SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.35)
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
CLS ADVISORONE FUNDS
(Name of Registrant as Specified In Its Charter)
SAME
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11(1).
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
CLS ADVISORONE FUNDS
AMERIGO FUND CLERMONT FUND
(THE "FUNDS")
CLASS C SHARES
CLASS N SHARES
SPECIAL MEETING OF SHAREHOLDERS
PROXY SOLICITED BY THE BOARD OF TRUSTEES FOR
THE SPECIAL MEETING OF SHAREHOLDERS, DECEMBER 22, 1999
The undersigned, revoking previous proxies with respect to the Shares
(defined below), hereby appoints John H. Grady, Jr. and Leslie Cruz as proxies,
and Catherine J. Taulbee as inspector of elections and each of them, each with
full power of substitution, to vote at the Special Meeting of Shareholders of
the Amerigo Fund and Clermont Fund, both series of the CLS AdvisorOne Funds (the
"Trust"), to be held in the offices of Morgan, Lewis & Bockius LLP, 101 Park
Avenue, New York, NY, 10178 on Wednesday, December 22, 1999, at 12:00 noon,
Eastern Time, and any adjournments or postponements thereof (the "Meeting") all
shares of beneficial interest of said Trust that the undersigned would be
entitled to vote if personally present at the Meeting ("Shares") on the
proposals set forth below, and on any other matters properly brought before the
Meeting.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS A VOTE "FOR" THE FOLLOWING
PROPOSALS:
Please mark your choices like this on the Proposals /X/
PROPOSAL 1: APPROVAL OF THE AGREEMENT AND PLAN OF REORGANIZATION
FOR AGAINST ABSTAIN
--- ------- -------
PROPOSAL 2: APPROVAL OF INTERIM ADVISORY AGREEMENT
Amerigo Fund: FOR AGAINST ABSTAIN
--- ------- -------
(TO BE VOTED ON BY AMERIGO FUND SHAREHOLDERS ONLY)
Clermont Fund: FOR AGAINST ABSTAIN
--- ------- -------
(TO BE VOTED ON BY CLERMONT FUND SHAREHOLDERS ONLY)
THIS PROXY WILL, WHEN PROPERLY EXECUTED, BE VOTED AS SPECIFIED HEREIN BY THE
SIGNING SHAREHOLDER(S). IF NO CONTRARY DIRECTION IS GIVEN WHEN THE DULY EXECUTED
PROXY IS RETURNED, THIS PROXY WILL BE VOTED FOR THE FOREGOING PROPOSALS AND WILL
BE VOTED IN THE APPOINTED PROXIES' DISCRETION UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING.
The undersigned acknowledges receipt with this Proxy of a copy of the Notice of
Special Meeting and the Proxy Statement of the Board of Trustees. Your
signature(s) on this Proxy should be exactly as your name(s) appear on this
Proxy. If the shares are held jointly, each holder should sign this Proxy.
Attorneys-in-fact, executors, administrators, trustees or guardians should
indicate the full title and capacity in which they are signing.
Dated: , 1999
----------------- --------------------------------
Signature of Shareholder
--------------------------------
Signature (Joint owners)
YOU CAN VOTE BY MAIL, INTERNET, OR IN PERSON.
TO VOTE BY MAIL, PLEASE DATE, SIGN AND RETURN THIS CARD USING THE ENCLOSED,
POSTAGE-PAID ENVELOPE.
TO VOTE BY TELEPHONE, PLEASE CALL (800) 690-6903.
YOU MAY ALSO SUBMIT YOUR VOTE OVER THE INTERNET AT WWW.PROXYVOTE.COM.
FINALLY, YOU MAY VOTE IN PERSON BY ATTENDING THE MEETING ON DECEMBER 22,
1999.
CLS ADVISORONE FUNDS
AMERIGO FUND CLERMONT FUND
(THE "FUNDS")
CLASS C SHARES
CLASS N SHARES
IMPORTANT INFORMATION
THIS DOCUMENT CONTAINS YOUR PROXY STATEMENT AND PROXY CARD. A PROXY CARD IS, IN
ESSENCE, A BALLOT. WHEN YOU VOTE YOUR PROXY CARD, IT TELLS US HOW TO VOTE ON
YOUR BEHALF ON IMPORTANT ISSUES RELATING TO THE FUNDS. IF YOU SIGN THE PROXY
CARD WITHOUT SPECIFYING A VOTE, YOUR SHARES WILL BE VOTED IN ACCORDANCE WITH THE
RECOMMENDATIONS OF THE BOARD OF TRUSTEES.
WE URGE YOU TO SPEND A FEW MINUTES WITH THE PROXY STATEMENT, FILL OUT YOUR PROXY
CARD, AND RETURN IT TO US. VOTING YOUR PROXY, AND DOING SO PROMPTLY, HELPS TO
AVOID ADDITIONAL MAILINGS. WHEN SHAREHOLDERS DO NOT RETURN THEIR PROXIES IN
SUFFICIENT NUMBERS, WE HAVE TO MAKE FOLLOW-UP SOLICITATIONS.
PLEASE TAKE A FEW MOMENTS TO EXERCISE YOUR RIGHT TO VOTE. THANK YOU.
CLS ADVISORONE FUNDS
CLS ADVISORONE FUNDS
AMERIGO FUND CLERMONT FUND
CLASS C SHARES
CLASS N SHARES
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 22, 1999
Notice is hereby given that a Special Meeting of Shareholders (the "Meeting") of
the Amerigo Fund and the Clermont Fund (the "Funds"), each a separate series of
CLS AdvisorOne Funds (the "Trust"), will be held at the offices of Morgan, Lewis
& Bockius LLP, 101 Park Avenue, New York, NY 10178, on December 22, 1999, at
12:00 noon, Eastern time, for the purpose of considering two proposals, which
are described below, and transacting any other business that may properly come
before the Meeting.
The first proposal asks shareholders to consider and act on the approval of an
agreement and plan of reorganization (the "Reorganization Agreement"), pursuant
to which each Fund will transfer all of its assets and liabilities to a
newly-created, corresponding portfolio of Orbitex's Group of Funds (the "Orbitex
Funds") in exchange for shares of the corresponding Orbitex Fund (the
"Reorganization"). The Reorganization is related to the pending merger of Clarke
Lanzen Skalla Investment Firm, Inc. ("CLS Advisers"), with and into a
newly-created, wholly-owned, indirect subsidiary of Orbitex Financial Services
Group, Inc. ("New Adviser").
The second proposal asks shareholders to consider and act on the approval of
interim investment advisory agreements between the Trust, on behalf of each
Fund, and the New Adviser, which would be effective for the period from December
23, 1999 (or such later date on which the merger of CLS Advisers with and into
New Adviser occurs) through the date on which the Reorganization occurs (the
"Interim Advisory Agreements"). Both proposals are more fully described in the
attached proxy statement.
The persons named as proxies are authorized to vote on such other business as
may properly come before the Meeting in accordance with their own discretion.
Shareholders of record at the close of business on November 2, 1999 are entitled
to notice of and to vote at the Meeting or any adjournment thereof
("Shareholders"). All Shareholders are cordially invited to attend the Meeting.
However, if you are unable to attend the Meeting, please mark, sign and date the
enclosed proxy card and return it promptly in the enclosed, postage-paid
envelope. Please see the enclosed materials for Internet and telephone voting
instructions.
AFTER CAREFUL REVIEW AND CONSIDERATION, THE TRUSTEES UNANIMOUSLY RECOMMEND THAT
SHAREHOLDERS VOTE FOR THE APPROVAL OF THE REORGANIZATION AGREEMENT AND FOR THE
APPROVAL OF THE INTERIM ADVISORY AGREEMENTS.
BY ORDER OF THE BOARD OF TRUSTEES
SUSAN KINEEN, SECRETARY
November __, 1999
CLS ADVISORONE FUNDS
14747 CALIFORNIA STREET
OMAHA, NEBRASKA 68154
AMERIGO FUND CLERMONT FUND
CLASS C SHARES
CLASS N SHARES
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of proxies
by the Board of Trustees of CLS AdvisorOne Funds (the "Trust") on behalf of its
separate series, the Amerigo Fund and the Clermont Fund (the "Funds"), for use
at a Special Meeting of Shareholders to be held on December 22, 1999 at 12:00
noon, Eastern time, at the offices of Morgan, Lewis & Bockius LLP, 101 Park
Avenue, New York, NY 10178, and at any adjourned session thereof (such meeting
and any adjournments thereof are hereinafter referred to as the "Meeting").
Shareholders of record at the close of business on November 2, 1999 (the "Record
Date") are entitled to vote at the Meeting (the "Shareholders"). The proxy card
and this proxy statement are being mailed to Shareholders on or about November
29, 1999.
At the meeting, Shareholders will be asked to consider and act upon the
following proposals:
1. APPROVAL OF AN AGREEMENT AND PLAN OF REORGANIZATION PURSUANT TO WHICH
EACH FUND WILL TRANSFER OF ITS ASSETS AND LIABILITIES TO A
NEWLY-CREATED, CORRESPONDING PORTFOLIO OF THE ORBITEX GROUP OF FUNDS IN
EXCHANGE FOR SHARES OF THE CORRESPONDING ORBITEX PORTFOLIO (VOTED ON BY
SHAREHOLDERS OF THE TRUST AS A WHOLE).
2. APPROVAL OF AN INTERIM INVESTMENT ADVISORY AGREEMENT BETWEEN THE TRUST,
ON BEHALF OF EACH FUND, AND A NEWLY-CREATED, WHOLLY-OWNED, INDIRECT
SUBSIDIARY OF ORBITEX FINANCIAL SERVICES GROUP, INC. (THE "NEW
ADVISER"), WHICH WOULD BE EFFECTIVE FOR THE PERIOD FROM DECEMBER 23,
1999 (OR SUCH LATER DATE ON WHICH THE MERGER OF THE FUNDS' CURRENT
ADVISER WITH AND INTO NEW ADVISER OCCURS) THROUGH THE DATE ON WHICH THE
REORGANIZATION (AS DEFINED BELOW) OCCURS (VOTED ON SEPARATELY BY
SHAREHOLDERS OF EACH FUND, WITH BOTH CLASSES OF EACH FUND VOTING
TOGETHER).
Shareholders will be asked to consider and act upon such other business as may
properly be brought before the meeting. Each share is entitled to one vote and
each fractional share is entitled to a proportionate fractional vote. Shares
represented by duly executed proxies will be voted in accordance with the
instructions given. Proxies may be revoked at any time before they are exercised
by a written revocation received by Ms. Susan Kineen, Secretary, at 14747
California Street, Omaha, Nebraska 68154, by properly executing a later-dated
proxy, or by attending the Meeting and voting in person. You may also vote
over the Internet or by telephone. Please follow the enclosed instructions to
use these methods of voting.
