To be filed via Edgar with the Securities and Exchange Commission on
April __, 2000
Registration Statement No. 2-34277
ICA No. 811-1920
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. |_|
Post-Effective Amendment No. 43 |X|
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 23 |X|
STRALEM FUND
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(Exact Name of Registrant as Specified in Charter)
405 Park Avenue, New York NY 10022
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(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (212) 888-8123
Philippe E. Baumann, 405 Park Avenue, New York, NY 10022
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(Name and Address of Agent for Service)
Copy to:
Susan J. Penry-Williams, Esq.
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
It is proposed that this filing will become effective (check appropriate box):
[X] Immediately upon filing pursuant to paragraph (b)
[ ] On (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] On (date) pursuant to paragraph (a)(1)
[ } On (date) pursuant to paragraph (a)(2)
[ ] On (date) pursuant to paragraph (a)(2) of Rule 485
<PAGE>
STRALEM FUND
STRALEM EQUITY FUND
PROSPECTUS
April 24, 2000
The Securities and Exchange Commission has not approved or disapproved the
shares of either Fund as an investment. The Securities and Exchange Commission
also has not determined whether this prospectus is accurate or complete. Any
person who tells you that the Securities and Exchange Commission has made such
an approval or determination is committing a crime.
<PAGE>
Table of Contents
Page
Risk/Return Summary..........................................................1
Investment Objective.......................................................1
Principal Investment Strategies............................................1
Principal Risks of Investing...............................................1
Bar Chart and Performance Table............................................1
Fees and Expenses of the Fund................................................3
Example......................................................................4
Investment Objectives, Principal Strategies and Related Risks................5
Investment Objective.......................................................5
Principal Strategies.......................................................5
Risks of Investing.........................................................5
Investment Adviser and Investment Advisory Agreement.........................7
Shareholder Information......................................................7
Investment Minimums........................................................7
Net Asset Value............................................................7
How to Purchase Shares.....................................................8
How to Exchange or Redeem Shares...........................................8
Dividends and Capital Gains Distributions....................................8
Tax Issues.................................................................9
Financial Highlights........................................................10
<PAGE>
RISK/RETURN SUMMARY
Investment Objective
Stralem Fund is a no-load mutual fund with the investment objective of realizing
both income and capital appreciation in an attempt to maximize total return.
Stralem Equity Fund is a no-load mutual fund with the investment objective of
long-term capital appreciation.
Principal Investment Strategies
Stralem Fund
The Fund seeks to achieve its investment objective by investing in equity
securities listed or traded on major U.S. stock exchanges and in U.S. Treasury
bonds of varying maturities and by modifying the composition of the Fund's
portfolio as economic and market trends change. The Fund's investment strategies
can be identified as "value-driven" and/or "flexible" investing.
Stralem Equity Fund
The Fund seeks to achieve its investment objective by investing in equity
securities listed or traded on major U.S. stock exchanges and in the
over-the-counter market. The Fund will invest at least 65% of its assets in the
equity securities of large capitalization U.S. companies. The Fund's investment
strategies can be identified as "value-driven" and/or "flexible" investing.
Principal Risks of Investing
The Funds are subject to the risks common to all mutual funds that invest in
equity securities and U.S. Treasury bonds. You may lose money by investing in
the Funds if any of these occur:
o the stock markets of the United States go down decreasing the value of
equity securities;
o a stock or stocks in the Funds' portfolios do not perform as well as
expected;
o for the Stralem Fund only, a change in interest rates that changes the
value of a U.S. Treasury bond; or
o the Fund manager's investment strategy does not achieve the Fund's
objective or the manager does not implement the strategy properly.
In addition, the Funds are non-diversified which means that either Fund could
have a portfolio with as few as twelve issuers. To the extent that a Fund
invests in a small number of issuers, there may be a greater risk of losing
money than in a diversified investment company.
Bar Chart and Performance Table
The bar chart and table shown below provide an indication of the risks of
investing in Stralem Fund by showing changes in that Fund's performance from
year to year from January 1, 1990 through December 31, 1999. The following table
also shows Stralem Fund's average annual returns for 1, 5 and 10 years compared
with those of Lipper Flexible Portfolio Index Average. Past performance is not
an indication of future performance.
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<PAGE>
Stralem Equity Fund has only been in existence since January 3, 2000. Therefore,
no bar chart or performance table is presented for Stralem Equity Fund.
Bar Chart - Stralem Fund
Stralem Fund's annual total return for 1999 was 14.7%. The Fund's annual total
return for 1998 was 24.7%. The Fund's annual total return for 1997 was 20.6%.
The Fund's annual total return for 1996 was 7.2%. The Fund's annual total return
for 1995 was 25.5%. The Fund's annual total return for 1994 was -5.6%. The
Fund's annual total return for 1993 was 11.7%. The Fund's annual total return
for 1992 was 4.7%. The Fund's annual total return for 1991 was 16.4%. The Fund's
annual total return for 1990 was 1.8%.
[GRAPHIC INFORMATION]
The Fund's highest quarterly return was 11.3% (for the quarter ended 6/30/97).
The lowest quarterly return was -7.6% (for the quarter ended 9/30/90).
Performance Table - Stralem Fund
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Average Annual Total Returns for Period Ending One Five Ten
12/31/99 Year Years Years
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Stralem Fund (after fees and expenses) 14.69% 18.36% 11.75%
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S&P 500* 20.89% 24.43% 27.14%
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J.P. Morgan U. S. Government Bond Index** -6.60% 3.48% 5.61%
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* The S&P 500 is the Standard & Poor's Composite Index of 500 Stocks, a widely
recognized, unmanaged index of common stock prices. This is shown with dividends
included.
** The J.P. Morgan U.S. Government Bond Index is comprised of U. S. Treasury
notes and bonds. It is a weighted average and is adjusted daily to reflect
changes in price and accrued interest. It assumes that interest is reinvested
in the bond that pays the interest.
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<PAGE>
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Funds.
Stralem Fund --
Shareholder Fees (Fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases None
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None
Redemption Fee None
Exchange Fee None
Annual Fund Operating Expenses (Expenses deducted from Fund assets)
Management Fees* 1.00%
Distribution (12b-1) Fees 0.00%
Other Expenses 0.35%
Total Annual Fund Operating Expenses* 1.35%
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* Includes administrative fees of 0.04% reimbursed to the Adviser.
Stralem Equity Fund --
Shareholder Fees (Fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases None
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None
Redemption Fee None
Exchange Fee None
Annual Fund Operating Expenses (Expenses deducted from Fund assets)
Management Fees 1.50%
Distribution (12b-1) Fees 0.00%
Other Expenses* 0.20%
Total Annual Fund Operating Expenses* 1.70%
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*These expenses are based on estimated amounts for the current fiscal year.
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<PAGE>
EXAMPLE OF EXPENSES
This Example is intended to help you compare the cost of investing in either
Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in a Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that the investor redeems all of his or her shares at the
end of each period and that your investment has a 5% return each year and that
the Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your cost would be:
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1 YEAR 3 YEARS 5 YEARS 10 YEARS
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Stralem Fund $137 $428 $739 $1,624
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Stralem Equity Fund $173 $536
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The purpose of the above table is to assist you in understanding the various
costs and expenses that an investor in either Fund would bear directly or
indirectly. Neither Stralem Fund nor Stralem Equity Fund has a contingent
deferred sales charge or a redemption fee.
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<PAGE>
INVESTMENT OBJECTIVE, PRINCIPAL STRATEGIES AND RELATED RISKS
Investment Objective
The Stralem Fund's investment objective is realizing both income and capital
appreciation in an attempt to maximize total return. The Stralem Equity Fund's
investment objective is long-term capital appreciation.
Principal Strategies
The Funds' investment strategies can be identified as "value-driven" and/or
"flexible" investing. This means that when the Funds anticipate a generally
rising stock market, the Funds invest in equity securities of companies that:
o are listed or traded on major U.S. stock exchanges;
o are a primary factor in their industry;
o have an equity capitalization (at market) of at least $4 billion;
o have a consistently strong and conservative balance sheet;
o have demonstrated a long-term potential for growth superior to the
long-term inflation rate; and
o can be purchased at a price which is in line with current earnings.
Stralem Fund
When the Stralem Fund anticipates a decline in the stock market, the Fund may
shift its emphasis from equity securities to U.S. Treasury bonds if it believes
that the total return from U.S. Treasury bonds will exceed returns from equity
investments.
The Fund invests in U.S. Treasury bonds with longer maturities during periods
when it anticipates lower interest rates and shorter-term U.S. Treasury bonds
when it expects interest rates to rise. The Fund may also invest in money market
instruments from banks insured by the Federal Deposit Insurance Corporation.
Stralem Equity Fund
During unfavorable market conditions, the Stralem Equity Fund may invest
"defensively," that is, make temporary investments that are not consistent with
the Fund's investment objective and principal strategies. As a result, the Fund
may not achieve its investment objective. For example, if there is a market
downturn or if the Fund must raise cash to meet redemption requests, the Fund
may invest more assets in bonds or money market instruments, or invest in
derivative instruments to protect the Fund's investments.
Risks of Investing
As with all mutual funds, investing in the Funds involves certain risks. We
cannot guarantee that the Funds will meet their investment objectives or that
the Funds will perform as in the past. You may lose money if you invest in the
Funds.
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<PAGE>
The Funds may use various investment techniques, some of which involve greater
amounts of risk. These investment techniques are discussed in detail in the
Statement of Additional Information. To reduce risk, the Funds are subject to
certain limitations and restrictions. The Funds, however, intend to comply with
the diversification requirements of federal tax law as necessary to qualify as a
regulated investment company.
Risks of Investing in Mutual Funds
The following risks are common to all mutual funds and therefore apply to the
Funds:
o Market Risk. The market value of a security may go up or down,
sometimes rapidly and unpredictably. These fluctuations may cause a
security to be worth less than it was at the time of purchase.
Market risk applies to individual securities, a particular sector or
the entire economy.
o Manager Risk. Fund management affects Fund performance. A Fund may
lose money if the Fund manager's investment strategy does not
achieve the Fund's objective or the manager does not implement the
strategy properly.
Risk of Investing in Equity Securities
The following risk is common to all mutual funds that invest in equity
securities and therefore applies to the Funds:
o Equity Risk. The value of the stock will fluctuate with events
affecting the company's profitability or volatility. Unlike debt
securities, which have a preference to a company's earnings and cash
flow, equity securities receive value only after the company meets
its other obligations.
Risks of Investing in U.S. Treasury Bonds
The following risk is common to all mutual funds that invest in U.S. Treasury
bonds and therefore applies to the portion of the Stralem Fund that is invested
in U.S. Treasury bonds:
o Interest Rate Risk. The value of a U.S. Treasury bond may decline if
interest rates change. The value of a such a security changes in the
opposite direction from a change in interest rates. For example, the
value of the security typically decreases when interest rates rise.
In general, U.S. Treasury bonds with longer maturities are more
sensitive to changes in interest rates than those with shorter
maturities.
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<PAGE>
INVESTMENT ADVISER AND INVESTMENT ADVISORY AGREEMENT
Stralem & Company Incorporated (the "Adviser"), 405 Park Avenue, New York, NY
10022 is the investment adviser of each Fund. The Adviser, an investment adviser
registered with the SEC, was founded in November 22, 1966. The Adviser manages
funds for individuals, trusts, pension plans and other institutional investors.
The Adviser also performs some brokerage functions for its clients.
Advisory Services. Under its investment advisory agreement (the "Contract") with
each Fund, the Adviser screens and analyzes potential investments for the Funds
and, subject to the investment restrictions and policies of each Fund,
determines the amount of each investment that should be made and the form of
such investment. The Adviser also reviews and re-evaluates the Funds'
portfolios, periodically, to determine at what point investments have met the
Funds' investment objective or are unlikely to meet such objective. The Adviser
then purchases or sells the Funds' investments as it deems appropriate and
consistent with the Funds' investment objectives. The Adviser also provides
certain clerical, statistical and other administrative services for the Funds.
Stralem Fund
For the year ending December 31, 1999, the Fund paid a quarterly management fee
calculated at an annual rate of 1.00% of the Fund's average weekly net assets on
the first $50 million and 0.75% of the Fund's average weekly net assets on
amounts between $50 million and $100 million. Of the total management fee paid,
0.96% was paid for advisory services and 0.04% was reimbursed to the Adviser for
administrative services.
Stralem Equity Fund
For providing these services, the Fund pays the Adviser a quarterly management
fee calculated at an annual rate of 1.50% of the Fund's average weekly net
assets.
Portfolio Manager. Philippe E. Baumann is primarily responsible for the
day-to-day management of the Funds' portfolios. Mr. Baumann has been
executive vice president of the Adviser since 1973.
SHAREHOLDER INFORMATION
Investment Minimums.
The minimum initial investment in the Stralem Fund is $100. The minimum initial
investment in the Stralem Equity Fund is $200,000 but current investors of the
Stralem Fund are not subject to the investment minimum for Stralem Equity Fund.
There is no minimum for subsequent investments. We may reduce or waive the
minimum investment requirements in some cases.
Net Asset Value. The net asset value ("NAV") per share of the each Fund is
determined as of 4:00 p.m. Eastern Standard Time on each day the New York Stock
Exchange, Inc. (the "Exchange") is open for business. The NAV is calculated by
subtracting each Fund's liabilities from its assets and then dividing that
number by the total number of outstanding shares. Securities without a readily
available price quotation may be priced at fair value. Fair value is determined
in good faith by the management of each Fund.
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<PAGE>
How to Purchase Shares. You must be a client of the Adviser to purchase shares
of either Fund. Clients may purchased shares from the Adviser at 405 Park
Avenue, New York, New York 10022. When you purchases shares of either Fund, you
will pay no sales charges, underwriting discounts or commissions. The Fund's
shares are continuously offered for sale at NAV. The Funds must receive your
purchase request by the close of the Exchange to receive the NAV of that day. If
your request is received after the close of trading on the Exchange, it will be
processed the next business day.
How to Exchange or Redeem Shares. You may exchange shares of the Stralem Equity
Fund for shares of the Stralem Fund and shares of Stralem Fund for shares of
Stralem Equity Fund. You may redeem shares of either Fund without charge at any
time by telephone. If you were issued certificates, you must submit your
properly endorsed certificates with your signature guaranteed. Please contact
the Adviser for information about obtaining a signature guarantee.
When you exchange shares, you sell your shares of one Fund and buy shares of the
other Fund. When you exchange or redeem shares, your shares will be valued at
the next-determined NAV of such shares. The Funds must receive your purchase or
exchange request by the close of the Exchange to receive the NAV of that day.
The Funds will pay you as soon as reasonably practicable after receipt of the
redemption request and certificates. In any event, the Funds will pay you within
three business days. Because the NAV fluctuates with the change in market value
of the securities owned, the amount you receive upon redemption may be more or
less than the amount you paid for the shares.
Suspension of Redemptions. The Funds may suspend at any time redemption of
shares or payment when:
o the Exchange is closed;
o trading on the Exchange is restricted; or
o certain emergency circumstances exists.
Exchange Limit. In order to limit expenses, the Funds reserve the right to
limit to two the number of exchanges you can make in any year.
