-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SM4ND6EJj2f+9EuXrnO16fw8p7Cb1OQUmUElF/xlnNfOdAwzFQhgPSLnZ2yHxzGr j53ynN9mA5VA1nQp79K8Cw== 0000932384-96-000242.txt : 19961217 0000932384-96-000242.hdr.sgml : 19961217 ACCESSION NUMBER: 0000932384-96-000242 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19961216 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OMNI INVESTMENT FUND CENTRAL INDEX KEY: 0000765924 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 363344166 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485APOS SEC ACT: 1933 Act SEC FILE NUMBER: 033-15867 FILM NUMBER: 96681495 FILING VALUES: FORM TYPE: 485APOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-04273 FILM NUMBER: 96681496 BUSINESS ADDRESS: STREET 1: 53 W JACKSON BLVD STREET 2: STE 818 CITY: CHICAGO STATE: IL ZIP: 60604 BUSINESS PHONE: 3129220355 485APOS 1 AS FILED ON DECEMBER 16, 1996 As filed with the Securities and Exchange Commission on December 16, 1996 File No. 33-15867 File No. 811-4273 ================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ______________________ FORM N-1A ______________________ REGISTRATION STATEMENT [X] UNDER THE SECURITIES ACT OF 1933 Pre-Effective Amendment No. [ ] Post-Effective Amendment No. 11 [X] and REGISTRATION STATEMENT [X] UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment No. 11 [X] THE OMNI INVESTMENT FUND (Exact Name of Registrant as Specified in Charter) 53 West Jackson Blvd., Suite 818, Chicago, Illinois 60604 (Address of Principal Executive Offices) (312) 922-0431 (Registrant's Telephone Number, including Area Code) ROBERT H. PERKINS THE OMNI INVESTMENT FUND 53 West Jackson Boulevard Suite 818 Chicago, Illinois 60604 (Name and address of Agent for Service) ____________________________ It is proposed that this filing become effective: [ ] Immediately upon filing pursuant to paragraph (b). [ ] On (Date) pursuant to paragraph (b). [X] 60 days after filing pursuant to paragraph (a). [ ] On (Date) pursuant to Paragraph (a)(1). [ ] 75 days after filing pursuant to paragraph (a)(2). [ ] On (date) pursuant to paragraph (a)(2) of Rule 485. If appropriate, check the following box: [ ] This post-effective amendment designates a new effective date for a previously filed post-effective amendment. Pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended, the Registrant has registered an indefinite number of shares, par value $0.01 per share, under the Securities Act of 1933. The Notice pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended, for the Registrant's fiscal year ended December 31, 1996, is anticipated to be filed with the Securities and Exchange Commission on or about February 28, 1997. THE OMNI INVESTMENT FUND CROSS-REFERENCE SHEET PURSUANT TO RULE 481 I. Berger Small Cap Value Fund Investor Shares
Item No. and Caption in Form N-1A Number of Section _________________________________ _________________ A. Prospectus __________ 1. Cover Page Cover Page 2. Synopsis Section 1 3. Condensed Financial Information Section 2 4. General Description of Registrant Sections 3, 4, 5 and 16 5. Management of the Fund Sections 6, 7 and 8 5A. Management's Discussion of Fund PerformanceIn Annual Report 6. Capital Stock and Other Securities Sections 15, 16 and 17 7. Purchase of Securities Being Offered Sections 8, 9, 10, 11, 13 and 14 8. Redemption or Repurchase Section 12 9. Pending Legal Proceedings Not Applicable B. Statement of Additional Information ___________________________________ 10. Cover Page Cover Page 11. Table of Contents Table of Contents 12. General Information and History Section 14 13. Investment Objectives and Policies Sections 1 and 2 14. Management of the Fund Section 3 and 4 15. Control Persons and Principal Holders ofSections 3 and 14 Securities 16. Investment Advisory and Other Services Sections 3, 4, 5 and 14 17. Brokerage Allocation and Other PracticesSections 1 and 6 18. Capital Stock and Other Securities Section 14 19. Purchase, Redemption and Pricing of SecuritiesSections 7, 8, 10, 11 Being Offered and 12 20. Tax Status Section 9 21. Underwriters Section 7 22. Calculations of Performance Data Section 13 23. Financial Statements Financial Statements
THE OMNI INVESTMENT FUND CROSS-REFERENCE SHEET PURSUANT TO RULE 481 II. Berger Small Cap Value Fund Institutional Shares
Item No. and Caption in Form N-1A Number of Section _________________________________ _________________ A. Prospectus __________ 1. Cover Page Cover Page 2. Synopsis Section 1 3. Condensed Financial Information Section 2 4. General Description of Registrant Sections 3, 4, 5 and 15 5. Management of the Fund Sections 6 and 7 5A. Management's Discussion of Fund PerformanceIn Annual Report 6. Capital Stock and Other Securities Sections 14, 15 and 16 7. Purchase of Securities Being Offered Sections 8, 9, 10, 12 and 13 8. Redemption or Repurchase Section 11 9. Pending Legal Proceedings Not Applicable B. Statement of Additional Information ___________________________________ 10. Cover Page Cover Page 11. Table of Contents Table of Contents 12. General Information and History Section 14 13. Investment Objectives and Policies Sections 1 and 2 14. Management of the Fund Section 3 and 4 15. Control Persons and Principal Holders ofSections 3 and 14 Securities 16. Investment Advisory and Other Services Sections 3, 4, 5 and 14 17. Brokerage Allocation and Other PracticesSections 1 and 6 18. Capital Stock and Other Securities Section 14 19. Purchase, Redemption and Pricing of SecuritiesSections 7, 8, 10, 11 Being Offered and 12 20. Tax Status Section 9 21. Underwriters Section 5 and 14 22. Calculations of Performance Data Section 13 23. Financial Statements Financial Statements
EXPLANATORY NOTE This amendment to the Registration Statement of The Omni Investment Fund contains the following: Two Prospectuses One for the Berger Small Cap Value Fund Investor Shares One for the Berger Small Cap Value Fund Institutional Shares Two Statements of Additional Information One for the Berger Small Cap Value Fund Investor Shares One for the Berger Small Cap Value Fund Institutional Shares One Part C PROSPECTUS BERGER SMALL CAP VALUE FUND INVESTOR SHARES The BERGER SMALL CAP VALUE FUND (the "Fund") is a no-load, diversified mutual fund. The investment objective of the Fund is capital appreciation. The Fund seeks to achieve this objective by investing primarily in common stocks of small companies that the Fund's investment sub-advisor believes are undervalued in the marketplace relative to their assets, earnings, cash flow or business franchise. Under normal circumstances, the Fund will invest at least 65% of its assets in common stocks of small companies with market capitalizations of less than $1 billion at the time of initial purchase. The balance of the Fund may be invested in common stocks of companies with market capitalizations in excess of $1 billion, equity securities other than common stocks, government securities, short-term investments or other securities described in this Prospectus, if the sub-advisor believes these are likely to be best suited at that time to achieve the Fund's objective. Current income is not an investment objective of the Fund and any income produced will be a by-product of the effort to achieve the Fund's objective. This Prospectus offers the class of shares of the Fund designated as Investor Shares. Investor Shares are available for sale to the general public, subject to the Fund's regular minimum initial investment requirement of $2,000 and a minimum subsequent investment requirement of $50. The investment advisor and administrator of the Fund is Berger Associates, Inc. (the "Advisor" or "Berger Associates"). Day-to-day management of the Fund's investments is provided by Perkins, Wolf, McDonnell & Company (the "Sub-Advisor" or "PWM"), as the Fund's investment sub-advisor. The Fund is a series of Berger Omni Investment Trust, a Massachusetts business trust. Prior to February 14, 1997, the Fund and the Trust were known as The Omni Investment Fund. This Prospectus concisely sets forth the information about the Investor Shares of the Fund that a prospective investor should consider before investing. Investors are advised to retain this Prospectus for future reference. Additional information about the Investor Shares of the Fund has been filed with the Securities and Exchange Commission. A copy of the Statement of Additional Information for the Investor Shares, dated February 14, 1997, which is incorporated in its entirety by reference, is available upon request without charge by writing to the Fund at P.O. Box 5005, Denver, CO 80217, or by calling 1-800-333-1001. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Dated February 14, 1997 Table of Contents Section Page _______ ____ 1. Fee Tables . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2. Condensed Financial Information. . . . . . . . . . . . . . . . 2 3. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . 4 4. Investment Objectives and Policies and Risk Factors. . . . . . 4 5. Portfolio Turnover . . . . . . . . . . . . . . . . . . . . . . 7 6. Management and Investment Advice . . . . . . . . . . . . . . . 8 7. Expenses of the Fund . . . . . . . . . . . . . . . . . . . . . 9 8. Policies of the Fund to Promote Sales of Investor Shares . . . 10 9. How to Purchase Shares in the Fund . . . . . . . . . . . . . . 12 10. How the Net Asset Value Is Determined . . . . . . . . . . . . 14 11. Open Account System and Share Certificates. . . . . . . . . . 14 12. How to Redeem or Sell Fund Shares . . . . . . . . . . . . . . 14 13. Exchange Privilege and Systematic Withdrawal Plan . . . . . . 17 14. Tax-Sheltered Retirement Plans. . . . . . . . . . . . . . . . 18 15. Income Dividends, Capital Gains Distributions and Tax Treatment 19 16. Additional Information. . . . . . . . . . . . . . . . . . . . 21 17. Performance . . . . . . . . . . . . . . . . . . . . . . . . . 22 -i- 1. FEE TABLES SHAREHOLDER TRANSACTION EXPENSES =============================================================== | Maximum Sales Load Imposed on Purchases | 0% | |-------------------------------------------------------------| | Maximum Sales Load Imposed on Reinvested Dividends | 0% | |-------------------------------------------------------------| | Deferred Sales Load | 0% | |-------------------------------------------------------------| | Redemption Fees | 0%*| |-------------------------------------------------------------| | Exchange Fee | 0% | =============================================================== * There will be a $10 wire service charge if redemption proceeds are requested by wire. ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) =========================================================================== | | | | | TOTAL | | |INVESTMENT| | | FUND | | | ADVISORY | | OTHER |OPERATING| | | FEE |12B-1 FEE|EXPENSES*| EXPENSES| |-------------------------------------------------------------------------| | Berger Small Cap Value Fund | 0.90% | 0.25% | 0.____% | _____% | | - Institutional Shares** | | | | | =========================================================================== * Other Expenses primarily include transfer agency fees, shareholder report expenses, registration fees and custodian fees. ** Based on actual expenses for the Fund's only outstanding class of shares as of December 31, 1996, restated to reflect expenses borne by the Investor Shares. EXAMPLES You would pay the following expenses on a $1,000 investment, assuming (1) 5% annual return, and (2) redemption at the end of each time period: ====================================================================== | | 1 Year | 3 Years | 5 Years | 10 Years | - ---------------------------------------------------------------------- - - | Berger Small Cap Value Fund | $____ | $____ | $____ | $____ | | - Investor Shares | | | | | ====================================================================== = THE EXPENSES SET FORTH IN THE PRECEDING TABLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THE ASSUMED 5% ANNUAL RETURN IS HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE ANNUAL RETURNS, WHICH MAY BE GREATER OR LESS THAN THE ASSUMED AMOUNT. -1- Shares of the Fund had no class designations until February 14, 1997, when all of the then-existing shares were designated as Institutional Shares and the Fund commenced offering Investor Shares. Simultaneously, other fee and service provider arrangements for the Fund were changed, including a reduction in the percentage upon which the advisory fee paid by the Fund is based from an annual rate of 1.00% to 0.90% of the Fund's average daily net assets. Accordingly, expenses in the tables above are not actual Investor Share expenses, but are based on actual expenses of the only class of shares outstanding for the fiscal year ended December 31, 1996, restated to reflect fees borne by the Investor Shares, as if such fees had been in effect during that year. As a result of the 12b-1 fee paid by the Investor Shares of the Fund, over time long-term shareholders of Investor Shares may pay more than the economic equivalent of the maximum front-end sales charge permitted for mutual funds by the National Association of Securities Dealers, Inc. The investment advisory fee for the Fund is higher than that paid by most other mutual funds. The purpose of the preceding tables is to assist the investor in understanding the various costs and expenses that a shareholder of Investor Shares of the Fund will bear directly or indirectly. The Fund's expenses are described in greater detail under "Management and Investment Advice," "Expenses of the Fund," and "Policies of the Fund to Promote Sales of Investor Shares." 2. CONDENSED FINANCIAL INFORMATION On the following page is a table setting forth certain financial highlights for the Fund. The information provided for each of the eight fiscal years ended December 31, 1996, has been audited by Ernst & Young LLP, whose report thereon is incorporated by reference from the Fund's 1996 Annual Report into the Statement of Additional Information. The information provided in the table for the fiscal years ended December 31, 1988 and 1987, was audited by other independent accountants. The financial data below only cover periods prior to the Fund's adoption of class designations on February 14, 1997, and therefore do not reflect the 0.25% per year 12b-1 fee applicable to the Investor Shares, which will cause the Fund's operating expense ratios after that date to be higher than in the past. The most recent Annual Report for the Fund, including additional performance information, may be obtained upon request and without charge by calling the Fund at 1-800-333-1001. -2- BERGER SMALL CAP VALUE FUND FINANCIAL HIGHLIGHTS
For a share outstanding throughout the year ended December 31 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- PER SHARE OPERATING PERFORMANCE NET ASSET VALUE AT BEGINNING OF PERIOD $ 12.75 13.99 13.39 11.39 9.23 12.19 11.21 10.06 11.33 ---- ----- ----- ----- ----- ---- ----- ---- ----- ----- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income (loss) ____ 0.09 (.01) .03 .09 .14 .28 .23 .24 .21 Net realized and unrealized gain (loss) on investments 3.23 .91 2.14 2.14 2.16 (2.95) 2.71 1.77 (.29) ---- ----- ----- ----- ----- ---- ----- ---- ----- ----- Total from investment operations 3.32 .90 2.17 2.23 2.30 (2.67) 2.94 2.01 (.08) DIVIDENDS Dividends from net investment income ____ (0.09) 0 (.03) (.10) (.14) (.29) (.22) (.24) (.20) Dividends from net realized gain on investments (1.41) (2.14) (1.54) (.13) 0 0 (1.74) (.62) (.99) ---- ----- ----- ----- ----- ----- ----- ---- ----- ----- Total dividends (1.50) (2.14) (1.57) (.23) (.14) (.29) (1.96) (.86) (1.19) ---- ---- ---- ---- ---- ---- ---- --- ---- ---- ---- ---- ---- ---- ---- ---- --- ---- ---- NET ASSET VALUE AT END OF PERIOD $ 14.57 12.75 13.99 13.39 11.39 9.23 12.19 11.21 10.06 ==== ===== ===== ===== ===== ===== ===== ==== ===== ===== TOTAL RETURN (%): 26.07 6.74 16.25 19.59 25.01 (21.94) 26.44 20.09 (0.68) ---- ----- ----- ----- ----- ----- ----- ---- ----- ----- Ratios to average net assets (%) Expenses ---- 1.64 1.43 1.31 1.41 1.52 1.84 1.78 1.44 1.69 Net investment income (loss) ---- 0.64 (.04) .18 .73 1.24 2.34 1.85 2.33 1.87 Portfolio turnover rate (%) ---- 90 125 108 105 130 146 118 103 189 Average commission rate ____ -- -- -- -- -- -- - -- -- Total net assets at end of period (in thousands) ____ 31,833 18,270 16,309 14,007 11,940 9,839 13,576 9,976 6,748 - -------------------- Covers the period from February 1, 1987, to December 31, 1987. Effective October 20, 1987, the Fund became publicly registered under the Investment Company Act of 1940. Prior thereto, its shares were not publicly offered. All per share amounts prior to December 31, 1994 have been adjusted for a 10 for 1 share split which occurred September 30, 1994. Annualized.
-3- 3. INTRODUCTION The Berger Small Cap Value Fund is a mutual fund or, to use the technical name, a diversified open-end, management investment company. The Fund is a "no-load" fund, meaning that a buyer pays no commissions or sales load when buying shares of the Fund, although the Investor Shares of the Fund pay certain costs of distributing those shares. See "Policies of the Fund to Promote Sales of Investor Shares." 4. INVESTMENT OBJECTIVES AND POLICIES AND RISK FACTORS The investment objective of the Fund is capital appreciation. The Fund seeks to achieve this objective by investing primarily in common stocks of small companies that the Fund's Sub-Advisor believes are undervalued in the marketplace relative to their assets, earnings, cash flow or business franchise. Under normal circumstances, the Fund will invest at least 65% of its assets in common stocks of small companies with market capitalizations of less than $1 billion at the time of initial purchase. Market capitalization is defined as total current market value of a company's outstanding common stock. The balance of the Fund may be invested in common stocks of companies with market capitalizations in excess of $1 billion, equity securities other than common stocks, government securities, short-term investments or other securities described on the following pages, if the Sub-Advisor believes these are likely to be best suited at that time to achieve the Fund's objective. Current income is not an investment objective of the Fund and any income produced will be a by- product of the effort to achieve the Fund's objective. In selecting stocks for the Fund's portfolio, the Sub-Advisor will seek out companies whose current stock price appears undervalued in the marketplace, which may include companies with relatively low price-to-book value ratios or low price-to-earnings multiples, or companies which, in the view of the Sub-Advisor, have significant growth potential and are out-of-favor with or have not yet been discovered by the broader investment community. The Sub-Advisor strives to identify industries that operate in a favorable competitive and regulatory environment and companies within these industries that exhibit growth characteristics. Attention is placed on companies which have products or services, management or other advantages over their competitors, with a strong emphasis on companies with a quality balance sheet and the potential ability to generate earnings and cash flow, and which tend to reinvest their income instead of declaring cash dividends. The Sub-Advisor's philosophy is to weigh downside risk before considering upside potential. Accordingly, the Sub-Advisor will focus on capital preservation, as opposed to the often temporary rewards of participating in passing market trends, desiring not only to outperform broad market averages in bull markets, but to outperform these averages during periods of decline. -4- The Fund's investment objective is considered fundamental, meaning that it cannot be changed without a shareholders' vote. There can be no assurance that the Fund's investment objective will be realized. Since the shares of the Fund primarily represent an investment in common stocks, investors should realize that the net asset value of the Fund will reflect changes in the market value of the securities held in the Fund's portfolio, and the value of a Fund share will therefore go up and down. Investments in the types of companies sought by the Fund may involve greater risks and volatility than more traditional equity investments due to some of these companies potentially having limited product lines, reduced market liquidity for the trading of their shares and less depth in management than more established companies. For this reason, the Fund is not intended as a complete or balanced investment vehicle but rather as an investment for persons who are in a financial position to assume greater risk and share price volatility over time. Realizing the full potential of these types of companies frequently takes time. As a result, the Fund should be considered as a long-term investment vehicle. The Fund may increase its investment in government securities, and other short-term, interest-bearing securities without limit when the Sub-Advisor believes market conditions warrant a temporary defensive position, during which period it may be more difficult for the Fund to achieve its investment objective. The following is additional information about some of the other specific types of securities and other instruments in which the Fund may invest: SECURITIES OF SMALLER COMPANIES. The Fund will invest in securities of companies with small market capitalizations. Market capitalization is defined as total current market value of a company's outstanding common stock. Investments in companies with smaller market capitalizations may involve greater risks and price volatility (that is, more abrupt or erratic price movements) than investments in larger, more mature companies since smaller companies may be at an earlier stage of development and may have limited product lines, reduced market liquidity for their shares, limited financial resources or less depth in management than larger or more established companies. Smaller companies also may be less significant factors within their industries and may have difficulty withstanding competition from larger companies. While smaller companies may be subject to these additional risks, they may also realize more substantial growth than larger or more established companies. SPECIAL SITUATIONS. The Fund may also invest in special situations, that is, in common stocks of companies that have recently experienced or are anticipated to experience a significant change in structure, management, products or services. Examples of special situations are companies being reorganized or merged, companies having unusual new products, or which enjoy particular tax advantages, or companies that are run by new management or may be probable takeover candidates. The opportunity to invest in special situations, however, is limited and depends in part on the market's assessment of these issuers and their circumstances. In addition, stocks of companies in special situations may be more volatile, since the market value of these stocks may decline if an anticipated event or benefit does not materialize. -5- UNSEASONED ISSUERS. The Fund may invest to a limited degree in securities of unseasoned issuers. Unseasoned issuers are companies with a record of less than three years' continuous operation, even including the operations of any predecessors and parents. Unseasoned issuers by their nature have only a limited operating history which can be used for evaluating the company's growth prospects. As a result, investment decisions for these securities may place a greater emphasis on current or planned product lines and the reputation and experience of the company's management and less emphasis on fundamental valuation factors than would be the case for more mature growth companies. In addition, many unseasoned issuers may also be small companies and involve the risks and price volatility associated with smaller companies. The Fund may invest up to 5% of its total assets in securities of unseasoned issuers. FOREIGN SECURITIES. The Fund may invest in both domestic and foreign securities. Investments in foreign securities involve some risks that are different from the risks of investing in securities of U.S. issuers, such as the risk of fluctuations in the value of the currencies in which they are denominated, the risk of adverse political and economic developments and, with respect to certain countries, the possibility of expropriation, confiscatory taxation or limitations on the removal of funds or other assets of the Fund. Securities of some foreign companies, particularly those of developing countries, are less liquid and more volatile than securities of comparable domestic companies. A developing country generally is considered to be in the initial stages of its industrialization cycle. Investing in the securities of developing countries may involve exposure to economic structures that are less diverse and mature, and to political systems that can be expected to have less stability than developed countries. There also may be less publicly available information about foreign issuers than domestic issuers, and foreign issuers generally are not subject to the uniform accounting, auditing and financial reporting standards and practices applicable to domestic issuers. Delays may be encountered in settling certain foreign securities transactions and the Fund will incur costs in converting foreign currencies into U.S. dollars. The Fund will consider the political and economic conditions in a country, the prospect for changes in the value of its currency and the liquidity of an investment in that country's securities markets in selecting investments in foreign securities. HEDGING TRANSACTIONS. The Fund is authorized to make limited use of certain types of put and call options, but only for the purpose of hedging, that is, protecting against the risk of market movements that may adversely affect the value of the Fund's securities or the price of securities that the Fund is considering purchasing. Although a hedging transaction may, for example, partially protect the Fund from a decline in the value of a particular security or its portfolio generally, hedging may also limit the Fund's opportunity to profit from favorable price movements, and the cost of the transaction will reduce the potential return on the security or the portfolio. The following is a summary of the options which the Fund may utilize, provided that no more than 5% of the Fund's net assets at the time of purchase may be utilized as premiums for options. An option gives the holder the right, but not the obligation, to purchase or sell something (such as a security) at a specified price at any time until the expiration date. An option on a securities index is similar, except that upon exercise, settlement is made in cash rather than in specific securities. The Fund may only write call options (that is, issue options that obligate the Fund to deliver if the option is exercised by the holder) that are "covered" and only up to 10% of the Fund's net assets. A call option is considered "covered" if the Fund already owns the security on which the option is written or, in the case of an option written on a securities index, if the Fund owns a portfolio of securities believed likely to substantially replicate movement of the index. Use of call options written by the Fund involves the potential for a loss that may exceed the premium received for the option. However, the Fund will be permitted to use such instruments for hedging purposes only, and only if the aggregate amount of its obligations under these contracts does not exceed the total market value of the assets the Fund is attempting to hedge, such as a portion or all of its exposure to equity securities or its holding in a specific security. To help ensure that the Fund will be able to meet its obligations under options written by the Fund, the Fund will be required to maintain liquid assets in a segregated account with its custodian bank or to set aside portfolio securities to "cover" its position in these contracts. -6- The principal risks of the Fund utilizing options are: (a) losses resulting from market movements not anticipated by the Fund; (b) possible imperfect correlation between movements in the prices of options and movements in the prices of the securities or positions hedged or used to cover such positions; (c) lack of assurance that a liquid secondary market will exist for any particular options at any particular time, and possible exchange-imposed price fluctuation limits, either of which may make it difficult or impossible to close a position when so desired; (d) the need for additional information and skills beyond those required for the management of a portfolio of traditional securities; and (e) possible need to defer closing out certain options contracts in order to continue to qualify for beneficial tax treatment afforded "regulated investment companies" under the Internal Revenue Code of 1986, as amended. In addition, when the Fund enters into an over-the-counter contract with a counterparty, the Fund will assume counterparty credit risk, that is, the risk that the counterparty will fail to perform its obligations, in which case the Fund could be worse off than if the contract had not been entered into. Additional detail concerning the Fund's use of options and the risks of such investments can be found in the Statement of Additional Information. INVESTMENT RESTRICTIONS The Fund has adopted a number of other restrictions on its investments and other activities that may not be changed without shareholder approval. For example, as to 75% of its total assets, the Fund may not purchase securities of any issuer (except U.S. Government securities) if, immediately after and as a result of such purchase, the value of the Fund's holdings in the securities of that issuer exceeds 5% of the value of its total assets or it owns more than 10% of the outstanding voting securities of such issuer. In addition, the Fund may invest no more than 25% of the value of its assets, at the time of purchase, in securities of companies principally engaged in a particular industry, although the Fund may as a temporary defensive measure invest up to 100% of its total assets in obligations issued or guaranteed by the U.S. Government or its agencies. The investment restrictions described above and in the Statement of Additional Information that involve a maximum percentage of securities or assets will not be considered to be violated unless an excess over the percentage occurs after, and is caused by, an acquisition or encumbrance of securities or assets of the Fund. "Value" for the purposes of all investment restrictions shall mean the value used in determining the Fund's net asset value. Additional investment restrictions are described in the Statement of Additional Information. 5. PORTFOLIO TURNOVER The Fund intends to purchase and hold common stocks for capital appreciation. Changes in the portfolio will be made, however, whenever the Fund's Sub-Advisor believes they are advisable, either as a result of common stocks having reached a price objective or by reason of developments not foreseen at the time of the investment decision, such as changes in the economics of an industry or a particular company. These investment changes will usually be -7- made without reference to the length of time a security has been held, and there may, therefore, be a significant number of short-term transactions. In addition, portfolio turnover may increase as a result of large amounts of purchases and redemptions of shares of the Fund due to economic, market or other factors that are not within the control of management. The annual portfolio turnover rate of the Fund may at times exceed 100%. An annual turnover rate of 100% or more would be higher than that of most other funds. Increased portfolio turnover would necessarily result in correspondingly higher brokerage costs for the Fund and may result in the acceleration of net taxable gains. The portfolio turnover rate is shown in the Financial Highlights table on page 3. 8. MANAGEMENT AND INVESTMENT ADVICE The trustees of the Fund are responsible for major decisions relating to the Fund's policies and objective. They also oversee the operation of the Fund by its officers and review the investment performance of the Fund on a regular basis. THE ADVISOR The investment advisor to the Fund is Berger Associates, Inc. (the "Advisor" or "Berger Associates"), 210 University Boulevard, Suite 900, Denver, CO 80206. Berger Associates became the Fund's investment advisor on February 14, 1997, following shareholder approval of a new Investment Advisory Agreement between the Fund and the Advisor. The Advisor is responsible for managing the investment operations of the Fund and the composition of its investment portfolio. The Advisor is permitted to engage a sub-advisor for the Fund. The Advisor also acts as the Fund's administrator and is responsible for such functions as monitoring the Fund's compliance with all applicable federal and state laws. The Advisor has been in the investment advisory business for over 20 years. It serves as investment advisor or sub-advisor to mutual funds, pension and profit-sharing plans, and institutional and private investors, and had assets under management of more than $3.6 billion as of September 30, 1996. Kansas City Southern Industries, Inc. ("KCSI") owns approximately 80% of the outstanding shares of the Advisor. KCSI is a publicly traded holding company with principal operations in rail transportation, through its subsidiary The Kansas City Southern Railway Company, and financial asset management businesses. KCSI also owns approximately 41% of the outstanding shares of DST Systems, Inc. ("DST"), a publicly traded information and transaction processing company which acts as the Fund's sub-transfer agent. THE SUB-ADVISOR Perkins, Wolf, McDonnell & Company (the "Sub-Advisor" or "PWM"), 53 West Jackson Boulevard, Suite 818, Chicago, Illinois 60604, has been engaged as the Fund's investment sub-advisor. The Sub- Advisor was organized in 1980 under the name Mac-Per-Wolf Co. to operate as a securities broker-dealer. In September 1983, it changed its name to Perkins, -8- Wolf, McDonnell & Company. The Sub-Advisor is a member of the National Association of Securities Dealers, Inc. (the "NASD") and, in 1984, became registered as an investment adviser with the Securities and Exchange Commission. PWM was the Fund's investment advisor from the date the Fund commenced operations in 1985 to February 1997. PWM became the investment sub-advisor to the Fund on February 14, 1997, following shareholder approval of a new Sub-Advisory Agreement between the Advisor and the Sub-Advisor. Robert H. Perkins is the individual who is primarily responsible for the day-to-day management of the Fund's portfolio. Mr. Perkins has held such responsibility and has been employed by the Sub-Advisor since the Fund commenced operations in 1985. Mr. Perkins owns 49% of the Sub-Advisor's outstanding common stock and serves as Secretary and a director of the Sub-Advisor. Gregory E. Wolf owns 20% of the Sub-Advisor's outstanding common stock and serves as President and a director of the Sub-Advisor. ADVISORY FEES Under the Investment Advisory Agreement for the Fund, the Advisor is compensated for its services to the Fund by the payment of a fee at the annual rate of 0.90% of the average daily net assets of the Fund. The Fund pays no fees directly to the Sub-Advisor. The Sub-Advisor receives from the Advisor a fee at the annual rate of 0.90% of the first $75 million of average daily net assets of the Fund, 0.50% of the next $125 million, and 0.20% of any amount in excess of $200 million. 