with effecting transactions for
the account of the Trust, and the Trustees of the Trust review and
approve all the Trust's portfolio transactions and the compensation
received by WPG in connection therewith.
WPG does not knowingly participate in commissions paid by the
Trust to other brokers or dealers and does not seek or knowingly
receive any reciprocal business as the result of the payment of such
commissions. In the event WPG at any time learns that it has knowingly
received reciprocal business, it will so inform the Trustees.
To the extent that WPG receives brokerage commissions on Trust
portfolio transactions, officers and Trustees of the Trust who are also
principals in WPG may receive indirect compensation from the Trust
through their participation in such brokerage commissions.
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In certain instances there may be securities which are suitable
for a Fund's portfolio as well as for that of another Fund or one or
more of the other clients of the Adviser. Investment decisions for a
Fund and for the Adviser's other clients are made with a view to
achieving their respective investment objectives. It may develop that a
particular security is bought or sold for only one client even though
it might be held by, or bought or sold for, other clients. Likewise, a
particular security may be bought for one or more clients when one or
more other clients are selling that same security. Some simultaneous
transactions are inevitable when several clients receive investment
advice from the same investment adviser, particularly when the same
security is suitable for the investment objectives of more than one
client. When two or more clients are simultaneously engaged in the
purchase or sale of the same security, the securities are allocated
among clients in a manner believed to be equitable to each. It is
recognized that in some cases this system could have a detrimental
effect on the price or volume of the security in a particular
transaction as far as a Fund is concerned. The Trust believes that over
time its ability to participate in volume transactions will produce
better executions for the Funds. When appropriate, orders for the
account of the Funds are combined with orders for other investment
companies or other clients advised by WPG in order to obtain a more
favorable commission rate. When the same security is purchased for a
Fund and one or more other funds or other clients on the same day, each
party pays the average price and commissions paid are allocated in
direct proportion to the number of shares purchased.
The U.S. Government and debt securities in which the Funds invest
are traded primarily in the over-the-counter market. Transactions in
the over-the-counter market are generally principal transactions with
dealers and the costs of such transactions involve dealer spreads
rather than brokerage commissions. With respect to over-the-counter
transactions, the Trust, where possible, deals directly with the
dealers who make a market in the securities involved except in those
circumstances where better prices and execution are available
elsewhere. Under the 1940 Act, persons affiliated with the Trust are
prohibited from dealing with the Trust as a principal in the purchase
and sale of securities. Since transactions in the over-the-counter
market usually involve transactions with dealers acting as principal
for their own account, affiliated persons of the Trust, including WPG,
may not serve as the Trust's dealer in connection with such
transactions. However, affiliated persons of the Trust may serve as its
broker in transactions conducted on an exchange or over-the-counter
transactions conducted on an agency basis. On occasion, certain money
market instruments may be purchased
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directly from an issuer, in which case no commissions or discounts
are paid.
Subject to the supervision of the Trustees, all investment
decisions of the Trust are executed through WPG's trading department.
PORTFOLIO TURNOVER
See "Risk Considerations and Other Investment Practices and
Policies -- Portfolio Turnover" in the Prospectus.
The annual portfolio turnover rate of a Fund is calculated by
dividing the lesser of the purchase or sales of a Fund's portfolio
securities for the year by the monthly average of the value of the
portfolio securities owned by that Fund during the year. The monthly
average is calculated by totalling the values of the portfolio
securities as of the beginning and end of the first month of the year
and as of the end of the succeeding 11 months and dividing the sum by
13. In determining portfolio turnover, securities (including options)
which have maturities at the time of acquisition of one year or less
("short-term securities"), are excluded. A turnover rate of 100% would
occur if all of a Fund's portfolio securities (other than short-term
securities) were replaced once in a period of one year. It should be
noted that if a Fund were to write a substantial number of options
which are exercised, the portfolio turnover rate of that Fund would
increase. Increased portfolio turnover results in increased brokerage
costs which the Trust must pay and the possibility of more short-term
gains which may increase the difficulty of qualifying as a regulated
investment company.
To the extent that their portfolios are traded for short-term
market considerations and exceeds 100%, the annual portfolio turnover
rate of the Funds could be higher than most mutual funds. None of the
Funds will engage in short-term trading to an extent which would
disqualify them as regulated investment companies under Subchapter M of
the Code.
ORGANIZATION
(See "Management of the Funds" and "The Trust" in the
Prospectuses.)
As a Delaware business trust, the Trust's operations are governed
by its Agreement and Declaration of Trust dated June 21, 1995 (the
"Declaration of Trust"). A copy of the Trust's Certificate of Trust,
also dated June 21, 1995, is on file with the Office of the Secretary
of State of the State of Delaware. Upon the initial purchase of shares,
the shareholder agrees to be
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bound by the Trust's Declaration of Trust, as amended from time to
time. Generally, Delaware business trust shareholders are not
personally liable for obligations of the Delaware business trust under
Delaware law. The Delaware Business Trust Act (the "Delaware Act")
provides that a shareholder of a Delaware business trust shall be
entitled to the same limitation of liability extended to shareholders
of private for-profit corporations. The Trust's Declaration of Trust
expressly provides that the Trust has been organized under the Delaware
Act and that the Declaration of Trust is to be governed by Delaware
law. It is nevertheless possible that a Delaware business trust, such
as the Trust, might become a party to an action in another state whose
courts refused to apply Delaware law, in which case the Trust's
shareholders could be subject to personal liability.
To guard against this risk, the Declaration of Trust (i) contains
an express disclaimer of shareholder liability for acts or obligations
of the Trust and provides that notice of such disclaimer may be given
in each agreement, obligation and instrument entered into or executed
by the Trust or its Trustees, (ii) provides for the indemnification out
of Trust property of any shareholders held personally liable for any
obligations of the Trust or any series of the Trust and (iii) provides
that the Trust shall, upon request, assume the defense of any claim
made against any shareholder for any act or obligation of the Trust and
satisfy any judgment thereon. Thus, the risk of a Trust shareholder
incurring financial loss beyond his or her investment because of
shareholder liability is limited to circumstances in which all of the
following factors are present: (1) a court refused to apply Delaware
law; (2) the liability arose under tort law or, if not, no contractual
limitation of lability was in effect; and (3) the Trust itself would be
unable to meet its obligations. In the light of Delaware law, the
nature of the Trust's business and the nature of its assets, the risk
of personal liability to a Fund shareholder is remote.
The Declaration of Trust further provides that the Trust shall
indemnify each of its Trustees and officers against liabilities and
expenses reasonably incurred by them, in connection with, or arising
out of, any action, suit or proceeding, threatened against or otherwise
involving such Trustee or officer, directly or indirectly, by reason of
being or having been a Trustee or officer of the Trust. The Declaration
of Trust does not authorize the Trust to indemnify any Trustee or
officer against any liability to which he or she would otherwise be
subject by reason of or for willful misfeasance, bad faith, gross
negligence or reckless disregard of such person's duties.
Under the Declaration of Trust, the Trust is not required to
hold annual meetings to elect Trustees or for other purposes. It
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is not anticipated that the Trust will hold shareholders' meetings
unless required by law or the Declaration of Trust. The Trust will be
required to hold a meeting to elect Trustees to fill any existing
vacancies on the Board if, at any time, fewer than a majority of the
Trustees have been elected by the shareholders of the Trust. The Board
is required to call a meeting for the purpose of considering the
removal of persons serving as Trustee if requested in writing to do so
by the holders of not less than 10% of the outstanding shares of the
Trust.
Shares of the Trust do not entitle their holders to cumulative
voting rights, so that the holders of more than 50% of the outstanding
shares of the Trust may elect all of the Trustees, in which case the
holders of the remaining shares would not be able to elect any
Trustees. As determined by the Trustees, shareholders are entitled to
one vote for each full share held and fractional votes for fractional
shares held or one vote for each dollar of net asset value (number of
shares held times the net asset value of the applicable class of the
applicable Fund).
As it is expected that Separate Accounts of Participating
Insurance Companies will be purchasing Institutional Class shares of
each of the Funds, it should be noted that the rights, if any, of
Variable Contract holders to vote the Institutional Class shares of a
Fund beneficially owned by such Variable Contract holders are governed
by the relevant Variable Contract.
Pursuant to the Declaration of Trust, the Trustees may create
additional funds by establishing additional series of shares in the
Trust. The establishment of additional series would not affect the
interests of current shareholders in the existing six Funds. As of the
date of this Statement of Additional Information, the Board does not
have any plan to establish another series of shares in the Trust.
Pursuant to the Declaration of Trust, the Board may establish and
issue multiple classes of shares for each Fund. As of the date of this
Statement of Additional Information, the Trustees have authorized the
issuance of two classes of shares for each series, designated Adviser
Class and Institutional Class. See "The Trust" in the Prospectuses for
a detailed description of the respective rights of the two classes of
shares. The Trustees do not have any plan to establish additional
classes of shares for any Fund.
Each share of each class of a Fund is entitled to such dividends
and distributions out of the income earned on the assets belonging to
that Fund which are attributable to such class as are declared in the
discretion of the Board. In the event of the liquidation or dissolution
of the Trust, shares of each class of
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each Fund are entitled to receive their proportionate share of the
assets which are attributable to such class of such Fund and which are
available for distribution as the Trustees in their sole discretion may
determine. Shareholders are not entitled to any preemptive, conversion
or subscription rights. All shares, when issued, will be fully paid and
non-assessable by the Trust.
Pursuant to the Declaration of Trust and subject to shareholder
approval (if then required), the Trustees may authorize each Fund to
invest all or part of its investable assets in a single open-end
investment company that has substantially the same investment
objectives, policies and restrictions as the Fund. As of the date of
this Statement of Additional Information, the Board does not have any
plan to authorize any Fund to so invest its assets.
"Tomorrow Funds Retirement Trust" is the designation of the Trust
for the time being under the Declaration of Trust, and all persons
dealing with a Fund must look solely to the property of that Fund for
the enforcement of any claims against that Fund as neither the
Trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of a Fund or the
Trust. No Fund is liable for the obligations of any other Fund. Since
the Funds use combined prospectuses, however, it is possible that one
Fund might become liable for a misstatement or omission in its
prospectus regarding the other Fund with which its disclosure is
combined. The Trustees have considered this factor in approving the use
of the combined prospectuses.
CUSTODIAN
The Custodian for the Trust is Boston Safe Deposit and Trust
Company at One Exchange Place, Boston, Massachusetts 02109. In its
capacity as Custodian, Boston Safe Deposit and Trust Company performs
all accounting services, holds the assets of the Trust and is
responsible for calculating the net asset value per share.
TRANSFER AGENT
The Shareholder Services Group, Inc. acts as transfer agent for
the Trust and, in such capacity, processes purchases, transfers and
redemptions of shares, acts as dividend disbursing agent, and maintains
records and handles correspondence with respect to shareholder
accounts.
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INDEPENDENT AUDITORS
KPMG Peat Marwick LLP ("KPMG"), 345 Park Avenue, New York, New
York 10154, are the independent auditors for the Trust. Professional
services performed by KPMG include audits of the financial statements
of the Trust, consultation on financial, accounting and reporting
matters, review and consultation regarding various filings with the SEC
and attendance at the meetings of the Audit Committee and Board of
Trustees. KPMG also performs other professional services for the Trust
including preparation of income tax returns of the Funds.
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APPENDIX
Description of Bond Ratings Moody's Investors Service, Inc.
Aaa: Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can
be visualized are most unlikely to impair the fundamentally strong
position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities
or fluctuations of protective elements may be of greater amplitude or
there may be other elements present which make the long-term risks
appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for
the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Moody's also provides credit ratings for preferred stocks. It
should be borne in mind that preferred stock occupies a junior position
to bonds within a particular capital structure and that these
securities are rated within the universe of preferred stocks.
aaa: An issue which is rated "aaa" is considered to be a top-quality
preferred stock. This rating indicates good asset protection and the
least risk of dividend impairment within the universe of preferred
stocks.
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aa: An issue which is rated "aa" is considered a high-grade preferred
stock. This rating indicates that there is a reasonable assurance that
earnings and asset protection will remain relatively well maintained in
the foreseeable future.
a: An issue which is rated "a" is considered to be an upper-medium
grade preferred stock. While risks are judged to be somewhat greater
than in the "aaa" and "aa" classifications, earnings and asset
protections are, nevertheless, expected to be maintained at adequate
levels.
baa: An issue which is rated "baa" is considered to be a medium grade
preferred stock, neither highly protected nor poorly secured. Earnings
and asset protection appear adequate at present but may be questionable
over any great length of time.
Moody's ratings for municipal notes and other short-term loans are
designated Moody's Investment Grade (MIG). This distinction is in
recognition of the differences between short-term and long-term credit
risk. Loans bearing the designation MIG 1 are of the best quality,
enjoying strong protection by establishing cash flows of funds for
their servicing or by established and broad-based access to the market
for refinancing, or both. Loans bearing the designation MIG 2 are of
high quality, with margins of protection ample although not so large as
in the preceding group. A short term issue having a demand feature
(i.e. payment relying on external liquidity and usually payable on
demand rather than fixed maturity dates) is differentiated by Moody's
with the use of the Symbol VMIG, instead of MIG.
Moody's also provides credit ratings for tax-exempt commercial
paper. These are promissory obligations (1) not having an original
maturity in excess of nine months, and (2) backed by commercial banks.
Notes bearing the designation P-1 have a superior capacity for
repayment. Notes bearing the designation P-2 have a strong capacity for
repayment.
Standard & Poor's Ratings Group
AAA: Bonds rated AAA have the higher rating assigned by
Standard & Poor's. Capacity to pay interest and repay principal
is extremely strong.
AA: Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the higher rated issues only in small
degree.
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A: Bonds rated A have a very strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than bonds
in higher rated categories.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than in higher
rated categories.
S&P's top ratings for municipal notes issued after July 29, 1984
are SP-1 and SP-2. The designation SP-1 indicates a very strong
capacity to pay principal and interest. A "+" is added for those issues
determined to possess overwhelming safety characteristics. An "SP-2"
designation indicates a satisfactory capacity to pay principal and
interest.
Commercial paper rated A-2 or better by S&P is described as having
a very strong degree of safety regarding timeliness and capacity to
repay. Additionally, as a precondition for receiving an S&P commercial
paper rating, a bank credit line and/or liquid assets must be present
to cover the amount of commercial paper outstanding at all times.
The Moody's Prime-2 rating and above indicates a strong capacity
for repayment of short-term promissory obligations.
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GLOSSARY
Commercial Paper: Short-term promissory notes of large
corporations with excellent credit ratings issued to finance their
current operations.
Certificates of Deposit: Negotiable certificates representing a
commercial bank's obligations to repay funds deposited with it, earning
specified rates of interest over given periods.
Bankers' Acceptances: Negotiable obligations of a bank to pay a
draft which has been drawn on it by a customer. These obligations
are backed by large banks and usually are backed by goods in
international trade.
Time Deposits: Non-negotiable deposits in a banking institution
earning a specified interest rate over a given period of time.
Corporate Obligations: Bonds and notes issued by corporations and
other business organizations in order to finance their long-term
credit needs.
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PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
Statement of Assets and Liabilities*
Report of Independent Public Accountants*
(b) Exhibits:
1.(a) Agreement and Declaration of Trust.
1.(b) Certificate of Trust.
2. By-Laws.
3. None.
4. None.
5.(a) Form of Investment Advisory Agreement
between the Registrant, on behalf of
Tomorrow Long-Term Retirement Fund, and
Weiss, Peck & Greer, L.L.C. ("WPG").
5.(b) Form of Investment Advisory Agreement between
the Registrant, on behalf of Tomorrow Mid-Term
Retirement Fund, and WPG.
5.(c) Form of Investment Advisory Agreement
between the Registrant, on behalf of
Tomorrow Short-Term Retirement Fund, and
WPG.
5.(d) Form of Investment Advisory Agreement between
the Registrant, on behalf of Tomorrow
Post-Retirement Fund, and WPG.
5.(e) Form of Investment Advisory Agreement between
the Registrant, on behalf of Core Large-Cap
Stock Fund, and WPG.
5.(f) Form of Investment Advisory Agreement between
the Registrant, on behalf of Core Small-Cap
Stock Fund, and WPG.
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5.(g) Form of Administration Agreement between the
Registrant, on behalf of Tomorrow Long-Term
Retirement Fund, and WPG.
5.(h) Form of Administration Agreement between the
Registrant, on behalf of Tomorrow Mid-Term
Retirement Fund, and WPG.
5.(i) Form of Administration Agreement between the
Registrant, on behalf of Tomorrow Short-Term
Retirement Fund, and WPG.
5.(j) Form of Administration Agreement between the
Registrant, on behalf of Tomorrow
Post-Retirement Fund, and WPG.
5.(k) Form of Administration Agreement between the
Registrant, on behalf of Core Large-Cap Stock
Fund, and WPG.
5.(l) Form of Administration Agreement between the
Registrant, on behalf of Core Small-Cap Stock
Fund, and WPG.
6. Underwriting Agreement between the
Registrant and WPG.*
7. None.
8. Custodian Agreement between the Registrant
and Boston Safe Deposit and Trust Company.*
9.(a) Transfer Agency Agreement between the
Registrant and The Shareholder Services
Group, Inc.*
9.(b) Institutional Class Shares Service Plan.*
10. Opinion and Consent of Counsel.
11. Consent of Independent Public Accountants.*
12. None.
13. Share Purchase Agreement.*
14.(a) Prototype Pension Plan and Adoption
Agreement.*
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14.(b) Prototype Individual Retirement Account
Plan.*
15. Adviser Class Shares Distribution Plan.*
16. None.
17. None.
18. Multiple Class Plan adopted pursuant to
Rule 18f-3.*
19. Powers of Attorney.
--------------
* To be filed by amendment.
Item 25. Persons Controlled By or Under
Common Control With Registrant.
Just prior to the effective date of this Registration
Statement, it is expected that WPG will own all of the issued and
outstanding shares of the Registrant.
Item 26. Number of Holders of Securities.
Just prior to the effective date of this Registration
Statement, it is expected that there will be one record holder, WPG, of
the Registrant's shares of beneficial interest.
Number of
Record Holders
Title of Class As of June 15, 1995
Tomorrow Long-Term Retirement Fund
Institutional Class 0
Adviser Class 0
Tomorrow Mid-Term Retirement Fund
Institutional Class 0
Adviser Class 0
Tomorrow Short-Term Retirement Fund
Institutional Class 0
Adviser Class 0
Tomorrow Post-Retirement Fund
Institutional Class 0
Adviser Class 0
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Core Large-Cap Stock Fund
Institutional Class 0
Adviser Class 0
Core Small-Cap Stock Fund
Institutional Class 0
Adviser Class 0
Item 27. Indemnification.
Except for the Agreement and Declaration of Trust dated June
21, 1995, establishing the Registrant as a Trust under Delaware law,
there is no contract, arrangement or statute under which any trustee,
officer, underwriter or affiliated person of the Registrant is insured
or indemnified. The Agreement and Declaration of Trust provides that no
Trustee or officer will be indemnified against any liability to which
the Registrant would otherwise be subject by reason of or for willful
misfeasance, bad faith, gross negligence or reckless disregard of such
person's duties.
Insofar as indemnification for liability arising under the
Securities Act of 1933, as amended (the "Act"), may be available 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 of the
Registrant of expenses incurred or paid by a trustee, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such trustee, officer or
controlling person in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser.
All of the information required by this item is set forth in
the Form ADV, as currently amended, of WPG (File No. 801-6604). The
following sections of such Form ADV are incorporated herein by
reference:
(a) Items 1 and 2 of Part 2;
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(b) Section 6, Business Background, of each
Schedule D.
Item 29. Principal Underwriter
(a) WPG serves as the investment adviser to each investment
company in the Weiss, Peck & Greer Investments Group of Mutual Funds.
These mutual funds include: Weiss, Peck & Greer Funds Trust, which
consists of WPG Government Money Market Fund, WPG Tax-Free Money Market
Fund, WPG Government Securities Fund, WPG Municipal Bond Fund and WPG
Quantitative Equity Fund; Weiss, Peck & Greer International Fund; WPG
Tudor Fund; WPG Growth Fund; WPG Growth and Income Fund; and U.S. Large
Stock Fund. WPG also serves as the investment advisor or subadviser to
SEI PA Tax Exempt Money Market Fund, SEI MuniBond Fund, Bullock
American Fund and Bullock Optimization USA Fund.
(b) Principals and Officers of WPG:
Positions and Offices Positions and Offices
Name* with WPG with Registrant
Samuel H. Armacost Principal
Annette Bianchi Principal
John P. Callaghan Principal
Gill Cogan Principal
Candice Eggerss Principal
Ellen M. Feeney Principal
Janet Fiorenza Principal
Margery Z. Flicker Principal
Anthony J. Giammalva Principal
Philip Greer Senior Managing
Principal
Ronald M. Hoffner Principal
Steven N. Hutchinson Principal
James W. Kiley Principal
A. Roy Knutsen Principal
Alan D. Kohn Principal
Wesley W. Lang, Jr. Principal
Steven Lear Principal
Gary R. Lisk Principal
Marvin B. Markowitz Principal
Howard G. Mattsson Principal
Kathleen A. McCarragher Principal
John Murabito Principal
Jay C. Nadel Principal Executive Vice
President and
Secretary
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Joseph N. Pappo Principal
Bradford R. Peck Principal
Peter B. Pfister Principal
Steven Pomerantz Principal
McGehee Porter Principal
Stuart W. Porter Principal
Francis H. Powers Principal Executive Vice
President and
Treasurer
R. Scott Richter Principal
Nelson Schaenen, Jr. Principal
James S. Schainuck Principal
Gary E. Scheier Principal
David J. Schilder Principal
Arthur L. Schwarz Principal
Melville Straus Principal
Daniel S. Vandivort Principal
Robert D. Weiss Principal
Roger J. Weiss Senior Managing Chairman and President
Principal
Stephen H. Weiss Chairman of the
Executive Committee/
Senior Managing Principal
Ellen P. Welsh Principal
Hugh S. Zurkuhlen Principal
------------
* The principal business address of each principal and officer of WPG
is One New York Plaza, New York, New York 10004
(c) Not applicable.
Item 30. Location of Accounts and Records
All account, books and other documents required to be
maintained by Section 31(a) of the 1940 Act and the rules thereunder
will be maintained (1) at the offices of the Registrant at One New York
Plaza, New York, New York 10004 (2) at the offices of the Registrant's
Custodian, Boston Safe Deposit and Trust Company, at One Boston Place,
Boston, MA 02109 and (3) at the offices of the Registrant's Transfer
Agent, The Shareholder Services Group, Inc., P.O. Box 9037, Boston, MA
02205.
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Item 31. Management Services
The Registrant is not a party to any management-related
service contract, except as described in the prospectuses and the
statements of additional information.
Item 32. Undertakings
(a) Not applicable.
(b) The Registrant undertakes to file a post-effective
amendment, using financial statements which need not be certified,
within four to six months from the later of the effective date of this
Registration Statement or the commencement of operations of the series
of the Registrant to which the financial statements relate.
(c) The Registrant undertakes to deliver, or cause to be
delivered with the each prospectus, to each person to whom such
prospectus is sent or given a copy of the Registrant's report to
shareholders furnished pursuant to and meeting the requirements of Rule
30d-1 from which the specified information is incorporated by
reference, unless such person currently holds securities of the
Registrant and otherwise has received a copy of such report, in which
case the Registrant shall state in each prospectus that it will
furnish, without charge, a copy of such report on request, and the
name, address and telephone number of the person to whom such a request
should be directed.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City and State of New York, on the
day of June, 1995.
TOMORROW FUNDS RETIREMENT TRUST
/s/ Roger J. Weiss
Roger J. Weiss, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the date indicated:
Signature Title
/s/ Roger J. Weiss Chairman of the Board, )
Roger J. Weiss Trustee and President )
(Principal Executive )
Officer) )
)
)
/s/ Raymond R. Herrmann, Jr. Trustee )
Raymond R. Herrmann, Jr. ) June , 1995
)
)
)
/s/ Lawrence J. Israel Trustee )
Lawrence J. Israel )
)
)
)
/s/ Harvey E. Sampson Trustee )
Harvey E. Sampson )
)
)
)
/s/ Francis H. Powers Executive Vice President )
Francis H. Powers and Treasurer (Principal )
Financial and Accounting )
Officer) )
<PAGE>
Exhibit Index
Exhibit
Number Document Title
1.(a) Agreement and Declaration of Trust.
1.(b) Certificate of Trust.
2. By-Laws.
5.(a) Form of Investment Advisory Agreement
between the Registrant, on behalf of
Tomorrow Long-Term Retirement Fund,
and Weiss, Peck & Greer, L.L.C. ("WPG").
5.(b) Form of Investment Advisory Agreement between the Registrant,
on behalf of Tomorrow Mid-Term Retirement Fund, and WPG.
5.(c) Form of Investment Advisory Agreement between the Registrant,
on behalf of Tomorrow Short-Term Retirement Fund, and WPG.
5.(d) Form of Investment Advisory Agreement
between the Registrant, on behalf of
Tomorrow Post-Retirement Fund, and WPG.
5.(e) Form of Investment Advisory Agreement between the Registrant,
on behalf of Core Large-Cap Stock Fund, and WPG.
5.(f) Form of Investment Advisory Agreement between the Registrant,
on behalf of Core Small-Cap Stock Fund, and WPG.
5.(g) Form of Administration Agreement between
the Registrant, on behalf of Tomorrow
Long-Term Retirement Fund, and WPG.
5.(h) Form of Administration Agreement between
the Registrant, on behalf of Tomorrow
Mid-Term Retirement Fund, and WPG.
5.(i) Form of Administration Agreement between
the Registrant, on behalf of Tomorrow
Short-Term Retirement Fund, and WPG.
<PAGE>
5.(j) Form of Administration Agreement between
the Registrant, on behalf of Tomorrow
Post-Retirement Fund, and WPG.
5.(k) Form of Administration Agreement between
the Registrant, on behalf of Core
Large-Cap Stock Fund, and WPG.
5.(l) Form of Administration Agreement between
the Registrant, on behalf of Core
Small-Cap Stock Fund, and WPG.
10. Opinion and Consent of Counsel.
19. Powers of Attorney.
CERTIFICATE OF TRUST
THIS Certificate of Trust of Tomorrow Funds Retirement Trust
(the "Trust"), dated June 21, 1995, is being duly executed and
filed by Roger J. Weiss, Raymond R. Herrmann, Jr., Lawrence J.
Israel and Harvey E. Sampson, as trustees, to form a business
trust under the Delaware Business Trust Act (12 Del. C. 3801, et
seq.).
1. Name. The name of the business trust formed hereby
is Tomorrow Funds Retirement Trust.
2. Registered Agent. The business address of the
registered office of the Trust in the State of Delaware is 1201
North Market Street in the City of Wilmington, County of New
Castle, 19801. The name of the Trust's registered agent at such
address is Delaware Corporation Organizers, Inc.
3. Effective Date. This Certificate of Trust shall be
effective upon the date and time of filing.
4. Series Trust. Notice is hereby given that pursuant
to Section 3804 of the Delaware Business Trust Act, the debts,
liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to a particular series of the
Trust shall be enforceable against the assets of such series only
and not against the assets of the Trust generally.
5. Registered Investment Company. The Trust will
become a registered investment company under the Investment
Company Act of 1940, as amended, prior to or within 180 days
following the first issuance of beneficial interest.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being the Trustees
of the Trust, have executed this Certificate of Trust as of the
date first above-written.
/s/ Roger J. Weiss
Roger J. Weiss,
as Trustee and not individually,
/s/ Raymond R. Herrmann, Jr.
Raymond R. Herrmann, Jr.,
as Trustee and not individually,
/s/ Harvey E. Sampson
Harvey E. Sampson,
as Trustee and not individually,
/s/ Lawrence J. Israel
Lawrence J. Israel,
as Trustee and not individually,
-2-
DECLARATION OF TRUST
OF
TOMORROW FUNDS RETIREMENT TRUST
One New York Plaza
New York, NY 10004
Dated June 21, 1995
AGREEMENT AND DECLARATION OF TRUST made this 21st day of June,
1995 by Roger J. Weiss, Raymond R. Herrmann, Jr., Lawrence J. Israel
and Harvey E. Sampson (together with all other persons from time to
time duly elected, qualified and serving as Trustees in accordance with
the provisions of Article II hereof, the "Trustees");
WHEREAS, the Trustees desire to establish a trust for the
investment and reinvestment of funds contributed thereto;
WHEREAS, the Trustees desire that the beneficial interest in the
trust assets be divided into transferable shares of beneficial
interest, as hereinafter provided;
WHEREAS, the Trustees declare that all money and property
contributed to the trust established hereunder shall be held and
managed in trust for the benefit of the holders, from time to time, of
the shares of beneficial interest issued hereunder and subject to the
provisions hereof;
NOW, THEREFORE, in consideration of the foregoing premises and the
agreements contained herein, the undersigned, being all of the Trustees
of the Trust, hereby declare as follows:
ARTICLE I
NAME AND DEFINITIONS
Section 1. Name. The name of the Trust created by this Agreement
and Declaration of Trust is "Tommorrow Funds Retirement Trust."
Section 2. Definitions. Unless otherwise provided or required by
the context:
(a) "Administrator" means the party, other than the Trust, to the
contract described in Article III, Section 3 hereof.
<PAGE>
(b) "By-laws" means the By-laws of the Trust adopted by the
Trustees, as amended from time to time, which By-laws are expressly
herein incorporated by reference as part of the "governing instrument"
within the meaning of the Delaware Act.
(c) "Class" means the class of Shares of a Series
established pursuant to Article V.
(d) "Commission," "Interested Person" and "Principal Underwriter"
have the meanings provided in the 1940 Act. Except as such term may be
otherwise defined by the Trustees in conjunction with the establishment
of any Series of Shares, the term "vote of a majority of the Shares
outstanding and entitled to vote" shall have the same meaning as is
assigned to the term "vote of a majority of the outstanding voting
securities" in the 1940 Act.
(e) "Covered Person" means a person so defined in
Article IV, Section 2.
(f) "Custodian" means any Person other than the Trust who has
custody of any Trust Property as required by Section 17(f) of the 1940
Act, but does not include a system for the central handling of
securities described in said Section 17(f).
(g) "Declaration" shall mean this Agreement and Declaration of
Trust, as amended or restated from time to time. Reference in this
Declaration of Trust to "Declaration," "hereof," "herein," and
"hereunder" shall be deemed to refer to this Declaration rather than
exclusively to the article or section in which such words appear.
(h) "Delaware Act" means Chapter 38 of Title 12 of the Delaware
Code entitled "Treatment of Delaware Business Trusts," as amended from
time to time.
(i) "Distributor" means the party, other than the Trust, to the
contract described in Article III, Section 1 hereof.
(j) "His" shall include the feminine and neuter, as well as
the masculine, genders.
(k) "Investment Adviser" means the party, other than the Trust, to
the contract described in Article III, Section 2 hereof.
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<PAGE>
(l) "Net Asset Value" means the net asset value of each Series of
the Trust, determined as provided in Article VI, Section 3.
(m) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures, estates and other
entities, and governments and agencies and political subdivisions,
thereof, whether domestic or foreign.
(n) "Series" means a series of Shares established pursuant
to Article V.
(o) "Shareholder" means a record owner of Outstanding
Shares;
(p) "Shares" means the equal proportionate transferable units of
interest into which the beneficial interest of each Series or Class is
divided from time to time (including whole Shares and fractions of
Shares). "Outstanding Shares" means Shares shown in the books of the
Trust or its transfer agent as then issued and outstanding, but does
not include Shares which have been repurchased or redeemed by the Trust
and which are held in the treasury of the Trust.
(q) "Transfer Agent" means any Person other than the Trust who
maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the
like.
(r) "Trust" means Tomorrow Funds Retirement Trust established
hereby, and reference to the Trust, when applicable to one or more
Series, refers to that Series.
(s) "Trustees" means the persons who have signed this Declaration
of Trust, so long as they shall continue in office in accordance with
the terms hereof, and all other persons who may from time to time be
duly qualified and serving as Trustees in accordance with Article II,
in all cases in their capacities as Trustees hereunder.