Dividends and Capital Gains Distributions. The Funds intend to distribute all or
most of their net investment income and net capital gains to shareholders
annually. If you are buying shares of the Stralem Fund, you should indicate on
your purchase application whether you want your dividends and distributions
automatically paid to you in cash or reinvested in the Funds at NAV. Otherwise,
dividends and/or capital gains distributions with respect to the Stralem Fund
will be automatically reinvested, and dividends and/or capital gains
distributions with respect to the Stralem Equity Fund will be automatically paid
to you in cash.
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<PAGE>
Tax Issues. The Funds intend to continue to qualify as regulated investment
companies, which means that they pay no federal income tax on the earnings or
capital gains they distribute to their shareholders. We provide this tax
information for your general information. You should consult your own tax
adviser about the tax consequences of investing in a Fund.
o Ordinary dividends from a Fund are taxable as ordinary income and
dividends from a Fund's long-term capital gains are taxable as
capital gain.
o Dividends are treated in the same manner for federal income tax
purposes whether you receive them in the form of cash or additional
shares. They may also be subject to state and local taxes.
o Certain dividends paid to you in January will be taxable as if they
had been paid the previous December.
o We will mail you tax statements every January showing the amounts
and tax status of the distributions you received.
o When you sell (redeem) or exchange shares of a Fund, you must
recognize any gain or loss.
o Because your tax treatment depends on your purchase price and tax
position, you should keep your regular account statements for use in
determining your tax.
o You should review the more detailed discussion of federal income tax
considerations in the Statement of Additional Information.
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<PAGE>
FINANCIAL HIGHLIGHTS
Stralem Fund
This financial highlights table is intended to help you understand the Stralem
Fund's financial performance for the past 5 years. Certain information reflects
financial results for a single share of the Fund. The total returns in the table
represent the rate that an investor would have earned on an investment in the
Fund assuming reinvestment of all dividends and distributions. Richard A. Eisner
& Company, LLP has audited this information. Richard A. Eisner & Company LLP's
report along with further detail on the Fund's financial statements are included
in the annual report which is available upon request.
For a capital share of the Stralem Fund outstanding throughout the period
Year Ended December 31,
1999 1998 1997 1996 1995
Net asset value, beginning of $15.14 $13.15 $11.66 $11.55 $9.77
------ ------ ------ ------ -----
period
Income from investment operations:
Net investment income .32 .35 .41 .47 .49
Net gains or losses on 1.90 2.90 2.00 .36 2.00
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securities
Total from investment income 2.22 3.25 2.41 .83 2.49
---- ---- ---- --- ----
Less distributions:
Dividends from net investment (.31) (.34) (.40) (.47) (.49)
income
Distributions from capital gains (.49) (.92) (.52) (.25) (.22)
----- ----- ----- ----- -----
Total distributions (.80) (1.26) (.92) (.72) (.71)
----- ------ ----- ---- -----
Net asset value, end of period $16.56 $15.14 $13.15 $11.66 $11.55
------ ------ ------ ------ -------
Total Return 14.69% 24.70% 20.62% 7.22% 25.45%
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Ratio/supplemental data:
Net assets, end of period (in
thousands) $65,793 $48,662 $35,586 $30,849 $29,483
Ratio of expenses to average 1.35% 1.18% 1.19% 1.21% 1.23%
net assets
Ratio of net investment income
to average net assets 1.97% 2.30% 2.87% 3.72% 4.12%
Portfolio turnover rate 20.00% 18.00% 52.00% 17.00% 35.00%
Stralem Equity Fund
The Stralem Equity Fund commenced selling shares in January 2000 and thus has no
performance history and no financial highlights for review.
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<PAGE>
[back cover]
Statement of Additional Information. The Statement of Additional Information
provides a more complete discussion about the Funds and is incorporated by
reference into this prospectus, which means that it is considered a part of this
prospectus.
Annual and Semi-Annual Reports. The annual and semi-annual reports to
shareholders contain additional information about Stralem Fund's investments,
including a discussion of the market conditions and investment strategies that
significantly affected Stralem Fund's performance during its last fiscal year.
To Review or Obtain this Information. To obtain a free copy of the Statement of
Additional Information and annual and semi-annual reports or to make any other
inquiries about the Funds, you may call the Funds collect at (212) 888-8123.
This information may be reviewed and copied at the Public Reference Room of the
Securities and Exchange Commission in Washington, D.C. Information on the
operation of the Public Reference Room may be obtained by calling (800)
SEC-0330. Copies of this information may also be obtained for a duplicating fee
by electronic request to [email protected], or by writing the Public Reference
Room of the Securities and Exchange Commission, Washington, D.C. 20549-6009.
Information about the Fund is also available on the SEC's EDGAR database on its
internet site at http://www.sec.gov.
Investment Company Act File No. 811-1920.
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<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
STRALEM FUND
405 Park Avenue
New York, New York 10022
STRALEM FUND
STRALEM EQUITY FUND
April 24, 2000
This Statement of Additional Information ("SAI") is not a Prospectus. This SAI
should be read in conjunction with the prospectus of Stralem Fund and Stralem
Equity Fund dated April 24, 2000 (each Fund to which this SAI relates will be
referred to as, collectively, the "Funds") pursuant to which shares of the Funds
are offered (the "Prospectus"). This SAI should also be read in conjunction with
Stralem Fund's Annual Report for the year ended December 31, 1999. This SAI is
incorporated by reference in its entirety into the Prospectus. To obtain a copy
of the Prospectus, please write to Stralem Fund at 405 Park Avenue, New York,
New York 10022 or call collect at (212) 888-8123.
Stralem & Company Incorporated serves as the Funds' investment adviser (the
"Investment Adviser").
TABLE OF CONTENTS
Page
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General Information........................................................B-2
Organization and History...................................................B-2
Investment Objective, Policies and Techniques..............................B-2
Management of the Funds....................................................B-4
Control Persons and Principal Holders of Securities........................B-6
Investment Adviser.........................................................B-7
Brokerage Allocation.......................................................B-9
Codes of Ethics............................................................B-9
Additional Information on Purchase, Redemption and Pricing of Shares.......B-10
Performance of the Funds...................................................B-10
Taxes......................................................................B-11
Additional Information About the Funds.....................................B-15
Financial Statements.......................................................B-16
B-1
<PAGE>
GENERAL INFORMATION
The SAI provides a further discussion of certain matters described in the
Prospectus and other matters which may be of interest to investors. No
investment in shares of the Funds should be made without first reading the
Prospectus.
ORGANIZATION AND HISTORY
Stralem Fund (the "Trust" or "Stralem") is an open-end management
investment company. Stralem was incorporated on July 9, 1969 under the laws of
the State of Delaware, and on April 30, 1999, Stralem was reorganized into a
Delaware business trust. Currently, the Trust offers two separate,
non-diversified series portfolios: Stralem Fund and Stralem Equity Fund.
INVESTMENT OBJECTIVE, POLICIES AND TECHNIQUES
Objectives of the Funds
The investment objective of Stralem Fund is to seek the realization of a
combination of income and capital appreciation in an attempt to maximize total
return. The investment objective of Stralem Equity Fund is long-term capital
appreciation.
Investment Policies
Since 1974, Stralem Fund's investment policy has been to achieve its
investment objective through a portfolio of securities which is not confined to
any particular area. Stralem Equity Fund's investment policy is to invest
primarily in equity securities listed or traded on major U.S. stock exchanges.
Both Funds are non-diversified and may, therefore, invest a greater percentage
of its assets in the securities of fewer issuers than many diversified
investment companies. To the extent that a greater portion of each Fund's assets
is invested in a smaller number of issuers, an investment in either Fund may be
considered more speculative than an investment in a diversified fund.
Other Investment Techniques
Each Fund may purchase and sell covered options on stocks and stock price
index listed on major exchanges or traded over-the counter where the total cost
of such options does not exceed 10% of the net asset value of a Fund at the time
of purchase. A covered option is one where a Fund owns the underlying
securities.
Turnover Rate
During 1999, 1998 and 1997 the turnover rate of Stralem Fund's portfolio,
calculated by dividing the lesser of purchases or sales of portfolio securities
for the period by the monthly average of the value of the portfolio securities
owned by Stralem Fund during the period, was approximately 20%, 18% and 52%,
respectively. Neither Stralem Fund nor Stralem Equity Fund can predict what its
turnover rate will be in 2000. A high rate of turnover may result in increased
income and gain which would have to be distributed to a Fund's shareholders in
order for a Fund to continue to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code.
Fundamental Investment Restrictions
Each Fund has adopted the following investment restrictions which cannot
be changed without approval of the holders of a majority of its outstanding
shares of that Fund. A majority vote means the lesser of (i) 67% or more of the
shares present (in person or by proxy) at a meeting of shareholders at which
more than one-half of the outstanding shares of a Fund are present (in person or
by proxy) or (ii) more than one-half of the outstanding shares of a Fund.
1. Each Fund may not issue any senior security (as defined by the
Investment Company Act of 1940 (the "1940 Act")), except that (a) each
Fund may engage in transactions that may result in the
B-2
<PAGE>
issuance of senior securities to the extent permitted under applicable
regulations and interpretations of the 1940 Act or an exemptive order; (b)
each Fund may acquire other securities, the acquisition of which may
result in the issuance of a senior security, to the extent permitted under
applicable regulations or interpretations of the 1940 Act; and (c) subject
to the restrictions set forth below, each Fund may borrow as authorized by
the 1940 Act.
2. Each Fund may not borrow money, except that it may (a) enter into
commitments to purchase securities and instruments in accordance with its
investment program, provided that the total amount of any borrowing does
not exceed 33 1/3% of that Fund's total assets at the time of the
transaction; and (b) borrow money in an amount not exceeding 33 1/3% of
the value of its total assets at the time when the loan is made. Any
borrowings representing more than 33 1/3% of a Fund's total assets must be
repaid before that Fund may make additional investments.
3. Each Fund may underwrite securities of other issuers, except to
extent that it may be considered an underwriter within the meaning of the
Securities Act when reselling securities held in its own portfolio.
4. The Funds may not concentrate their investments in a particular
industry (other than securities issued or guaranteed by the government or
any of its agencies or instrumentalities). No more than 25% of the value
of a Fund's total assets, based upon the current market value at the time
of purchase of securities in a particular industry, may be invested in
such industry. This restriction shall not prevent a Fund from investing
all of its assets in a "master" fund that has adopted a similar
restriction.
5. The Funds may not engage in the purchase or sale of direct
interests in real estate or invest in indirect interests in real estate,
except for the purpose of providing office space for the transaction of
its business. The Funds may, however, invest in securities of real estate
investment trusts when such securities are readily marketable, but the
Funds have no current intention of so doing.
6. The Funds may not purchase or sell physical commodities unless
acquired as a result of ownership of securities or other instruments (but
this shall not prevent a Fund from purchasing or selling options and
futures contracts or from investing in securities or other instruments
backed by physical commodities).
7. The Funds may not lend any security or make any other loan if, as
a result, more than 33 1/3% of its total assets would be lent to other
parties, but this limitation does not apply to purchases of publicly
issued debt securities or to repurchase agreements.
Stralem Fund has also adopted the following investment restrictions
which cannot be changed without shareholder vote:
8. As to 50% of the value of its total assets, the Fund may not
invest more than 5% of its assets, taken at market value, in the
securities of any one issuer (except United States Government securities)
and may not purchase more than 10% of the outstanding voting securities of
any such issuer.
9. The Fund may not invest more than 25% of the value of its total
assets, taken at market value, in the securities of a single issuer.
Each Fund will also be subject to certain restrictions in order to qualify
as a regulated investment company. See "Taxes - Qualifications as a Regulated
Investment Company".
B-3
<PAGE>
MANAGEMENT OF THE FUNDS
Trustees and Officers
The Board of Trustees is responsible for the over-all operations of the
Funds. The officers of the Funds, under the direction of the Board of Trustees,
are responsible for the day-to-day operations of the Funds. The Board of
Trustees and Officers of the Funds are as follows:
Shares of Funds Current Principal Occupation
Name, Office, Address Beneficially and Principal Occupation
and Age Owned Directly or During Past Five Years
--- ----------------------
Indirectly
at March 31, 2000
Philippe E. Baumann 129,895 Stralem Fund Mr. Baumann has been a
(69)* 2,808 Stralem Equity Director and Vice-President of
Trustee and President Fund(1) Stralem & Company Incorporated
405 Park Avenue from 1970 to May 31, 1973.
New York, NY 10022 Since June 1, 1973, he has
been its Executive Vice
President.
Hirschel B. Abelson 200,161 Stralem Fund Mr. Abelson has been a
(66)* 4,436 Stralem Equity Director and President of
Secretary and Treasurer Fund(2) Stralem & Company Incorporated
405 Park Avenue since June 1, 1973.
New York, NY 10022
Kenneth D. Pearlman 394 Stralem Fund Mr. Pearlman has been the
(69) 100 Stralem Equity Fund Managing Director of The Evans
Trustee Partnership, an investment
745 Fifth Avenue partnership, since 1992.
New York, NY 10151
Michael T. Rubin (59) 4,019 Stralem Fund(3) From 1974 through his
Trustee 200 Stralem Equity Fund retirement in June 1997, Mr.
425 Park Avenue South Rubin served as Vice President
New York, NY 10016 of Stralem Fund and an
Assistant Vice President and
an Assistant Secretary of
Stralem & Company
Incorporated.
Jean Paul Ruff (65) 816 Stralem Fund(4) Mr. Ruff has been President of
Trustee 130 Stralem Equity Fund Hawley Fuel Coal, Inc. since
351 East 84th Street 1976 and Chairman since 1980.
New York, NY 10028
Philippe Labaune (31) * 1,328 Stralem Fund Mr. Labaune has been employed
Vice President 26 Stralem Equity Fund by Stralem & Company
405 Park Avenue Incorporated since May 1997.
New York, NY 10022 He has served as Assistant
Vice President and Assistant
Secretary of Stralem & Company
Incorporated and Vice
President of Stralem Fund
since October 1997. He was a
trader at Societe Generale
Securities Corp. from
1995-1997 and a student at
Pace University prior to 1995.
B-4
<PAGE>
Joann Paccione (43) 0 Ms. Paccione has been
Assistant Secretary and Assistant Secretary and
Assistant Treasurer Assistant Treasurer of Stralem
405 Park Avenue Fund since April 1990. She was
New York, NY 10022 employed as an accountant by
Richard A. Eisner & Company,
LLP from 1981 through October
1987. Since October 1987, Ms.
Paccione has been engaged in
providing accounting services
on an independent basis.
- --------------------
* Interested person as defined in the Investment Company Act of 1940, as
amended, by reason of relationship as officer or trustee.
1 Does not include 190,263 shares owned in the aggregate by two children of
Mr. Baumann and 13,782 shares owned by his wife, but includes 126,459
shares of Stralem Fund owned beneficially by Mr. Baumann through his
interest in Stralem Employees Profit Sharing Trust; 3,436 shares of
Stralem Fund held directly; and 2808 shares of Stralem Equity Fund owned
beneficially by Mr. Baumann through his interest in Stralem Employees
Profit Sharing Trust.