As of the Record Date, the approximate number of units of beneficial interest
(shares) issued and outstanding for each Class of each Fund is set forth below:
FUND AND CLASS SHARES OUTSTANDING
Amerigo Fund
Class C xxx
Class N xxx
Clermont Fund
Class C xxx
Class N xxx
INTRODUCTION
Shareholders are being asked to consider two proposals which are related to the
pending merger of Clarke Lanzen Skalla Investment Firm, Inc. ("CLS Advisers"),
the Funds' current adviser, with and into a newly-created, wholly-owned indirect
subsidiary of Orbitex Financial Services Group, Inc. ("New Adviser"). The first
proposal asks Shareholders to consider and act upon the approval of an agreement
and plan of reorganization (the "Reorganization Agreement"), pursuant to which
each Fund will transfer its assets and liabilities to a newly-created,
corresponding portfolio of the Orbitex Group of Funds (the "Corresponding
Orbitex Fund"), in exchange for shares of the Corresponding Orbitex Fund (the
"Reorganization"). The Corresponding Orbitex Funds will have substantially the
same investment goals, policies and strategies as those of the Funds. The
Corresponding Orbitex Funds' investment advisor will be New Advisor, which will
employ the same portfolio manager and management personnel as those employed by
CLS Advisers. New Advisor will manage the Funds' assets much in the same way as
CLS Advisers does now for the same level of advisory fees as those currently
received by CLS Advisers. New Advisor will maintain its offices in Omaha, in the
same facilities as CLS Advisers. If the Reorganization is carried out as
proposed, it is expected that there will be no federal income tax consequences
to the Trust, the Funds or the Shareholders.
The second proposal asks Shareholders to consider and act upon the approval of
an interim investment advisory agreement (the "Interim Agreement") between the
Trust, on behalf of each Fund, and New Adviser, for the period from December 23,
1999 (or such later date on which the merger of CLS Advisers and New Adviser)
through the date of which the Reorganization occurs (the "Interim Agreements").
Under the Interim Agreements, the Funds' current portfolio manager and other key
personnel will continue to manage the Funds' assets and provide related services
as employees of New Advisor. The Interim Agreements provide for the same level
of advisory fees as those charged under the current advisory agreements with CLS
Advisers.
PROPOSAL 1 CONSIDERATION OF AGREEMENT AND PLAN OF REORGANIZATION (VOTED ON
BY SHAREHOLDERS OF THE TRUST AS A WHOLE).
INTRODUCTION. At the Meeting, Shareholders will be asked to consider and act
upon a proposal to approve an agreement and plan of reorganization (the
"Reorganization Agreement"), pursuant to which each Fund will transfer its
assets and liabilities to a newly-created, corresponding portfolio of the
Orbitex Group of Funds (the "Corresponding Orbitex Funds"), in exchange for
shares of the Corresponding Orbitex Fund (the "Reorganization"). The
Corresponding Orbitex Funds will have substantially the same investment goals,
policies and strategies as those of the Funds. In connection with the
Reorganization, Class C Shareholders will receive Class C shares of the
Corresponding Orbitex Fund and Class N Shareholders will receive Class D shares
of the Corresponding Orbitex Fund. Orbitex Class C and Class D shares are
identical to the Funds' Class C and Class N shares, respectively. The
Corresponding Orbitex Funds will be managed by New Advisor with the same
portfolio manager and other key CLS Adviser employees that currently serve the
Funds. Total operating expenses and shareholder fees are not expected to
increase as a result of the Reorganization. The Reorganization is expected to be
free from federal income taxes for the Trust, the Funds and the Shareholders.
DESCRIPTION OF THE AGREEMENT AND PLAN OF REORGANIZATION. The Reorganization
Agreement by and between the Trust, on behalf of the Funds, and the Orbitex
Group of Funds ("Orbitex"), on behalf of the Corresponding Orbitex Funds,
provides for the transfer of the assets of each Fund solely in exchange for
shares of beneficial interest of the Corresponding Orbitex Fund and the
assumption by the Corresponding Orbitex Fund of all, or substantially all, of
the liabilities of the Fund, followed by the distribution on the closing date of
shares of the Corresponding Orbitex Fund received by the Fund to the holders of
the Fund's shares. It is anticipated that the Reorganization would be effected
on or about February 15, 2000 (the "Closing Date").
Before the Closing Date, Orbitex will establish two new series as the
Corresponding Orbitex Funds. In addition, before the Closing Date, Orbitex will
create two classes of shares to receive the assets of the Funds' Class C and
Class N shares in connection with the Reorganization. Orbitex Class C shares
will have the same features as the Funds' Class C shares; Orbitex Class D shares
will have the same features as the Funds' Class N shares. After the Closing
Date, the Trust will take all necessary and proper steps to terminate the Funds
and dissolve the Trust.
TAX CONSEQUENCES OF THE REORGANIZATION. The Reorganization is expected to be
free from federal income taxes for the Trust, the Funds and the Shareholders.
Specifically, the
Reorganization is expected to qualify as a "reorganization" within the meaning
of Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended (the
"Code"), with Orbitex and the Trust being "parties to a reorganization" within
the meaning of Section 368(b) of the Code.
On or before the Closing Date, the Trust and Orbitex will receive an opinion of
counsel substantially to the effect that, for federal income tax purposes: (1)
no gain or loss will be recognized to either Fund upon the transfer of its
assets in exchange solely for the Corresponding Orbitex Fund Shares and the
assumption by the Corresponding Orbitex Fund of the Fund's stated liabilities;
(2) no gain or loss will be recognized to either Corresponding Orbitex Fund on
its receipt of the Fund's assets in exchange for the Orbitex Fund shares and the
assumption by each Corresponding Orbitex Fund of the Fund's liabilities; (3) the
basis of each Fund's assets in the corresponding Orbitex Fund's hands will be
the same as the basis of those assets in each Fund's hands immediately before
the Reorganization; (4) each Corresponding Orbitex Fund's holding period for the
assets transferred to it by the Fund will include the holding period of those
assets in the Fund's hands immediately before the conversion; (5) no gain or
loss will be recognized by Fund on the distribution of the Corresponding Orbitex
Fund shares to the Fund's shareholders in exchange for their Fund Shares; (6) no
gain or loss will be recognized by either Fund's shareholders as a result of the
Fund's distribution of Orbitex's Fund shares to the Fund's Shareholders in
exchange for the Shareholders' Fund shares; (7) the basis of the Corresponding
Orbitex Fund shares received by each Fund's Shareholders will be the same as the
adjusted basis of the shareholders' Fund shares surrendered in exchange
therefor; and (8) the holding period of the Corresponding Orbitex Fund shares
received by each Fund's Shareholders will include the Shareholders' holding
period for the Fund shares surrendered in exchange therefor, provided that said
Fund shares were held as capital assets on the date of the Reorganization.
REASONS FOR THE REORGANIZATION.
INTRODUCTION. Clark Lanzen Skalla Investment Firm, Inc. ("CLS Advisers") has
served as investment adviser to the Funds since their inception. In the
interests of obtaining increased efficiencies relating to investment management
and operational issues, it was proposed to the Board of Trustees that the Funds
enter into the Reorganization Agreement with Orbitex. The Corresponding Orbitex
Funds will have substantially the same investment goals, policies and strategies
as those of the Funds. The Funds' total operating expenses and shareholder fees
are not expected to increase as a result of the Reorganization. The
Reorganization is expected to be free from federal income taxes for the Trust,
the Funds and the Shareholders.
CONSIDERATIONS OF THE BOARD OF TRUSTEES. At meetings held on September 24, 1999
and November 11, 1999, the Board of Trustees approved the Reorganization and
related matters. The Board of Trustees determined that the Reorganization is in
the best interests of the Funds and that the interests of Fund Shareholders
would not be diluted as a result of the Reorganization. In approving the
Reorganization, the Board of Trustees
considered, among other things: (i) the terms of the Reorganization; (ii) the
potential economies of scale to be gained by the Reorganization; (iii) the
expected tax-free nature of the Reorganization; (iv) the access to a broader
range of investment opportunities from Orbitex; (v) the depth of services that
Orbitex provides to its shareholders; (vi) the pending merger of CLS Advisers
with and into New Adviser; (vii) the continuity of portfolio management
personnel and investment management services as a result of the merger between
CLS Advisers and New Advisor; (viii) the substantial similarity of the
investment goals, policies and strategies of the Funds and the Corresponding
Orbitex Funds; and (ix) the expected continuity of fund expense and shareholder
fee levels after the Reorganization.
DESCRIPTION OF THE TRUST AND THE FUNDS. The Trust was organized as a
Massachusetts business trust pursuant to a Declaration of Trust dated March 3,
1997. The Trust is an open-end management investment company registered under
the Investment Company Act of 1940 (the "1940 Act"). Each Fund is organized as a
separate series of the Trust. The Trust is authorized to issue an unlimited
number shares of beneficial interest with a par value of $0.10 per share from an
unlimited number of series (portfolios) of shares. Fund shares do not have any
preference as to conversion, exchange, dividends, retirement or other features,
and have no preemptive rights.
The Funds offer Class C and Class N shares. Class C shares are subject to a
contingent deferred sales charge of 1.00% for redemptions within one year from
purchase and are subject to a 12b-1 distribution fee of 1.00%. Class N shares
are not subject to any sales charges or Rule 12b-1 distribution fees.
DESCRIPTION OF ORBITEX'S GROUP OF FUNDS. Orbitex was established pursuant to an
Agreement and Declaration of Trust dated December 31, 1996. Orbitex is an
open-end management investment company registered under the 1940 Act. The
Orbitex funds are organized as separate series of Orbitex. Orbitex is authorized
to issue an unlimited number shares of beneficial interest with a par value of
$.001 per share from an unlimited number of series (portfolios) of shares.
Orbitex fund shares do not have any preference as to conversion, exchange,
dividends, retirement or other features, and have no preemptive rights.
Currently, Orbitex offers five funds that invest primarily in equity securities:
Orbitex Growth Fund, Orbitex Info-Tech & Communications Fund, Orbitex Strategic
Natural Resources Fund, Orbitex Focus 30 Fund and the Orbitex Health &
Biotechnology Fund (collectively, the "Equity Funds"). Each Equity Fund offers
two classes of shares: Class A Shares and Class B Shares. Class A Shares are
sold subject to a front-end sales charge, and a service and Rule 12b-1
distribution fee of 0.40% of the average daily net assets of the Fund. Class B
Shares are sold without a front-end sales charge, but with a contingent deferred
sales charge on shares redeemed within six years of purchase. Class B Shares are
subject to service and Rule 12b-1 distribution fees of 1.00% of the average
daily net assets of the Fund. The Orbitex Focus 30 Fund also offers Class D
Shares, in addition to
Class A and B shares, which that were issued in connection with the acquisition
of the assets and liabilities of the ASM Index 30 Fund.
Orbitex also offers a money market fund, the Orbitex Cash Reserves Fund. The
Orbitex Cash Reserves Fund offers two classes of shares: Institutional Service
Shares, which have a 0.25% servicing fee, and Institutional Shares, which have
no service fees.
Before the Closing Date, Orbitex will establish the Corresponding Orbitex Funds
as separate series of Orbitex and will create two new classes designed to
accommodate the transfer of Fund assets in connection with the Reorganization.
Class C Shareholders will receive Orbitex Class C shares in the Reorganization.