(t) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the Trust or
any Series or the Trustees on behalf of the Trust or any Series.
(u) The "1940 Act" means the Investment Company Act of 1940, as
amended from time to time.
3
<PAGE>
ARTICLE II
THE TRUSTEES
Section 1. Management of the Trust. The business and affairs of
the Trust shall be managed by or under the direction of the Trustees,
and they shall have all powers necessary or desirable to carry out that
responsibility. The Trustees may execute all instruments and take all
action they deem necessary or desirable to promote the interests of the
Trust. Any determination made by the Trustees in good faith as to what
is in the interests of the Trust shall be conclusive. In construing the
provisions of this Declaration, the presumption shall be in favor of a
grant of power to the Trustees.
Section 2. Powers. The Trustees in all instances shall act as
principals, free of the control of the Shareholders. The Trustees shall
have full power and authority to take or refrain from taking any action
and to execute any contracts and instruments that they may consider
necessary or desirable in the management of the Trust. The Trustees
shall not in any way be bound or limited by current or future laws or
customs applicable to trust investments, but shall have full power and
authority to make any investments which they, in their sole discretion,
deem proper to accomplish the purposes of the Trust. The Trustees may
exercise all of their powers without recourse to any court or other
authority. Subject to any applicable limitation herein or in the
By-laws or resolutions of the Trust, the Trustees shall have power and
authority, without limitation:
(a) To operate as and carry on the business of an investment
company, and exercise all the powers necessary and appropriate to the
conduct of such operations.
(b) To invest in, hold for investment, or reinvest in, cash;
securities, including common, preferred and preference stocks;
warrants; subscription rights; profit-sharing interests or
participations and all other contracts for or evidence of equity
interests; bonds, debentures, bills, time notes and all other evidences
of indebtedness; negotiable or non-negotiable instruments; government
securities, including securities of any state, municipality or other
political subdivision thereof, or any governmental or
quasi-governmental agency or instrumentality; and money market
instruments including bank certificates of deposit, finance paper,
commercial paper, bankers' acceptances and all kinds of repurchase
agreements, of any corporation, company, trust, association, firm or
other business organization however
4
<PAGE>
established, and of any country, state, municipality or other political
subdivision, or any governmental or quasi-governmental agency or
instrumentality; or any other security, property or instrument in which
the Trust or any of its Series shall be authorized to invest.
(c) To acquire (by purchase, subscription or otherwise), to hold,
to trade in and deal in, to acquire any rights or options to purchase
or sell, to sell or otherwise dispose of, to lend and to pledge any
such securities, to enter into repurchase agreements, reverse
repurchase agreements, firm commitment agreements and forward foreign
currency exchange contracts, to purchase and sell options on
securities, securities indices, currency and other financial assets,
futures contracts and options on futures contracts of all descriptions
and to engage in all types of hedging and risk-management transactions.
(d) To exercise all rights, powers and privileges of ownership or
interest in all securities and repurchase agreements included in the
Trust Property, including the right to vote thereon and otherwise act
with respect thereto and to do all acts for the preservation,
protection, improvement and enhancement in value of all such securities
and repurchase agreements.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property,
real or personal, including cash or foreign currency, and any interest
therein.
(f) To borrow money or other property in the name of the Trust
exclusively for Trust purposes and in this connection issue notes or
other evidence of indebtedness; to secure borrowings by mortgaging,
pledging or otherwise subjecting as security the Trust Property; and to
endorse, guarantee, or undertake the performance of any obligation or
engagement of any other Person and to lend Trust Property.
(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included
in the Trust Property or in the affairs of which the Trustees have any
direct or indirect interest; to do all acts and things designed to
protect, preserve, improve or enhance the value of such obligation or
interest; and to guarantee or become surety on any or all of the
contracts, stocks, bonds, notes, debentures and other obligations of
any such corporation, company, trust, association or firm.
5
<PAGE>
(h) To adopt By-laws not inconsistent with this Declaration
providing for the conduct of the business of the Trust and to amend and
repeal them to the extent such right is not reserved to the
Shareholders.
(i) To elect and remove such officers and appoint and terminate
such agents as they deem appropriate.
(j) To employ as custodian of any assets of the Trust, subject to
any provisions herein or in the By-laws, one or more banks, trust
companies or companies that are members of a national securities
exchange, or other entities permitted by the Commission to serve as
such.
(k) To retain one or more transfer agents and shareholder
servicing agents, or both.
(l) To provide for the distribution of Shares either through a
Principal Underwriter as provided herein or by the Trust itself, or
both, or pursuant to a distribution plan of any kind.
(m) To set record dates in the manner provided for herein or
in the By-laws.
(n) To delegate such authority as they consider desirable to any
officers of the Trust and to any agent, independent contractor,
manager, investment adviser, custodian or underwriter.
(o) To hold any security or other property (i) in a form not
indicating any trust, whether in bearer, book entry, unregistered or
other negotiable form, or (ii) either in the Trust's or Trustees' own
name or in the name of a custodian or a nominee or nominees, subject to
safeguards according to the usual practice of business trusts or
investment companies.
(p) To establish separate and distinct Series with separately
defined investment objectives and policies and distinct investment
purposes, and with separate Shares representing beneficial interests in
such Series, and to establish separate Classes, all in accordance with
the provisions of Article V.
(q) To the full extent permitted by Section 3804 of the Delaware
Act, to allocate assets, liabilities and expenses of the Trust to a
particular Series and assets, liabilities and expenses to a particular
Class or to apportion the same between or among two or more Series or
Classes, provided that any liabilities or expenses incurred by a
particular Series or Class shall be payable
6
<PAGE>
solely out of the assets belonging to that Series or Class as provided
for in Article V, Section 4.
(r) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or concern
whose securities are held by the Trust; to consent to any contract,
lease, mortgage, purchase, or sale of property by such corporation or
concern; and to pay calls or subscriptions with respect to any security
held in the Trust.
(s) To compromise, arbitrate, or otherwise adjust claims in favor
of or against the Trust or any matter in controversy including, but not
limited to, claims for taxes.
(t) To make distributions of income, capital gains, returns of
capital (if any) and redemption proceeds to Shareholders in the manner
hereinafter provided for.
(u) To establish committees for such purposes, with such
membership, and with such responsibilities as the Trustees may consider
proper, including a committee consisting of fewer than all of the
Trustees then in office, which may act for and bind the Trustees and
the Trust with respect to the institution, prosecution, dismissal,
settlement, review or investigation of any legal action, suit or
proceeding, pending or threatened.
(v) To issue, sell, repurchase, redeem, cancel, retire, acquire,
hold, resell, reissue, dispose of and otherwise deal in Shares; to
establish terms and conditions regarding the issuance, sale,
repurchase, redemption, cancellation, retirement, acquisition, holding,
resale, reissuance, disposition of or dealing in Shares; and, subject
to Articles V and VI, to apply to any such repurchase, redemption,
retirement, cancellation or acquisition of Shares any funds or property
of the Trust or of the particular Series with respect to which such
Shares are issued.
(w) To invest part or all of the Trust Property (or part or all of
the assets of any Series), or to dispose of part or all of the Trust
Property (or part or all of the assets of any Series) and invest the
proceeds of such disposition, in securities issued by one or more other
investment companies registered under the 1940 Act all without any
requirement of approval by Shareholders. Any such other investment
company may (but need not) be a trust (formed under the laws of the
State of New York or of any other state) which is classified as a
partnership for federal income tax purposes.
7
<PAGE>
(x) To carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary
or desirable to accomplish any purpose or to further any of the
foregoing powers, and to take every other action incidental to the
foregoing business or purposes, objects or powers.
(y) To sell or exchange any or all of the assets of the Trust,
subject to Article IX, Section 4.
(z) To enter into joint ventures, partnerships and other
combinations and associations.
(aa) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that
connection to deposit any security with, or transfer any security to,
any such committee, depositary or trustee, and to delegate to them such
power and authority with relation to any security (whether or not so
deposited or transferred) as the Trustees shall deem proper, and to
agree to pay, and to pay, such portion of the expenses and compensation
of such Committee, depositary or trustee as the Trustees shall deem
proper;
(bb) To purchase and pay for entirely out of Trust Property such
insurance as the Trustees may deem necessary or appropriate for the
conduct of the business, including, without limitation, insurance
policies insuring the assets of the Trust or payment of distributions
and principal on its portfolio investments, and, subject to applicable
law and any restrictions set forth in the By-laws, insurance policies
insuring the Shareholders, Trustees, officers, employees, agents,
investment advisers, Principal Underwriters, or independent contractors
of the Trust, individually, against all claims and liabilities of every
nature arising by reason of holding Shares, holding, being or having
held any such office or position, or by reason of any action alleged to
have been taken or omitted by any such Person as Trustee, officer,
employee, agent, investment adviser, Principal underwriter, or
independent contractor, including any action taken or omitted that may
be determined to constitute negligence, whether or not the Trust would
have the power to indemnify such Person against liability;
(cc) To adopt, establish and carry out pension, profit-sharing,
share bonus, share purchase, savings, thrift and other retirement,
incentive and benefit plans and trusts, including the purchasing of
life insurance and annuity contracts as a means of providing such
retirement and other benefits, for any or all of the Trustees,
officers, employees and agents of the Trust;
8
<PAGE>
(dd) To enter into contracts of any kind and description;
(ee) To interpret the investment policies, practices or
limitations of any Series or Class; and
(ff) To guarantee indebtedness and contractual obligations of
others.
The clauses above shall be construed as objects and powers, and
the enumeration of specific powers shall not limit in any way the
general powers of the Trustees. Any action by one or more of the
Trustees in their capacity as such hereunder shall be deemed an action
on behalf of the Trust or the applicable Series, and not an action in
an individual capacity. No one dealing with the Trustees shall be under
any obligation to make any inquiry concerning the authority of the
Trustees, or to see to the application of any payments made or property
transferred to the Trustees or upon their order. In construing this
Declaration, the presumption shall be in favor of a grant of power to
the Trustees.
Section 3. Certain Transactions. Except as prohibited by
applicable law, the Trustees may, on behalf of the Trust, buy any
securities from or sell any securities to, or lend any assets of the
Trust to, any Trustee or officer of the Trust or any firm of which any
such Trustee or officer is a member acting as principal, or have any
such dealings with any investment adviser, administrator, distributor
or transfer agent for the Trust or with any Interested Person of such
person. The Trust may employ any such person or entity in which such
person is an Interested Person, as broker, legal counsel, registrar,
investment adviser, administrator, distributor, transfer agent,
dividend disbursing agent, custodian or in any other capacity upon
customary terms.
Section 4. Initial Trustees; Election and Number of Trustees. The
initial Trustees shall be the person initially signing this
Declaration. The number of Trustees (other than the initial Trustees)
shall be fixed from time to time by a majority of the Trustees;
provided, that there shall be at least one (1) Trustee and no more than
fifteen (15). The Shareholders shall elect the Trustees (other than the
initial Trustees) on such dates as the Trustees may fix from time to
time.
Section 5. Term of Office of Trustees. Each Trustee shall hold
office for life or until his successor is elected or the Trust
terminates; except that (a) any Trustee may resign by delivering to the
other Trustees or to any Trust officer a written resignation effective
upon such delivery or a later date specified
9
<PAGE>
therein; (b) any Trustee may be removed with or without cause at any
time by a written instrument signed by at least a majority of the then
Trustees, specifying the effective date of removal; (c) any Trustee who
requests to be retired, or who is declared bankrupt or has become
physically or mentally incapacitated or is otherwise unable to serve,
may be retired by a written instrument signed by a majority of the
other Trustees, specifying the effective date of retirement; and (d)
any Trustee may be removed at any meeting of the Shareholders by a vote
of at least two-thirds of the Outstanding Shares.
Section 6. Vacancies; Appointment of Trustees. Whenever a vacancy
shall exist in the Board of Trustees, regardless of the reason for such
vacancy, the remaining Trustees shall appoint any person as they
determine in their sole discretion to fill that vacancy, consistent
with the limitations under the 1940 Act. Such appointment shall be made
by a written instrument signed by a majority of the Trustees or by a
resolution of the Trustees, duly adopted and recorded in the records of
the Trust, specifying the effective date of the appointment. The
Trustees may appoint a new Trustee as provided above in anticipation of
a vacancy expected to occur because of the retirement, resignation or
removal of a Trustee, or an increase in number of Trustees, provided
that such appointment shall become effective only at or after the
expected vacancy occurs. As soon as any such Trustee has accepted his
appointment in writing, the trust estate shall vest in the new Trustee,
together with the continuing Trustees, without any further act or
conveyance, and he shall be deemed a Trustee hereunder. The Trustees'
power of appointment is subject to Section 16(a) of the 1940 Act.
Whenever a vacancy in the number of Trustees shall occur, until such
vacancy is filled as provided in this Article II, the Trustees in
office, regardless of their number, shall have all the powers granted
to the Trustees and shall discharge all the duties imposed upon the
Trustees by the Declaration. The death, declination to serve,
resignation, retirement, removal or incapacity of one or more Trustees,
or all of them, shall not operate to annul the Trust or to revoke any
existing agency created pursuant to the terms of this Declaration of
Trust.
Section 7. Temporary Vacancy or Absence. Whenever a vacancy in the
Board of Trustees shall occur, until such vacancy is filled, or while
any Trustee is absent from his domicile (unless that Trustee has made
arrangements to be informed about, and to participate in, the affairs
of the Trust during such absence), or is physically or mentally
incapacitated, the remaining Trustees shall have all the powers
hereunder and their certificate as to
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<PAGE>
such vacancy, absence, or incapacity shall be conclusive. Any Trustee
may, by power of attorney, delegate his powers as Trustee for a period
not exceeding six (6) months at any one time to any other Trustee or
Trustees.
Section 8. Chairman. The Trustees shall appoint one of their
number to be Chairman of the Board of Trustees. The Chairman shall
preside at all meetings of the Trustees, shall be responsible for the
execution of policies established by the Trustees and the
administration of the Trust, and may be the chief executive, financial
and/or accounting officer of the Trust.
Section 9. Action by the Trustees. The Trustees shall act by
majority vote at a meeting duly called at which a quorum is present,
including a meeting held by conference telephone, teleconference or
other electronic media or communication equipment by means of which all
persons participating in the meeting can communicate with each other;
or by written consent of a majority of Trustees (or such greater number
as may be required by applicable law) without a meeting. A majority of
the Trustees shall constitute a quorum at any meeting. Meetings of the
Trustees may be called orally or in writing by the President or by any
one of the Trustees. Notice of the time, date and place of all
Trustees' meetings shall be given to each Trustee as set forth in the
By-laws; provided, however, that no notice is required if the Trustees
provide for regular or stated meetings. Notice need not be given to any
Trustee who attends the meeting without objecting to the lack of notice
or who signs a waiver of notice either before or after the meeting. The
Trustees by majority vote may delegate to any Trustee or Trustees or
committee authority to approve particular matters or take particular
actions on behalf of the Trust. Any written consent or waiver may be
provided and delivered to the Trust by facsimile or other similar
electronic mechanism.
Section 10. Ownership of Trust Property. The Trust Property of the
Trust and of each Series shall be held separate and apart from any
assets now or hereafter held in any capacity other than as Trustee
hereunder by the Trustees or any successor Trustees. Legal title in and
beneficial ownership of all of the assets of the Trust shall at all
times be considered as vested in the Trust, except that the Trustees
may cause legal title in and beneficial ownership of any Trust Property
to be held by, or in the name of one or more of the Trustees acting for
and on behalf of the Trust, or in the name of any person as nominee
acting for and on behalf of the Trust. No Shareholder shall be deemed
to have a severable ownership in any individual asset of the Trust or
of any Series or
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any right of partition or possession thereof, but each Shareholder
shall have, as provided in Article V, a proportionate undivided
beneficial interest in the Trust or Series or Class thereof represented
by Shares. The Shares shall be personal property giving only the rights
specifically set forth in this Trust Instrument. The Trust, or at the
determination of the Trustees one or more of the Trustees or a nominee
acting for and on behalf of the Trust, shall be deemed to hold legal
title and beneficial ownership of any income earned on securities of
the Trust issued by any business entities formed, organized, or
existing under the laws of any jurisdiction, including the laws of any
foreign country. Upon the resignation or removal of a Trustee, or his
otherwise ceasing to be a Trustee, he shall execute and deliver such
documents as the remaining Trustees shall require for the purpose of
conveying to the Trust or the remaining Trustees any Trust Property
held in the name of the resigning or removed Trustee. Upon the
incapacity or death of any Trustee, his legal representative shall
execute and deliver on his behalf such documents as the remaining
Trustees shall require as provided in the preceding sentence.
Section 11. Effect of Trustees Not Serving. The death,
resignation, retirement, removal, incapacity or inability or refusal to
serve of the Trustees, or any one of them, shall not operate to annul
the Trust or to revoke any existing agency created pursuant to the
terms of this Declaration.
Section 12. Trustees, etc. as Shareholders. Subject to any
restrictions in the By-laws, any Trustee, officer, agent or independent
contractor of the Trust may acquire, own and dispose of Shares to the
same extent as any other Shareholder; the Trustees may issue and sell
Shares to and buy Shares from any such person or any firm or company in
which such person is interested, subject only to any general
limitations herein.
Section 13. Series of Trustees. In connection with the
establishment of one or more Series or Classes, the Trustees
establishing such Series or Class may appoint, to the extent permitted
by the Delaware Act, separate Trustees with respect to such Series or
Classes (the "Series Trustees"). Series Trustees may, but are not
required to, serve as Trustees of the Trust or any other Series or
Class of the Trust. The Trustees shall have, to the exclusion of any
other Trustee of the Trust, all the powers and authorities of Trustees
hereunder with respect to such Series or Class, but shall have no power
or authority with respect to any other Series or Class. Any provision
of this Declaration relating to election of Trustees by Shareholders
only shall entitle the
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Shareholders of a Series or Class for which Series Trustees have been
appointed to vote with respect to the election of such Series Trustees
and the Shareholders of any other Series or Class shall not be entitled
to participate in such vote. In the event that Series Trustees are
appointed, the Trustees initially appointing such Series Trustees
shall, without the approval of any Outstanding Shares, amend either the
Declaration or the By-laws to provide for the respective
responsibilities of the Trustees and the Series Trustees in
circumstances where an action of the Trustees or Series Trustees
affects all Series of the Trust or two or more Series represented by
different Trustees.
ARTICLE III
CONTRACTS WITH SERVICE PROVIDERS
Section 1. Underwriting Contract. The Trustees may in their
discretion from time to time enter into an exclusive or non-exclusive
distribution contract or contracts providing for the sale of the Shares
whereby the Trustees may either agree to sell the Shares to the other
party to the contract or appoint such other party as their sales agent
for the Shares, and in either case on such terms and conditions, if
any, as may be prescribed in the By-laws, and such further terms and
conditions as the Trustees may in their discretion determine not
inconsistent with the provisions of this Article III or of the By-laws;
and such contract may also provide for the repurchase of the Shares by
such other party as agent of the Trustees.
Section 2. Advisory or Management Contract. The Trustees may in
their discretion from time to time enter into one or more investment
advisory or management contracts or, if the Trustees establish multiple
Series, separate investment advisory or management contracts with
respect to one or more Series whereby the other party or parties to any
such contracts shall undertake to furnish the Trust or such Series
management, investment advisory, administration, accounting, legal,
statistical and research facilities and services, promotional or
marketing activities, and such other facilities and services, if any,
as the Trustees shall from time to time consider desirable and all upon
such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of the Declaration, the
Trustees may authorize the Investment Advisers or persons to whom the
Investment Adviser delegates certain or all of their duties, or any of
them, under any such contracts (subject to such general or specific
instructions as the Trustees may from time to time
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adopt) to effect purchases, sales, loans or exchanges of portfolio
securities and other investments of the Trust on behalf of the Trustees
or may authorize any officer, employee or Trustee to effect such
purchases, sales, loans or exchanges pursuant to recommendations of
such Investment Advisers, or any of them (and all without further
action by the Trustees). Any such purchases, sales, loans and exchanges
shall be deemed to have been authorized by all of the Trustees.
Section 3. Administration Agreement. The Trustees may in their
discretion from time to time enter into an administration agreement or,
if the Trustees establish multiple Series or Classes separate
administration agreements with respect to each Series or Class, whereby
the other party to such agreement shall undertake to manage the
business affairs of the Trust or of a Series or Class thereof of the
Trust and furnish the Trust or a Series or a Class thereof with office
facilities, and shall be responsible for the ordinary clerical,
bookkeeping and recordkeeping services at such office facilities, and
other facilities and services, if any, and all upon such terms and
conditions as the Trustees may in their discretion determine.
Section 4. Service Agreement. The Trustees may in their discretion
from time to time enter into service agreements with respect to one or
more Series or Classes of Shares whereby the other parties to such
Service Agreements will provide administration and/or support services
pursuant to administration plans and service plans, and all upon such
terms and conditions as the Trustees in their discretion may determine.
Section 5. Transfer Agent. The Trustees may in their discretion
from time to time enter into a transfer agency and shareholder service
contract whereby the other party to such contract shall undertake to
furnish transfer agency and shareholder services to the Trust. The
contract shall have such terms and conditions as the Trustees may in
their discretion determine not inconsistent with the Declaration. Such
services may be provided by one or more Persons.
Section 6. Custodian. The Trustees may appoint or otherwise engage
one or more banks or trust companies, each having an aggregate capital,
surplus and undivided profits (as shown in its last published report)
of at least two million dollars ($2,000,000), or any other entity
satisfying the requirements of the 1940 Act, to serve as Custodian with
authority as its agent, but subject to such restrictions, limitations
and other requirements, if any, as may be contained in the By-laws of
the
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Trust. The Trustees may also authorize the Custodian to employ one or
more sub-custodians, including such foreign banks and securities
depositories as meet the requirements of applicable provisions of the
1940 Act, and upon such terms and conditions as may be agreed upon
between the Custodian and such sub-custodian, to hold securities and
other assets of the Trust and to perform the acts and services of the
Custodian, subject to applicable provisions of law and resolutions
adopted by the Trustees.
Section 7. Affiliations of Trustees or Officers, Etc. The
fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust or any Series thereof is a shareholder, director, officer,
partner, trustee, employee, manager, adviser or distributor of or
for any partnership, corporation, trust, association or other
organization or of or for any parent or affiliate of any
organization, with which a contract of the character described in
this Article III or for services as Custodian, Transfer Agent or
disbursing agent or for related services may have been or may
hereafter be made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder of or has an interest in the
Trust, or that
(ii) any partnership, corporation, trust, association or other
organization with which a contract of the character described in
Sections 1, 2, 3 or 4 of this Article III or for services as
Custodian, Transfer Agent or disbursing agent or for related
services may have been or may hereafter be made also has any one
or more of such contracts with one or more other partnerships,
corporations, trusts, associations or other organizations, or has
other business or interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or
executing the same or create any liability or accountability to the
Trust or its Shareholders.
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ARTICLE IV
COMPENSATION, LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Compensation. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and they may fix the amount of
such compensation. Nothing herein shall in any way prevent the
employment of any Trustee for advisory, management, legal, accounting,
investment banking or other services and payment for the same by the
Trust.
Section 2. Limitation of Liability. All persons contracting with
or having any claim against the Trust or a particular Series shall look
only to the assets of all Series or such particular Series for payment
under such contract or claim; and neither the Trustees nor, when acting
in such capacity, any of the Trust's officers, employees or agents,
whether past, present or future, shall be personally liable therefor.
Every written instrument or obligation on behalf of the Trust or any
Series shall contain a statement to the foregoing effect, but the
absence of such statement shall not operate to make any Trustee or
officer of the Trust liable thereunder. Provided they have exercised
reasonable care and have acted under the reasonable belief that their
actions are in the best interest of the Trust, the Trustees and
officers of the Trust shall not be responsible or liable for any act or
omission or for neglect or wrongdoing of them or any officer, agent,
employee, investment adviser or independent contractor of the Trust,
but nothing contained in this Declaration or in the Delaware Act shall
protect any Trustee or officer of the Trust against liability to the
Trust or to Shareholders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
Section 3. Indemnification. (a) Subject to the exceptions
and limitations contained in subsection (b) below:
(i) every person who is, or has been, a Trustee or an
officer, employee or agent of the Trust (including any
individual who serves at its request as director, officer,
partner, trustee or the like of another organization in which
it has any interest as a shareholder, creditor or otherwise)
("Covered Person") shall be indemnified by the Trust or the
appropriate Series to the fullest extent permitted by law
against liability and against all expenses reasonably
incurred or paid by him in connection with any claim, action,
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suit or proceeding in which he becomes involved as a party or
otherwise by virtue of his being or having been a Covered
Person and against amounts paid or incurred by him in the
settlement thereof; and
(ii) as used herein, the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal 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
Covered Person:
(i) who shall have been adjudicated by a court or body before
which the proceeding was brought (A) to be liable to the
Trust or its Shareholders by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office, or (B) not to
have acted in good faith in the reasonable belief that his
action was in the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Covered Person 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; (B) by at least a majority of those Trustees who
are neither Interested Persons of the Trust nor are parties
to the matter based upon a review of readily available facts
(as opposed to a full trial-type inquiry); (C) by written
opinion of independent legal counsel based upon a review of
readily available facts (as opposed to a full trial-type
inquiry) or (D) by a vote of a majority of the Outstanding
Shares entitled to vote (excluding any Outstanding Shares
owned of record or beneficially by such individual).
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall
not be exclusive of or affect any other rights to which any Covered
Person may now or hereafter be entitled, and
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shall inure to the benefit of the heirs, executors and
administrators of a Covered Person.
(d) To the maximum extent permitted by applicable law, expenses in
connection with the preparation and presentation of a defense to any
claim, action, suit or proceeding of the character described in
subsection (a) of this Section may be paid by the Trust or applicable
Series from time to time prior to final disposition thereof upon
receipt of an undertaking by or on behalf of such Covered Person that
such amount will be paid over by him to the Trust or applicable Series
if it is ultimately determined that he is not entitled to
indemnification under this Section; provided, however, that either (i)
such Covered Person shall have provided appropriate security for such
undertaking, (ii) the Trust is insured against losses arising out of
any such advance payments or (iii) either a majority of the Trustees
who are neither Interested Persons of the Trust nor parties to the
matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed
to a full trial-type inquiry) that there is reason to believe that such
Covered Person will not be disqualified from indemnification under this
Section.
(e) Any repeal or modification of this Article IV by the
Shareholders, or adoption or modification of any other provision of the
Declaration or By-laws inconsistent with this Article, shall be
prospective only, to the extent that such repeal, or modification
would, if applied retrospectively, adversely affect any limitation on
the liability of any Covered Person or indemnification available to any
Covered Person with respect to any act or omission which occurred prior
to such repeal, modification or adoption.
Section 3. Indemnification of Shareholders. If any Shareholder or
former Shareholder of any Series shall be held personally liable solely
by reason of his being or having been a Shareholder and not because of
his acts or omissions or for some other reason, the Shareholder or
former Shareholder (or his heirs, executors, administrators or other
legal representatives or in the case of any entity, its general
successor) shall be entitled out of the assets belonging to the
applicable Series to be held harmless from and indemnified against all
loss and expense arising from such liability. The Trust, on behalf of
the affected Series, shall, upon request by such Shareholder, assume
the defense of any claim made against such Shareholder for any act or
obligation of the Series and satisfy any judgment thereon from the
assets of the Series.
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Section 4. No Bond Required of Trustees. No Trustee shall
be obligated to give any bond or other security for the
performance of any of his duties hereunder.
Section 5. No Duty of Investigation; Notice in Trust Instruments,
Etc. No purchaser, lender, transfer agent or other Person dealing with
the Trustees or any officer, employee or agent of the Trust or a Series
thereof shall be bound to make any inquiry concerning the validity of
any transaction purporting to be made by the Trustees or by said
officer, employee or agent or be liable for the application of money or
property paid, loaned, or delivered to or on the order of the Trustees
or of said officer, employee or agent. Every obligation, contract,
instrument, certificate, Share, other security of the Trust or a Series
thereof or undertaking, and every other act or thing whatsoever
executed in connection with the Trust shall be conclusively presumed to
have been executed or done by the executors thereof only in their
capacity as Trustees under this Declaration or in their capacity as
officers, employees or agents of the Trust or a Series thereof. Every
written obligation, contract, instrument, certificate, Share, other
security of the Trust or a Series thereof or undertaking made or issued
by the Trustees may recite that the same is executed or made by them
not individually, but as Trustees under the Declaration, and that the
obligations of the Trust or a Series thereof under any such instrument
are not binding upon any of the Trustees or Shareholders individually,
but bind only the Trust Property or the Trust Property of the
applicable Series, and may contain any further recital which they may
deem appropriate, but the omission of such recital shall not operate to
bind the Trustees individually. The Trustees shall at all times
maintain insurance for the protection of the Trust Property or the
Trust Property of the applicable Series, its Shareholders, Trustees,
officers, employees and agents in such amount as the Trustees shall
deem adequate to cover possible tort liability, and such other
insurance as the Trustees in their sole judgment shall deem advisable.
Section 6. Reliance on Experts, Etc. Each Trustee, officer or
employee of the Trust or a Series thereof shall, in the performance of
his duties, powers and discretions hereunder be fully and completely
justified and protected with regard to any act or any failure to act
resulting from reliance in good faith upon the books of account or
other records of the Trust or a Series thereof, upon an opinion of
counsel, or upon reports made to the Trust or a Series thereof by any
of its officers or employees or by the Investment Adviser, the
Administrator, the
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Distributor, Transfer Agent, selected dealers, accountants, appraisers
or other experts or consultants selected with reasonable care by the
Trustees, officers or employees of the Trust, regardless of whether
such counsel or expert may also be a Trustee.
ARTICLE V
SERIES; CLASSES; SHARES
Section 1. Establishment of Series or Class. The Trust shall
consist of one or more Series. Without limiting the authority of the
Trustees to establish and designate any further Series, the Trustees
hereby establish the following six Series: Tomorrow Long-Term
Retirement Fund, Tomorrow Mid-Term Retirement Fund, Tomorrow Short-Term
Retirement Fund, Core Small-Cap Stock Fund, Core Large-Cap Stock Fund
and Tomorrow Post-Retirement Fund (the "Existing Series"). Each
additional Series shall be established and is effective upon the
adoption of a resolution of a majority of the Trustees or any
alternative date specified in such resolution. The Trustees may
designate the relative rights and preferences of the Shares of each
Series. The Trustees may divide the Shares of any Series into Classes.
Without limiting the authority of the Trustees to establish and
designate any further Classes, the Trustees hereby establish two
Classes of Shares, designated as Adviser Class and Institutional Class
(the "Existing Classes"). The Shares of the Existing Series and each
Class thereof herein established and designated and any Shares of any
further Series and Classes that may from time to time be established
and designated by the Trustees shall be established and designated, and
the variations in the relative rights and preferences as between the
different Series shall be fixed and determined, by the Trustees;
provided, that all Shares shall be identical except for such variations
as shall be fixed and determined between different Series or Classes by
the Trustees in establishing and designating such Class or Series. In
connection therewith with respect to the Existing Classes, the purchase
price, the method of determining the net asset value, and the relative
dividend rights of holders shall be as set forth in the Trust's
Registration Statement on Form N-1A under the Securities Act of 1933
and/or the 1940 Act and as in effect at the time of issuing Shares of
the Existing Classes.
All references to Shares in this Declaration shall be deemed to be
Shares of any or all Series or Classes as the context may require. The
Trust shall maintain separate and distinct records for each Series and
hold and account for the assets thereof
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separately from the other assets of the Trust or of any other Series. A
Series may issue any number of Shares or any Class thereof and need not
issue Shares. Each Share of a Series shall represent an equal
beneficial interest in the net assets of such Series. Each holder of
Shares of a Series or a Class thereof shall be entitled to receive his
pro rata share of all distributions made with respect to such Series or
Class. Upon redemption of his Shares, such Shareholder shall be paid
solely out of the funds and property of such Series. The Trustees may
adopt and change the name of any Series or Class.