2 Does not include 3,135 shares owned in the aggregate by three children of
Mr. Abelson and 394 shares owned by his wife, but includes 199,767 shares
of Stralem Fund owned beneficially by Mr. Abelson through his interest in
Stralem Employees Profit Sharing Trust; 394 shares of Stralem Fund held
directly and 4,436 shares of Stralem Equity Fund owned beneficially by Mr.
Abelson through his interest in Stralem Employees Profit Sharing Trust.
3 Does not include an aggregate of 209 shares owned by Mr. Rubin's daughter,
of which shares he disclaims beneficial ownership.
4 Does not include 47,580 shares owned in the aggregate by two children of
Mr. Ruff and by Mr. Ruff's wife in custody for his daughter, of which
shares he disclaims beneficial ownership.
Mr. Baumann has served as a director since April 27, 1972. Mr. Pearlman
was elected a director for the first time on February 6, 1974. Mr. Ruff was
elected a director at the Annual Meeting of Stockholders held on April 23, 1980.
Mr. Rubin was elected a director on October 8, 1997 to fill the seat left vacant
upon the death of William Hertan in December 1996. At a meeting of shareholders
on April 7, 1999, Messrs. Baumann, Pearlman, Ruff and Rubin were elected to
serve as Trustees.
None of the Board of Trustees and Officers of the Funds receives any
compensation, other than Trustees' fees, from the Funds. The Funds pay each
Trustee who is not an employee of the Investment Adviser a Trustee's fee of up
to $1,200 a year for meetings attended, and reimburses them for their
out-of-pocket expenses incurred on Fund business. No Trustees' out-of-pocket
expenses were claimed or reimbursed during 1999. The table below illustrates the
compensation paid to each Trustee for the most recently completed fiscal year:
Pension or Total
Retirement Estimated Compensation
Aggregate Benefits Annual from the
Compensation Accrued as Benefits Funds
Name of Person, from the Part of Upon Paid to
Position Funds Fund Expenses Retirement Trustees
-------- ----- ------------- ---------- --------
Jean Paul Ruff, $800 0 0 $800
Trustee
Kenneth D. Pearlman, $1,000 0 0 $1,000
Trustee
Michael T. Rubin, $1,000 0 0 $1,000
Trustee
B-5
<PAGE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of March 31, 2000, Stralem Fund had 5,000,000 authorized shares of
beneficial interest, par value $0.01, of which Stralem Fund had 3,881,532 shares
of beneficial interest issued and outstanding and Stralem Equity Fund had
187,418 shares of beneficial interest issued and outstanding. The following
table shows certain information as to the holdings of shareholders with 5% or
more of Stralem Fund's outstanding shares and the trustees and officers of
Stralem Fund as a group as of March 31, 2000:
Stralem Fund
Amount and Nature
Name of of Beneficial Percent
Beneficial Owner Address Ownership(1) of Class
---------------- ------- ---------- --------
Stralem Employees' 405 Park Avenue 450,296 shares 11.60%
Profit Sharing Trust New York, New York
10022
Brown Brothers Harriman- 59 Wall Street 570,194 shares2 14.69%
UBS New York, New York
10005
- --------------------
1 Unless otherwise indicated, all ownership is record and beneficial.
2 Record only.
Stralem Equity Fund
Amount and Nature
Name of of Beneficial Percent
Beneficial Owner Address Ownership(1) of Class
---------------- ------- ---------- --------
Simone Nordman c/o Murs F. Meyer 9,467 shares 5.05%
Case Postale 1880
1211 Geneva 1,
Switzerland
Lombard Odier 11 Rue de Law 10,000 shares 5.34%
Corraterie
1204 Geneva,
Switzerland
Stralem Employees' 405 Park Avenue 10,000 shares 5.34%
Profit Shares Trust New York, New York
10022
Jan Krukowski R/O IRA Delaware Charter 10,566 shares 5.64%
Trustee
120 East End Avenue
New York, New York
10028-7533
Cambon Finance 4 Rue Cambon 11,238 shares(2) 6.00%
75001 Paris, France
Generali Assurances Attn: H.K. 11,580 shares 6.18%
(Familia) Schonenberger
Teufenerstrasse 25
9001 St. Gahen,
Switzerland
Brown Brothers Harriman 59 Wall Street 80,000 shares2 42.69%
General Assurances New York, New York
Generales 10005
- --------------------
1 Unless otherwise indicated, all ownership is record and beneficial.
2 Record only.
B-6
<PAGE>
INVESTMENT ADVISER
The Investment Adviser, Stralem & Company Incorporated, having an office
at 405 Park Avenue, New York, New York 10022, is the investment adviser to the
Funds under separate contracts (each, a "Contract") dated April 18, 2000 with
Stralem Fund and January 3, 2000 with Stralem Equity Fund. Pursuant to each
Contract, the Investment Adviser provides the Funds with, and pays for, all
office space and utilities and all research and investment services. The
Investment Adviser provides the Funds with, and initially pays for (subject to
reimbursement by the Funds, as provided below), all clerical, statistical and
related services (excluding legal, accounting, auditing and custodial services)
reasonably required by the Funds for the conduct of its business. Legal,
accounting, auditing and custodial services are separately obtained and paid for
by the Funds.
Contract with Stralem Fund
Under its Contract, Stralem Fund reimburses the Investment Adviser for
certain of its expenses attributable to the administration of Stralem Fund,
including a proportionate part of the compensation of employees of the
Investment Adviser who perform the clerical, statistical and related services
for Stralem Fund referred to above; such reimbursement is limited by its
Contract to $25,000 per annum. Stralem Fund reimburses the Investment Adviser
for, among other things, the expenses and compensation of its employees incurred
in preparing reports for Stralem Fund, in performing Stralem Fund's duties as
the transfer agent and registrar of its own shares and as dividend agent and in
performing all of the other administrative functions of Stralem Fund. Stralem
Fund pays all of its other costs and expenses directly. As a consequence of such
reimbursement of the Investment Adviser and such direct payment of other costs,
substantially all of Stralem Fund's expenses, other than those for office space
and facilities, are directly or indirectly paid by Stralem Fund. Stralem Fund's
Contract is reviewed annually by the Board of Trustees who may in their
discretion approve the continuation of the Contract.
The continuation of Stralem Fund's Contract was last approved on April 18,
2000 at a meeting of the Board of Trustees held for that purpose. Previously,
Stralem Fund's Contract was approved and adopted by Stralem Fund's shareholders
at an Annual Shareholders' meeting held on April 7, 1999 following the
conversion to a Delaware business trust. This Contract replaced the prior
investment management agreement of Stralem Fund dated February 28, 1977.
Stralem Fund pays the Adviser an advisory fee as described in its
Contract. Under the Contract, Stralem Fund pays to the Investment Adviser on a
quarterly basis an amount equal to the aggregate of the following percentages of
the average weekly net asset value of Stralem Fund during the quarterly period
then ended:
1/4 of 1.00% of the first $50 million of such net asset value
(1.00% annually),
3/16 of 1.00% of the next $50 million of such net asset value
(0.75% annually), and
1/8 of 1.00% of such net asset value in excess of $100 million
(0.50% annually).
The total payment under Stralem Fund's Contract for 1999 was $629,755, of which
$25,000 was a reimbursement of the Investment Adviser's expenses attributable to
administration of Stralem Fund. The total payment under Stralem Fund's Contract
for 1998 was $505,341, of which $24,945 was a reimbursement of the Investment
Adviser's expenses attributable to administration of Stralem Fund. The total
payment under Stralem Fund's Contract for 1997 was $412,175 of which $21,240 was
a reimbursement for the Investment Adviser's expenses attributable to the
administration of Stralem Fund.
Contract with Stralem Equity Fund
Under its Contract, Stralem Equity Fund reimburses the Investment Adviser
for certain of its expenses attributable to the administration of Stralem Equity
Fund, including a proportionate part of the compensation of employees of the
Investment Adviser who perform the clerical, statistical and related services
for Stralem Equity Fund referred to above. Stralem Equity Fund reimburses the
Investment Adviser for, among other things, the actual expenses and compensation
of its employees incurred in preparing reports for Stralem Equity Fund, in
performing
B-7
<PAGE>
Stralem Equity Fund's duties as the transfer agent and registrar of
its own shares and as dividend agent and in performing all of the other
administrative functions of Stralem Equity Fund. Stralem Equity Fund pays all of
its other costs and expenses directly. As a consequence of such reimbursement of
the Investment Adviser and such direct payment of other costs, substantially all
of Stralem Equity Fund's expenses, other than those for office space and
facilities, are directly or indirectly paid by Stralem Equity Fund. Stralem
Equity Fund's Contract is reviewed annually by the Board of Trustees who may in
their discretion approve the continuation of the Contract.
Stralem Equity Fund pays the Adviser an advisory fee as described in its
Contract. Under its Contract, Stralem Equity Fund pays to the Investment Adviser
on a quarterly basis an amount equal to the aggregate of the following
percentages of the average weekly net asset value of Stralem Equity Fund during
the quarterly period then ended:
1/4 of 1.50% of the first $100 million of such net asset value
(1.50% annually),
1/4 of 1.25% of the next $100 million of such net asset value
(1.25% annually), and
1/4 of 1.00% of such net asset value in excess of $200 million
(1.00% annually).
Each Contract will continue in effect from year to year so long as its
continuance is specifically approved at least annually either (1) by the Board
of Trustees or (2) by the vote of a majority of the outstanding shares of a
Fund, provided that in either event the continuance is also approved by the vote
of a majority of the Trustees who are not parties to the Contract or interested
persons of such parties, cast in person at a meeting called for the purpose of
voting on such approval. In addition, each Contract may be terminated, without
the payment of any penalty, at any time by the Board of Trustees or by the
Investment Adviser, or by the vote of a majority of the outstanding shares of a
Fund upon not more than 60 days' written notice, and will be automatically
terminated upon any assignment thereof.
Allocation of Investments
The Investment Adviser is a registered investment adviser under the
Investment Advisers Act of 1940, as amended, and has as clients private
individuals, trusts, pension and profit sharing funds, some of whom, like the
Funds, have capital appreciation as an investment objective. As a result,
investment personnel of the Investment Adviser may at times consider purchases
and sales of the same investment securities for the Funds as well as for one or
more of the other accounts which they manage or advise. In such cases, it would
be the practice of such personnel to allocate the purchases and sales
transactions among the Funds and such other accounts in an equitable manner with
each account paying the average share price for all transactions in a particular
security on a given business day. In making such allocation, the main factors
considered would be the respective investment objectives of a Fund and the other
accounts, the relative size of the portfolio holdings of each of the same or
comparable securities, the current availability of cash for investment by a Fund
and each of the other accounts, the tax status of a Fund and the other accounts,
and the size of investment commitments generally held by a Fund and the other
accounts. All transaction costs relating to these purchases and sales will be
shared pro rata by the Funds and the other accounts based on each account's
participation in a transaction.
Within the limits set forth in Section 17 of the Investment Company Act of
1940, as amended (the "1940 Act"), each Fund may invest in securities the
issuers of which are clients of the Investment Adviser, but such investments
would only be made in securities which are freely marketable under the
Securities Act of 1933 (the "Securities Act").
Each Fund pays an investment advisory fee to the Investment Adviser;
accordingly, investment advisory clients of the Investment Adviser who pay an
investment advisory fee based upon the amount of securities or cash with respect
to which the Investment Adviser renders investment advice and who own shares of
a Fund may also effectively pay an additional advisory fee with respect to these
shares. No additional investment advisory fees are charged to clients of the
Investment Adviser which are subject to the Employee Retirement and Income
Security Act on amounts invested by such clients in a Fund.
B-8
<PAGE>
Mr. Philippe E. Baumann is an officer and trustee of the Funds and also of
the Investment Adviser. Mr. Abelson is an officer of the Funds and is also an
officer of the Investment Adviser. Mr. Labaune is an officer of the Funds and an
officer of the Investment Adviser. The following persons, as of March 31, 2000,
beneficially owned 5% or more of the Investment Adviser's outstanding voting
common stock: President of the Investment Adviser, Hirschel B. Abelson (33.3%);
Executive Vice President of the Investment Adviser, Philippe E. Baumann (33.3%);
and Vice President of the Investment Adviser, M. Joel Unger (33.3%). Messrs.
Abelson, Baumann and Unger together control the Investment Adviser. Messrs.
Abelson, Baumann and Unger, together with members of their families, also own
100% of the outstanding non-voting common stock of the Investment Adviser.
BROKERAGE ALLOCATION
Decisions to buy and sell securities for a Fund and assignment of
portfolio business and negotiation of commission rates, where applicable, are
made by the Investment Adviser. It is the Funds' policy to obtain the best
prices and execution of orders available, and, in doing so, the Funds will
assign portfolio executions and negotiate transactions in accordance with the
reliability and quality of a broker's services (including handling of execution
of orders, research services the nature of which is the receipt of research
reports, and related services) and the value of such services and expected
contribution to the performance of a Fund. Where commissions paid reflect
services furnished to a Fund in addition to execution of orders, each Fund will
stand ready to demonstrate that such services were bona fide and rendered for
the benefit of that Fund. It is possible that certain of such services may have
the effect of reducing the Investment Adviser's expenses.
During 1999, 1998, and 1997, Stralem Fund's brokerage amounted to $39,168,
$37,935, and $57,500, respectively, 100% of which was placed through the
Investment Adviser or affiliated persons of Stralem Fund or the Investment
Adviser or any other brokers an affiliated person of which is an affiliated
person of Stralem Fund or the Investment Adviser. The Contracts do not contain
any provision requiring a Fund's brokerage to be transacted through the
Investment Adviser. The Board of Trustees has reviewed and approved the
foregoing brokerage arrangements.
With respect to any transactions to which competitively determined rates
are applicable, the execution will not be placed with the Investment Adviser at
a commission rate less favorable than the Investment Adviser's contemporaneous
charges for its other most favored, but unaffiliated, customers; and, in
addition, a good faith judgment will be made that the Investment Adviser is
qualified to obtain the best price on the particular transaction and that the
commission charged will be reasonable in relation to the value of the brokerage
provided in terms of either the particular transaction or the Investment
Adviser's overall responsibilities to the Funds. Since the obligation already
exists to provide management (which would include elements of research and
related skills), brokerage commissions paid to the Investment Adviser will not
reflect anything other than payment for the execution services performed on the
particular transactions.
When a Fund purchases or sells a security "over-the-counter" if possible
it effects the transaction with a principal market maker, without the use of a
broker, unless in the opinion of a Fund a better execution will be achieved
through the use of a broker.
The Contracts do not provide for a reduction of the investment advisory
fee by any portion of the brokerage generated by portfolio transactions of a
Fund which the Investment Adviser may receive.
The Investment Adviser will not participate in commissions paid by a Fund
to other brokers or dealers and will not receive any reciprocal business,
directly or indirectly, as a result of such commissions.