Orbitex Class C shares will be identical to the Funds' Class C shares, which are
sold subject to a contingent deferred sales charge of 1.00% for shareholders
that redeem within one year from purchase and are subject to a 12b-1
distribution fee of 1.00% of average daily net assets.
Class N Shareholders will receive Orbitex Class D shares in the Reorganization.
Orbitex Class D shares will be identical to the Funds' Class N shares, which are
not subject to any sales charges or Rule 12b-1 distribution fees.
COMPARISON OF THE TRUST AND ORBITEX.
SHAREHOLDER VOTING. Shareholders of the Trust and Orbitex have identical voting
rights. Shareholders are entitled to one vote for each share and fractional
votes for fractional shares.
SHAREHOLDER MEETINGS. The Trust and Orbitex have similar shareholder meeting
provisions. Annual meetings of shareholders are not required to be held, but
special meetings of shareholders may be held under certain circumstances.
Meetings may be held to vote on the following if requested in writing by the
holders of not less than 10% of the outstanding shares of the Trust : (1)
removal of a Trustee or Trustees of a Fund; (2) approval or termination of
investment advisory or management contracts; (3) termination or reorganization
of the Trust; (4) amending the Declaration of Trust; and (5) with respect to any
merger, consolidation or sale of assets. For the Trust, the presence (in person
or by proxy) of the holders of a majority of a portfolio's shares entitled to
vote at the meeting is required to establish a quorum at shareholder meetings.
For Orbitex, the presence (in person or by proxy) of 30% of the beneficial
owners of shares is required to establish a quorum at shareholder meetings.
Orbitex requires thirty percent of the shares entitled to vote to make a quorum
for the transaction of business at a Shareholder's meeting.
ELECTION AND TERM OF TRUSTEES. The Trust and Orbitex have similar requirements
regarding the election and term of trustees. Trustees are elected by a majority
vote of a quorum cast by written ballot at the regular meeting of shareholders,
if any, or at a special meeting held for that purpose. Trustees hold office
until their successors are duly elected and qualified or until their death,
removal or resignation. Shareholders may remove a
trustee by written instrument, signed by at least two-thirds of the Trustees in
office immediately prior to the removal, or by a vote of not less than
two-thirds of the shares then outstanding. Trustees may elect a successor to
fill a resulting vacancy by written instrument, signed by a majority of the
Trustees. A trustee elected thereby serves for the balance of the term of the
removed trustee.
SHAREHOLDER LIABILITY. Shareholders of the Trust are not personally liable for
the obligations of the Trust, although under Massachusetts law, Trust
Shareholders may conceivably be held liable as partners of the Trust's
obligations, but only under certain remote circumstances. Under Delaware law,
Orbitex shareholders are not liable for obligations of Orbitex.
LIABILITY OF TRUSTEES. The Trust and Orbitex have similar provisions regarding
the liability of trustees. Trustees of the Trust and Orbitex are not personally
liable for any obligations of the Trust or Orbitex, respectively. The Trust and
Orbitex will indemnify their respective trustees and officers against all
liabilities and expenses, except for those arising from such person's
self-dealing, willful misconduct or recklessness.
COMPARISON OF FUND SERVICE PROVIDERS.
INVESTMENT ADVISERS. CLS Advisers currently serves as the Funds' investment
adviser pursuant to an investment advisory agreements. Under the agreements, CLS
Advisers manages each Fund's assets within the limitations of its investment
policies and restrictions, and furnishes all services required for the
transaction of Fund business, other than services which are provided by the
Fund's administrator, custodian, transfer agent, independent accountants and
legal counsel. During the Funds' last fiscal year, the Amerigo Fund paid
$135,471 to CLS Advisers for advisory services rendered and the Clermont Fund
paid $68,606 to CLS Advisers for advisory services rendered. The current
advisory agreements were approved by the sole initial shareholder of the Funds
when the Funds commenced investment operations. CLS Advisers maintains its
offices at 14747 California Street, Omaha, NE 68154-1979. CLS Advisers is
controlled by W. Patrick Clarke. Mr. Clarke, a director and the President of CLS
Advisers, is Chairman, President and a Trustee of the Trust.
New Advisor will be the investment advisor for the Corresponding Orbitex Funds.
New Advisor will maintain its offices in Omaha, in the same facilities as CLS
Advisers currently occupies. The Funds' current portfolio manager and other key
CLS Advisers personnel will be employed by New Advisor after the merger of CLS
Advisers with and into New Advisor. Information about New Advisor's principal
executive officers and directors is included in Exhibit D.
Orbitex Management, Inc. is Orbitex's investment advisor. Orbitex Management,
Inc. is an affiliate of Orbitex Management Ltd., a Bahamian corporation and
investment advisor that provides investment services to individuals and
institutions including Canadian unit trusts. Advisor. As of November 1, 1999,
Orbitex Management Ltd. and Orbitex
Management, Inc. had $160 million in U.S. mutual fund assets under management
and managed $250 million in Canadian unit trust assets. With its affiliates,
Orbitex Management Ltd. had $1.5 billion in assets under management, as of
November 1, 1999. Orbitex Management, Inc. maintains offices at 410 Park Avenue,
New York, NY 10222 and its telephone number is 1-888-ORBITEX.
DISTRIBUTORS. CLS Distributors, Inc., 14747 California Street, Omaha, NE 68154,
an affiliate of CLS Advisers, serves as the distributor of Class C Shares of the
Funds. Class N Shares are self-distributed. Orbitex's distributor is Fund
Distributors, Inc., 60 State Street, Boston, MA 02109.
INDEPENDENT AUDITORS. At a meeting held on September 24, 1999, the Board of
Trustees selected KPMG LLP as the Trust's independent auditors for the fiscal
year ending December 31, 1999. Representatives from KPMG LLP are not expected to
be present at the Meeting, but will have an opportunity to make a statement and
will be available to respond to questions. Orbitex's independent accountants for
the fiscal year ending April 30, 2000 are PricewaterhouseCoopers LLP, 160
Federal Street, Boston, MA 02110.
OTHER SERVICE PROVIDERS. The Trust's administrator and transfer agent is Mutual
Funds Service Co., 6000 Memorial Drive, Dublin, Ohio, 43017. The Trust's
custodian is Firststar Bank, N.A., Star Bank Center, 425 Walnut Street,
Cincinnati, Ohio 45202.
Orbitex's administrator is American Data Services, Inc., Hauppauge Corporate
Center, 150 Motor Parkway, Hauppauge, NY 11788. Orbitex' transfer and dividend
disbursing agent for the Growth Fund, Info-Tech & Communications Fund and
Strategic Natural Resources Fund is Boston Financial Data Service, Inc., Two
Heritage Drive, North Quincy, MA 02171. Orbitex' transfer and dividend
disbursing agent for the Focus 30 Fund and Health and Biotechnology Fund is
American Data Services, Inc., Hauppauge Corporate Center, 150 Motor Parkway,
Hauppauge, NY 11788.
VOTING. The persons named in the accompanying proxy intend, in the absence of
contrary instructions, to vote all proxies on behalf of Shareholders FOR the
approval of the Reorganization. Shareholders of the Trust will vote together on
this proposal. Approval of this proposal requires the affirmative vote of
two-thirds of the outstanding shares of the Trust.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE FOR THE APPROVAL OF
THE REORGANIZATION.
PROPOSAL 2 CONSIDERATION OF AN INTERIM ADVISORY AGREEMENT BETWEEN THE
TRUST, ON BEHALF OF EACH FUND, AND NEW ADVISOR (VOTED ON
SEPARATELY BY
SHAREHOLDERS OF EACH FUND, WITH BOTH CLASSES OF EACH FUND
VOTING TOGETHER)
INTRODUCTION. At the Meeting, Shareholders will be asked to consider and act
upon a proposal to approve an interim investment advisory agreement between the
Trust, on behalf of each Fund, and New Advisor, which would be effective for the
period from December 23, 1999 (or such later date on which the merger of CLS
Advisers with and into New Adviser occurs) through the date on which the
Reorganization (as defined below) occurs (the "Interim Agreements").
CLS Advisers and New Advisor have entered into an agreement to merge CLS
Advisers with and into New Advisor. Under the 1940 Act, the Trust's current
investment advisory agreements with CLS Advisers will terminate when CLS
Advisers merges into New Advisor. Because the Reorganization will take place
after the merger of CLS Advisers into New Advisor, Shareholders are being asked
to approve an advisory agreement for the interim period between the merger of
the advisors and the Reorganization. Accordingly, Shareholders of the Amerigo
Fund are being asked to consider the approval of the Interim Agreement between
the Trust, on behalf of the Amerigo Fund, and New Advisor. A copy of this
Interim Agreement is attached as Exhibit B. Similarly, Shareholders of the
Clermont Fund are being asked to consider the approval of the Interim Agreement
between the Trust, on behalf of the Clermont Fund, and New Advisor. A copy of
this Interim Agreement is attached as Exhibit C.
If Shareholders of a Fund approve the Interim Agreement, New Advisor will serve
as the Fund's investment advisor upon the merger of CLS Advisers with New
Advisor through the Closing Date of the Reorganization. Assuming that
Shareholders approve the Reorganization, the Interim Agreement would terminate
on the Closing Date of the Reorganization and thereafter the Funds would be
managed by the Corresponding Orbitex Funds' investment advisor, New Advisor
pursuant to advisory agreements with the same terms and fees as the current
advisory agreements.
Based on information provided by CLS Advisers and New Advisor, the Board of
Trustees does not anticipate that the merger of CLS Advisers with and into New
Advisor will reduce the quality of services provided to the Funds or result in
any material changes in the manner in which the Funds' assets are managed. The
advisory fees paid to New Advisor under the Interim Agreements are identical to
the advisory fees currently paid by the Funds to CLS Advisers under the current
advisory agreements. New Advisor will maintain its offices in Omaha, in the same
facilities as CLS Advisers currently occupy. The Funds' current portfolio
manager and other key CLS Advisers personnel will be employed by New Advisor
after the merger.
DESCRIPTION OF NEW ADVISOR. New Advisor is a newly-created, wholly-owned,
indirect subsidiary of Orbitex Financial Services Group, Inc., 410 Park Avenue,
New York, New York 10022. Orbitex Acquisition Holdings Corp. is New Advisor's
direct parent and is a
wholly-owned, direct subsidiary of Orbitex Financial Services Group, Inc., 410
Park Avenue, New York, NY 10022, a New York corporation. Orbitex Financial
Services Group, Inc., in turn, is majority owned by Capital Management Ltd., a
Bahamian corporation. Mr. Thomas Bachmann is the controlling person of Capital
Management Ltd.
New Advisor was organized as a New York corporation pursuant to Articles of
Incorporation dated October 15, 1999. New Advisor's principal executive offices
will remain at 14747 California Street, Omaha, NE 68154-1979. New Advisor is
under common control with Orbitex Management, Inc., 410 Park Avenue, New York,
NY 10022, and Orbitex Management Ltd., a Bahamian corporation; both entities are
investment advisers that provide investment services to individuals and
institutions, including Canadian unit trusts and Orbitex. As of November 1,
1999, Orbitex Management Ltd. and Orbitex Management, Inc. had $160 million in
U.S. mutual fund assets under management and managed $250 million in Canadian
unit trust assets. With its affiliates, Orbitex Management Ltd. had $1.5 billion
in assets under management, as of November 1, 1999. Information about New
Advisor's principal executive officers and directors is included in Exhibit D.