Section 2. Shares. The beneficial interest in the Trust shall be
divided into transferable Shares of one or more separate and distinct
Series or Classes established by the Trustees. The number of Shares of
each Series and Class is unlimited and each Share shall have no par
value per Share or such other amount as the Trustees may establish. All
Shares issued hereunder shall be fully paid and nonassessable.
Shareholders shall have no preemptive or other right to subscribe to
any additional Shares or other securities issued by the Trust. The
Trustees shall have full power and authority, in their sole discretion
and without obtaining Shareholder approval, to issue original or
additional Shares at such times and on such terms and conditions as
they deem appropriate; to issue fractional Shares and Shares held in
the treasury; to establish and to change in any manner Shares of any
Series or Classes with such preferences, terms of conversion, voting
powers, rights and privileges as the Trustees may determine (but the
Trustees may not change Outstanding Shares in a manner materially
adverse to the Shareholders of such Shares); to divide or combine the
Shares of any Series or Classes into a greater or lesser number; to
classify or reclassify any unissued Shares of any Series or Classes
into one or more Series or Classes of Shares; to abolish any one or
more Series or Classes of Shares; to issue Shares to acquire other
assets (including assets subject to, and in connection with, the
assumption of liabilities) and businesses; and to take such other
action with respect to the Shares as the Trustees may deem desirable.
Shares held in the treasury shall not confer any voting rights on the
Trustees and shall not be entitled to any dividends or other
distributions declared with respect to the Shares.
Section 3. Investment in the Trust. The Trustees shall accept
investments in any Series or Class from such persons and on such terms
as they may from time to time authorize. At the Trustees' discretion,
such investments, subject to applicable law, may be in the form of cash
or securities in which that Series is authorized to invest, valued as
provided in Article VI, Section 3.
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Investments in a Series shall be credited to each Shareholder's account
in the form of full Shares at the Net Asset Value per Share next
determined after the investment is received or accepted as may be
determined by the Trustees; provided, however, that the Trustees may,
in their sole discretion, (a) impose a sales charge upon investments in
any Series or Class, (b) issue fractional Shares, (c) determine the Net
Asset Value per Share of the initial capital contribution or (d)
authorize the issuance of Shares at a price other than Net Asset Value
to the extent permitted by the 1940 Act or any rule, order or
interpretation of the Commission thereunder. The Trustees shall have
the right to refuse to accept investments in any Series at any time
without any cause or reason therefor whatsoever.
Section 4. Assets and Liabilities of Series. All considera-tion
received by the Trust for the issue or sale of Shares of a particular
Series, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits, and proceeds
thereof (including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be), shall
be held and accounted for separately from the assets of every other
Series and are referred to as "assets belonging to" that Series. The
assets belonging to a Series shall belong only to that Series for all
purposes, and to no other Series, subject only to the rights of
creditors of that Series. Any assets, income, earnings, profits, and
proceeds thereof, funds, or payments which are not readily identifiable
as belonging to any particular Series shall be allocated by the
Trustees between and among one or more Series as the Trustees deem fair
and equitable. Each such allocation shall be conclusive and binding
upon the Shareholders of all Series for all purposes, and such assets,
earnings, income, profits or funds, or payments and proceeds thereof
shall be referred to as assets belonging to that Series. The assets
belonging to a Series shall be so recorded upon the books of the Trust,
and shall be held by the Trustees in trust for the benefit of the
Shareholders of that Series. The assets belonging to a Series shall be
charged with the liabilities of that Series and all expenses, costs,
charges and reserves attributable to that Series, except that
liabilities and expenses allocated solely to a particular Class shall
be borne by that Class. Any general liabilities, expenses, costs,
charges or reserves of the Trust which are not readily identifiable as
belonging to any particular Series or Class shall be allocated and
charged by the Trustees between or among any one or more of the Series
or Classes in such manner as the Trustees deem fair and
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equitable. Each such allocation shall be conclusive and binding
upon the Shareholders of all Series or Classes for all purposes.
Without limiting the foregoing, but subject to the right of the
Trustees to allocate general liabilities, expenses, costs, charges or
reserves as herein provided, the debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to
a particular Series shall be enforceable against the assets of such
Series only, and not against the assets of any other Series. Notice of
this contractual limitation on liabilities among Series may, in the
Trustees' discretion, be set forth in the certificate of trust of the
Trust (whether originally or by amendment) as filed or to be filed in
the Office of the Secretary of State of the State of Delaware pursuant
to the Delaware Act, and upon the giving of such notice in the
certificate of trust, the statutory provisions of Section 3804 of the
Delaware Act relating to limitations on liabilities among Series (and
the statutory effect under Section 3804 of setting forth such notice in
the certificate of trust) shall become applicable to the Trust and each
Series. Any person extending credit to, contracting with or having any
claim against any Series may look only to the assets of that Series to
satisfy or enforce any debt, with respect to that Series. No
Shareholder or former Shareholder of any Series shall have a claim on
or any right to any assets allocated or belonging to any other Series.
Section 5. Ownership and Transfer of Shares. The Trust or a
transfer or similar agent for the Trust shall maintain a register
containing the names and addresses of the Shareholders of each Series
and Class thereof, the number of Shares of each Series and Class held
by such Shareholders, and a record of all Share transfers. The register
shall be conclusive as to the identity of Shareholders of record and
the number of Shares held by them from time to time. The Trustees may
authorize the issuance of certificates representing Shares and adopt
rules governing their use. The Trustees may make rules governing the
transfer of Shares, whether or not represented by certificates. Except
as otherwise provided by the Trustees, Shares shall be transferable on
the books of the Trust only by the record holder thereof or by his duly
authorized agent upon delivery to the Trustees or the Trust's transfer
agent of a duly executed instrument of transfer, together with a Share
certificate if one is outstanding, and such evidence or the genuineness
of each such execution and authorization and of such other matters as
may be required by the Trustees. Upon such delivery, and subject to any
further requirements specified by the Trustees or contained in the
By-laws, the transfer shall be recorded on the books of the Trust.
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Until a transfer is so recorded, the Shareholder of record of Shares
shall be deemed to be the holder of such Shares for all purposes
hereunder and neither the Trustees nor the Trust, nor any transfer
agent or registrar or any officer, employee or agent of the Trust,
shall be affected by any notice of a proposed transfer.
Section 6. Status of Shares; Limitation of Shareholder Liability.
Shares shall be deemed to be personal property giving Shareholders only
the rights provided in this Declaration. Every Shareholder, by virtue
of having acquired a Share, shall be held expressly to have assented to
and agreed to be bound by the terms of this Declaration and to have
become a party hereto. No Shareholder shall be personally liable for
the debts, liabilities, obligations and expenses incurred by,
contracted for, or otherwise existing with respect to, the Trust or any
Series. The death, incapacity, dissolution, termination or bankruptcy
of a Shareholder during the existence of the Trust shall not operate to
terminate the Trust, nor entitle the representative of any such
Shareholder to an accounting or to take any action in court or
elsewhere against the Trust or the Trustees, but entitles such
representative only to the rights of such Shareholder under this Trust.
Ownership of Shares shall not entitle the Shareholder to any title in
or to the whole or any part of the Trust Property or right to call for
a partition or division of the same or for an accounting, nor shall the
ownership of Shares constitute the Shareholders as partners. Neither
the Trust nor the Trustees shall have any power to bind any Shareholder
personally or to demand payment from any Shareholder for anything,
other than as agreed by the Shareholder. Shareholders shall have the
same limitation of personal liability as is extended to shareholders of
a private corporation for profit incorporated in the State of Delaware.
Every written obligation of the Trust or any Series shall contain a
statement to the effect that such obligation may only be enforced
against the assets of the appropriate Series or all Series; however,
the omission of such statement shall not operate to bind or create
personal liability for any Shareholder or Trustee.
ARTICLE VI
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions. The Trustees or a committee of
one or more Trustees and one or more officers may declare and pay
dividends and other distributions, including dividends on Shares
of a particular Series and other distributions from the assets
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belonging to that Series. No dividend or distribution, including,
without limitation, any distribution paid upon termination of the Trust
or of any Series (or Class) with respect to, nor any redemption or
repurchase of, the Shares of any Series (or Class) shall be effected by
the Trust other than from the assets held with respect to such Series,
nor shall any Shareholder of any particular Series otherwise have any
right or claim against the assets held with respect to any other Series
except to the extent that such Shareholder has such a right or claim
hereunder as a Shareholder of such other Series. The Trustees shall
have full discretion to determine which items shall be treated as
income and which items as capital; and each such determination and
allocation shall be conclusive and binding upon the Shareholders. The
amount and payment of dividends or distributions and their form,
whether they are in cash, Shares or other Trust Property, shall be
determined by the Trustees. Dividends and other distributions may be
paid pursuant to a standing resolution adopted once or more often as
the Trustees determine. All dividends and other distributions on Shares
of a particular Series shall be distributed pro rata to the
Shareholders of that Series in proportion to the number of Shares of
that Series they held on the record date established for such payment,
except that such dividends and distributions shall appropriately
reflect expenses allocated to a particular Class of such Series. The
Trustees may adopt and offer to Shareholders such dividend reinvestment
plans, cash dividend payout plans or similar plans as the Trustees deem
appropriate.
Section 2. Redemptions. Each Shareholder of a Series shall have
the right at such times as may be permitted by the Trustees to require
the Series to redeem all or any part of his Shares at a redemption
price per Share equal to the Net Asset Value per Share at such time as
the Trustees shall have prescribed by resolution, or, to the extent
permitted by the 1940 Act, at such other redemption price and at such
times as the Trustees shall prescribe by resolution. In the absence of
such resolution, the redemption price per Share shall be the Net Asset
Value next determined after receipt by the Series of a request for
redemption in proper form less such charges as are determined by the
Trustees and described in the Trust's Registration Statement for that
Series under the Securities Act of 1933. The Trustees may specify
conditions, prices, and places of redemption, may specify binding
requirements for the proper form or forms of requests for redemption
and may specify the amount of any deferred sales charge to be withheld
from redemption proceeds. Payment of the redemption price may be wholly
or partly in securities or other assets at the value of such securities
or assets used in such determination of Net Asset
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Value, or may be in cash. Upon redemption, Shares may be reissued from
time to time. The Trustees may require Shareholders to redeem Shares
for any reason under terms set by the Trustees, including, but not
limited to, the failure of a Shareholder to supply a taxpayer
identification number if required to do so, or to have the minimum
investment required, or to pay when due for the purchase of Shares
issued to him. To the extent permitted by law, the Trustees may retain
the proceeds of any redemption of Shares required by them for payment
of amounts due and owing by a Shareholder to the Trust or any Series or
Class or any governmental authority. Notwithstanding the foregoing, the
Trustees may postpone payment of the redemption price and may suspend
the right of the Shareholders to require any Series or Class to redeem
Shares during any period of time when and to the extent permissible
under the 1940 Act.
Section 3. Determination of Net Asset Value. The Trustees shall
cause the Net Asset Value of Shares of each Series or Class to be
determined from time to time in a manner consistent with applicable
laws and regulations. The Trustees may delegate the power and duty to
determine Net Asset Value per Share to one or more Trustees or officers
of the Trust or to a custodian, depository or other agent appointed for
such purpose. The Net Asset Value of Shares shall be determined
separately for each Series or Class at such times as may be prescribed
by the Trustees or, in the absence of action by the Trustees, as of the
close of regular trading on the New York Stock Exchange on each day for
all or part of which such Exchange is open for unrestricted trading.
Section 4. Suspension of Right of Redemption. If, as referred to
in Section 2 of this Article, the Trustees postpone payment of the
redemption price and suspend the right of Shareholders to redeem their
Shares, such suspension shall take effect at the time the Trustees
shall specify, but not later than the close of business on the business
day next following the declaration of suspension. Thereafter
Shareholders shall have no right of redemption or payment until the
Trustees declare the end of the suspension. If the right of redemption
is suspended, a Shareholder may either withdraw his request for
redemption or receive payment based on the Net Asset Value per Share
next determined after the suspension terminates.
Section 5. Repurchase by Agreement. The Trust may repurchase
Shares directly, or through the Distributor or another agent designated
for the purpose, by agreement with the owner thereof at a price not
exceeding the Net Asset Value per Share determined as of the time when
the purchase or contract of
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purchase is made or the Net Asset Value as of any time which may be
later determined, provided payment is not made for the Shares prior to
the time as of which such Net Asset Value is determined.
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers. The Shareholders shall have power to
vote only with respect to (a) the election of Trustees as provided in
Section 2 of this Article; (b) the removal of Trustees as provided in
Article II, Section 3(d); (c) any investment advisory or management
contract as provided in Article VIII, Section 1; (d) any termination of
the Trust to the extent and as provided in Article IX, Section 4; (e)
the amendment of this Declaration to the extent and as provided in
Article X, Section 8; and (f) such additional matters relating to the
Trust as may be required or authorized by law, this Declaration, or the
By-laws or any registration of the Trust with the Commission or any
State, or as the Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares
shall be voted by individual Series or Class, except (a) when required
by the 1940 Act, Shares shall be voted in the aggregate and not by
individual Series or Class, and (b) when the Trustees have determined
that the matter affects the interests of more than one Series or Class,
then the Shareholders of all such Series or Classes shall be entitled
to vote thereon. As determined by the Trustees without the vote or
consent of shareholders, on any matter submitted to a vote of
Shareholders either (i) each whole Share shall be entitled to one vote
as to any matter on which it is entitled to vote and each fractional
Share shall be entitled to a proportionate fractional vote or (ii) each
dollar of net asset value (number of Shares owned times net asset value
per share of such Series or Class, as applicable) shall be entitled to
one vote on any matter on which such Shares are entitled to vote and
each fractional dollar amount shall be entitled to a proportionate
fractional vote. Without limiting the power of the Trustees in any way
to designate otherwise in accordance with the preceding sentence, the
Trustees hereby establish that each whole Share shall be entitled to
one vote as to any matter on which it is entitled to vote and each
fractional Share shall be entitled to a proportionate fractional vote.
There shall be no cumulative voting in the election of Trustees. Shares
may be voted in person or by proxy or in any manner provided for in the
By-laws. The By-laws may provide that proxies may be given by any
electronic or telecommunications device or in any other
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manner, but if a proposal by anyone other than the officers or Trustees
is submitted to a vote of the Shareholders of any Series or Class, or
if there is a proxy contest or proxy solicitation or proposal in
opposition to any proposal by the officers or Trustees, Shares may be
voted only in person or by written proxy. Until Shares of a Series are
issued, as to that Series the Trustees may exercise all rights of
Shareholders and may take any action required or permitted to be taken
by Shareholders by law, this Declaration or the By-laws. Meetings of
Shareholders shall be called and notice thereof and record dates
therefor shall be given and set as provided in the By-laws.
Section 2. Quorum; Required Vote. One-third of the Outstanding
Shares of each Series or Class, or one-third of the Outstanding Shares
of the Trust, entitled to vote in person or by proxy shall be a quorum
for the transaction of business at a Shareholders' meeting with respect
to such Series or Class, or with respect to the entire Trust,
respectively. Any lesser number shall be sufficient for adjournments.
Any adjourned session of a Shareholders' meeting may be held within a
reasonable time without further notice. Except when a larger vote is
required by law, this Declaration or the By-laws, a majority of the
Shares voting at a Shareholders' meeting in person or by proxy shall
decide any matters to be voted upon with respect to the entire Trust
and a plurality of such Shares shall elect a Trustee; provided, that if
this Declaration or applicable law permits or requires that Shares be
voted on any matter by individual Series or Classes, then a majority of
the Shares of that Series or Class (or, if required by law, a majority
of the Shares outstanding and entitled to vote of that Series or Class)
voting at a Shareholders' meeting in person or by proxy on the matter
shall decide that matter insofar as that Series or Class is concerned.
Shareholders may act as to the Trust or any Series or Class by the
written consent of a majority (or such other amount as may be required
by applicable law) of the Outstanding Shares of the Trust or of such
Series or Class, as the case may be.
Section 3. Record Dates. For the purpose of determining the
Shareholders of any Series (or Class) who are entitled to receive
payment of any dividend or of any other distribution, the Trustees may
from time to time fix a date, which shall be before the date for the
payment of such dividend or such other payment, as the record date for
determining the Shareholders of such Series (or Class) having the right
to receive such dividend or distribution. Without fixing a record date,
the Trustees may for distribution purposes close the register or
transfer books for one or more Series (or Classes) any time prior to
the payment of a
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distribution. Nothing in this Section shall be construed as precluding
the Trustees from setting different record dates for different Series
(or Classes).
Section 4. Additional Provisions. The By-laws may include
further provisions for Shareholders' votes and meetings and
related matters.
ARTICLE VIII
EXPENSES OF THE TRUST AND SERIES
Section 1. Payment of Expenses by the Trust. Subject to Article V,
Section 4, the Trust or a particular Series shall pay, or shall
reimburse the Trustees from the assets belonging to all Series or the
particular Series, for their expenses (or the expenses of a Class of
such Series) and disbursements, including, but not limited to, interest
charges, taxes, brokerage fees and commissions; expenses of issue,
repurchase and redemption of Shares; certain insurance premiums;
applicable fees, interest charges and expenses of third parties,
including the Trust's investment advisers, managers, administrators,
distributors, custodians, transfer agents and fund accountants; fees of
pricing, interest, dividend, credit and other reporting services; costs
of membership in trade associations; telecommunications expenses; funds
transmission expenses; auditing, legal and compliance expenses; costs
of forming the Trust and its Series and maintaining its existence;
costs of preparing and printing the prospectuses of the Trust and each
Series, statements of additional information and Shareholder reports
and delivering them to Shareholders; expenses of meetings of
Shareholders and proxy solicitations therefor; costs of maintaining
books and accounts; costs of reproduction, stationery and supplies;
fees and expenses of the Trustees; compensation of the Trust's officers
and employees and costs of other personnel performing services for the
Trust or any Series; costs of Trustee meetings; Commission registration
fees and related expenses; state or foreign securities laws
registration fees and related expenses; and for such non-recurring
items as may arise, including litigation to which the Trust or a Series
(or a Trustee or officer of the Trust acting as such) is a party, and
for all losses and liabilities by them incurred in administering the
Trust. The Trustees shall have a lien on the assets belonging to the
appropriate Series, or in the case of an expense allocable to more than
one Series, on the assets of each such Series, prior to any rights or
interests of the Shareholders thereto, for the reimbursement to them of
such expenses, disbursements, losses and liabilities.
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Section 2. Payment of Expenses by Shareholders. The Trustees shall
have the power, as frequently as they may determine, to cause each
Shareholder, or each Shareholder of any particular Series, to pay
directly, in advance or arrears, for charges of the Trust's custodian
or transfer, shareholder servicing or similar agent, an amount fixed
from time to time by the Trustees, by setting off such charges due from
such Shareholder from declared but unpaid dividends owed such
Shareholder and/or by reducing the number of Shares in the account of
such Shareholder by that number of full and/or fractional Shares which
represents the outstanding amount of such charges due from such
Shareholder.
ARTICLE IX
MISCELLANEOUS
Section 1. Trust Not a Partnership. This Declaration
creates a trust and not a partnership. No Trustee shall have any
power to bind personally either the Trust's officers or any
Shareholder.
Section 2. Trustee Action. The exercise by the Trustees of their
powers and discretion hereunder in good faith and with reasonable care
under the circumstances then prevailing shall be binding upon everyone
interested. Subject to the provisions of Article IV, the Trustees shall
not be liable for errors of judgment or mistakes of fact or law.
Section 3. Record Dates. The Trustees may fix in advance a date up
to ninety (90) days before the date of any Shareholders' meeting, or
the date for the payment of any dividends or other distributions, or
the date for the allotment of rights, or the date when any change or
conversion or exchange of Shares shall go into effect as a record date
for the determination of the Shareholders entitled to notice of, and to
vote at, any such meeting, or entitled to receive payment of such
dividend or other distribution, or to receive any such allotment of
rights, or to exercise such rights in respect of any such change,
conversion or exchange of Shares.
Section 4. Termination of the Trust. (a) This Trust shall
have perpetual existence. Subject to the vote of a majority of
the Shares outstanding and entitled to vote of the Trust or of
each Series to be affected, the Trustees may
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(i) sell and convey all or substantially all of the assets of
all Series or any affected Series to another Series or to
another entity which is an open-end investment company as
defined in the 1940 Act, or is a series thereof, for adequate
consideration, which may include the assumption of all
outstanding obligations, taxes and other liabilities, accrued
or contingent, of the Trust or any affected Series, and which
may include shares of or interests in such Series, entity, or
series thereof; or
(ii) at any time sell and convert into money all or
substantially all of the assets of all Series or any affected
Series.
Upon making reasonable provision for the payment of all known
liabilities of all Series or any affected Series in either (i) or (ii),
by such assumption or otherwise, the Trustees shall distribute the
remaining proceeds or assets (as the case may be) ratably among the
Shareholders of all Series or any affected Series; however, the payment
to any particular Class of such Series may be reduced by any fees,
expenses or charges allocated to that Class.
(b) The Trustees may take any of the actions specified in
subsection (a) (i) and (ii) above without obtaining the vote of a
majority of the Shares Outstanding and entitled to vote of the Trust or
any Series if a majority of the Trustees determines that the
continuation of the Trust or Series is not in the best interests of the
Trust, such Series, or their respective Shareholders as a result of
factors or events adversely affecting the ability of the Trust or such
Series to conduct its business and operations in an economically viable
manner. Such factors and events may include the inability of the Trust
or a Series to maintain its assets at an appropriate size, changes in
laws or regulations governing the Trust or the Series or affecting
assets of the type in which the Trust or Series invests, or economic
developments or trends having a significant adverse impact on the
business or operations of the Trust or such Series.
(c) Upon completion of the distribution of the remaining proceeds
or assets pursuant to subsection (a), the Trust or affected Series
shall terminate and the Trustees and the Trust shall be discharged of
any and all further liabilities and duties hereunder with respect
thereto and the right, title and interest of all parties therein shall
be canceled and discharged. Upon termination of the Trust, following
completion of winding up of
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its business, the Trustees shall cause a certificate of cancellation of
the Trust's certificate of trust to be filed in accordance with the
Delaware Act, which certificate of cancellation may be signed by any
one Trustee.
Section 5. Reorganization. (a) Notwithstanding anything else
herein, to change the Trust's form or place of organization the
Trustees may, without Shareholder approval unless such approval is
required by applicable law, (i) cause the Trust to merge or consolidate
with or into one or more entities, if the surviving or resulting entity
is the Trust or another open-end management investment company under
the 1940 Act, or a series thereof, that will succeed to or assume the
Trust's registration under the 1940 Act, (ii) cause the Shares to be
exchanged under or pursuant to any state or federal statute to the
extent permitted by law, or (iii) cause the Trust to incorporate under
the laws of Delaware or any other U.S. jurisdiction. Any agreement of
merger or consolidation or certificate of merger may be signed by a
majority of Trustees and facsimile signatures conveyed by electronic or
telecommunication means shall be valid.
(b) Pursuant to and in accordance with the provisions of Section
3815(f) of the Delaware Act, an agreement of merger or consolidation
approved by the Trustees in accordance with this Section 5 may effect
any amendment to the Declaration or effect the adoption of a new trust
instrument of the Trust if it is the surviving or resulting trust in
the merger or consolidation.
(c) The Trustees may cause to be organized or assist in organizing
a corporation or corporations under the laws of any jurisdiction or any
other trust, partnership, association or other organization to take
over all or portion of the Trust Property or the Trust Property
allocated or belonging to such Series or to carry on any business in
which the Trust shall directly or indirectly have any interest, or to
sell, convey and transfer all or a portion of the Trust Property or the
Trust Property allocated or belonging to such Series to any such
corporation, trust, association or organization in exchange for the
shares or securities thereof or otherwise, and to lend money to,
subscribe for the shares or securities of, and enter into any contracts
with any such corporation, trust, partnership, association, or
organization or any corporation, partnership, trust, association or
organization in which the Trust or such Series holds or is about to
acquire shares or any other interest. The Trustees may also cause a
merger or consolidation between the Trust or any sucessor thereto and
any such corporation, trust, partnership, association or other
organization if and to the extent permitted
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by law, as provided under the law then in effect. Nothing contained
herein shall be construed as requiring approval of Shareholders for the
Trustees to organize or assist in organizing one or more corporations,
trusts, partnerships, associations or other organizations and selling,
conveying or transferring all or a portion of the Trust Property to
such organization or entities.
Section 6. Declaration of Trust. The original or a copy of this
Declaration of Trust and of each amendment hereto or Declaration of
Trust supplemental shall be kept at the office of the Trust where it
may be inspected by any Shareholder. Anyone dealing with the Trust may
rely on a certificate by a Trustee or an officer of the Trust as to the
authenticity of the Declaration of Trust or any such amendments or
supplements and as to any matters in connection with the Trust. The
masculine gender herein shall include the feminine and neuter genders.
Headings herein are for convenience only and shall not affect the
construction of this Declaration of Trust. This Declaration of Trust
may be executed in any number of counterparts, each of which shall be
deemed an original.
Section 7. Applicable Law. This Declaration and the Trust created
hereunder are governed by and construed and administered according to
the Delaware Act and the applicable laws of the State of Delaware;
provided, however, that there shall not be applicable to the Trust, the
Trustees or this Declaration of Trust (a) the provisions of Section
3540 of Title 12 of the Delaware Code, or (b) any provisions of the
laws (statutory or common) of the State of Delaware (other than the
Delaware Act) pertaining to trusts which relate to or regulate (i) the
filing with any court or governmental body or agency of trustee
accounts or schedules of trustee fees and charges, (ii) affirmative
requirements to post bonds for trustees, officers, agents or employees
of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or
disposition of real or personal property, (iv) fees or other sums
payable to trustees, officers, agents or employees of a trust, (v) the
allocation of receipts and expenditures to income or principal, (vi)
restrictions or limitations on the permissible nature, amount or
concentration of trust investments or requirements relating to the
titling, storage or other manner of holding of trust assets, or (vii)
the establishment of fiduciary or other standards of responsibilities
or limitations on the acts or powers of trustees, which are
inconsistent with the limitations or liabilities or authorities and
powers of the Trustees set forth or referenced in this Declaration. The
Trust shall be of the type commonly called a Delaware business trust,
and, without limiting the provisions
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hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust under Delaware law. The Trust specifically
reserves the right to exercise any of the powers or privileges afforded
to trusts or actions that may be engaged in by trusts under the
Delaware Act, and the absence of a specific reference herein to any
such power, privilege or action shall not imply that the Trust may not
exercise such power or privilege or take such actions.
Section 8. Amendments. The Trustees may, without any Shareholder
vote, amend or otherwise supplement this Declaration by making an
amendment, a Declaration of Trust supplemental hereto or an amended and
restated trust instrument; provided, that Shareholders shall have the
right to vote on any amendment (a) which would affect the voting rights
of Shareholders granted in Article VII, Section l, (b) to this Section
8, (c) required to be approved by Shareholders by law or by the Trust's
registration statement(s) filed with the Commission, and (d) submitted
to them by the Trustees in their discretion. Any amendment submitted to
Shareholders which the Trustees determine would affect the Shareholders
of any Series shall be authorized by vote of the Shareholders of such
Series and no vote shall be required of Shareholders of a Series not
affected. Notwithstanding anything else herein, any amendment to
Article IV which would have the effect of reducing the indemnification
and other rights provided thereby to Trustees, officers, employees, and
agents of the Trust or to Shareholders or former Shareholders, and any
repeal or amendment of this sentence shall each require the affirmative
vote of the holders of two-thirds of the Outstanding Shares of the
Trust entitled to vote thereon.
Section 9. Derivative Actions. In addition to the requirements set
forth in Section 3816 of the Delaware Act, a Shareholder may bring a
derivative action on behalf of the Trust only if the following
conditions are met:
(a) Shareholders eligible to bring such derivative action under
the Delaware Act who hold at least 10% of the Outstanding Shares of the
Trust, or 10% of the Outstanding Shares of the Series or Class to which
such action relates, shall join in the request for the Trustees to
commence such action; and
(b) the Trustees must be afforded a reasonable amount of time to
consider such shareholder request and to investigate the basis of such
claim. The Trustees shall be entitled to retain counsel or other
advisers in considering the merits of the request and shall require an
undertaking by the Shareholders making such
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request to reimburse the Trust for the expense of any such advisers in
the event that the Trustees determine not to bring such action.
Section 10. Fiscal Year. The fiscal year of the Trust shall
end on a specified date as set forth in the By-laws. The Trustees
may change the fiscal year of the Trust without Shareholder
approval.
Section 11. Severability. The provisions of this Declaration are
severable. If the Trustees determine, with the advice of counsel, that
any provision hereof conflicts with the 1940 Act, the regulated
investment company provisions of the Internal Revenue Code or with
other applicable laws and regulations, the conflicting provision shall
be deemed never to have constituted a part of this Declaration;
provided, however, that such determination shall not affect any of the
remaining provisions of this Declaration or render invalid or improper
any action taken or omitted prior to such determination. If any
provision hereof shall be held invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall attach only to
such provision only in such jurisdiction and shall not affect any other
provision of this Declaration.
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IN WITNESS WHEREOF, the undersigned have executed this instrument
as of the date first written above.
/s/ Roger J. Weiss
Roger J. Weiss,
as Trustee and not individually,
/s/ Raymond R. Herrmann, Jr.
Raymond R. Herrmann, Jr.,
as Trustee and not individually,
/s/ Harvey E. Sampson
Harvey E. Sampson,
as Trustee and not individually,
/s/ Lawrence J. Israel
Lawrence J. Israel,
as Trustee and not individually,
36
BY-LAWS
OF
TOMORROW FUNDS RETIREMENT TRUST
ARTICLE I
DEFINITIONS
All capitalized terms have the respective meanings given them in
the Agreement and Declaration of Tomorrow Funds Retirement Trust dated
June 21, 1995, as amended or restated from time to time (the
"Declaration").
ARTICLE II
OFFICES
Section 1. Principal Office. Until changed by the Trustees,
the principal office of the Trust shall be at One New York Plaza,
New York, New York.
Section 2. Other Offices. The Trust may have offices in
such other places without as well as within the State of Delaware
as the Trustees may from time to time determine.
Section 3. Registered Office and Registered Agent. The Board of
Trustees shall establish a registered office in the State of Delaware
and shall appoint as the Trust's registered agent for service of
process in the State of Delaware an individual resident of the State of
Delaware or a Delaware corporation or a corporation authorized to
transact business in the State of Delaware; in each case the business
office of such registered agent for service of process shall be
identical with the registered Delaware office of the Trust.
ARTICLE III
SHAREHOLDERS
Section 1. Meetings. Meetings of the Shareholders of the
Trust or a Series or Class thereof shall be held as provided in
the Declaration at such place within or without the State of
Delaware as the Trustees shall designate. The holders of one-
third of the Outstanding Shares of the Trust or a Series or Class
<PAGE>
thereof present in person or by proxy and entitled to vote shall
constitute a quorum at any meeting of the Shareholders of the Trust or
a Series or Class thereof.
Section 2. Notice of Meetings. Notice of all meetings of the
Shareholders, stating the time, place and purposes of the meeting,
shall be given by the Trustees by mail or telegraphic or electronic
means to each Shareholder at his address as recorded on the register of
the Trust mailed at least (10) days and not more than ninety (90) days
before the meeting, provided, however, that notice of a meeting need
not be given to a Shareholder to whom such notice need not be given
under the proxy rules of the Commission under the 1940 Act and the
Securities Exchange Act of 1934, as amended. Only the business stated
in the notice of the meeting shall be considered at such meeting. Any
adjourned meeting may be held as adjourned without further notice. No
notice need be given to any Shareholder who shall have failed to inform
the Trust of his current address or if a written waiver of notice,
executed before or after the meeting by the Shareholder or his attorney
thereunto authorized, is filed with the records of the meeting.
Section 3. Record Date for Meetings and Other Purposes. For the
purpose of determining the Shareholders who are entitled to notice of
and to vote at any meeting, or to participate in any distribution, or
for the purpose of any other action, the Trustees may from time to time
close the transfer books for such period, not exceeding thirty (30)
days, as the Trustees may determine; or without closing the transfer
books the Trustees may fix a date not more than ninety (90) days prior
to the date of any meeting of Shareholders or distribution or other
action as a record date for the determination of the persons to be
treated as Shareholders of record for such purposes, except for
dividend payments which shall be governed by the Declaration.