CODES OF ETHICS
The Trust and Stralem & Company Incorporated have each adopted a Code of
Ethics (the "Codes of Ethics") to comply with Rule 17j-1 under the Investment
Company Act of 1940, as amended. These Codes of Ethics are designed to identify
and prevent conflicts of interest and prevent fraud. The Codes of Ethics require
initial, quarterly and annual reports by covered employees of all personal
securities transactions and holdings. The Codes of Ethics also bar investments
in private placements and initial public offerings by certain personnel of the
B-9
<PAGE>
Funds and Stralem & Company Incorporated without preclearance. The Board of
Trustees will review reports under the Codes of Ethics and receive certain
certifications with respect to their administration. The procedures under the
Adviser's Code of Ethics require preclearance of all personal securities
investments by persons who have access to certain sensitive investment
information. The Codes of Ethics are on file with and available from the
Securities and Exchange Commission.
ADDITIONAL INFORMATION ON PURCHASE, REDEMPTION AND PRICING OF SHARES
Shares of the Funds may be purchased only from Stralem & Company
Incorporated, 405 Park Avenue, New York, New York 10022, the statutory
underwriter of such shares, which pursuant to a distribution agreements dated as
of April 30, 1999 with Stralem Fund and January 3, 2000 with Stralem Equity
Fund, acts without any compensation as exclusive representative of the Funds in
making such sales. Stralem & Company Incorporated receives, on behalf of the
Funds, subscriptions for shares and payments therefor. The April 30, 1999
distribution agreement for Stralem Fund replaced the prior distribution
agreement dated February 28, 1977.
Shares of each Fund may be exchanged for shares of the other Fund. Sales
and exchanges of the Funds shares are executed at the Fund's prevailing net
asset value per share as of the date the purchase or exchange request is
received, if received before 4:00 p.m.
PERFORMANCE OF THE FUNDS
From time to time, the "average annual total return" and "total return" of
an investment in a Fund's shares may be advertised. An explanation of how yields
and total returns are calculated for each class and the components of those
calculations are set forth below.
Total return information may be useful to investors in reviewing a Fund's
performance. A Fund's advertisement of its performance must, under applicable
SEC rules, include the average annual total returns for each class of shares of
a Fund for the 1, 5, and 10-year period (or the life of the class, if less) as
of the most recently ended calendar quarter. This enables an investor to compare
a Fund's performance to the performance of other funds for the same periods.
However, a number of factors should be considered before using such information
as a basis for comparison with other investments. Investments in a Fund are not
insured; its total return is not guaranteed and normally will fluctuate on a
daily basis. When redeemed, an investor's shares may be worth more or less than
their original cost. Total return for any given past period is not a prediction
or representation by a Fund of future rates of return on its shares. The total
return of the shares of a Fund are affected by portfolio quality, portfolio
maturity, the type of investments a Fund holds, and operating expenses.
Total Returns
The "average annual total return" of a Fund is an average annual
compounded rate of return for each year in a specified number of years. It is
the rate of return ("T" in the formula below) based on the change in value of a
hypothetical initial investment of $1,000 ("P") held for a number of years ("n")
to achieve an Ending Redeemable Value ("ERV"), according to the following
formula:
P(1+T)n = ERV
The cumulative "total return" calculation measures the change in value of a
hypothetical investment of $1,000 over an entire period of years. Its
calculation uses some of the same factors as average annual total return, but it
does not average the rate of return on an annual basis. Cumulative total return
is determined as follows:
ERV - P = Cumulative Total Return
-------
P
In calculating total return for a Fund, the current maximum sales charge (as a
percentage of the offering price) is deducted from the initial investment ("P").
Total return also assumes that all dividends and net capital gains
B-10
<PAGE>
distributions during the period are reinvested to buy additional shares at net
asset value per share, and that the investment is redeemed at the end of the
period.
TAXES
The following is only a summary of certain additional federal income tax
considerations generally affecting the Funds and their shareholders that are not
described in the Prospectus. No attempt is made to present a detailed
explanation of the tax treatment of the Funds or their shareholders, and the
discussions here and in the Prospectus are not intended as substitutes for
careful tax planning. Special tax considerations may apply to certain types of
investors subject to special treatment under the Code, (including, for example,
insurance companies, banks and tax-exempt organizations).
Qualification as a Regulated Investment Company
Each Fund intend to qualify as a regulated investment company under
Subchapter M of the Code. If so qualified, a Fund will not be subject to federal
income tax on the portion of its net investment income (i.e., taxable interest,
dividends and other taxable ordinary income, net of expenses) and capital gain
net income (i.e., the excess of capital gains over capital losses) that it
distributes to shareholders, provided that it distributes at least 90% of its
investment company taxable income (i.e., net investment income and the excess of
net short-term capital gain over net long-term capital loss) and at least 90% of
its tax-exempt income (net of expenses allocable thereto) for the taxable year
(the "Distribution Requirement"), and satisfies certain other requirements of
the Code that are described below. Distributions by a Fund made during the
taxable year or, under specified circumstances, within twelve months after the
close of the taxable year, will be considered distributions of income and gains
of the taxable year and will, therefore, count towards the satisfaction of the
Distribution Requirement.
In addition to satisfying the Distribution Requirement, a regulated
investment company must derive at least 90% of its gross income from dividends,
interest, certain payments with respect to securities loans, gains from the sale
or other disposition of stock or securities or foreign currencies (to the extent
such currency gains are directly related to the regulated investment company's
principal business of investing in stock or securities) and 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 (the "Income Requirement").
In general, gain or loss recognized by a Fund on the disposition of an
asset will be a capital gain or loss. In addition, gain will be recognized as a
result of certain constructive sales, including short sales "against the box."
However, gain recognized on the disposition of a debt obligation purchased by a
Fund at a market discount (generally, at a price less than its principal amount)
will be treated as ordinary income to the extent of the portion of the market
discount which accrued during the period of time a Fund held the debt
obligation. In addition, under the rules of Code Section 988, gain or loss
recognized on the disposition of a debt obligation denominated in a foreign
currency or an option with respect thereto, and gain or loss recognized on the
disposition of a foreign currency forward contract, futures contract, option or
similar financial instrument, or of foreign currency itself, except for
regulated futures contracts or non-equity options subject to Code Section 1256
(unless a Fund elects otherwise), will generally be treated as ordinary income
or loss (but only to the extent attributable to changes in foreign currency
exchange rates).
Further, the Code also treats as ordinary income a portion of the capital
gain attributable to a transaction where substantially all of the expected
return is attributable to the time value of a Fund's net investment in the
transaction and: (1) the transaction consists of the acquisition of property by
a Fund and a contemporaneous contract to sell substantially identical property
in the future; (2) the transaction is a straddle within the meaning of section
1092 of the Code; (3) the transaction is one that was marketed or sold to a Fund
on the basis that it would have the economic characteristics of a loan but the
interest-like return would be taxed as capital gain; or (4) the transaction is
described as a conversion transaction in the Treasury Regulations. The amount of
the gain recharacterized generally will not exceed the amount of the interest
that would have accrued on the net investment for the relevant period at a yield
equal to 120% of the federal long-term, mid-term, or short-term rate, depending
upon the type of instrument at issue reduced by an amount equal to: (1) prior
inclusions of ordinary income items from the conversion transaction and (2)
under Treasury regulations that have not yet been promulgated, the capitalized
interest on acquisition indebtedness. Built-in losses will be preserved where a
Fund has a built-in loss
B-11
<PAGE>
with respect to property that becomes a part of a conversion transaction. No
authority exists that indicates that the converted character of the income will
not be passed through to a Fund's shareholders.
In general, for purposes of determining whether capital gain or loss
recognized by a Fund on the disposition of an asset is long-term or short-term,
the holding period of the asset may be affected if (1) the asset is used to
close a "short sale" (which includes for certain purposes the acquisition of a
put option) or is substantially identical to another asset so used, or (2) the
asset is otherwise held by a Fund as part of a "straddle" (which term generally
excludes a situation where the asset is stock and a Fund grants qualified
covered call option (which, among other things, must not be deep-in-the-money)
with respect thereto), or (3) the asset is stock and a Fund grants an
in-the-money qualified covered call option with respect thereto. In addition, a
Fund may be required to defer the recognition of a loss on the disposition of an
asset held as part of a straddle to the extent of any unrecognized gain on the
offsetting position.
Any gain recognized by a Fund on the lapse of, or any gain or loss
recognized by a Fund from a closing transaction with respect to, an option
written by a Fund will be treated as a short-term capital gain or loss.
Treasury Regulations permit a regulated investment company, in determining
its investment company taxable income and net capital gain (i.e., the excess of
net long-term capital gain over net short-term capital loss) for any taxable
year, to elect (unless it has made a taxable year election for excise tax
purposes as discussed below) to treat all or any part of any net capital loss,
any net long-term capital loss or any net foreign currency loss (including, to
the extent provided in Treasury Regulations, losses recognized pursuant to the
PFIC mark-to-market election) incurred after October 31 as if it had been
incurred in the succeeding year.
In addition to satisfying the requirements described above, a Fund must
satisfy an asset diversification test in order to qualify as a regulated
investment company. Under this test, at the close of each quarter of a Fund's
taxable year, at least 50% of the value of a Fund's assets must consist of cash
and cash items, U.S. Government securities, securities of other regulated
investment companies, and securities of other issuers (as to which a Fund has
not invested more than 5% of the value of a Fund' total assets in securities of
any such issuer and as to which a Fund does not hold more than 10% of the
outstanding voting securities of any such issuer), and no more than 25% of the
value of its total assets may be invested in the securities of any one issuer
(other than U.S. Government securities and securities of other regulated
investment companies), or in two or more issuers which a Fund controls and which
are engaged in the same or similar trades or businesses. Generally, an option
(call or put) with respect to a security is treated as issued by the issuer of
the security not the issuer of the option.
If, for any taxable year, a Fund does not qualify as a regulated
investment company, all of its taxable income (including its net capital gain)
will be subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and such distributions will be taxable to the
shareholders as ordinary dividends to the extent of a Fund's current or
accumulated earnings and profits. Such distributions may be eligible for the
dividends-received deduction in the case of corporate shareholders.
Excise Tax on Regulated Investment Companies
A 4% non-deductible excise tax is imposed on a regulated investment
company that fails to distribute in each calendar year an amount equal to 98% of
its ordinary taxable income for such calendar year and 98% of its capital gain
net income for the one-year period ended on October 31 of such calendar year
(or, with respect to capital gain net income, at the election of a regulated
investment company having a taxable year ending November 30 or December 31, for
its taxable year (a "taxable year election")). The balance of such income must
be distributed during the next calendar year. For the foregoing purposes, a
regulated investment company is treated as having distributed any amount on
which it is subject to income tax for any taxable year ending in such calendar
year.
For purposes of the excise tax, a regulated investment company shall: (1)
reduce its capital gain net income (but not below its net capital gain) by the
amount of any net ordinary loss for the calendar year; and (2) exclude foreign
currency gains and losses incurred after October 31 of any year (or after the
end of its taxable year if it has made a taxable year election) in determining
the amount of ordinary taxable income for the current calendar year (and,
instead, include such gains and losses in determining ordinary taxable income
for the succeeding calendar year).
B-12
<PAGE>
Each Fund intends to make sufficient distributions or deemed distributions
of its ordinary taxable income and capital gain net income prior to the end of
each calendar year to avoid liability for the excise tax. However, investors
should note that a Fund may in certain circumstances be required to liquidate
portfolio investments to make sufficient distributions to avoid excise tax
liability.
Fund Distributions
Each Fund anticipates distributing substantially all of its investment
company taxable income for each taxable year. Such distributions will be taxable
to shareholders as ordinary income and treated as dividends for federal income
tax purposes. However, such distributions will qualify for the 70%
dividends-received deduction for corporate shareholders, but only to the extent
discussed below.
Ordinary income dividends paid by a Fund with respect to a taxable year
will qualify for the 70% dividends-received deduction generally available to
corporations (other than corporations, such as S corporations, which are not
eligible for the deduction because of their special characteristics and other
than for purposes of special taxes such as the accumulated earnings tax and the
personal holding company tax) to the extent of the amount of qualifying
dividends received by a Fund from domestic corporations for the taxable year.
Generally, a dividend Fund will not be treated as a qualifying dividend (1) if
it has been received with respect to any share of stock that a Fund has held for
less than 46 days (91 days in the case of certain preferred stock), excluding
for this purpose under the rules of Code Section 246(c)(3) and (4) any period
during which a Fund has an option to sell, is under a contractual obligation to
sell, has made and not closed a short sale of, is the grantor of a
deep-in-the-money or otherwise nonqualified option to buy, or has otherwise
diminished its risk of loss by holding other positions with respect to, such (or
substantially identical) stock; (2) to the extent that a Fund is under an
obligation (pursuant to a short sale or otherwise) to make related payments with
respect to positions in substantially similar or related property; or (3) to the
extent that the stock on which the dividend is paid is treated as debt-financed
under the rules of Code section 246A. The 46-day holding period must be
satisfied during the 90-day period beginning 45 days prior to each applicable
ex-dividend date; the 91-day holding period must be satisfied during the 180-day
period beginning 90 days before each applicable ex-dividend date. Moreover, the
dividends-received deduction for a corporate shareholder may be disallowed or
reduced (1) if the corporate shareholder fails to satisfy the foregoing
requirements with respect to its shares of a Fund or (2) by application of Code
Section 246(b) which in general limits the dividends-received deduction to 70%
of the shareholder's taxable income (determined without regard to the
dividends-received deduction and certain other items).
Alternative minimum tax ("AMT") is imposed in addition to, but only to the
extent it exceeds, the regular tax and is computed at a maximum marginal rate of
28% for non-corporate taxpayers and 20% for corporate taxpayers on the excess of
the taxpayer's alternative minimum taxable income ("AMTI") over an exemption
amount. For purposes of the corporate AMT, the corporate dividends-received
deduction is not itself an item of tax preference that must be added back to
taxable income or is otherwise disallowed in determining a corporation's AMTI.
However, a corporate shareholder will generally be required to take the full
amount of any dividend received from a Fund into account (without a
dividends-received deduction) in determining its adjusted current earnings,
which are used in computing an additional corporate preference item (i.e., 75%
of the excess of a corporate taxpayer's adjusted current earnings over its AMTI
(determined without regard to this item and the AMT net operating loss
deduction)) includable in AMTI.
Each Fund may either retain or distribute to shareholders its net capital
gain for each taxable year. Each Funds currently intends to distribute any such
amounts. Net capital gain that is distributed and designated as a capital gain
dividend will be taxable to shareholders as long-term capital gain, regardless
of the length of time the shareholder has held his shares or whether such gain
was recognized by a Fund prior to the date on which the shareholder acquired his
shares. The Code provides, however, that under certain conditions only 50% of
the capital gain recognized upon a Fund's disposition of domestic "small
business" stock will be subject to tax.
Conversely, if a Fund elects to retain its net capital gain, a Fund will
be taxed thereon (except to the extent of any available capital loss carryovers)
at the 35% corporate tax rate. If a Fund elects to retain its net capital gain,
it is expected that a Fund also will elect to have shareholders of record on the
last day of its taxable year treated as if each received a distribution of his
pro rata share of such gain, with the result that each shareholder will be
required to report his pro rata share of such gain on his tax return as
long-term capital gain, will receive a refundable tax
B-13
<PAGE>
credit for his pro rata share of tax paid by a Fund on the gain, and will
increase the tax basis for his shares by an amount equal to the deemed
distribution less the tax credit.