THE INTERIM AGREEMENTS. The Interim Agreements are identical to the current
advisory agreements between the Trust and CLS Advisers, except for the dates of
execution, effectiveness, and the substitution of New Advisor as the investment
advisor in place of CLS Advisers. Specifically, the Interim Agreements provide,
in part, that New Advisor will make investment decisions regarding each Fund's
assets and continuously review, supervise and administer the Fund's investment
program, subject to the supervision of, and policies established by, the Board
of Trustees. Under the Interim Agreements, New Advisor will receive advisory
fees of 1.00% of average daily net assets from each Fund. The advisory fees
payable under the Interim Agreements and the current advisory agreements are the
same.
THE CURRENT AGREEMENTS. The current advisory agreements, dated as of March 3,
1997, were last approved by the Board of Trustees at a meeting held on February
19, 1999. The current agreements provide that CLS Advisers will supply
investment research and portfolio management, including the selection of
securities for each Fund to purchase, hold or sell and the selection of brokers
through whom that Fund's portfolio transactions are executed. CLS Advisers also
administers the business affairs of the Fund, furnishes offices, necessary
facilities and equipment, and permits its officers and employees to serve
without compensation as Trustees and officers of the Fund if duly elected to
such positions. Under the current advisory agreements, each Fund pays CLS
Advisers, as compensation for the services rendered, an annual fee equal to
1.00% of the Fund's average daily net assets.
CONSIDERATIONS OF THE BOARD OF TRUSTEES. At a meeting held on September 24,
1999, the Trustees, including a majority of Trustees who are neither parties to
the Interim Agreements nor "interested persons" of any such party (within the
meaning of the 1940
Act), unanimously approved the Interim Agreements. In addition, the Trustees
unanimously recommended that Shareholders approve the Interim Agreements. In
connection with the approval of the Interim Agreements, the Board of Trustees
considered the terms of the current advisory agreements and the Interim
Agreements, particularly those governing the services to be provided to the
Funds and the fees and expenses payable by the Funds. The Board of Trustees also
considered the skills and capabilities of New Advisor and the representations
from Orbitex and CLS Advisers that the Funds' portfolio manager key management
personnel of CLS Advisers will continue to serve the Funds as employees of New
Advisor.
VOTING. The persons named in the accompanying proxy intend, in the absence of
contrary instructions, to vote all proxies on behalf of Shareholders FOR the
approval of the Interim Agreements. Shareholders of the Amerigo Fund will be
asked to vote on the Interim Agreement between the Trust, on behalf of the
Amerigo Fund, and New Advisor, with both Classes voting together. Similarly,
Shareholders of the Clermont Fund will be asked to vote on the Interim Agreement
between the Trust, on behalf of the Clermont Fund, and New Advisor, with both
Classes voting together. Approval of this proposal for a Fund requires the vote
of (a) 67% or more of the voting securities present at the Meeting, if the
holders of more than 50% of the outstanding voting securities of the Fund are
present or represented by proxy, or (b) more than 50% of the outstanding voting
securities of the Fund, whichever is less.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE FOR THE APPROVAL OF
THE INTERIM ADVISORY AGREEMENTS.
VOTING INFORMATION
SHAREHOLDER VOTING AND QUORUM. Each Fund share has identical voting rights.
Shareholders are entitled to one vote for each share and fractional votes for
fractional shares. At shareholder meetings, the holders of a majority of the
outstanding shares entitled to vote at the meeting (in person or by proxy)
constitutes a quorum. Shares represented by a properly executed proxy will be
voted in accordance with the instructions thereon, or if no specification is
made, the shares will be voted FOR the approval of the Proposals.
Abstentions and "broker non-votes" will not be counted for or against the
Proposals, but will be counted for purposes of determining whether a quorum is
present. Abstentions and broker non-votes will be counted as votes present for
purposes of determining the number of voting securities present at the Meeting,
and will therefore have the effect of counting against the Proposals.
ADJOURNMENT. In the event that sufficient votes in favor of the Proposals set
forth in the Notice of the Special Meeting are not received by the time
scheduled for the meeting, the persons named as proxies may propose one or more
adjournments of the meeting to permit further solicitation of proxies with
respect to the Proposals. Any such adjournment
will require the affirmative vote of a majority of the votes cast on the
question in person or by proxy at the session of the meeting to be adjourned.
The persons named as proxies will vote in favor of such adjournment those
proxies which they are entitled to vote in favor of the Proposals. They will
vote against any such adjournment those proxies required to be voted against the
Proposals. The costs of any such additional solicitation and of any adjourned
session will be borne by the Trust.
OTHER BUSINESS. The Board of Trustees knows of no other business to be brought
before the Meeting. However, if any other matters properly come before the
Meeting, it is their intention that proxies which do not contain specific
restrictions to the contrary will be voted on such matters in accordance with
the judgment of the persons named in the enclosed form of proxy.
PROXY SOLICITATIONS. The cost of the solicitation and the Meeting will be borne
by the Trust. In addition to the solicitation of proxies by mail, the Trustees,
CLS Advisers, and officers of the Trust may solicit proxies in person or by
telephone. Employees of CLS Advisers will not be compensated by the Trust for
their solicitation activities. Persons holding shares as nominees will, upon
request, be reimbursed by the Trust for their reasonable expenses incurred in
sending soliciting materials to their principals.
INTEREST OF CERTAIN PERSONS. Messrs. W. Patrick Clarke, Randall Skalla and Todd
Clarke, who are "interested persons" of the Trust (within the meaning of the
1940 Act) and current Trustees, may have an interest in the approval of the
Interim Agreements due to their positions with CLS Advisers. Under the agreement
of merger between CLS Advisers and New Adviser Messrs. Clarke, Skalla and Clarke
will be employed by New Adviser under employment contracts, which will have
five-year terms. In addition, Messrs. Clarke, Skalla and Clarke will receive the
option to purchase the common stock of New Adviser and Orbitex Financial
Services Group, Inc.
Messrs. Clarke, Skalla and Clarke are affiliates of CLS Distributors, Inc. and
CLS Advisers. Ms. Susan Kineen, Secretary of the Trust, is an affiliate of CLS
Distributors, Inc.
OTHER INFORMATION
REPORTS TO SHAREHOLDERS. The Trust will furnish, without charge, a copy of the
most recent Annual Report to Shareholders of the Funds and the most recent
Semi-Annual Report succeeding such Annual Report, if any, on request. Requests
should be directed to the Trust, or by calling the Administrator at (800)
377-8796. Shareholders may request Orbitex's annual and semi-annual reports by
calling 1-888-ORBITEX.
OBTAINING ADDITIONAL INFORMATION. Information about the Trust and Orbitex,
including prospectuses, statements of additional information and shareholder
reports, may be obtained from the SEC by: reviewing and copying documents in the
SEC's Public Reference Room in Washington, D.C. (for information call
1-800-SEC-0330); retrieving
information from the SEC's web site at http://www.sec.gov; or requesting
documents, upon payment of a duplicating fee, by writing to SEC, Public
Reference Section, Washington, D.C. 20549-6009. To aid you in obtaining this
information, the Trust's 1940 Act registration number is 811-08095 and Orbitex's
1940 Act registration number is 811-08037.
SHAREHOLDER INQUIRIES. Shareholder inquiries may be addressed to the Trust in
writing c/o Mutual Funds Service Co., 6000 Memorial Drive, Dublin, Ohio 43017,
or by telephoning 1-888-455-4244 . Orbitex's shareholder inquiries may be
addressed to American Data Services, Inc., P.O. Box 5786, Hauppauge, NY
11788-0786 or by telephoning Mr. Fyzul Khan, Legal Counsel, Orbitex Management,
Inc. at 212/891-7900.
BENEFICIAL OWNERS. As of October 31, 1999, the following persons were the only
persons who were, to the knowledge of the Trust, beneficial owners of 5% or more
of a Class of shares of a Fund: [TO BE INSERTED]
The current Trustees and Officers of the Trust own, in the aggregate less than
1% of the outstanding shares of The Amerigo Fund and The Clermont Fund. The
current Trustees and Officers of Orbitex, in the aggregate, owned lass than 1%
of each of the Funds.
IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING, PLEASE DATE AND SIGN THE
ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF
MAILED IN THE UNITED STATES. YOU MAY ALSO VOTE OVER THE INTERNET OR BY
TELEPHONE. PLEASE FOLLOW THE ENCLOSED INSTRUCTIONS TO USE THESE METHODS OF
VOTING.
EXHIBIT A
FORM OF AGREEMENT AND PLAN
OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated as of ________, 1999 (the
"Agreement"), by and between the CLS AdvisorOne Funds (the "Trust"), a
Massachusetts business trust, on behalf of the Amerigo Fund and Clermont Fund
(each an "Acquired Fund" and together, the "Acquired Funds"), and the Orbitex
Group of Funds ("Orbitex"), a Delaware business trust, on behalf of the Orbitex
______ Fund and Orbitex ______ Fund (each an "Acquiring Fund" and together, the
"Acquiring Funds").
WHEREAS, the Trust was organized under Massachusetts law as a business
trust under a Declaration of Trust dated March 3, 1997. The Trust is an open-end
management investment company registered under the Investment Company Act of
1940 ("1940 Act"). The Trust has authorized capital consisting of an unlimited
number of units of beneficial interest of separate series of the Trust. The
Acquired Funds are duly organized and validly existing series of the Trust;
WHEREAS, the Orbitex was organized under Delaware law as a business trust
under a Declaration of Trust dated December 31, 1996. Orbitex is an open-end
management investment company registered under the 1940 Act, as amended. Orbitex
has authorized capital consisting of an unlimited number of units of beneficial
interest of separate series of Orbitex. The Acquiring Funds are duly organized
and validly existing series of Orbitex;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree to effect the transfer of all of the assets of the
Acquired Funds solely in exchange for the assumption by the corresponding
Acquiring Funds of all or substantially all of the liabilities of the Acquired
Funds and units of beneficial interest of the corresponding Acquiring Funds
("Acquiring Fund Shares") followed by the distribution, at the Effective Time
(as defined in Section 9 of this Agreement), of such Acquiring Fund Shares to
the holders of units of beneficial interest of each corresponding Acquired Fund
("Acquired Fund Shares"), on the terms and conditions hereinafter set forth in
liquidation of the Acquired Funds. The parties hereto covenant and agree as
follows:
1. PLAN OF REORGANIZATION. At the Effective Time, the Acquired Funds will
assign, deliver and otherwise transfer all of their assets and good and
marketable title thereto, and assign all or substantially all of the liabilities
as are set forth in a statement of assets and responsibilities, to be prepared
as of the Effective Time (the "Statement of Assets and Liabilities") to the
Acquiring Funds free and clear of all liens, encumbrances and adverse claims
except as provided in this Agreement, and the Acquiring Funds shall acquire all
such assets, and shall assume all such liabilities of the Acquired Funds, in
exchange for delivery to the Acquired Funds by the Acquiring Funds of a number
of Acquiring Fund Shares (both full and fractional) equivalent in number and
value to the Acquired Fund Shares outstanding immediately prior to the Effective
Time. The assets and stated liabilities of the Acquired Funds, as set forth in
the Statement of Assets and Liabilities attached hereto as Exhibit A, shall be
exclusively assigned to and assumed by the Acquiring Funds. All debts,
liabilities, obligations and duties of the Acquired Funds, to the extent that
they exist at or after the Effective Time and are stated in the Statement of
Assets and Liabilities, shall after the Effective Time attach to the Acquiring
Funds and may be enforced against the Acquiring Funds to the same extent as if
the same had been incurred by the Acquiring Funds.