Section 4. Proxies. At any meeting of Shareholders, any holder of
Shares entitled to vote thereat may vote by proxy, provided that no
proxy shall be voted at any meeting unless it shall have been placed on
file with the Secretary, or with such other officer or agent of the
Trust as the Secretary may direct, for verification prior to the time
at which such vote shall be taken. A proxy shall be deemed signed if
the shareholder's name is placed on the proxy (whether by manual
signature, typewriting, telegraphic transmission, facsimile, other
electronic means or otherwise) by the shareholder or the shareholder's
attorney-in-fact. Proxies may be given by any electronic or
telecommunication device except as otherwise provided in the
Declaration. Proxies may be solicited in the name of one or more
Trustees or one or more of the officers of the Trust. Only Shareholders
of
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record shall be entitled to vote. When any Share is held jointly by
several persons, any one of them may vote at any meeting in person or
by proxy in respect of such Share, but if more than one of them shall
be present at such meeting in person or by proxy, and such joint owners
or their proxies so present disagree as to any vote to be cast, such
vote shall not be received in respect of such Share. A proxy purporting
to be executed by or on behalf of a Shareholder shall be deemed valid
unless challenged at or prior to its exercise, and the burden of
proving invalidity shall rest on the challenger. If the holder of any
such share is a minor or a person of unsound mind, and subject to
guardianship or the legal control of any other person as regards the
charge or management of such Share, he may vote by his guardian or such
other person appointed or having such control, and such vote may be
given in person or by proxy.
Section 5. Abstentions and Broker Non-Votes. Outstanding Shares
represented in person or by proxy (including Shares which abstain or do
not vote with respect to one or more of any proposals presented for
Shareholder approval) will be counted for purposes of determining
whether a quorum is present at a meeting. Abstentions will be treated
as Shares that are present and entitled to vote for purposes of
determining the number of Shares that are present and entitled to vote
with respect to any particular proposal, but will not be counted as a
vote in favor of such proposal. If a broker or nominee holding Shares
in "street name" indicates on the proxy that it does not have
discretionary authority to vote as to a particular proposal, those
Shares will not be considered as present and entitled to vote with
respect to such proposal.
Section 6. Inspection of Records. The records of the Trust
shall be open to inspection by Shareholders to the same extent as
is permitted shareholders of a Delaware business corporation.
Section 7. Action without Meeting. Any action which may be taken
by Shareholders may be taken without a meeting if a majority of
Outstanding Shares entitled to vote on the matter (or such larger
proportion thereof as shall be required by law) consent to the action
in writing and the written consents are filed with the records of the
meetings of Shareholders. Such consents shall be treated for all
purposes as a vote taken at a meeting of Shareholders.
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ARTICLE IV
TRUSTEES
Section 1. Meetings of the Trustees. The Trustees may in their
discretion provide for regular or stated meetings of the Trustees.
Notice of regular or stated meetings need not be given. Meetings of the
Trustees other than regular or stated meetings shall be held whenever
called by the President, the Chairman or by any one of the Trustees, at
the time being in office. Notice of the time and place of each meeting
other than regular or stated meetings shall be given by the Secretary
or an Assistant Secretary or by the officer or Trustee calling the
meeting and shall be mailed to each Trustee at least two days before
the meeting, or shall be given by telephone, cable, wireless, facsimile
or other electronic mechanism to each Trustee at his business address,
or personally delivered to him at least one day before the meeting.
Such notice may, however, be waived by any Trustee. Notice of a meeting
need not be given to any Trustee if a written waiver of notice,
executed by him before or after the meeting, is filed with the records
of the meeting, or to any Trustee who attends the meeting without
protesting prior thereto or at its commencement the lack of notice to
him. A notice or waiver of notice need not specify the purpose of any
meeting. The Trustees may meet by means of a telephone conference
circuit or similar communications equipment by means of which all
persons participating in the meeting can hear each other at the same
time and participation by such means shall be deemed to have been held
at a place designated by the Trustees at the meeting. Participation in
a telephone conference meeting shall constitute presence in person at
such meeting. Any action required or permitted to be taken at any
meeting of the Trustees may be taken by the Trustees without a meeting
if a majority of the Trustees consent to the action in writing and the
written consents are filed with the records of the Trustees' meetings.
Such consents shall be treated as a vote for all purposes.
Section 2. Quorum and Manner of Acting. A majority of the Trustees
shall be present in person at any regular or special meeting of the
Trustees in order to constitute a quorum for the transaction of
business at such meeting and (except as otherwise required by law, the
Declaration or these By-laws) the act of a majority of the Trustees
present at any such meeting, at which a quorum is present, shall be the
act of the Trustees. In the absence of a quorum, a majority of the
Trustees present may adjourn the meeting from time to time until a
quorum shall be present. Notice of an adjourned meeting need not be
given.
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ARTICLE V
COMMITTEES
Section 1. Executive and Other Committees. The Trustees by vote of
a majority of all the Trustees may elect from their own number an
Executive Committee to consist of not less than three (3) members to
hold office at the pleasure of the Trustees, which shall have the power
to conduct the current and ordinary business of the Trust while the
Trustees are not in session, including the purchase and sale of
securities and the designation of securities to be delivered upon
redemption of Shares of the Trust or a Series thereof, and such other
powers of the Trustees as the Trustees may delegate to them, from time
to time, except those powers which by law, the Declaration or these
By-laws they are prohibited from delegating. The Trustees may also
elect from their own number other Committees from time to time; the
number composing such Committees, the powers conferred upon the same
(subject to the same limitations as with respect to the Executive
Committee) and the term of membership on such Committees to be
determined by the Trustees. The Trustees may designate a chairman of
any such Committee. In the absence of such designation the Committee
may elect its own Chairman.
Section 2. Meetings, Quorum and Manner of Acting. The Trustees may
(1) provide for stated meetings of any Committee, (2) specify the
manner of calling and notice required for special meetings of any
Committee, (3) specify the number of members of a Committee required to
constitute a quorum and the number of members of a Committee required
to exercise specified powers delegated to such Committee, (4) authorize
the making of decisions to exercise specified powers by written assent
of the requisite number of members of a Committee without a meeting,
and (5) authorize the members of a Committee to meet by means of a
telephone conference circuit.
The Executive Committee shall keep regular minutes of its meetings
and records of decisions taken without a meeting and cause them to be
recorded in a book designated for that purpose and kept in the office
of the Trust.
ARTICLE VI
OFFICERS
Section 1. General Provisions. The officers of the Trust
shall be a President, a Treasurer and a Secretary, who shall be
elected by the Trustees. The Trustees may elect or appoint such
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other officers or agents as the business of the Trust may require,
including one or more Vice Presidents, one or more Assistant
Secretaries, and one or more Assistant Treasurers. The Trustees may
delegate to any officer or committee the power to appoint any
subordinate officers or agents.
Section 2. Term of Office and Qualifications. Except as otherwise
provided by law, the Declaration or these By-laws, the President, the
Treasurer, the Secretary and any other officer shall each hold office
at the pleasure of the Board of Trustees or until his successor shall
have been duly elected and qualified. The Secretary and the Treasurer
may be the same person. A Vice President and the Treasurer or a Vice
President and the Secretary may be the same person, but the offices of
Vice President, Secretary and Treasurer shall not be held by the same
person. The President shall hold no other office other than as Chairman
of the Board of Trustees (if so elected). Except as above provided, any
two offices may be held by the same person. Any officer may be but none
need be a Trustee or Shareholder.
Section 3. Removal. The Trustees, at any regular or special
meeting of the Trustees, may remove any officer with or without cause,
by a vote of a majority of the Trustees then in office. Any officer or
agent appointed by an officer or committee may be removed with or
without cause by such appointing officer or committee.
Section 4. Powers and Duties of the Chairman. The Trustees may,
but need not, appoint from among their number a Chairman. When present
he shall preside at the meetings of the Shareholders and of the
Trustees. He may call meetings of the Trustees and of any committee
thereof whenever he deems it necessary. He shall be an executive
officer of the Trust and shall have, with the President, general
supervision over the business and policies of the Trust, subject to the
limitations imposed upon the President, as provided in Section 5 of
this Article VI.
Section 5. Powers and Duties of the President. The President may
call meetings of the Trustees and of any Committee thereof when he
deems it necessary and shall preside at all meetings of the
Shareholders. Subject to the control of the Trustees and to the control
of any Committees of the Trustees, within their respective spheres, as
provided by the Trustees, he shall at all times exercise a general
supervision and direction over the affairs of the Trust. He shall have
the power to employ attorneys and counsel for the Trust or any Series
or Class thereof and to employ such subordinate officers, agents,
clerks and employees as he may find necessary to transact the business
of the Trust or any Series or Class thereof. He shall also have the
power to grant, issue, execute or sign such powers of attorney,
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<PAGE>
proxies or other documents as may be deemed advisable or necessary in
furtherance of the interests of the Trust or any Series thereof. The
President shall have such other powers and duties, as from time to time
may be conferred upon or assigned to him by the Trustees.
Section 6. Powers and Duties of Vice Presidents. In the absence or
disability of the President, the Vice President or, if there be more
than one Vice President, any Vice President designated by the Trustees,
shall perform all the duties and may exercise any of the powers of the
President, subject to the control of the Trustees. Each Vice President
shall perform such other duties as may be assigned to him from time to
time by the Trustees and the President.
Section 7. Powers and Duties of the Treasurer. The Treasurer shall
be the principal financial and accounting officer of the Trust. He
shall deliver all funds of the Trust or any Series or Class thereof
which may come into his hands to such Custodian as the Trustees may
employ. He shall render a statement of condition of the finances of the
Trust or any Series or Class thereof to the Trustees as often as they
shall require the same and he shall in general perform all the duties
incident to the office of a Treasurer and such other duties as from
time to time may be assigned to him by the Trustees. The Treasurer
shall give a bond for the faithful discharge of his duties, if required
so to do by the Trustees, in such sum and with such surety or sureties
as the Trustees shall require.
Section 8. Powers and Duties of the Secretary. The Secretary shall
keep the minutes of all meetings of the Trustees and of the
Shareholders in proper books provided for that purpose; he shall have
custody of the seal of the Trust; he shall have charge of the Share
transfer books, lists and records unless the same are in the charge of
a transfer agent. He shall attend to the giving and serving of all
notices by the Trust in accordance with the provisions of these By-laws
and as required by law; and subject to these By-laws, he shall in
general perform all duties incident to the office of Secretary and such
other duties as from time to time may be assigned to him by the
Trustees.
Section 9. Powers and Duties of Assistant Officers. In the absence
or disability of the Treasurer, any officer designated by the Trustees
shall perform all the duties, and may exercise any of the powers, of
the Treasurer. Each officer shall perform such other duties as from
time to time may be assigned to him by the Trustees. Each officer
performing the duties and exercising the powers of the Treasurer, if
any, and any Assistant Treasurer, shall give a bond for the faithful
discharge of his duties, if
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<PAGE>
required so to do by the Trustees, in such sum and with such surety or
sureties as the Trustees shall require.
Section 10. Powers and Duties of Assistant Secretaries. In the
absence or disability of the Secretary, any Assistant Secretary
designated by the Trustees shall perform all the duties, and may
exercise any of the powers, of the Secretary. Each Assistant Secretary
shall perform such other duties as from time to time may be assigned to
him by the Trustees.
Section 11. Compensation of Officers and Trustees and Mem bers of
the Advisory Board. Subject to any applicable provisions of the
Declaration, the compensation of the officers and Trustees and members
of an advisory board shall be fixed from time to time by the Trustees
or, in the case of officers, by any Committee or officer upon whom such
power may be conferred by the Trustees. No officer shall be prevented
from receiving such compensation as such officer by reason of the fact
that he is also a Trustee.
ARTICLE VII
FISCAL YEAR
The fiscal year of the Trust shall begin on the first day of
January in each year and shall end on the last day of December in each
year, provided, however, that the Trustees may from time to time change
the fiscal year. The taxable year of each Series of the Trust shall be
as determined by the Trustees from time to time.
ARTICLE VIII
SEAL
The Trustees may adopt a seal which shall be in such form and
shall have such inscription thereon as the Trustees may from time to
time prescribe.
ARTICLE IX
SUFFICIENCY AND WAIVERS OF NOTICE
Whenever any notice whatever is required to be given by law, the
Declaration or these By-laws, a waiver thereof in writing, signed by
the person or persons entitled to said notice,
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<PAGE>
whether before or after the time stated therein, shall be deemed
equivalent thereto. A notice shall be deemed to have been sent by mail,
telegraph, cable, wireless, facsimile or other electronic means for the
purposes of these By-laws when it has been delivered to a
representative of any company holding itself out as capable of sending
notice by such means with instructions that it be so sent.
ARTICLE X
AMENDMENTS
These By-laws, or any of them, may be altered, amended or
repealed, or new By-laws may be adopted by (a) vote of a majority of
the Outstanding Shares voting in person or by proxy at a meeting of
Shareholders and entitled to vote or (b) by the Trustees, provided,
however, that no By-law may be amended, adopted or repealed by the
Trustees if such amendment, adoption or repeal requires, pursuant to
law, the Declaration or these By-laws, a vote of the Shareholders.
END OF BY-LAWS
-9-
FORM OF
INVESTMENT ADVISORY AGREEMENT
TOMORROW LONG-TERM RETIREMENT FUND
AGREEMENT made as of the __ day of ___, 1995, by and between
TOMORROW FUNDS RETIREMENT TRUST, a Delaware business trust (the
"Trust"), on behalf of its series TOMORROW LONG-TERM RETIREMENT FUND
(the "Fund"), and WEISS, PECK & GREER, L.L.C., a Delaware limited
liability corporation (the "Investment Adviser" or "WPG").
The Trust is an open-end, management investment company,
registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Investment Adviser is an investment adviser registered
under the Investment Advisers Act of 1940, as amended, and is a
broker-dealer registered under the Securities Exchange Act of 1934, as
amended.
The Trust desires the Investment Adviser to render services to the
Trust, on behalf of the Fund, and the Investment Adviser is willing to
render such services upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
1. Investment Adviser. The Trust will, and hereby does,
retain the Investment Adviser to act as the investment
adviser of the Fund and to provide certain services, as
more fully set forth below, and the Investment Adviser
hereby accepts such retainer.
2. Sub-Advisers. The Investment Adviser may engage one or
more investment advisers which are either registered as
such or specifically exempt from registration under the
Investment Advisers Act of 1940, as amended, to act as
sub-advisers to provide with respect to the Fund certain
services set forth in Section 4 of this Agreement, all
as shall be set forth in a written contract to which the
Trust, on behalf of the Fund, and the Investment Adviser
shall be parties, which contract shall be subject to
approval by the vote of a majority of the Trustees of
the Trust who are not interested persons of the
Investment Adviser, the sub-adviser or of the Trust,
cast in person at a meeting called for the purpose of
voting on such approval and by the vote of a majority of
the outstanding voting securities of the Fund and
otherwise consistent with the terms of the 1940 Act.
<PAGE>
3. Information Supplied by the Trust. The Trust will, from
time to time, deliver to the Investment Adviser detailed
statements of the assets and resources of the Fund and
information as to the Fund's investment objectives.
4. Advisory Services.
(a) The Investment Adviser will regularly provide the
Trust, on behalf of the Fund, with investment
research, advice and supervision and will furnish
continuously an investment program for the Fund
consistent with the investment objectives and
policies of the Fund. The Investment Adviser will
determine from time to time what securities shall
be purchased for the Fund, what securities shall be
held or sold by the Fund and what portion of the
Fund's assets shall be held uninvested as cash,
subject always to the provisions of the Trust's
Declaration of Trust, By-Laws and its registration
statement under the 1940 Act and under the
Securities Act of 1933 covering the Trust's shares,
as filed with the Securities and Exchange
Commission, and to the investment objectives,
policies and restrictions of the Fund, as each of
the same shall be from time to time in effect, and
subject, further, to such policies and instructions
as the Board of Trustees of the Trust may from time
to time establish. To carry out such
determinations, the Investment Adviser will place
orders for the investment and reinvestment of Fund
assets. The Investment Adviser will exercise full
discretion and act for the Fund in the same manner
and with the same force and effect as the Fund
itself might or could do with respect to purchases,
sales or other transactions, as well as with
respect to all other things necessary or incidental
to the furtherance or conduct of such purchases,
sales or other transactions.
(b) The Investment Adviser will, to the extent
reasonably required in the conduct of the business
of the Fund and upon its request, furnish to the
Fund research, statistical and advisory reports
upon the industries, businesses, corporations or
securities as to which such requests shall be made,
whether or not the Fund shall at the time have any
investment in such industries, businesses,
corporations or securities. The Investment Adviser
will use its best efforts in the preparation of
such reports and will endeavor to consult the
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<PAGE>
persons and sources believed by it to have information
available with respect to such industries, businesses,
corporations or securities.
(c) The Investment Adviser will maintain all books and
records with respect to the Fund's securities
transactions required by sub-paragraphs
(b)(5),(6),(9) and (10) and paragraph (f) of
Rule 31a-1 under the 1940 Act (other than those
records being maintained by the Trust's custodian
or transfer agent) and preserve such records for
the periods prescribed therefor by Rule 31a-2 of
the 1940 Act. The Investment Adviser will also
provide to the Trust's Board of Trustees such
periodic and special reports as the Board may
reasonably request.
5. Allocation of Charges and Expenses. The Investment
Adviser will pay all costs incurred by it in connection
with the performance of its duties under Section 4. The
Investment Adviser will pay the compensation and
expenses of all of its personnel and will make
available, without expense to the Trust or the Fund, the
services of such of its principals, officers and
employees as may be duly elected officers or Trustees of
the Trust, subject to their individual consent to serve
and to any limitations imposed by law. The Investment
Adviser will not be required to bear any expenses
otherwise payable by the Trust or the Fund except as may
be specifically agreed pursuant to Section 7 of this
Agreement, but will be required to pay expenses
specifically allocated to the Investment Adviser in this
paragraph 5. In particular, but without limiting the
generality of the foregoing, the Investment Adviser will
not be required to pay: (i) fees and expenses of any
administrator of the Fund; (ii) organization expenses of
the Trust or the Fund; (iii) fees and expenses incurred
by the Trust in connection with membership in investment
company organizations; (iv) brokers' commissions; (v)
payment for portfolio pricing services to a pricing
agent, if any; (vi) legal, accounting or auditing
expenses (including an allocable portion of the cost of
its employees rendering legal services to the Trust);
(vii) interest, insurance premiums, taxes or
governmental fees; (viii) the fees and expenses of the
transfer agent of the Trust; (ix) the cost of preparing
stock certificates or any other expenses, including
clerical expenses of issue, redemption or repurchase of
shares of the Trust; (x) the expenses of and fees for
registering or qualifying shares for sale and of
maintaining the registration of the Trust and
registering the Trust as a broker or a dealer; (xi) the
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<PAGE>
fees and expenses of Trustees of the Trust who are not
affiliated with the Investment Adviser; (xii) the cost of
preparing and distributing reports and notices to
shareholders, the Securities and Exchange Commission and
other regulatory authorities; (xiii) the fees or
disbursements of custodians of the Trust's assets, including
expenses incurred in the performance of any obligations
enumerated by the Declaration of Trust or By-Laws of the
Trust insofar as they govern agreements with any such
custodian; (xiv) costs in connection with annual or special
meetings of shareholders, including proxy material
preparation, printing and mailing; (xv) litigation and
indemnification expenses and other extraordinary expenses not
incurred in the ordinary course of the Trust's business; or
(xvi) distribution fees and service fees.
6. Limitation of Liability.
(a) The Investment Adviser. The Investment Adviser
will not be liable for any error of judgment or
mistake of law or for any loss sustained by reason
of the adoption of any investment policy or the
purchase, sale, or retention of any security on the
recommendation of the Investment Adviser, whether
or not such recommendation shall have been based
upon its own investigation and research or upon
investigation and research made by any other
individual, firm or corporation; but nothing
contained herein will be construed to protect the
Investment Adviser against any liability to the
Trust or its shareholders by reason of willful
misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its
reckless disregard of its obligations and duties
under this Agreement.
(b) The Trust. It is understood and expressly
stipulated that none of the Trustees or
shareholders of the Trust shall be personally
liable hereunder. Neither the Trustees, officers,
agents nor shareholders of the Trust assume any
personal liability for obligations entered into on
behalf of the Trust. All persons dealing with the
Trust must look solely to the property of the Trust
for the enforcement of any claims against the
Trust. No series of the Trust shall be liable for
any claims against any other series.
-4-
<PAGE>
7. Compensation of the Investment Adviser. Neither the
Investment Adviser nor any affiliate of the Investment
Adviser will act as principal or receive directly or
indirectly any compensation in connection with the
purchase or sale of investment securities by the Trust,
other than the compensation provided for in this Section
and such brokerage commissions as are permitted by the
1940 Act and brokerage and research services as are
permitted by the Securities Exchange Act of 1934, it
being contemplated that WPG will act as principal broker
for the Trust in U.S. securities transactions.
(a) Except as provided in Subsection (b) below, the
Trust, on behalf of the Fund, will pay the
Investment Adviser an annual fee, payable monthly,
which varies in accordance with the total amount of
daily net assets of the Fund under the management
of the Investment Adviser. The annual advisory fee
expressed as a percentage of the average daily net
assets of the Fund is __________________________
__________________. For any period less than a
full month during which this Agreement is in
effect, the fee shall be prorated according to the
proportion which such period bears to a full month.
For the purposes hereof, the net assets of the Fund
shall be computed in the manner specified in the
Fund's prospectus for the computation of the value
of such net assets in connection with the
determination of the net asset value of its shares.
On any day that the net asset value calculation is
suspended as specified in the Fund's prospectus,
the net asset value for purposes of calculating the
advisory fee shall be calculated as of the date
last determined.
(b) If the operating expenses of the Fund in any year
(including the investment advisory fee referred to
in Subsection (a) above, but excluding taxes,
brokerage commissions, interest, dividends on
securities sold short, distribution expenses, and
extraordinary legal fees and expenses) exceed the
limits set by certain state securities
administrators in states in which shares of the
Fund are sold, the amount payable to the Investment
Adviser under Subsection (a) above will be reduced
(but not below $0) by the amount of such excess.
If amounts have already been advanced to the
Investment Adviser under this Agreement, the
Investment Adviser will return such amounts to the
Fund to the extent required by the preceding
sentence.
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<PAGE>
(c) In addition to the foregoing, the investment
Adviser may from time to time agree not to impose
all or a portion of its fee otherwise payable
hereunder (in advance of the time such fee or
portion thereof would otherwise accrue) and/or
undertake to assume responsibility for all or a
portion of any expenses related to the operations
of the Fund that are not otherwise required to be
directly or indirectly borne by the Investment
Adviser. Further, any agreement by the Investment
Adviser to limit the Fund's operating expenses to a
specific level may be made with the understanding
that the Fund, to the extent legally permissable,
will reimburse the Investment Adviser for advisory
fees foregone and/or expenses paid by the
Investment Adviser for a particular year pursuant
to such agreement if in any subsequent year
operating expenses for the Fund are less than the
operating expenses limitation (if any), for such
subsequent year to which the Investment Adviser may
agree. Subject to the foregoing, any fee reduction
or undertaking referred to in this Subsection shall
constitute a binding modification of this Agreement
while it is in effect but may be discontinued or
modified prospectively by the Investment Adviser at
any time.
8. Advertising Material. The Trust will not approve or
authorize the use or distribution, in connection with
the offering of shares of the Fund for sale, of any
literature or advertisements in any form or through any
medium, written or oral, unless not less than ten (10)
days prior to the giving of such approval or
authorization by the Trust, the Trust shall have
submitted such literature or advertising to the
Investment Adviser and the Investment Adviser, within
ten (10) days, shall either have specifically approved
or shall have failed to disapprove such literature or
advertising.
9. Duration and Termination of this Agreement.
(a) Duration. This Agreement shall remain in force
until ________, 1997 and from year to year
thereafter, but only so long as such continuance is
specifically approved at least annually by a vote
of a majority of the Trustees, including a majority
of the Trustees who are not parties hereto or
"interested persons" (as defined by the 1940 Act)
of the Investment Adviser, or by vote of a
"majority of the outstanding voting shares" (as
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<PAGE>
defined in the 1940 Act) of the Trust, subject to
the provisions for termination and all of the other
terms and conditions hereof.
(b) Voluntary Termination. This Agreement may be
terminated without the payment of any penalty by
(a) the Trust, upon sixty (60) days notice in
writing to the Investment Adviser provided such
termination is authorized by resolution of the
Trustees of the Trust or by a vote of a "majority
of its outstanding voting shares" of the Fund (as
defined in the Act) and (b) the Investment Adviser
upon sixty (60) days notice in writing to the
Trust.
(c) Automatic Termination. This Agreement will automatically
and immediately terminate in the event of its
"assignment," as that term is used in the 1940 Act and
rules and regulations promulgated thereunder, by the
Investment Adviser.
10. Trading, Services to Others, Brokerage. Nothing in this
Agreement will in any way limit or restrict the
Investment Adviser or any of its officers, directors,
partners or employees from buying, selling or trading in
any securities for its own or other accounts. The
Investment Adviser may act as an investment adviser to
any other person, firm or corporation, and may perform
management and any other services for any other person,
association, corporation, firm or other entity pursuant
to any contract or otherwise, and take any action or do
anything in connection therewith or related thereto; and
no such performance of management or other services or
taking of any such action or doing of any such thing
shall be in any manner restricted or otherwise affected
by any aspect of any relationship of the Investment
Adviser to or with the Trust or deemed to violate or
give rise to any duty or obligation of the Investment
Adviser to the Trust; provided, however, that it is
understood that any advice rendered to the Trust, on
behalf of the Fund, by the Investment Adviser will be
used solely for the benefit of the Fund. The Trust
recognizes that Investment Adviser, in effecting
transactions for its various accounts, may not always be
able to take or liquidate investment positions in the
same security at the same time and at the same price.
11. Name of the Trust. The Trust hereby agrees that in the
event that neither the Investment Adviser nor any of its
affiliates acts as investment adviser to the Trust, the
name of the Trust will be changed to one that does not
-7-
<PAGE>
contain the name "Weiss, Peck & Greer" or the initials "WPG"
or otherwise suggest an affiliation with the Investment
Adviser.
12. Series of the Trust. The Investment Adviser recognizes
that the Trust may terminate any series of the Trust,
and may create new series.
13. Change of Membership of Investment Adviser. The
Investment Adviser hereby agrees to notify the Trust of
any change in the membership of its limited liability
corporation within a reasonable time after such change.
14. Independent Contractor. The Investment Adviser is an
independent contractor and not an employee of the Trust
for any purpose.
15. Entire Agreement. This Agreement states the entire agreement
of the parties hereto, and is intended to be the complete and
exclusive statement of the terms hereof. It may not be added
to or changed orally, and may not be modified or rescinded
except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.
16. Notices. Any notices sent pursuant to this Agreement
may be sent by mail (postage prepaid) as follows, or to
such other address or addresses as the party may advise
in writing:
(a) In the case of notices sent to the Trust to:
TOMORROW LONG-TERM RETIREMENT FUND
One New York Plaza
New York, New York 10004
Attention: Jay C. Nadel
(b) In the case of notices sent to the Investment
Adviser to:
WEISS, PECK & GREER, L.L.C.
One New York Plaza
New York, New York 10004
Attention: Francis H. Powers
17. Governing Law. This Agreement and all performance
hereunder shall be governed by the laws of the State of
New York, which apply to contracts made and to be
performed in the State of New York.
-8-
<PAGE>
18. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way
define or delimit any of the provisions hereof or
otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
TOMORROW FUNDS RETIREMENT TRUST,
on behalf of TOMORROW LONG-TERM
RETIREMENT FUND
By:________________________________
Its: ______________________________
WEISS, PECK & GREER, L.L.C.
By:________________________________
Its: ______________________________
-9-
FORM OF
INVESTMENT ADVISORY AGREEMENT
TOMORROW MID-TERM RETIREMENT FUND
AGREEMENT made as of the __ day of ___, 1995, by and between
TOMORROW FUNDS RETIREMENT TRUST, a Delaware business trust (the
"Trust"), on behalf of its series TOMORROW MID-TERM RETIREMENT FUND
(the "Fund"), and WEISS, PECK & GREER, L.L.C., a Delaware limited
liability corporation (the "Investment Adviser" or "WPG").
The Trust is an open-end, management investment company,
registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Investment Adviser is an investment adviser registered
under the Investment Advisers Act of 1940, as amended, and is a
broker-dealer registered under the Securities Exchange Act of 1934, as
amended.
The Trust desires the Investment Adviser to render services to the
Trust, on behalf of the Fund, and the Investment Adviser is willing to
render such services upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
1. Investment Adviser. The Trust will, and hereby does,
retain the Investment Adviser to act as the investment
adviser of the Fund and to provide certain services, as
more fully set forth below, and the Investment Adviser
hereby accepts such retainer.
2. Sub-Advisers. The Investment Adviser may engage one or
more investment advisers which are either registered as
such or specifically exempt from registration under the
Investment Advisers Act of 1940, as amended, to act as
sub-advisers to provide with respect to the Fund certain
services set forth in Section 4 of this Agreement, all
as shall be set forth in a written contract to which the
Trust, on behalf of the Fund, and the Investment Adviser
shall be parties, which contract shall be subject to
approval by the vote of a majority of the Trustees of
the Trust who are not interested persons of the
Investment Adviser, the sub-adviser or of the Trust,
cast in person at a meeting called for the purpose of
voting on such approval and by the vote of a majority of
the outstanding voting securities of the Fund and
otherwise consistent with the terms of the 1940 Act.
<PAGE>
3. Information Supplied by the Trust. The Trust will, from
time to time, deliver to the Investment Adviser detailed
statements of the assets and resources of the Fund and
information as to the Fund's investment objectives.
4. Advisory Services.
(a) The Investment Adviser will regularly provide the
Trust, on behalf of the Fund, with investment
research, advice and supervision and will furnish
continuously an investment program for the Fund
consistent with the investment objectives and
policies of the Fund. The Investment Adviser will
determine from time to time what securities shall
be purchased for the Fund, what securities shall be
held or sold by the Fund and what portion of the
Fund's assets shall be held uninvested as cash,
subject always to the provisions of the Trust's
Declaration of Trust, By-Laws and its registration
statement under the 1940 Act and under the
Securities Act of 1933 covering the Trust's shares,
as filed with the Securities and Exchange
Commission, and to the investment objectives,
policies and restrictions of the Fund, as each of
the same shall be from time to time in effect, and
subject, further, to such policies and instructions
as the Board of Trustees of the Trust may from time
to time establish. To carry out such
determinations, the Investment Adviser will place
orders for the investment and reinvestment of Fund
assets. The Investment Adviser will exercise full
discretion and act for the Fund in the same manner
and with the same force and effect as the Fund
itself might or could do with respect to purchases,
sales or other transactions, as well as with
respect to all other things necessary or incidental
to the furtherance or conduct of such purchases,
sales or other transactions.
(b) The Investment Adviser will, to the extent
reasonably required in the conduct of the business
of the Fund and upon its request, furnish to the
Fund research, statistical and advisory reports
upon the industries, businesses, corporations or
securities as to which such requests shall be made,
whether or not the Fund shall at the time have any
investment in such industries, businesses,
corporations or securities. The Investment Adviser
will use its best efforts in the preparation of
such reports and will endeavor to consult the
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<PAGE>
persons and sources believed by it to have information
available with respect to such industries, businesses,
corporations or securities.
(c) The Investment Adviser will maintain all books and
records with respect to the Fund's securities
transactions required by sub-paragraphs
(b)(5),(6),(9) and (10) and paragraph (f) of
Rule 31a-1 under the 1940 Act (other than those
records being maintained by the Trust's custodian
or transfer agent) and preserve such records for
the periods prescribed therefor by Rule 31a-2 of
the 1940 Act. The Investment Adviser will also
provide to the Trust's Board of Trustees such
periodic and special reports as the Board may
reasonably request.