7. EXPENSES OF THE FUND The Fund has appointed Investors Fiduciary Trust Company ("IFTC") as its recordkeeping and pricing agent to calculate the daily net asset value of the Fund and to perform certain accounting and recordkeeping functions required by the Fund. In addition, IFTC also serves as the Fund's custodian, transfer agent and dividend disbursing agent. IFTC has engaged DST as sub-agent to provide transfer agency and dividend disbursing services for the Fund. As noted above, approximately 41% of the outstanding shares of DST are owned by KCSI. For custodian, recordkeeping and pricing services, the Fund pays fees to IFTC based on a percentage of its assets, subject to certain minimums. The Fund also pays a monthly fee based primarily on the number of accounts maintained on behalf of the Fund for transfer agency and dividend disbursing services, which fees are paid by the Fund to IFTC and in turn passed through to DST as sub-agent. In addition, the Fund reimburses IFTC and DST for certain out-of-pocket expenses. The Fund and/or Berger Associates may enter into arrangements with certain organizations (broker-dealers, recordkeepers and administrators) to provide sub-transfer agency, -9- recordkeeping, shareholder communications, sub-accounting and/or other services to investors purchasing shares of the Fund through investment programs or pension plans established or serviced by those organizations. The Fund and/or Berger Associates may pay fees to these organizations for their services. Any such fees paid by the Fund will be for services that otherwise would be provided or paid for by the Fund if all the investors who own Fund shares through these organizations were registered record holders of shares in the Fund. The trustees of the Fund have authorized Berger Associates to place portfolio transactions on an agency basis through DST Securities, Inc. ("DSTS"), a wholly-owned broker-dealer subsidiary of DST. When transactions are effected through DSTS, the commission received by DSTS is credited against, and thereby reduces, certain operating expenses that the Fund would otherwise be obligated to pay. No portion of the commission is retained by DSTS. In addition, under a separate Administrative Services Agreement with the Fund, Berger Associates performs certain administrative and recordkeeping services not performed by other service providers, including compliance monitoring and the preparation of financial statements and reports to be filed with regulatory authorities. The Fund pays Berger Associates a fee at the annual rate of 1/100 of 1% (0.01%) of its average daily net assets for such services. The Fund also incurs other expenses, including accounting, administrative and legal expenses. DISTRIBUTOR The distributor (principal underwriter) of the Fund's shares is Berger Distributors, Inc. (the "Distributor"), 210 University Boulevard, Suite 900, Denver, CO 80206. The Distributor may be reimbursed by Berger Associates for its costs in distributing Investor Shares. See "Policies of the Fund to Promote Sales of Investor Shares" below. The Distributor is a wholly-owned subsidiary of Berger Associates, and certain officers of the Fund are officers or directors of the Distributor. 8. POLICIES OF THE FUND TO PROMOTE SALES OF INVESTOR SHARES The Fund has adopted a 12b-1 plan (the "Plan") for the Investor Shares pursuant to Rule 12b-1 under the Investment Company Act of 1940, which permits the Fund to pay certain costs for the distribution of Investor Shares. The Plan provides for the payment to Berger Associates of a 12b-1 fee of .25 of 1% (0.25%) per annum of the Fund's average daily net assets attributable to Investor Shares to finance activities primarily intended to result in the sale of Investor Shares. The expenses paid by Berger Associates may include, but are not limited to, payments made to, and costs incurred by, the Fund's principal underwriter in connection with the distribution of Investor Shares, including payments made to and expenses of officers and registered representatives of the Distributor; payments made to and expenses of other persons (including employees of Berger Associates) who are engaged in, or provide support services in -10- connection with, the distribution of Investor Shares, such as answering routine telephone inquiries and processing shareholder requests for information; compensation (including incentive compensation and/or continuing compensation based on the amount of customer assets maintained in the Fund) paid to securities dealers, financial institutions and other organizations which render distribution and administrative services in connection with the distribution of Investor Shares, including services to holders of Investor Shares and prospective investors; costs related to the formulation and implementation of marketing and promotional activities, including direct mail promotions and television, radio, newspaper, magazine and other mass media advertising; costs of printing and distributing prospectuses and reports to prospective shareholders of Investor Shares; costs involved in preparing, printing and distributing sales literature for Investor Shares; costs involved in obtaining whatever information, analyses and reports with respect to market and promotional activities on behalf of the Fund relating to the Investor Shares that Berger Associates deems advisable; and such other costs relating to the Investor Shares as the Trust may from time to time reasonably deem necessary or appropriate in order to finance activities primarily intended to result in the sale of Investor Shares. Such 12b-1 fee payments are to be made by the Fund to Berger Associates with respect to each fiscal year of the Fund without regard to the actual distribution expenses incurred by Berger Associates in such year; that is, if the distribution expenditures incurred by Berger Associates are less than the total of such payments in such year, the difference is not to be reimbursed to the Fund by Berger Associates, and if the distribution expenditures incurred by Berger Associates are more than the total of such payments, the excess is not to be reimbursed to Berger Associates by the Fund. Payments made pursuant to the Plan are imposed only against the assets of the Fund attributable to the Investor Shares. From time to time the Fund may engage in activities which jointly promote the sale of the Investor Shares and other funds that are or may in the future be advised or administered by Berger Associates, which costs are not readily identifiable as related to any one fund. In such cases, Berger Associates allocates the cost of the activity among the funds involved on the basis of their respective net assets, unless otherwise directed by the trustees. The current 12b-1 Plan will continue in effect until the end of April 1997, and from year to year thereafter if approved at least annually by the Fund's trustees and those trustees who are not interested persons of the Fund and have no direct or indirect financial interest in the operation of the Plan or any related agreements by votes cast in person at a meeting called for such purpose. The Plan may not be amended to increase materially the amount to be spent on distribution of Investor Shares without shareholder approval. The trustees of the Fund have authorized Berger Associates to consider sales of shares of the Fund by a broker-dealer and the recommendations of a broker-dealer to its customers that they purchase Fund shares as factors in the selection of broker-dealers to execute portfolio transactions for the Fund. In placing portfolio business with such broker-dealers, Berger Associates will seek the best execution of each transaction. -11- 9. HOW TO PURCHASE SHARES IN THE FUND (i) Minimum Initial Investment -- $2,000.00. To purchase shares in the Fund, simply complete the application form enclosed with this Prospectus. Then mail it along with a check made payable to "Berger Funds" in care of DST Systems, Inc., the Fund's sub-transfer agent, as follows: Berger Funds c/o DST Systems, Inc. P.O. Box 419958 Kansas City, MO 64141 A confirmation indicating the details of the transaction will be sent to you promptly. Unless you specify full shares only, the purchase will be made in full and fractional shares calculated to three decimal places. In addition, Fund shares may be purchased through certain broker-dealers that have established mutual fund programs and certain other organizations connected with pension and retirement plans. These broker-dealers and other organizations may charge investors a transaction or other fee for their services, may require different minimum initial and subsequent investments than the Fund and may impose other charges or restrictions different from those applicable to shareholders who invest in the Fund directly. Fees charged by these organizations will have the effect of reducing a shareholder's total return on an investment in Fund shares. No such charge will be paid by an investor who purchases shares directly from the Fund as described above. The Fund will, at its discretion, accept orders transmitted by these organizations although not accompanied by payment for the shares being purchased. Payment must be received by the Fund within three business days after acceptance of the order. The price at which a purchase will be effected is based on the next calculation of net asset value after the order is received by the Fund's transfer agent, sub-transfer agent or any other authorized agent of the Fund. (ii) Minimum Subsequent Investments -- $50.00. Shareholders may, at any time, purchase additional shares subject to a minimum investment of $50.00. A check made payable to "Berger Funds" in the amount to be invested, should be sent to the Berger Funds, c/o DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141. Please be sure to give your name and account number. You will receive a confirmation of every transaction. (iii) Automatic Investment Plan. By completing the Automatic Investment Plan section of the application, you may authorize the Fund to debit your bank account for the periodic purchase of shares on or about the 5th or 20th day of each month. Automatic investments are subject to the minimum initial investment of $2,000, a minimum investment of -12- $50.00 per month and are unrestricted as to the permitted maximum. You will receive confirmation of automatic investments after the end of each calendar quarter. (iv) Telephone and On-line Investments. The Fund will, at its discretion, accept purchase orders from existing shareholders by telephone, or via their personal computer, through on-line service providers or other on-line access points approved by the Fund, although not accompanied by payment for the shares being purchased. To receive the net asset value for a specific day, a telephone or on- line purchase request must be received before the close of the New York Stock Exchange on that day. Payment for shares ordered on-line must be made by electronic funds transfer. Payment for shares ordered by telephone must be received by the Fund's transfer agent within three business days after acceptance of the order. In order to make sure that payment is received on time, shareholders are encouraged to remit payment by electronic funds transfer. Shareholders may also remit payment by wire or by overnight delivery. If payment is not received on time, the Fund may cancel the order and redeem shares held in the shareholder's account to compensate the Fund for any decline in the value of the purchased shares. Telephone and on-line purchase orders may not exceed four times the value of an account on the date the order is placed (shares previously purchased by telephone or on- line are included in computing such value only if payment has been received). See "How to Redeem or Sell Fund Shares - Telephone and On- line Redemptions" for procedures for telephone transactions. (v) Payment and Terms of Offering. Payment for shares purchased should be made by check or money order drawn on a United States bank and made payable to the Berger Funds. Checks not made payable to the Berger Funds, the account registrant, transfer agent or retirement account custodian will not be accepted. Alternatively, payment for shares purchased by telephone may be made by wire or electronic funds transfer from the investor's bank to DST Systems, Inc. Shares purchased on-line must be paid for by electronic funds transfer. Please call 1-800-551-5849 for current wire or electronic funds transfer instructions. The Fund will not accept purchases by cash or credit card or checks drawn on foreign banks unless provision is made for payment through a U.S. bank in U.S. dollars. The Fund reserves the right in its sole discretion to withdraw all or any part of the offering made by this Prospectus or to reject purchase orders, when in the judgment of management, such withdrawal or rejection is in the best interest of the Fund. The Fund also reserves the right at any time to waive the minimum investment requirements applicable to initial or subsequent investments or to increase minimum investment or account balance requirements following notice. No application to purchase shares is binding on the Fund until accepted in writing. -13- 10. HOW THE NET ASSET VALUE IS DETERMINED The price of the Fund's Investor Shares is based on the net asset value of the Fund, which is determined at the close of the regular trading session of the New York Stock Exchange (the "Exchange") (normally 4:00 p.m., New York time) each day that the Exchange is open. The per share net asset value of the Investor Shares is determined by dividing the Investor Shares' pro rata portion of the total value of the Fund's securities and other assets, less the Investor Shares' pro rata portion of the Fund's liabilities and the liabilities attributable directly to the Investor Shares, by the total number of Investor Shares outstanding. In determining net asset value, securities are valued at market value or, if market quotations are not readily available, at their fair value determined in good faith pursuant to consistently applied procedures established by the trustees. Money market instruments maturing within 60 days are valued at amortized cost, which approximates market value. Since the Fund does not impose any front end sales load or redemption fee, both the purchase price and the redemption price of an Investor Share are the same and will be equal to the next calculated net asset value of an Investor Share. 11. OPEN ACCOUNT SYSTEM AND SHARE CERTIFICATES Unless otherwise directed, all investor accounts are maintained on a book-entry basis. Share certificates will not be issued unless requested by the shareholder. Shares purchased by dividend reinvestment or under an Automatic Investment Plan, and shares redeemed under a Systematic Withdrawal Plan, will be confirmed after the end of each calendar quarter. Following any other investment or redemption, the investor will receive a printed confirmation indicating the dollar amount of the transaction, the per share price of the transaction and the number of shares purchased or redeemed. 12. HOW TO REDEEM OR SELL FUND SHARES (i) Share Redemptions by Mail. The Fund will buy back (redeem), at current net asset value, all shares offered for redemption. The redemption price of shares tendered for redemption will be the net asset value next determined after receipt of all required documents by the Fund's transfer agent, sub-transfer agent or other authorized agent of the Fund. To receive the net asset value for a specific day, a redemption request must be received before the close of the Exchange on that day. Shareholders who purchased their shares directly from the Fund may redeem all or part of their shares in the Fund by sending a written request to the Berger Funds, c/o DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141. The written request for redemption must be signed by each registered owner exactly as the shares are registered and must clearly identify the account and the number of shares or the dollar amount -14- to be redeemed. If a share certificate has been issued, the certificate, properly endorsed by the registered owner, must be submitted with the written redemption request. The signatures of the redeeming shareholders must be guaranteed by a national or state bank, a member firm of a domestic stock exchange or the National Association of Securities Dealers (NASD), a credit union, a federal savings and loan association or another eligible guarantor institution if the redemption: exceeds $100,000; is being made payable other than exactly as registered; is being mailed to an address which has been changed within 30 days of the redemption request; or is being mailed to an address other than the one on record. A notary public is not an acceptable guarantor. The Fund also reserves the right to require a signature guarantee under other circumstances. The signature guarantees must appear, together with the signatures of the registered owners, (i) on the written request for redemption which clearly identifies the account and the number of shares to be redeemed, (ii) on a separate instrument of assignment ("stock power") which may be obtained from a bank or broker, or (iii) on any share certificates tendered for redemption. The use of signature guarantees is intended to protect the shareholder and the Fund from a possibly fraudulent application for redemption. Additional documents are required for redemptions by corporations, executors, administrators, trustees and guardians. If there is doubt as to what additional documents are required, please write the Berger Funds, c/o DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141, or call DST at 1-800-551-5849. (ii) Telephone and On-line Redemptions. All shareholders have Telephone and On-line Transaction Privileges to authorize purchases, exchanges or redemptions unless they specifically decline this service on the account application or by writing to the Berger Funds, c/o DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141. Shareholders may redeem shares by telephone or, via their personal computer, through on-line service providers or other on-line access points approved by the Fund. The telephone and on-line redemption option is not available for shares held in retirement accounts sponsored by the Fund. Telephone redemption requests may be made by calling DST Systems, Inc., at 1-800-551-5849. To receive the net asset value for a specific day, a redemption request must be received before the close of the New York Stock Exchange on that day. As discussed above, certain requests must be in writing and the signature of a redeeming shareholder must be signature guaranteed, and therefore shares may not be redeemed by telephone or on-line, if the redemption: exceeds $100,000; is being made payable other than exactly as registered; is being mailed to an address which has been changed within 30 days of the redemption request; is being mailed to an address other than the one on record; or the shares are represented by share certificates issued to the shareholder. All telephone and on-line transactions are recorded and written confirmations indicating the details of all telephone and on- line transactions will promptly be sent to the shareholder of record. Prior to accepting a telephone or on-line transaction, the shareholder placing the order may be required to provide certain identifying information. A shareholder -15- electing to communicate instructions by telephone or on-line may be giving up some level of security that would otherwise be present were the shareholder to request a transaction in writing. Neither the Fund nor its transfer agent or investment advisor assume responsibility for the authenticity of instructions communicated by telephone or on-line which are reasonably believed to be genuine and which comply with the foregoing procedures. The Fund, and/or its transfer agent, may be liable for losses resulting from unauthorized or fraudulent telephone or on-line instructions in the event these procedures are not followed. In times of extreme economic or market conditions, redeeming shares by telephone or on-line may be difficult. The Fund may terminate or modify the procedures concerning the telephone or on-line redemption and wire transfer services at any time, although shareholders of the Fund will be given at least 60 days' prior notice of any termination or material modification. Berger Associates may, at its own risk, waive certain of these redemption requirements. (iii) Payment for Redeemed Shares. Payment for shares redeemed upon written request will be made by check and generally will be mailed within three business days after receipt by the transfer agent of the properly executed redemption request and any outstanding certificates for the shares to be redeemed. Payment for shares redeemed by telephone or on-line will be made by check payable to the account name(s) and address exactly as registered, and generally will be mailed within three business days following the date of the request for redemption. A shareholder may request that payment for redeemed shares of the Fund be made by wire or electronic funds transfer. Shareholders may elect to use these services on the account application or by providing the Fund with a signature guaranteed letter requesting these services and designating the bank to receive all wire or electronic funds transfers. A shareholder may change the predesignated bank of record by providing the Fund with written, signature guaranteed instructions. Wire and electronic funds transfers are subject to a $1,000 minimum and a $100,000 maximum limitation. Redemption proceeds paid by wire transfer generally will be transmitted to the shareholder's predesignated bank account on the next business day after receipt of the shareholder's redemption request. There is a $10 fee for each wire payment for shares redeemed by the Fund. Redemption proceeds paid by electronic funds transfer will be electronically transmitted to the shareholder's predesignated bank account on the second business day after receipt of the shareholder's redemption request. There is no fee for electronic funds transfer of proceeds from the redemption of Fund shares. A shareholder may also request that payment for redeemed shares of a Cash Account Trust portfolio be made by wire or electronic funds transfer and should review the Cash Account Trust portfolio prospectus for procedures and charges applicable to redemptions by wire and electronic funds transfers. See below under "Exchange Privilege and Systematic Withdrawal Plan" for more information concerning the Cash Account Trust portfolios. -16- Shareholders may encounter delays in redeeming shares purchased by check (other than cashier's or certified checks), electronic funds transfer or through the Automatic Investment Program if the redemption request is made within 15 days after the date of purchase. In those situations, the redemption check will be mailed within 15 days after the transfer agent's receipt of the purchase instrument, provided that it has not been dishonored or cancelled during that time. The foregoing policy is to ensure that all payments for the shares being redeemed have been honored. In addition to the foregoing restrictions, no redemption payment can be made for shares which have been purchased by telephone or on-line order until full payment for the shares has been received. In any event, valid redemption requests concerning shares for which full payment has been made will be priced at the net asset value next determined after receipt of the request. (iv) Redemptions by the Fund. As a means of reducing its expenses, the Fund is authorized to redeem involuntarily all shares held in accounts with a value of less than $2,000. Such redemptions will be permitted only when the account is reduced below the minimum value by redemption, and not by declines in per share net asset value. As a result, accounts established with the applicable minimum investment might be subject to redemption after only a small redemption has been made by the shareholder. At least 60 days' written notice will be given to a shareholder before such an account is redeemed. During that time, the shareholder may add sufficient funds to the account. If such amount is not added to the account, the shares will be redeemed, at the per share net asset value next determined after the 60th day following the notice. A check for the proceeds will be sent to the shareholder unless a share certificate has been issued, in which case payment will be made upon surrender of the certificate. 13. EXCHANGE PRIVILEGE AND SYSTEMATIC WITHDRAWAL PLAN (i) Exchanges. By telephoning the Fund at 1-800-551-5849, or writing to the Fund at P.O. Box 419958, Kansas City, MO 64141, or, via their personal computer through on-line service providers or other on-line access points approved by the Fund, any shareholder may exchange, without charge, any or all of the shareholder's shares in the Fund for shares of any of the other publicly available Berger Funds, or for shares of the Money Market Portfolio, the Government Securities Portfolio or the Tax-Exempt Portfolio of the Cash Account Trust (the "CAT Portfolios"), separately managed, unaffiliated money market funds. Exchanges may be made only if the Berger Fund or CAT Portfolio with which you wish to exchange your shares is eligible for sale in your state of residence. The exchange privilege with the CAT Portfolios does not constitute an offering or recommendation of the shares of any such CAT Portfolio by any of the Berger Funds or Berger Associates. Berger Associates is compensated for administrative services it performs with respect to the CAT Portfolios. It is your responsibility to obtain and read a prospectus of the Berger Fund or CAT Portfolio into which you are exchanging. By giving exchange instructions, a shareholder will be deemed to have acknowledged receipt of the prospectus for the Berger Fund or CAT Portfolio being purchased. You may make up to four exchanges out of the Fund during the -17- calendar year. This limit helps keep the Fund's net asset base stable and reduces the Fund's administrative expenses. There currently is no limit on exchanges out of the three CAT Portfolios. In times of extreme economic or market conditions, exchanging Fund or CAT Portfolio shares by telephone or on-line may be difficult. See "How to Redeem or Sell Fund Shares - Telephone and On-line Redemptions" for procedures for telephone and on-line transactions. Redemptions of shares in connection with exchanges into or out of the Fund are made at the net asset value per share next determined after the exchange request is received. To receive a specific day's price, your letter, call or on-line order must be received before that day's close of the New York Stock Exchange. A day or more delay may be experienced prior to the investment of the redemption proceeds into a CAT Portfolio. Each exchange represents the sale of shares from one fund and the purchase of shares in another, which may produce a gain or loss for Federal income tax purposes. All exchanges are subject to the minimum and subsequent investment requirements of the fund or CAT Portfolio into which shares are being exchanged. Exchanges will be accepted only if the registration of the two accounts is identical. Neither the Fund nor the CAT Portfolios, or their transfer agents or advisors assume responsibility for the authenticity of exchange instructions communicated in writing or by telephone or on-line which are believed to be genuine. See "How to Redeem or Sell Fund Shares - Telephone and On-line Redemptions" for procedures for telephone and on-line transactions. All shareholders have Telephone and On-line Transaction Privileges to authorize exchanges unless they specifically decline this service on the account application or by writing to the Berger Funds, c/o DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141. (ii) Systematic Withdrawal Plan. A shareholder who owns shares of the Fund worth at least $5,000 -------------------------- at the current net asset value may establish a Systematic Withdrawal account from which a fixed sum, minimum of $50, will be paid to the shareholder monthly, quarterly, semiannually or annually. You will receive confirmation of systematic withdrawals after the end of each calendar quarter. For more information regarding the Systematic Withdrawal Plan and forms to open such accounts, please write to the Berger Funds, c/o DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141, or call 1-800-551-5849. 14. TAX-SHELTERED RETIREMENT PLANS The Fund offers several tax-qualified retirement plans for adoption by individuals and employers. Participants in these plans can accumulate shares of the Fund on a tax-deferred basis. -18- The Fund offers both a profit-sharing plan and a money purchase pension plan for employers and self-employed persons. Contributions to these plans are tax-deductible and earnings are tax-exempt until distributed. Under the profit-sharing plan, the employer or self-employed person can adjust their contributions from year to year. Under the money purchase pension plan, the employer or self-employed person must commit to a contribution each year. When these plans are adopted by self-employed persons, they are sometimes referred to as Keogh or HR 10 plans. The Fund also offers an Individual Retirement Account ("IRA"). Individuals who have compensation, but who are either not covered by existing qualified retirement plans and do not have spouses covered by such plans, or do not have incomes which exceed certain amounts, may contribute tax-deductible dollars to an IRA. Individuals who are covered by existing retirement plans or have spouses covered by such plans, and whose incomes exceed the applicable amounts, are not permitted to deduct their IRA contributions for Federal income tax purposes. However, whether an individual's contributions are deductible or not, the earnings on his or her IRA are not taxed until the account is distributed. The Fund also offers a 403(b) Custodial Account. Employees of certain tax-exempt organizations and public schools may contribute tax-deductible dollars to these accounts, on which earnings are tax-exempt until distributed. In order to receive the necessary materials to create a profit-sharing or money purchase pension plan account, an IRA account or a 403(b) Custodial Account, please write to the Fund, c/o Berger Associates, Inc., P.O. Box 5005, Denver, CO 80217, or call 1-800- 333-1001. Trustees for existing 401(k) or other plans interested in utilizing Fund shares as an investment or investment alternative in their plans should contact the Fund at 1-800-333-1001. 15. INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX TREATMENT The Fund intends to declare dividends representing the Fund's net investment income annually, normally in December. It is also the present policy of the Fund to distribute annually all of its net realized capital gains. The Fund has elected and intends to maintain its qualification to be treated as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. If it so qualifies and meets certain minimum distribution requirements, the Fund generally will not be liable for Federal income tax on the amount of its earnings that are timely distributed. If the Fund distributes annually less than 98% of its income and gain, it may be subject to a nondeductible excise tax equal to 4% of the shortfall. All dividends and capital gains distributions paid by the Fund will be automatically reinvested in shares of the Fund at the net asset value on the ex-dividend date unless an investor specifically requests that either dividends or distributions, or both, be paid in cash. The election -19- to receive dividends or distributions in cash or to reinvest them in Fund shares may be changed by calling the Berger Funds at 1-800-551- 5849 or by written request to the Berger Funds, c/o DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141, and must be received at least ten days prior to the record date of any dividend or capital gains distribution. The Fund will inform its shareholders of the amount and nature of such income or gains resulting from their investment in the Fund. Dividends declared and payable to shareholders of record on a specified date in December will be deemed to have been received by shareholders on December 31 for tax purposes if paid during January the following year. Dividends paid by the Fund from net investment income and distributions from net short-term capital gains in excess of any net long-term capital losses, whether received in cash or reinvested, generally will be taxable as ordinary income. Distributions received from the Fund designated as long-term capital gains (net of capital losses), whether received in cash or reinvested, will be taxable as long-term capital gains without regard to the length of time a shareholder has owned shares in the Fund. Any loss on the redemption or other sale or exchange of the Fund's shares held for six months or less will be treated as a long-term capital loss to the extent of any long-term capital gain distribution received on the shares. A portion of the dividends (but not capital gains distributions) paid by the Fund may be eligible for the dividends received deduction for corporate shareholders to the extent that the Fund's income consists of dividends paid by United States corporations. If a shareholder is exempt from Federal income tax, the shareholder will not generally be taxed on amounts distributed by the Fund. At certain levels of taxable income, the Internal Revenue Code provides a preferential tax rate for long-term capital gains. Long-term capital gains of taxpayers other than corporations are taxed at a 28% maximum rate, whereas ordinary income is taxed at a 39.6% maximum rate. Capital losses continue to be deductible only against capital gains plus (in the case of taxpayers other than corporations) $3,000 of ordinary income annually ($1,500 for married individuals filing separately). Some shareholders may be subject to 31% "backup withholding" on dividends, capital gains distributions and redemption payments made by the Fund. Backup withholding generally will apply to shareholders who fail to provide the Fund with their correct taxpayer identification number or to make required certifications. Backup withholding is not an additional tax. Any amounts withheld may be credited against a shareholder's U.S. Federal income tax liability. The foregoing is only a brief summary of the Federal income tax considerations affecting the Fund and its shareholders. Accordingly, potential investors should consult their tax advisors with specific reference to their own tax situation. -20- 16. ADDITIONAL INFORMATION Today, the Fund is a series of a Massachusetts business trust (the "Trust") organized on April 20, 1990. The Fund was initially organized in November 1984 as a Delaware corporation, and operated as a private investment fund from February 14, 1985, to October 20, 1987, when it was registered as an investment company under the Investment Company Act of 1940 and its initial registration statement under the Securities Act of 1933 became effective. On May 18, 1990, the Fund as a series of the Trust assumed all of the assets and liabilities of the predecessor Delaware corporation. All references in this Prospectus to the Fund and all financial and other information about the Fund prior to May 18, 1990, are to the Fund as a Delaware corporation, and all references after May 18, 1990, are to the Fund as a series of the Trust. Prior to February 14, 1997, when the name of the Trust was changed to Berger Omni Investment Trust and the name of the Fund was changed to the Berger Small Cap Value Fund, the Fund and the Trust were known as The Omni Investment Fund. The Trust is authorized to issue an unlimited number of shares of beneficial interest in series or portfolios. Currently, the Fund is the only series established under the Trust, although others may be added in the future. Shares of the Fund are fully paid and nonassessable when issued. Each share has a par value of $.01. Currently, the Fund offers two classes of shares by separate prospectuses. The Investor Shares offered in this Prospectus are available to the general public, subject to the Fund's regular minimum investment requirements as specified above under "How to Purchase Shares in the Fund." A second class of shares, Institutional Shares, are offered through a separate prospectus and are designed for institutional, individual and other investors willing to maintain a high minimum account balance, currently set at $100,000. Because each class of shares of the Fund is subject to different expenses, the performance of, and any dividend or other distribution made to, each class of shares will differ. For additional information about the other class of shares offered by the Fund, please call the Berger Funds at 1-800-333-1001. Shareholders owning a particular series or class of shares of the Fund will vote separately on matters relating to that series or class, although they will vote together and along with the shareholders of other series and classes of the Fund in the election of trustees of the Trust and on all matters relating to the Trust as a whole. Each full share of the Fund has one vote. Shares of the Fund have non-cumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of trustees can elect 100% of the trustees if they choose to do so and, in such event, the holders of the remaining less than 50% of the shares voting for the election of trustees will not be able to elect any person or persons as trustees. The Fund is not required to hold annual shareholder meetings unless required by the Investment Company Act of 1940 or other applicable law or unless called by the trustees. The Fund's transfer agent and dividend disbursing agent is Investors Fiduciary Trust Company ("IFTC"), 127 West 10th Street, Kansas City, MO 64105. IFTC has engaged DST Systems, Inc., as sub- agent to provide transfer agency and dividend disbursing services for -21- the Fund. Accordingly, the address and telephone number for DST Systems, Inc., set forth in this Prospectus should be used for correspondence with the Fund's transfer agent. 