2. TRANSFER OF ASSETS. The assets of the Acquired Funds to be acquired by the
Acquiring Funds and allocated thereto shall include, without limitation, all
cash, cash equivalents, securities, receivables (including interest and
dividends receivable) as set forth in the Statement of Assets and Liabilities,
as well as any claims or rights of action or rights to register shares under
applicable securities laws, any books or records of the Acquired Funds and other
property owned by the Acquired Funds at the Effective Time.
3. LIQUIDATION AND DISSOLUTION OF THE ACQUIRED FUNDS. At the Effective Time, the
Acquired Funds will liquidate and the Acquiring Fund Shares (both full and
fractional)
received by the Acquired Funds will be distributed to the shareholders of record
of the Acquired Funds as of the Effective Time in exchange for their respective
Acquired Fund Shares and in complete liquidation of the Acquired Funds. Each
shareholder of the Acquired Funds will receive a number of Acquiring Fund Shares
equal in number and value to the Acquired Fund Shares held by that shareholder,
and each Acquiring Fund and Acquired Fund share will be of equivalent net asset
value per share. Such liquidation and distribution will be accompanied by the
establishment of an open account on the share records of the Acquiring Funds in
the name of each shareholder of the Acquired Funds and representing the
respective number of Acquiring Fund Shares due such shareholder. As soon as
practicable after the Effective Time, the Trust shall take all steps as shall be
necessary and proper to effect a complete termination of the Acquired Funds.
4. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING FUNDS. The Acquiring Funds
represent and warrant to the Acquired Funds as follows:
(a) ORGANIZATION, EXISTENCE, ETC. Orbitex is a business trust duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has the power to carry on its business as it is now
being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. Orbitex is registered under the
1940 Act as an open-end management investment company; such registration
has not been revoked or rescinded and will be in full force and effect.
(c) FINANCIAL STATEMENTS. The audited financial statements, if any, of
Orbitex relating to the Acquiring Funds dated as of April 30, 1999 (the
"Acquiring Funds Financial Statements"), which will, if available, be
delivered to the Acquired Funds as of the Effective Time, will fairly
present the financial position of the Acquiring Funds as of the date
thereof.
(d) SHARES TO BE ISSUED UPON REORGANIZATION. The Acquiring Fund Shares to
be issued in connection with the Reorganization have been duly authorized
and upon consummation of the Reorganization will be validly issued, fully
paid and nonassessable. Prior to the Effective Time, there shall be no
issued and outstanding Acquiring Fund Shares or any other securities issued
by the Acquiring Funds.
(e) AUTHORITY RELATIVE TO THIS AGREEMENT. Orbitex, on behalf of the
Acquiring Funds, has the power to enter into this Agreement and to carry
out their obligations hereunder. The execution, delivery and performance of
this Agreement, and the consummation of the transactions contemplated
hereby, have been duly authorized by the Orbitex Board of Trustees, and no
other proceedings by the Acquiring Funds are necessary to authorize their
officers to effectuate this Agreement and the transactions contemplated
hereby. The Acquiring Funds are not a party to or obligated under any
charter, by-law, indenture or contract provision or any other commitment or
obligation, or subject to any order or
decree, which would be violated by their executing and carrying out this
Agreement.
(f) LIABILITIES. There are no liabilities of the Acquiring Funds, whether
or not determined or determinable, other than liabilities disclosed or
provided for in the Acquiring Funds' Financial Statements and liabilities
incurred in the ordinary course of business subsequent to the Effective
Time or otherwise previously disclosed to the Acquired Funds, none of which
has been materially adverse to the business, assets or results of
operations of the Acquiring Funds.
(g) LITIGATION. Except as previously disclosed to the Acquired Funds, there
are no claims, actions, suits or proceedings pending or, to the actual
knowledge of the Acquiring Funds, threatened which would materially
adversely affect the Acquiring Funds or their assets or business or which
would prevent or hinder in any material respect consummation of the
transactions contemplated hereby.
(h) CONTRACTS. Except for contracts and agreements disclosed to the
Acquired Funds, under which no default exists, the Acquiring Funds are not
a party to or subject to any material contract, debt instrument, plan,
lease, franchise, license or permit of any kind or nature whatsoever with
respect to the Acquiring Funds.
(i) TAXES. As of the Effective Time, all Federal and other tax returns and
reports of the Acquiring Funds required by law to have been filed shall
have been filed, and all other taxes shall have been paid so far as due, or
provision shall have been made for the payment thereof, and to the best of
the Acquiring Funds' knowledge, no such return is currently under audit and
no assessment has been asserted with respect to any of such returns.
5. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRED FUNDS. The Acquired Funds
represent and warrant to the Acquiring Funds as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Trust is a business trust duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has the power to carry on its business as
it is now being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Trust is registered under the
1940 Act as an open-end management investment company; such registration
has not been revoked or rescinded and is in full force and effect.
(c) FINANCIAL STATEMENTS. The audited financial statements of the Trust
relating to the Acquired Funds for the fiscal year ended December 31, 1999
(the "Acquired Funds Financial Statements"), as delivered to the Acquiring
Funds, fairly present the financial position of the Acquired Funds as of
the dates thereof,
and the results of its operations and changes in its net assets for the
periods indicated.
(d) MARKETABLE TITLE TO ASSETS. The Acquired Funds will have, at the
Effective Time, good and marketable title to, and full right, power and
authority to sell, assign, transfer and deliver, the assets to be
transferred to the Acquiring Funds. Upon delivery and payment for such
assets, the Acquiring Funds will have good and marketable title to such
assets without restriction on the transfer thereof free and clear of all
liens, encumbrances and adverse claims.
(e) AUTHORITY RELATIVE TO THIS AGREEMENT. The Trust, on behalf of the
Acquired Funds, has the power to enter into this Agreement and to carry out
their obligations hereunder. The execution, delivery and performance of
this Agreement, and the consummation of the transactions contemplated
hereby, have been duly authorized by the Trust's Board of Trustees, and,
except for approval by the shareholders of the Acquired Funds, no other
proceedings by the Acquired Funds are necessary to authorize their officers
to effectuate this Agreement and the transactions contemplated hereby. The
Acquired Funds are not a party to or obligated under any charter, by-law,
indenture or contract provision or any other commitment or obligation, or
subject to any order or decree, which would be violated by their executing
and carrying out this Agreement.
(f) LIABILITIES. There are no liabilities of the Acquired Funds, whether or
not determined or determinable, other than liabilities disclosed or
provided for in the Acquired Funds' Financial Statements and liabilities
incurred in the ordinary course of business subsequent to the Effective
Time, or otherwise previously disclosed to the Acquiring Funds, none of
which has been materially adverse to the business, assets or results of
operations of the Acquired Funds. The Trust's Registration Statement, which
is on file with the Securities and Exchange Commission, does not contain an
untrue statement of a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(g) LITIGATION. Except as previously disclosed to the Acquiring Funds,
there are no claims, actions, suits or proceedings pending or, to the
knowledge of the Acquired Funds, threatened which would materially
adversely affect the Acquired Funds or their assets or business or which
would prevent or hinder in any material respect consummation of the
transactions contemplated hereby.
(h) CONTRACTS. Except for contracts and agreements disclosed to the
Acquiring Funds, under which no default exists, the Acquired Funds, at the
Effective Time, are not a party to or subject to any material contract,
debt instrument, plan, lease, franchise, license or permit of any kind or
nature whatsoever.
(i) TAXES. As of the Effective Time, all Federal and other tax returns and
reports of the Acquired Funds required by law to have been filed shall have
been
filed, and all other taxes shall have been paid so far as due, or provision
shall have been made for the payment thereof, and to the best of the
Acquired Funds' knowledge, no such return is currently under audit and no
assessment has been asserted with respect to any of such returns.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUNDS.
(a) All representations and warranties of the Acquired Funds contained in
this Agreement shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Effective Time, with the same
force and effect as if made on and as of the Effective Time.
(b) The Acquiring Funds shall have received an opinion of counsel, dated as
of the Effective Time, addressed to and in form and substance satisfactory
to counsel for the Acquiring Funds, to the effect that (i) the Acquired
Funds are duly organized and validly existing series of the Trust under the
laws of the Commonwealth of Massachusetts; (ii) the Trust is an open-end
management investment company registered under the 1940 Act; (iii) this
Agreement and the Reorganization provided for herein and the execution of
this Agreement have been duly authorized and approved by all requisite
action of the Acquired Funds and this Agreement has been duly executed and
delivered by the Trust on behalf of the Acquired Funds and is a valid and
binding obligation of the Acquired Funds, subject to applicable bankruptcy,
insolvency, fraudulent conveyance and similar laws or court decisions
regarding enforcement of creditors' rights generally; (iv) to the best of
counsel's knowledge after reasonable inquiry, no consent, approval, order
or other authorization of any Federal or state court or administrative or
regulatory agency is required for the Acquired Funds to enter into this
Agreement or carry out its terms that has not been obtained other than
where the failure to obtain any such consent, approval, order or
authorization would not have a material adverse effect on the operations of
the Acquired Funds; and (v) upon consummation of this Agreement, the
Acquiring Funds shall have acquired all of the Acquired Funds' assets
listed in the Statement of Assets and Liabilities, free and clear of all
liens encumbrances or adverse claims.
(c) The Acquired Funds shall have delivered to the Acquiring Funds at the
Effective Time each Acquired Fund's Statement of Assets and Liabilities,
prepared in accordance with generally accepted accounting principles
consistently applied, together with a certificate of the Treasurer or
Assistant Treasurer of each Acquired Fund as to the aggregate asset value
of each Acquired Fund's portfolio of securities.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUNDS.
(a) All representations and warranties of the Acquiring Funds contained in
this Agreement shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Effective Time, with the same
force and effect as if made on and as of the Effective Time.