5. Allocation of Charges and Expenses. The Investment
Adviser will pay all costs incurred by it in connection
with the performance of its duties under Section 4. The
Investment Adviser will pay the compensation and
expenses of all of its personnel and will make
available, without expense to the Trust or the Fund, the
services of such of its principals, officers and
employees as may be duly elected officers or Trustees of
the Trust, subject to their individual consent to serve
and to any limitations imposed by law. The Investment
Adviser will not be required to bear any expenses
otherwise payable by the Trust or the Fund except as may
be specifically agreed pursuant to Section 7 of this
Agreement, but will be required to pay expenses
specifically allocated to the Investment Adviser in this
paragraph 5. In particular, but without limiting the
generality of the foregoing, the Investment Adviser will
not be required to pay: (i) fees and expenses of any
administrator of the Fund; (ii) organization expenses of
the Trust or the Fund; (iii) fees and expenses incurred
by the Trust in connection with membership in investment
company organizations; (iv) brokers' commissions; (v)
payment for portfolio pricing services to a pricing
agent, if any; (vi) legal, accounting or auditing
expenses (including an allocable portion of the cost of
its employees rendering legal services to the Trust);
(vii) interest, insurance premiums, taxes or
governmental fees; (viii) the fees and expenses of the
transfer agent of the Trust; (ix) the cost of preparing
stock certificates or any other expenses, including
clerical expenses of issue, redemption or repurchase of
shares of the Trust; (x) the expenses of and fees for
registering or qualifying shares for sale and of
maintaining the registration of the Trust and
registering the Trust as a broker or a dealer; (xi) the
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<PAGE>
fees and expenses of Trustees of the Trust who are not
affiliated with the Investment Adviser; (xii) the cost of
preparing and distributing reports and notices to
shareholders, the Securities and Exchange Commission and
other regulatory authorities; (xiii) the fees or
disbursements of custodians of the Trust's assets, including
expenses incurred in the performance of any obligations
enumerated by the Declaration of Trust or By-Laws of the
Trust insofar as they govern agreements with any such
custodian; (xiv) costs in connection with annual or special
meetings of shareholders, including proxy material
preparation, printing and mailing; (xv) litigation and
indemnification expenses and other extraordinary expenses not
incurred in the ordinary course of the Trust's business; or
(xvi) distribution fees and service fees.
6. Limitation of Liability.
(a) The Investment Adviser. The Investment Adviser
will not be liable for any error of judgment or
mistake of law or for any loss sustained by reason
of the adoption of any investment policy or the
purchase, sale, or retention of any security on the
recommendation of the Investment Adviser, whether
or not such recommendation shall have been based
upon its own investigation and research or upon
investigation and research made by any other
individual, firm or corporation; but nothing
contained herein will be construed to protect the
Investment Adviser against any liability to the
Trust or its shareholders by reason of willful
misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its
reckless disregard of its obligations and duties
under this Agreement.
(b) The Trust. It is understood and expressly
stipulated that none of the Trustees or
shareholders of the Trust shall be personally
liable hereunder. Neither the Trustees, officers,
agents nor shareholders of the Trust assume any
personal liability for obligations entered into on
behalf of the Trust. All persons dealing with the
Trust must look solely to the property of the Trust
for the enforcement of any claims against the
Trust. No series of the Trust shall be liable for
any claims against any other series.
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<PAGE>
7. Compensation of the Investment Adviser. Neither the
Investment Adviser nor any affiliate of the Investment
Adviser will act as principal or receive directly or
indirectly any compensation in connection with the
purchase or sale of investment securities by the Trust,
other than the compensation provided for in this Section
and such brokerage commissions as are permitted by the
1940 Act and brokerage and research services as are
permitted by the Securities Exchange Act of 1934, it
being contemplated that WPG will act as principal broker
for the Trust in U.S. securities transactions.
(a) Except as provided in Subsection (b) below, the
Trust, on behalf of the Fund, will pay the
Investment Adviser an annual fee, payable monthly,
which varies in accordance with the total amount of
daily net assets of the Fund under the management
of the Investment Adviser. The annual advisory fee
expressed as a percentage of the average daily net
assets of the Fund is __________________________
__________________. For any period less than a
full month during which this Agreement is in
effect, the fee shall be prorated according to the
proportion which such period bears to a full month.
For the purposes hereof, the net assets of the Fund
shall be computed in the manner specified in the
Fund's prospectus for the computation of the value
of such net assets in connection with the
determination of the net asset value of its shares.
On any day that the net asset value calculation is
suspended as specified in the Fund's prospectus,
the net asset value for purposes of calculating the
advisory fee shall be calculated as of the date
last determined.
(b) If the operating expenses of the Fund in any year
(including the investment advisory fee referred to
in Subsection (a) above, but excluding taxes,
brokerage commissions, interest, dividends on
securities sold short, distribution expenses, and
extraordinary legal fees and expenses) exceed the
limits set by certain state securities
administrators in states in which shares of the
Fund are sold, the amount payable to the Investment
Adviser under Subsection (a) above will be reduced
(but not below $0) by the amount of such excess.
If amounts have already been advanced to the
Investment Adviser under this Agreement, the
Investment Adviser will return such amounts to the
Fund to the extent required by the preceding
sentence.
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<PAGE>
(c) In addition to the foregoing, the investment
Adviser may from time to time agree not to impose
all or a portion of its fee otherwise payable
hereunder (in advance of the time such fee or
portion thereof would otherwise accrue) and/or
undertake to assume responsibility for all or a
portion of any expenses related to the operations
of the Fund that are not otherwise required to be
directly or indirectly borne by the Investment
Adviser. Further, any agreement by the Investment
Adviser to limit the Fund's operating expenses to a
specific level may be made with the understanding
that the Fund, to the extent legally permissable,
will reimburse the Investment Adviser for advisory
fees foregone and/or expenses paid by the
Investment Adviser for a particular year pursuant
to such agreement if in any subsequent year
operating expenses for the Fund are less than the
operating expenses limitation (if any), for such
subsequent year to which the Investment Adviser may
agree. Subject to the foregoing, any fee reduction
or undertaking referred to in this Subsection shall
constitute a binding modification of this Agreement
while it is in effect but may be discontinued or
modified prospectively by the Investment Adviser at
any time.
8. Advertising Material. The Trust will not approve or
authorize the use or distribution, in connection with
the offering of shares of the Fund for sale, of any
literature or advertisements in any form or through any
medium, written or oral, unless not less than ten (10)
days prior to the giving of such approval or
authorization by the Trust, the Trust shall have
submitted such literature or advertising to the
Investment Adviser and the Investment Adviser, within
ten (10) days, shall either have specifically approved
or shall have failed to disapprove such literature or
advertising.
9. Duration and Termination of this Agreement.
(a) Duration. This Agreement shall remain in force
until ________, 1997 and from year to year
thereafter, but only so long as such continuance is
specifically approved at least annually by a vote
of a majority of the Trustees, including a majority
of the Trustees who are not parties hereto or
"interested persons" (as defined by the 1940 Act)
of the Investment Adviser, or by vote of a
"majority of the outstanding voting shares" (as
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<PAGE>
defined in the 1940 Act) of the Trust, subject to
the provisions for termination and all of the other
terms and conditions hereof.
(b) Voluntary Termination. This Agreement may be
terminated without the payment of any penalty by
(a) the Trust, upon sixty (60) days notice in
writing to the Investment Adviser provided such
termination is authorized by resolution of the
Trustees of the Trust or by a vote of a "majority
of its outstanding voting shares" of the Fund (as
defined in the Act) and (b) the Investment Adviser
upon sixty (60) days notice in writing to the
Trust.
(c) Automatic Termination. This Agreement will automatically
and immediately terminate in the event of its
"assignment," as that term is used in the 1940 Act and
rules and regulations promulgated thereunder, by the
Investment Adviser.
10. Trading, Services to Others, Brokerage. Nothing in this
Agreement will in any way limit or restrict the
Investment Adviser or any of its officers, directors,
partners or employees from buying, selling or trading in
any securities for its own or other accounts. The
Investment Adviser may act as an investment adviser to
any other person, firm or corporation, and may perform
management and any other services for any other person,
association, corporation, firm or other entity pursuant
to any contract or otherwise, and take any action or do
anything in connection therewith or related thereto; and
no such performance of management or other services or
taking of any such action or doing of any such thing
shall be in any manner restricted or otherwise affected
by any aspect of any relationship of the Investment
Adviser to or with the Trust or deemed to violate or
give rise to any duty or obligation of the Investment
Adviser to the Trust; provided, however, that it is
understood that any advice rendered to the Trust, on
behalf of the Fund, by the Investment Adviser will be
used solely for the benefit of the Fund. The Trust
recognizes that Investment Adviser, in effecting
transactions for its various accounts, may not always be
able to take or liquidate investment positions in the
same security at the same time and at the same price.
11. Name of the Trust. The Trust hereby agrees that in the
event that neither the Investment Adviser nor any of its
affiliates acts as investment adviser to the Trust, the
name of the Trust will be changed to one that does not
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<PAGE>
contain the name "Weiss, Peck & Greer" or the initials "WPG"
or otherwise suggest an affiliation with the Investment
Adviser.
12. Series of the Trust. The Investment Adviser recognizes
that the Trust may terminate any series of the Trust,
and may create new series.
13. Change of Membership of Investment Adviser. The
Investment Adviser hereby agrees to notify the Trust of
any change in the membership of its limited liability
corporation within a reasonable time after such change.
14. Independent Contractor. The Investment Adviser is an
independent contractor and not an employee of the Trust
for any purpose.
15. Entire Agreement. This Agreement states the entire agreement
of the parties hereto, and is intended to be the complete and
exclusive statement of the terms hereof. It may not be added
to or changed orally, and may not be modified or rescinded
except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.
16. Notices. Any notices sent pursuant to this Agreement
may be sent by mail (postage prepaid) as follows, or to
such other address or addresses as the party may advise
in writing:
(a) In the case of notices sent to the Trust to:
TOMORROW MID-TERM RETIREMENT FUND
One New York Plaza
New York, New York 10004
Attention: Jay C. Nadel
(b) In the case of notices sent to the Investment
Adviser to:
WEISS, PECK & GREER, L.L.C.
One New York Plaza
New York, New York 10004
Attention: Francis H. Powers
17. Governing Law. This Agreement and all performance
hereunder shall be governed by the laws of the State of
New York, which apply to contracts made and to be
performed in the State of New York.
-8-
<PAGE>
18. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way
define or delimit any of the provisions hereof or
otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
TOMORROW FUNDS RETIREMENT TRUST,
on behalf of TOMORROW MID-TERM
RETIREMENT FUND
By:________________________________
Its: ______________________________
WEISS, PECK & GREER, L.L.C.
By:________________________________
Its: _______________________________
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FORM OF
INVESTMENT ADVISORY AGREEMENT
TOMORROW SHORT-TERM RETIREMENT FUND
AGREEMENT made as of the __ day of ___, 1995, by and between
TOMORROW FUNDS RETIREMENT TRUST, a Delaware business trust (the
"Trust"), on behalf of its series TOMORROW SHORT-TERM RETIREMENT FUND
(the "Fund"), and WEISS, PECK & GREER, L.L.C., a Delaware limited
liability corporation (the "Investment Adviser" or "WPG").
The Trust is an open-end, management investment company,
registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Investment Adviser is an investment adviser registered
under the Investment Advisers Act of 1940, as amended, and is a
broker-dealer registered under the Securities Exchange Act of 1934, as
amended.
The Trust desires the Investment Adviser to render services to the
Trust, on behalf of the Fund, and the Investment Adviser is willing to
render such services upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
1. Investment Adviser. The Trust will, and hereby does,
retain the Investment Adviser to act as the investment
adviser of the Fund and to provide certain services, as
more fully set forth below, and the Investment Adviser
hereby accepts such retainer.
2. Sub-Advisers. The Investment Adviser may engage one or
more investment advisers which are either registered as
such or specifically exempt from registration under the
Investment Advisers Act of 1940, as amended, to act as
sub-advisers to provide with respect to the Fund certain
services set forth in Section 4 of this Agreement, all
as shall be set forth in a written contract to which the
Trust, on behalf of the Fund, and the Investment Adviser
shall be parties, which contract shall be subject to
approval by the vote of a majority of the Trustees of
the Trust who are not interested persons of the
Investment Adviser, the sub-adviser or of the Trust,
cast in person at a meeting called for the purpose of
voting on such approval and by the vote of a majority of
the outstanding voting securities of the Fund and
otherwise consistent with the terms of the 1940 Act.
<PAGE>
3. Information Supplied by the Trust. The Trust will, from
time to time, deliver to the Investment Adviser detailed
statements of the assets and resources of the Fund and
information as to the Fund's investment objectives.
4. Advisory Services.
(a) The Investment Adviser will regularly provide the
Trust, on behalf of the Fund, with investment
research, advice and supervision and will furnish
continuously an investment program for the Fund
consistent with the investment objectives and
policies of the Fund. The Investment Adviser will
determine from time to time what securities shall
be purchased for the Fund, what securities shall be
held or sold by the Fund and what portion of the
Fund's assets shall be held uninvested as cash,
subject always to the provisions of the Trust's
Declaration of Trust, By-Laws and its registration
statement under the 1940 Act and under the
Securities Act of 1933 covering the Trust's shares,
as filed with the Securities and Exchange
Commission, and to the investment objectives,
policies and restrictions of the Fund, as each of
the same shall be from time to time in effect, and
subject, further, to such policies and instructions
as the Board of Trustees of the Trust may from time
to time establish. To carry out such
determinations, the Investment Adviser will place
orders for the investment and reinvestment of Fund
assets. The Investment Adviser will exercise full
discretion and act for the Fund in the same manner
and with the same force and effect as the Fund
itself might or could do with respect to purchases,
sales or other transactions, as well as with
respect to all other things necessary or incidental
to the furtherance or conduct of such purchases,
sales or other transactions.
(b) The Investment Adviser will, to the extent
reasonably required in the conduct of the business
of the Fund and upon its request, furnish to the
Fund research, statistical and advisory reports
upon the industries, businesses, corporations or
securities as to which such requests shall be made,
whether or not the Fund shall at the time have any
investment in such industries, businesses,
corporations or securities. The Investment Adviser
will use its best efforts in the preparation of
such reports and will endeavor to consult the
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<PAGE>
persons and sources believed by it to have information
available with respect to such industries, businesses,
corporations or securities.
(c) The Investment Adviser will maintain all books and
records with respect to the Fund's securities
transactions required by sub-paragraphs
(b)(5),(6),(9) and (10) and paragraph (f) of
Rule 31a-1 under the 1940 Act (other than those
records being maintained by the Trust's custodian
or transfer agent) and preserve such records for
the periods prescribed therefor by Rule 31a-2 of
the 1940 Act. The Investment Adviser will also
provide to the Trust's Board of Trustees such
periodic and special reports as the Board may
reasonably request.
5. Allocation of Charges and Expenses. The Investment
Adviser will pay all costs incurred by it in connection
with the performance of its duties under Section 4. The
Investment Adviser will pay the compensation and
expenses of all of its personnel and will make
available, without expense to the Trust or the Fund, the
services of such of its principals, officers and
employees as may be duly elected officers or Trustees of
the Trust, subject to their individual consent to serve
and to any limitations imposed by law. The Investment
Adviser will not be required to bear any expenses
otherwise payable by the Trust or the Fund except as may
be specifically agreed pursuant to Section 7 of this
Agreement, but will be required to pay expenses
specifically allocated to the Investment Adviser in this
paragraph 5. In particular, but without limiting the
generality of the foregoing, the Investment Adviser will
not be required to pay: (i) fees and expenses of any
administrator of the Fund; (ii) organization expenses of
the Trust or the Fund; (iii) fees and expenses incurred
by the Trust in connection with membership in investment
company organizations; (iv) brokers' commissions; (v)
payment for portfolio pricing services to a pricing
agent, if any; (vi) legal, accounting or auditing
expenses (including an allocable portion of the cost of
its employees rendering legal services to the Trust);
(vii) interest, insurance premiums, taxes or
governmental fees; (viii) the fees and expenses of the
transfer agent of the Trust; (ix) the cost of preparing
stock certificates or any other expenses, including
clerical expenses of issue, redemption or repurchase of
shares of the Trust; (x) the expenses of and fees for
registering or qualifying shares for sale and of
maintaining the registration of the Trust and
registering the Trust as a broker or a dealer; (xi) the
-3-
<PAGE>
fees and expenses of Trustees of the Trust who are not
affiliated with the Investment Adviser; (xii) the cost of
preparing and distributing reports and notices to
shareholders, the Securities and Exchange Commission and
other regulatory authorities; (xiii) the fees or
disbursements of custodians of the Trust's assets, including
expenses incurred in the performance of any obligations
enumerated by the Declaration of Trust or By-Laws of the
Trust insofar as they govern agreements with any such
custodian; (xiv) costs in connection with annual or special
meetings of shareholders, including proxy material
preparation, printing and mailing; (xv) litigation and
indemnification expenses and other extraordinary expenses not
incurred in the ordinary course of the Trust's business; or
(xvi) distribution fees and service fees.
6. Limitation of Liability.
(a) The Investment Adviser. The Investment Adviser
will not be liable for any error of judgment or
mistake of law or for any loss sustained by reason
of the adoption of any investment policy or the
purchase, sale, or retention of any security on the
recommendation of the Investment Adviser, whether
or not such recommendation shall have been based
upon its own investigation and research or upon
investigation and research made by any other
individual, firm or corporation; but nothing
contained herein will be construed to protect the
Investment Adviser against any liability to the
Trust or its shareholders by reason of willful
misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its
reckless disregard of its obligations and duties
under this Agreement.
(b) The Trust. It is understood and expressly
stipulated that none of the Trustees or
shareholders of the Trust shall be personally
liable hereunder. Neither the Trustees, officers,
agents nor shareholders of the Trust assume any
personal liability for obligations entered into on
behalf of the Trust. All persons dealing with the
Trust must look solely to the property of the Trust
for the enforcement of any claims against the
Trust. No series of the Trust shall be liable for
any claims against any other series.
-4-
<PAGE>
7. Compensation of the Investment Adviser. Neither the
Investment Adviser nor any affiliate of the Investment
Adviser will act as principal or receive directly or
indirectly any compensation in connection with the
purchase or sale of investment securities by the Trust,
other than the compensation provided for in this Section
and such brokerage commissions as are permitted by the
1940 Act and brokerage and research services as are
permitted by the Securities Exchange Act of 1934, it
being contemplated that WPG will act as principal broker
for the Trust in U.S. securities transactions.
(a) Except as provided in Subsection (b) below, the
Trust, on behalf of the Fund, will pay the
Investment Adviser an annual fee, payable monthly,
which varies in accordance with the total amount of
daily net assets of the Fund under the management
of the Investment Adviser. The annual advisory fee
expressed as a percentage of the average daily net
assets of the Fund is __________________________
__________________. For any period less than a
full month during which this Agreement is in
effect, the fee shall be prorated according to the
proportion which such period bears to a full month.
For the purposes hereof, the net assets of the Fund
shall be computed in the manner specified in the
Fund's prospectus for the computation of the value
of such net assets in connection with the
determination of the net asset value of its shares.
On any day that the net asset value calculation is
suspended as specified in the Fund's prospectus,
the net asset value for purposes of calculating the
advisory fee shall be calculated as of the date
last determined.
(b) If the operating expenses of the Fund in any year
(including the investment advisory fee referred to
in Subsection (a) above, but excluding taxes,
brokerage commissions, interest, dividends on
securities sold short, distribution expenses, and
extraordinary legal fees and expenses) exceed the
limits set by certain state securities
administrators in states in which shares of the
Fund are sold, the amount payable to the Investment
Adviser under Subsection (a) above will be reduced
(but not below $0) by the amount of such excess.
If amounts have already been advanced to the
Investment Adviser under this Agreement, the
Investment Adviser will return such amounts to the
Fund to the extent required by the preceding
sentence.
-5-
<PAGE>
(c) In addition to the foregoing, the investment
Adviser may from time to time agree not to impose
all or a portion of its fee otherwise payable
hereunder (in advance of the time such fee or
portion thereof would otherwise accrue) and/or
undertake to assume responsibility for all or a
portion of any expenses related to the operations
of the Fund that are not otherwise required to be
directly or indirectly borne by the Investment
Adviser. Further, any agreement by the Investment
Adviser to limit the Fund's operating expenses to a
specific level may be made with the understanding
that the Fund, to the extent legally permissable,
will reimburse the Investment Adviser for advisory
fees foregone and/or expenses paid by the
Investment Adviser for a particular year pursuant
to such agreement if in any subsequent year
operating expenses for the Fund are less than the
operating expenses limitation (if any), for such
subsequent year to which the Investment Adviser may
agree. Subject to the foregoing, any fee reduction
or undertaking referred to in this Subsection shall
constitute a binding modification of this Agreement
while it is in effect but may be discontinued or
modified prospectively by the Investment Adviser at
any time.
8. Advertising Material. The Trust will not approve or
authorize the use or distribution, in connection with
the offering of shares of the Fund for sale, of any
literature or advertisements in any form or through any
medium, written or oral, unless not less than ten (10)
days prior to the giving of such approval or
authorization by the Trust, the Trust shall have
submitted such literature or advertising to the
Investment Adviser and the Investment Adviser, within
ten (10) days, shall either have specifically approved
or shall have failed to disapprove such literature or
advertising.
9. Duration and Termination of this Agreement.
(a) Duration. This Agreement shall remain in force
until ________, 1997 and from year to year
thereafter, but only so long as such continuance is
specifically approved at least annually by a vote
of a majority of the Trustees, including a majority
of the Trustees who are not parties hereto or
"interested persons" (as defined by the 1940 Act)
of the Investment Adviser, or by vote of a
"majority of the outstanding voting shares" (as
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<PAGE>
defined in the 1940 Act) of the Trust, subject to
the provisions for termination and all of the other
terms and conditions hereof.
(b) Voluntary Termination. This Agreement may be
terminated without the payment of any penalty by
(a) the Trust, upon sixty (60) days notice in
writing to the Investment Adviser provided such
termination is authorized by resolution of the
Trustees of the Trust or by a vote of a "majority
of its outstanding voting shares" of the Fund (as
defined in the Act) and (b) the Investment Adviser
upon sixty (60) days notice in writing to the
Trust.
(c) Automatic Termination. This Agreement will automatically
and immediately terminate in the event of its
"assignment," as that term is used in the 1940 Act and
rules and regulations promulgated thereunder, by the
Investment Adviser.
10. Trading, Services to Others, Brokerage. Nothing in this
Agreement will in any way limit or restrict the
Investment Adviser or any of its officers, directors,
partners or employees from buying, selling or trading in
any securities for its own or other accounts. The
Investment Adviser may act as an investment adviser to
any other person, firm or corporation, and may perform
management and any other services for any other person,
association, corporation, firm or other entity pursuant
to any contract or otherwise, and take any action or do
anything in connection therewith or related thereto; and
no such performance of management or other services or
taking of any such action or doing of any such thing
shall be in any manner restricted or otherwise affected
by any aspect of any relationship of the Investment
Adviser to or with the Trust or deemed to violate or
give rise to any duty or obligation of the Investment
Adviser to the Trust; provided, however, that it is
understood that any advice rendered to the Trust, on
behalf of the Fund, by the Investment Adviser will be
used solely for the benefit of the Fund. The Trust
recognizes that Investment Adviser, in effecting
transactions for its various accounts, may not always be
able to take or liquidate investment positions in the
same security at the same time and at the same price.
11. Name of the Trust. The Trust hereby agrees that in the
event that neither the Investment Adviser nor any of its
affiliates acts as investment adviser to the Trust, the
name of the Trust will be changed to one that does not
-7-
<PAGE>
contain the name "Weiss, Peck & Greer" or the initials "WPG"
or otherwise suggest an affiliation with the Investment
Adviser.
12. Series of the Trust. The Investment Adviser recognizes
that the Trust may terminate any series of the Trust,
and may create new series.
13. Change of Membership of Investment Adviser. The
Investment Adviser hereby agrees to notify the Trust of
any change in the membership of its limited liability
corporation within a reasonable time after such change.
14. Independent Contractor. The Investment Adviser is an
independent contractor and not an employee of the Trust
for any purpose.
15. Entire Agreement. This Agreement states the entire agreement
of the parties hereto, and is intended to be the complete and
exclusive statement of the terms hereof. It may not be added
to or changed orally, and may not be modified or rescinded
except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.
16. Notices. Any notices sent pursuant to this Agreement
may be sent by mail (postage prepaid) as follows, or to
such other address or addresses as the party may advise
in writing:
(a) In the case of notices sent to the Trust to:
TOMORROW SHORT-TERM RETIREMENT FUND
One New York Plaza
New York, New York 10004
Attention: Jay C. Nadel
(b) In the case of notices sent to the Investment
Adviser to:
WEISS, PECK & GREER, L.L.C.
One New York Plaza
New York, New York 10004
Attention: Francis H. Powers
17. Governing Law. This Agreement and all performance
hereunder shall be governed by the laws of the State of
New York, which apply to contracts made and to be
performed in the State of New York.
-8-
<PAGE>
18. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way
define or delimit any of the provisions hereof or
otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
TOMORROW FUNDS RETIREMENT TRUST,
on behalf of TOMORROW SHORT-TERM
RETIREMENT FUND
By:________________________________
Its: ______________________________
WEISS, PECK & GREER, L.L.C.
By:________________________________
Its: ______________________________
-9-
FORM OF
INVESTMENT ADVISORY AGREEMENT
TOMORROW POST RETIREMENT FUND
AGREEMENT made as of the __ day of ___, 1995, by and between
TOMORROW FUNDS RETIREMENT TRUST, a Delaware business trust (the
"Trust"), on behalf of its series TOMORROW POST RETIREMENT FUND (the
"Fund"), and WEISS, PECK & GREER, L.L.C., a Delaware limited liability
corporation (the "Investment Adviser" or "WPG").
The Trust is an open-end, management investment company,
registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Investment Adviser is an investment adviser registered
under the Investment Advisers Act of 1940, as amended, and is a
broker-dealer registered under the Securities Exchange Act of 1934, as
amended.
The Trust desires the Investment Adviser to render services to the
Trust, on behalf of the Fund, and the Investment Adviser is willing to
render such services upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
1. Investment Adviser. The Trust will, and hereby does,
retain the Investment Adviser to act as the investment
adviser of the Fund and to provide certain services, as
more fully set forth below, and the Investment Adviser
hereby accepts such retainer.
2. Sub-Advisers. The Investment Adviser may engage one or
more investment advisers which are either registered as
such or specifically exempt from registration under the
Investment Advisers Act of 1940, as amended, to act as
sub-advisers to provide with respect to the Fund certain
services set forth in Section 4 of this Agreement, all
as shall be set forth in a written contract to which the
Trust, on behalf of the Fund, and the Investment Adviser
shall be parties, which contract shall be subject to
approval by the vote of a majority of the Trustees of
the Trust who are not interested persons of the
Investment Adviser, the sub-adviser or of the Trust,
cast in person at a meeting called for the purpose of
voting on such approval and by the vote of a majority of
the outstanding voting securities of the Fund and
otherwise consistent with the terms of the 1940 Act.
<PAGE>
3. Information Supplied by the Trust. The Trust will, from
time to time, deliver to the Investment Adviser detailed
statements of the assets and resources of the Fund and
information as to the Fund's investment objectives.
4. Advisory Services.
(a) The Investment Adviser will regularly provide the
Trust, on behalf of the Fund, with investment
research, advice and supervision and will furnish
continuously an investment program for the Fund
consistent with the investment objectives and
policies of the Fund. The Investment Adviser will
determine from time to time what securities shall
be purchased for the Fund, what securities shall be
held or sold by the Fund and what portion of the
Fund's assets shall be held uninvested as cash,
subject always to the provisions of the Trust's
Declaration of Trust, By-Laws and its registration
statement under the 1940 Act and under the
Securities Act of 1933 covering the Trust's shares,
as filed with the Securities and Exchange
Commission, and to the investment objectives,
policies and restrictions of the Fund, as each of
the same shall be from time to time in effect, and
subject, further, to such policies and instructions
as the Board of Trustees of the Trust may from time
to time establish. To carry out such
determinations, the Investment Adviser will place
orders for the investment and reinvestment of Fund
assets. The Investment Adviser will exercise full
discretion and act for the Fund in the same manner
and with the same force and effect as the Fund
itself might or could do with respect to purchases,
sales or other transactions, as well as with
respect to all other things necessary or incidental
to the furtherance or conduct of such purchases,
sales or other transactions.
(b) The Investment Adviser will, to the extent
reasonably required in the conduct of the business
of the Fund and upon its request, furnish to the
Fund research, statistical and advisory reports
upon the industries, businesses, corporations or
securities as to which such requests shall be made,
whether or not the Fund shall at the time have any
investment in such industries, businesses,
corporations or securities. The Investment Adviser
will use its best efforts in the preparation of
such reports and will endeavor to consult the
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<PAGE>
persons and sources believed by it to have information
available with respect to such industries, businesses,
corporations or securities.
(c) The Investment Adviser will maintain all books and
records with respect to the Fund's securities
transactions required by sub-paragraphs
(b)(5),(6),(9) and (10) and paragraph (f) of
Rule 31a-1 under the 1940 Act (other than those
records being maintained by the Trust's custodian
or transfer agent) and preserve such records for
the periods prescribed therefor by Rule 31a-2 of
the 1940 Act. The Investment Adviser will also
provide to the Trust's Board of Trustees such
periodic and special reports as the Board may
reasonably request.
5. Allocation of Charges and Expenses. The Investment
Adviser will pay all costs incurred by it in connection
with the performance of its duties under Section 4. The
Investment Adviser will pay the compensation and
expenses of all of its personnel and will make
available, without expense to the Trust or the Fund, the
services of such of its principals, officers and
employees as may be duly elected officers or Trustees of
the Trust, subject to their individual consent to serve
and to any limitations imposed by law. The Investment
Adviser will not be required to bear any expenses
otherwise payable by the Trust or the Fund except as may
be specifically agreed pursuant to Section 7 of this
Agreement, but will be required to pay expenses
specifically allocated to the Investment Adviser in this
paragraph 5. In particular, but without limiting the
generality of the foregoing, the Investment Adviser will
not be required to pay: (i) fees and expenses of any
administrator of the Fund; (ii) organization expenses of
the Trust or the Fund; (iii) fees and expenses incurred
by the Trust in connection with membership in investment
company organizations; (iv) brokers' commissions; (v)
payment for portfolio pricing services to a pricing
agent, if any; (vi) legal, accounting or auditing
expenses (including an allocable portion of the cost of
its employees rendering legal services to the Trust);
(vii) interest, insurance premiums, taxes or
governmental fees; (viii) the fees and expenses of the
transfer agent of the Trust; (ix) the cost of preparing
stock certificates or any other expenses, including
clerical expenses of issue, redemption or repurchase of
shares of the Trust; (x) the expenses of and fees for
registering or qualifying shares for sale and of
maintaining the registration of the Trust and
registering the Trust as a broker or a dealer; (xi) the
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<PAGE>
fees and expenses of Trustees of the Trust who are not
affiliated with the Investment Adviser; (xii) the cost of
preparing and distributing reports and notices to
shareholders, the Securities and Exchange Commission and
other regulatory authorities; (xiii) the fees or
disbursements of custodians of the Trust's assets, including
expenses incurred in the performance of any obligations
enumerated by the Declaration of Trust or By-Laws of the
Trust insofar as they govern agreements with any such
custodian; (xiv) costs in connection with annual or special
meetings of shareholders, including proxy material
preparation, printing and mailing; (xv) litigation and
indemnification expenses and other extraordinary expenses not
incurred in the ordinary course of the Trust's business; or
(xvi) distribution fees and service fees.
6. Limitation of Liability.
(a) The Investment Adviser. The Investment Adviser
will not be liable for any error of judgment or
mistake of law or for any loss sustained by reason
of the adoption of any investment policy or the
purchase, sale, or retention of any security on the
recommendation of the Investment Adviser, whether
or not such recommendation shall have been based
upon its own investigation and research or upon
investigation and research made by any other
individual, firm or corporation; but nothing
contained herein will be construed to protect the
Investment Adviser against any liability to the
Trust or its shareholders by reason of willful
misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its
reckless disregard of its obligations and duties
under this Agreement.