17. PERFORMANCE From time to time in advertisements, the Fund may discuss its performance ratings as published by recognized mutual fund statistical services, such as Lipper Analytical Services, Inc., CDA Investment Technologies, Inc., or Morningstar, Inc., or Value Line Investment Survey or by publications of general interest such as The Wall Street Journal, Investor's Business Daily, Barron's, Financial World or Kiplinger's Personal Finance Magazine. In addition, the Fund may compare its performance to that of recognized broad-based securities market indices, including the Standard & Poor's 500 Stock Index, the Dow Jones Industrial Average, the Russell 2000 Stock Index, the Standard & Poor's 600 Small Cap Index or the Nasdaq Composite Index, or more narrowly-based indices which reflect the market sectors in which the Fund invests. The total return of the Fund is calculated for any specified period of time by assuming the purchase of shares of the Fund at the net asset value at the beginning of the period. Each dividend or other distribution paid by the Fund is assumed to have been reinvested at the net asset value on the reinvestment date. The total number of shares then owned as a result of this process is valued at the net asset value at the end of the period. The percentage increase is determined by subtracting the initial value of the investment from the ending value and dividing the remainder by the initial value. The Fund's total return reflects the Fund's performance over a stated period of time. An average annual total return reflects the hypothetical annually compounded return that would have produced the same total return if the Fund's performance had been constant over the entire period. Total return figures are based on the overall change in value of a hypothetical investment in the Fund. Because average annual total returns for more than one year tend to smooth out variations in the Fund's return, investors should recognize that such figures are not the same as actual year-by-year results. Shares of the Fund had no class designations until February 14, 1997, when all of the then-existing shares were designated as Institutional Shares and the Fund commenced offering Investor Shares. Performance data for the Investor Shares include periods prior to the adoption of class designations on February 14, 1997, and therefore do not reflect the 0.25% per year 12b-1 fee applicable to the Investor Shares, which might adversely affect performance results for periods after that date. Total return of the Investor Shares and other classes of shares of the Fund will be calculated separately. Because each class of shares is subject to different expenses, the performance of each class for the same period will differ. Any performance figures for the Fund are based upon historical results and do not assure future performance. The investment return and principal value of an investment will -22- fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Shareholders with questions should write to the Berger Funds, c/o Berger Associates, Inc., P.O. Box 5005, Denver, CO 80217, or call 1-303-329-0200 or 1-800-333-1001. -23- PROSPECTUS BERGER SMALL CAP VALUE FUND INSTITUTIONAL SHARES The BERGER SMALL CAP VALUE FUND (the "Fund") is a no-load, diversified mutual fund. The investment objective of the Fund is capital appreciation. The Fund seeks to achieve this objective by investing primarily in common stocks of small companies that the Fund's investment sub-advisor believes are undervalued in the marketplace relative to their assets, earnings, cash flow or business franchise. Under normal circumstances, the Fund will invest at least 65% of its assets in common stocks of small companies with market capitalizations of less than $1 billion at the time of initial purchase. The balance of the Fund may be invested in common stocks of companies with market capitalizations in excess of $1 billion, equity securities other than common stocks, government securities, short-term investments or other securities described in this Prospectus, if the sub-advisor believes these are likely to be best suited at that time to achieve the Fund's objective. Current income is not an investment objective of the Fund and any income produced will be a by-product of the effort to achieve the Fund's objective. This Prospectus offers the class of shares of the Fund designated as Institutional Shares. Institutional Shares are designed for pension and profit-sharing plans, employee benefit trusts, endowments, foundations and corporations, as well as high net worth individuals, who are willing to maintain a minimum account balance of $100,000. Institutional Shares may be offered through certain financial intermediaries that may charge their customers transaction or other fees with respect to the customer's investment in the Fund. Institutional Shares are also made available for purchase and dividend reinvestment to all holders of the Fund's shares as of February 14, 1997, when all the Fund's then outstanding shares were designated as Institutional Shares, subject to a minimum account balance requirement of $500. The investment advisor and administrator of the Fund is Berger Associates, Inc. (the "Advisor" or "Berger Associates"). Day- to-day management of the Fund's investments is provided by Perkins, Wolf, McDonnell & Company (the "Sub-Advisor" or "PWM"), as the Fund's investment sub-advisor. The Fund is a series of Berger Omni Investment Trust, a Massachusetts business trust. Prior to February 14, 1997, the Fund and the Trust were known as The Omni Investment Fund. This Prospectus concisely sets forth the information about the Institutional Shares of the Fund that a prospective investor should consider before investing. Investors are advised to retain this Prospectus for future reference. Additional information about the Institutional Shares of the Fund has been filed with the Securities and Exchange Commission. A copy of the Statement of Additional Information for the Institutional Shares, dated February 14, 1997, which is incorporated in its entirety by reference, is available upon request without charge by writing to the Fund at P.O. Box 5005, Denver, CO 80217, or by calling 1-800-706-0539. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. DATED FEBRUARY 14, 1997 Table of Contents Section Page - ------ ---- 1. Fee Tables . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2. Condensed Financial Information. . . . . . . . . . . . . . . . 2 3. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . 4 4. Investment Objectives and Policies and Risk Factors. . . . . . 4 5. Portfolio Turnover . . . . . . . . . . . . . . . . . . . . . . 7 6. Management and Investment Advice . . . . . . . . . . . . . . . 8 7. Expenses of the Fund . . . . . . . . . . . . . . . . . . . . . 9 8. Purchase of Shares in the Fund . . . . . . . . . . . . . . . . 11 9. Net Asset Value. . . . . . . . . . . . . . . . . . . . . . . . 13 10. Open Account System and Share Certificates. . . . . . . . . . 13 11. Redemption of Fund Shares . . . . . . . . . . . . . . . . . . 13 12. Exchange Privilege. . . . . . . . . . . . . . . . . . . . . . 16 13. Plans and Programs. . . . . . . . . . . . . . . . . . . . . . 17 14. Income Dividends, Capital Gains Distributions and Tax Treatment 18 15. Additional Information. . . . . . . . . . . . . . . . . . . . 19 16. Performance . . . . . . . . . . . . . . . . . . . . . . . . . 20 -i- 1. FEE TABLES SHAREHOLDER TRANSACTION EXPENSES =============================================================== | Maximum Sales Load Imposed on Purchases | 0% | |-------------------------------------------------------------| | Maximum Sales Load Imposed on Reinvested Dividends | 0% | |-------------------------------------------------------------| | Deferred Sales Load | 0% | |-------------------------------------------------------------| | Redemption Fees | 0% | |-------------------------------------------------------------| | Exchange Fee | 0% | =============================================================== ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) ====================================================================== | | | | TOTAL | | | INVESTMENT | | FUND | | | ADVISORY | OTHER | OPERATING | | | FEE | EXPENSES* | EXPENSES | |--------------------------------------------------------------------| | Berger Small Cap Value Fund | 0.90% | 0.____% | _____% | | - Institutional Shares** | | | | ====================================================================== * Other Expenses primarily include transfer agency fees, shareholder report expenses, registration fees and custodian fees. ** Based on actual expenses for the Fund's only outstanding class of shares as of December 31, 1996, restated to reflect expenses borne by the Institutional Shares. EXAMPLES You would pay the following expenses on a $1,000 investment, assuming (1) 5% annual return, and (2) redemption at the end of each time period: ====================================================================== | | 1 Year | 3 Years | 5 Years | 10 Years| - ---------------------------------------------------------------------- | Berger Small Cap Value Fund | $____ | $____ | $____ | $____ | | - Institutional Shares | | | | | ====================================================================== THE EXPENSES SET FORTH IN THE PRECEDING TABLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THE ASSUMED 5% ANNUAL RETURN IS HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE ANNUAL RETURNS, WHICH MAY BE GREATER OR LESS THAN THE ASSUMED AMOUNT. -1- Shares of the Fund had no class designations until February 14, 1997, when all of the then-existing shares were designated as Institutional Shares and the Fund commenced offering a separate class of shares designated as Investor Shares. Simultaneously, other fee and service provider arrangements for the Fund were changed, including a reduction in the percentage upon which the advisory fee paid by the Fund is based from an annual rate of 1.00% to 0.90% of the Fund's average daily net assets. Accordingly, expenses in the tables above are not actual Institutional Share expenses, but are based on actual expenses of the only class of shares outstanding for the fiscal year ended December 31, 1996, restated to reflect fees borne by the Institutional Shares, as if such fees had been in effect during that year. The purpose of the preceding tables is to assist the investor in understanding the various costs and expenses that a shareholder of Institutional Shares of the Fund will bear directly or indirectly. The investment advisory fee for the Fund is higher than that paid by most other mutual funds. The Fund's expenses are described in greater detail under "Management and Investment Advice," and "Expenses of the Fund." 2. CONDENSED FINANCIAL INFORMATION On the following page is a table setting forth certain financial highlights for the Fund. The information provided for each of the eight fiscal years ended December 31, 1996, has been audited by Ernst & Young LLP, whose report thereon is incorporated by reference from the Fund's 1996 Annual Report into the Statement of Additional Information. The information provided in the table for the fiscal years ended December 31, 1988 and 1987, was audited by other independent accountants. The financial data below only cover periods prior to the Fund's adoption of class designations on February 14, 1997, when all of the Fund's then-existing shares were designated as Institutional Shares. The most recent Annual Report for the Fund, including additional performance information, may be obtained upon request and without charge by calling the Fund at 1-800-706-0539. -2- BERGER SMALL CAP VALUE FUND FINANCIAL HIGHLIGHTS
For a share outstanding throughout the year ended December 31 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 ---- ---- ---- ---- - ---- ---- ---- ---- ---- ---- PER SHARE OPERATING PERFORMANCE NET ASSET VALUE AT BEGINNING OF PERIOD $ 12.75 13.99 13.39 11.39 9.23 12.19 11.21 10.06 11.33 ---- ----- ----- ----- - ----- ---- ----- ---- ----- ----- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income (loss) ____ 0.09 (.01) .03 .09 .14 .28 .23 .24 .21 Net realized and unrealized gain (loss) on investments 3.23 .91 2.14 2.14 2.16 (2.95) 2.71 1.77 (.29) ---- ----- ----- ----- - ----- ---- ----- ---- ----- ----- Total from investment operations 3.32 .90 2.17 2.23 2.30 (2.67) 2.94 2.01 (.08) DIVIDENDS Dividends from net investment income ____ (0.09) 0 (.03) (.10) (.14) (.29) (.22) (.24) (.20) Dividends from net realized gain on investments (1.41) (2.14) (1.54) (.13) 0 0 (1.74) (.62) (.99) ---- ----- ----- ----- - ----- ----- ----- ---- ----- ----- Total dividends (1.50) (2.14) (1.57) (.23) (.14) (.29) (1.9) (.86) (1.19) ---- ---- ---- ---- - ---- ---- ---- --- ---- ---- ---- ---- ---- - ---- ---- ---- --- ---- ---- NET ASSET VALUE AT END OF PERIOD $ 14.57 12.75 13.99 13.39 11.39 9.23 12.19 11.21 10.06 ==== ===== ===== ===== ===== ===== ===== ==== ===== ===== TOTAL RETURN (%): 26.07 6.74 16.25 19.59 25.01 (21.94) 26.44 20.09 (0.68) ---- ----- ----- ----- - ----- ----- ----- ---- ----- ----- Ratios to average net assets (%) Expenses ---- 1.64 1.43 1.31 1.41 1.52 1.84 1.78 1.44 1.69 Net investment income (loss) ---- 0.64 (.04) .18 .73 1.24 2.34 1.85 2.33 1.87 Portfolio turnover rate (%) ---- 90 125 108 105 130 146 118 103 189 Average commission rate ____ -- -- -- - -- -- -- - -- -- Total net assets at end of period (in thousands) ____ 31,833 18,270 16,309 14,007 11,940 9,839 13,576 9,976 6,748 - -------------------- Covers the period from February 1, 1987 to December 31, 1987. Effective October 20, 1987, the Fund became publicly registered under the Investment Company Act of 1940. Prior thereto, its shares were not publicly offered. All per share amounts prior to December 31, 1994 have been adjusted for a 10 for 1 share split which occurred September 30, 1994. Annualized.
-3- 3. INTRODUCTION The Berger Small Cap Value Fund is a mutual fund or, to use the technical name, a diversified open-end, management investment company. The Fund is a "no-load" fund, meaning that a buyer pays no commissions or sales load when buying shares of the Fund. Institutional Shares are designed for pension and profit-sharing plans, employee benefit trusts, endowments, foundations and corporations, as well as high net worth individuals, who are willing to maintain a minimum account balance of $100,000. Institutional Shares are also made available for purchase and dividend reinvestment to all holders of the Fund's shares as of February 14, 1997, when all the Fund's then outstanding shares were designated as Institutional Shares, subject to a minimum account balance requirement of $500. 4. INVESTMENT OBJECTIVES AND POLICIES AND RISK FACTORS The investment objective of the Fund is capital appreciation. The Fund seeks to achieve this objective by investing primarily in common stocks of small companies that the Fund's Sub- Advisor believes are undervalued in the marketplace relative to their assets, earnings, cash flow or business franchise. Under normal circumstances, the Fund will invest at least 65% of its assets in common stocks of small companies with market capitalizations of less than $1 billion at the time of initial purchase. Market capitalization is defined as total current market value of a company's outstanding common stock. The balance of the Fund may be invested in common stocks of companies with market capitalizations in excess of $1 billion, equity securities other than common stocks, government securities, short-term investments or other securities described on the following pages, if the Sub-Advisor believes these are likely to be best suited at that time to achieve the Fund's objective. Current income is not an investment objective of the Fund and any income produced will be a by-product of the effort to achieve the Fund's objective. In selecting stocks for the Fund's portfolio, the Sub- Advisor will seek out companies whose current stock price appears undervalued in the marketplace, which may include companies with relatively low price-to-book value ratios or low price-to-earnings multiples, or companies which, in the view of the Sub-Advisor, have significant growth potential and are out-of-favor with or have not yet been discovered by the broader investment community. The Sub-Advisor strives to identify industries that operate in a favorable competitive and regulatory environment and companies within these industries that exhibit growth characteristics. Attention is placed on companies which have products or services, management or other advantages over their competitors, with a strong emphasis on companies with a quality balance sheet and the potential ability to generate earnings and cash flow, and which tend to reinvest their income instead of declaring cash dividends. The Sub-Advisor's philosophy is to weigh downside risk before considering upside potential. Accordingly, the Sub-Advisor will focus on capital preservation, as opposed to the often temporary rewards of participating in passing market trends, desiring not only to -4- outperform broad market averages in bull markets, but to outperform these averages during periods of decline. The Fund's investment objective is considered fundamental, meaning that it cannot be changed without a shareholders' vote. There can be no assurance that the Fund's investment objective will be realized. Since the shares of the Fund primarily represent an investment in common stocks, investors should realize that the net asset value of the Fund will reflect changes in the market value of the securities held in the Fund's portfolio, and the value of a Fund share will therefore go up and down. Investments in the types of companies sought by the Fund may involve greater risks and volatility than more traditional equity investments due to some of these companies potentially having limited product lines, reduced market liquidity for the trading of their shares and less depth in management than more established companies. For this reason, the Fund is not intended as a complete or balanced investment vehicle but rather as an investment for persons who are in a financial position to assume greater risk and share price volatility over time. Realizing the full potential of these types of companies frequently takes time. As a result, the Fund should be considered as a long-term investment vehicle. The Fund may increase its investment in government securities, and other short-term, interest-bearing securities without limit when the Sub-Advisor believes market conditions warrant a temporary defensive position, during which period it may be more difficult for the Fund to achieve its investment objective. The following is additional information about some of the other specific types of securities and other instruments in which the Fund may invest: SECURITIES OF SMALLER COMPANIES. The Fund will invest in securities of companies with small market capitalizations. Market capitalization is defined as total current market value of a company's outstanding common stock. Investments in companies with smaller market capitalizations may involve greater risks and price volatility (that is, more abrupt or erratic price movements) than investments in larger, more mature companies since smaller companies may be at an earlier stage of development and may have limited product lines, reduced market liquidity for their shares, limited financial resources or less depth in management than larger or more established companies. Smaller companies also may be less significant factors within their industries and may have difficulty withstanding competition from larger companies. While smaller companies may be subject to these additional risks, they may also realize more substantial growth than larger or more established companies. SPECIAL SITUATIONS. The Fund may also invest in special situations, that is, in common stocks of companies that have recently experienced or are anticipated to experience a significant change in structure, management, products or services. Examples of special situations are companies being reorganized or merged, companies having unusual new products, or which enjoy particular tax advantages, or companies that are run by new management or may be probable takeover candidates. The opportunity to invest in special situations, however, is limited and depends in part on the market's assessment of these issuers and their circumstances. -5- In addition, stocks of companies in special situations may be more volatile, since the market value of these stocks may decline if an anticipated event or benefit does not materialize. UNSEASONED ISSUERS. The Fund may invest to a limited degree in securities of unseasoned issuers. Unseasoned issuers are companies with a record of less than three years' continuous operation, even including the operations of any predecessors and parents. Unseasoned issuers by their nature have only a limited operating history which can be used for evaluating the company's growth prospects. As a result, investment decisions for these securities may place a greater emphasis on current or planned product lines and the reputation and experience of the company's management and less emphasis on fundamental valuation factors than would be the case for more mature growth companies. In addition, many unseasoned issuers may also be small companies and involve the risks and price volatility associated with smaller companies. The Fund may invest up to 5% of its total assets in securities of unseasoned issuers. FOREIGN SECURITIES. The Fund may invest in both domestic and foreign securities. Investments in foreign securities involve some risks that are different from the risks of investing in securities of U.S. issuers, such as the risk of fluctuations in the value of the currencies in which they are denominated, the risk of adverse political and economic developments and, with respect to certain countries, the possibility of expropriation, confiscatory taxation or limitations on the removal of funds or other assets of the Fund. Securities of some foreign companies, particularly those of developing countries, are less liquid and more volatile than securities of comparable domestic companies. A developing country generally is considered to be in the initial stages of its industrialization cycle. Investing in the securities of developing countries may involve exposure to economic structures that are less diverse and mature, and to political systems that can be expected to have less stability than developed countries. There also may be less publicly available information about foreign issuers than domestic issuers, and foreign issuers generally are not subject to the uniform accounting, auditing and financial reporting standards and practices applicable to domestic issuers. Delays may be encountered in settling certain foreign securities transactions and the Fund will incur costs in converting foreign currencies into U.S. dollars. The Fund will consider the political and economic conditions in a country, the prospect for changes in the value of its currency and the liquidity of an investment in that country's securities markets in selecting investments in foreign securities. HEDGING TRANSACTIONS. The Fund is authorized to make limited use of certain types of put and call options, but only for the purpose of hedging, that is, protecting against the risk of market movements that may adversely affect the value of the Fund's securities or the price of securities that the Fund is considering purchasing. Although a hedging transaction may, for example, partially protect the Fund from a decline in the value of a particular security or its portfolio generally, hedging may also limit the Fund's opportunity to profit from favorable price movements, and the cost of the transaction will reduce the potential return on the security or the portfolio. The following is a summary of the options which the Fund may utilize, provided that no more than 5% of the Fund's net assets at the time of purchase may be utilized as premiums for options. An option gives the holder the right, but not the obligation, to purchase or sell something (such as a security) at a specified price at any time until the expiration date. An option on a securities index is similar, except that upon exercise, settlement is made in cash rather than in specific securities. The Fund may only write call options (that is, issue options that obligate the Fund to deliver if the option is exercised by the holder) that are "covered" and only up to 10% of the Fund's net assets. A call option is considered "covered" if the Fund already owns the security on which the option is written or, in the case of an option written on a securities index, if the Fund owns a portfolio of securities believed likely to substantially replicate movement of the index. Use of call options written by the Fund involves the potential for a loss that may exceed the premium received for the option. However, the Fund will be permitted to use such instruments for hedging purposes only, and only if the aggregate amount of its obligations under these contracts does not exceed the total market value of the assets the Fund is attempting to hedge, such as a portion or all of its exposure to equity securities or its holding in a specific security. To help ensure that the Fund will be able to meet its obligations under options written -6- by the Fund, the Fund will be required to maintain liquid assets in a segregated account with its custodian bank or to set aside portfolio securities to "cover" its position in these contracts. The principal risks of the Fund utilizing options are: (a) losses resulting from market movements not anticipated by the Fund; (b) possible imperfect correlation between movements in the prices of options and movements in the prices of the securities or positions hedged or used to cover such positions; (c) lack of assurance that a liquid secondary market will exist for any particular options at any particular time, and possible exchange-imposed price fluctuation limits, either of which may make it difficult or impossible to close a position when so desired; (d) the need for additional information and skills beyond those required for the management of a portfolio of traditional securities; and (e) possible need to defer closing out certain options contracts in order to continue to qualify for beneficial tax treatment afforded "regulated investment companies" under the Internal Revenue Code of 1986, as amended. In addition, when the Fund enters into an over-the-counter contract with a counterparty, the Fund will assume counterparty credit risk, that is, the risk that the counterparty will fail to perform its obligations, in which case the Fund could be worse off than if the contract had not been entered into. Additional detail concerning the Fund's use of options and the risks of such investments can be found in the Statement of Additional Information. INVESTMENT RESTRICTIONS The Fund has adopted a number of other restrictions on its investments and other activities that may not be changed without shareholder approval. For example, as to 75% of its total assets, the Fund may not purchase securities of any issuer (except U.S. Government securities) if, immediately after and as a result of such purchase, the value of the Fund's holdings in the securities of that issuer exceeds 5% of the value of its total assets or it owns more than 10% of the outstanding voting securities of such issuer. In addition, the Fund may invest no more than 25% of the value of its assets, at the time of purchase, in securities of companies principally engaged in a particular industry, although the Fund may as a temporary defensive measure invest up to 100% of its total assets in obligations issued or guaranteed by the U.S. Government or its agencies. The investment restrictions described above and in the Statement of Additional Information that involve a maximum percentage of securities or assets will not be considered to be violated unless an excess over the percentage occurs after, and is caused by, an acquisition or encumbrance of securities or assets of the Fund. "Value" for the purposes of all investment restrictions shall mean the value used in determining the Fund's net asset value. Additional investment restrictions are described in the Statement of Additional Information. 5. PORTFOLIO TURNOVER The Fund intends to purchase and hold common stocks for capital appreciation. Changes in the portfolio will be made, however, whenever the Fund's Sub-Advisor believes they -7- are advisable, either as a result of common stocks having reached a price objective or by reason of developments not foreseen at the time of the investment decision, such as changes in the economics of an industry or a particular company. These investment changes will usually be made without reference to the length of time a security has been held, and there may, therefore, be a significant number of short-term transactions. In addition, portfolio turnover may increase as a result of large amounts of purchases and redemptions of shares of the Fund due to economic, market or other factors that are not within the control of management. The annual portfolio turnover rate of the Fund may at times exceed 100%. An annual turnover rate of 100% or more would be higher than that of most other funds. Increased portfolio turnover would necessarily result in correspondingly higher brokerage costs for the Fund and may result in the acceleration of net taxable gains. The portfolio turnover rate is shown in the Financial Highlights table on page 3. 6. MANAGEMENT AND INVESTMENT ADVICE The trustees of the Fund are responsible for major decisions relating to the Fund's policies and objective. They also oversee the operation of the Fund by its officers and review the investment performance of the Fund on a regular basis. THE ADVISOR The investment advisor to the Fund is Berger Associates, Inc. (the "Advisor" or "Berger Associates"), 210 University Boulevard, Suite 900, Denver, CO 80206. Berger Associates became the Fund's investment advisor on February 14, 1997, following shareholder approval of a new Investment Advisory Agreement between the Fund and the Advisor. The Advisor is responsible for managing the investment operations of the Fund and the composition of its investment portfolio. The Advisor is permitted to engage a sub-advisor for the Fund. The Advisor also acts as the Fund's administrator and is responsible for such functions as monitoring the Fund's compliance with all applicable federal and state laws. The Advisor has been in the investment advisory business for over 20 years. It serves as investment advisor or sub-advisor to mutual funds, pension and profit-sharing plans, and institutional and private investors, and had assets under management of more than $3.6 billion as of September 30, 1996. Kansas City Southern Industries, Inc. ("KCSI") owns approximately 80% of the outstanding shares of the Advisor. KCSI is a publicly traded holding company with principal operations in rail transportation, through its subsidiary The Kansas City Southern Railway Company, and financial asset management businesses. KCSI also owns approximately 41% of the outstanding shares of DST Systems, Inc. ("DST"), a publicly traded information and transaction processing company which acts as the Fund's sub-transfer agent. -8- The trustees of the Fund have authorized Berger Associates to consider sales of shares of the Fund by a broker-dealer and the recommendations of a broker-dealer to its customers that they purchase Fund shares as factors in the selection of broker-dealers to execute portfolio transactions for the Fund. In placing portfolio business with such broker-dealers, Berger Associates will seek the best execution of each transaction. THE SUB-ADVISOR Perkins, Wolf, McDonnell & Company (the "Sub-Advisor" or "PWM"), 53 West Jackson Boulevard, Suite 818, Chicago, Illinois 60604, has been engaged as the Fund's investment sub-advisor. The Sub- Advisor was organized in 1980 under the name Mac-Per-Wolf Co. to operate as a securities broker-dealer. In September 1983, it changed its name to Perkins, Wolf, McDonnell & Company. The Sub-Advisor is a member of the National Association of Securities Dealers, Inc. (the "NASD") and, in 1984, became registered as an investment adviser with the Securities and Exchange Commission. PWM was the Fund's investment advisor from the date the Fund commenced operations in 1985 to February 1997. PWM became the investment sub-advisor to the Fund on February 14, 1997, following shareholder approval of a new Sub-Advisory Agreement between the Advisor and the Sub-Advisor. Robert H. Perkins is the individual who is primarily responsible for the day-to-day management of the Fund's portfolio. Mr. Perkins has held such responsibility and has been employed by the Sub-Advisor since the Fund commenced operations in 1985. Mr. Perkins owns 49% of the Sub-Advisor's outstanding common stock and serves as Secretary and a director of the Sub-Advisor. Gregory E. Wolf owns 20% of the Sub-Advisor's outstanding common stock and serves as President and a director of the Sub-Advisor. ADVISORY FEES Under the Investment Advisory Agreement for the Fund, the Advisor is compensated for its services to the Fund by the payment of a fee at the annual rate of 0.90% of the average daily net assets of the Fund. The Fund pays no fees directly to the Sub-Advisor. The Sub-Advisor receives from the Advisor a fee at the annual rate of 0.90% of the first $75 million of average daily net assets of the Fund, 0.50% of the next $125 million, and 0.20% of any amount in excess of $200 million. 