(b) The Acquired Funds shall have received an opinion of counsel for the
Acquiring Funds, dated as of the Effective Time, addressed to and in form
and substance satisfactory to counsel for the Acquired Funds, to the effect
that: (i) the Acquiring Funds are duly organized and validly existing
series of Orbitex under the laws of the State of Delaware; (ii) Orbitex is
an open-end management investment company registered under the 1940 Act;
(iii) this Agreement and the Reorganization provided for herein and the
execution of this Agreement have been duly authorized and approved by all
requisite corporate action of the Acquiring Funds and this Agreement has
been duly executed and delivered by the Acquiring Funds and is a valid and
binding obligation of the Acquiring Funds, subject to applicable
bankruptcy, insolvency, fraudulent conveyance and similar laws or court
decisions regarding enforcement of creditors' rights generally; (iv) to the
best of counsel's knowledge, no consent, approval, order or other
authorization of any Federal or state court or administrative or regulatory
agency is required for the Acquiring Funds to enter into this Agreement or
carry out its terms that has not already been obtained, other than where
the failure to obtain any such consent, approval, order or authorization
would not have a material adverse effect on the operations of the Acquiring
Funds; and (v) the Acquiring Fund Shares to be issued in the Reorganization
have been duly authorized and upon issuance thereof in accordance with this
Agreement will be validly issued, fully paid and nonassessable.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUNDS AND THE
ACQUIRING FUNDS. The obligations of the Acquired Funds and the Acquiring Funds
to effectuate this Agreement shall be subject to the satisfaction of each of the
following conditions:
(a) Such authority from the Securities and Exchange Commission (the "SEC")
as may be necessary to permit the parties to carry out the transactions
contemplated by this Agreement shall have been received.
(b) With respect to the Acquired Funds, the Trust will call a meeting of
shareholders to consider and act upon this Agreement and to take all other
actions reasonably necessary to obtain the approval by shareholders of the
Acquired Funds of this Agreement and the transactions contemplated herein,
including the Reorganization and the termination of the Acquired Funds if
the Reorganization is consummated. The Trust has prepared or will prepare
the notice of meeting, form of proxy and proxy statement (collectively,
"Proxy Materials") to be used in connection with such meeting, and with
such other information relating to the
Acquiring Funds as is reasonably necessary for the preparation of the Proxy
Materials.
(c) The Registration Statement on Form N-1A of the Acquiring Funds shall be
effective under the Securities Act of 1933 ("1933 Act") and, to the best
knowledge of the Acquiring Funds, no investigation or proceeding for that
purpose shall have been instituted or be pending, threatened or
contemplated under the 1933 Act.
(d) The shares of the Acquiring Funds shall have been duly qualified for
offering to the public in all states of the United States, the Commonwealth
of Puerto Rico and the District of Columbia (except where such
qualifications are not required) so as to permit the transfer contemplated
by this Agreement to be consummated.
(e) The Acquired Funds and the Acquiring Funds shall have received on or
before the Effective Time an opinion of counsel satisfactory to the
Acquired Funds and the Acquiring Funds substantially to the effect that for
Federal income tax purposes:
(1) No gain or loss will be recognized to each Acquired Fund upon the
transfer of its assets in exchange solely for the corresponding
Acquiring Fund Shares and the assumption by each Acquiring Fund of the
corresponding Acquired Fund's stated liabilities;
(2) No gain or loss will be recognized to each Acquiring Fund on its
receipt of the corresponding Acquired Fund's assets in exchange for
the Acquiring Fund Shares and the assumption by each Acquiring Fund of
the corresponding Acquired Fund's liabilities;
(3) The basis of each Acquired Fund's assets in the corresponding
Acquiring Fund's hands will be the same as the basis of those assets
in each Acquired Fund's hands immediately before the Reorganization;
(4) Each Acquiring Fund's holding period for the assets transferred to
it by the corresponding Acquired Fund will include the holding period
of those assets in the Acquired Fund's hands immediately before the
conversion;
(5) No gain or loss will be recognized to each Acquired Fund on the
distribution of the corresponding Acquiring Fund Shares to each
Acquired Fund's shareholders in exchange for their Acquired Fund
Shares;
(6) No gain or loss will be recognized to each Acquired Fund's
shareholders as a result of the Acquired Fund's distribution of
Acquiring
Fund Shares to the Acquired Fund's shareholders in exchange for the
Acquired Fund's shareholders' Acquired Fund Shares;
(7) The basis of the Acquiring Fund Shares received by each Acquired
Fund's shareholders will be the same as the adjusted basis of that
Acquired Fund's shareholders' Acquired Fund Shares surrendered in
exchange therefor; and
(8) The holding period of the Acquiring Fund Shares received by each
Acquired Fund's shareholders will include the Acquired Fund's
shareholders' holding period for the Acquired Fund's shareholders'
Acquired Fund Shares surrendered in exchange therefor, provided that
said Acquired Fund Shares were held as capital assets on the date of
the Reorganization.
(f) A vote approving this Agreement and the Reorganization contemplated
hereby shall have been adopted by at least a majority of the outstanding
shares of each of the Acquired Funds entitled to vote at an annual or
special meeting.
(g) The Board of Trustees of Orbitex, at a meeting duly called for such
purpose, shall have authorized the issuance by each of the Acquiring Funds
of Acquiring Fund Shares at the Effective Time in exchange for the assets
of the corresponding Acquired Funds pursuant to the terms and provisions of
this Agreement.
9. EFFECTIVE TIME OF THE REORGANIZATION. The exchange of each Acquired Fund's
assets for corresponding Acquiring Fund Shares shall be effective as of close of
business on the date of reorganization, or at such other time and date as fixed
by the mutual consent of the parties (the "Effective Time").
10. TERMINATION. This Agreement and the transactions contemplated hereby may be
terminated and abandoned without penalty by resolution of the Board of Trustees
of the Trust, at any time prior to the Effective Time, if circumstances should
develop that, in the opinion of the Board, make proceeding with the Agreement
inadvisable.
11. AMENDMENT. This Agreement may be amended, modified or supplemented in such
manner as may be mutually agreed upon in writing by the parties; provided,
however, that following the Shareholders' Meeting called on behalf of the
Acquired Funds pursuant to Section 8 of this Agreement, no such amendment may
have the effect of changing the provisions for determining the number or value
of Acquiring Fund Shares to be paid to the Acquired Funds' shareholders under
this Agreement to the detriment of the Acquired Funds' shareholders without
their further approval.
12. GOVERNING LAW. This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
13. NOTICES. Any notice, report, statement or demand required or permitted by
and provision of this Agreement shall be in writing and shall be given by
prepaid telegraph, telecopy, certified mail or overnight express courier
addressed as follows:
if to the Acquiring Funds:
Orbitex Group of Funds
410 Park Avenue
New York, NY 10022
with a copy to:
Leonard Mackay, Esq.
Rogers & Wells
200 Park Avenue
New York, NY 10166-0153
if to the Acquired Funds:
CLS AdvisorOne Funds
14747 California Street
Omaha, NE 68154-1979
with a copy to:
John H. Grady, Esq.
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19243
14. FEES AND EXPENSES.
(a) The Acquiring Funds and the Acquired Funds represent and warrant to the
other that there are no brokers or finders entitled to receive any payments
in connection with the transactions provided for herein.
(b) Except as otherwise provided for herein, all expenses of the
transactions contemplated by this Agreement incurred by the Acquired Funds
and the Acquiring Funds will be borne by each Fund. Such expenses include,
without limitation, (i) expenses incurred in connection with the entering
into and the carrying out of the provisions of this Agreement; (ii)
expenses associated with the preparation and filing of the Proxy Statement
under the Securities Exchange Act of 1934 Act, as amended; (iii)
registration or qualification fees and expenses of
preparing and filing such forms as are necessary under applicable state
securities laws to qualify the Acquiring Fund Shares to be issued in
connection herewith in each state in which the Acquired Funds' shareholders
are resident as of the date of the mailing of the Proxy Statement to such
shareholders; (iv) postage; (v) printing; (iv) accounting fees; (vii) legal
fees; and (viii) solicitation costs of the transaction. Notwithstanding the
foregoing, the Acquiring Funds shall pay their own Federal and state
registration fees.
15. HEADINGS, COUNTERPARTS, ASSIGNMENT.
(a) The article and paragraph headings contained in this Agreement are for
reference purposes only and shall not effect in any way the meaning or
interpretation of this Agreement.
(b) This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
(c) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, but no
assignment or transfer hereof or of any rights or obligations hereunder
shall be made by any party without the written consent of the other party.
Nothing herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm or corporation other than the parties
hereto and their respective successors and assigns any rights or remedies
under or by reason of this Agreement.
16. ENTIRE AGREEMENT. The Acquiring Funds and the Acquired Funds agree that
neither party has made any representation, warranty or covenant not set forth
herein and that this Agreement constitutes the entire agreement between the
parties. The representations, warranties and covenants contained herein or in
any document delivered pursuant hereto or in connection herewith shall survive
the consummation of the transactions contemplated hereunder.
17. FURTHER ASSURANCES. The Acquiring Funds and the Acquired Funds shall take
such further action as may be necessary or desirable and proper to consummate
the transactions contemplated hereby.
18. BINDING NATURE OF AGREEMENT. As provided in each Trust's Declaration of
Trust on file with the Secretary of State of the State of Delaware or
Commonwealth of Massachusetts, this Agreement was executed by the undersigned
officers of Orbitex and the Trust, on behalf of the Acquiring Funds and the
Acquired Funds, respectively, as officers and not individually, and the
obligations of this Agreement are not binding upon the undersigned officers
individually, but are binding only upon the assets and property of each Trust.
Moreover, no series of a trust shall be liable for the obligations of any other
series of that trust.
Attest: CLS AdvisorOne Funds,
on behalf of its series, the Amerigo Fund
and the Clermont Fund
________________________ By:______________________________
Attest: Orbitex Group of Funds,
on behalf of its series, the Orbitex
______ Fund and Orbitex ______ Fund
________________________ By:______________________________
EXHIBIT B
FORM OF INTERIM INVESTMENT ADVISORY AGREEMENT
Between
CLS ADVISORONE FUNDS
on behalf of
the Amerigo Fund
and
CLARKE LANZEN SKALLA INVESTMENT FIRM, INC.
This Agreement is made the ____ day of December, 1999, by and between the
Amerigo Fund (the "Fund") a separate investment series of CLS AdvisorOne Funds,
a business trust organized and existing under the laws of the State of
Massachusetts, operating as an open-end investment company (the "Trust") and
Clarke Lanzen Skalla Investment Firm, Inc. a corporation organized and existing
under the laws of New York (the "Advisor").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended; and
WHEREAS, the Advisor is engaged principally in the business of rendering
investment supervisory services and is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Trust desires to retain the Advisor to render investment and
supervisory services to the Fund in the manner and on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth, the parties hereto agree as follows:
I.
INVESTMENT RESPONSIBILITY
(1) In providing the services and assuming the obligations set forth
herein, the Advisor may, at its expense, employ one or more subadvisers.
References herein to the Advisor shall include any subadviser employed by the
Advisor. Any agreement between
the Advisor and a subadviser shall be subject to the renewal, termination and
amendment provisions of Section V hereof.
The Trust hereby retains the Advisor to supervise and assist in the
management of the assets for the Fund and to furnish the Fund with a continuous
program for the investment of the Fund's assets in accordance with the Fund's
currently effective registration statement, including:
a. Recommendations as to specific securities to be purchased for or
eliminated from THE Fund, and
b. Recommendations as to the portion of the Fund's assets that should be
held uninvested.