Investment income that may be received by a Fund from sources within
foreign countries may be subject to foreign taxes withheld at the source. The
United States has entered into tax treaties with many foreign countries which
entitle a Fund to a reduced rate of, or exemption from, taxes on such income. It
is impossible to determine the effective rate of foreign tax in advance since
the amount of a Fund's assets to be invested in various countries is not known.
Distributions by a Fund that do not constitute ordinary income dividends
or capital gain dividends will be treated as a return of capital to the extent
of (and in reduction of) the shareholder's tax basis in his/her shares; any
excess will be treated as gain from the sale of his/her shares, as discussed
below.
Distributions by a Fund will be treated in the manner described above
regardless of whether such distributions are paid in cash or reinvested in
additional shares of a Fund (or of another fund). Shareholders receiving a
distribution in the form of additional shares will be treated as receiving a
distribution in an amount equal to the fair market value of the shares received,
determined as of the reinvestment date. In addition, if the net asset value at
the time a shareholder purchases shares of a Fund reflects undistributed net
investment income or recognized capital gain net income, or unrealized
appreciation in the value of the assets of a Fund, distributions of such amounts
will be taxable to the shareholder in the manner described above, although such
distributions economically constitute a return of capital to the shareholder.
Ordinarily, shareholders are required to take distributions by a Fund into
account in the year in which the distributions are made. However, dividends
declared in October, November or December of any year and payable to
shareholders of record on a specified date in such a month will be deemed to
have been received by the shareholders (and made by a Fund) on December 31 of
such calendar year if such dividends are actually paid in January of the
following year. Shareholders will be advised annually as to the U.S. federal
income tax consequences of distributions made (or deemed made) during the year.
Each Fund will be required in certain cases to withhold and remit to the
U.S. Treasury 31% of ordinary income dividends and capital gain dividends, and
the proceeds of redemption of shares, paid to any shareholder (1) who has failed
to provide a correct taxpayer identification number, (2) who is subject to
backup withholding for failure to properly report the receipt of interest or
dividend income, or (3) who has failed to certify to a Fund that it is not
subject to backup withholding or that it is a corporation or other "exempt
recipient."
Sale or Redemption of Shares
A shareholder will recognize gain or loss on the sale or redemption of
shares of a Fund (including an exchange of shares of a Fund for shares of
another Fund) in an amount equal to the difference between the proceeds of the
sale or redemption and the shareholder's adjusted tax basis in the shares. All
or a portion of any loss so recognized may be disallowed if the shareholder
purchases other shares of a Fund within 30 days before or after the sale,
redemption or exchange of shares in that Fund. In general, any gain or loss
arising from (or treated as arising from) the sale or redemption of shares of a
Fund will be considered capital gain or loss and will be long-term capital gain
or loss if the shares were held for longer than one year. However, any capital
loss arising from the sale or redemption of shares held for six months or less
will be treated as a long-term capital loss to the extent of the amount of
capital gain dividends received on such shares. For this purpose, the special
holding period rules of Code Section 246(c)(3) and (4) (discussed above in
connection with the dividends-received. deduction for corporations) generally
will apply in determining the holding period of shares. Capital losses in any
year are deductible only to the extent of capital gains plus, in the case of a
non-corporate taxpayer, $3,000 of ordinary income.
Foreign Shareholders
Taxation of a shareholder who, as to the United States, is a nonresident
alien individual, foreign trust or estate, foreign corporation, or foreign
partnership ("foreign shareholder"), depends on whether the income from a Fund
is "effectively connected" with a U.S. trade or business carried on by such
shareholder.
B-14
<PAGE>
If the income from a Fund is not effectively connected with a U.S. trade
or business carried on by a foreign shareholder, ordinary income dividends paid
to a foreign shareholder will be subject to U.S. withholding tax at the rate of
30% (or lower treaty rate) upon the gross amount of the dividend. Such foreign
shareholder would generally be exempt from U.S. federal income tax on gains
realized on the sale of shares of a Fund, capital gain dividends and amounts
retained by a Fund that are designated as undistributed capital gains.
If the income from a Fund is effectively connected with a U.S. trade or
business carried on by a foreign shareholder, then ordinary income dividends,
capital gain dividends, and any gains realized upon the sale of shares of a Fund
will be subject to U.S. federal income tax at the rates applicable to U.S.
citizens or domestic corporations.
In the case of a foreign shareholder other than a corporation, a Fund may
be required to withhold U.S. federal income tax at a rate of 31% on
distributions that are otherwise exempt from withholding tax (or taxable at a
reduced treaty rate) unless such shareholder furnishes a Fund with proper
notification of his/her foreign status.
The tax consequences to a foreign shareholder entitled to claim the
benefits of an applicable tax treaty may be different from those described
herein. Foreign shareholders are urged to consult their own tax advisers with
respect to the particular tax consequences to them of an investment in a Fund,
including the applicability of foreign taxes.
Effect of Future Legislation; State and Local Tax Consideration
The foregoing general discussion of U.S. federal income tax consequences
is based on the Code and the Treasury Regulations issued thereunder as in effect
on the date of this SAI. Future legislative or administrative changes or court
decisions may significantly change the conclusions expressed herein, and any
such changes or decisions may have a retroactive effect.
Rules of state and local taxation of ordinary income dividends and capital
gain dividends from regulated investment companies may differ from the rules for
U.S. federal income taxation described above. Shareholders are urged to consult
their tax advisers as to the consequences of these and other state and local tax
rules affecting investment in a Fund.
ADDITIONAL INFORMATION ABOUT THE FUNDS
Each Fund is a separate series of Stralem Fund, a Delaware business trust.
The Delaware Business Trust Act provides that a shareholder of a Delaware
business trust shall be entitled to the same limitation of personal liability
extended to shareholders of Delaware corporations, and the Trust Instrument
provides that shareholders of each Fund shall not be liable for the obligations
of that Fund. The Trust Instrument also provides for indemnification out of Fund
property for any shareholder held personally liable solely by his or her being
or having been a shareholder. The Trust Instrument also provides that a Fund
shall, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of a Fund, and shall satisfy any judgment
thereon. Thus, the risk of a shareholder incurring financial loss because of
shareholder liability is considered to be extremely remote.
The Trust Instrument authorizes the Board of Trustees to issue an
unlimited number of shares, which are units of beneficial interest, with a par
value of $0.01 per share. Each share has one vote and participates equally in
dividends and distributions declared by a Fund and in a Fund's net assets on
liquidation. The shares, when issued, are fully paid and non-assessable. Shares
have no pre-emptive, subscription or conversion rights and are freely
transferable.
Richard A. Eisner & Company, LLP, 575 Madison Avenue, New York, New York
10022 is the independent certified public accountant for the Funds and performs
auditing services for the Funds.
Schroder & Co. Inc. (the "Custodian"), a Delaware corporation which is a
member corporation of the New York Stock Exchange, Inc., and the corporation
through which the Investment Adviser clears its securities transactions, acts as
the custodian for all securities of the Funds. The Custodian's principal office
is presently
B-15
<PAGE>
located at 787 Seventh Avenue, New York, New York 10019. Each Fund
has a bank checking account with Chase Manhattan Bank.
Kramer Levin Naftalis & Frankel LLP, 919 Third Avenue, New York, New York
10022 serves as counsel to the Funds.
Each Fund acts as its own transfer agent, registrar and dividend agent.
FINANCIAL STATEMENTS
The audited financial statements for Stralem Fund (formerly Stralem Fund,
Inc.) and the notes thereto as of December 31, 1999 are incorporated herein by
reference to Stralem Fund's Annual Report to Shareholders dated February 2000.
The December 31, 1999 financial statements are incorporated herein in reliance
upon the report of Richard A. Eisner & Company, LLP, independent accountants,
given on the authority of such firm as experts in auditing and accounting.
Copies of the Annual Report may be obtained free of charge by telephoning
Stralem at the telephone number appearing on the front page of this SAI.
B-16
<PAGE>
PART C
OTHER INFORMATION
Item 23. Exhibits.
(a) Charter
(i) Amendment dated December 11, 1987, incorporated by reference herein from
Post-Effective Amendment No. 29 to its Registration Statement on Form N-1A
dated May 1, 1988 (the "1988 Registration Statement").
(ii) Charter, as amended, incorporated by reference from Post-Effective
Amendment No. 21 dated March 31, 1980 (SEC Reg. No. 2-34277) (the "1980
Registration Statement").
(iii) Certificate of Trust, filed as an Exhibit to Post-Effective Amendment
No. 40 to Registrant's Registration Statement on Form N-1A filed
electronically on February 26, 1999, accession number 0000922423-99-000367
and incorporated herein by reference.
(iv) Form of Trust Instrument, filed as an Exhibit to Post-Effective
Amendment No. 40 to Registrant's Registration Statement on Form N-1A filed
electronically on February 26, 1999, accession number 0000922423-99-000367
and incorporated herein by reference.
(b) By-laws
(i) Restated and amended, effective as of February 24, 1988, incorporated by
reference herein from 1988 Registration Statement.
(ii) By-laws effective prior to February 24, 1988, incorporated by reference
herein from the 1980 Registration Statement.
(iii) Form of Trust Bylaws, filed as an Exhibit to Post-Effective Amendment
No. 40 to Registrant's Registration Statement on Form N-1A filed
electronically on February 26, 1999, accession number 0000922423-99-000367
and incorporated herein by reference.
(c) Not applicable.
(d) Investment Advisory Contracts.
(i) Incorporated by reference from the 1980 Registration Statement.
(ii) Form of new Investment Advisory Agreement, filed as an Exhibit to
Post-Effective Amendment No. 40 to Registrant's Registration Statement on
Form N-1A filed electronically on February 26, 1999, accession number
0000922423-99-000367 and incorporated herein by reference.
(iii) Form of Investment Advisory Agreement for Stralem Equity Fund, filed
as an Exhibit to Post-Effective Amendment No. 42 to Registrant's
Registration Statement on Form N-1A filed electronically on January 10,
2000, accession number 0000922423-00-000042 and incorporated herein by
reference.
<PAGE>
(e) Distribution Agreements.
(i) Incorporated by reference from the 1980 Registration Statement.
(ii) Form of new Distribution Agreement, filed as an Exhibit to
Post-Effective Amendment No. 40 to Registrant's Registration Statement on
Form N-1A filed electronically on February 26, 1999, accession number
0000922423-99-000367 and incorporated herein by reference.
(iii) Form of Distribution Agreement for Stralem Equity Fund, filed as an
Exhibit to Post-Effective Amendment No. 42 to Registrant's Registration
Statement on Form N-1A filed electronically on January 10, 2000, accession
number 0000922423-00-000042 and incorporated herein by reference.
(f) Not applicable.
(g) Custodian Agreements.
(i) Incorporated by reference from the 1980 Registration Statement.
(ii) Form of new Custodian Agreement, filed as an Exhibit to Post-Effective
Amendment No. 41 to Registrant's Registration Statement on Form N-1A filed
electronically on April 29, 1999, accession number 0000922423-99-000570 and
incorporated herein by reference.
(h) Not applicable.
(i) Legal Opinion.
(i) Opinion of Kramer Levin Naftalis & Frankel LLP, filed as an Exhibit to
Post-Effective Amendment No. 41 to Registrant's Registration Statement on
Form N-1A filed electronically on April 29, 1999, accession number
0000922423-99-000570 and incorporated herein by reference.
(ii) Opinion of Morris, Nichols, Arsht & Tunnell, filed as an Exhibit to
Post-Effective Amendment No. 41 to Registrant's Registration Statement on
Form N-1A filed electronically on April 29, 1999, accession number
0000922423-99-000570 and incorporated herein by reference.
(j) Consents
(i) Consent of Counsel, filed herewith.
(ii) Consent of Independent Public Accountants, filed herewith.
(k) Not applicable.
(l) Not applicable.
(m) Not applicable.
(n) Not applicable.
<PAGE>
(p) Codes of Ethics.
(i) Code of Ethics of Stralem Fund, filed herewith
(ii) Code of Ethics of Stralem & Company Incorporated, filed herewith.
Item 24. Persons Controlled by or Under Common Control with Registrant.
There are no persons controlled by or under common control with the Registrant.
Item 25. Indemnification.
Indemnification in Form of Trust Instrument for Delaware business trust.
Section 10.02 Indemnification
(a) Subject to the exceptions and limitations contained in Subsection
10.02(b):
(i) every person who is, or has been, a Trustee or officer of the
Trust (hereinafter referred to as a "Covered Person") shall be
indemnified by the Trust 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, suit or proceeding in which he
becomes involved as a party or otherwise by virtue of his being or
having been a Trustee or officer and against amounts paid or incurred by
him in the settlement thereof;
(ii) the word "claim," "action," "suit," or "proceeding" shall apply
to all claims, actions, suits or proceedings (civil, criminal or other,
including appeals), actual or threatened while in office or thereafter,
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 Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office, (A) by the court or other
body approving the settlement; (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); or (C) by written opinion of independent
legal counsel based upon a review of readily available facts (as opposed
to a full trial-type inquiry).
(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
<PAGE>
which any covered Persona and shall inure to the benefit of the heirs, executors
and administrators of such a person. Nothing contained herein shall affect any
rights to indemnification to which Trust personnel, other than Covered Persons,
and other persons may be entitled by contact or otherwise under law.
(d) 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 10.02 may be paid by the Trust or 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 Series if it is ultimately determined that he is not entitled to
indemnification under this Section 10.02; 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 trial-type inquiry or full
investigation), that there is reason to believe that such Covered Person will be
found entitled to indemnification under this Section 10.02.
Item 26. Business and Other Connections of Investment Adviser.
The names and principal occupations of the officers and directors of the
Investment Adviser are:
Name and Title Principal Occupation
- -------------- --------------------
Hirschel B. Abelson President of Stralem & Company
Director and President Incorporated
Philippe E. Baumann Executive Vice President of Stralem &
Director and Executive Vice President Company Incorporated
M. Joel Unger Vice President of Stralem & Company
Director and Vice President Incorporated
Irene Bergman Assistant Vice President of Stralem &
Assistant Vice President Company Incorporated
Philippe Labaune Assistant Vice President and
Assistant Vice President Assistant Secretary of Stralem &
Company Incorporated
Adam Abelson Assistant Vice President of
Stralem & Company Incorporated
Except for Mr. Unger, the address of each of the foregoing is 405 Park
Avenue, New York, NY 10022. Mr. Unger's address is 1650 Yates Street,
Denver, CO 90203.
Item 27. Principal Underwriters.
(a) Stralem & Company Incorporated, the only underwriter of the
Fund, does not act as a principal underwriter, depositor or investment
advisor to any other investment company.
<PAGE>
(b) Please see the table furnished in response to Item 26
above. In addition, Mr. Philippe E. Baumann, the President and a
Trustee of the Fund, is the Executive Vice-President and a Director
of Stralem & Company Incorporated. Hirschel Abelson, the Secretary
and Treasurer of the Fund is also the President of Stralem & Company
Incorporated. Mr. Philippe Labaune, Vice-President of the Fund, is
also an Assistant Vice-President and Assistant Secretary of Stralem &
Company Incorporated.
(c) Inapplicable.