7. EXPENSES OF THE FUND The Fund has appointed Investors Fiduciary Trust Company ("IFTC") as its recordkeeping and pricing agent to calculate the daily net asset value of the Fund and to perform certain accounting and recordkeeping functions required by the Fund. In addition, IFTC also serves as the Fund's custodian, transfer agent and dividend disbursing agent. IFTC has engaged -9- DST as sub-agent to provide transfer agency and dividend disbursing services for the Fund. As noted above, approximately 41% of the outstanding shares of DST are owned by KCSI. For custodian, recordkeeping and pricing services, the Fund pays fees to IFTC based on a percentage of its assets, subject to certain minimums. The Fund also pays a monthly fee based primarily on the number of accounts maintained on behalf of the Fund for transfer agency and dividend disbursing services, which fees are paid by the Fund to IFTC and in turn passed through to DST as sub-agent. In addition, the Fund reimburses IFTC and DST for certain out-of-pocket expenses. The Fund and/or Berger Associates may enter into arrangements with certain organizations (broker-dealers, recordkeepers and administrators) to provide sub-transfer agency, recordkeeping, shareholder communications, sub-accounting and/or other services to investors purchasing shares of the Fund through investment programs or pension plans established or serviced by those organizations. The Fund and/or Berger Associates may pay fees to these organizations for their services. Any such fees paid by the Fund will be for services that otherwise would be provided or paid for by the Fund if all the investors who own Fund shares through these organizations were registered record holders of shares in the Fund. The trustees of the Fund have authorized Berger Associates to place portfolio transactions on an agency basis through DST Securities, Inc. ("DSTS"), a wholly-owned broker-dealer subsidiary of DST. When transactions are effected through DSTS, the commission received by DSTS is credited against, and thereby reduces, certain operating expenses that the Fund would otherwise be obligated to pay. No portion of the commission is retained by DSTS. In addition, under a separate Administrative Services Agreement with the Fund, Berger Associates performs certain administrative and recordkeeping services not performed by other service providers, including compliance monitoring and the preparation of financial statements and reports to be filed with regulatory authorities. The Fund pays Berger Associates a fee at the annual rate of 1/100 of 1% (0.01%) of its average daily net assets for such services. The Fund also incurs other expenses, including accounting, administrative and legal expenses. DISTRIBUTOR The distributor (principal underwriter) of the Fund's shares is Berger Distributors, Inc. (the "Distributor"), 210 University Boulevard, Suite 900, Denver, CO 80206. The Distributor may be reimbursed by Berger Associates for its costs in distributing Institutional Shares. The Distributor is a wholly-owned subsidiary of Berger Associates, and certain officers of the Fund are officers or directors of the Distributor. -10- 8. PURCHASE OF SHARES IN THE FUND Institutional Shares are designed for pension and profit- sharing plans, employee benefit trusts, endowments, foundations and corporations, as well as high net worth individuals, who are willing to maintain a minimum account balance of $100,000. Institutional Shares are also made available for purchase and dividend reinvestment to all holders of the Fund's shares as of February 14, 1997, when all the Fund's then outstanding shares were designated as Institutional Shares, subject to a minimum account balance requirement of $500. Institutional Shares may be purchased at the relevant net asset value without a sales charge. The minimum initial investment for Institutional Shares is $100,000. (This requirement is inapplicable to shareholders who purchased shares prior to February 14, 1997, who met the initial investment minimum in effect for the Fund at the time of their initial purchase.) To purchase Institutional Shares, simply complete the application form enclosed with this Prospectus and mail it to the Fund in care of DST Systems, Inc., the Fund's transfer agent, as follows: Berger Funds c/o DST Systems, Inc. P.O. Box 419958 Kansas City, MO 64141 Additional investments may be made at any time by telephone or by mail at the relevant net asset value by calling or writing the Fund. Unless effected through an Automatic Investment Plan, subsequent purchases by shareholders must be in the minimum amount of $1,000. A confirmation indicating the details of the transaction will be sent promptly. Unless full shares only are specified, all purchases will be made in full and fractional shares calculated to three decimal places. All purchase orders are effected at the relevant net asset value per share for the Institutional Shares of the Fund next determined after receipt of the purchase order, completed application and payment. A purchase order, together with payment in proper form, received by the transfer agent, sub-transfer agent or any other authorized agent of the Fund prior to the close of the New York Stock Exchange (the "Exchange") on a day the Fund is open for business will be effected at that day's net asset value. An order received after that time will be effected at the net asset value determined on the next business day. See "Redemptions of Fund Shares - Redemptions by Telephone" for the Fund's policies and procedures on effecting transactions by telephone. Payment for shares purchased may be made as follows: -11- BY WIRE OR ELECTRONIC FUNDS TRANSFER. Payment for shares purchased may be made by wire or electronic funds transfer from the investor's bank to DST Systems, Inc. Please call 1-800-551-5849 for current wire or electronic funds transfer instructions. The following information may be requested: name of authorized person; shareholder name; shareholder account number; name of Fund; amount being wired or transferred; and name of wiring or transferring bank. BY MAIL. Alternatively, payment for shares purchased may be made by mail, so long as payment is accompanied or preceded by a completed account application. Payment should be made by check or money order drawn on a United States bank and made payable to the "Berger Funds". Checks not made payable to the Berger Funds, the account registrant, transfer agent or retirement account custodian will not be accepted. The Fund will not accept purchases by cash or credit card or checks drawn on foreign banks unless provision is made for payment through a U.S. bank in U.S. dollars. Fund shares may also be purchased through certain broker- dealers that have established mutual fund programs and certain other organizations connected with pension and retirement plans. These broker-dealers and other organizations may charge investors a transaction or other fee for their services, may require different minimum initial and subsequent investments than the Fund and may impose other charges or restrictions different from those applicable to shareholders who invest in the Fund directly. Fees charged by these organizations will have the effect of reducing a shareholder's total return on an investment in Fund shares. No such charge will be paid by an investor who purchases shares directly from the Fund as described above. The Fund will, at its discretion, accept orders transmitted by these organizations although not accompanied by payment for the shares being purchased. Payment must be received by the Fund within three business days after acceptance of the order. The price at which a purchase will be effected is based on the next calculation of net asset value after the order is received by the Fund's transfer agent, sub-transfer agent or any other authorized agent of the Fund. The Fund reserves the right in its sole discretion to withdraw all or any part of the offering made by this Prospectus or to reject purchase orders, when in the judgment of management, such withdrawal or rejection is in the best interest of the Fund. The Fund also reserves the right at any time to waive the minimum investment requirements applicable to initial or subsequent investments or to increase minimum investment or account balance requirements following notice. No application to purchase shares is binding on the Fund until accepted in writing. -12- Investors may, subject to the approval of the Fund, purchase Institutional Shares of the Fund with liquid securities that are eligible for purchase by the Fund (consistent with the Fund's investment policies and restrictions) and that have a value that is readily ascertainable in accordance with the valuation policies of the Fund. These transactions will be effected only if the Sub-Advisor intends to retain the securities in the Fund as an investment. Assets so purchased will be valued in generally the same manner as they would be valued for purposes of pricing the Fund's Institutional Shares, if such assets were included in the Fund's assets at the time of purchase. The Fund reserves the right to amend or terminate this practice at any time. 9. NET ASSET VALUE The price of the Fund's Institutional Shares is based on the net asset value of the Fund, which is determined at the close of the regular trading session of the Exchange (normally 4:00 p.m., New York time) each day that the Exchange is open. The per share net asset value of the Institutional Shares is determined by dividing the Institutional Shares' pro rata portion of the total value of the Fund's securities and other assets, less the Institutional Shares' pro rata portion of the Fund's liabilities and the liabilities attributable directly to the Institutional Shares, by the total number of Institutional Shares outstanding. In determining net asset value, securities are valued at market value or, if market quotations are not readily available, at their fair value determined in good faith pursuant to consistently applied procedures established by the trustees. Money market instruments maturing within 60 days are valued at amortized cost, which approximates market value. Since the Fund does not impose any front end sales load or redemption fee, both the purchase price and the redemption price of an Institutional Share are the same and will be equal to the next calculated net asset value of an Institutional Share. 10. OPEN ACCOUNT SYSTEM AND SHARE CERTIFICATES Unless otherwise directed, all investor accounts are maintained on a book-entry basis. Share certificates will not be issued unless requested by the shareholder. Shares purchased by dividend reinvestment or under an Automatic Investment Plan, and shares redeemed under a Systematic Withdrawal Plan, will be confirmed after the end of each calendar quarter. Following any other investment or redemption, the investor will receive a printed confirmation indicating the dollar amount of the transaction, the per share price of the transaction and the number of shares purchased or redeemed. 11. REDEMPTION OF FUND SHARES (i) Share Redemptions by Mail. The Fund will redeem, at ------------------------- current net asset value, all shares of the Fund offered for redemption. The redemption price of shares tendered for redemption will be the net asset value next determined after receipt of all required documents -13- by the Fund's transfer agent, sub-transfer agent or other authorized agent of the Fund. To receive the net asset value for a specific day, a redemption request must be received before the close of the Exchange on that day. Shareholders who purchased their shares directly from the Fund may redeem all or part of their shares in the Fund by sending a written request to the Fund, c/o DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141. The written request for redemption must be signed by each registered owner exactly as the shares are registered and must clearly identify the account and the number of shares or the dollar amount to be redeemed. The signatures of the redeeming shareholders must be guaranteed by a national or state bank, a member firm of a domestic stock exchange or the National Association of Securities Dealers (NASD), a credit union, a federal savings and loan association or another eligible guarantor institution if the redemption: is being made payable other than exactly as registered; is being mailed to an address which has been changed within 30 days of the redemption request; or is being mailed to an address other than the one on record. A notary public is not an acceptable guarantor. The Fund also reserves the right to require a signature guarantee under other circumstances. The signature guarantees must appear, together with the signatures of the registered owners, (i) on the written request for redemption which clearly identifies the account and the number of shares to be redeemed, (ii) on a separate instrument of assignment ("stock power") which may be obtained from a bank or broker, or (iii) on any share certificates tendered for redemption. The use of signature guarantees is intended to protect the shareholder and the Fund from a possibly fraudulent application for redemption. Additional documents are required for redemptions by corporations, executors, administrators, trustees and guardians. If there is doubt as to what additional documents are required, please write the Berger Funds, c/o DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141, or call DST at 1-800-551-5849. (ii) Redemptions by Telephone. All shareholders have ------------------------ Telephone Transaction Privileges to authorize purchases, exchanges or redemptions unless they specifically decline this service on the account application or by writing to the Fund, c/o DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141. The telephone redemption option is not available for shares held in retirement accounts sponsored by the Fund. Redemption requests may be made by telephoning DST Systems, Inc., at 1-800-551-5849. To receive the net asset value for a specific day, a redemption request must be received before the close of the Exchange on that day. As discussed above, certain requests must be in writing and the signature of a redeeming shareholder must be signature guaranteed, and therefore shares may not be redeemed by telephone, if the redemption: is being made payable other than exactly as registered; is being mailed to an address which has been changed within 30 days of the redemption request; is being mailed to an address other than the one on record; or the shares are represented by share certificates issued to the shareholder. All telephone transactions are recorded and written confirmations indicating the details of all telephone transactions will promptly be sent to the shareholder of record. Prior -14- to accepting a telephone transaction, the shareholder placing the order may be required to provide certain identifying information. A shareholder electing to communicate instructions by telephone may be giving up some level of security that would otherwise be present were the shareholder to request a transaction in writing. Neither the Fund nor its transfer agent or Advisor assume responsibility for the authenticity of instructions communicated by telephone which are reasonably believed to be genuine and which comply with the foregoing procedures. The Fund, and/or its transfer agent, may be liable for losses resulting from unauthorized or fraudulent telephone instructions in the event these procedures are not followed. In times of extreme economic or market conditions, redeeming shares by telephone may be difficult. The Fund may terminate or modify the procedures concerning the telephone redemption and wire transfer services at any time, although shareholders of the Fund will be given at least 60 days' prior notice of any termination or material modification. The Advisor may, at its own risk, waive certain of the redemption requirements described in the preceding paragraphs. (iii) Payment for Redeemed Shares. Payment for shares --------------------------- redeemed upon written request will be made by check and generally will be mailed within three business days after receipt by the transfer agent of the properly executed redemption request and any outstanding certificates for the shares to be redeemed. Payment for shares redeemed by telephone will be made by check payable to the account name(s) and address exactly as registered, and generally will be mailed within three business days following the date of the request for redemption. A shareholder may request that payment for redeemed shares of the Fund be made by wire or electronic funds transfer. Shareholders may elect to use these services on the account application or by providing the Fund with a signature guaranteed letter requesting these services and designating the bank to receive all wire or electronic funds transfers. A shareholder may change the predesignated bank of record by providing the Fund with written, signature guaranteed instructions. Redemption proceeds paid by wire transfer generally will be transmitted to the shareholder's predesignated bank account on the next business day after receipt of the shareholder's redemption request. Redemption proceeds paid by electronic funds transfer will be electronically transmitted to the shareholder's predesignated bank account on the second business day after receipt of the shareholder's redemption request. There is no fee for wire or electronic funds transfer of proceeds from the redemption of Fund shares. Shareholders may encounter delays in redeeming shares purchased by check (other than cashier's or certified checks), electronic funds transfer or through the Automatic Investment Program if the redemption request is made within 15 days after the date of purchase. In those situations, the redemption check will be mailed within 15 days after the transfer agent's receipt of the purchase instrument, provided that it has not been dishonored or cancelled during that time. The foregoing policy is to ensure that all payments for the shares being redeemed have been honored. In addition to the foregoing restrictions, no redemption payment can be made for shares which have been purchased by telephone order until full payment for the shares has -15- been received. In any event, valid redemption requests concerning shares for which full payment has been made will be priced at the net asset value next determined after receipt of the request. (iv) Redemption In-Kind. The Fund intends to redeem its ------------------ shares only for cash, although it retains the right to redeem its shares in-kind under unusual circumstances, in order to protect the interests of the remaining shareholders, by the delivery of securities selected from its assets at its discretion. The Fund is, however, governed by Rule 18f-1 under the Investment Company Act of 1940 pursuant to which the Fund is obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of the net assets of the Fund during any 90-day period for any one shareholder. Should redemptions by any shareholder during any 90-day period exceed such limitation, the Fund will have the option of redeeming the excess in cash or in- kind. If shares are redeemed in-kind, the redeeming shareholder generally will incur brokerage costs in converting the assets to cash. (v) Redemptions by the Fund. As a means of reducing its ----------------------- expenses, the Fund is authorized to redeem involuntarily all Institutional Shares held in accounts with a value of less than $100,000. (Shareholders who purchased Fund shares prior to February 14, 1997, and whose shares were designated as Institutional Shares on that date are subject only to a minimum account balance requirement of $500.) Such redemptions will be permitted only when the account is reduced below the minimum value by redemption, and not by declines in per share net asset value. As a result, accounts established with the applicable minimum investment might be subject to redemption after only a small redemption has been made by the shareholder. At least 60 days' written notice will be given to a shareholder before such an account is redeemed. During that time, the shareholder may add sufficient funds to the account to meet or exceed the minimum. If this condition is not met, the shares will be redeemed at the per share net asset value next determined after the 60th day following the notice. A check for the proceeds will be sent to the shareholder unless a share certificate has been issued, in which case payment will be made upon surrender of the certificate. 12. EXCHANGE PRIVILEGE (i) Exchanges. By telephoning the Fund at 1-800-551-5849, --------- or writing to the Fund, in care of DST at P.O. Box 419958, Kansas City, MO 64141, any shareholder may exchange, without charge, any or all of his or her shares in the Fund, subject to stated minimums, for shares of any of the publicly available Berger Funds. Exchanges may be made only if the Berger Fund into which a shareholder wishes to exchange shares is registered in the shareholder's state of residence. It is each investor's responsibility to obtain and read a prospectus of the Berger Fund into which the investor is exchanging. By giving exchange instructions, a shareholder will be deemed to have acknowledged receipt of the prospectus for the Berger Fund being purchased. Up to four exchanges out of the Fund are permitted during the calendar year. This limit helps -16- keep the Fund's net asset base stable and reduces the Fund's administrative expenses. In times of extreme economic or market conditions, exchanging Fund shares by telephone may be difficult. See "Redemption of Fund Shares - Redemptions by Telephone" for procedures for telephone transactions. Redemptions of shares in connection with exchanges into or out of the Fund are made at the net asset value per share next determined after the exchange request is received. To receive a specific day's price, a letter or call must be received before that day's close of the Exchange. Each exchange represents the sale of shares from one fund and the purchase of shares in another, which may produce a gain or loss for U.S. Federal income tax purposes. All exchanges out of the Fund are subject to the minimum and subsequent investment requirements of the fund into which shares are being exchanged. Exchanges will be accepted only if the registration of the two accounts is identical. Neither the Fund, the Berger Funds, nor their transfer agents or advisors assume responsibility for the authenticity of exchange instructions communicated by telephone or in writing which are believed to be genuine. See "Redemption of Fund Shares - Redemptions by Telephone" for procedures for telephone transactions. All shareholders have Telephone Transaction Privileges to authorize exchanges unless they specifically decline this service on the account application or by writing to the Fund, c/o DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141. 13. PLANS AND PROGRAMS The Fund offers several tax-qualified retirement plans for adoption by individuals and employers. The Fund also offers both a profit-sharing plan and a money purchase pension plan for employers and self-employed persons, an Individual Retirement Account ("IRA") and a 403(b) Custodial Account. In order to receive the necessary materials to create a profit-sharing or money purchase pension plan account, an IRA account or a 403(b) Custodial Account, please write to the Fund, c/o Berger Associates, Inc., P.O. Box 5005, Denver, CO 80217, or call 1-800-706- 0539. Trustees for existing 401(k) or other plans interested in utilizing Fund shares as an investment or investment alternative in their plans should contact the Fund at 1-800-551-5849. The Fund also offers an Automatic Investment Plan (minimum $100 per monthly or quarterly investment) and a Systematic Withdrawal Plan (for shareholders who own shares of the Fund worth at least $5,000; minimum of $50 withdrawn monthly, quarterly, semiannually or annually). Forms for these plans may be obtained by writing to the Fund, c/o DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141, or call 1-800-551-5849. -17- 14. INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX TREATMENT The Fund intends to declare dividends representing the Fund's net investment income annually, normally in December. It is also the present policy of the Fund to distribute annually all of its net realized capital gains. The Fund has elected and intends to maintain its qualification to be treated as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. If it so qualifies and meets certain minimum distribution requirements, the Fund generally will not be liable for Federal income tax on the amount of its earnings that are timely distributed. If the Fund distributes annually less than 98% of its income and gain, it may be subject to a nondeductible excise tax equal to 4% of the shortfall. All dividends and capital gains distributions paid by the Fund will be automatically reinvested in shares of the Fund at the net asset value on the ex-dividend date unless an investor specifically requests that either dividends or distributions, or both, be paid in cash. The election to receive dividends or distributions in cash or to reinvest them in Fund shares may be changed by calling the Berger Funds at 1-800-551-5849 or by written request to the Berger Funds, c/o DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141, and must be received at least ten days prior to the record date of any dividend or capital gains distribution. The Fund will inform its shareholders of the amount and nature of such income or gains resulting from their investment in the Fund. Dividends declared and payable to shareholders of record on a specified date in December will be deemed to have been received by shareholders on December 31 for tax purposes if paid during January the following year. Dividends paid by the Fund from net investment income and distributions from net short-term capital gains in excess of any net long-term capital losses, whether received in cash or reinvested, generally will be taxable as ordinary income. Distributions received from the Fund designated as long-term capital gains (net of capital losses), whether received in cash or reinvested, will be taxable as long-term capital gains without regard to the length of time a shareholder has owned shares in the Fund. Any loss on the redemption or other sale or exchange of the Fund's shares held for six months or less will be treated as a long-term capital loss to the extent of any long-term capital gain distribution received on the shares. A portion of the dividends (but not capital gains distributions) paid by the Fund may be eligible for the dividends received deduction for corporate shareholders to the extent that the Fund's income consists of dividends paid by United States corporations. If a shareholder is exempt from Federal income tax, the shareholder will not generally be taxed on amounts distributed by the Fund. At certain levels of taxable income, the Internal Revenue Code provides a preferential tax rate for long-term capital gains. Long-term capital gains of taxpayers other than corporations are taxed at a 28% maximum rate, whereas ordinary income is taxed at a 39.6% maximum rate. Capital losses continue to be deductible only against capital gains plus (in the -18- case of taxpayers other than corporations) $3,000 of ordinary income annually ($1,500 for married individuals filing separately). Some shareholders may be subject to 31% "backup withholding" on dividends, capital gains distributions and redemption payments made by the Fund. Backup withholding generally will apply to shareholders who fail to provide the Fund with their correct taxpayer identification number or to make required certifications. Backup withholding is not an additional tax. Any amounts withheld may be credited against a shareholder's U.S. Federal income tax liability. The foregoing is only a brief summary of the Federal income tax considerations affecting the Fund and its shareholders. Accordingly, potential investors should consult their tax advisors with specific reference to their own tax situation. 15. ADDITIONAL INFORMATION Today, the Fund is a series of a Massachusetts business trust (the "Trust") organized on April 20, 1990. The Fund was initially organized in November 1984 as a Delaware corporation, and operated as a private investment fund from February 14, 1985, to October 20, 1987, when it was registered as an investment company under the Investment Company Act of 1940 and its initial registration statement under the Securities Act of 1933 became effective. On May 18, 1990, the Fund as a series of the Trust assumed all of the assets and liabilities of the predecessor Delaware corporation. All references in this Prospectus to the Fund and all financial and other information about the Fund prior to May 18, 1990, are to the Fund as a Delaware corporation, and all references after May 18, 1990, are to the Fund as a series of the Trust. Prior to February 14, 1997, when the name of the Trust was changed to Berger Omni Investment Trust and the name of the Fund was changed to the Berger Small Cap Value Fund, the Fund and the Trust were known as The Omni Investment Fund. The Trust is authorized to issue an unlimited number of shares of beneficial interest in series or portfolios. Currently, the Fund is the only series established under the Trust, although others may be added in the future. Shares of the Fund are fully paid and nonassessable when issued. Each share has a par value of $.01. Currently, the Fund offers two classes of shares by separate prospectuses. The Institutional Shares offered in this Prospectus are designed for pension and profit-sharing plans, employee benefit trusts, endowments, foundations and corporations, as well as high net worth individuals, who are willing to maintain a minimum account balance of $100,000. Institutional Shares are also made available for purchase and dividend reinvestment to all holders of the Fund's shares as of February 14, 1997, when all the Fund's then outstanding shares were designated as Institutional Shares, subject to a minimum account balance requirement of $500. A separate class of shares, Investor Shares, are available to the general public, subject to the Fund's regular minimum investment requirements (currently a $2,000 minimum initial investment). Because each class of shares of the Fund is subject to different expenses, the performance of, and any dividend or other -19- distribution made to, each class of shares will differ. For additional information about the other class of shares offered by the Fund, please call the Berger Funds at 1-800-706-0539. Shareholders owning a particular series or class of shares of the Fund will vote separately on matters relating to that series or class, although they will vote together and along with the shareholders of other series and classes of the Fund in the election of trustees of the Trust and on all matters relating to the Trust as a whole. Each full share of the Fund has one vote. Shares of the Fund have non-cumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of trustees can elect 100% of the trustees if they choose to do so and, in such event, the holders of the remaining less than 50% of the shares voting for the election of trustees will not be able to elect any person or persons as trustees. The Fund is not required to hold annual shareholder meetings unless required by the Investment Company Act of 1940 or other applicable law or unless called by the trustees. The Fund's transfer agent and dividend disbursing agent is Investors Fiduciary Trust Company ("IFTC"), 127 West 10th Street, Kansas City, MO 64105. IFTC has engaged DST Systems, Inc., as sub- agent to provide transfer agency and dividend disbursing services for the Fund. Accordingly, the address and telephone number for DST Systems, Inc., set forth in this Prospectus should be used for correspondence with the Fund's transfer agent. 16. PERFORMANCE From time to time in advertisements, the Fund may discuss its performance ratings as published by recognized mutual fund statistical services, such as Lipper Analytical Services, Inc., CDA Investment Technologies, Inc., or Morningstar, Inc., or Value Line Investment Survey or by publications of general interest such as The --- Wall Street Journal, Investor's Business Daily, Barron's, Financial - ------------------- ------------------------- ------------------- World or Kiplinger's Personal Finance Magazine. In addition, the Fund - ----- ------------------------------------- may compare its performance to that of recognized broad-based securities market indices, including the Standard & Poor's 500 Stock Index, the Dow Jones Industrial Average, the Russell 2000 Stock Index, the Standard & Poor's 600 Small Cap Index or the Nasdaq Composite Index, or more narrowly-based indices which reflect the market sectors in which the Fund invests. The total return of the Fund is calculated for any specified period of time by assuming the purchase of shares of the Fund at the net asset value at the beginning of the period. Each dividend or other distribution paid by the Fund is assumed to have been reinvested at the net asset value on the reinvestment date. The total number of shares then owned as a result of this process is valued at the net asset value at the end of the period. The percentage increase is determined by subtracting the initial value of the investment from the ending value and dividing the remainder by the initial value. The Fund's total return reflects the Fund's performance over a stated period of time. An average annual total return reflects the hypothetical annually compounded return that -20- would have produced the same total return if the Fund's performance had been constant over the entire period. Total return figures are based on the overall change in value of a hypothetical investment in the Fund. Because average annual total returns for more than one year tend to smooth out variations in the Fund's return, investors should recognize that such figures are not the same as actual year-by-year results. Shares of the Fund had no class designations until February 14, 1997, when all of the then-existing shares were designated as Institutional Shares and the Fund commenced offering a separate class of shares designated as Investor Shares. Total return of the Institutional Shares and other classes of shares of the Fund will be calculated separately. Because each class of shares is subject to different expenses, the performance of each class for the same period will differ. Any performance figures for the Fund are based upon historical results and do not assure future performance. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Shareholders with questions should write to the Berger Funds, c/o Berger Associates, Inc., P.O. Box 5005, Denver, CO 80217, or call 1-303-329-0200 or 1-800-706-0539. -21- BERGER SMALL CAP VALUE FUND INVESTOR SHARES STATEMENT OF ADDITIONAL INFORMATION SHAREHOLDER SERVICES: 1-800-551-5849 This Statement of Additional Information about the Berger Small Cap Value Fund (the "Fund") Investor Shares is not a prospectus. It should be read in conjunction with the Prospectus describing the Investor Shares of the Fund, dated February 14, 1997, which may be obtained by writing the Fund at P.O. Box 5005, Denver, Colorado 80217, or calling 1-800-333-1001. The Fund is a no-load, diversified mutual fund. The investment objective of the Fund is capital appreciation. The Fund seeks to achieve this objective by investing primarily in common stocks of small companies that the Fund's investment sub-advisor believes are undervalued in the marketplace relative to their assets, earnings, cash flow or business franchise. Under normal circumstances, the Fund will invest at least 65% of its assets in common stocks of small companies with market capitalizations of less than $1 billion at the time of initial purchase. The balance of the Fund may be invested in common stocks of companies with market capitalizations in excess of $1 billion, equity securities other than common stocks, government securities, short-term investments or other securities described in the Prospectus, if the sub-advisor believes these are likely to be best suited at that time to achieve the Fund's objective. Current income is not an investment objective of the Fund and any income produced will be a by-product of the effort to achieve the Fund's objective. This Statement of Additional Information is about the class of shares of the Fund designated as Investor Shares. Investor Shares are available for sale to the general public, subject to the Fund's regular minimum initial investment requirement of $2,000 and a minimum subsequent investment requirement of $50. The Fund is a series of Berger Omni Investment Trust, a Massachusetts business trust (the "Trust"). Prior to February 14, 1997, the Fund and the Trust were known as The Omni Investment Fund. FEBRUARY 14, 1997 TABLE OF CONTENTS & CROSS-REFERENCES TO PROSPECTUS Cross-References to Related Disclosures Table of Contents in Prospectus _________________ ___________________ Introduction Section 3 1. Portfolio Policies of the Fund Section 3, 4, 5 2. Investment Restrictions Section 4 3. Management of the Fund Section 6 4. Investment Advisor Section 6 5. Expenses of the Fund Section 7, 8 6. Brokerage Policy Section 8 7. How to Purchase Shares in Section 9 the Fund 8. How the Net Asset Value is Section 10 Determined 9. Income Dividends, Capital Gains Section 15 Distributions and Tax Treatment 10. Suspension of Redemption Rights Section 12 11. Tax-Sheltered Retirement Plans Section 14 12. Special Purchase and Exchange PlansSection 13 13. Performance Information Section 17 14. Additional Information Section 16 Financial Statements -i- INTRODUCTION ______________ The Berger Small Cap Value Fund (the "Fund") is a mutual fund, or to use a more technical term, a diversified open-end, management investment company. The Fund's investment objective is capital appreciation. 1. Portfolio Policies of the Fund ______________________________ The Prospectus discusses the investment objective of the Fund and the policies to be employed to achieve that objective. This section contains supplemental information concerning the types of securities and other instruments in which the Fund may invest, the investment policies and portfolio strategies that the Fund may utilize and certain risks attendant to those investments, policies and strategies. CONVERTIBLE SECURITIES. The Fund may purchase securities that are convertible into common stock when the Sub-Advisor believes they offer the potential for a higher total return than nonconvertible securities. While fixed income securities generally have a priority claim on a corporation's assets over that of common stock, some of the convertible securities which the Fund may hold are high-yield/high- risk securities that are subject to special -1- risks, including the risk of default in interest or principal payments which could result in a loss of income to the Fund or a decline in the market value of the securities. Convertible securities often display a degree of market price volatility that is comparable to common stocks. The credit risk associated with convertible securities generally is reflected by their being rated below investment grade by organizations such as Moody's Investors Service, Inc., and Standard & Poor's Corporation, or being of similar creditworthiness in the determination of the Sub-Advisor. The Fund has no pre-established minimum quality standards for convertible securities and may invest in convertible securities of any quality, including lower rated or unrated securities. However, the Fund will not invest in any security in default at the time of purchase or in any nonconvertible debt securities rated below investment grade, and the Fund will invest less than 20% of the market value of its net assets at the time of purchase in convertible securities rated below investment grade. If convertible securities purchased by the Fund are downgraded following purchase, or if other circumstances cause 20% or more of the Fund's assets to be invested in convertible securities rated below investment grade, the trustees of the Fund, in consultation with the Sub-Advisor, will determine what action, if any, is appropriate in light of all relevant circumstances. For a further discussion of debt security ratings, see Appendix A to the Statement of Additional Information. ILLIQUID SECURITIES. The Fund is authorized to invest in securities which are illiquid or not readily marketable because, based upon their nature or the market for such securities, no ready market is available. However, the Fund will not purchase any such security, the purchase of which would cause the Fund to invest more than 10% of its net assets, measured at the time of purchase, in illiquid securities. Investments in illiquid securities involve certain risks to the extent that the Fund may be unable to dispose of such a security at the time desired or at a reasonable price or, in some cases, may be unable to dispose of it at all. If securities become illiquid following purchase or other circumstances cause more than 10% of the Fund's net assets to be invested in illiquid securities, the trustees of the Fund, in consultation with the Fund's Sub-Advisor, will determine what action, if any, is appropriate in light of all relevant circumstances. Repurchase agreements maturing in more than seven days will be considered as illiquid for purposes of this restriction. REPURCHASE AGREEMENTS. The Fund may invest in repurchase agreements with various financial organizations, including commercial banks, registered broker-dealers and registered government securities dealers. A repurchase agreement is an agreement under which the Fund acquires a debt security (generally a security issued or guaranteed by the U.S. government or an agency thereof, a banker's acceptance or a certificate of deposit) from a commercial bank, broker or dealer, subject to resale to the seller at an agreed upon price and date (normally, the next business day). -2- A repurchase agreement may be considered a loan collateralized by securities. The resale price reflects an agreed upon interest rate effective for the period the instrument is held by the Fund and is unrelated to the interest rate on the underlying instrument. In these transactions, the securities acquired by the Fund (including accrued interest earned thereon) must have a total value equal to or in excess of the value of the repurchase agreement and are held by the Fund's custodian bank until repurchased. In addition, the trustees will establish guidelines and standards for review by the Sub-Advisor of the creditworthiness of any bank, broker or dealer party to a repurchase agreement with the Fund. The Fund will not enter into a repurchase agreement maturing in more than seven days if as a result more than 10% of the Fund's net assets would be invested in such repurchase agreements and other illiquid securities. The use of repurchase agreements involves certain risks. For example, if the other party to the agreement defaults on its obligation to repurchase the underlying security at a time when the value of the security has declined, the Fund may incur a loss upon disposition of the security. If the other party to the agreement becomes insolvent and subject to liquidation or reorganization under the Bankruptcy Code or other laws, a court may determine that the underlying security is collateral for a loan by the Fund not within the control of the Fund and therefore the realization by the Fund on such collateral may automatically be stayed. Finally, it is possible that the Fund may not be able to substantiate its interest in the underlying security and may be deemed an unsecured creditor of the other party to the agreement. Although these risks are acknowledged, it is expected that they can be controlled through careful monitoring procedures. WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Fund may purchase and sell securities on a when-issued or delayed delivery basis. However, the Fund currently does not intend to purchase or sell securities on a when-issued or delayed delivery basis, if as a result more than 5% of its total assets taken at market value at the time of purchase would be invested in such securities. When-issued or delayed delivery transactions arise when securities (normally, equity obligations of issuers eligible for investment by the Fund) are purchased or sold by the Fund with payment and delivery taking place in the future in order to secure what is considered to be an advantageous price or yield. However, the yield on a comparable security available when delivery takes place may vary from the yield on the security at the time that the when-issued or delayed delivery transaction was entered into. Any failure to consummate a when-issued or delayed delivery transaction may result in the Fund missing the opportunity of obtaining a price or yield considered to be advantageous. When-issued and delayed delivery transactions may generally be expected to settle within one month from the date the transactions are entered into, but in no event later than 90 days. However, no payment or delivery is made by the Fund until it receives delivery or payment from the other party to the transaction. -3- When the Fund purchases securities on a when-issued basis, it will maintain in a segregated account with its custodian cash, U.S. government securities or other liquid assets having an aggregate value equal to the amount of such purchase commitments, until payment is made. If necessary, additional assets will be placed in the account daily so that the value of the account will equal or exceed the amount of the Fund's purchase commitments. HEDGING TRANSACTIONS. As described in the Prospectus, the Fund is authorized to make limited use of certain types of options, but only for the purpose of hedging, that is, protecting against market risk due to market movements that may adversely affect the value of the Fund's securities or the price of securities that the Fund is considering purchasing. The utilization of options is also subject to policies and procedures which may be established by the trustees from time to time. A hedging transaction may partially protect the Fund from a decline in the value of a particular security or its portfolio generally, although hedging may also limit the Fund's opportunity to profit from favorable price movements, and the cost of the transaction will reduce the potential return on the security or the portfolio. The following is additional information concerning the options which the Fund may utilize, provided that no more than 5% of the Fund's net assets at the time the contract is entered into may be used for premiums paid for the purchase of options. In addition, the Fund may only write call options that are covered and only up to 10% of the Fund's net assets. The following information should be read in conjunction with the information concerning the Fund's use of options and the risks of such instruments contained in the Prospectus. Options on Securities and Securities Indices. The Fund may buy or sell put or call options and write covered call options on securities that are traded on United States or foreign securities exchanges or over-the-counter. Buying an option involves the risk that, during the option period, the price of the underlying security will not increase (in the case of a call) to above the exercise price, or will not decrease (in the case of a put) to below the exercise price, in which case the option will expire without being exercised and the holder would lose the amount of the premium. Writing a call option involves the risk of an increase in the market value of the underlying -4- security, in which case the option could be exercised and the underlying security would then be sold by the Fund to the option holder at a lower price than its current market value and the Fund's potential for capital appreciation on the security would be limited to the exercise price. Moreover, when the Fund writes a call option on a securities index, the Fund bears the risk of loss resulting from imperfect correlation between movements in the price of the index and the price of the securities set aside to cover such position. Although they entitle the holder to buy equity securities, call options to purchase equity securities do not entitle the holder to dividends or voting rights with respect to the underlying securities, nor do they represent any rights in the assets of the issuer of those securities. A call option written by the Fund is "covered" if the Fund owns the underlying security covered by the call or has an absolute and immediate right to acquire that security without additional cash consideration (or for additional cash consideration held in a segregated account by its custodian) upon conversion or exchange of other securities held in its portfolio. A call option is also deemed to be covered if the Fund holds a call on the same security and in the same principal amount as the call written and the exercise price of the call held (i) is equal to or less than the exercise price of the call written or (ii) is greater than the exercise price of the call written if the difference is maintained by the Fund in liquid assets in a segregated account with its custodian. The writer of a call option may have no control when the underlying securities must be sold. Whether or not an option expires unexercised, the writer retains the amount of the premium. This amount, of course, may, in the case of a covered call option, be offset by a decline in the market value of the underlying security during the option period. The writer of an exchange-traded call option that wishes to terminate its obligation may effect a "closing purchase transaction." This is accomplished by buying an option of the same series as the option previously written. The effect of the purchase is that the writer's position will be cancelled by the clearing corporation. If the Fund desires to sell a particular security from the Fund's portfolio on which the Fund has written a call option, the Fund will effect a closing transaction prior to or concurrent with the sale of the security. However, a writer may not effect a closing purchase transaction after being notified of the exercise of an option. An investor who is the holder of an exchange-traded option may liquidate its position by effecting a "closing sale transaction." This is accomplished by selling an option of the same series as the option previously bought. There is no guarantee that either a closing purchase or a closing sale transaction can be effected. The Fund will realize a profit from a closing transaction if the price of the purchase transaction is less than the premium received from writing the option or the price received from a sale transaction is more than the premium paid to buy the option; the Fund will realize a loss from a closing transaction if the price of the purchase transaction is more than the premium received from writing the option or the price received from a sale transaction is less than the premium paid to buy the option. Because increases in the market price of a call option will generally reflect increases in the market price of the underlying security, any loss resulting from the repurchase of a call option is likely to be offset in whole or in part by appreciation of the underlying security owned by the Fund. -5- An option position may be closed out only where there exists a secondary market for an option of the same series. If a secondary market does not exist, it might not be possible to effect closing transactions in particular options with the result that the Fund would have to exercise the options in order to realize any profit. If the Fund is unable to effect a closing purchase transaction in a secondary market, it will not be able to sell the underlying security until the option expires or the Fund delivers the underlying security upon exercise. Reasons for the absence of a liquid secondary market may include the following: (i) there may be insufficient trading interest in certain options, (ii) restrictions may be imposed by a national securities exchange on which the option is traded ("Exchange") on opening or closing transactions or both, (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of options or underlying securities, (iv) unusual or unforeseen circumstances may interrupt normal operations on an Exchange, (v) the facilities of an Exchange or of the Options Clearing Corporation ("OCC") may not at all times be adequate to handle current trading volume, or (vi) one or more Exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of options (or a particular class or series of options), in which event the secondary market on that Exchange (or in that class or series of options) would cease to exist, although outstanding options on that Exchange that had been issued by the OCC as a result of trades on that Exchange would continue to be exercisable in accordance with their terms. In addition, when the Fund enters into an over-the-counter option contract with a counterparty, the Fund assumes counterparty credit risk, that is, the risk that the counterparty will fail to perform its obligations, in which case the Fund could be worse off than if the contract had not been entered into. An option on a securities index is similar to an option on a security except that, rather than the right to take or make delivery of a security at a specified price, an option on a securities index gives the holder the right to receive, on exercise of the option, an amount of cash if the closing level of the securities index on which the option is based is greater than, in the case of a call, or less than, in the case of a put, the exercise price of the option. The Fund may buy call options on securities or securities indices to hedge against an increase in the price of a security or securities that the Fund may buy in the future. The premium paid for the call option plus any transaction costs will reduce the benefit, if any, realized by the Fund upon exercise of the option, and, unless the price of the underlying security or index rises sufficiently, the option may expire and become worthless to the Fund. The Fund may buy put options to hedge against a decline in the value of a security or its portfolio. The premium paid for the put option plus any transaction costs will reduce the benefit, if any, realized by the Fund upon exercise of the option, and, unless -6- the price of the underlying security or index declines sufficiently, the option may expire and become worthless to the Fund. An example of a hedging transaction using an index option would be if the Fund were to purchase a put on a stock index, in order to protect the Fund against a decline in the value of all securities held by it to the extent that the stock index moves in a similar pattern to the prices of the securities held. While the correlation between stock indices and price movements of the stocks in which the Fund will generally invest may be imperfect, the Fund expects, nonetheless, that the use of put options that relate to such indices will, in certain circumstances, protect against declines in values of specific portfolio securities or the Fund's portfolio generally. Although the purchase of a put option may partially protect the Fund from a decline in the value of a particular security or its portfolio generally, the cost of a put will reduce the potential return on the security or the portfolio. PORTFOLIO TURNOVER. The portfolio turnover rates of the Fund are shown in the Financial Highlights table in Section 2 of the Prospectus. The annual portfolio turnover rates of the Fund have exceeded 100%. A 100% annual turnover rate results, for example, if the equivalent of all of the securities in the Fund's portfolio are replaced in a period of one year. A 100% turnover rate is higher than the turnover rate experienced by most mutual funds. The Fund anticipates that its portfolio turnover rates in future years may exceed 100%, and investment changes will be made whenever management deems them appropriate even if this results in a higher portfolio turnover rate. In addition, portfolio turnover may increase as a result of large amounts of purchases and redemptions of shares of the Fund due to economic, market or other factors that are not within the control of management. Increased portfolio turnover would necessarily result in correspondingly higher brokerage costs for the Fund. The existence of a high portfolio turnover rate has no direct relationship to the tax liability of the Fund, although sales of certain stocks will lead to realization of gains, and, possibly, increased taxable distributions. The Fund's brokerage policy is discussed further under Section 6 Brokerage Policy, and additional information concerning income taxes is located under Section 15 Income Dividends, Capital Gains Distributions and Tax Treatment. 2. Investment Restrictions _______________________ The Fund has adopted the following fundamental restrictions on its investments and other activities, and none of these restrictions may be changed without the approval of (i) 67% or more of the voting securities of the Fund present at a meeting of shareholders thereof if the holders of more than 50% of the outstanding voting securities are present or represented by proxy, or (ii) more than 50% of the outstanding voting securities of the Fund. The Fund may not: -7- (1) Issue senior securities as defined in the Investment Company Act of 1940; (2) Invest in companies for the purpose of acquiring control or management thereof; (3) Invest or hold securities of any issuer if the officers and trustees of the Fund and its advisor own individually more than one-half (1/2) of 1% of the securities of such issuer or together own more than 5% of the securities of such issuer; (4) Invest in other investment companies, except in connection with a plan of merger, consolidation, reorganization or acquisition of assets, or in the open market involving no commission or profit to a sponsor or dealer (other than a customary broker's commission); (5) Participate on a joint or joint and several basis in any trading account in securities; (6) Purchase securities of any company with a record of less than three (3) years continuous operation (including that of predecessors) if such purchase would cause the cost of the Fund's investments in all such companies to exceed 5% of the Fund's total assets; (7) Invest in securities (except those of the U.S. government or its agencies) of any issuer if immediately thereafter the Fund would then own more than 10% of that issuer's voting securities; (8) Loan cash or portfolio securities, except in connection with the acquisition of debt securities which the Fund's investment policies and restrictions permit it to purchase; (9) Borrow money in excess of 5% of the value of its assets and, then, only as a temporary measure for extraordinary or emergency purposes; (10) Pledge, mortgage or hypothecate any of its assets to secure a debt; (11) Purchase or sell real estate or any other interests in real estate (including real estate limited partnership interests); (12) Purchase securities on margin or sell short; (13) Invest in commodities or commodity contracts; (14) Act as an underwriter of securities of other issuers or invest in portfolio securities which the Fund might not be free to sell to the public without registration of such securities under the Securities Act of 1933 ("Restricted Securities"); -8- (15) Invest more than 10% of the value of its net assets in illiquid securities, including Restricted Securities, securities which are not readily marketable, repurchase agreements maturing in more than seven (7) days, written over-the-counter ("OTC") options and securities used as cover for written OTC options; (16) Invest in oil, gas or mineral leases; (17) Invest more than 5% of the value of its net assets in warrants or more than 2% of its net assets in warrants that are not listed on the New York Stock Exchange, the American Stock Exchange, or the NASDAQ National Market System; (18) Invest more than 25% of the value of its assets, at the time of purchase, in securities of companies principally engaged in a particular industry, although the Fund may as a temporary defensive measure invest up to 100% of its total assets in obligations issued or guaranteed by the U.S. government or its agencies; or (19) With respect to 75% of the Fund's total assets, purchase the securities of any one issuer (except U.S. government securities) if immediately after and as a result of such purchase (a) the value of the holdings of the Fund in the securities of such issuer exceeds 5% of the value of the Fund's total assets or (b) the Fund owns more than 10% of the outstanding voting securities of such issuer. In applying the Fund's industry concentration restriction (number (18) above), the Fund uses the industry groups used in the Data Monitor Portfolio Monitoring System of William O'Neil & Co. Incorporated. The trustees have adopted additional non-fundamental investment restrictions for the Fund. These limitations may be changed by the trustees without a shareholder vote. The non-fundamental investment restrictions include the following: (1) Only for the purpose of hedging, the Fund may purchase and sell put and call options, but no more than 5% of the Fund's net assets at the time of purchase may be invested in premiums for options. The Fund may only write call options that are covered and only up to 10% of the Fund's total assets. (2) The Fund may not purchase or sell securities on a when- issued or delayed delivery basis, if as a result more than 5% of its total assets taken at market value at the time of purchase would be invested in such securities. Investment restrictions that involve a maximum percentage of securities or assets will not be considered to be violated unless an excess over the percentage occurs immediately after, and is caused by, an acquisition or encumbrance of securities or assets of the Fund. -9- 3. Management of the Fund ______________________ The trustees and executive officers of the Fund are listed below, together with information which includes their principal occupations during the past five years and other principal business affiliations. * GERARD M. LAVIN, 210 University Boulevard, Suite 900, Denver, CO 80206, age 54. President and a trustee of Berger Omni Investment Trust since February 1997. President and a trustee of Berger/BIAM Worldwide Portfolios Trust and Berger/BIAM Worldwide Funds Trust since their inception in May 1996. President and a trustee of Berger Institutional Products Trust since its inception in October 1995. President and a director since April 1995 of Berger Associates, Inc. Member and Chairman of the Board of Managers and Chief Executive Officer on the Management Committee of BBOI Worldwide LLC since November 1996. A Vice President of DST Systems, Inc. (data processing) since July 1995. Director of First of Michigan Capital Corp. (holding company) and First of Michigan Corp. (broker-dealer) since March 1995. Formerly President and Chief Executive Officer of Investors Fiduciary Trust Company (banking) from February 1992 to March 1995 and Chief Operating Officer of SunAmerica Asset Management Co. (money management) from January 1990 to February 1992. DENNIS E. BALDWIN, 3481 South Race Street, Englewood, CO 80110, age 68. President, Baldwin Financial Counseling. Formerly (1978-1990), Vice President and Denver Office Manager of Merrill Lynch Capital Markets. Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. * WILLIAM M. B. BERGER, 210 University Boulevard, Suite 900, Denver, CO 80206, age 71. Director and, formerly, President (1974-1994) of Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio Trust since its inception in August 1993 (Chairman of the Trustees through November 1994). Trustee of Berger Institutional Products Trust since its inception in October 1995. Trustee of Berger/BIAM Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios Trust since their inception in May 1996. Trustee of Berger Omni Investment Trust since February 1997. Chairman (since 1994) and a Director (since 1973) and, formerly, President (1973-1994) of Berger Associates. LOUIS R. BINDNER, 1075 South Fox, Denver, CO 80223, age 71. President, Climate Engineering, Inc. (building environmental systems). Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide -10- Funds Trust, Berger/BIAM WorldwidePortfolios Trust and Berger Omni Investment Trust. KATHERINE A. CATTANACH, 384 South Ogden, Denver, CO 80209, age 51. Managing Principal, Sovereign Financial Services, L.L.C. (investment consulting firm). Formerly (1981-1988), Executive Vice President, Captiva Corporation, Denver, Colorado (private investment management firm). Ph.D. in Finance (Arizona State University); Chartered Financial Analyst (CFA). Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. LUCY BLACK CREIGHTON, 1917 Leyden Street, Denver, CO 80220, age 69. Associate, University College, University of Denver. Formerly, President of the Colorado State Board of Land Commissioners (1989-1995), and Vice President and Economist (1983-1988) and Consulting Economist (1989) for First Interstate Bank of Denver. Ph.D. in Economics (Harvard University). Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. PAUL R. KNAPP, 33 North LaSalle Street, Suite 1920, Chicago, IL 60602, age 51. Since 1991, Director, Chairman, President and Chief Executive Officer of Catalyst Institute (international public policy research organization focused primarily on financial markets and institutions) and Catalyst Consulting (international financial institutions business consulting firm). Formerly (1988-1991), Director, President and Chief Executive Officer of Kessler Asher Group (brokerage, clearing and trading firm). Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. HARRY T. LEWIS, JR., 370 17th Street, Suite 3560, Denver, CO 80202, age 64. Self-employed as a private investor. Formerly (1981-1988), Senior Vice President, Rocky Mountain Region, of Dain Bosworth Incorporated and member of that firm's Management Committee. Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. MICHAEL OWEN, 412 Reid Hall, Montana State University, Bozeman, MT 59717, age 59. Since 1994, Dean, and from 1989 to 1994, a member of the Finance faculty, of the College of Business, -11- Montana State University. Self-employed as a financial and management consultant, and in real estate development. Formerly (1976-1989), Chairman and Chief Executive Officer of Royal Gold, Inc. (mining). Chairman of the Board of Berger 100 Fund and Berger Growth and Income Fund. Chairman of the Trustees of Berger Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. WILLIAM SINCLAIRE, 3049 S. Perry Park Road, Sedalia, CO 80135, age 68. President, Sinclaire Cattle Co., and private investor. Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. * CRAIG D. CLOYED, 210 University Boulevard, Suite 900, Denver, CO 80206, age 50. Vice President of Berger/BIAM Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios Trust since their inception in May 1996. Vice President of Berger Omni Investment Trust since February 1997. Also, Vice President and Chief Marketing Officer of Berger Associates, Inc., since August 1995, and President, CEO and a director of Berger Distributors, Inc., since its inception in May 1996. Formerly (September 1989 to August 1995), Senior Vice President of INVESCO Funds Group (mutual funds). * KEVIN R. FAY, 210 University Boulevard, Suite 900, Denver, CO 80206, age 41. Vice President, Secretary and Treasurer of Berger 100 Fund and Berger Growth and Income Fund since October 1991, of Berger Investment Portfolio Trust since its inception in August 1993, of Berger Institutional Products Trust since its inception in October 1995, of Berger/BIAM Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios Trust since their inception in May 1996, and of Berger Omni Investment Trust since February 1997. Also, Vice President- Finance and Administration, Secretary and Treasurer of Berger Associates since September 1991 and a director of Berger Distributors, Inc., since its inception in May 1996. Formerly, Financial Consultant (registered representative) with Neidiger Tucker Bruner, Inc. (broker-dealer) (October 1989 to September 1991) and Financial Consultant with Merrill Lynch, Pierce, Fenner & Smith, Inc. (October 1985 to October 1989). ________________ * Interested person (as defined in the Investment Company Act of 1940) of the Fund and of the Fund's Advisor or Sub-Advisor. The trustees of the Fund have adopted a trustee retirement age of 75 years. -12- TRUSTEE COMPENSATION The officers of the Fund received no compensation from the Fund during the fiscal year ended December 31, 1996. Each non-interested trustee of the Fund received $300 per Board meeting attended. During the fiscal year ended December 31, 1996, the Fund paid aggregate fees to its non-interested trustees of $______. Effective February 14, 1997, the trustees shown in the table below, who also act as trustees of other Berger Funds, became the trustees of the Fund with shareholder approval. As the Fund's new trustees, those who are not interested persons of the Advisor or the Sub-Advisor are compensated for their services according to a fee schedule, allocated among the Berger Funds, which includes an annual fee component and a per meeting fee component. Neither the officers of the Fund nor the trustees receive any form of pension or retirement benefit compensation from the Fund. Set forth below is information regarding compensation paid or accrued during the year ended December 31, 1996, for each current trustee of the Fund as a director or trustee of other Berger Funds. -13- NAME AND POSITION AGGREGATE AGGREGATE WITH BERGER FUNDS COMPENSATION FROM COMPENSATION(1) THE FUND FROM ALL BERGER FUNDS(2) Dennis E. Baldwin(3) $0* $_____ William M.B. Berger(3),(5) $0* $ 0 Louis R. Bindner(3) $0* $_____ Katherine A. Cattanach(3) $0* $_____ Lucy Black Creighton(3) $0* $_____ Paul R. Knapp(3) $0* $_____ Gerard M. Lavin(4),(5) $0* $ 0 Harry T. Lewis(3) $0* $_____ Michael Owen(3) $0* $_____ William Sinclaire(3) $0* $_____ * The persons named above were elected as trustees of the Fund effective February 14, 1997, and accordingly did not receive any compensation from the Fund during the fiscal year ended December 31, 1996. The Fund's former trustees who were not interested persons of the Fund received during that fiscal year the following trustee compensation: Burt W. Engelberg: $__________; John R. Hall $__________; Keith L. Cook $________________. (1) Directors/trustees who are not interested persons of Berger Associates received as a group compensation from the Berger Funds of approximately $__________ for the year ended December 31, 1996. Of the aggregate amounts shown for each trustee, the following amounts were deferred under applicable deferred compensation plans: Dennis E. Baldwin $_______; Louis R. Bindner $____________; Katherine A. Cattanach $_____________; Lucy Black Creighton $___________; Paul R. Knapp $____________; Harry T. Lewis $______________; Michael Owen $_____________; William Sinclaire $______________. (2) Includes Berger 100 Fund, Berger Growth and Income Fund, Berger Investment Portfolio Trust (two funds), Berger Institutional Products Trust (three funds), Berger/BIAM Worldwide Portfolios Trust and Berger/BIAM Worldwide Funds Trust (three funds). Berger Omni Investment Trust (one fund) was added to the Berger Funds complex in February 1997. (3) Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. (4) Trustee of Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. (5) Interested person of the Fund or the Fund's Advisor or Sub- Advisor. -14- Trustees may elect to defer receipt of all or a portion of their fees pursuant to a fee deferral plan adopted by certain of the Berger Funds. Under the plan, deferred fees are credited to an account and adjusted thereafter to reflect the investment experience of whichever of the Berger Funds (or approved money market funds) is designated by the trustee for this purpose. Pursuant to an SEC exemptive order, those Berger Funds that have adopted the plan are permitted to purchase shares of the designated funds in order to offset their obligation to the trustees participating in the plan. Purchases made pursuant to the plan are excepted from any otherwise applicable investment restriction limiting the purchase of securities of any other investment company. The obligation of a Berger Fund to make payments of deferred fees under the plan is a general obligation of that fund. As of the date of this Statement of Additional Information, the current officers and trustees of the Fund as a group owned of record or beneficially less than 1% of the outstanding shares of the Fund. 4. Investment Advisor __________________ INVESTMENT ADVISOR The investment advisor to the Fund is Berger Associates, Inc. (the "Advisor" or "Berger Associates"), 210 University Boulevard, Suite 900, Denver, CO 80206. Berger Associates became the Fund's investment advisor on February 14, 1997, following shareholder approval of a new Investment Advisory Agreement between the Fund and the Advisor. The Advisor is responsible for managing the investment operations of the Fund and the composition of its investment portfolio. The Advisor is permitted to engage a sub-advisor for the Fund. The Advisor also acts as the Fund's administrator and is responsible for such functions as monitoring the Fund's compliance with all applicable federal and state laws. The Advisor has been in the investment advisory business for over 20 years. It serves as investment advisor or sub-advisor to mutual funds, pension and profit-sharing plans, and institutional and private investors, and has assets under management of more than $3.6 billion as of September 30, 1996. Kansas City Southern Industries, Inc. ("KCSI") owns approximately 80% of the outstanding shares of the Advisor. KCSI is a publicly traded holding company with principal operations in rail transportation, through its subsidiary The Kansas City Southern Railway Company, and financial asset management businesses. KCSI also owns approximately 41% of the outstanding shares of DST Systems, Inc. ("DST"), a publicly traded information and transaction processing company which acts as the Fund's sub-transfer agent. -15- THE SUB-ADVISOR Perkins, Wolf, McDonnell & Company (the "Sub-Advisor" or "PWM"), 53 West Jackson Boulevard, Suite 818, Chicago, Illinois 60604, has been engaged as the Fund's investment sub-advisor. The Sub-Advisor was organized in 1980 under the name Mac-Per-Wolf Co. to operate as a securities broker-dealer. In September 1983, it changed its name to Perkins, Wolf, McDonnell & Company. The Sub-Advisor is a member of the National Association of Securities Dealers, Inc. (the "NASD") and, in 1984, became registered as an investment adviser with the SEC. PWM was the Fund's investment advisor from the date the Fund commenced operations in 1985 to February 1997. PWM became the investment sub-advisor to the Fund on February 14, 1997, following shareholder approval of a new Sub-Advisory Agreement between the Advisor and the Sub-Advisor. Robert H. Perkins is the individual who is primarily responsible for the day-to-day management of the Fund's portfolio. Mr. Perkins has held such responsibility and has been employed by the Sub-Advisor since the Fund commenced operations in 1985. Mr. Perkins owns 49% of the Sub-Advisor's outstanding common stock and serves as Secretary and a director of the Sub-Advisor. Gregory E. Wolf owns 20% of the Sub- Advisor's outstanding common stock and serves as President and a director of the Sub-Advisor. INVESTMENT ADVISORY AGREEMENT AND SUB-ADVISORY AGREEMENT Under the Investment Advisory Agreement between the Advisor and the Fund, the Advisor is responsible for managing the investment operations of the Fund and the composition of its investment portfolio. Under the Investment Advisory Agreement, the Advisor is compensated for its services to the Fund by the payment of a fee at the annual rate of 0.90% of the average daily net assets of the Fund. The Investment Advisory Agreement will continue in effect until April 1998, and thereafter from year to year if such continuation is specifically approved at least annually by the trustees or by vote of a majority of the outstanding shares of the Fund and in either case by vote of a majority of the trustees of the Fund who are not "interested persons" (as that term is defined in the Investment Company Act of 1940) of the Fund or the Advisor or Sub-Advisor. The Agreement is subject to termination by the Fund or the Advisor on 60 days' written notice, and terminates automatically in the event of its assignment. Under the Sub-Advisory Agreement between the Advisor and the Sub- Advisor, the Sub-Advisor is responsible for day-to-day portfolio management of the Fund. The Sub-Advisor manages the investments in the Fund and determines what securities and other investments will be acquired, held or disposed of, consistent with the investment objective and policies established by the trustees -16- of the Fund. The Fund pays no fees directly to the Sub-Advisor. The Sub-Advisor will receive from the Advisor a fee at the annual rate of 0.90% of the first $75 million of average daily net asset of the Fund, 0.50% of the next $125 million, and 0.20% of any amounts in excess of $200 million. The Sub-Advisory Agreement will continue in effect until April 1998, and thereafter from year to year if such continuation is specifically approved at least annually by the trustees or by vote of a majority of the outstanding shares of the Fund and in either case by vote of a majority of the trustees of the Fund who are not "interested persons" (as that term is defined in the Investment Company Act of 1940) of the Fund or the Advisor or the Sub-Advisor. The Sub-Advisory Agreement is subject to termination by the Fund or the Sub-Advisor on 60 days' written notice, and terminates automatically in the event of its assignment and in the event of termination of the Investment Advisory Agreement. OTHER ARRANGEMENTS BETWEEN THE ADVISOR AND SUB-ADVISOR The Advisor and Sub-Advisor entered into an Agreement, dated November 18, 1996 (the "November 18 Agreement"), under which, among other things, the Sub-Advisor agreed that, so long as Berger acts as the Fund's Advisor and PWM provides sub-advisory or other services in connection with the Fund, the Sub-Advisor will not manage or provide advisory services to any registered investment company that is in direct competition with the Fund. The November 18 Agreement also provides that at the end of the first five years under the Sub-Advisory Agreement (or at such earlier time if the Sub-Advisory Agreement is terminated or not renewed by the trustees other than for cause), Berger and PWM will enter into a consulting agreement for PWM to provide consulting services to Berger with respect to the Fund, subject to any requisite approvals under the Investment Company Act of 1940. Under the Consulting Agreement, PWM would provide training and assistance to Berger analysts and marketing support appropriate to the Fund and would be paid a fee at an annual rate of 0.10% of the first $100 million of average daily net assets of the Fund, 0.05% of the next $100 million and 0.02% on any part in excess of $200 million. No part of the consulting fee would be borne by the Fund. Berger and PWM have further agreed under the November 18 Agreement that if the Fund's assets do not reach $100 million at any time during the first five years after Berger becomes the Fund's advisor, Berger will use its reasonable best efforts, consistent with the fiduciary obligations of all parties, together with PWM, to obtain the required approvals of a new advisory agreement between PWM and the Trust for the Fund. TRADE ALLOCATIONS Investment decisions for the Fund and other accounts advised by the Advisor are made independently with a view to -17- achieving each of their respective investment objectives and after consideration of such factors as their current holdings, availability of cash for investment and the size of their investments generally. However, certain investments may be appropriate for the Fund and one or more such accounts. If the Fund and other accounts advised by the Advisor are contemporaneously engaged in the purchase or sale of the same security, the orders may be aggregated and/or the transactions averaged as to price and allocated equitably to the Fund and each participating account. While in some cases, this policy might adversely affect the price paid or received by the Fund or other participating accounts, or the size of the position obtained or liquidated, the Advisor will aggregate orders if it believes that coordination of orders and the ability to participate in volume transactions will result in the best overall combination of net price and execution. RESTRICTIONS ON PERSONAL TRADING Berger Associates permits its directors, officers, employees and other access persons (as defined below) of Berger Associates ("covered persons") to purchase and sell securities for their own accounts in accordance with provisions governing personal investing in Berger Associates' Code of Ethics. The Code requires all covered persons to conduct their personal securities transactions in a manner which does not operate adversely to the interests of the Fund or Berger Associates' other advisory clients. Directors and officers of Berger Associates (including those who also serve as trustees of the Fund), investment personnel and other designated covered persons deemed to have access to current trading information ("access persons") are required to pre-clear all transactions in securities not otherwise exempt under the Code. Requests for authority to trade will be denied pre-clearance when, among other reasons, the proposed personal transaction would be contrary to the provisions of the Code or would be deemed to adversely affect any transaction then known to be under consideration for or currently being effected on behalf of any client account, including the Fund. In addition to the pre-clearance requirements described above, the Code subjects those covered persons deemed to be access persons to various trading restrictions and reporting obligations. All reportable transactions are reviewed for compliance with Berger Associates' Code. Those covered persons also may be required under certain circumstances to forfeit their profits made from personal trading. The Code is administered by Berger Associates and the provisions of the Code are subject to interpretation by and exceptions authorized by its board of directors. The Sub-Advisor has also adopted a Code of Ethics which permits investment and other personnel to purchase and sell securities for their own accounts, subject to restrictions set forth in its Code. In addition, during a two-day "blackout" period prior to a securities trade by the Fund, the Code prohibits -18- securities trades by directors, officers and employees in securities which the Fund proposes to buy or sell. Further, the Code requires investment and other personnel to at all times conduct their personal investment activities in a manner which places the interest of the Fund and its shareholders first. 5. Expenses of the Fund ____________________ Under the Investment Advisory Agreement, the Fund has agreed to compensate Berger Associates for its investment advisory services to the Fund by the payment of a fee at the annual rate of .90 of 1% (0.90%) of the average daily net assets of the Fund. The fee is accrued daily and payable monthly. This fee may be higher than that paid by most other mutual funds. The Fund pays all of its expenses not assumed by Berger Associates, which normally would include, but not be limited to, investment advisor fees, custodian and transfer agent fees, legal and accounting expenses, administrative and record keeping expenses, interest charges, federal and state taxes, costs of share certificates, expenses of shareholders' meetings, compensation of trustees who are not interested persons of Berger Associates, expenses of printing and distributing reports to shareholders and federal and state administrative agencies, and all expenses incurred in connection with the execution of its portfolio transactions, including brokerage commissions on purchases and sales of portfolio securities, which are considered a cost of securities of the Fund. The Fund also pays all expenses incurred in complying with all federal and state laws and the laws of any foreign country applicable to the issue, offer or sale of shares of the Fund, including, but not limited to, all costs involved in preparing and printing prospectuses for shareholders of the Fund. The Fund has adopted a 12b-1 plan (the "Plan") for the Investor Shares pursuant to Rule 12b-1 under the Investment Company Act of 1940, which provides for the payment to Berger Associates of a 12b-1 fee of .25 of 1% (0.25%) per annum of the Fund's average daily net assets represented by the Investor Shares to finance activities primarily intended to result in the sale of Investor Shares. The expenses paid by Berger Associates may include payments made to the Fund's distributor in connection with the distribution of the Investor Shares, costs of preparing, printing and mailing prospectuses to other than existing shareholders, as well as promotional expenses directed at increasing the sale of Investor Shares. The 12b-1 Plan for the Investor Shares came into effect on February 14, 1997, when the Fund commenced offering the Investor Shares. A further discussion of the Plan is contained in Section 8 of the Prospectus. The Fund has appointed Investors Fiduciary Trust Company ("IFTC") as its recordkeeping and pricing agent. In addition, IFTC also serves as the Fund's custodian, transfer agent and dividend -19- disbursing agent. IFTC has engaged DST as sub-agent to provide transfer agency and dividend disbursing services for the Fund. As noted in the previous section, approximately 41% of the outstanding shares of DST are owned by KCSI. The addresses and telephone numbers for DST set forth in the Prospectus and this Statement of Additional Information should be used for correspondence with the transfer agent. As recordkeeping and pricing agent, IFTC calculates the daily net asset value of the Fund and performs certain accounting and recordkeeping functions required by the Fund. The Fund pays IFTC a monthly base fee plus an asset-based fee. IFTC is also reimbursed for certain out-of-pocket expenses. IFTC, as custodian, and its subcustodians have custody and provide for the safekeeping of the Fund's securities and cash, and receive and remit the income thereon as directed by the management of the Fund. The custodian and subcustodians do not perform any managerial or policy-making functions for the Fund. For its services as custodian, IFTC receives an asset-based fee plus certain transaction fees and out-of-pocket expenses. Under the Custodian Agreement in effect for the Fund until January 1, 1997, PWM, the Fund's then investment advisor, acted as the Fund's custodian and was not compensated under that Agreement other than by the reimbursement of its costs in providing such services. As transfer agent and dividend disbursing agent, IFTC (through DST, as sub-agent) maintains all shareholder accounts of record; assists in mailing all reports, proxies and other information to the Fund's shareholders; calculates the amount of, and delivers to the Fund's shareholders, proceeds representing all dividends and distributions; and performs other related services. For these services, IFTC receives a fee from the Fund at an annual rate of $15.65 per open Fund shareholder account, subject to scheduled increases, plus certain transaction fees and fees for closed accounts, and is reimbursed for out-of-pocket expenses, which fees in turn are passed through to DST as sub-agent. All of IFTC's fees are subject to reduction pursuant to an agreed upon formula for certain earnings credits on the cash balances of the Fund. The trustees of the Fund have authorized Berger Associates to place portfolio transactions on an agency basis through DST Securities, Inc. ("DSTS"), a wholly-owned broker-dealer subsidiary of DST. When transactions are effected through DSTS, the commission received by DSTS is credited against, and thereby reduces, certain operating expenses that the Fund would otherwise be obligated to pay. No portion of the commission is retained by DSTS. See Section 6 Brokerage Policy for further information. The Fund and Berger Associates have entered into arrangements with certain organizations (broker-dealers, recordkeepers and administrators) to provide sub-transfer agency, recordkeeping, shareholder communications, sub-accounting and/or -20- other services to investors purchasing shares of the Fund through investment programs or pension plans established or serviced by those organizations. The Fund and/or Berger Associates may pay fees to these organizations for their services. Any such fees paid by the Fund will be for services that otherwise would be provided or paid for by the Fund if all the investors who own Fund shares through these organizations were registered record holders of shares in the Fund. In addition, under a separate Administrative Services Agreement with respect to the Fund, Berger Associates performs certain administrative and recordkeeping services not otherwise performed by IFTC, including the preparation of financial statements and reports to be filed with the Securities and Exchange Commission and state regulatory authorities. The Fund pays Berger Associates a fee at an annual rate of 1/100 of 1% (0.01%) of its average daily net assets for such services. Those fees are in addition to the investment advisory fees paid under the Investment Advisory Agreement. The administrative services fees may be changed by the trustees without shareholder approval. The following table shows the cost to the Fund of the previously applicable advisory fee for the last three fiscal years. For the fiscal years shown, all amounts were paid to PWM, the Fund's then investment advisor, now the Fund's Sub-Advisor. Fiscal Year Ended Advisory December 31, Fee(1) ________________ ___________ 1994 $ 168,271 1995 275,236 1996 _________ ____________________ (1) Under the Investment Advisory Agreement in effect until February 14, 1997, the Fund paid an advisory fee at an annual rate of 1.00% of the Fund's average daily net assets. Distributor ___________ The distributor (principal underwriter) of the Fund's shares is Berger Distributors, Inc. (the "Distributor"), 210 University Blvd., Suite 900, Denver, CO 80206. The Distributor may be reimbursed by Berger Associates for its costs in distributing Investor Shares. 6. Brokerage Policy ________________ Although the Fund retains full control over its own investment policies, under the terms of its Investment Advisory Agreement, Berger Associates is directed to place the portfolio transactions of the Fund. Berger Associates is required to report on the placement of brokerage business to the trustees of the Fund -21- every quarter, indicating the brokers with whom Fund portfolio business was placed and the basis for such placement. Under the Investment Advisory Agreement in effect until February 14, 1997, the advisor was permitted to place the Fund's brokerage with affiliated brokers, subject to adhering to certain procedures adopted by the trustees and subject to obtaining prompt execution or orders at the most favorable net price. All brokerage commissions paid by the Fund during the most recent three fiscal years were paid to PWM, then the Fund's advisor, now the Fund's Sub-Advisor, which is also a registered broker-dealer. The amounts paid were as follows: BROKERAGE COMMISSIONS _____________________ Fiscal Year Ended December 31 Paid to PWM 1996 $____________ 1995 $ 342,121 1994 $ 229,459 The Investment Advisory Agreement in effect since February 14, 1997, between the Fund and Berger Associates authorizes and directs Berger Associates to place portfolio transactions for the Fund only with brokers and dealers who render satisfactory service in the execution of orders at the most favorable prices and at reasonable commission rates. However, the Agreement specifically authorizes Berger Associates to place such transactions with a broker with whom it has negotiated a commission that is in excess of the commission another broker or dealer would have charged for effecting that transaction if Berger Associates determines in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such broker viewed in terms of either that particular transaction or the overall responsibilities of Berger Associates. In accordance with this provision of the Agreement, Berger Associates places portfolio brokerage business of the Fund with brokers who provide useful research services to Berger Associates. Such research services typically consist of studies made by investment analysts or economists relating either to the past record of and future outlook for companies and the industries in which they operate, or to national and worldwide economic conditions, monetary conditions and trends in investors' sentiment, and the relationship of these factors to the securities market. In addition, such analysts may be available for regular consultation so that Berger Associates may be apprised of current developments in the above-mentioned factors. -22- The research services received from brokers are often helpful to Berger Associates in performing its investment advisory responsi- bilities to the Fund, but they are not essential, and the availability of such services from brokers does not reduce the responsibility of Berger Associates' advisory personnel to analyze and evaluate the securities in which the Fund invests. The research services obtained as a result of the Fund's brokerage business also will be useful to Berger Associates in making investment decisions for its other advisory accounts, and, conversely, information obtained by reason of placement of brokerage business of such other accounts may be used by Berger Associates in rendering investment advice to the Fund. Although such research services may be deemed to be of value to Berger Associates, they are not expected to decrease the expenses that Berger Associates would otherwise incur in performing its investment advisory services for the Fund nor will the advisory fees that are received by Berger Associates from the Fund be reduced as a result of the availability of such research services from brokers. The trustees of the Fund have authorized Berger Associates to place portfolio transactions on an agency basis through DSTS, a wholly-owned broker-dealer subsidiary of DST. When transactions are effected through DSTS, the commission received by DSTS is credited against, and thereby reduces, certain operating expenses that the Fund would otherwise be obligated to pay. No portion of the commission is retained by DSTS. To date, the trustees have not authorized Berger Associates to place the Fund's brokerage with any other broker or dealer affiliated with Berger Associates or the Sub-Advisor. 7. How To Purchase Shares In the Fund __________________________________ Minimum Initial Investment $2,000.00 Minimum Subsequent Investment $ 50.00 To purchase shares in the Fund, simply complete the application form enclosed with the Prospectus. Then mail it with a check payable to "Berger Funds" to the Fund in care of DST Systems, Inc., the Fund's sub-transfer agent, as follows: Berger Funds c/o DST Systems, Inc. P.O. Box 419958 Kansas City, MO 64141 If a shareholder is adding to an existing account, shares may also be purchased by placing an order by telephone call to the Fund at 1-800-551-5849 or via personal computer through on-line service providers or other on-line access points approved by the Fund, and remitting payment to DST Systems, Inc. Payment for shares ordered on- line must be made by electronic funds transfer. In order to make sure that payment for telephone purchases is received on time, shareholders are encouraged to remit payment by -23- electronic funds transfer. Shareholders may also remit payment by wire or by overnight delivery. In addition, Fund shares may be purchased through certain broker- dealers that have established mutual fund programs and certain other organizations connected with pension and retirement plans. These broker-dealers and other organizations may charge investors a transaction or other fee for their services, may require different minimum initial and subsequent investments than the Fund and may impose other charges or restrictions different from those applicable to shareholders who invest in the Fund directly. Fees charged by these organizations will have the effect of reducing a shareholder's total return on an investment in Fund shares. No such charge will be paid by an investor who purchases the Fund shares directly from the Fund as described above. 8. How The Net Asset Value Is Determined _____________________________________ The net asset value of the Fund is determined once daily, at the close of the regular trading session of the New York Stock Exchange (the "Exchange") (normally 4:00 p.m., New York time, Monday through Friday) each day that the Exchange is open. The Exchange is closed and the net asset value of the Fund is not determined on weekends and on New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day each year. The per share net asset value of the Investor Shares is determined by dividing the Investor Shares' pro rata portion of the total value of the Fund's securities and other assets, less the Investor Shares' pro rata portion of the Fund's liabilities and the liabilities attributable to the Investor Shares, by the total number of Investor Shares outstanding. In determining net asset value, securities listed or traded primarily on national exchanges, The Nasdaq Stock Market and foreign exchanges are valued at the last sale price on such markets, or, if such a price is lacking for the trading period immediately preceding the time of determination, such securities are valued at the mean of their current bid and asked prices. Securities that are traded in the over-the-counter market are valued at the mean between their current bid and asked prices. The market value of individual securities held by the Fund will be determined by using prices provided by pricing services which provide market prices to other mutual funds or, as needed, by obtaining market quotations from independent broker/dealers. Short-term money market securities maturing within 60 days are valued on the amortized cost basis, which approximates market value. All assets and liabilities initially expressed in terms of non-U.S. dollar currencies are translated into U.S. dollars at the prevailing market rates as quoted by one or more banks or dealers shortly before the close of the Exchange. Securities and assets for which quotations are not readily available are valued at fair values determined in good faith pursuant to consistently applied procedures established by the trustees. -24- 9. Income Dividends, Capital Gains Distributions and Tax Treatment _______________________________ It is the policy of the Fund to meet the requirements of Subchapter M of the Internal Revenue Code and to distribute to its investors all or substantially all of its taxable income as defined in the Code. The Fund met the requirements for the last fiscal year end, and intends to meet them in the future. If the Fund meets the Subchapter M requirements, it generally is not liable for Federal income taxes to the extent its earnings are distributed. Qualification as a regulated investment company under the Internal Revenue Code does not, however, involve any federal supervision of management or of the investment practices or policies of the Fund. If the Fund distributes annually less than 98% of its income and gain, it will be subject to a nondeductible excise tax equal to 4% of the shortfall. Advice as to the tax status of each year's dividends and distributions will be mailed annually to the shareholders of the Fund. Dividends paid by the Fund from net investment income and distributions from the Fund's net short-term capital gains in excess of any net long-term capital losses, whether received in cash or reinvested, generally will be taxable as ordinary income. Distributions received from the Fund designated as long-term capital gains (net of capital losses), whether received in cash or reinvested, will be taxable as long-term capital gains without regard to the length of time a shareholder has owned shares in the Fund. Any loss on the redemption or other sale or exchange of the Fund's shares held for six months or less will be treated as a long-term capital loss to the extent of any long-term capital gain distribution received on the shares. A portion of the dividends (but not capital gains distributions) paid by the Fund may be eligible for the dividends received deduction for corporate shareholders to the extent that the Fund's income consists of dividends paid by United States corporations. If a shareholder is exempt from Federal income tax, the shareholder will not generally be taxed on amounts distributed by the Fund. Dividends and interest received by the Fund on foreign securities may give rise to withholding and other taxes imposed by foreign countries. It is expected that foreign taxes paid by the Fund will be treated as expenses of the Fund. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. If the amount of the Fund's distributions for a taxable year exceeds the Fund's tax earnings and profits available for distribution, all or portion or the distributions may be treated as a return of capital or as capital gains. In the event a distribution is treated as a return of capital, the shareholder's basis in his or her Fund shares will be reduced to the extent the distribution is so treated. -25- At certain levels of taxable income, the Internal Revenue Code provides a preferential tax rate for long-term capital gains. Long- term capital gains of taxpayers other than corporations are taxed at a 28% maximum rate, whereas ordinary income is taxed at a 39.6% maximum rate. Capital losses continue to be deductible only against capital gains plus (in the case of taxpayers other than corporations) $3,000 of ordinary income annually ($1,500 for married individuals filing separately). 10. Suspension of Redemption Rights _______________________________ The right of redemption may be suspended for any period during which the New York Stock Exchange is closed or the Securities and Exchange Commission determines that trading on the Exchange is restricted, or when there is an emergency as determined by the Securities and Exchange Commission as a result of which it is not reasonably practicable for the Fund to dispose of securities owned by it or to determine the value of its net assets, or for such other period as the Securities and Exchange Commission may by order permit for the protection of shareholders of the Fund. The Fund intends to redeem its shares only for cash, although it retains the right to redeem its shares in-kind under unusual circumstances, in order to protect the interests of the remaining shareholders, by the delivery of securities selected from its assets at its discretion. The Fund is, however, governed by Rule 18f-1 under the Investment Company Act of 1940 pursuant to which the Fund is obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of the net assets of the Fund during any 90-day period for any one shareholder. For purposes of this threshold, each underlying account holder whose shares are held of record in certain omnibus accounts is treated as one shareholder. Should redemptions by any shareholder during any 90-day period exceed such limitation, the Fund will have the option of redeeming the excess in cash or in-kind. If shares are redeemed in-kind, the redeeming shareholder generally will incur brokerage costs in converting the assets to cash. The method of valuing securities used to make redemption in-kind will be the same as the method of valuing portfolio securities described under Section 8. Shareholders have the ability to request in writing a review of the valuation of in-kind redemptions, which will be considered by the trustees of the Fund within 90 days of such written request. 