(2) Notwithstanding the generality of the foregoing, the Advisor may
itself, and at its own expense, contract for such supplementary advisory and
research services as it deems necessary or desirable to fulfill its obligations
under paragraph (1) above, provided that any such contract shall have been
approved by the Fund and its shareholders to the extent, and in the manner,
required by the Investment Company Act of 1940, as amended.
(3) The Advisor shall furnish to the Trust the services of one or more
persons who shall be authorized by the Trust to place orders for the purchase
and sale of securities for the account of the Fund. Acting through a person so
authorized by the Trust, the Advisor shall place such orders for the Fund.
(4) Notwithstanding the generality of paragraph (3) above, and subject to
the provisions of paragraphs (5) and (6) below, the Advisor shall endeavor to
secure for the Fund the best possible price and execution of every purchase and
sale for the account of the Fund. In seeking such best price and execution the
Advisor shall use its own judgment as to the implementation of its own
investment recommendations, including the Advisor's judgment as to the time when
an order should be placed, the number of securities to be bought or sold in any
one trade that is a part of any particular recommendation, and the market in
which an order should be placed.
(5) The Advisor shall use its own judgment in determining the
broker-dealers who shall be employed to execute orders for the purchase or sale
of securities for the Fund, in order to:
a. Secure best price and execution on purchases and sales for the Fund;
and
b. Secure supplemental research and statistical data for use in making
its recommendations to the Fund.
(6) The Advisor shall use its discretion as to when, and in which market,
the Fund's transactions shall be executed, in order to secure for the Fund the
benefits of best price and execution, and supplemental research and statistical
data. The use of such discretion shall be subject to review by the Trustees of
the Trust at any time and form time to time. The Trust, acting by its Trustees,
may withdraw said discretion at any time, and may direct the execution of
portfolio transactions for the Fund in any lawful manner different from that
provided for herein. Until a decision is made to withdraw or limit the
discretion herein granted, the Advisor shall not be liable for any loss suffered
by the Fund through the exercise by the Advisor of that discretion unless the
Advisor shall be; guilty of gross negligence or willful misconduct.
II.
ADMINISTRATIVE RESPONSIBILITY
During the continuance of this Agreement, Advisor shall provide the Fund
with a continuous program of general administration including:
a. Office space, equipment, supplies and utility services as shall be
required to conduct Fund business;
b. The provision and supervision of all persons performing the executive,
administrative, and clerical functions necessary for the conduct of
the Fund's business except as set forth in g., below;
c. The supervision of accounting, and of records and record-keeping for
the Fund;
d. The preparation and distribution of mandatory reports to Fund
shareholders and regulatory bodies;
e. The supervision of the daily net asset value of the Fund;
f. The preparation and distribution on behalf of the Fund of notices of
shareholder and Trustee meetings, agendas, proxies, and proxy
statements; and
g. Other facilities, services, and activities necessary for the conduct
of the Fund's business, except for services by the Fund's Custodian,
Registrar, Transfer Agent, Accounting Services Agent, Dividend
Disbursing Agent, Auditors, and Legal Counsel.
III.
ALLOCATION OF EXPENSES
The Advisor shall pay the Fund's pro rata share of the cost and expenses of
the following services, facilities and activities: necessary office space,
equipment, supplies, utility services and all other ordinary office expenses;
the salaries and other compensation of the Trust's trustees, officers and
employees who are affiliated persons, of the Advisor; and fees for supplementary
advisory and research services performed for the Advisor. The Fund shall pay all
other expenses incurred in the organization and operation of the Fund and the
continuous offering of interests in the Fund, including, but not limited to, the
following:
a. The Fund's PRO RATA share of the fees and expenses of counsel in
connection with the organization of the Fund.
b. The regular fees or special charges of any Custodian, Transfer Agent,
Registrar, Accounting Services Agent or Dividend Disbursing Agent
allocable to the Fund.
c. The Fund's PRO RATA share of the compensation or fees of the Trust's
auditors and legal counsel, and compensation and costs relating to
legal or administrative proceedings or to litigation.
d. Income, franchise, stock transfer and other taxes attributable to the
Fund.
e. Initial or renewal fees payable to governmental agencies in connection
with the filing of reports, notices, registration statements, and
other material required to be filed in connection with the Fund's
business.
f. The Fund's pro rata share of any insurance or bond premiums.
g. The Funds pro rata share of association dues or assessments.
h. Brokerage fees or commissions on all Fund transactions.
i. The Fund's pro rata share of interest on borrowed funds or otherwise.
j. Any extraordinary expenses attributable directly to the Fund.
IV.
COMPENSATION
The Fund shall pay the Advisor a fee, based on the value of the net assets
of the Fund determined in accordance with the Trust's Declaration of Trust, and
computed as follows:
(a) The annual advisory fee (the "Fee") shall be equal to the sum of 1.00%
of the Funds average daily net assets.
(b) The amounts due the Advisor in payment of the Fee set forth, above. The
Fee will be accrued daily and shall be paid to the Advisor in pro rata monthly
installments due and payable on the first business day of each calendar month.
V.
DURATION AND TERMINATION
(1) The term of this Agreement shall begin on the date first written above
and, unless sooner terminated as hereinafter provided, this Agreement shall
remain in effect for a period of two years. Thereafter this Agreement shall
continue in effect from year to year, subject to the termination provisions and
all other terms and conditions hereof; if: (a) such continuation shall be
specifically approved at least annually by vote of the holders of majority of
the outstanding voting securities of the Fund or by the vote cast in person at
meeting called for the purpose of voting on such approval, of a majority of the
Trustees of the Trust who are not parties to this Agreement or interested
persons of a of any such party; and (b) the Advisor shall not have notified the
Fund, in writing, at least 60 days prior to the expiration of any term, that it
does not desire such continuation. The Advisor shall furnish to the Trust,
promptly upon its request, such information, as may reasonably be necessary to
evaluate the terms of this Agreement or any extension, renewal or amendment
hereof.
(2) This Agreement may not be amended, transferred, sold or in any manner
hypothecated or pledged, without the affirmative vote of a majority of the
outstanding voting securities of the Fund, and this Agreement shall
automatically and immediately terminate in the event of its assignment.
(3) This Agreement may be terminated by either party hereto, without the
payment of any penalty, upon 60 days' notice in writing to the other party,
provided, that in the case of termination by the Fund such action shall have
been authorized by resolution of the Trustees of the Trust or by vote of a
majority of the outstanding voting securities of the Fund.
VI.
MISCELLANEOUS
(1) The Advisor shall not deal with the Fund as broker or dealer but the
Advisor may enter orders for the purchase or sale of the Fund's securities
through a company or companies that are under common control with the Advisor,
provided such company acts as broker and charges a commission that does not
exceed the usual and customary broker's commission if the sale is effected on a
securities exchange, or, 11 percent of the purchase or sale price of such
securities if the sale is otherwise effected. In connection with the purchase or
sale of portfolio securities for the account of the Fund, neither the Advisor
nor any officer or director of the Advisor shall act as a principal.
(2) Except as expressly prohibited in this Agreement, nothing herein shall
in any way limit or restrict the Advisor, or any officers, shareholders or
employees of Advisor, from buying selling or trading in any security for its or
their own account. Neither the Advisor nor any Officer or Director thereof shall
take a short position in any interests of the Fund or otherwise purchase such
interests for any purpose other than that of investment. However, the Advisor
may act as underwriter or distributor provided it does so pursuant to a written
contract approved in the manner specified in the Investment Company Act of 1940,
as amended.
(3) The Advisor may act as investment adviser to, and provide management
services for, other investment companies, and may engage in businesses that are
unrelated to investment companies, without limitation, provided the performance
of such services and the transaction of such businesses does not impair the
Advisor's performance of this Agreement.
(4) The Advisor shall not be liable for any error or judgment or mistake of
law or for any loss suffered by the Fund in connection with the matters to which
this Agreement relates (including, but not limited to, loss sustained by reason
of the adoption or implementation of any investment policy or the purchase, sale
or retention of any security), except for loss resulting from willful
misfeasance, bad faith or gross negligence of the Advisor in the performance of
its duties or from reckless disregard by the Advisor of its obligations and
duties under this Agreement.
(5) Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the Investment Company Act of 1940, as amended, shall be resolved by
reference to such term or provision of the Act and to interpretations thereof,
if any, by the United States courts or, in the absence of any controlling
decision of any such court, by rules, regulations or orders of the Securities
and Exchange Commission validly issued pursuant to said Act. Specifically, the
terms "vote by a majority of the outstanding voting securities," "annually,"
"interested person," "assignment," and "affiliated person," as issued herein,
shall have the meanings assigned to them by the Investment Company Act of 1940,
as amended. In addition, where the effect of a requirement of the Investment
Company Act of 1940, as amended, reflected in any provision of this contract is
relaxed by a rule,
regulation or order of the Securities and Exchange Commission, whether of
special or of general application, such provision shall be deemed to incorporate
the effect of such rule, regulation or order.
(6) The Trust will provide the Advisor with all information concerning the
investment policies and restrictions of the Fund as the Advisor may from time to
time request or which the Trust deems necessary. In the event of any change in
the investment policies or restrictions of the Fund, the Trust will promptly
provide Advisor with all information concerning such change including, but not
limited to, copies of all documents filed by the Fund with the Securities and
Exchange Commission.
(7) The Trustees, officers, employees and agents of the Trust shall not be
personally bound by or liable hereunder, nor shall resort be had to their
private property for the satisfaction of any obligation or claim hereunder.
(8) Except to the extent the provisions of this Agreement are govern led by
federal law, they shall be governed by the law of Nebraska, without reference to
its choice of law rules.
(9) This Agreement represents the entire agreement between the parties
hereto.
(10) This Agreement may be executed in two or more counterparts, each of
which shall be considered an original.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized as of the day and
year first above written.
CLS AdvisorOne Funds,
on behalf of the Amerigo Fund
Attest:_____________________ By:__________________________
Secretary
Clarke Lanzen Skalla Investment Firm, Inc.
Attest:_____________________ By:__________________________
Secretary W. Patrick Clarke, President
EXHIBIT C
FORM OF INTERIM INVESTMENT ADVISORY AGREEMENT
Between
CLS ADVISORONE FUNDS
on behalf of
the Clermont Fund
and
CLARKE LANZEN SKALLA INVESTMENT FIRM, INC.
This Agreement is made the ____ day of December, 1999, by and between the
Clermont Fund (the "Fund") a separate investment series of CLS AdvisorOne Funds,
a business trust organized and existing under the laws of the State of
Massachusetts, operating as an open-end investment company (the "Trust"), and
Clarke Lanzen Skalla Investment Firm, Inc. a corporation organized and existing
under the laws of New York (the "Advisor").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended; and
WHEREAS, the Advisor is engaged principally in the business of rendering
investment supervisory services and is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Trust desires to retain the Advisor to render investment and
supervisory services to the Fund in the manner and on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth, the parties hereto agree as follows:
I.
INVESTMENT RESPONSIBILITY
(1) In providing the services and assuming the obligations set forth
herein, the Advisor may, at its expense, employ one or more subadvisers.
References herein to the Advisor shall include any subadviser employed by the
Advisor. Any agreement between
the Advisor and a subadviser shall be subject to the renewal, termination and
amendment provisions of Section V hereof.