Item 28. Location of Accounts and Records.
All accounts and records are in the physical possession of Stralem Fund
at 405 Park Avenue, New York, New York 10022.
Item 29. Management Services.
Inapplicable.
Item 30. Undertakings.
The Registrant will provide each person to whom a prospectus is
delivered with a copy of Stralem Fund's most recent annual report to
shareholders upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness under Rule 485(b) under the Securities Act of
1933 and has duly caused this Post-Effective Amendment to its Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, and State of New York, on the 18th day of
April, 2000.
STRALEM FUND
By: /s/ Philippe E. Baumann
-----------------------------
Philippe E. Baumann, President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the dates indicated.
Signatures Title Dates
---------- ----- -----
/s/Philippe E. Baumann Trustee and President April 18, 2000
- ---------------------------- (Principal Executive Officer)
(Philippe E. Baumann)
/s/Kenneth D. Pearlman Trustee April 18, 2000
- ----------------------------
(Kenneth D. Pearlman)
/s/Jean Paul Ruff Trustee April 18, 2000
- ----------------------------
(Jean Paul Ruff)
/s/Michael Rubin Trustee April 18, 2000
- ----------------------------
(Michael Rubin)
/s/Hirschel B. Abelson Secretary and Treasurer April 18, 2000
- ---------------------------- (Principal Financial and
(Hirschel B. Abelson) Accounting Officer)
<PAGE>
EXHIBIT INDEX
Ex-99.j(i) Consent of Kramer Levin Naftalis & Frankel LLP
Ex-99.j(ii) Consent of Richard A. Eisner & Company, LLP
Ex-99.p(i) Form of Code of Ethics of Stralem Fund
Ex-99.p(ii) Form of Code of Ethics of Stralem & Company Incorporated
KRAMER LEVIN NAFTALIS & FRANKEL LLP
919 THIRD AVENUE
NEW YORK, N.Y. 10022-3852
(212) 715-9100
FAX
(212) 715-8000
----
WRITER'S
DIRECT NUMBER
(212) 715-9100
April 21, 2000
Stralem Fund
405 Park Avenue
New York, New York 10022
Re: Stralem Fund
Registration No. 2-34277
Dear Gentlemen:
We hereby consent to the reference of our firm as counsel in
Post-Effective Amendment No. 43, Amendment No. 23, to Stralem Fund's
Registration Statement on Form N-1A.
Very truly yours,
/s/ Kramer Levin Naftalis & Frankel LLP
Kramer Levin Naftalis & Frankel LLP
INDEPENDENT AUDITORS' CONSENT
We hereby consent to the incorporation by reference to the Fund's Annual Report
to shareholders as of December 31, 1999 in the Statement of Additional
Information in Post-Effective Amendment No. 43 to the Registration Statement
(No. 2-34277) being filed under the Securities Act of 1933 (No. 23 under the
Investment Company Act of 1940) on Form N-1A by Stralem Fund of our report dated
January 27, 2000 relating to the statement of assets and liabilities, including
the portfolio of investments in securities of Stralem Fund as of December 31,
1999, the related statement of operations for the year then ended and statements
of changes in net assets for each of the years in the two-year period then
ended, and the condensed financial information for each of the years in the
five-year period then ended, appearing in the Prospectus. We also consent to the
reference to Richard A. Eisner & Company, LLP in the sections "Financial
Highlights","Additional Information About the Fund" and "Financial Statements".
/s/ Richard A. Eisner & Company, LLP
New York, New York
April 19, 2000
STRALEM FUND
Stralem Fund
Stralem Equity Fund
CODE OF ETHICS
WHEREAS, STRALEM FUND (the "Trust") is a registered investment
company under the Investment Company Act of 1940, as amended (the "ICA"); and
WHEREAS, Rule 17j-1 under the ICA requires the Trust to adopt a Code
of Ethics;
WHEREAS, the purpose of Rule 17j-1 is to prevent affiliated persons
of the Trust in connection with the purchase or sale of a security held or to be
acquired by the Trust from (i) employing any device, scheme or artifice to
defraud the Trust; (ii) making any untrue statements of material fact to the
Trust or omitting to state a material fact necessary in order to make the
statements made to the Trust, in light of the circumstances under which they are
made, not misleading; (iii) engaging in any act, practice or course of business
that operates or would operate as a fraud or deceit on the Trust; (iv) or
engaging in any manipulative practice with respect to the Trust;
NOW, THEREFORE, the Trust hereby adopts this Code of Ethics as of
this ____ day of _________, 2000, superseding the Code of Ethics adopted by the
Trust as of the 20th day of October, 1999.
I. DEFINITIONS
For purposes of this Code of Ethics the following terms shall have
the meanings set forth below:
A. "Access Person" means any director1, officer, or advisory person of
the Trust or of the Trust's Investment Adviser; provided, however,
that any persons who are access persons of any investment adviser
of, administrator or principal underwriter for the Trust and who
reports his or her securities and transactions to
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1 This Code of Ethics in places refers to directors. The definition of
"director" in Section 2(a)(12) of the 1940 Act includes any director of a
corporation or any person performing similar functions, including "any natural
person who is a member of a board of trustees of a management company created as
a common-law trust". For convenience, in this memorandum the term "director"
also refers to "trustee", and the term "board of directors" also refers to
"board of trustees".
<PAGE>
such investment adviser, administrator or principal underwriter in
accordance with Rule 17j-1 of the ICA, shall not be deemed an access
person of the Trust.
B. "Advisory Person" means
1. any employee of the Trust, its investment adviser or administrator (or
of any entity in a control relationship with the Trust, its investment
adviser or administrator, as defined in Section I.E hereof) who, in
connection with his or her regular functions or duties, makes,
participates in, or obtains information (other than publicly available
information) regarding the purchase or sale of Covered Securities by the
Trust, or whose functions relate to the making of any recommendations with
respect to such purchases or sales; and
2. any natural person directly or indirectly owning, controlling, or
holding with power to vote, 25% or more of the outstanding voting
securities of the Trust or its investment advisers who obtains information
(other than publicly available information) concerning recommendations
made by the Trust or its investment advisers with regard to the purchase
or sale of a security.
C. "Affiliated Persons" or "Affiliates" means
1. any employee or Access Person of the Trust, and any member of the
immediate family (defined as spouse, child, mother, father, brother,
sister, in-law or any other relative) of any such person who lives in the
same household as such person or who is financially dependent upon such
person;
2. any account for which any of the persons described above is a
custodian, trustee or otherwise acting in a fiduciary capacity, or with
respect to which any such person either has the authority to make
investment decisions or from time to time gives investment advice; and
3. any partnership, corporation, joint venture, trust or other entity in
which any employee of the Trust or Access Person of the Trust directly or
indirectly, in the aggregate, has a 10% or more beneficial interest or for
which any such person is a general partner or an executive officer.
D. "Beneficial ownership of a security" by any person includes securities
held by: (a) a spouse, minor children or relatives who share the same home
with such person; (b) an estate for such person's benefit; (c) a trust, of
which (i) such person is a trustee or such person or members of such
person's immediate family have a vested interest in the income or corpus
of the trust, or (ii) such person owns a vested beneficial interest, or
(iii) such person is the settlor and such person has the power to revoke
the trust without the consent of all the beneficiaries; (d) a partnership
in which such person is a partner; (e) a corporation (other than with
respect to treasury shares of the corporation) of which such person is an
officer, director or 10% stockholder; (f) any other person if, by reason
of contract, understanding, relationship, agreement or other arrangement,
such person obtains therefrom benefits substantially equivalent to those
of ownership; or (g) such
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<PAGE>
person's spouse or minor children or any other person, if, even though
such person does not obtain therefrom the above-mentioned benefits of
ownership, such person can vest or revest title in himself at once or at
some future time. A beneficial owner of a security also includes any
person who, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise, has or shares voting power
and/or investment power with respect to such security. Voting power
includes the power to vote, or to direct the voting of such security, and
investment power includes the power to dispose, or to direct the
disposition of such security. A person is the beneficial owner of a
security if he has the right to acquire beneficial ownership of such
security at any time within sixty (60) days.
E. "Control" means the power to exercise a controlling influence over the
management or policies of a corporation. Any person who owns beneficially,
either directly or through one or more controlled corporations, more than
25% of the voting securities of a corporation shall be presumed to control
such corporation.
F. "Covered Security" means any note, stock, treasury stock, bond, debenture,
evidence of indebtedness, certificate of interest or participation in any
profit-sharing agreement, collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment contract,
voting trust certificate, certificate of deposit for a security,
fractional undivided interest in oil, gas, or other mineral rights, any
put, call, straddle, option or privilege on any security (including a
certificate of deposit) or on any group or index of securities (including
any interest therein or based on the value thereof), or any put, call
straddle, option or privilege entered into on a national securities
exchange relating to foreign currency, or in general, any interest or
instrument commonly known as a "security", or any certificate of interest
or participation in, temporary or interim certificate for, receipt for,
guarantee of, or warrant or right to subscribe to or purchase, any of the
foregoing; provided, however, that "security" shall not mean securities
issued or guaranteed by the Government of the United States, its agencies
or instrumentalities, bankers' acceptances, bank certificates of deposit,
commercial paper and high quality short-term debt instruments, including
repurchase agreements, or shares of registered open-end investment
companies.
G. "Covered Security held or to be acquired" by the Trust means:
1. any security which, within the most recent fifteen (15) days,
a) is or has been held by the Trust, or
b) is being or has been considered by the Trust for purchase by
the Trust; or
2. any option to purchase or sell, and any security convertible into or
exchangeable for, a Covered Security.
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<PAGE>
H. An "Initial Public Offering" means an offering of securities
registered under the Securities Act of 1933 [15 U.S.C. 77a], the
issuer of which, immediately before the registration, was not
subject to the reporting requirements of sections 13 or 15(d) of the
Securities Exchange Act of 1934 [15 U.S.C. 78m or 78o(d)].
I. "Investment Adviser" means Stralem & Company Incorporated and any
successor entity.
J. A "Limited Offering" means an offering that is exempt from
registration under the Securities Act of 1933 pursuant to section
4(2) or section 4(6) [15 U.S.C. 77d(2) or 77d(6)] or pursuant to
rule 504, rule 505, or rule 506 [17 CFR 230.504, 230.505, or
230.506] under the Securities Act of 1933.
K. "Principal underwriter" of or for the Trust (unless the Trust
becomes a closed-end company), or of any security issued by the
Trust, means any underwriter who as principal purchases from the
Trust, or pursuant to contract has the right (whether absolute or
conditional) from time to time to purchase from the Trust, any
security issued by the Trust for distribution, or who as agent for
the Trust sells or has the right to sell any security issued by the
Trust to a dealer or to the public or both, but does not include a
dealer who purchases from the Trust through a principal underwriter
acting as agent for such company.
L. "Purchase or sale of a Covered Security" includes the writing of an
option to purchase or sell a security.
II. COMPLIANCE WITH GOVERNING LAWS,
REGULATIONS AND PROCEDURES
A. All employees shall have and maintain knowledge of and shall comply
strictly with all applicable Federal and state laws and all rules
and regulations of any governmental agency or self-regulatory
organization governing his or her activities.
B. Each employee will be given a copy of the Code of Ethics at the time
of his or her employment and each Access Person is required to
submit a statement (Exhibit A) at least annually that he or she has
reviewed the Code of Ethics.
C. All employees shall comply strictly with procedures established by
the Trust to ensure compliance with applicable Federal and state
laws and regulations of governmental agencies and self-regulatory
organizations. The employees shall not knowingly participate in,
assist, or condone any acts in violation of any statute or
regulation governing securities matters, nor any act which would
violate any provision of this Code of Ethics, or any rules adopted
thereunder.
D. Each employee having supervisory responsibility shall exercise
reasonable supervision over employees subject to his or her control,
with a view to preventing any violation by such persons of
applicable statutes or regulations, the Trust procedures or the
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<PAGE>
provisions of this Code of Ethics or procedures adopted in
furtherance thereof.
E. Any employee encountering evidence that acts in violation of
applicable statutes or regulations or provisions of this Code of
Ethics or procedures adopted in furtherance thereof have occurred
shall report such evidence to the President of the Trust who will
report to the Board of Trustees of the Trust.
III. CONFIDENTIALITY OF TRANSACTIONS
A. Information relating to the Trust's portfolio and research and
studies activities is confidential until publicly available.
Whenever statistical information or research is supplied to or
requested by the Trust, such information must not be disclosed to
any persons other than persons designated by the President or the
Board of Trustees of the Trust. If the Trust is considering a
particular purchase or sale of a security, this must not be
disclosed except to such duly authorized persons.
B. Any employee authorized to place orders for the purchase or sale of
securities on behalf of the Trust shall take all steps reasonably
necessary to provide that all brokerage orders for the purchase and
sale of securities for the account of the Trust will be so executed
as to ensure that the nature of the transactions shall be kept
confidential until the information is reported to the Securities and
Exchange Commission or the Trust's shareholders in the normal course
of business.
C. If any employee of the Trust or Access Person should obtain
information concerning the Trust's portfolio (including, the
consideration by the Trust of acquiring, or recommending any
security for the Trust's portfolio), whether in the course of such
person's duties or otherwise, such person shall respect the
confidential nature of this information and shall not divulge it to
anyone unless it is properly part of such person's services to the
Trust to do so or such person is specifically authorized to do so by
the President of the Trust.
IV. ETHICAL STANDARDS
A. Every employee, in making any investment recommendation or taking
any investment action, shall exercise diligence and thoroughness,
and shall have a reasonable and adequate basis for any such
recommendations or action.
B. No employee shall undertake independent practice for compensation in
competition with the Trust.
C. The employees of the Trust and Access Persons and their respective
affiliates, shall conduct themselves in a manner consistent with the
highest ethical standards. They shall avoid any action, whether for
personal profit or otherwise, that results in an actual or potential
conflict of interest, or the appearance of a conflict of interest,
with the Trust or which may be otherwise detrimental to the
interests of the Trust.
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<PAGE>
D. An employee having discretion as to the selection of broker-dealers
to execute securities transactions for the Trust shall select
broker-dealers solely on the basis of the services provided directly
or indirectly by such broker-dealers to the Trust. An employee shall
not, directly or indirectly, receive a fee or commission from any
source in connection with the sale or purchase of any security for
the Trust.
E. In addition, the Trust shall take all actions reasonably calculated
to ensure that they engage broker-dealers to transact business with
the Trust whose partners, officers and employees, and their
respective affiliates, will conduct themselves in a manner
consistent with the provisions of this Section IV.
F. Conflicts of interest generally result from a situation in which an
individual has personal interests in a matter that is or may be
competitive with his responsibilities to another person or entity
(such as the Trust) or where an individual has or may have competing
obligations or responsibilities to two or more persons or entities.
In the case of the relationship between the Trust on the one hand,
and its employees and Access Persons and their respective
affiliates, on the other hand, such conflicts may result from the
purchase or sale of securities for the account of the Trust and for
the account of any affiliated person or from the purchase or sale
for the account of the Trust of securities in which an Access Person
or employee of the Trust, or his or her affiliates, has an interest.