11. Tax-Sheltered Retirement Plans ______________________________ The Fund offers a Profit-Sharing Plan, a Money Purchase Pension Plan, an Individual Retirement Account and a 403(b) Custodial Account for adoption by employers and individuals who wish to participate in such Plans by accumulating shares of the Fund with tax-deductible dollars. -26- Profit-Sharing and Money Purchase Pension Plans _______________________________________________ Employers, self-employed individuals and partnerships may make tax-deductible contributions to the tax-qualified retirement plans offered by the Fund. All income and capital gains in the Plans are tax free until withdrawn. The amounts that are deductible depend upon the type of Plan or Plans adopted. If you, as an employer, self-employed person or partnership, adopt the Profit-Sharing Plan, you may vary the amount of your contributions from year to year and may elect to make no contribution at all for some years. If you adopt the Money Purchase Pension Plan, you must commit yourself to make a contribution each year according to a formula in the Plan that is based upon your and your employees' compensation or earned income. By adopting both the Profit-Sharing and the Money Purchase Pension Plan, you can increase the amount of contributions that you may deduct in any one year. If you wish to purchase shares of the Fund in conjunction with one or both of these tax-qualified plans, you may use an Internal Revenue Service approved prototype Trust Agreement and Retirement Plan available from the Fund. IFTC serves as trustee of the Plan, for which it charges an annual trustee's fee of $12 for each Fund or Cash Account Trust Money Portfolio (discussed below) in which the participant's account is invested. Contributions under the Plans are invested exclusively in shares of the Fund or the Cash Account Trust Money Market Portfolios, which are then held by the trustee under the terms of the Plans to create a retirement fund in accordance with the tax code. Distributions from the Profit-Sharing and Money Purchase Pension Plans generally may not be made without penalty until the participant reaches age 59-1/2 and must begin no later than April 1 of the calendar year following the year in which the participant attains age 70-1/2. A participant who is not a 5% owner of the employer may postpone such distributions to April 1 of the calendar year following the year of retirement. This exception does not apply to distributions from an individual retirement account (IRA). Except for required distributions after age 70-1/2, periodic distributions over more than 10 years and the distribution of any after-tax contributions, distributions are subject to 20% Federal income tax withholding unless those distributions are rolled directly to another qualified plan or an IRA. Participants may not be able to receive distributions immediately upon request because of certain requirements under Federal tax law. Since distributions which do not satisfy these requirements can result in adverse tax consequences, consultation with an attorney or tax advisor regarding the Plans is recommended. In order to receive the necessary materials to create a Profit- Sharing or Money Purchase Pension Plan, please write to the Fund, c/o Berger Associates, Inc., P.O. Box 5005, Denver, Colorado 80217, or call 1-800-333-1001. Trustees for 401(k) or other -27- existing plans interested in utilizing Fund shares as an investment or investment alternative in their plans should contact the Fund at 1- 800-333-1001. Individual Retirement Account (IRA) ___________________________________ If you are an individual with compensation or earned income, whether or not you are actively participating in an existing qualified retirement plan, you can provide for your own retirement by adopting an IRA. Under an IRA, you can contribute each year up to the lesser of 100% of your compensation or $2,000. If you have a nonemployed spouse (or if your spouse elects to be treated as having no compensation), you may make contributions totaling up to $4,000 to two IRAs (with no more than $2,000 being contributed to either account). If neither you nor your spouse are covered by an existing qualified retirement plan, or if your income does not exceed certain amounts, the amounts contributed to your IRA can be deducted for Federal income tax purposes whether or not your deductions are itemized. If you or your spouse are covered by an existing qualified retirement plan, and your income exceeds the applicable amounts, your IRA contributions are not deductible for Federal income tax purposes. However, whether your contributions are deductible or not, the income and capital gains on your IRA are not taxed until the account is distributed. If you wish to create an IRA to invest in shares of the Fund, you may use the Fund's IRA custodial agreement form which is an adaptation of the form provided by the Internal Revenue Service. Under the IRA custodial agreement, IFTC will serve as custodian, for which it will charge an annual custodian fee of $12 per Fund or Cash Account Trust Money Market Portfolio in which the IRA is invested. Distributions from an IRA generally may not be made without penalty until you reach age 59-1/2 and must begin no later than April 1 of the calendar year following the year in which you attain age 70- 1/2. Since distributions which do not satisfy these requirements can result in adverse tax consequences, consultation with an attorney or tax advisor is recommended. In order to receive the necessary materials to create an IRA account, please write to the Fund, c/o Berger Associates, Inc., P.O. Box 5005, Denver, Colorado 80217, or call 1-800-333-1001. 403(b) Custodial Accounts _________________________ If you are employed by a public school system or certain tax- exempt organizations such as private schools, colleges, universities, hospitals, religious and charitable or other nonprofit organizations, you may establish a 403(b) Custodial Account. Your employer must participate in the establishment of the account. -28- Your employer will automatically deduct the amount you designate from your gross salary and contribute it to your 403(b) Custodial Account. The amount which you may contribute annually under a salary reduction agreement is generally the lesser of $9,500 or your exclusion allowance, which is based upon a specified formula. There is a $50 minimum investment in the 403(b) Custodial Account. Contributions made to the account reduce the amount of your current income subject to Federal income tax. Federal income tax is not paid on your contribution until you begin making withdrawals. In addition, all income and capital gains in the account are tax-free until withdrawn. Withdrawals from your 403(b) Custodial Agreement may begin as soon as you reach age 59-1/2 and must begin no later than April 1 of the year following the later of the calendar year in which you attain age 70-1/2 or the calendar year in which you retire. Except for required distributions after age 70-1/2 and periodic distributions over more than 10 years, distributions are subject to 20% Federal income tax withholding unless those distributions are rolled directly to another 403(b) account or annuity or an individual retirement account (IRA). You may not be able to receive distributions immediately upon request because of certain notice requirements under federal tax law. Since distributions which do not satisfy these requirements can result in adverse tax consequences, consultation with an attorney or tax advisor regarding the 403(b) Custodial Account is recommended. Individuals who wish to purchase shares of the Fund in conjunction with a 403(b) Custodial Account may use a Custodian Account Agreement and related forms available from the Fund. IFTC serves as custodian of the 403(b) Custodial Account, for which it charges an annual custodian fee of $12 per Fund in which the participant's account is invested. In order to receive the necessary materials to create a 403(b) Custodial Account, please write to the Fund, c/o Berger Associates, Inc., P.O. Box 5005, Denver, Colorado 80217, or call 1-800-333-1001. 12. Exchange Privilege and Systematic Withdrawal Plan _________________________________________________ A shareholder who owns shares of the Fund worth at least $5,000 at the current net asset value may establish a Systematic Withdrawal account from which a fixed sum will be paid to the shareholder at regular intervals by the Fund in which the shareholder is invested. To establish a Systematic Withdrawal account, the shareholder deposits Fund shares with the Fund and appoints the Fund as agent to redeem shares in the shareholder's account in order to make monthly, quarterly, semi-annual or annual withdrawal payments to the shareholder of a fixed amount. The minimum withdrawal payment is $50.00. These payments generally will be made on the 25th day of each month. -29- Withdrawal payments are not yield or income on the shareholder's investment, since portions of each payment will normally consist of a return of the shareholder's investment. Depending on the size of the disbursements requested and the fluctuation in value of the Fund's portfolio, redemptions for the purpose of making such disbursements may reduce or even exhaust the shareholder's account. The shareholder may vary the amount or frequency of withdrawal payments, temporarily discontinue them, or change the designated payee or payee's address, by notifying the Fund. The shareholder may, of course, make additional deposits of Fund shares in the shareholder's account at any time. Since redemption of shares to make withdrawal payments is a taxable event, each investor should consult a tax advisor concerning proper tax treatment of the redemption. Any shareholder may exchange any or all of the shareholder's shares in the Fund for shares of any of the other available Berger Funds or for shares of the Money Market Portfolio, the Government Securities Portfolio or the Tax-Exempt Portfolio of the Cash Account Trust ("CAT Portfolios"), separately managed, unaffiliated money market funds, without charge, after receiving a current prospectus of the other fund or CAT Portfolio. The exchange privilege with the CAT Portfolios does not constitute an offering or recommendation of the shares of any such CAT Portfolio by any of the funds or Berger Associates. Exchanges into or out of the Fund are made at the net asset value per share next determined after the exchange request is received. Each exchange represents the sale of shares from one fund and the purchase of shares in another, which may produce a gain or loss for Federal income tax purposes. An exchange of shares may be made by written request directed to DST Systems, Inc., via a personal computer through on-line service providers or other on-line access points approved by the Fund, or simply by telephoning the Berger Funds at 1-800-551-5849. This privilege is revocable by the Fund, and is not available in any state in which the shares of the Fund or CAT Portfolio being acquired in the exchange are not eligible for sale. Shareholders automatically have telephone and on-line privileges to authorize exchanges unless they specifically decline this service in the account application or in writing. 13. Performance Information _______________________ The Prospectus contains a brief description of how total return is calculated. Quotations of average annual total return for the Fund will be expressed in terms of the average annual compounded rate of return of a hypothetical investment in the Fund over periods of 1, 5 and 10 years, or for the period since the Fund's registration statement became effective, if shorter. These are the rates of return that would equate the initial amount invested to the ending -30- redeemable value. These rates of return are calculated pursuant to the following formula: P(1 + T) (to the power of n) = ERV (where P = a hypothetical initial payment of $1,000, T = the average annual total return, n = the number of years and ERV = the ending redeemable value of a hypothetical $1,000 payment made at the beginning of the period). All total return figures reflect the deduction of a proportional share of Fund expenses on an annual basis, and assume that all dividends and distributions are reinvested when paid. Total return of the Investor Shares and other classes of shares of the Fund will be calculated separately. Because each class of shares is subject to different expenses, the performance of each class for the same period will differ. For the 1- and 5-year periods ending December 31, 1996, and for the period from October 20, 1987 (date the Fund's registration statement became effective) through December 31, 1996, the average annual total returns for the Fund were [___]%, [___]% and [___]%, respectively. For the 10-year period ending December 31, 1996, and for the period from February 14, 1985 (commencement of operations) through December 31, 1996, the Fund's average annual total returns were [___]% and [___]%, respectively, both of which include performance of the Fund prior to October 20, 1987, when the Fund's initial registration statement became effective. During that period, the Fund was not registered under the Investment Company Act of 1940 and thus was not subject to certain investment restrictions that are imposed by that Act. If the Fund had been registered under that Act, the Fund's performance during that period might have been adversely affected. Shares of the Fund had no class designations until February 14, 1997, when all of the then-existing shares were designated as Institutional Shares and the Fund commenced offering Investor Shares. Therefore, the quoted performance data include periods prior to the adoption of class designations and do not reflect the 0.25% per year 12b-1 fee applicable to the Investor Shares, which might adversely affect performance results for the Investor Shares for periods after that date. 14. Additional Information ______________________ The Fund was originally organized in November 1984 as a Delaware corporation. In May 1990, the Fund was reorganized from a Delaware corporation into a Massachusetts business trust known as The Omni Investment Fund (the "Trust"). Pursuant to the Fund's reorganization, the Fund as a series of the Trust assumed all of the assets and liabilities of the Fund as a Delaware corporation, and Fund shareholders received shares of the Massachusetts business trust equal both in number and net asset value to their shares of the Delaware corporation. All references in this Statement of Additional Information to the Fund and all financial and other information about the Fund prior to such reorganization are to the Fund as a Delaware corporation; all references after such -31- reorganization are to the Fund as a series of the Trust. On February 14, 1997, the name of the Trust was changed to Berger Omni Investment Trust and the name of the Fund was changed to the Berger Small Cap Value Fund. The Trust is authorized to issue an indefinite number of shares of beneficial interest having a par value of $0.01 per share, which may be issued in any number of series. Currently, the Fund is the only series established under the Trust, although others may be added in the future. The shares of each series of the Trust are permitted to be divided into classes. Currently, the Fund issues two classes of shares: The Investor Shares, to which this Statement of Additional Information relates, are available to the general public, subject to the Fund's regular minimum investment requirements as specified in the Prospectus. A separate class of shares, Institutional Shares, are offered through a separate prospectus and statement of additional information and are designed for institutional, individual and other investors willing to maintain a higher minimum account balance, currently set at $100,000. Under the Fund's Declaration of Trust, each trustee will continue in office until the termination of the Trust or his or her earlier death, resignation, incapacity, retirement or removal. Vacancies will be filled by a majority vote of the remaining trustees, subject to the provisions of the Investment Company Act of 1940. Therefore, no annual or regular meetings of shareholders normally will be held, unless otherwise required by the Declaration of Trust or the Investment Company Act of 1940. Subject to the foregoing, shareholders have the power to vote for the election and removal of trustees, to terminate or reorganize the Trust, to amend the Declaration of Trust, and on any other matters on which a shareholder vote is required by the Investment Company Act of 1940, the Declaration of Trust, the Trust's bylaws or the trustees. Shareholders are entitled to one vote for each full share held and fractional votes for fractional shares held on matters submitted to a vote of shareholders. Shares of the Fund do not have cumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of trustees can elect 100% of the trustees if they choose to do so, and in such event the holders of the remaining shares will not be able to elect any person as a trustee. Shares of the Fund are fully paid and non-assessable when issued. Dividends, distributions and the residual assets of the Fund in the event of liquidation are distributed to shareholders equally for each outstanding share of the Fund, subject to any applicable distinctions by class. Shares of the Fund have no preemptive rights and no conversion or subscription rights. Shares of the Fund may be transferred by endorsement or stock power as is customary, but the Fund is not required to recognize any transfer until it is recorded on the books. -32- Under Massachusetts law, shareholders of the Fund could, under certain circumstances, be held personally liable for the obligations of the Fund. However, the Declaration of Trust disclaims shareholder liability for acts or obligations of the Fund and requires that notice of such disclaimer be given in each agreement, obligation, or instrument entered into or executed by the Fund or the trustees. The Fund's Declaration of Trust provides for indemnification out of the property of the Fund for all loss and expense of any shareholder of the Fund held personally liable for the obligations of the Fund. Accordingly, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which the Fund would be unable to meet its obligations. The possibility that these circumstances would occur is remote. The trustees intend to conduct the operations of the Fund to avoid, to the extent possible, liability of shareholders for liabilities of the Fund. Insofar as the management of the Fund is aware, as of November 11, 1996, no person owned, beneficially or of record, more than 5% of the outstanding shares of the Fund, except for United Missouri Bank of Kansas City, N.A., P.O. Box 419692, Kansas City, MO 64141, as trustee of the Kansas City Southern Industries, Inc. Profit Sharing Trust, which held approximately 20% of the Fund's outstanding shares (now all designated as Institutional Shares). DISTRIBUTION The Distributor is the principal underwriter of the Fund's shares. The Distributor is a registered broker-dealer under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. The Distributor acts as the agent of the Fund in connection with the sale of its shares in all states in which the shares are registered and in which the Distributor is qualified as a broker-dealer. The Trust, on behalf of the Fund, and the Distributor are parties to a Distribution Agreement that continues through April 1998, and thereafter from year to year if such continuation is specifically approved at least annually by the trustees or by vote of a majority of the outstanding shares of the Fund and in either case by vote of a majority of the trustees of the Trust who are not "interested persons" (as that term is defined in the Investment Company Act of 1940) of the Trust or the Distributor. The Distribution Agreement is subject to termination by the Trust or the Distributor on not more than 60 days' prior written notice, and terminates automatically in the event of its assignment. Under the Distribution Agreement, the Distributor continuously offers the Fund's shares and solicits orders to purchase Fund shares at net asset value. OTHER INFORMATION Davis, Graham & Stubbs LLP, 370 Seventeenth Street, Denver, Colorado, acts as counsel to the Fund. -33- Ernst & Young LLP, 233 South Wacker Drive, Chicago, Illinois, acted as independent accountants for the Fund for the fiscal year ended December 31, 1996. The Fund has filed with the Securities and Exchange Commission, Washington, D.C., a Registration Statement under the Securities Act of 1933, as amended, with respect to the securities of the Fund of which this Statement of Additional Information is a part. If further information is desired with respect to the Fund or such securities, reference is made to the Registration Statement and the exhibits filed as a part thereof. Financial Statements ____________________ The statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights for the Fund for the fiscal year ended December 31, 1996, and the Report of Independent Auditors thereon dated January ___, 1997, are incorporated by reference into this Statement of Additional Information from the Annual Report to Shareholders dated December 31, 1996, for the Fund. A copy of the 1996 Annual Report for the Fund is enclosed with this Statement of Additional Information. APPENDIX A HIGH-YIELD/HIGH RISK CONVERTIBLE BONDS The Fund may purchase securities which are convertible into common stock when the Fund's management believes they offer the potential for a higher total return than nonconvertible securities. While fixed income securities generally have a priority claim on a corporation's assets over that of common stock, some of the convertible securities which the Fund may hold are high-yield/high- risk securities that are subject to special risks, including the risk of default in interest or principal payments which could result in a loss of income to the Fund or a decline in the market value of the securities. Convertible securities often display a degree of market price volatility that is comparable to common stocks. Specifically, corporate debt securities which are below investment grade (securities rated Ba or lower by Moody's or BB or lower by Standard & Poor's) and unrated securities which the Fund may purchase and hold are subject to a higher risk of non-payment of principal or interest, or both, than higher grade debt securities. Generally speaking, the lower the quality of a debt security (which may be reflected in its Moody's and/or Standard & Poor's ratings), the higher the yield it will provide, but the greater the risk that interest or principal payments will not be made when due. Thus, the lower the grade of a security, the more speculative characteristics it generally has. Information about the ratings of Moody's and Standard & Poor's, and the investment risks associated with the various ratings, is set forth below. The market prices of these lower grade convertible securities are generally less sensitive to interest rate changes than higher-rated investments, but more sensitive to economic changes or individual corporate developments. Periods of economic uncertainty and change can be expected to result in volatility of prices of these securities. Lower rated securities also may have less liquid markets than higher rated securities, and their liquidity as well as their value may be adversely affected by poor economic conditions. Adverse publicity and investor perceptions as well as new or proposed laws may also have a negative impact on the market for high-yield/high-risk bonds. CORPORATE BOND RATINGS The ratings of fixed-income securities by Moody's and Standard & Poor's are a generally accepted measurement of credit risk. However, they are subject to certain limitations. Ratings are generally based upon historical events and do not necessarily reflect the future. In addition, there is a period of time between the issuance of a rating and the update of the rating, during which time a published rating may be inaccurate. -35- KEY TO MOODY'S CORPORATE RATINGS Aaa-Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa-Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long- term risks appear somewhat larger than in Aaa securities. A-Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future. Baa-Bonds which are rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Ba-Bonds which are rated Ba are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate and thereby not well safeguarded during good and bad times over the future. Uncertainty of position characterizes bonds of this class. B-Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. Caa-Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest. Ca-Bonds which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings. -36- C-Bonds which are rated C are the lowest rated class of bonds and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing. Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating classification from Aa through B in its corporate bond rating system. The modifier 1 indicates that the security ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks in the lower end of its generic category. KEY TO STANDARD & POOR'S CORPORATE RATINGS AAA-Debt rated AAA has the highest rating assigned by Standard & Poor's. Capacity to pay interest and repay principal is extremely strong. AA-Debt rated AA has a very strong capacity to pay interest and repay principal and differs from the higher rated issues only in small degree. A-Debt rated A has a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories. BBB-Debt rated BBB is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions, or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher rated categories. BB, B, CCC, CC and C-Debt rated BB, B, CCC, CC and C is regarded, on balance, as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation. BB indicates the lowest degree of speculation and C the highest degree of speculation. While such debt will likely have some quality and protective characteristics, these are out-weighed by the large uncertainties or major risk exposures to adverse conditions. C1-The rating C1 is reserved for income bonds on which no interest is being paid. D-Debt rated D is in default, and payment of interest and/or repayment of principal is in arrears. Plus (+) or Minus (-)-The ratings from "AA" to "CCC" may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. -37- BERGER SMALL CAP VALUE FUND INSTITUTIONAL SHARES STATEMENT OF ADDITIONAL INFORMATION SHAREHOLDER SERVICES: 1-800-551-5849 This Statement of Additional Information about the Berger Small Cap Value Fund (the "Fund") Institutional Shares is not a prospectus. It should be read in conjunction with the Prospectus describing the Institutional Shares of the Fund, dated February 14, 1997, which may be obtained by writing the Fund at P.O. Box 5005, Denver, Colorado 80217, or calling 1-800-706-0539. The Fund is a no-load, diversified mutual fund. The investment objective of the Fund is capital appreciation. The Fund seeks to achieve this objective by investing primarily in common stocks of small companies that the Fund's investment sub-advisor believes are undervalued in the marketplace relative to their assets, earnings, cash flow or business franchise. Under normal circumstances, the Fund will invest at least 65% of its assets in common stocks of small companies with market capitalizations of less than $1 billion at the time of initial purchase. The balance of the Fund may be invested in common stocks of companies with market capitalizations in excess of $1 billion, equity securities other than common stocks, government securities, short-term investments or other securities described in the Prospectus, if the sub-advisor believes these are likely to be best suited at that time to achieve the Fund's objective. Current income is not an investment objective of the Fund and any income produced will be a by-product of the effort to achieve the Fund's objective. This Statement of Additional Information is about the class of shares of the Fund designated as Institutional Shares. Institutional Shares are designed for pension and profit-sharing plans, employee benefit trusts, endowments, foundations and corporations, as well as high net worth individuals, who are willing to maintain a minimum account balance of $100,000. Shares of the Fund may be offered through certain financial intermediaries that may charge their customers transaction or other fees with respect to the customers' investment in the Fund. Institutional Shares are also made available for purchase and dividend reinvestment to all holders of the Fund's shares as of February 14, 1997, when all the Fund's then outstanding shares were designated as Institutional Shares, subject to a minimum account balance of $500. The Fund is a series of Berger Omni Investment Trust, a Massachusetts business trust (the "Trust"). Prior to February 14, 1997, the Fund and the Trust were known as The Omni Investment Fund. FEBRUARY 14, 1997 TABLE OF CONTENTS & CROSS-REFERENCES TO PROSPECTUS Cross-References to Related Disclosures Table of Contents in Prospectus ----------------- ------------------- Introduction Section 3 1. Portfolio Policies of the Fund Section 3, 4, 5 2. Investment Restrictions Section 4 3. Management of the Fund Section 6 4. Investment Advisor Section 6 5. Expenses of the Fund Section 6, 7 6. Brokerage Policy Section 6, 7 7. Purchase of Shares in Section 8 the Fund 8. Net Asset Value Section 9 9. Income Dividends, Capital Gains Section 14 Distributions and Tax Treatment 10. Suspension of Redemption Rights Section 11 11. Tax-Sheltered Retirement Plans Section 13 12. Special Purchase and Exchange Plans Section 13 13. Performance Information Section 16 14. Additional Information Section 15 Financial Statements INTRODUCTION ------------ The Berger Small Cap Value Fund (the "Fund") is a mutual fund, or to use a more technical term, a diversified open- end, management investment company. The Fund's investment objective is capital appreciation. 