(b) The Trust. It is understood and expressly
stipulated that none of the Trustees or
shareholders of the Trust shall be personally
liable hereunder. Neither the Trustees, officers,
agents nor shareholders of the Trust assume any
personal liability for obligations entered into on
behalf of the Trust. All persons dealing with the
Trust must look solely to the property of the Trust
for the enforcement of any claims against the
Trust. No series of the Trust shall be liable for
any claims against any other series.
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<PAGE>
7. Compensation of the Investment Adviser. Neither the
Investment Adviser nor any affiliate of the Investment
Adviser will act as principal or receive directly or
indirectly any compensation in connection with the
purchase or sale of investment securities by the Trust,
other than the compensation provided for in this Section
and such brokerage commissions as are permitted by the
1940 Act and brokerage and research services as are
permitted by the Securities Exchange Act of 1934, it
being contemplated that WPG will act as principal broker
for the Trust in U.S. securities transactions.
(a) Except as provided in Subsection (b) below, the
Trust, on behalf of the Fund, will pay the
Investment Adviser an annual fee, payable monthly,
which varies in accordance with the total amount of
daily net assets of the Fund under the management
of the Investment Adviser. The annual advisory fee
expressed as a percentage of the average daily net
assets of the Fund is __________________________
__________________. For any period less than a
full month during which this Agreement is in
effect, the fee shall be prorated according to the
proportion which such period bears to a full month.
For the purposes hereof, the net assets of the Fund
shall be computed in the manner specified in the
Fund's prospectus for the computation of the value
of such net assets in connection with the
determination of the net asset value of its shares.
On any day that the net asset value calculation is
suspended as specified in the Fund's prospectus,
the net asset value for purposes of calculating the
advisory fee shall be calculated as of the date
last determined.
(b) If the operating expenses of the Fund in any year
(including the investment advisory fee referred to
in Subsection (a) above, but excluding taxes,
brokerage commissions, interest, dividends on
securities sold short, distribution expenses, and
extraordinary legal fees and expenses) exceed the
limits set by certain state securities
administrators in states in which shares of the
Fund are sold, the amount payable to the Investment
Adviser under Subsection (a) above will be reduced
(but not below $0) by the amount of such excess.
If amounts have already been advanced to the
Investment Adviser under this Agreement, the
Investment Adviser will return such amounts to the
Fund to the extent required by the preceding
sentence.
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<PAGE>
(c) In addition to the foregoing, the investment
Adviser may from time to time agree not to impose
all or a portion of its fee otherwise payable
hereunder (in advance of the time such fee or
portion thereof would otherwise accrue) and/or
undertake to assume responsibility for all or a
portion of any expenses related to the operations
of the Fund that are not otherwise required to be
directly or indirectly borne by the Investment
Adviser. Further, any agreement by the Investment
Adviser to limit the Fund's operating expenses to a
specific level may be made with the understanding
that the Fund, to the extent legally permissable,
will reimburse the Investment Adviser for advisory
fees foregone and/or expenses paid by the
Investment Adviser for a particular year pursuant
to such agreement if in any subsequent year
operating expenses for the Fund are less than the
operating expenses limitation (if any), for such
subsequent year to which the Investment Adviser may
agree. Subject to the foregoing, any fee reduction
or undertaking referred to in this Subsection shall
constitute a binding modification of this Agreement
while it is in effect but may be discontinued or
modified prospectively by the Investment Adviser at
any time.
8. Advertising Material. The Trust will not approve or
authorize the use or distribution, in connection with
the offering of shares of the Fund for sale, of any
literature or advertisements in any form or through any
medium, written or oral, unless not less than ten (10)
days prior to the giving of such approval or
authorization by the Trust, the Trust shall have
submitted such literature or advertising to the
Investment Adviser and the Investment Adviser, within
ten (10) days, shall either have specifically approved
or shall have failed to disapprove such literature or
advertising.
9. Duration and Termination of this Agreement.
(a) Duration. This Agreement shall remain in force
until ________, 1997 and from year to year
thereafter, but only so long as such continuance is
specifically approved at least annually by a vote
of a majority of the Trustees, including a majority
of the Trustees who are not parties hereto or
"interested persons" (as defined by the 1940 Act)
of the Investment Adviser, or by vote of a
"majority of the outstanding voting shares" (as
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<PAGE>
defined in the 1940 Act) of the Trust, subject to
the provisions for termination and all of the other
terms and conditions hereof.
(b) Voluntary Termination. This Agreement may be
terminated without the payment of any penalty by
(a) the Trust, upon sixty (60) days notice in
writing to the Investment Adviser provided such
termination is authorized by resolution of the
Trustees of the Trust or by a vote of a "majority
of its outstanding voting shares" of the Fund (as
defined in the Act) and (b) the Investment Adviser
upon sixty (60) days notice in writing to the
Trust.
(c) Automatic Termination. This Agreement will automatically
and immediately terminate in the event of its
"assignment," as that term is used in the 1940 Act and
rules and regulations promulgated thereunder, by the
Investment Adviser.
10. Trading, Services to Others, Brokerage. Nothing in this
Agreement will in any way limit or restrict the
Investment Adviser or any of its officers, directors,
partners or employees from buying, selling or trading in
any securities for its own or other accounts. The
Investment Adviser may act as an investment adviser to
any other person, firm or corporation, and may perform
management and any other services for any other person,
association, corporation, firm or other entity pursuant
to any contract or otherwise, and take any action or do
anything in connection therewith or related thereto; and
no such performance of management or other services or
taking of any such action or doing of any such thing
shall be in any manner restricted or otherwise affected
by any aspect of any relationship of the Investment
Adviser to or with the Trust or deemed to violate or
give rise to any duty or obligation of the Investment
Adviser to the Trust; provided, however, that it is
understood that any advice rendered to the Trust, on
behalf of the Fund, by the Investment Adviser will be
used solely for the benefit of the Fund. The Trust
recognizes that Investment Adviser, in effecting
transactions for its various accounts, may not always be
able to take or liquidate investment positions in the
same security at the same time and at the same price.
11. Name of the Trust. The Trust hereby agrees that in the
event that neither the Investment Adviser nor any of its
affiliates acts as investment adviser to the Trust, the
name of the Trust will be changed to one that does not
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<PAGE>
contain the name "Weiss, Peck & Greer" or the initials "WPG"
or otherwise suggest an affiliation with the Investment
Adviser.
12. Series of the Trust. The Investment Adviser recognizes
that the Trust may terminate any series of the Trust,
and may create new series.
13. Change of Membership of Investment Adviser. The
Investment Adviser hereby agrees to notify the Trust of
any change in the membership of its limited liability
corporation within a reasonable time after such change.
14. Independent Contractor. The Investment Adviser is an
independent contractor and not an employee of the Trust
for any purpose.
15. Entire Agreement. This Agreement states the entire agreement
of the parties hereto, and is intended to be the complete and
exclusive statement of the terms hereof. It may not be added
to or changed orally, and may not be modified or rescinded
except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.
16. Notices. Any notices sent pursuant to this Agreement
may be sent by mail (postage prepaid) as follows, or to
such other address or addresses as the party may advise
in writing:
(a) In the case of notices sent to the Trust to:
TOMORROW POST RETIREMENT FUND
One New York Plaza
New York, New York 10004
Attention: Jay C. Nadel
(b) In the case of notices sent to the Investment
Adviser to:
WEISS, PECK & GREER, L.L.C.
One New York Plaza
New York, New York 10004
Attention: Francis H. Powers
17. Governing Law. This Agreement and all performance
hereunder shall be governed by the laws of the State of
New York, which apply to contracts made and to be
performed in the State of New York.
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<PAGE>
18. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way
define or delimit any of the provisions hereof or
otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
TOMORROW FUNDS RETIREMENT TRUST,
on behalf of TOMORROW POST
RETIREMENT FUND
By:________________________________
Its: ______________________________
WEISS, PECK & GREER, L.L.C.
By:________________________________
Its: ______________________________
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FORM OF
INVESTMENT ADVISORY AGREEMENT
CORE LARGE-CAP STOCK FUND
AGREEMENT made as of the __ day of ___, 1995, by and between
TOMORROW FUNDS RETIREMENT TRUST, a Delaware business trust (the
"Trust"), on behalf of its series CORE LARGE-CAP STOCK FUND (the
"Fund"), and WEISS, PECK & GREER, L.L.C., a Delaware limited liability
corporation (the "Investment Adviser" or "WPG").
The Trust is an open-end, management investment company,
registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Investment Adviser is an investment adviser registered
under the Investment Advisers Act of 1940, as amended, and is a
broker-dealer registered under the Securities Exchange Act of 1934, as
amended.
The Trust desires the Investment Adviser to render services to the
Trust, on behalf of the Fund, and the Investment Adviser is willing to
render such services upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
1. Investment Adviser. The Trust will, and hereby does,
retain the Investment Adviser to act as the investment
adviser of the Fund and to provide certain services, as
more fully set forth below, and the Investment Adviser
hereby accepts such retainer.
2. Sub-Advisers. The Investment Adviser may engage one or
more investment advisers which are either registered as
such or specifically exempt from registration under the
Investment Advisers Act of 1940, as amended, to act as
sub-advisers to provide with respect to the Fund certain
services set forth in Section 4 of this Agreement, all
as shall be set forth in a written contract to which the
Trust, on behalf of the Fund, and the Investment Adviser
shall be parties, which contract shall be subject to
approval by the vote of a majority of the Trustees of
the Trust who are not interested persons of the
Investment Adviser, the sub-adviser or of the Trust,
cast in person at a meeting called for the purpose of
voting on such approval and by the vote of a majority of
the outstanding voting securities of the Fund and
otherwise consistent with the terms of the 1940 Act.
<PAGE>
3. Information Supplied by the Trust. The Trust will, from
time to time, deliver to the Investment Adviser detailed
statements of the assets and resources of the Fund and
information as to the Fund's investment objectives.
4. Advisory Services.
(a) The Investment Adviser will regularly provide the
Trust, on behalf of the Fund, with investment
research, advice and supervision and will furnish
continuously an investment program for the Fund
consistent with the investment objectives and
policies of the Fund. The Investment Adviser will
determine from time to time what securities shall
be purchased for the Fund, what securities shall be
held or sold by the Fund and what portion of the
Fund's assets shall be held uninvested as cash,
subject always to the provisions of the Trust's
Declaration of Trust, By-Laws and its registration
statement under the 1940 Act and under the
Securities Act of 1933 covering the Trust's shares,
as filed with the Securities and Exchange
Commission, and to the investment objectives,
policies and restrictions of the Fund, as each of
the same shall be from time to time in effect, and
subject, further, to such policies and instructions
as the Board of Trustees of the Trust may from time
to time establish. To carry out such
determinations, the Investment Adviser will place
orders for the investment and reinvestment of Fund
assets. The Investment Adviser will exercise full
discretion and act for the Fund in the same manner
and with the same force and effect as the Fund
itself might or could do with respect to purchases,
sales or other transactions, as well as with
respect to all other things necessary or incidental
to the furtherance or conduct of such purchases,
sales or other transactions.
(b) The Investment Adviser will, to the extent
reasonably required in the conduct of the business
of the Fund and upon its request, furnish to the
Fund research, statistical and advisory reports
upon the industries, businesses, corporations or
securities as to which such requests shall be made,
whether or not the Fund shall at the time have any
investment in such industries, businesses,
corporations or securities. The Investment Adviser
will use its best efforts in the preparation of
such reports and will endeavor to consult the
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<PAGE>
persons and sources believed by it to have information
available with respect to such industries, businesses,
corporations or securities.
(c) The Investment Adviser will maintain all books and
records with respect to the Fund's securities
transactions required by sub-paragraphs
(b)(5),(6),(9) and (10) and paragraph (f) of
Rule 31a-1 under the 1940 Act (other than those
records being maintained by the Trust's custodian
or transfer agent) and preserve such records for
the periods prescribed therefor by Rule 31a-2 of
the 1940 Act. The Investment Adviser will also
provide to the Trust's Board of Trustees such
periodic and special reports as the Board may
reasonably request.
5. Allocation of Charges and Expenses. The Investment
Adviser will pay all costs incurred by it in connection
with the performance of its duties under Section 4. The
Investment Adviser will pay the compensation and
expenses of all of its personnel and will make
available, without expense to the Trust or the Fund, the
services of such of its principals, officers and
employees as may be duly elected officers or Trustees of
the Trust, subject to their individual consent to serve
and to any limitations imposed by law. The Investment
Adviser will not be required to bear any expenses
otherwise payable by the Trust or the Fund except as may
be specifically agreed pursuant to Section 7 of this
Agreement, but will be required to pay expenses
specifically allocated to the Investment Adviser in this
paragraph 5. In particular, but without limiting the
generality of the foregoing, the Investment Adviser will
not be required to pay: (i) fees and expenses of any
administrator of the Fund; (ii) organization expenses of
the Trust or the Fund; (iii) fees and expenses incurred
by the Trust in connection with membership in investment
company organizations; (iv) brokers' commissions; (v)
payment for portfolio pricing services to a pricing
agent, if any; (vi) legal, accounting or auditing
expenses (including an allocable portion of the cost of
its employees rendering legal services to the Trust);
(vii) interest, insurance premiums, taxes or
governmental fees; (viii) the fees and expenses of the
transfer agent of the Trust; (ix) the cost of preparing
stock certificates or any other expenses, including
clerical expenses of issue, redemption or repurchase of
shares of the Trust; (x) the expenses of and fees for
registering or qualifying shares for sale and of
maintaining the registration of the Trust and
registering the Trust as a broker or a dealer; (xi) the
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<PAGE>
fees and expenses of Trustees of the Trust who are not
affiliated with the Investment Adviser; (xii) the cost of
preparing and distributing reports and notices to
shareholders, the Securities and Exchange Commission and
other regulatory authorities; (xiii) the fees or
disbursements of custodians of the Trust's assets, including
expenses incurred in the performance of any obligations
enumerated by the Declaration of Trust or By-Laws of the
Trust insofar as they govern agreements with any such
custodian; (xiv) costs in connection with annual or special
meetings of shareholders, including proxy material
preparation, printing and mailing; (xv) litigation and
indemnification expenses and other extraordinary expenses not
incurred in the ordinary course of the Trust's business; or
(xvi) distribution fees and service fees.
6. Limitation of Liability.
(a) The Investment Adviser. The Investment Adviser
will not be liable for any error of judgment or
mistake of law or for any loss sustained by reason
of the adoption of any investment policy or the
purchase, sale, or retention of any security on the
recommendation of the Investment Adviser, whether
or not such recommendation shall have been based
upon its own investigation and research or upon
investigation and research made by any other
individual, firm or corporation; but nothing
contained herein will be construed to protect the
Investment Adviser against any liability to the
Trust or its shareholders by reason of willful
misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its
reckless disregard of its obligations and duties
under this Agreement.
(b) The Trust. It is understood and expressly
stipulated that none of the Trustees or
shareholders of the Trust shall be personally
liable hereunder. Neither the Trustees, officers,
agents nor shareholders of the Trust assume any
personal liability for obligations entered into on
behalf of the Trust. All persons dealing with the
Trust must look solely to the property of the Trust
for the enforcement of any claims against the
Trust. No series of the Trust shall be liable for
any claims against any other series.
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<PAGE>
7. Compensation of the Investment Adviser. Neither the
Investment Adviser nor any affiliate of the Investment
Adviser will act as principal or receive directly or
indirectly any compensation in connection with the
purchase or sale of investment securities by the Trust,
other than the compensation provided for in this Section
and such brokerage commissions as are permitted by the
1940 Act and brokerage and research services as are
permitted by the Securities Exchange Act of 1934, it
being contemplated that WPG will act as principal broker
for the Trust in U.S. securities transactions.
(a) Except as provided in Subsection (b) below, the
Trust, on behalf of the Fund, will pay the
Investment Adviser an annual fee, payable monthly,
which varies in accordance with the total amount of
daily net assets of the Fund under the management
of the Investment Adviser. The annual advisory fee
expressed as a percentage of the average daily net
assets of the Fund is __________________________
__________________. For any period less than a
full month during which this Agreement is in
effect, the fee shall be prorated according to the
proportion which such period bears to a full month.
For the purposes hereof, the net assets of the Fund
shall be computed in the manner specified in the
Fund's prospectus for the computation of the value
of such net assets in connection with the
determination of the net asset value of its shares.
On any day that the net asset value calculation is
suspended as specified in the Fund's prospectus,
the net asset value for purposes of calculating the
advisory fee shall be calculated as of the date
last determined.
(b) If the operating expenses of the Fund in any year
(including the investment advisory fee referred to
in Subsection (a) above, but excluding taxes,
brokerage commissions, interest, dividends on
securities sold short, distribution expenses, and
extraordinary legal fees and expenses) exceed the
limits set by certain state securities
administrators in states in which shares of the
Fund are sold, the amount payable to the Investment
Adviser under Subsection (a) above will be reduced
(but not below $0) by the amount of such excess.
If amounts have already been advanced to the
Investment Adviser under this Agreement, the
Investment Adviser will return such amounts to the
Fund to the extent required by the preceding
sentence.
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<PAGE>
(c) In addition to the foregoing, the investment
Adviser may from time to time agree not to impose
all or a portion of its fee otherwise payable
hereunder (in advance of the time such fee or
portion thereof would otherwise accrue) and/or
undertake to assume responsibility for all or a
portion of any expenses related to the operations
of the Fund that are not otherwise required to be
directly or indirectly borne by the Investment
Adviser. Further, any agreement by the Investment
Adviser to limit the Fund's operating expenses to a
specific level may be made with the understanding
that the Fund, to the extent legally permissable,
will reimburse the Investment Adviser for advisory
fees foregone and/or expenses paid by the
Investment Adviser for a particular year pursuant
to such agreement if in any subsequent year
operating expenses for the Fund are less than the
operating expenses limitation (if any), for such
subsequent year to which the Investment Adviser may
agree. Subject to the foregoing, any fee reduction
or undertaking referred to in this Subsection shall
constitute a binding modification of this Agreement
while it is in effect but may be discontinued or
modified prospectively by the Investment Adviser at
any time.
8. Advertising Material. The Trust will not approve or
authorize the use or distribution, in connection with
the offering of shares of the Fund for sale, of any
literature or advertisements in any form or through any
medium, written or oral, unless not less than ten (10)
days prior to the giving of such approval or
authorization by the Trust, the Trust shall have
submitted such literature or advertising to the
Investment Adviser and the Investment Adviser, within
ten (10) days, shall either have specifically approved
or shall have failed to disapprove such literature or
advertising.
9. Duration and Termination of this Agreement.
(a) Duration. This Agreement shall remain in force
until ________, 1997 and from year to year
thereafter, but only so long as such continuance is
specifically approved at least annually by a vote
of a majority of the Trustees, including a majority
of the Trustees who are not parties hereto or
"interested persons" (as defined by the 1940 Act)
of the Investment Adviser, or by vote of a
"majority of the outstanding voting shares" (as
-6-
<PAGE>
defined in the 1940 Act) of the Trust, subject to
the provisions for termination and all of the other
terms and conditions hereof.
(b) Voluntary Termination. This Agreement may be
terminated without the payment of any penalty by
(a) the Trust, upon sixty (60) days notice in
writing to the Investment Adviser provided such
termination is authorized by resolution of the
Trustees of the Trust or by a vote of a "majority
of its outstanding voting shares" of the Fund (as
defined in the Act) and (b) the Investment Adviser
upon sixty (60) days notice in writing to the
Trust.
(c) Automatic Termination. This Agreement will automatically
and immediately terminate in the event of its
"assignment," as that term is used in the 1940 Act and
rules and regulations promulgated thereunder, by the
Investment Adviser.
10. Trading, Services to Others, Brokerage. Nothing in this
Agreement will in any way limit or restrict the
Investment Adviser or any of its officers, directors,
partners or employees from buying, selling or trading in
any securities for its own or other accounts. The
Investment Adviser may act as an investment adviser to
any other person, firm or corporation, and may perform
management and any other services for any other person,
association, corporation, firm or other entity pursuant
to any contract or otherwise, and take any action or do
anything in connection therewith or related thereto; and
no such performance of management or other services or
taking of any such action or doing of any such thing
shall be in any manner restricted or otherwise affected
by any aspect of any relationship of the Investment
Adviser to or with the Trust or deemed to violate or
give rise to any duty or obligation of the Investment
Adviser to the Trust; provided, however, that it is
understood that any advice rendered to the Trust, on
behalf of the Fund, by the Investment Adviser will be
used solely for the benefit of the Fund. The Trust
recognizes that Investment Adviser, in effecting
transactions for its various accounts, may not always be
able to take or liquidate investment positions in the
same security at the same time and at the same price.
11. Name of the Trust. The Trust hereby agrees that in the
event that neither the Investment Adviser nor any of its
affiliates acts as investment adviser to the Trust, the
name of the Trust will be changed to one that does not
-7-
<PAGE>
contain the name "Weiss, Peck & Greer" or the initials "WPG"
or otherwise suggest an affiliation with the Investment
Adviser.
12. Series of the Trust. The Investment Adviser recognizes
that the Trust may terminate any series of the Trust,
and may create new series.
13. Change of Membership of Investment Adviser. The
Investment Adviser hereby agrees to notify the Trust of
any change in the membership of its limited liability
corporation within a reasonable time after such change.
14. Independent Contractor. The Investment Adviser is an
independent contractor and not an employee of the Trust
for any purpose.
15. Entire Agreement. This Agreement states the entire agreement
of the parties hereto, and is intended to be the complete and
exclusive statement of the terms hereof. It may not be added
to or changed orally, and may not be modified or rescinded
except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.
16. Notices. Any notices sent pursuant to this Agreement
may be sent by mail (postage prepaid) as follows, or to
such other address or addresses as the party may advise
in writing:
(a) In the case of notices sent to the Trust to:
CORE LARGE-CAP STOCK FUND
One New York Plaza
New York, New York 10004
Attention: Jay C. Nadel
(b) In the case of notices sent to the Investment
Adviser to:
WEISS, PECK & GREER, L.L.C.
One New York Plaza
New York, New York 10004
Attention: Francis H. Powers
17. Governing Law. This Agreement and all performance
hereunder shall be governed by the laws of the State of
New York, which apply to contracts made and to be
performed in the State of New York.
-8-
<PAGE>
18. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way
define or delimit any of the provisions hereof or
otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
TOMORROW FUNDS RETIREMENT TRUST,
on behalf of CORE LARGE-CAP
STOCK FUND
By:________________________________
Its: ______________________________
WEISS, PECK & GREER, L.L.C.
By:________________________________
Its: ______________________________
-9-
FORM OF
INVESTMENT ADVISORY AGREEMENT
CORE SMALL-CAP STOCK FUND
AGREEMENT made as of the __ day of ___, 1995, by and between
TOMORROW FUNDS RETIREMENT TRUST, a Delaware business trust (the
"Trust"), on behalf of its series CORE SMALL-CAP STOCK FUND (the
"Fund"), and WEISS, PECK & GREER, L.L.C., a Delaware limited liability
corporation (the "Investment Adviser" or "WPG").
The Trust is an open-end, management investment company,
registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Investment Adviser is an investment adviser registered
under the Investment Advisers Act of 1940, as amended, and is a
broker-dealer registered under the Securities Exchange Act of 1934, as
amended.
The Trust desires the Investment Adviser to render services to the
Trust, on behalf of the Fund, and the Investment Adviser is willing to
render such services upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
1. Investment Adviser. The Trust will, and hereby does,
retain the Investment Adviser to act as the investment
adviser of the Fund and to provide certain services, as
more fully set forth below, and the Investment Adviser
hereby accepts such retainer.
2. Sub-Advisers. The Investment Adviser may engage one or
more investment advisers which are either registered as
such or specifically exempt from registration under the
Investment Advisers Act of 1940, as amended, to act as
sub-advisers to provide with respect to the Fund certain
services set forth in Section 4 of this Agreement, all
as shall be set forth in a written contract to which the
Trust, on behalf of the Fund, and the Investment Adviser
shall be parties, which contract shall be subject to
approval by the vote of a majority of the Trustees of
the Trust who are not interested persons of the
Investment Adviser, the sub-adviser or of the Trust,
cast in person at a meeting called for the purpose of
voting on such approval and by the vote of a majority of
the outstanding voting securities of the Fund and
otherwise consistent with the terms of the 1940 Act.
<PAGE>
3. Information Supplied by the Trust. The Trust will, from
time to time, deliver to the Investment Adviser detailed
statements of the assets and resources of the Fund and
information as to the Fund's investment objectives.
4. Advisory Services.
(a) The Investment Adviser will regularly provide the
Trust, on behalf of the Fund, with investment
research, advice and supervision and will furnish
continuously an investment program for the Fund
consistent with the investment objectives and
policies of the Fund. The Investment Adviser will
determine from time to time what securities shall
be purchased for the Fund, what securities shall be
held or sold by the Fund and what portion of the
Fund's assets shall be held uninvested as cash,
subject always to the provisions of the Trust's
Declaration of Trust, By-Laws and its registration
statement under the 1940 Act and under the
Securities Act of 1933 covering the Trust's shares,
as filed with the Securities and Exchange
Commission, and to the investment objectives,
policies and restrictions of the Fund, as each of
the same shall be from time to time in effect, and
subject, further, to such policies and instructions
as the Board of Trustees of the Trust may from time
to time establish. To carry out such
determinations, the Investment Adviser will place
orders for the investment and reinvestment of Fund
assets. The Investment Adviser will exercise full
discretion and act for the Fund in the same manner
and with the same force and effect as the Fund
itself might or could do with respect to purchases,
sales or other transactions, as well as with
respect to all other things necessary or incidental
to the furtherance or conduct of such purchases,
sales or other transactions.
(b) The Investment Adviser will, to the extent
reasonably required in the conduct of the business
of the Fund and upon its request, furnish to the
Fund research, statistical and advisory reports
upon the industries, businesses, corporations or
securities as to which such requests shall be made,
whether or not the Fund shall at the time have any
investment in such industries, businesses,
corporations or securities. The Investment Adviser
will use its best efforts in the preparation of
such reports and will endeavor to consult the
-2-
<PAGE>
persons and sources believed by it to have information
available with respect to such industries, businesses,
corporations or securities.
(c) The Investment Adviser will maintain all books and
records with respect to the Fund's securities
transactions required by sub-paragraphs
(b)(5),(6),(9) and (10) and paragraph (f) of
Rule 31a-1 under the 1940 Act (other than those
records being maintained by the Trust's custodian
or transfer agent) and preserve such records for
the periods prescribed therefor by Rule 31a-2 of
the 1940 Act. The Investment Adviser will also
provide to the Trust's Board of Trustees such
periodic and special reports as the Board may
reasonably request.
5. Allocation of Charges and Expenses. The Investment
Adviser will pay all costs incurred by it in connection
with the performance of its duties under Section 4. The
Investment Adviser will pay the compensation and
expenses of all of its personnel and will make
available, without expense to the Trust or the Fund, the
services of such of its principals, officers and
employees as may be duly elected officers or Trustees of
the Trust, subject to their individual consent to serve
and to any limitations imposed by law. The Investment
Adviser will not be required to bear any expenses
otherwise payable by the Trust or the Fund except as may
be specifically agreed pursuant to Section 7 of this
Agreement, but will be required to pay expenses
specifically allocated to the Investment Adviser in this
paragraph 5. In particular, but without limiting the
generality of the foregoing, the Investment Adviser will
not be required to pay: (i) fees and expenses of any
administrator of the Fund; (ii) organization expenses of
the Trust or the Fund; (iii) fees and expenses incurred
by the Trust in connection with membership in investment
company organizations; (iv) brokers' commissions; (v)
payment for portfolio pricing services to a pricing
agent, if any; (vi) legal, accounting or auditing
expenses (including an allocable portion of the cost of
its employees rendering legal services to the Trust);
(vii) interest, insurance premiums, taxes or
governmental fees; (viii) the fees and expenses of the
transfer agent of the Trust; (ix) the cost of preparing
stock certificates or any other expenses, including
clerical expenses of issue, redemption or repurchase of
shares of the Trust; (x) the expenses of and fees for
registering or qualifying shares for sale and of
maintaining the registration of the Trust and
registering the Trust as a broker or a dealer; (xi) the
-3-
<PAGE>
fees and expenses of Trustees of the Trust who are not
affiliated with the Investment Adviser; (xii) the cost of
preparing and distributing reports and notices to
shareholders, the Securities and Exchange Commission and
other regulatory authorities; (xiii) the fees or
disbursements of custodians of the Trust's assets, including
expenses incurred in the performance of any obligations
enumerated by the Declaration of Trust or By-Laws of the
Trust insofar as they govern agreements with any such
custodian; (xiv) costs in connection with annual or special
meetings of shareholders, including proxy material
preparation, printing and mailing; (xv) litigation and
indemnification expenses and other extraordinary expenses not
incurred in the ordinary course of the Trust's business; or
(xvi) distribution fees and service fees.
6. Limitation of Liability.
(a) The Investment Adviser. The Investment Adviser
will not be liable for any error of judgment or
mistake of law or for any loss sustained by reason
of the adoption of any investment policy or the
purchase, sale, or retention of any security on the
recommendation of the Investment Adviser, whether
or not such recommendation shall have been based
upon its own investigation and research or upon
investigation and research made by any other
individual, firm or corporation; but nothing
contained herein will be construed to protect the
Investment Adviser against any liability to the
Trust or its shareholders by reason of willful
misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its
reckless disregard of its obligations and duties
under this Agreement.
(b) The Trust. It is understood and expressly
stipulated that none of the Trustees or
shareholders of the Trust shall be personally
liable hereunder. Neither the Trustees, officers,
agents nor shareholders of the Trust assume any
personal liability for obligations entered into on
behalf of the Trust. All persons dealing with the
Trust must look solely to the property of the Trust
for the enforcement of any claims against the
Trust. No series of the Trust shall be liable for
any claims against any other series.
-4-
<PAGE>
7. Compensation of the Investment Adviser. Neither the
Investment Adviser nor any affiliate of the Investment
Adviser will act as principal or receive directly or
indirectly any compensation in connection with the
purchase or sale of investment securities by the Trust,
other than the compensation provided for in this Section
and such brokerage commissions as are permitted by the
1940 Act and brokerage and research services as are
permitted by the Securities Exchange Act of 1934, it
being contemplated that WPG will act as principal broker
for the Trust in U.S. securities transactions.
(a) Except as provided in Subsection (b) below, the
Trust, on behalf of the Fund, will pay the
Investment Adviser an annual fee, payable monthly,
which varies in accordance with the total amount of
daily net assets of the Fund under the management
of the Investment Adviser. The annual advisory fee
expressed as a percentage of the average daily net
assets of the Fund is __________________________
__________________. For any period less than a
full month during which this Agreement is in
effect, the fee shall be prorated according to the
proportion which such period bears to a full month.
For the purposes hereof, the net assets of the Fund
shall be computed in the manner specified in the
Fund's prospectus for the computation of the value
of such net assets in connection with the
determination of the net asset value of its shares.
On any day that the net asset value calculation is
suspended as specified in the Fund's prospectus,
the net asset value for purposes of calculating the
advisory fee shall be calculated as of the date
last determined.
(b) If the operating expenses of the Fund in any year
(including the investment advisory fee referred to
in Subsection (a) above, but excluding taxes,
brokerage commissions, interest, dividends on
securities sold short, distribution expenses, and
extraordinary legal fees and expenses) exceed the
limits set by certain state securities
administrators in states in which shares of the
Fund are sold, the amount payable to the Investment
Adviser under Subsection (a) above will be reduced
(but not below $0) by the amount of such excess.
If amounts have already been advanced to the
Investment Adviser under this Agreement, the
Investment Adviser will return such amounts to the
Fund to the extent required by the preceding
sentence.