In these cases, all potential or actual conflicts must be disclosed
and the first preference and priority must be to avoid such
conflicts of interest wherever possible and, where they unavoidably
occur, to resolve them in a manner not disadvantageous to the
client.
V. ACTIVITIES AND TRANSACTIONS OF ACCESS PERSONS
A. No Access Person shall recommend to, or cause or attempt to cause,
the Trust to acquire, dispose of, or hold any security (including,
any option, warrant or other right or interest relating to such
security) which such Access Person or an affiliate of such Access
Person has direct or indirect beneficial ownership unless the Access
Person shall first disclose in writing to the President of the Trust
all facts reasonably necessary to identify the nature of the
ownership of such Access Person or his or her affiliate in such
security.
B. No Access Person or affiliate of such Access Person shall engage in
a purchase or sale of a security (including, any option, warrant or
other right or interest relating to such security), other than on
behalf of the Trust, with respect to any security held or to be
acquired by the Trust, unless such transaction is: only remotely
potentially harmful to the Trust because it would be unlikely to
affect trading in or the market value of the security; or
non-volitional on the part of the Access Person; or clearly not
related economically to the securities to be acquired, disposed of
or held by the Trust; or effected in an account over which the
Access Person has no direct or indirect influence or control; or in
a security non-eligible for purchase or sale by the Trust; or in
light of all relevant facts and circumstances, otherwise not
disadvantageous to the Trust.
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<PAGE>
C. No Access Person shall acquire direct or indirect beneficial
ownership of an unregistered security issued in a Limited Offering
without obtaining the prior written approval of the President of the
Trust.
D. No Access Person shall acquire direct or indirect beneficial
ownership of, or otherwise purchase, securities issued during an
Initial Public Offering without obtaining the prior written approval
of the President of the Trust.
E. If, as a result of fiduciary obligations to other persons or
entities, an Access Person believes that such person or an affiliate
of such person is unable to comply with certain provisions of the
Code, such Access Person shall so advise the President of the Trust
in writing, setting forth with reasonable specificity the nature of
such fiduciary obligations and the reasons why such Access Person
believes such person is unable to comply with any such provisions.
The President of the Trust may, in his discretion, exempt such
Access Person or an affiliate of such person from any such
provisions, if the President of the Trust shall determine that the
services of such Access Person are valuable to the Trust and the
failure to grant such exemption is likely to cause such Access
Person to be unable to render services to the Trust. Any Access
Person granted an exemption (including, an exception for an
affiliate of such person), pursuant to this Section shall, within
three business days after engaging in a purchase or sale of a
security held or to be acquired by a client, furnish the President
of the Trust with a written report concerning such transaction,
setting forth the information specified in Section hereof.
VI. REPORTING PROCEDURES
A. Except as provided by Section VI.E hereof, every Access Person shall
report to the President of the Trust the information described in
Sections VI.B and VI.C hereof with respect to transactions in any
security in which such Access Person has, or by reason of such
transaction acquires, any direct or indirect beneficial ownership in
the security (whether or not such security is a security held or to
be acquired by a client); provided, however, that any such report
may contain a statement that the report shall not be construed as an
admission by the person making such report that he has any direct or
indirect beneficial ownership in the security to which the report
relates.
B. Initial Holdings Report. Each Access Person, within ten days of
becoming an Access Person, shall report to the Trust, the following
information, in the form of Exhibit B hereto:
1. The title, number of shares and principal amount of each Covered
Security in which the Access Person had any direct or indirect
beneficial ownership when the person became an Access Person;
2. The name of any broker, dealer or bank with whom the Access
Person maintained an account in which any securities were held for
the direct or indirect
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<PAGE>
benefit of the Access Person as of the date the person became and
Access Person; and
3. The date that the report is submitted by the Access Person.
C. Quarterly Transactions Report. Every report required to be made
pursuant to Section VI.A hereof shall be made not later than ten
days after the end of the calendar quarter in which the transaction
to which the report relates was effected, shall be in the form of
Exhibit C hereto, and shall contain the following information:
1. With Respect to Transactions During the Quarter In Covered
Securities:
a) The date of transaction, the title, the interest rate
and maturity date (if applicable), the number of shares,
and the principal amount of each Covered Security
involved;
b) The nature of the transaction (i.e., purchase, sale or
any other type of acquisition or disposition);
c) The price at which the transaction was effected; and
d) The name of the broker, dealer or bank with or through
which the transaction was effected.
e) The date that the report is submitted by the Access
Person.
2. With Respect to new accounts established during the quarter In
Which Any Securities Were Held:
a) The name of the broker, dealer or bank with whom the
Access Person established the account;
b) The date the account was established; and
c) The date that the report is submitted by the Access
Person.
D. Annual Holdings Report. Access Persons must report the following
information to the Trust on an annual basis no later than 20
calendar days after December 31 of each year in the form of Exhibit
D attached hereto:
1. The title, number of shares and principal amount of each Covered
Security in which the Access Person had any direct or indirect
beneficial interest;
2. The name of any broker, dealer or bank with whom the Access
Person maintains an account in which any securities are held for the
direct or indirect benefit of the Access Person as of the date the
person became an Access Person; and
3. The date that the report is submitted by the Access Person.
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<PAGE>
In the event that no securities are held as of December 31, the
report should specify that securities were not held as of such date.
This report should include all securities and other financial
property , including book entry shares held at companies,
broker/dealers, investment advisers or other institutions and
physically issued certificates held in a safe deposit box, at one's
home, or in the trust department of a bank or trust company.
E. Notwithstanding the provisions of Sections V.C, V.D, VI.A, and VI.C
hereof,
1. No person shall be required to make a report with respect to
transactions effected for any account over which such person does
not have any direct or indirect influence or control;
2. A Trustee of the Trust who is not an interested person of the
Trust and who would be required to report solely by reason of being
a Trustee of the Trust is not required to make:
a) An Initial Holdings Report under Section VI.B or an
Annual Holdings Report under Section VI.D; and
b) A Quarterly Transactions Report under Section VI.C,
unless the Trustee knew, or in the ordinary course of
fulfilling his or her official duties as a Trustee of
the Trust, should have known that during the 15-day
period immediately before or after the Trustee's
transaction in a Covered Security, the Trust purchased
or sold the Covered Security, or the Trust or its
Investment Adviser considered purchasing or selling the
Covered Security.
3. A Trustee of the Trust who is not an interested person of the
Trust and who would be required to pre-clear transactions solely by
reason of being a Trustee of the Trust is not required to obtain any
such pre-clearance.
4. No report is required from an Access Person of an investment
company registered under the ICA if such investment company is a
money market fund or an investment company that does not invest in
Covered Securities.
5. No Quarterly Transactions Report is required from an Access
Person of the Trust if the report would duplicate information
contained in broker trade confirmations or account statements
received by the Trust, its Investment Adviser, Administrator or its
Principal Underwriter with respect to that Access Person, if all of
the information required to be contained in the Quarterly
Transactions Report is contained in such broker trade confirmations
or account statements that are received within ten days after the
end of the calendar quarter.
VII. REVIEW PROCEDURES
A. The reports submitted by Access Persons pursuant to Section VI.C
hereof shall be reviewed at least quarterly by the President of the
Trust, or such other persons or
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<PAGE>
committees as shall be designated by the Board of Trustees, in order
to monitor compliance with this Code of Ethics. The President shall
report all failures to comply with this Code of Ethics to the Board
of Trustees.
B. If it is determined by the Board of Trustees that a violation of
this Code of Ethics has occurred and that the person violating this
Code of Ethics has purchased or sold a security at a more
advantageous price than that obtained by the Trust, such person
shall be required to offer to sell to or purchase from the Trust, as
the case may be, such security at the more advantageous price. If
this cannot be consummated, then the Board of Trustees shall take
such other course of action as it may deem appropriate. With respect
to any violation of this Code of Ethics, the Board of Trustees may
take any preventive, remedial or other action which it may deem
appropriate. In determining whether or not there has been, or may
be, a conflict of interest between the Trust and any person subject
to this Code of Ethics, the Board of Trustees shall consider all of
the relevant facts and circumstances.
C. At least annually, the Trust shall furnish to the Board of Trustees
a written report that:
1. Describes any issues arising under this Code of Ethics or
procedures adopted in furtherance thereof, including but not limited
to, any information about material violations of this Code of
Ethics, procedures adopted in furtherance thereof, and sanctions
impose in response to such material violations; and
2. Certifies that the Trust has adopted procedures reasonably
necessary to prevent Access Persons from violating this Code of
Ethics.
D. The records created and maintained under this Code of Ethics shall
be maintained as follows:
1. A copy of each Code of Ethics for the Trust, its investment
adviser(s) and its principal underwriter in effect at any time in
the last five years must be maintained in an easily accessible
place.
2. A copy of any records of violations of the Code of Ethics or any
action taken as a result of a violation must be maintained in an
easily accessible place for five years after the end of the fiscal
year in which the violation occurs.
3. All Initial Holdings Reports, Quarterly Transactions Reports and
Annual Holdings Reports from Access Persons, and all reports from
the Trust, its investment adviser(s) and its principal underwriter,
shall be maintained for at least five years after the end of the
fiscal year in which the report was made, the first two years in an
easily accessible place.
4. A record of all persons currently or within the past five years
who are or were required to make reports and persons designated to
review the reports required
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<PAGE>
under this Code of Ethics shall be maintained in an easily
accessible place for at least five years.
5. All approvals of the purchase of securities in an Initial Public
Offering or Limited Offering shall be maintained for at least five
years after the end of the fiscal year in which the approval is
granted.
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<PAGE>
Exhibit A
Stralem Fund
CERTIFICATION
I hereby certify to Stralem Fund that I have read and understand the Code of
Ethics dated ______________, 2000, and will act in accordance with the policies
and procedures expressed therein.
--------------------------
(Date) (Signature)
--------------------------
(Printed Name)
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STRALEM & COMPANY INCORPORATED
CODE OF ETHICS
WHEREAS, STRALEM & COMPANY INCORPORATED (the "Adviser") is a
registered investment adviser under the Investment Advisers Act of 1940, as
amended, and serves as adviser to Stralem Fund (the "Trust"), a registered
investment company under the Investment Company Act of 1940, as amended (the
"ICA"); and
WHEREAS STRALEM & COMPANY INCORPORATED, a registered broker dealer
acts as the principal underwriter of the Trust;
WHEREAS, Rule 17j-1 under the ICA requires that the adviser and the
principal underwriter of the Trust adopt a Code of Ethics.
NOW, THEREFORE, the Adviser hereby adopts this Code of Ethics as of
this ____ day of _________, 2000.
I. DEFINITIONS
For purposes of this Code of Ethics the following terms shall have
the meanings set forth below:
A. "Access Person" means any director, officer, general partner or
Advisory Person of the Adviser who, with respect to any Trust or
investment company registered under the ICA makes any
recommendation, participates in the determination of which
recommendation will be made, or whose principal function or duties
relate to the determination of which recommendation will be made, or
who, in connection with his or her duties, obtains any information
concerning recommendations on Covered Securities being made by the
Adviser to the Trust or any investment company registered under the
ICA.
B. "Advisory Person" means
1. any employee of the Adviser, the Trust or its administrator
(or of any entity in a control relationship with the Adviser
or the Trust ) who, in connection with his or her regular
functions or duties, makes, participates in, or obtains
information (other than publicly available information)
regarding the purchase or sale of Covered Securities by the
Trust, or whose functions relate to the making of any
recommendations with respect to such purchases or sales; and
2. any natural person directly or indirectly owning, controlling,
or holding with power to vote, 25% or more of the outstanding
voting securities of the Adviser or Trust who obtains
information (other than publicly available information)
concerning recommendations made by the Adviser or the Trust
with regard to the purchase or sale of a security.
<PAGE>
C. "Affiliated Persons" or "Affiliates" means
1. any employee or Access Person of the Adviser or the Trust, and
any member of the immediate family (defined as spouse, child,
mother, father, brother, sister, in-law or any other relative)
of any such person who lives in the same household as such
person or who is financially dependent upon such person;
2. any account for which any of the persons described in C.1.
hereof is a custodian, trustee or otherwise acting in a
fiduciary capacity, or with respect to which any such person
either has the authority to make investment decisions or from
time to time gives investment advice; and
3. any partnership, corporation, joint venture, trust or other
entity in which any employee of the Adviser or the Trust or
Access Person of the Trust directly or indirectly, in the
aggregate, has a 10% or more beneficial interest or for which
any such person is a general partner or an executive officer.
D. "Adviser's Client Accounts" means accounts of any persons who
receive from the Adviser investment advice, recommendations,
research or analyses concerning securities and from whom the Adviser
receives compensation. This definition is intended to include the
Trust.
E. "Beneficial ownership of a security" by any person includes
securities held by:
1. a spouse, minor children or relatives who share the same home
with such person;
2. an estate for such person's benefit;
3. a trust, of which
(a) such person is a trustee or such person or members of
such person's immediate family have a vested interest in
the income or corpus of the trust, or
(b) such person owns a vested beneficial interest, or
(c) such person is the settlor and such person has the power
to revoke the trust without the consent of all the
beneficiaries;
4. a partnership in which such person is a partner;
5. a corporation (other than with respect to treasury shares of
the corporation) of which such person is an officer, director
or 10% stockholder;
6. any other person if, by reason of contract, understanding,
relationship, agreement or other arrangement, such person
obtains therefrom benefits substantially equivalent to those
of ownership; or
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<PAGE>
7. such person's spouse or minor children or any other person,
if, even though such person does not obtain therefrom the
above-mentioned benefits of ownership, such person can vest or
revest title in himself at once or at some future time.
A beneficial owner of a security also includes any person who,
directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise, has or shares voting power
and/or investment power with respect to such security. Voting power
includes the power to vote, or to direct the voting of such
security, and investment power includes the power to dispose, or to
direct the disposition of such security. A person is the beneficial
owner of a security if he has the right to acquire beneficial
ownership of such security at any time within sixty (60) days.
F. "Control" means the power to exercise a controlling influence over
the management or policies of a corporation. Any person who owns
beneficially, either directly or through one or more controlled
corporations, more than 25% of the voting securities of a
corporation shall be presumed to control such corporation.
G. "Covered Security" means any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or
participation in any profit-sharing agreement, collateral-trust
certificate, preorganization certificate or subscription,
transferable share, investment contract, voting trust certificate,
certificate of deposit for a security, fractional undivided interest
in oil, gas, or other mineral rights, any put, call, straddle,
option or privilege on any security (including a certificate of
deposit) or on any group or index of securities (including any
interest therein or based on the value thereof), or any put, call
straddle, option or privilege entered into on a national securities
exchange relating to foreign currency, or in general, any interest
or instrument commonly known as a "security", or any certificate of
interest or participation in, temporary or interim certificate for,
receipt for, guarantee of, or warrant or right to subscribe to or
purchase, any of the foregoing; provided, however, that "security"
shall not mean securities issued or guaranteed by the Government of
the United States, its agencies or instrumentalities, bankers'
acceptances, bank certificates of deposit, commercial paper and high
quality short-term debt instruments, including repurchase
agreements, or shares of registered open-end investment companies.