The Trust hereby retains the Advisor to supervise and assist in the
management of the assets for the Fund and to furnish the Fund with a continuous
program for the investment of the Fund's assets in accordance with the Fund's
currently effective registration statement, including:
a. Recommendations as to specific securities to be purchased for or
eliminated from the Fund, and
b. Recommendations as to the portion of the Fund's assets that should be
held uninvested.
(2) Notwithstanding the generality of the foregoing, the Advisor may
itself, and at its own expense, contract for such supplementary advisory and
research services as it deems necessary or desirable to fulfill its obligations
under paragraph (1) above, provided that any such contract shall have been
approved by the Fund and its shareholders to the extent, and in the manner,
required by the Investment Company Act of 1940, as amended.
(3) The Advisor shall furnish to the Trust the services of one or more
persons who shall be authorized by the Trust to place orders for the purchase
and sale of securities for the account of the Fund. Acting through a person so
authorized by the Trust, the Advisor shall place such orders for the Fund.
(4) Notwithstanding the generality of paragraph (3) above, and subject to
the provisions of paragraphs (5) and (6) below, the Advisor shall endeavor to
secure for the Fund the best possible price and execution of every purchase and
sale for the account of the Fund. In seeking such best price and execution the
Advisor shall use its own judgment as to the implementation of its own
investment recommendations, including the Advisor's judgment as to the time when
an order should be placed, the number of securities to be bought or sold in any
one trade that is a part of any particular recommendation, and the market in
which an order should be placed.
(5) The Advisor shall use its own judgment in determining the
broker-dealers who shall be employed to execute orders for the purchase or sale
of securities for the Fund, in order to:
a. Secure best price and execution on purchases and sales for the Fund;
and
b. Secure supplemental research and statistical data for use in making
its recommendations to the Fund.
(6) The Advisor shall use its discretion as to when, and in which market,
the Fund's transactions shall be executed, in order to secure for the Fund the
benefits of best price and execution, and supplemental research and statistical
data. The use of such discretion shall be subject to review by the Trustees of
the Trust at any time and form time to time. The Trust, acting by its Trustees,
may withdraw said discretion at any time, and may direct the execution of
portfolio transactions for the Fund in any lawful manner different from that
provided for herein. Until a decision is made to withdraw or limit the
discretion herein granted, the Advisor shall not be liable for any loss suffered
by the Fund through the exercise by the Advisor of that discretion unless the
Advisor shall be; guilty of gross negligence or willful misconduct.
II.
ADMINISTRATIVE RESPONSIBILITY
During the continuance of this Agreement, Advisor shall provide the Fund
with a continuous program of general administration including:
a. Office space, equipment, supplies and utility services as shall be
required to conduct Fund business;
b. The provision and supervision of all persons performing the executive,
administrative, and clerical functions necessary for the conduct of
the Fund's business except as set forth in g., below;
c. The supervision of accounting, and of records and record-keeping for
the Fund;
d. The preparation and distribution of mandatory reports to Fund
shareholders and regulatory bodies;
e. The supervision of the daily net asset value of the Fund;
f. The preparation and distribution on behalf of the Fund of notices of
shareholder and Trustee meetings, agendas, proxies, and proxy
statements; and
g. Other facilities, services, and activities necessary for the conduct
of the Fund's business, except for services by the Fund's Custodian,
Registrar, Transfer Agent, Accounting Services Agent, Dividend
Disbursing Agent, Auditors, and Legal Counsel.
III.
ALLOCATION OF EXPENSES
The Advisor shall pay the Fund's pro rata share of the cost and expenses of
the following services, facilities and activities: necessary office space,
equipment, supplies, utility services and all other ordinary office expenses;
the salaries and other compensation of the Trust's trustees, officers and
employees who are affiliated persons, of the Advisor; and fees for supplementary
advisory and research services performed for the Advisor. The Fund shall pay all
other expenses incurred in the organization and operation of the Fund and the
continuous offering of interests in the Fund, including, but not limited to, the
following:
a. The Fund's PRO RATA share of the fees and expenses of counsel in
connection with the organization of the Fund.
b. The regular fees or special charges of any Custodian, Transfer Agent,
Registrar, Accounting Services Agent or Dividend Disbursing Agent
allocable to the Fund.
c. The Fund's PRO RATA share of the compensation or fees of the Trust's
auditors and legal counsel, and compensation and costs relating to
legal or administrative proceedings or to litigation.
d. Income, franchise, stock transfer and other taxes attributable to the
Fund.
e. Initial or renewal fees payable to governmental agencies in connection
with the filing of reports, notices, registration statements, and
other material required to be filed in connection with the Fund's
business.
f. The Fund's pro rata share of any insurance or bond premiums.
g. The Funds pro rata share of association dues or assessments.
h. Brokerage fees or commissions on all Fund transactions.
i. The Fund's pro rata share of interest on borrowed funds or otherwise.
j. Any extraordinary expenses attributable directly to the Fund.
IV.
COMPENSATION
The Fund shall pay the Advisor a fee, based on the value of the net assets
of the Fund determined in accordance with the Trust's Declaration of Trust, and
computed as follows:
(a) The annual advisory fee (the "Fee") shall be equal to the sum of 1.00%
of the Funds average daily net assets.
(b) The amounts due the Advisor in payment of the Fee set forth, above. The
Fee will be accrued daily and shall be paid to the Advisor in pro rata monthly
installments due and payable on the first business day of each calendar month.
V.
DURATION AND TERMINATION
(1) The term of this Agreement shall begin on the date first written above
and, unless sooner terminated as hereinafter provided, this Agreement shall
remain in effect for a period of two years. Thereafter this Agreement shall
continue in effect from year to year, subject to the termination provisions and
all other terms and conditions hereof; if: (a) such continuation shall be
specifically approved at least annually by vote of the holders of majority of
the outstanding voting securities of the Fund or by the vote cast in person at
meeting called for the purpose of voting on such approval, of a majority of the
Trustees of the Trust who are not parties to this Agreement or interested
persons of a of any such party; and (b) the Advisor shall not have notified the
Fund, in writing, at least 60 days prior to the expiration of any term, that it
does not desire such continuation. The Advisor shall furnish to the Trust,
promptly upon its request, such information, as may reasonably be necessary to
evaluate the terms of this Agreement or any extension, renewal or amendment
hereof.
(2) This Agreement may not be amended, transferred, sold or in any manner
hypothecated or pledged, without the affirmative vote of a majority of the
outstanding voting securities of the Fund, and this Agreement shall
automatically and immediately terminate in the event of its assignment.
(3) This Agreement may be terminated by either party hereto, without the
payment of any penalty, upon 60 days' notice in writing to the other party,
provided, that in the case of termination by the Fund such action shall have
been authorized by resolution of the Trustees of the Trust or by vote of a
majority of the outstanding voting securities of the Fund.
VI.
MISCELLANEOUS
(1) The Advisor shall not deal with the Fund as broker or dealer but the
Advisor may enter orders for the purchase or sale of the Fund's securities
through a company or companies that are under common control with the Advisor,
provided such company acts as broker and charges a commission that does not
exceed the usual and customary broker's commission if the sale is effected on a
securities exchange, or, 11 percent of the purchase or sale price of such
securities if the sale is otherwise effected. In connection with the purchase or
sale of portfolio securities for the account of the Fund, neither the Advisor
nor any officer or director of the Advisor shall act as a principal.
(2) Except as expressly prohibited in this Agreement, nothing herein shall
in any way limit or restrict the Advisor, or any officers, shareholders or
employees of Advisor, from buying selling or trading in any security for its or
their own account. Neither the Advisor nor any Officer or Director thereof shall
take a short position in any interests of the Fund or otherwise purchase such
interests for any purpose other than that of investment. However, the Advisor
may act as underwriter or distributor provided it does so pursuant to a written
contract approved in the manner specified in the Investment Company Act of 1940,
as amended.
(3) The Advisor may act as investment adviser to, and provide management
services for, other investment companies, and may engage in businesses that are
unrelated to investment companies, without limitation, provided the performance
of such services and the transaction of such businesses does not impair the
Advisor's performance of this Agreement.
(4) The Advisor shall not be liable for any error or judgment or mistake of
law or for any loss suffered by the Fund in connection with the matters to which
this Agreement relates (including, but not limited to, loss sustained by reason
of the adoption or implementation of any investment policy or the purchase, sale
or retention of any security), except for loss resulting from willful
misfeasance, bad faith or gross negligence of the Advisor in the performance of
its duties or from reckless disregard by the Advisor of its obligations and
duties under this Agreement.
(5) Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the Investment Company Act of 1940, as amended, shall be resolved by
reference to such term or provision of the Act and to interpretations thereof,
if any, by the United States courts or, in the absence of any controlling
decision of any such court, by rules, regulations or orders of the Securities
and Exchange Commission validly issued pursuant to said Act.
Specifically, the terms "vote by a majority of the outstanding voting
securities," "annually," "interested person," "assignment," and "affiliated
person," as issued herein, shall have the meanings assigned to them by the
Investment Company Act of 1940, as amended. In addition, where the effect of a
requirement of the Investment Company Act of 1940, as amended, reflected in any
provision of this contract is relaxed by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or of general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
(6) The Trust will provide the Advisor with all information concerning the
investment policies and restrictions of the Fund as the Advisor may from time to
time request or which the Trust deems necessary. In the event of any change in
the investment policies or restrictions of the Fund, the Trust will promptly
provide Advisor with all information concerning such change including, but not
limited to, copies of all documents filed by the Fund with the Securities and
Exchange Commission.
(7) The Trustees, officers, employees and agents of the Trust shall not be
personally bound by or liable hereunder, nor shall resort be had to their
private property for the satisfaction of any obligation or claim hereunder.
(8) Except to the extent the provisions of this Agreement are govern led by
federal law, they shall be governed by the law of Nebraska, without reference to
its choice of law rules.
(9) This Agreement represents the entire agreement between the parties
hereto.
(10) This Agreement may be executed in two or more counterparts, each of
which shall be considered an original.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized as of the day and
year first above written.
CLS AdvisorOne Funds
on behalf of the Clermont Fund
Attest:_____________________ By:__________________________
Secretary
Clarke Lanzen Skalla Investment Firm, Inc.
Attest:_____________________ By:__________________________
Secretary W. Patrick Clarke, President
EXHIBIT D
The principal Executive Officers and Directors of CLS Advisers and New Advisor
are listed below.
- ------------------------------------- -----------------------------------------
NAME AND ADDRESS PRINCIPAL OCCUPATION
- ------------------------------------- -----------------------------------------
W. Patrick Clarke* President
14747 California Street
Omaha, NE 68154-1979
- ------------------------------------- -----------------------------------------
Todd P. Clarke* Executive Senior Vice President
14747 California Street
Omaha, NE 68154-1979
- ------------------------------------- -----------------------------------------
Randal D. Skalla* Chief Investment Officer
14747 California Street
Omaha, NE 68154-1979
- ------------------------------------- -----------------------------------------
Other principal Executive Officers
and Directors.
- ------------------------------------- -----------------------------------------
*: These are interested persons of both the Trust and the adviser.