-5-
<PAGE>
(c) In addition to the foregoing, the investment
Adviser may from time to time agree not to impose
all or a portion of its fee otherwise payable
hereunder (in advance of the time such fee or
portion thereof would otherwise accrue) and/or
undertake to assume responsibility for all or a
portion of any expenses related to the operations
of the Fund that are not otherwise required to be
directly or indirectly borne by the Investment
Adviser. Further, any agreement by the Investment
Adviser to limit the Fund's operating expenses to a
specific level may be made with the understanding
that the Fund, to the extent legally permissable,
will reimburse the Investment Adviser for advisory
fees foregone and/or expenses paid by the
Investment Adviser for a particular year pursuant
to such agreement if in any subsequent year
operating expenses for the Fund are less than the
operating expenses limitation (if any), for such
subsequent year to which the Investment Adviser may
agree. Subject to the foregoing, any fee reduction
or undertaking referred to in this Subsection shall
constitute a binding modification of this Agreement
while it is in effect but may be discontinued or
modified prospectively by the Investment Adviser at
any time.
8. Advertising Material. The Trust will not approve or
authorize the use or distribution, in connection with
the offering of shares of the Fund for sale, of any
literature or advertisements in any form or through any
medium, written or oral, unless not less than ten (10)
days prior to the giving of such approval or
authorization by the Trust, the Trust shall have
submitted such literature or advertising to the
Investment Adviser and the Investment Adviser, within
ten (10) days, shall either have specifically approved
or shall have failed to disapprove such literature or
advertising.
9. Duration and Termination of this Agreement.
(a) Duration. This Agreement shall remain in force
until ________, 1997 and from year to year
thereafter, but only so long as such continuance is
specifically approved at least annually by a vote
of a majority of the Trustees, including a majority
of the Trustees who are not parties hereto or
"interested persons" (as defined by the 1940 Act)
of the Investment Adviser, or by vote of a
"majority of the outstanding voting shares" (as
-6-
<PAGE>
defined in the 1940 Act) of the Trust, subject to
the provisions for termination and all of the other
terms and conditions hereof.
(b) Voluntary Termination. This Agreement may be
terminated without the payment of any penalty by
(a) the Trust, upon sixty (60) days notice in
writing to the Investment Adviser provided such
termination is authorized by resolution of the
Trustees of the Trust or by a vote of a "majority
of its outstanding voting shares" of the Fund (as
defined in the Act) and (b) the Investment Adviser
upon sixty (60) days notice in writing to the
Trust.
(c) Automatic Termination. This Agreement will automatically
and immediately terminate in the event of its
"assignment," as that term is used in the 1940 Act and
rules and regulations promulgated thereunder, by the
Investment Adviser.
10. Trading, Services to Others, Brokerage. Nothing in this
Agreement will in any way limit or restrict the
Investment Adviser or any of its officers, directors,
partners or employees from buying, selling or trading in
any securities for its own or other accounts. The
Investment Adviser may act as an investment adviser to
any other person, firm or corporation, and may perform
management and any other services for any other person,
association, corporation, firm or other entity pursuant
to any contract or otherwise, and take any action or do
anything in connection therewith or related thereto; and
no such performance of management or other services or
taking of any such action or doing of any such thing
shall be in any manner restricted or otherwise affected
by any aspect of any relationship of the Investment
Adviser to or with the Trust or deemed to violate or
give rise to any duty or obligation of the Investment
Adviser to the Trust; provided, however, that it is
understood that any advice rendered to the Trust, on
behalf of the Fund, by the Investment Adviser will be
used solely for the benefit of the Fund. The Trust
recognizes that Investment Adviser, in effecting
transactions for its various accounts, may not always be
able to take or liquidate investment positions in the
same security at the same time and at the same price.
11. Name of the Trust. The Trust hereby agrees that in the
event that neither the Investment Adviser nor any of its
affiliates acts as investment adviser to the Trust, the
name of the Trust will be changed to one that does not
-7-
<PAGE>
contain the name "Weiss, Peck & Greer" or the initials "WPG"
or otherwise suggest an affiliation with the Investment
Adviser.
12. Series of the Trust. The Investment Adviser recognizes
that the Trust may terminate any series of the Trust,
and may create new series.
13. Change of Membership of Investment Adviser. The
Investment Adviser hereby agrees to notify the Trust of
any change in the membership of its limited liability
corporation within a reasonable time after such change.
14. Independent Contractor. The Investment Adviser is an
independent contractor and not an employee of the Trust
for any purpose.
15. Entire Agreement. This Agreement states the entire agreement
of the parties hereto, and is intended to be the complete and
exclusive statement of the terms hereof. It may not be added
to or changed orally, and may not be modified or rescinded
except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.
16. Notices. Any notices sent pursuant to this Agreement
may be sent by mail (postage prepaid) as follows, or to
such other address or addresses as the party may advise
in writing:
(a) In the case of notices sent to the Trust to:
CORE SMALL-CAP STOCK FUND
One New York Plaza
New York, New York 10004
Attention: Jay C. Nadel
(b) In the case of notices sent to the Investment
Adviser to:
WEISS, PECK & GREER, L.L.C.
One New York Plaza
New York, New York 10004
Attention: Francis H. Powers
17. Governing Law. This Agreement and all performance
hereunder shall be governed by the laws of the State of
New York, which apply to contracts made and to be
performed in the State of New York.
-8-
<PAGE>
18. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way
define or delimit any of the provisions hereof or
otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
TOMORROW FUNDS RETIREMENT TRUST,
on behalf of CORE SMALL-CAP
STOCK FUND
By:________________________________
Its: ______________________________
WEISS, PECK & GREER, L.L.C.
By:________________________________
Its: ______________________________
-9-
FORM OF
ADMINISTRATION AGREEMENT
TOMORROW LONG-TERM RETIREMENT FUND
AGREEMENT made as of the ___ day of _____, 1995, by and between
TOMORROW FUNDS RETIREMENT TRUST, a Delaware business trust (the
"Trust"), on behalf of its series TOMORROW LONG-TERM RETIREMENT FUND
(the "Fund"), and WEISS, PECK & GREER, L.L.C., a Delaware limited
liability corporation (the "Administrator").
The Trust is an open-end, management investment company,
registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Administrator is an investment adviser registered
under the Investment Advisers Act of 1940, as amended and is a
broker-dealer registered under the Securities Exchange Act of 1934, as
amended.
The Trust desires the Administrator to render services to the
Trust, on behalf of the Fund, and the Administrator is willing to
render such services upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
1. Administrative Services.
(a) Subject to the general supervision of the Board of
Trustees of the Trust, the Administrator will provide
certain administrative services to the Trust, on behalf
of the Fund. The Administrator will, to the extent such
services are not required to be performed by others
pursuant to the custodian agreement, the transfer agency
agreement (to the extent that a person other than the
Administrator is serving thereunder as the Trust's
transfer agent), or other arrangements (i) provide
supervision of all aspects of the Fund's operations not
referred to in Section 4 of the current Investment
Advisory Agreement between the Trust, on behalf of the
Fund, and the Trust's investment adviser (the
"Investment Advisory Agreement"); (ii) provide the Fund
with personnel to perform such executive,
administrative, accounting and clerical services as are
reasonably necessary to provide effective administration
of the Fund; (iii) arrange for, at the Fund's expense,
(a) the preparation for the Fund of all required tax
returns, (b) the preparation and submission of reports
to existing shareholders and (c) the periodic updating
of the Fund's prospectuses and statements of additional
<PAGE>
information and the preparation of reports filed with the
Securities and Exchange Commission and other regulatory
authorities; (iv) maintain all of the Fund's records not
required to be maintained by the investment adviser pursuant
to Section 4(c) of the Investment Advisory Agreement; (v)
provide the Fund with adequate office space and all necessary
office equipment and services, including, without limitation,
telephone service, heat, utilities, stationery supplies and
similar items; and (vi) provide to the Fund transfer
agency-related and shareholder relations services and
facilities and the services of one or more of its employees
or officers, or employees or officers of its affiliates,
relating to such functions (including salaries and benefits,
office space and supplies, equipment and teaching).
(b) The Administrator will also provide to the Trust's Board
of Trustees such periodic and special reports as the
Board may reasonably request. The Administrator shall
for all purposes herein be deemed to be an independent
contractor and shall, except as otherwise expressly
provided or authorized, have no authority to act for or
represent the Trust in any way or otherwise be deemed an
agent of the Trust.
(c) The Administrator will notify the Trust of any change in its
membership within a reasonable time after such change.
(d) The services hereunder are not deemed exclusive and the
Administrator shall be free to render similar services to
others so long as its services under this Agreement are not
impaired thereby.
2. Allocation of Charges and Expenses. Except as otherwise
provided in Section 1 of this Agreement, the Administrator
will pay all costs it incurs in connection with the
performance of its duties under Section 1 of this Agreement.
The Administrator will pay the compensation and expenses of
all of its personnel and will make available, without expense
to the Trust or the Fund, the services of such of its
principals, officers and employees as may be duly elected
officers or Trustees of the Trust, subject to their
individual consent to serve and to any limitations imposed by
law. The Administrator will not be required to bear any
expenses otherwise payable by the Trust or the Fund except as
may be specifically agreed pursuant to Section 3 of this
Agreement, but will be required to pay expenses specifically
allocated to the Administrator in this Section 2. In
particular, but without limiting the generality of the
foregoing, the Administrator will not be required to pay:
-2-
<PAGE>
(i) fees and expenses of any investment adviser of the Fund; (ii)
organization expenses of the Trust or the Fund; (iii) fees and
expenses incurred by the Trust in connection with membership in
investment company organizations; (iv) brokers' commissions; (v)
payment for portfolio pricing services to a pricing agent, if any;
(vi) legal or auditing expenses (including an allocable portion of
the cost of its employees rendering legal services to the Trust);
(vii) interest, insurance premiums, taxes or governmental fees;
(viii) the fees and expenses of the transfer agent of the Trust;
(ix) the cost of preparing stock certificates or any other
expenses, including, without limitation, clerical expenses of
issue, redemption or repurchase of shares of the Trust; (x) the
expenses of and fees for registering or qualifying shares of the
Trust for sale and of maintaining the registration of the Trust
and registering the Trust as a broker or a dealer; (xi) the fees
and expenses of Trustees of the Trust who are not affiliated with
the Administrator; (xii) the cost of preparing and distributing
reports and notices to shareholders, the Securities and Exchange
Commission and other regulatory authorities; (xiii) the fees or
disbursements of custodians of the Trust's assets, including
expenses incurred in the performance of any obligations enumerated
by the Agreement and Declaration of Trust or By-Laws of the Trust
insofar as they govern agreements with any such custodian; (xiv)
costs in connection with annual or special meetings of
shareholders, including proxy material preparation, printing and
mailing; (xv) litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the
Trust's business; or (xvi) distribution fees and service fees.
3. Compensation of the Administrator.
(a) For all services to be rendered and payments made as provided
in Sections 1 and 2 hereof, the Trust, on behalf of the Fund,
will pay the Administrator on the last day of each month a
fee at an annual rate equal to
---------------------------------------------------.
The "average daily net assets" of the Fund shall be
determined on the basis set forth in the Fund's prospectus or
otherwise consistent with the 1940 Act and the regulations
promulgated thereunder.
(b) If the operating expenses of the Fund in any year (including
the administration fee referred to in Subsection (a) above,
but excluding taxes, brokerage commissions, interest,
dividends on securities sold short, distribution expenses,
and extraordinary legal fees and expenses) exceed the limits
set by certain state securities administrators in states in
which
-3-
<PAGE>
shares of the Fund are sold, the amount payable to the
Administrator under Subsection (a) above will be reduced (but
not below $0) by the amount of such excess. If amounts have
already been advanced to the Administrator under this
Agreement, the Administrator will return such amounts to the
Fund to the extent required by the preceding sentence.
(c) In addition to the foregoing, the Administrator may from
time to time agree not to impose all or a portion of its
fee otherwise payable hereunder (in advance of the time
such fee or portion thereof would otherwise accrue) and/
or undertake to assume responsibility for all or a
portion of any expenses related to the operations of the
Fund that are not otherwise required to be directly or
indirectly borne by the Administrator. Further, any
agreement by the Administrator to limit the Fund's
operating expenses to a specific level may be made with
the understanding that the Fund, to the extent legally
permissable, will reimburse the Administrator for
advisory fees foregone and/or expenses paid by the
Administrator for a particular year pursuant to such
agreement if in any subsequent year operating expenses
for the Fund are less than the operating expenses
limitation (if any), for such subsequent year to which
the Administrator may agree. Subject to the foregoing,
any fee reduction or undertaking referred to in this
Subsection shall constitute a binding modification of
this Agreement while it is in effect but may be
discontinued or modified prospectively by the
Administrator at any time.
4. Limitation of Liability of Administrator and Trust. The
Administrator shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Trust or
the Fund in connection with the matters to which this
Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by the
Administrator of its obligations and duties under this
Agreement. Any person, even though also employed by the
Administrator, who may be or become an employee of and paid
by the Trust shall be deemed, when acting within the scope of
his employment by the Trust, to be acting in such employment
solely for the Trust and not as its employee or agent. It is
understood and expressly stipulated that none of the trustees
or shareholders of the Trust shall be personally liable
hereunder. None of the trustees, officers, agents or
shareholders of the Trust assume any personal liability for
obligations entered into on behalf of the Trust. All persons
dealing with the Trust must look solely to the property of
-4-
<PAGE>
the Trust for the enforcement of any claims against the Trust. The
Fund shall not be liable for any claims against any other series
of the Trust.
5. Duration and Termination of this Agreement. This Agreement
shall remain in force until ______, 1996 and shall continue
for periods of one year thereafter, but only so long as such
continuance is specifically approved at least annually by the
vote of a majority of the Board of Trustees of the Trust.
This Agreement may, on 60 days' written notice to the other
party, be terminated at any time without the payment of any
penalty by the Trust or by the Administrator.
6. Amendment of this Agreement. No provisions of this Agreement may
be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is
sought.
7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York.
8. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or
effect. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
TOMORROW FUNDS RETIREMENT TRUST,
on behalf of TOMORROW LONG-TERM
RETIREMENT FUND
By:________________________________
Its:______________________________
-5-
<PAGE>
WEISS, PECK & GREER, L.L.C.
By:________________________________
Its: _____________________________
-6-
FORM OF
ADMINISTRATION AGREEMENT
TOMORROW MID-TERM RETIREMENT FUND
AGREEMENT made as of the ___ day of _____, 1995, by and between
TOMORROW FUNDS RETIREMENT TRUST, a Delaware business trust (the
"Trust"), on behalf of its series TOMORROW MID-TERM RETIREMENT FUND
(the "Fund"), and WEISS, PECK & GREER, L.L.C., a Delaware limited
liability corporation (the "Administrator").
The Trust is an open-end, management investment company,
registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Administrator is an investment adviser registered
under the Investment Advisers Act of 1940, as amended and is a
broker-dealer registered under the Securities Exchange Act of 1934, as
amended.
The Trust desires the Administrator to render services to the
Trust, on behalf of the Fund, and the Administrator is willing to
render such services upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
1. Administrative Services.
(a) Subject to the general supervision of the Board of
Trustees of the Trust, the Administrator will provide
certain administrative services to the Trust, on behalf
of the Fund. The Administrator will, to the extent such
services are not required to be performed by others
pursuant to the custodian agreement, the transfer agency
agreement (to the extent that a person other than the
Administrator is serving thereunder as the Trust's
transfer agent), or other arrangements (i) provide
supervision of all aspects of the Fund's operations not
referred to in Section 4 of the current Investment
Advisory Agreement between the Trust, on behalf of the
Fund, and the Trust's investment adviser (the
"Investment Advisory Agreement"); (ii) provide the Fund
with personnel to perform such executive,
administrative, accounting and clerical services as are
reasonably necessary to provide effective administration
of the Fund; (iii) arrange for, at the Fund's expense,
(a) the preparation for the Fund of all required tax
returns, (b) the preparation and submission of reports
to existing shareholders and (c) the periodic updating
of the Fund's prospectuses and statements of additional
<PAGE>
information and the preparation of reports filed with the
Securities and Exchange Commission and other regulatory
authorities; (iv) maintain all of the Fund's records not
required to be maintained by the investment adviser pursuant
to Section 4(c) of the Investment Advisory Agreement; (v)
provide the Fund with adequate office space and all necessary
office equipment and services, including, without limitation,
telephone service, heat, utilities, stationery supplies and
similar items; and (vi) provide to the Fund transfer
agency-related and shareholder relations services and
facilities and the services of one or more of its employees
or officers, or employees or officers of its affiliates,
relating to such functions (including salaries and benefits,
office space and supplies, equipment and teaching).
(b) The Administrator will also provide to the Trust's Board
of Trustees such periodic and special reports as the
Board may reasonably request. The Administrator shall
for all purposes herein be deemed to be an independent
contractor and shall, except as otherwise expressly
provided or authorized, have no authority to act for or
represent the Trust in any way or otherwise be deemed an
agent of the Trust.
(c) The Administrator will notify the Trust of any change in its
membership within a reasonable time after such change.
(d) The services hereunder are not deemed exclusive and the
Administrator shall be free to render similar services to
others so long as its services under this Agreement are not
impaired thereby.
2. Allocation of Charges and Expenses. Except as otherwise
provided in Section 1 of this Agreement, the Administrator
will pay all costs it incurs in connection with the
performance of its duties under Section 1 of this Agreement.
The Administrator will pay the compensation and expenses of
all of its personnel and will make available, without expense
to the Trust or the Fund, the services of such of its
principals, officers and employees as may be duly elected
officers or Trustees of the Trust, subject to their
individual consent to serve and to any limitations imposed by
law. The Administrator will not be required to bear any
expenses otherwise payable by the Trust or the Fund except as
may be specifically agreed pursuant to Section 3 of this
Agreement, but will be required to pay expenses specifically
allocated to the Administrator in this Section 2. In
particular, but without limiting the generality of the
foregoing, the Administrator will not be required to pay:
-2-
<PAGE>
(i) fees and expenses of any investment adviser of the Fund; (ii)
organization expenses of the Trust or the Fund; (iii) fees and
expenses incurred by the Trust in connection with membership in
investment company organizations; (iv) brokers' commissions; (v)
payment for portfolio pricing services to a pricing agent, if any;
(vi) legal or auditing expenses (including an allocable portion of
the cost of its employees rendering legal services to the Trust);
(vii) interest, insurance premiums, taxes or governmental fees;
(viii) the fees and expenses of the transfer agent of the Trust;
(ix) the cost of preparing stock certificates or any other
expenses, including, without limitation, clerical expenses of
issue, redemption or repurchase of shares of the Trust; (x) the
expenses of and fees for registering or qualifying shares of the
Trust for sale and of maintaining the registration of the Trust
and registering the Trust as a broker or a dealer; (xi) the fees
and expenses of Trustees of the Trust who are not affiliated with
the Administrator; (xii) the cost of preparing and distributing
reports and notices to shareholders, the Securities and Exchange
Commission and other regulatory authorities; (xiii) the fees or
disbursements of custodians of the Trust's assets, including
expenses incurred in the performance of any obligations enumerated
by the Agreement and Declaration of Trust or By-Laws of the Trust
insofar as they govern agreements with any such custodian; (xiv)
costs in connection with annual or special meetings of
shareholders, including proxy material preparation, printing and
mailing; (xv) litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the
Trust's business; or (xvi) distribution fees and service fees.
3. Compensation of the Administrator.
(a) For all services to be rendered and payments made as provided
in Sections 1 and 2 hereof, the Trust, on behalf of the Fund,
will pay the Administrator on the last day of each month a
fee at an annual rate equal to
---------------------------------------------------.
The "average daily net assets" of the Fund shall be
determined on the basis set forth in the Fund's prospectus or
otherwise consistent with the 1940 Act and the regulations
promulgated thereunder.
(b) If the operating expenses of the Fund in any year (including
the administration fee referred to in Subsection (a) above,
but excluding taxes, brokerage commissions, interest,
dividends on securities sold short, distribution expenses,
and extraordinary legal fees and expenses) exceed the limits
set by certain state securities administrators in states in
which
-3-
<PAGE>
shares of the Fund are sold, the amount payable to the
Administrator under Subsection (a) above will be reduced (but
not below $0) by the amount of such excess. If amounts have
already been advanced to the Administrator under this
Agreement, the Administrator will return such amounts to the
Fund to the extent required by the preceding sentence.
(c) In addition to the foregoing, the Administrator may from
time to time agree not to impose all or a portion of its
fee otherwise payable hereunder (in advance of the time
such fee or portion thereof would otherwise accrue) and/
or undertake to assume responsibility for all or a
portion of any expenses related to the operations of the
Fund that are not otherwise required to be directly or
indirectly borne by the Administrator. Further, any
agreement by the Administrator to limit the Fund's
operating expenses to a specific level may be made with
the understanding that the Fund, to the extent legally
permissable, will reimburse the Administrator for
advisory fees foregone and/or expenses paid by the
Administrator for a particular year pursuant to such
agreement if in any subsequent year operating expenses
for the Fund are less than the operating expenses
limitation (if any), for such subsequent year to which
the Administrator may agree. Subject to the foregoing,
any fee reduction or undertaking referred to in this
Subsection shall constitute a binding modification of
this Agreement while it is in effect but may be
discontinued or modified prospectively by the
Administrator at any time.
4. Limitation of Liability of Administrator and Trust. The
Administrator shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Trust or
the Fund in connection with the matters to which this
Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by the
Administrator of its obligations and duties under this
Agreement. Any person, even though also employed by the
Administrator, who may be or become an employee of and paid
by the Trust shall be deemed, when acting within the scope of
his employment by the Trust, to be acting in such employment
solely for the Trust and not as its employee or agent. It is
understood and expressly stipulated that none of the trustees
or shareholders of the Trust shall be personally liable
hereunder. None of the trustees, officers, agents or
shareholders of the Trust assume any personal liability for
obligations entered into on behalf of the Trust. All persons
dealing with the Trust must look solely to the property of
-4-
<PAGE>
the Trust for the enforcement of any claims against the Trust. The
Fund shall not be liable for any claims against any other series
of the Trust.
5. Duration and Termination of this Agreement. This Agreement
shall remain in force until ______, 1996 and shall continue
for periods of one year thereafter, but only so long as such
continuance is specifically approved at least annually by the
vote of a majority of the Board of Trustees of the Trust.
This Agreement may, on 60 days' written notice to the other
party, be terminated at any time without the payment of any
penalty by the Trust or by the Administrator.
6. Amendment of this Agreement. No provisions of this Agreement may
be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is
sought.
7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York.
8. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or
effect. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
TOMORROW FUNDS RETIREMENT TRUST,
on behalf of TOMORROW MID-TERM
RETIREMENT FUND
By:________________________________
Its: _______________________________
-5-
<PAGE>
WEISS, PECK & GREER, L.L.C.
By:________________________________
Its: _______________________________
-6-
FORM OF
ADMINISTRATION AGREEMENT
TOMORROW SHORT-TERM RETIREMENT FUND
AGREEMENT made as of the ___ day of _____, 1995, by and between
TOMORROW FUNDS RETIREMENT TRUST, a Delaware business trust (the
"Trust"), on behalf of its series TOMORROW SHORT-TERM RETIREMENT FUND
(the "Fund"), and WEISS, PECK & GREER, L.L.C., a Delaware limited
liability corporation (the "Administrator").
The Trust is an open-end, management investment company,
registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Administrator is an investment adviser registered
under the Investment Advisers Act of 1940, as amended and is a
broker-dealer registered under the Securities Exchange Act of 1934, as
amended.
The Trust desires the Administrator to render services to the
Trust, on behalf of the Fund, and the Administrator is willing to
render such services upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
1. Administrative Services.
(a) Subject to the general supervision of the Board of
Trustees of the Trust, the Administrator will provide
certain administrative services to the Trust, on behalf
of the Fund. The Administrator will, to the extent such
services are not required to be performed by others
pursuant to the custodian agreement, the transfer agency
agreement (to the extent that a person other than the
Administrator is serving thereunder as the Trust's
transfer agent), or other arrangements (i) provide
supervision of all aspects of the Fund's operations not
referred to in Section 4 of the current Investment
Advisory Agreement between the Trust, on behalf of the
Fund, and the Trust's investment adviser (the
"Investment Advisory Agreement"); (ii) provide the Fund
with personnel to perform such executive,
administrative, accounting and clerical services as are
reasonably necessary to provide effective administration
of the Fund; (iii) arrange for, at the Fund's expense,
(a) the preparation for the Fund of all required tax
returns, (b) the preparation and submission of reports
to existing shareholders and (c) the periodic updating
of the Fund's prospectuses and statements of additional
<PAGE>
information and the preparation of reports filed with the
Securities and Exchange Commission and other regulatory
authorities; (iv) maintain all of the Fund's records not
required to be maintained by the investment adviser pursuant
to Section 4(c) of the Investment Advisory Agreement; (v)
provide the Fund with adequate office space and all necessary
office equipment and services, including, without limitation,
telephone service, heat, utilities, stationery supplies and
similar items; and (vi) provide to the Fund transfer
agency-related and shareholder relations services and
facilities and the services of one or more of its employees
or officers, or employees or officers of its affiliates,
relating to such functions (including salaries and benefits,
office space and supplies, equipment and teaching).
(b) The Administrator will also provide to the Trust's Board
of Trustees such periodic and special reports as the
Board may reasonably request. The Administrator shall
for all purposes herein be deemed to be an independent
contractor and shall, except as otherwise expressly
provided or authorized, have no authority to act for or
represent the Trust in any way or otherwise be deemed an
agent of the Trust.
(c) The Administrator will notify the Trust of any change in its
membership within a reasonable time after such change.
(d) The services hereunder are not deemed exclusive and the
Administrator shall be free to render similar services to
others so long as its services under this Agreement are not
impaired thereby.
2. Allocation of Charges and Expenses. Except as otherwise
provided in Section 1 of this Agreement, the Administrator
will pay all costs it incurs in connection with the
performance of its duties under Section 1 of this Agreement.
The Administrator will pay the compensation and expenses of
all of its personnel and will make available, without expense
to the Trust or the Fund, the services of such of its
principals, officers and employees as may be duly elected
officers or Trustees of the Trust, subject to their
individual consent to serve and to any limitations imposed by
law. The Administrator will not be required to bear any
expenses otherwise payable by the Trust or the Fund except as
may be specifically agreed pursuant to Section 3 of this
Agreement, but will be required to pay expenses specifically
allocated to the Administrator in this Section 2. In
particular, but without limiting the generality of the
foregoing, the Administrator will not be required to pay:
-2-
<PAGE>
(i) fees and expenses of any investment adviser of the Fund; (ii)
organization expenses of the Trust or the Fund; (iii) fees and
expenses incurred by the Trust in connection with membership in
investment company organizations; (iv) brokers' commissions; (v)
payment for portfolio pricing services to a pricing agent, if any;
(vi) legal or auditing expenses (including an allocable portion of
the cost of its employees rendering legal services to the Trust);
(vii) interest, insurance premiums, taxes or governmental fees;
(viii) the fees and expenses of the transfer agent of the Trust;
(ix) the cost of preparing stock certificates or any other
expenses, including, without limitation, clerical expenses of
issue, redemption or repurchase of shares of the Trust; (x) the
expenses of and fees for registering or qualifying shares of the
Trust for sale and of maintaining the registration of the Trust
and registering the Trust as a broker or a dealer; (xi) the fees
and expenses of Trustees of the Trust who are not affiliated with
the Administrator; (xii) the cost of preparing and distributing
reports and notices to shareholders, the Securities and Exchange
Commission and other regulatory authorities; (xiii) the fees or
disbursements of custodians of the Trust's assets, including
expenses incurred in the performance of any obligations enumerated
by the Agreement and Declaration of Trust or By-Laws of the Trust
insofar as they govern agreements with any such custodian; (xiv)
costs in connection with annual or special meetings of
shareholders, including proxy material preparation, printing and
mailing; (xv) litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the
Trust's business; or (xvi) distribution fees and service fees.
3. Compensation of the Administrator.
(a) For all services to be rendered and payments made as provided
in Sections 1 and 2 hereof, the Trust, on behalf of the Fund,
will pay the Administrator on the last day of each month a
fee at an annual rate equal to
---------------------------------------------------.
The "average daily net assets" of the Fund shall be
determined on the basis set forth in the Fund's prospectus or
otherwise consistent with the 1940 Act and the regulations
promulgated thereunder.
(b) If the operating expenses of the Fund in any year (including
the administration fee referred to in Subsection (a) above,
but excluding taxes, brokerage commissions, interest,
dividends on securities sold short, distribution expenses,
and extraordinary legal fees and expenses) exceed the limits
set by certain state securities administrators in states in
which
-3-
<PAGE>
shares of the Fund are sold, the amount payable to the
Administrator under Subsection (a) above will be reduced (but
not below $0) by the amount of such excess. If amounts have
already been advanced to the Administrator under this
Agreement, the Administrator will return such amounts to the
Fund to the extent required by the preceding sentence.
(c) In addition to the foregoing, the Administrator may from
time to time agree not to impose all or a portion of its
fee otherwise payable hereunder (in advance of the time
such fee or portion thereof would otherwise accrue) and/
or undertake to assume responsibility for all or a
portion of any expenses related to the operations of the
Fund that are not otherwise required to be directly or
indirectly borne by the Administrator. Further, any
agreement by the Administrator to limit the Fund's
operating expenses to a specific level may be made with
the understanding that the Fund, to the extent legally
permissable, will reimburse the Administrator for
advisory fees foregone and/or expenses paid by the
Administrator for a particular year pursuant to such
agreement if in any subsequent year operating expenses
for the Fund are less than the operating expenses
limitation (if any), for such subsequent year to which
the Administrator may agree. Subject to the foregoing,
any fee reduction or undertaking referred to in this
Subsection shall constitute a binding modification of
this Agreement while it is in effect but may be
discontinued or modified prospectively by the
Administrator at any time.
4. Limitation of Liability of Administrator and Trust. The
Administrator shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Trust or
the Fund in connection with the matters to which this
Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by the
Administrator of its obligations and duties under this
Agreement. Any person, even though also employed by the
Administrator, who may be or become an employee of and paid
by the Trust shall be deemed, when acting within the scope of
his employment by the Trust, to be acting in such employment
solely for the Trust and not as its employee or agent. It is
understood and expressly stipulated that none of the trustees
or shareholders of the Trust shall be personally liable
hereunder. None of the trustees, officers, agents or
shareholders of the Trust assume any personal liability for
obligations entered into on behalf of the Trust. All persons
dealing with the Trust must look solely to the property of
-4-
<PAGE>
the Trust for the enforcement of any claims against the Trust. The
Fund shall not be liable for any claims against any other series
of the Trust.
5. Duration and Termination of this Agreement. This Agreement
shall remain in force until ______, 1996 and shall continue
for periods of one year thereafter, but only so long as such
continuance is specifically approved at least annually by the
vote of a majority of the Board of Trustees of the Trust.
This Agreement may, on 60 days' written notice to the other
party, be terminated at any time without the payment of any
penalty by the Trust or by the Administrator.
6. Amendment of this Agreement. No provisions of this Agreement may
be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is
sought.
7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York.
8. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or
effect. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
TOMORROW FUNDS RETIREMENT TRUST,
on behalf of TOMORROW SHORT-TERM
RETIREMENT FUND
By:________________________________
Its: _______________________________
-5-
<PAGE>
WEISS, PECK & GREER, L.L.C.
By:________________________________
Its: ______________________________
-6-
FORM OF
ADMINISTRATION AGREEMENT
TOMORROW POST-RETIREMENT FUND
AGREEMENT made as of the ___ day of _____, 1995, by and between
TOMORROW FUNDS RETIREMENT TRUST, a Delaware business trust (the
"Trust"), on behalf of its series TOMORROW POST-RETIREMENT FUND (the
"Fund"), and WEISS, PECK & GREER, L.L.C., a Delaware limited liability
corporation (the "Administrator").
The Trust is an open-end, management investment company,
registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Administrator is an investment adviser registered
under the Investment Advisers Act of 1940, as amended and is a
broker-dealer registered under the Securities Exchange Act of 1934, as
amended.