H. "Covered Security held or to be acquired" by the Trust means:
1. any security which, within the most recent fifteen (15) days,
(a) is or has been held by the Trust, or
(b) is being or has been considered by the Adviser or the
Trust for purchase by the Trust; or
2. any option to purchase or sell, and any security convertible
into or exchangeable for, a security described in G.1. hereof.
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I. "Employee" means any employee of the Adviser.
J. "Initial Public Offering" means an offering of securities registered
under the Securities Act of 1933 [15 U.S.C. 77a et seq.], the issuer
of which, immediately before the registration, was not subject to
the reporting requirements of sections 13 or 15(d) of the Securities
Exchange Act of 1934 [15 U.S.C. 78m or 78o(d)].
K. "Investment Adviser" means
1. Stralem & Company Incorporated and any successor entity;
2. any person (other than a bona fide officer, director, trustee,
member of an advisory board, or employee of the Trust, as
such) who pursuant to a contract with the Trust regularly
furnishes advice to the Trust with respect to the desirability
of investing in, purchase or selling securities or other
property, or is empowered to determine what securities or
other property shall be purchased or sold by the Trust; and
3. any other person who pursuant to a contract with a person
described in clause (2) regularly performs substantially all
of the duties undertaken by such person described in clause
(2); but does not include (i) a person whose advice is
furnished solely through uniform publications distributed to
subscribers thereto, (ii) a person who furnishes only
statistical and other factual information, advice regarding
economic factors and trends, or advice as to occasional
transactions in specific securities, but without generally
furnishing advice or making recommendations regarding the
purchase or sale of securities, (iii) a company furnishing
such services at cost to one or more investment companies,
insurance companies, or other financial institutions, (iv) any
person the character and amount of whose compensation for such
services must be approved by a court, or (v) such other
persons as the Securities and Exchange Commission may by rules
and regulations or order determine not to be an investment
adviser within the intent of Section 2(a)(2) of the ICA.
L. "Investment Personnel" of the Adviser or the Trust means:
1. Any employee of the Adviser or the Trust (or of any company in
a control relationship to the Adviser or the Trust) who, in
connection with his or her regular functions or duties, makes
or participates in making recommendations regarding the
purchase or sale of securities by the Trust; and
2. Any natural person who controls the Adviser or the Trust and
who obtains information concerning recommendations made to the
Trust regarding the purchase or sale of securities by the
Trust.
M. "Limited Offering" means an offering that is exempt from
registration under the Securities Act of 1933 pursuant to section
4(2) or section 4(6) [15 U.S.C. 77d(2) or 77d(6)] or pursuant to
rule 504, rule 505, or rule 506 [17 CFR 230.504, 230.505, or
230.506] under the Securities Act of 1933.
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N. "Principal underwriter" of or for the Trust (unless the Trust
becomes a closed-end company), or of any security issued by the
Trust, means any underwriter who as principal purchases from the
Trust, or pursuant to contract has the right (whether absolute or
conditional) from time to time to purchase from the Trust, any
security issued by the Trust for distribution, or who as agent for
the Trust sells or has the right to sell any security issued by the
Trust to a dealer or to the public or both, but does not include a
dealer who purchases from the Trust through a principal underwriter
acting as agent for such company. "Principal underwriter" of or for
a closed-end company or any issuer which is not an investment
company, or of any security issued by such a company or issuer,
means any underwriter who, in connection with a primary distribution
of securities, (A) is in privity of contract with the issuer or an
affiliated person of the issuer; (B) acting alone or in concert with
one or more other persons, initiates or directs the formation of an
underwriting syndicate; or (C) is allowed a rate of gross
commission, spread, or other profit greater than the rate allowed
another underwriter participating in the distribution.
O. "Purchase or sale of a Covered Security" includes the writing of an
option to purchase or sell a security.
II. COMPLIANCE WITH GOVERNING LAWS,
REGULATIONS AND PROCEDURES
A. All Employees shall have and maintain knowledge of and shall comply
strictly with all applicable federal and state laws and all rules
and regulations of any governmental agency or self-regulatory
organization governing his or her activities.
B. The Adviser will identify all Access Persons employed directly by
the Adviser by March 1, 2000. Employees beginning employment with
the Adviser after March 1, 2000 will be notified at the time of hire
if they are Access Persons. Employees who are not Access Persons at
the time of hire or on March 1, 2000, may become Access Persons and
such employees are obligated to comply with the reporting
obligations set forth in this Code of Ethics and procedures adopted
hereunder. Persons required to report under this Code of Ethics
shall be listed on Exhibit A.
C. Each Employee will be given a copy of the Code of Ethics at the time
of his or her employment and each Access Person is required to
submit a statement (Exhibit B) at least annually that he or she has
reviewed the Code of Ethics. Each Employee shall have and maintain
knowledge of and shall comply with the provisions of this Code of
Ethics and any procedures adopted hereunder.
D. All Employees shall comply with all laws and regulations concerning
insider trading and with the Adviser's prohibition against insider
trading contained in the "Insider Trading Procedures," Exhibit C to
this Code of Ethics. Trading on or communicating material non-public
information, or "inside information," of any sort, whether obtained
in the course of research activities, through a client relationship
or otherwise, is strictly prohibited.
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E. All Employees shall comply strictly with procedures established by
the Adviser to ensure compliance with this Code of Ethics and with
applicable federal and state laws and regulations of governmental
agencies and self-regulatory organizations. Employees shall not
knowingly participate in, assist, or condone (i) any act in
violation of any statute or regulation governing securities matters
or the Adviser, nor (ii) any act which would violate any provision
of this Code of Ethics or any procedures adopted hereunder.
F. Each Employee having supervisory responsibility shall exercise
reasonable supervision over Employees subject to his or her control,
with a view to preventing any violation by such persons of
applicable statutes or regulations, the Trust's Code of Ethics or
procedures, or the provisions of this Code of Ethics or procedures
adopted hereunder.
G. Any Employee encountering evidence that acts in violation of
applicable statutes or regulations or provisions of this Code of
Ethics or procedures adopted hereunder have occurred shall report
such evidence to the Executive Vice President (the "EVP") of the
Adviser or such other person as appointed in procedures adopted
hereunder. Such action by the Employee shall remain confidential,
unless the Employee waives confidentiality or federal or state
authorities compel disclosure. Failure to report such evidence may
result in disciplinary proceedings and may include sanctions as set
forth in procedures adopted hereunder.
III. ACTIVITIES AND TRANSACTIONS OF ACCESS PERSONS
A. No Access Person shall recommend to, or cause or attempt to cause,
the Adviser's Client Accounts or the Trust to acquire, dispose of,
or hold any security (including, any option, warrant or other right
or interest relating to such security) of which such Access Person
or an affiliate of such Access Person has direct or indirect
beneficial ownership unless the Access Person has first disclosed in
writing to the EVP of the Adviser all facts reasonably necessary to
identify the nature of the ownership of such Access Person or his or
her affiliate in such security.
B. Limited Offerings and Initial Public Offerings:
1. No Access Person shall acquire direct or indirect beneficial
ownership of an unregistered security issues in a Limited
Offering or an Initial Public Offering without obtaining the
prior written approval of the EVP of the Adviser.
2. Under normal circumstances, such approval will not be withheld
if the Access Person demonstrates in writing that:
(a) the investment is not suitable for the Trust;
(b) the investment opportunity was unique to the individual
circumstances of the Access Person; and
(c) no overreaching would or could occur.
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An Access Person who has been authorized to acquire securities
in a Limited Offering must disclose such investment to the EVP
of the Adviser when such Access Person plays a part in any
subsequent consideration of any investment in the issuer by
the Trust. The decision to purchase securities of the issuer
for the Trust shall be subject to an independent review by the
President of the Trust.
C. No Access Person shall serve on the board of directors/trustees of
organizations (whether for profit or not for profit) that will or
intend to raise proceeds through public solicitation or issuance of
securities without prior written approval of the EVP of the Adviser.
In the relatively small number of instances in which board service
is authorized, Access Persons serving as directors normally should
be isolated from those making investment decisions through "Chinese
Wall" or other procedures.
D. If, as a result of fiduciary obligations to other persons or
entities, an Access Person believes that such person or an affiliate
of such person is unable to comply with certain provisions of the
Code, such Access Person shall so advise the EVP of the Adviser in
writing, setting forth with reasonable specificity the nature of
such fiduciary obligations and the reasons why such Access Person
believes such person is unable to comply with any such provisions.
The EVP of the Adviser may, in his discretion, exempt such Access
Person or an affiliate of such person from any such provisions, if
the EVP of the Adviser shall determine that the services of such
Access Person are valuable to the Adviser and the failure to grant
such exemption is likely to cause such Access Person to be unable to
render services to the Adviser. Any Access Person granted an
exemption (including, an exception for an affiliate of such person),
pursuant to this Section IV shall, within three business days after
engaging in a purchase or sale of a security held or to be acquired
by a client, furnish the EVP of the Adviser with a written report
concerning such transaction, setting forth the information specified
in Section IV.C hereof.
IV. REPORTING PROCEDURES
A. Except as provided by Section IV.E hereof, every Access Person shall
report to the EVP of the Adviser the information described in
Sections IV.B and IV.C hereof with respect to transactions in any
security in which such Access Person has, or by reason of such
transaction acquires, any direct or indirect beneficial ownership in
the security (whether or not such security is a security held or to
be acquired by a client); provided, however, that any such report
may contain a statement that the report shall not be construed as an
admission by the person making such report that he has any direct or
indirect beneficial ownership in the security to which the report
relates.
B. Initial Holdings Report. Each Access Person, within ten days of
becoming an Access Person, shall report to the Adviser, the
following information, in the form of Exhibit D hereto:
1. The title, number of shares and principal amount of each
Covered Security in which the Access Person had any direct or
indirect beneficial ownership when the person became an Access
Person;
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2. The name of any broker, dealer or bank with whom the Access
Person maintained an account in which any securities were held
for the direct or indirect benefit of the Access Person as of
the date the person became and Access Person; and
3. The date that the report is submitted by the Access Person.
C. Quarterly Transactions Report. Each Access Person, not later than
ten days after the end of the calendar quarter in which the
transaction to which the report relates was effected, shall report
the following information, in the form of Exhibit E hereto:
1. With Respect to Transactions During the Quarter In Covered
Securities:
(a) The date of transaction, the title, the interest rate
and maturity date (if applicable), the number of shares,
and the principal amount of each Covered Security
involved;
(b) The nature of the transaction (i.e., purchase, sale or
any other type of acquisition or disposition);
(c) The price at which the transaction was effected; and
(d) The name of the broker, dealer or bank with or through
which the transaction was effected.
(e) The date that the report is submitted by the Access
Person.
2. With Respect to New Accounts Established During the Quarter In
Which Any Securities Were Held:
(a) The name of the broker, dealer or bank with whom the
Access Person established the account;
(b) The date the account was established; and
(c) The date that the report is submitted by the Access
Person.
D. Annual Holdings Report. Each Access Persons, no later than 20
calendar days after December 31 of each year, shall report the
following information in the form of Exhibit F hereto:
1. The title, number of shares and principal amount of each
Covered Security in which the Access Person had any direct or
indirect beneficial interest;
2. The name of any broker, dealer or bank with whom the Access
Person maintains an account in which any securities are held
for the direct or indirect benefit of the Access Person; and
3. The date that the report is submitted by the Access Person.
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In the event that no securities are held as of December 31,
the report should specify that securities were not held as of
such date. This report should include all securities and other
financial property, including book entry shares held at
companies, broker/dealers, investment advisers or other
institutions and physically issued certificates held in a safe
deposit box, at one's home, or in the trust department of a
bank or trust company.
E. Notwithstanding the provisions of Sections IV.A and IV.C hereof,
1. no person shall be required to make a report with respect to
transactions effected for any account over which such person
does not have any direct or indirect influence or control;
2. no report is required from an Access Person of an investment
company registered under the ICA if such investment company is
a money market fund or an investment company that does not
invest in Covered Securities; and
3. no Quarterly Transactions Report is required from an Access
Person of the Trust if the report would duplicate information
contained in broker trade confirmations or account statements
received by the Adviser with respect to that Access Person, if
all of the information required to be contained in the
Quarterly Transactions Report is contained in such broker
trade confirmations or account statements that are received
within ten days after the end of the calendar quarter.
V. REVIEW PROCEDURES
A. The reports submitted by Access Persons pursuant to Section IV.C
hereof shall be reviewed at least quarterly by the EVP of the
Adviser, or such other persons or committees as shall be designated
by the EVP of the Adviser, in order to monitor compliance with this
Code of Ethics. The EVP shall report all failures to comply with
this Code of Ethics to the Board of Trustees of the Trust.
B. If it is determined by the Adviser or the Board of Trustees of the
Trust that a violation of this Code of Ethics has occurred and that
the person violating this Code of Ethics has purchased or sold a
security at a more advantageous price than that obtained by the
Trust, such person shall be required to offer to sell to or purchase
from the Trust, as the case may be, such security at the more
advantageous price. If this cannot be consummated, then the Adviser
or the Board of Trustees of the Trust shall take such other course
of action as it may deem appropriate. With respect to any violation
of this Code of Ethics, the Adviser or the Board of Trustees of the
Trust may take any preventive, remedial or other action that it may
deem appropriate. In determining whether or not there has been, or
may be, a conflict of interest between the Trust and any person
subject to this Code of Ethics, the Adviser or the Board of Trustees
of the Trust shall consider all of the relevant facts and
circumstances.
C. At least annually, the Adviser shall furnish to the Board of
Trustees a written report that:
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1. Describes any issues arising under this Code of Ethics or
procedures adopted hereunder, including but not limited to,
any information about material violations of this Code of
Ethics, procedures adopted hereunder, and sanctions impose in
response to such material violations; and
2. Certifies that the Adviser has adopted procedures reasonably
necessary to prevent Access Persons from violating this Code
of Ethics.
D. The records created and maintained under this Code of Ethics shall
be maintained as follows:
1. A copy of each Code of Ethics for the Adviser in effect at any
time in the last five years must be maintained in an easily
accessible place.
2. A copy of any records of violations of the Code of Ethics or
any action taken as a result of a violation must be maintained
in an easily accessible place for five years after the end of
the fiscal year in which the violation occurs.
3. All Initial Holdings Reports, Quarterly Transactions Reports
and Annual Holdings Reports from Access Persons, and all
reports to the Trust shall be maintained for at least five
years after the end of the fiscal year in which the report was
made, the first two years in an easily accessible place.
4. A record of all persons currently or within the past five
years who are or were required to make reports and persons
designated to review the reports required under this Code of
Ethics shall be maintained in an easily accessible place for
at least five years.
5. All approvals of the purchase of securities in an Initial
Public Offering or Limited Offering shall be maintained for at
least five years after the end of the fiscal year in which the
approval is granted.
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Exhibit A
LIST OF ACCESS PERSONS REQUIRED TO REPORT UNDER CODE OF ETHICS
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Exhibit B
STRALEM & COMPANY INCORPORATED
CERTIFICATION
I hereby certify to Stralem Fund and/or Stralem & Company Incorporated that I
have read and understand the Code of Ethics dated ______________, 2000, and will
act in accordance with the policies and procedures expressed therein.
_____________ ______________________
(Date) (Signature)
______________________
(Printed Name)
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