The Trust desires the Administrator to render services to the
Trust, on behalf of the Fund, and the Administrator is willing to
render such services upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
1. Administrative Services.
(a) Subject to the general supervision of the Board of
Trustees of the Trust, the Administrator will provide
certain administrative services to the Trust, on behalf
of the Fund. The Administrator will, to the extent such
services are not required to be performed by others
pursuant to the custodian agreement, the transfer agency
agreement (to the extent that a person other than the
Administrator is serving thereunder as the Trust's
transfer agent), or other arrangements (i) provide
supervision of all aspects of the Fund's operations not
referred to in Section 4 of the current Investment
Advisory Agreement between the Trust, on behalf of the
Fund, and the Trust's investment adviser (the
"Investment Advisory Agreement"); (ii) provide the Fund
with personnel to perform such executive,
administrative, accounting and clerical services as are
reasonably necessary to provide effective administration
of the Fund; (iii) arrange for, at the Fund's expense,
(a) the preparation for the Fund of all required tax
returns, (b) the preparation and submission of reports
to existing shareholders and (c) the periodic updating
of the Fund's prospectuses and statements of additional
<PAGE>
information and the preparation of reports filed with the
Securities and Exchange Commission and other regulatory
authorities; (iv) maintain all of the Fund's records not
required to be maintained by the investment adviser pursuant
to Section 4(c) of the Investment Advisory Agreement; (v)
provide the Fund with adequate office space and all necessary
office equipment and services, including, without limitation,
telephone service, heat, utilities, stationery supplies and
similar items; and (vi) provide to the Fund transfer
agency-related and shareholder relations services and
facilities and the services of one or more of its employees
or officers, or employees or officers of its affiliates,
relating to such functions (including salaries and benefits,
office space and supplies, equipment and teaching).
(b) The Administrator will also provide to the Trust's Board
of Trustees such periodic and special reports as the
Board may reasonably request. The Administrator shall
for all purposes herein be deemed to be an independent
contractor and shall, except as otherwise expressly
provided or authorized, have no authority to act for or
represent the Trust in any way or otherwise be deemed an
agent of the Trust.
(c) The Administrator will notify the Trust of any change in its
membership within a reasonable time after such change.
(d) The services hereunder are not deemed exclusive and the
Administrator shall be free to render similar services to
others so long as its services under this Agreement are not
impaired thereby.
2. Allocation of Charges and Expenses. Except as otherwise
provided in Section 1 of this Agreement, the Administrator
will pay all costs it incurs in connection with the
performance of its duties under Section 1 of this Agreement.
The Administrator will pay the compensation and expenses of
all of its personnel and will make available, without expense
to the Trust or the Fund, the services of such of its
principals, officers and employees as may be duly elected
officers or Trustees of the Trust, subject to their
individual consent to serve and to any limitations imposed by
law. The Administrator will not be required to bear any
expenses otherwise payable by the Trust or the Fund except as
may be specifically agreed pursuant to Section 3 of this
Agreement, but will be required to pay expenses specifically
allocated to the Administrator in this Section 2. In
particular, but without limiting the generality of the
foregoing, the Administrator will not be required to pay:
-2-
<PAGE>
(i) fees and expenses of any investment adviser of the Fund; (ii)
organization expenses of the Trust or the Fund; (iii) fees and
expenses incurred by the Trust in connection with membership in
investment company organizations; (iv) brokers' commissions; (v)
payment for portfolio pricing services to a pricing agent, if any;
(vi) legal or auditing expenses (including an allocable portion of
the cost of its employees rendering legal services to the Trust);
(vii) interest, insurance premiums, taxes or governmental fees;
(viii) the fees and expenses of the transfer agent of the Trust;
(ix) the cost of preparing stock certificates or any other
expenses, including, without limitation, clerical expenses of
issue, redemption or repurchase of shares of the Trust; (x) the
expenses of and fees for registering or qualifying shares of the
Trust for sale and of maintaining the registration of the Trust
and registering the Trust as a broker or a dealer; (xi) the fees
and expenses of Trustees of the Trust who are not affiliated with
the Administrator; (xii) the cost of preparing and distributing
reports and notices to shareholders, the Securities and Exchange
Commission and other regulatory authorities; (xiii) the fees or
disbursements of custodians of the Trust's assets, including
expenses incurred in the performance of any obligations enumerated
by the Agreement and Declaration of Trust or By-Laws of the Trust
insofar as they govern agreements with any such custodian; (xiv)
costs in connection with annual or special meetings of
shareholders, including proxy material preparation, printing and
mailing; (xv) litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the
Trust's business; or (xvi) distribution fees and service fees.
3. Compensation of the Administrator.
(a) For all services to be rendered and payments made as provided
in Sections 1 and 2 hereof, the Trust, on behalf of the Fund,
will pay the Administrator on the last day of each month a
fee at an annual rate equal to
---------------------------------------------------.
The "average daily net assets" of the Fund shall be
determined on the basis set forth in the Fund's prospectus or
otherwise consistent with the 1940 Act and the regulations
promulgated thereunder.
(b) If the operating expenses of the Fund in any year (including
the administration fee referred to in Subsection (a) above,
but excluding taxes, brokerage commissions, interest,
dividends on securities sold short, distribution expenses,
and extraordinary legal fees and expenses) exceed the limits
set by certain state securities administrators in states in
which
-3-
<PAGE>
shares of the Fund are sold, the amount payable to the
Administrator under Subsection (a) above will be reduced (but
not below $0) by the amount of such excess. If amounts have
already been advanced to the Administrator under this
Agreement, the Administrator will return such amounts to the
Fund to the extent required by the preceding sentence.
(c) In addition to the foregoing, the Administrator may from
time to time agree not to impose all or a portion of its
fee otherwise payable hereunder (in advance of the time
such fee or portion thereof would otherwise accrue) and/
or undertake to assume responsibility for all or a
portion of any expenses related to the operations of the
Fund that are not otherwise required to be directly or
indirectly borne by the Administrator. Further, any
agreement by the Administrator to limit the Fund's
operating expenses to a specific level may be made with
the understanding that the Fund, to the extent legally
permissable, will reimburse the Administrator for
advisory fees foregone and/or expenses paid by the
Administrator for a particular year pursuant to such
agreement if in any subsequent year operating expenses
for the Fund are less than the operating expenses
limitation (if any), for such subsequent year to which
the Administrator may agree. Subject to the foregoing,
any fee reduction or undertaking referred to in this
Subsection shall constitute a binding modification of
this Agreement while it is in effect but may be
discontinued or modified prospectively by the
Administrator at any time.
4. Limitation of Liability of Administrator and Trust. The
Administrator shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Trust or
the Fund in connection with the matters to which this
Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by the
Administrator of its obligations and duties under this
Agreement. Any person, even though also employed by the
Administrator, who may be or become an employee of and paid
by the Trust shall be deemed, when acting within the scope of
his employment by the Trust, to be acting in such employment
solely for the Trust and not as its employee or agent. It is
understood and expressly stipulated that none of the trustees
or shareholders of the Trust shall be personally liable
hereunder. None of the trustees, officers, agents or
shareholders of the Trust assume any personal liability for
obligations entered into on behalf of the Trust. All persons
dealing with the Trust must look solely to the property of
-4-
<PAGE>
the Trust for the enforcement of any claims against the Trust. The
Fund shall not be liable for any claims against any other series
of the Trust.
5. Duration and Termination of this Agreement. This Agreement
shall remain in force until ______, 1996 and shall continue
for periods of one year thereafter, but only so long as such
continuance is specifically approved at least annually by the
vote of a majority of the Board of Trustees of the Trust.
This Agreement may, on 60 days' written notice to the other
party, be terminated at any time without the payment of any
penalty by the Trust or by the Administrator.
6. Amendment of this Agreement. No provisions of this Agreement may
be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is
sought.
7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York.
8. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or
effect. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
TOMORROW FUNDS RETIREMENT TRUST,
on behalf of TOMORROW POST-
RETIREMENT FUND
By:________________________________
Its: ______________________________
-5-
<PAGE>
WEISS, PECK & GREER, L.L.C.
By:________________________________
Its: ______________________________
-6-
FORM OF
ADMINISTRATION AGREEMENT
CORE LARGE-CAP STOCK FUND
AGREEMENT made as of the ___ day of _____, 1995, by and between
TOMORROW FUNDS RETIREMENT TRUST, a Delaware business trust (the
"Trust"), on behalf of its series CORE LARGE-CAP STOCK FUND (the
"Fund"), and WEISS, PECK & GREER, L.L.C., a Delaware limited liability
corporation (the "Administrator").
The Trust is an open-end, management investment company,
registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Administrator is an investment adviser registered
under the Investment Advisers Act of 1940, as amended and is a
broker-dealer registered under the Securities Exchange Act of 1934, as
amended.
The Trust desires the Administrator to render services to the
Trust, on behalf of the Fund, and the Administrator is willing to
render such services upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
1. Administrative Services.
(a) Subject to the general supervision of the Board of
Trustees of the Trust, the Administrator will provide
certain administrative services to the Trust, on behalf
of the Fund. The Administrator will, to the extent such
services are not required to be performed by others
pursuant to the custodian agreement, the transfer agency
agreement (to the extent that a person other than the
Administrator is serving thereunder as the Trust's
transfer agent), or other arrangements (i) provide
supervision of all aspects of the Fund's operations not
referred to in Section 4 of the current Investment
Advisory Agreement between the Trust, on behalf of the
Fund, and the Trust's investment adviser (the
"Investment Advisory Agreement"); (ii) provide the Fund
with personnel to perform such executive,
administrative, accounting and clerical services as are
reasonably necessary to provide effective administration
of the Fund; (iii) arrange for, at the Fund's expense,
(a) the preparation for the Fund of all required tax
returns, (b) the preparation and submission of reports
to existing shareholders and (c) the periodic updating
of the Fund's prospectuses and statements of additional
<PAGE>
information and the preparation of reports filed with the
Securities and Exchange Commission and other regulatory
authorities; (iv) maintain all of the Fund's records not
required to be maintained by the investment adviser pursuant
to Section 4(c) of the Investment Advisory Agreement; (v)
provide the Fund with adequate office space and all necessary
office equipment and services, including, without limitation,
telephone service, heat, utilities, stationery supplies and
similar items; and (vi) provide to the Fund transfer
agency-related and shareholder relations services and
facilities and the services of one or more of its employees
or officers, or employees or officers of its affiliates,
relating to such functions (including salaries and benefits,
office space and supplies, equipment and teaching).
(b) The Administrator will also provide to the Trust's Board
of Trustees such periodic and special reports as the
Board may reasonably request. The Administrator shall
for all purposes herein be deemed to be an independent
contractor and shall, except as otherwise expressly
provided or authorized, have no authority to act for or
represent the Trust in any way or otherwise be deemed an
agent of the Trust.
(c) The Administrator will notify the Trust of any change in its
membership within a reasonable time after such change.
(d) The services hereunder are not deemed exclusive and the
Administrator shall be free to render similar services to
others so long as its services under this Agreement are not
impaired thereby.
2. Allocation of Charges and Expenses. Except as otherwise
provided in Section 1 of this Agreement, the Administrator
will pay all costs it incurs in connection with the
performance of its duties under Section 1 of this Agreement.
The Administrator will pay the compensation and expenses of
all of its personnel and will make available, without expense
to the Trust or the Fund, the services of such of its
principals, officers and employees as may be duly elected
officers or Trustees of the Trust, subject to their
individual consent to serve and to any limitations imposed by
law. The Administrator will not be required to bear any
expenses otherwise payable by the Trust or the Fund except as
may be specifically agreed pursuant to Section 3 of this
Agreement, but will be required to pay expenses specifically
allocated to the Administrator in this Section 2. In
particular, but without limiting the generality of the
foregoing, the Administrator will not be required to pay:
-2-
<PAGE>
(i) fees and expenses of any investment adviser of the Fund; (ii)
organization expenses of the Trust or the Fund; (iii) fees and
expenses incurred by the Trust in connection with membership in
investment company organizations; (iv) brokers' commissions; (v)
payment for portfolio pricing services to a pricing agent, if any;
(vi) legal or auditing expenses (including an allocable portion of
the cost of its employees rendering legal services to the Trust);
(vii) interest, insurance premiums, taxes or governmental fees;
(viii) the fees and expenses of the transfer agent of the Trust;
(ix) the cost of preparing stock certificates or any other
expenses, including, without limitation, clerical expenses of
issue, redemption or repurchase of shares of the Trust; (x) the
expenses of and fees for registering or qualifying shares of the
Trust for sale and of maintaining the registration of the Trust
and registering the Trust as a broker or a dealer; (xi) the fees
and expenses of Trustees of the Trust who are not affiliated with
the Administrator; (xii) the cost of preparing and distributing
reports and notices to shareholders, the Securities and Exchange
Commission and other regulatory authorities; (xiii) the fees or
disbursements of custodians of the Trust's assets, including
expenses incurred in the performance of any obligations enumerated
by the Agreement and Declaration of Trust or By-Laws of the Trust
insofar as they govern agreements with any such custodian; (xiv)
costs in connection with annual or special meetings of
shareholders, including proxy material preparation, printing and
mailing; (xv) litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the
Trust's business; or (xvi) distribution fees and service fees.
3. Compensation of the Administrator.
(a) For all services to be rendered and payments made as provided
in Sections 1 and 2 hereof, the Trust, on behalf of the Fund,
will pay the Administrator on the last day of each month a
fee at an annual rate equal to
---------------------------------------------------.
The "average daily net assets" of the Fund shall be
determined on the basis set forth in the Fund's prospectus or
otherwise consistent with the 1940 Act and the regulations
promulgated thereunder.
(b) If the operating expenses of the Fund in any year (including
the administration fee referred to in Subsection (a) above,
but excluding taxes, brokerage commissions, interest,
dividends on securities sold short, distribution expenses,
and extraordinary legal fees and expenses) exceed the limits
set by certain state securities administrators in states in
which
-3-
<PAGE>
shares of the Fund are sold, the amount payable to the
Administrator under Subsection (a) above will be reduced (but
not below $0) by the amount of such excess. If amounts have
already been advanced to the Administrator under this
Agreement, the Administrator will return such amounts to the
Fund to the extent required by the preceding sentence.
(c) In addition to the foregoing, the Administrator may from
time to time agree not to impose all or a portion of its
fee otherwise payable hereunder (in advance of the time
such fee or portion thereof would otherwise accrue) and/
or undertake to assume responsibility for all or a
portion of any expenses related to the operations of the
Fund that are not otherwise required to be directly or
indirectly borne by the Administrator. Further, any
agreement by the Administrator to limit the Fund's
operating expenses to a specific level may be made with
the understanding that the Fund, to the extent legally
permissable, will reimburse the Administrator for
advisory fees foregone and/or expenses paid by the
Administrator for a particular year pursuant to such
agreement if in any subsequent year operating expenses
for the Fund are less than the operating expenses
limitation (if any), for such subsequent year to which
the Administrator may agree. Subject to the foregoing,
any fee reduction or undertaking referred to in this
Subsection shall constitute a binding modification of
this Agreement while it is in effect but may be
discontinued or modified prospectively by the
Administrator at any time.
4. Limitation of Liability of Administrator and Trust. The
Administrator shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Trust or
the Fund in connection with the matters to which this
Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by the
Administrator of its obligations and duties under this
Agreement. Any person, even though also employed by the
Administrator, who may be or become an employee of and paid
by the Trust shall be deemed, when acting within the scope of
his employment by the Trust, to be acting in such employment
solely for the Trust and not as its employee or agent. It is
understood and expressly stipulated that none of the trustees
or shareholders of the Trust shall be personally liable
hereunder. None of the trustees, officers, agents or
shareholders of the Trust assume any personal liability for
obligations entered into on behalf of the Trust. All persons
dealing with the Trust must look solely to the property of
-4-
<PAGE>
the Trust for the enforcement of any claims against the Trust. The
Fund shall not be liable for any claims against any other series
of the Trust.
5. Duration and Termination of this Agreement. This Agreement
shall remain in force until ______, 1996 and shall continue
for periods of one year thereafter, but only so long as such
continuance is specifically approved at least annually by the
vote of a majority of the Board of Trustees of the Trust.
This Agreement may, on 60 days' written notice to the other
party, be terminated at any time without the payment of any
penalty by the Trust or by the Administrator.
6. Amendment of this Agreement. No provisions of this Agreement may
be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is
sought.
7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York.
8. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or
effect. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
TOMORROW FUNDS RETIREMENT TRUST,
on behalf of CORE LARGE-CAP
STOCK FUND
By:________________________________
Its: ______________________________
-5-
<PAGE>
WEISS, PECK & GREER, L.L.C.
By:________________________________
Its: ______________________________
-6-
FORM OF
ADMINISTRATION AGREEMENT
CORE SMALL-CAP STOCK FUND
AGREEMENT made as of the ___ day of _____, 1995, by and between
TOMORROW FUNDS RETIREMENT TRUST, a Delaware business trust (the
"Trust"), on behalf of its series CORE SMALL-CAP STOCK FUND (the
"Fund"), and WEISS, PECK & GREER, L.L.C., a Delaware limited liability
corporation (the "Administrator").
The Trust is an open-end, management investment company,
registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Administrator is an investment adviser registered
under the Investment Advisers Act of 1940, as amended and is a
broker-dealer registered under the Securities Exchange Act of 1934, as
amended.
The Trust desires the Administrator to render services to the
Trust, on behalf of the Fund, and the Administrator is willing to
render such services upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
1. Administrative Services.
(a) Subject to the general supervision of the Board of
Trustees of the Trust, the Administrator will provide
certain administrative services to the Trust, on behalf
of the Fund. The Administrator will, to the extent such
services are not required to be performed by others
pursuant to the custodian agreement, the transfer agency
agreement (to the extent that a person other than the
Administrator is serving thereunder as the Trust's
transfer agent), or other arrangements (i) provide
supervision of all aspects of the Fund's operations not
referred to in Section 4 of the current Investment
Advisory Agreement between the Trust, on behalf of the
Fund, and the Trust's investment adviser (the
"Investment Advisory Agreement"); (ii) provide the Fund
with personnel to perform such executive,
administrative, accounting and clerical services as are
reasonably necessary to provide effective administration
of the Fund; (iii) arrange for, at the Fund's expense,
(a) the preparation for the Fund of all required tax
returns, (b) the preparation and submission of reports
to existing shareholders and (c) the periodic updating
of the Fund's prospectuses and statements of additional
<PAGE>
information and the preparation of reports filed with the
Securities and Exchange Commission and other regulatory
authorities; (iv) maintain all of the Fund's records not
required to be maintained by the investment adviser pursuant
to Section 4(c) of the Investment Advisory Agreement; (v)
provide the Fund with adequate office space and all necessary
office equipment and services, including, without limitation,
telephone service, heat, utilities, stationery supplies and
similar items; and (vi) provide to the Fund transfer
agency-related and shareholder relations services and
facilities and the services of one or more of its employees
or officers, or employees or officers of its affiliates,
relating to such functions (including salaries and benefits,
office space and supplies, equipment and teaching).
(b) The Administrator will also provide to the Trust's Board
of Trustees such periodic and special reports as the
Board may reasonably request. The Administrator shall
for all purposes herein be deemed to be an independent
contractor and shall, except as otherwise expressly
provided or authorized, have no authority to act for or
represent the Trust in any way or otherwise be deemed an
agent of the Trust.
(c) The Administrator will notify the Trust of any change in its
membership within a reasonable time after such change.
(d) The services hereunder are not deemed exclusive and the
Administrator shall be free to render similar services to
others so long as its services under this Agreement are not
impaired thereby.
2. Allocation of Charges and Expenses. Except as otherwise
provided in Section 1 of this Agreement, the Administrator
will pay all costs it incurs in connection with the
performance of its duties under Section 1 of this Agreement.
The Administrator will pay the compensation and expenses of
all of its personnel and will make available, without expense
to the Trust or the Fund, the services of such of its
principals, officers and employees as may be duly elected
officers or Trustees of the Trust, subject to their
individual consent to serve and to any limitations imposed by
law. The Administrator will not be required to bear any
expenses otherwise payable by the Trust or the Fund except as
may be specifically agreed pursuant to Section 3 of this
Agreement, but will be required to pay expenses specifically
allocated to the Administrator in this Section 2. In
particular, but without limiting the generality of the
foregoing, the Administrator will not be required to pay:
-2-
<PAGE>
(i) fees and expenses of any investment adviser of the Fund; (ii)
organization expenses of the Trust or the Fund; (iii) fees and
expenses incurred by the Trust in connection with membership in
investment company organizations; (iv) brokers' commissions; (v)
payment for portfolio pricing services to a pricing agent, if any;
(vi) legal or auditing expenses (including an allocable portion of
the cost of its employees rendering legal services to the Trust);
(vii) interest, insurance premiums, taxes or governmental fees;
(viii) the fees and expenses of the transfer agent of the Trust;
(ix) the cost of preparing stock certificates or any other
expenses, including, without limitation, clerical expenses of
issue, redemption or repurchase of shares of the Trust; (x) the
expenses of and fees for registering or qualifying shares of the
Trust for sale and of maintaining the registration of the Trust
and registering the Trust as a broker or a dealer; (xi) the fees
and expenses of Trustees of the Trust who are not affiliated with
the Administrator; (xii) the cost of preparing and distributing
reports and notices to shareholders, the Securities and Exchange
Commission and other regulatory authorities; (xiii) the fees or
disbursements of custodians of the Trust's assets, including
expenses incurred in the performance of any obligations enumerated
by the Agreement and Declaration of Trust or By-Laws of the Trust
insofar as they govern agreements with any such custodian; (xiv)
costs in connection with annual or special meetings of
shareholders, including proxy material preparation, printing and
mailing; (xv) litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the
Trust's business; or (xvi) distribution fees and service fees.
3. Compensation of the Administrator.
(a) For all services to be rendered and payments made as provided
in Sections 1 and 2 hereof, the Trust, on behalf of the Fund,
will pay the Administrator on the last day of each month a
fee at an annual rate equal to
---------------------------------------------------.
The "average daily net assets" of the Fund shall be
determined on the basis set forth in the Fund's prospectus or
otherwise consistent with the 1940 Act and the regulations
promulgated thereunder.
(b) If the operating expenses of the Fund in any year (including
the administration fee referred to in Subsection (a) above,
but excluding taxes, brokerage commissions, interest,
dividends on securities sold short, distribution expenses,
and extraordinary legal fees and expenses) exceed the limits
set by certain state securities administrators in states in
which
-3-
<PAGE>
shares of the Fund are sold, the amount payable to the
Administrator under Subsection (a) above will be reduced (but
not below $0) by the amount of such excess. If amounts have
already been advanced to the Administrator under this
Agreement, the Administrator will return such amounts to the
Fund to the extent required by the preceding sentence.
(c) In addition to the foregoing, the Administrator may from
time to time agree not to impose all or a portion of its
fee otherwise payable hereunder (in advance of the time
such fee or portion thereof would otherwise accrue) and/
or undertake to assume responsibility for all or a
portion of any expenses related to the operations of the
Fund that are not otherwise required to be directly or
indirectly borne by the Administrator. Further, any
agreement by the Administrator to limit the Fund's
operating expenses to a specific level may be made with
the understanding that the Fund, to the extent legally
permissable, will reimburse the Administrator for
advisory fees foregone and/or expenses paid by the
Administrator for a particular year pursuant to such
agreement if in any subsequent year operating expenses
for the Fund are less than the operating expenses
limitation (if any), for such subsequent year to which
the Administrator may agree. Subject to the foregoing,
any fee reduction or undertaking referred to in this
Subsection shall constitute a binding modification of
this Agreement while it is in effect but may be
discontinued or modified prospectively by the
Administrator at any time.
4. Limitation of Liability of Administrator and Trust. The
Administrator shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Trust or
the Fund in connection with the matters to which this
Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by the
Administrator of its obligations and duties under this
Agreement. Any person, even though also employed by the
Administrator, who may be or become an employee of and paid
by the Trust shall be deemed, when acting within the scope of
his employment by the Trust, to be acting in such employment
solely for the Trust and not as its employee or agent. It is
understood and expressly stipulated that none of the trustees
or shareholders of the Trust shall be personally liable
hereunder. None of the trustees, officers, agents or
shareholders of the Trust assume any personal liability for
obligations entered into on behalf of the Trust. All persons
dealing with the Trust must look solely to the property of
-4-
<PAGE>
the Trust for the enforcement of any claims against the Trust. The
Fund shall not be liable for any claims against any other series
of the Trust.
5. Duration and Termination of this Agreement. This Agreement
shall remain in force until ______, 1996 and shall continue
for periods of one year thereafter, but only so long as such
continuance is specifically approved at least annually by the
vote of a majority of the Board of Trustees of the Trust.
This Agreement may, on 60 days' written notice to the other
party, be terminated at any time without the payment of any
penalty by the Trust or by the Administrator.
6. Amendment of this Agreement. No provisions of this Agreement may
be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is
sought.
7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York.
8. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or
effect. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
TOMORROW FUNDS RETIREMENT TRUST,
on behalf of CORE SMALL-CAP
STOCK FUND
By:________________________________
Its: ______________________________
-5-
<PAGE>
WEISS, PECK & GREER, L.L.C.
By:________________________________
Its: ______________________________
-6-
June 26, 1995
Tomorrow Funds Retirement Trust
One New York Plaza
New York, NY 10004
Re: Tomorrow Funds Retirement Trust
Ladies and Gentlemen:
We have acted as special Delaware counsel to Tomorrow Funds Retirement
Trust, a Delaware business trust (the "Trust"), in connection with certain
matters relating to the issuance of Shares of beneficial interest in the Trust.
Capitalized terms used herein and not otherwise herein defined are used as
defined in the Agreement and Declaration of Trust of the Trust dated June 21,
1995 (the "Governing Instrument").
In rendering this opinion, we have examined copies of the following
documents, each in the form provided to us: the Certificate of Trust of the
Trust as filed in the Office of the Secretary of State of the State of Delaware
(the "Recording Office") on June 21, 1995 (the "Certificate"); the Governing
Instrument; the By-laws of the Trust; certain resolutions of the Trustees of the
Trust; the Trust's Notification of Registration on Form N-8A to be filed with
the Securities and Exchange Commission on or about the date hereof; the Trust's
Registration Statement on Form N-1A to be filed with the Securities and Exchange
Commission on or about the date hereof (the "Registration Statement"); and a
certification of good standing of the Trust obtained as of a recent date from
the Recording Office. In such examinations, we have assumed the genuineness of
all signatures, the conformity to original documents of all documents submitted
to us as copies or drafts of documents to be executed or filed, and the legal
capacity of natural persons to complete the execution of documents. We have
further assumed for the purpose of this opinion: (i) the due authorization,
execution and delivery by, or on behalf of, each of the parties thereto of the
above-referenced instruments, certificates and other documents, and of all
documents contemplated by the Governing Instrument, the By-laws and applicable
resolutions of the Trustees to be executed by investors desiring to become
Shareholders; (ii) the payment of consideration for Shares, and the
application of such consideration, as provided in the Governing Instrument,
and compliance with the other terms, conditions and restrictions set forth in
the Governing Instrument, the By-laws and all applicable resolutions of the
Trustees of the Trust in connection with the issuance of Shares (including,
without limitation, the taking of all appropriate action by the Trustees to
designate Series of Shares and the rights and preferences attributable thereto
as contemplated by the Governing Instrument); (iii) that appropriate notation of
the names and addresses of, the number of Shares held by, and the consideration
paid by, Shareholders will be maintained in the appropriate registers and other
books and records of the Trust in connection with the issuance, redemption or
transfer of Shares; (iv) that no event has occurred subsequent to the filing of
the Certificate that would cause a termination or reorganization of the Trust
under Section 4 or Section 5 of Article IX of the Governing Instrument; (v) that
the activities of the Trust have been and will be conducted in accordance with
the terms of the Governing Instrument and the Delaware Business Trust Act, 12
Del. C. section section 3801 et seq. (the "Delaware Act"); and (vi) that each of
the documents examined by us is in full force and effect and has not been
modified, supplemented or otherwise amended except as herein referenced. No
opinion is expressed herein with respect to the requirements of, or compliance
with, federal or state securities or blue sky laws. Further, we express no
opinion on the sufficiency or accuracy of any registration or offering
documentation relating to the Trust or the Shares. As to any facts material to
our opinion, other than those assumed, we have relied without independent
investigation on the above-referenced documents and on the accuracy, as of the
date hereof, of the matters therein contained.
Based on and subject to the foregoing, and limited in all respects to
matters of Delaware law, it is our opinion that:
1. The Trust is a duly organized and validly existing business trust
in good standing under the laws of the State of Delaware.
2. The Shares of each of the following Series of the Trust, when
issued to Shareholders of such Series in accordance with the terms, conditions,
requirements and procedures set forth in the Governing Instrument, will
constitute legally issued, fully paid and non-assessable Shares of beneficial
interest in the Trust: Tomorrow Long-Term Retirement Fund, Tomorrow Mid-Term
Retirement Fund, Tomorrow Short-Term Retirement Fund, Core Small-Stock Fund,
Core Large-Stock Fund and Tomorrow Post-Retirement Fund.
3. Under the Delaware Act and the terms of the Governing Instrument,
each Shareholder of the Trust, in such capacity, will be entitled to the same
limitation of personal liability as that extended to stockholders of private
corporations for profit organized under the general corporation law of the State
of Delaware; provided, however, that we express no opinion with respect to the
liability of any Shareholder who is, was or may become a named Trustee of the
Trust. Neither the existence nor exercise of the voting rights granted to
Shareholders under the Governing Instrument will, of itself, cause a Shareholder
to be deemed a trustee of the Trust under the Delaware Act. Notwithstanding the
foregoing or the opinion expressed in paragraph 2 above, we note that, pursuant
to Section 2 of Article VIII of the Governing Instrument, the Trustees have the
power to cause Shareholders, or Shareholders of a particular Series, to pay
certain custodian, transfer, servicing or similar agent charges by setting off
the same against declared but unpaid dividends or by reducing Share ownership
(or by both means).
We understand that the Trust is currently in the process of
registering or qualifying Shares of the Trust in various states, and we hereby
consent to the filing of a copy of this opinion with the securities
administrators of such states and with the Securities and Exchange Commission
as part of the Trust's Registration Statement (or an amendment thereto). In
giving this consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder. Except as provided in this paragraph, the opinion set
forth above is expressed solely for the benefit of the addressee hereof and may
not be relied upon by, or filed with, any other person or entity for any purpose
without our prior written consent.
Sincerely,
MORRIS, NICHOLS, ARSHT & TUNNELL
POWER OF ATTORNEY
We, the undersigned Trustees and/or officers of Tomorrow Funds
Retirement Trust, a Delaware business trust (the "Trust"), do hereby
severally constitute and appoint Roger J. Weiss, Jay C. Nadel, Richard
Pollack and Francis H. Powers, and each of them acting singly, to be
our true, sufficient and lawful attorneys, with full power to each of
them, and each of them acting singly, to sign for each of us, in the
name of each of us and in the capacity(ies) indicated below the
Registration Statement on Form N-1A and any Registration Statement on
Form N-14 to be filed by the Trust under the Investment Company Act of
1940, as amended (the "1940 Act"), and under the Securities Act of
1933, as amended (the "1933 Act"), and any and all amendments thereto,
with respect to the offering of its shares of beneficial interest and
any and all other documents and papers relating thereto, and generally
to do all such things in the name of each of us and on behalf of each
of us in the capacity(ies) indicated below to enable the Trust to
comply with the 1940 Act and the 1933 Act, and all requirements of the
Securities and Exchange Commission thereunder, hereby ratifying and
confirming the signature of each of us as it may be signed by said
attorneys or each of them to any said Registration Statements and any
and all amendments thereto.
IN WITNESS WHEREOF, we have hereunder set our hands on this
Instrument the 21st day of June, 1995.
/s/ Roger J. Weiss /s/ Raymond R. Herrmann, Jr.
Roger J. Weiss, Raymond R. Herrmann, Jr.,
Chairman, Trustee and Trustee
President
/s/ Harvey E. Sampson /s/ Lawrence J. Israel
Harvey E. Sampson, Trustee Lawrence J. Israel, Trustee
/s/ Francis H. Powers
Francis H. Powers, Treasurer
(Principal Financial and
Accounting Officer)