1. Portfolio Policies of the Fund ------------------------------ The Prospectus discusses the investment objective of the Fund and the policies to be employed to achieve that objective. This section contains supplemental information concerning the types of securities and other instruments in which the Fund may invest, the investment policies and portfolio strategies that the Fund may utilize and certain risks attendant to those investments, policies and strategies. CONVERTIBLE SECURITIES. The Fund may purchase securities that are convertible into common stock when the Sub- Advisor believes they offer the potential for a higher total return than nonconvertible securities. While fixed income securities generally have a priority claim on a corporation's assets over that of common stock, some of the convertible securities which the Fund may hold are high-yield/high-risk securities that are subject to special -1- risks, including the risk of default in interest or principal payments which could result in a loss of income to the Fund or a decline in the market value of the securities. Convertible securities often display a degree of market price volatility that is comparable to common stocks. The credit risk associated with convertible securities generally is reflected by their being rated below investment grade by organizations such as Moody's Investors Service, Inc., and Standard & Poor's Corporation, or being of similar creditworthiness in the determination of the Sub-Advisor. The Fund has no pre-established minimum quality standards for convertible securities and may invest in convertible securities of any quality, including lower rated or unrated securities. However, the Fund will not invest in any security in default at the time of purchase or in any nonconvertible debt securities rated below investment grade, and the Fund will invest less than 20% of the market value of its net assets at the time of purchase in convertible securities rated below investment grade. If convertible securities purchased by the Fund are downgraded following purchase, or if other circumstances cause 20% or more of the Fund's assets to be invested in convertible securities rated below investment grade, the trustees of the Fund, in consultation with the Sub-Advisor, will determine what action, if any, is appropriate in light of all relevant circumstances. For a further discussion of debt security ratings, see Appendix A to the Statement of Additional Information. ILLIQUID SECURITIES. The Fund is authorized to invest in securities which are illiquid or not readily marketable because, based upon their nature or the market for such securities, no ready market is available. However, the Fund will not purchase any such security, the purchase of which would cause the Fund to invest more than 10% of its net assets, measured at the time of purchase, in illiquid securities. Investments in illiquid securities involve certain risks to the extent that the Fund may be unable to dispose of such a security at the time desired or at a reasonable price or, in some cases, may be unable to dispose of it at all. If securities become illiquid following purchase or other circumstances cause more than 10% of the Fund's net assets to be invested in illiquid securities, the trustees of the Fund, in consultation with the Fund's Sub-Advisor, will determine what action, if any, is appropriate in light of all relevant circumstances. Repurchase agreements maturing in more than seven days will be considered as illiquid for purposes of this restriction. REPURCHASE AGREEMENTS. The Fund may invest in repurchase agreements with various financial organizations, including commercial banks, registered broker-dealers and registered government securities dealers. A repurchase agreement is an agreement under which the Fund acquires a debt security (generally a security issued or guaranteed by the U.S. government or an agency thereof, a banker's acceptance or a certificate of deposit) from a commercial bank, broker or dealer, subject to resale to the seller at an agreed upon price and date (normally, the next business day). -2- A repurchase agreement may be considered a loan collateralized by securities. The resale price reflects an agreed upon interest rate effective for the period the instrument is held by the Fund and is unrelated to the interest rate on the underlying instrument. In these transactions, the securities acquired by the Fund (including accrued interest earned thereon) must have a total value equal to or in excess of the value of the repurchase agreement and are held by the Fund's custodian bank until repurchased. In addition, the trustees will establish guidelines and standards for review by the Sub-Advisor of the creditworthiness of any bank, broker or dealer party to a repurchase agreement with the Fund. The Fund will not enter into a repurchase agreement maturing in more than seven days if as a result more than 10% of the Fund's net assets would be invested in such repurchase agreements and other illiquid securities. The use of repurchase agreements involves certain risks. For example, if the other party to the agreement defaults on its obligation to repurchase the underlying security at a time when the value of the security has declined, the Fund may incur a loss upon disposition of the security. If the other party to the agreement becomes insolvent and subject to liquidation or reorganization under the Bankruptcy Code or other laws, a court may determine that the underlying security is collateral for a loan by the Fund not within the control of the Fund and therefore the realization by the Fund on such collateral may automatically be stayed. Finally, it is possible that the Fund may not be able to substantiate its interest in the underlying security and may be deemed an unsecured creditor of the other party to the agreement. Although these risks are acknowledged, it is expected that they can be controlled through careful monitoring procedures. WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Fund may purchase and sell securities on a when-issued or delayed delivery basis. However, the Fund currently does not intend to purchase or sell securities on a when-issued or delayed delivery basis, if as a result more than 5% of its total assets taken at market value at the time of purchase would be invested in such securities. When-issued or delayed delivery transactions arise when securities (normally, equity obligations of issuers eligible for investment by the Fund) are purchased or sold by the Fund with payment and delivery taking place in the future in order to secure what is considered to be an advantageous price or yield. However, the yield on a comparable security available when delivery takes place may vary from the yield on the security at the time that the when-issued or delayed delivery transaction was entered into. Any failure to consummate a when-issued or delayed delivery transaction may result in the Fund missing the opportunity of obtaining a price or yield considered to be advantageous. When-issued and delayed delivery transactions may generally be expected to settle within one month from the date the transactions are entered into, but in no event later than 90 days. However, no payment or delivery is made by the Fund until it receives delivery or payment from the other party to the transaction. -3- When the Fund purchases securities on a when-issued basis, it will maintain in a segregated account with its custodian cash, U.S. government securities or other liquid assets having an aggregate value equal to the amount of such purchase commitments, until payment is made. If necessary, additional assets will be placed in the account daily so that the value of the account will equal or exceed the amount of the Fund's purchase commitments. HEDGING TRANSACTIONS. As described in the Prospectus, the Fund is authorized to make limited use of certain types of options, but only for the purpose of hedging, that is, protecting against market risk due to market movements that may adversely affect the value of the Fund's securities or the price of securities that the Fund is considering purchasing. The utilization of options is also subject to policies and procedures which may be established by the trustees from time to time. A hedging transaction may partially protect the Fund from a decline in the value of a particular security or its portfolio generally, although hedging may also limit the Fund's opportunity to profit from favorable price movements, and the cost of the transaction will reduce the potential return on the security or the portfolio. The following is additional information concerning the options which the Fund may utilize, provided that no more than 5% of the Fund's net assets at the time the contract is entered into may be used for premiums paid for the purchase of options. In addition, the Fund may only write call options that are covered and only up to 10% of the Fund's net assets. The following information should be read in conjunction with the information concerning the Fund's use of options and the risks of such instruments contained in the Prospectus. Options on Securities and Securities Indices. The Fund -------------------------------------------- may buy or sell put or call options and write covered call options on securities that are traded on United States or foreign securities exchanges or over-the-counter. Buying an option involves the risk that, during the option period, the price of the underlying security will not increase (in the case of a call) to above the exercise price, or will not decrease (in the case of a put) to below the exercise price, in which case the option will expire without being exercised and the holder would lose the amount of the premium. Writing a call option involves the risk of an increase in the market value of the underlying security, in which case the option could be exercised and the underlying security would then be sold by the Fund to the option holder at a lower price than its current market value and the Fund's potential for capital appreciation on the security would be limited to the exercise price. Moreover, when the Fund writes a call option on a securities index, the Fund bears the risk of loss resulting from imperfect correlation between movements in the price of the index and the price of the securities set aside to cover such position. Although they entitle the holder to buy equity securities, call options to purchase equity securities do not entitle the holder to dividends or voting rights with respect to the underlying -4- securities, nor do they represent any rights in the assets of the issuer of those securities. A call option written by the Fund is "covered" if the Fund owns the underlying security covered by the call or has an absolute and immediate right to acquire that security without additional cash consideration (or for additional cash consideration held in a segregated account by its custodian) upon conversion or exchange of other securities held in its portfolio. A call option is also deemed to be covered if the Fund holds a call on the same security and in the same principal amount as the call written and the exercise price of the call held (i) is equal to or less than the exercise price of the call written or (ii) is greater than the exercise price of the call written if the difference is maintained by the Fund in liquid assets in a segregated account with its custodian. The writer of a call option may have no control when the underlying securities must be sold. Whether or not an option expires unexercised, the writer retains the amount of the premium. This amount, of course, may, in the case of a covered call option, be offset by a decline in the market value of the underlying security during the option period. The writer of an exchange-traded call option that wishes to terminate its obligation may effect a "closing purchase transaction." This is accomplished by buying an option of the same series as the option previously written. The effect of the purchase is that the writer's position will be cancelled by the clearing corporation. If the Fund desires to sell a particular security from the Fund's portfolio on which the Fund has written a call option, the Fund will effect a closing transaction prior to or concurrent with the sale of the security. However, a writer may not effect a closing purchase transaction after being notified of the exercise of an option. An investor who is the holder of an exchange-traded option may liquidate its position by effecting a "closing sale transaction." This is accomplished by selling an option of the same series as the option previously bought. There is no guarantee that either a closing purchase or a closing sale transaction can be effected. The Fund will realize a profit from a closing transaction if the price of the purchase transaction is less than the premium received from writing the option or the price received from a sale transaction is more than the premium paid to buy the option; the Fund will realize a loss from a closing transaction if the price of the purchase transaction is more than the premium received from writing the option or the price received from a sale transaction is less than the premium paid to buy the option. Because increases in the market price of a call option will generally reflect increases in the market price of the underlying security, any loss resulting from the repurchase of a call option is likely to be offset in whole or in part by appreciation of the underlying security owned by the Fund. -5- An option position may be closed out only where there exists a secondary market for an option of the same series. If a secondary market does not exist, it might not be possible to effect closing transactions in particular options with the result that the Fund would have to exercise the options in order to realize any profit. If the Fund is unable to effect a closing purchase transaction in a secondary market, it will not be able to sell the underlying security until the option expires or the Fund delivers the underlying security upon exercise. Reasons for the absence of a liquid secondary market may include the following: (i) there may be insufficient trading interest in certain options, (ii) restrictions may be imposed by a national securities exchange on which the option is traded ("Exchange") on opening or closing transactions or both, (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of options or underlying securities, (iv) unusual or unforeseen circumstances may interrupt normal operations on an Exchange, (v) the facilities of an Exchange or of the Options Clearing Corporation ("OCC") may not at all times be adequate to handle current trading volume, or (vi) one or more Exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of options (or a particular class or series of options), in which event the secondary market on that Exchange (or in that class or series of options) would cease to exist, although outstanding options on that Exchange that had been issued by the OCC as a result of trades on that Exchange would continue to be exercisable in accordance with their terms. In addition, when the Fund enters into an over-the- counter option contract with a counterparty, the Fund assumes counterparty credit risk, that is, the risk that the counterparty will fail to perform its obligations, in which case the Fund could be worse off than if the contract had not been entered into. An option on a securities index is similar to an option on a security except that, rather than the right to take or make delivery of a security at a specified price, an option on a securities index gives the holder the right to receive, on exercise of the option, an amount of cash if the closing level of the securities index on which the option is based is greater than, in the case of a call, or less than, in the case of a put, the exercise price of the option. The Fund may buy call options on securities or securities indices to hedge against an increase in the price of a security or securities that the Fund may buy in the future. The premium paid for the call option plus any transaction costs will reduce the benefit, if any, realized by the Fund upon exercise of the option, and, unless the price of the underlying security or index rises sufficiently, the option may expire and become worthless to the Fund. The Fund may buy put options to hedge against a decline in the value of a security or its portfolio. The premium paid for the put option plus any transaction costs will reduce the benefit, if any, realized by the Fund upon exercise of the option, and, unless -6- the price of the underlying security or index declines sufficiently, the option may expire and become worthless to the Fund. An example of a hedging transaction using an index option would be if the Fund were to purchase a put on a stock index, in order to protect the Fund against a decline in the value of all securities held by it to the extent that the stock index moves in a similar pattern to the prices of the securities held. While the correlation between stock indices and price movements of the stocks in which the Fund will generally invest may be imperfect, the Fund expects, nonetheless, that the use of put options that relate to such indices will, in certain circumstances, protect against declines in values of specific portfolio securities or the Fund's portfolio generally. Although the purchase of a put option may partially protect the Fund from a decline in the value of a particular security or its portfolio generally, the cost of a put will reduce the potential return on the security or the portfolio. PORTFOLIO TURNOVER. The portfolio turnover rates of the Fund are shown in the Financial Highlights table in Section 2 of the Prospectus. The annual portfolio turnover rates of the Fund have exceeded 100%. A 100% annual turnover rate results, for example, if the equivalent of all of the securities in the Fund's portfolio are replaced in a period of one year. A 100% turnover rate is higher than the turnover rate experienced by most mutual funds. The Fund anticipates that its portfolio turnover rates in future years may exceed 100%, and investment changes will be made whenever management deems them appropriate even if this results in a higher portfolio turnover rate. In addition, portfolio turnover may increase as a result of large amounts of purchases and redemptions of shares of the Fund due to economic, market or other factors that are not within the control of management. Increased portfolio turnover would necessarily result in correspondingly higher brokerage costs for the Fund. The existence of a high portfolio turnover rate has no direct relationship to the tax liability of the Fund, although sales of certain stocks will lead to realization of gains, and, possibly, increased taxable distributions. The Fund's brokerage policy is discussed further under Section 6 Brokerage Policy, and additional information concerning income taxes is located under Section 15 Income Dividends, Capital Gains Distributions and Tax Treatment. 2. Investment Restrictions ----------------------- The Fund has adopted the following fundamental restrictions on its investments and other activities, and none of these restrictions may be changed without the approval of (i) 67% or more of the voting securities of the Fund present at a meeting of shareholders thereof if the holders of more than 50% of the outstanding voting securities are present or represented by proxy, or (ii) more than 50% of the outstanding voting securities of the Fund. The Fund may not: -7- (1) Issue senior securities as defined in the Investment Company Act of 1940; (2) Invest in companies for the purpose of acquiring control or management thereof; (3) Invest or hold securities of any issuer if the officers and trustees of the Fund and its advisor own individually more than one-half (1/2) of 1% of the securities of such issuer or together own more than 5% of the securities of such issuer; (4) Invest in other investment companies, except in connection with a plan of merger, consolidation, reorganization or acquisition of assets, or in the open market involving no commission or profit to a sponsor or dealer (other than a customary broker's commission); (5) Participate on a joint or joint and several basis in any trading account in securities; (6) Purchase securities of any company with a record of less than three (3) years continuous operation (including that of predecessors) if such purchase would cause the cost of the Fund's investments in all such companies to exceed 5% of the Fund's total assets; (7) Invest in securities (except those of the U.S. government or its agencies) of any issuer if immediately thereafter the Fund would then own more than 10% of that issuer's voting securities; (8) Loan cash or portfolio securities, except in connection with the acquisition of debt securities which the Fund's investment policies and restrictions permit it to purchase; (9) Borrow money in excess of 5% of the value of its assets and, then, only as a temporary measure for extraordinary or emergency purposes; (10) Pledge, mortgage or hypothecate any of its assets to secure a debt; (11) Purchase or sell real estate or any other interests in real estate (including real estate limited partnership interests); (12) Purchase securities on margin or sell short; (13) Invest in commodities or commodity contracts; (14) Act as an underwriter of securities of other issuers or invest in portfolio securities which the Fund might not be free to sell to the public without registration of such securities under the Securities Act of 1933 ("Restricted Securities"); -8- (15) Invest more than 10% of the value of its net assets in illiquid securities, including Restricted Securities, securities which are not readily marketable, repurchase agreements maturing in more than seven (7) days, written over- the-counter ("OTC") options and securities used as cover for written OTC options; (16) Invest in oil, gas or mineral leases; (17) Invest more than 5% of the value of its net assets in warrants or more than 2% of its net assets in warrants that are not listed on the New York Stock Exchange, the American Stock Exchange, or the NASDAQ National Market System; (18) Invest more than 25% of the value of its assets, at the time of purchase, in securities of companies principally engaged in a particular industry, although the Fund may as a temporary defensive measure invest up to 100% of its total assets in obligations issued or guaranteed by the U.S. government or its agencies; or (19) With respect to 75% of the Fund's total assets, purchase the securities of any one issuer (except U.S. government securities) if immediately after and as a result of such purchase (a) the value of the holdings of the Fund in the securities of such issuer exceeds 5% of the value of the Fund's total assets or (b) the Fund owns more than 10% of the outstanding voting securities of such issuer. In applying the Fund's industry concentration restriction (number (18) above), the Fund uses the industry groups used in the Data Monitor Portfolio Monitoring System of William O'Neil & Co. Incorporated. The trustees have adopted additional non-fundamental investment restrictions for the Fund. These limitations may be changed by the trustees without a shareholder vote. The non- fundamental investment restrictions include the following: (1) Only for the purpose of hedging, the Fund may purchase and sell put and call options, but no more than 5% of the Fund's net assets at the time of purchase may be invested in premiums for options. The Fund may only write call options that are covered and only up to 10% of the Fund's total assets. (2) The Fund may not purchase or sell securities on a when-issued or delayed delivery basis, if as a result more than 5% of its total assets taken at market value at the time of purchase would be invested in such securities. Investment restrictions that involve a maximum percentage of securities or assets will not be considered to be violated unless an excess over the percentage occurs immediately after, and is caused by, an acquisition or encumbrance of securities or assets of the Fund. -9- 3. Management of the Fund ---------------------- The trustees and executive officers of the Fund are listed below, together with information which includes their principal occupations during the past five years and other principal business affiliations. * GERARD M. LAVIN, 210 University Boulevard, Suite 900, Denver, CO 80206, age 54. President and a trustee of Berger Omni Investment Trust since February 1997. President and a trustee of Berger/BIAM Worldwide Portfolios Trust and Berger/BIAM Worldwide Funds Trust since their inception in May 1996. President and a trustee of Berger Institutional Products Trust since its inception in October 1995. President and a director since April 1995 of Berger Associates, Inc. Member and Chairman of the Board of Managers and Chief Executive Officer on the Management Committee of BBOI Worldwide LLC since November 1996. A Vice President of DST Systems, Inc. (data processing) since July 1995. Director of First of Michigan Capital Corp. (holding company) and First of Michigan Corp. (broker-dealer) since March 1995. Formerly President and Chief Executive Officer of Investors Fiduciary Trust Company (banking) from February 1992 to March 1995 and Chief Operating Officer of SunAmerica Asset Management Co. (money management) from January 1990 to February 1992. DENNIS E. BALDWIN, 3481 South Race Street, Englewood, CO 80110, age 68. President, Baldwin Financial Counseling. Formerly (1978-1990), Vice President and Denver Office Manager of Merrill Lynch Capital Markets. Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. * WILLIAM M. B. BERGER, 210 University Boulevard, Suite 900, Denver, CO 80206, age 71. Director and, formerly, President (1974-1994) of Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio Trust since its inception in August 1993 (Chairman of the Trustees through November 1994). Trustee of Berger Institutional Products Trust since its inception in October 1995. Trustee of Berger/BIAM Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios Trust since their inception in May 1996. Trustee of Berger Omni Investment Trust since February 1997. Chairman (since 1994) and a Director (since 1973) and, formerly, President (1973-1994) of Berger Associates. LOUIS R. BINDNER, 1075 South Fox, Denver, CO 80223, age 71. President, Climate Engineering, Inc. (building environmental systems). Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide -10- Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. KATHERINE A. CATTANACH, 384 South Ogden, Denver, CO 80209, age 51. Managing Principal, Sovereign Financial Services, L.L.C. (investment consulting firm). Formerly (1981-1988), Executive Vice President, Captiva Corporation, Denver, Colorado (private investment management firm). Ph.D. in Finance (Arizona State University); Chartered Financial Analyst (CFA). Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. LUCY BLACK CREIGHTON, 1917 Leyden Street, Denver, CO 80220, age 69. Associate, University College, University of Denver. Formerly, President of the Colorado State Board of Land Commissioners (1989-1995), and Vice President and Economist (1983-1988) and Consulting Economist (1989) for First Interstate Bank of Denver. Ph.D. in Economics (Harvard University). Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. PAUL R. KNAPP, 33 North LaSalle Street, Suite 1920, Chicago, IL 60602, age 51. Since 1991, Director, Chairman, President and Chief Executive Officer of Catalyst Institute (international public policy research organization focused primarily on financial markets and institutions) and Catalyst Consulting (international financial institutions business consulting firm). Formerly (1988-1991), Director, President and Chief Executive Officer of Kessler Asher Group (brokerage, clearing and trading firm). Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. HARRY T. LEWIS, JR., 370 17th Street, Suite 3560, Denver, CO 80202, age 64. Self-employed as a private investor. Formerly (1981-1988), Senior Vice President, Rocky Mountain Region, of Dain Bosworth Incorporated and member of that firm's Management Committee. Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. MICHAEL OWEN, 412 Reid Hall, Montana State University, Bozeman, MT 59717, age 59. Since 1994, Dean, and from 1989 to 1994, a member of the Finance faculty, of the College of Business, -11- Montana State University. Self-employed as a financial and management consultant, and in real estate develop- ment. Formerly (1976-1989), Chairman and Chief Executive Officer of Royal Gold, Inc. (mining). Chairman of the Board of Berger 100 Fund and Berger Growth and Income Fund. Chairman of the Trustees of Berger Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. WILLIAM SINCLAIRE, 3049 S. Perry Park Road, Sedalia, CO 80135, age 68. President, Sinclaire Cattle Co., and private investor. Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. * CRAIG D. CLOYED, 210 University Boulevard, Suite 900, Denver, CO 80206, age 50. Vice President of Berger/BIAM Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios Trust since their inception in May 1996. Vice President of Berger Omni Investment Trust since February 1997. Also, Vice President and Chief Marketing Officer of Berger Associates, Inc., since August 1995, and President, CEO and a director of Berger Distributors, Inc., since its inception in May 1996. Formerly (September 1989 to August 1995), Senior Vice President of INVESCO Funds Group (mutual funds). * KEVIN R. FAY, 210 University Boulevard, Suite 900, Denver, CO 80206, age 41. Vice President, Secretary and Treasurer of Berger 100 Fund and Berger Growth and Income Fund since October 1991, of Berger Investment Portfolio Trust since its inception in August 1993, of Berger Institutional Products Trust since its inception in October 1995, of Berger/BIAM Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios Trust since their inception in May 1996, and of Berger Omni Investment Trust since February 1997. Also, Vice President- Finance and Administration, Secretary and Treasurer of Berger Associates since September 1991 and a director of Berger Distributors, Inc., since its inception in May 1996. Formerly, Financial Consultant (registered representative) with Neidiger Tucker Bruner, Inc. (broker-dealer) (October 1989 to September 1991) and Financial Consultant with Merrill Lynch, Pierce, Fenner & Smith, Inc. (October 1985 to October 1989). ________________ * Interested person (as defined in the Investment Company Act of 1940) of the Fund and of the Fund's Advisor or Sub-Advisor. The trustees of the Fund have adopted a trustee retirement age of 75 years. -12- TRUSTEE COMPENSATION The officers of the Fund received no compensation from the Fund during the fiscal year ended December 31, 1996. Each non-interested trustee of the Fund received $300 per Board meeting attended. During the fiscal year ended December 31, 1996, the Fund paid aggregate fees to its non-interested trustees of $______. Effective February 14, 1997, the trustees shown in the table below, who also act as trustees of other Berger Funds, became the trustees of the Fund with shareholder approval. As the Fund's new trustees, those who are not interested persons of the Advisor or the Sub-Advisor are compensated for their services according to a fee schedule, allocated among the Berger Funds, which includes an annual fee component and a per meeting fee component. Neither the officers of the Fund nor the trustees receive any form of pension or retirement benefit compensation from the Fund. Set forth below is information regarding compensation paid or accrued during the year ended December 31, 1996, for each current trustee of the Fund as a director or trustee of other Berger Funds. -13- ================================================================= ===== | NAME AND POSITION | AGGREGATE | AGGREGATE | | WITH BERGER FUNDS | COMPENSATION FROM| COMPENSATION(1) | | | THE FUND | FROM | | | | ALL BERGER FUNDS(2) | |---------------------------------------------------------------- - ----| | Dennis E. Baldwin(3) | $0* | $_____ | | William M.B. Berger(3),(5)| $0* | $ 0 | | Louis R. Bindner(3) | $0* | $_____ | | Katherine A. Cattanach(3) | $0* | $_____ | | Lucy Black Creighton(3) | $0* | $_____ | | Paul R. Knapp(3) | $0* | $_____ | | Gerard M. Lavin(4),(5) | $0* | $ 0 | | Harry T. Lewis(3) | $0* | $_____ | | Michael Owen(3) | $0* | $_____ | | William Sinclaire(3) | $0* | $_____ | ================================================================= ===== * The persons named above were elected as trustees of the Fund effective February 14, 1997, and accordingly did not receive any compensation from the Fund during the fiscal year ended December 31, 1996. The Fund's former trustees who were not interested persons of the Fund received during that fiscal year the following trustee compensation: Burt W. Engelberg: $__________; John R. Hall $__________; Keith L. Cook $________________. (1) Directors/trustees who are not interested persons of Berger Associates received as a group compensation from the Berger Funds of approximately $________ for the year ended December 31, 1996. Of the aggregate amounts shown for each trustee, the following amounts were deferred under applicable deferred compensation plans: Dennis E. Baldwin $_______; Louis R. Bindner $____________; Katherine A. Cattanach $_____________; Lucy Black Creighton $___________; Paul R. Knapp $____________; Harry T. Lewis $______________; Michael Owen $_____________; William Sinclaire $______________. (2) Includes Berger 100 Fund, Berger Growth and Income Fund, Berger Investment Portfolio Trust (two funds), Berger Institutional Products Trust (three funds), Berger/BIAM Worldwide Portfolios Trust and Berger/BIAM Worldwide Funds Trust (three funds). Berger Omni Investment Trust (one fund) was added to the Berger Funds complex in February 1997. (3) Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. (4) Trustee of Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust. (5) Interested person of the Fund or the Fund's Advisor or Sub- Advisor. -14- Trustees may elect to defer receipt of all or a portion of their fees pursuant to a fee deferral plan adopted by certain of the Berger Funds. Under the plan, deferred fees are credited to an account and adjusted thereafter to reflect the investment experience of whichever of the Berger Funds (or approved money market funds) is designated by the trustee for this purpose. Pursuant to an SEC exemptive order, those Berger Funds that have adopted the plan are permitted to purchase shares of the designated funds in order to offset their obligation to the trustees participating in the plan. Purchases made pursuant to the plan are excepted from any otherwise applicable investment restriction limiting the purchase of securities of any other investment company. The obligation of a Berger Fund to make payments of deferred fees under the plan is a general obligation of that fund. As of the date of this Statement of Additional Information, the current officers and trustees of the Fund as a group owned of record or beneficially less than 1% of the outstanding shares of the Fund. 4. Investment Advisor ------------------ INVESTMENT ADVISOR The investment advisor to the Fund is Berger Associates, Inc. (the "Advisor" or "Berger Associates"), 210 University Boulevard, Suite 900, Denver, CO 80206. Berger Associates became the Fund's investment advisor on February 14, 1997, following shareholder approval of a new Investment Advisory Agreement between the Fund and the Advisor. The Advisor is responsible for managing the investment operations of the Fund and the composition of its investment portfolio. The Advisor is permitted to engage a sub-advisor for the Fund. The Advisor also acts as the Fund's administrator and is responsible for such functions as monitoring the Fund's compliance with all applicable federal and state laws. The Advisor has been in the investment advisory business for over 20 years. It serves as investment advisor or sub-advisor to mutual funds, pension and profit-sharing plans, and institutional and private investors, and has assets under management of more than $3.6 billion as of September 30, 1996. Kansas City Southern Industries, Inc. ("KCSI") owns approximately 80% of the outstanding shares of the Advisor. KCSI is a publicly traded holding company with principal operations in rail transportation, through its subsidiary The Kansas City Southern Railway Company, and financial asset management businesses. KCSI also owns approximately 41% of the outstanding shares of DST Systems, Inc. ("DST"), a publicly traded information and transaction processing company which acts as the Fund's sub-transfer agent. -15- THE SUB-ADVISOR Perkins, Wolf, McDonnell & Company (the "Sub-Advisor" or "PWM"), 53 West Jackson Boulevard, Suite 818, Chicago, Illinois 60604, has been engaged as the Fund's investment sub-advisor. The Sub- Advisor was organized in 1980 under the name Mac-Per-Wolf Co. to operate as a securities broker-dealer. In September 1983, it changed its name to Perkins, Wolf, McDonnell & Company. The Sub-Advisor is a member of the National Association of Securities Dealers, Inc. (the "NASD") and, in 1984, became registered as an investment adviser with the SEC. PWM was the Fund's investment advisor from the date the Fund commenced operations in 1985 to February 1997. PWM became the investment sub-advisor to the Fund on February 14, 1997, following shareholder approval of a new Sub-Advisory Agreement between the Advisor and the Sub-Advisor. Robert H. Perkins is the individual who is primarily responsible for the day-to-day management of the Fund's portfolio. Mr. Perkins has held such responsibility and has been employed by the Sub-Advisor since the Fund commenced operations in 1985. Mr. Perkins owns 49% of the Sub-Advisor's outstanding common stock and serves as Secretary and a director of the Sub-Advisor. Gregory E. Wolf owns 20% of the Sub-Advisor's outstanding common stock and serves as President and a director of the Sub-Advisor. INVESTMENT ADVISORY AGREEMENT AND SUB-ADVISORY AGREEMENT Under the Investment Advisory Agreement between the Advisor and the Fund, the Advisor is responsible for managing the investment operations of the Fund and the composition of its investment portfolio. Under the Investment Advisory Agreement, the Advisor is compensated for its services to the Fund by the payment of a fee at the annual rate of 0.90% of the average daily net assets of the Fund. The Investment Advisory Agreement will continue in effect until April 1998, and thereafter from year to year if such continuation is specifically approved at least annually by the trustees or by vote of a majority of the outstanding shares of the Fund and in either case by vote of a majority of the trustees of the Fund who are not "interested persons" (as that term is defined in the Investment Company Act of 1940) of the Fund or the Advisor or Sub- Advisor. The Agreement is subject to termination by the Fund or the Advisor on 60 days' written notice, and terminates automatically in the event of its assignment. Under the Sub-Advisory Agreement between the Advisor and the Sub-Advisor, the Sub-Advisor is responsible for day-to-day portfolio management of the Fund. The Sub-Advisor manages the investments in the Fund and determines what securities and other investments will be acquired, held or disposed of, consistent with the investment objective and policies established by the trustees -16- of the Fund. The Fund pays no fees directly to the Sub-Advisor. The Sub-Advisor will receive from the Advisor a fee at the annual rate of 0.90% of the first $75 million of average daily net asset of the Fund, 0.50% of the next $125 million, and 0.20% of any amounts in excess of $200 million. The Sub-Advisory Agreement will continue in effect until April 1998, and thereafter from year to year if such continuation is specifically approved at least annually by the trustees or by vote of a majority of the outstanding shares of the Fund and in either case by vote of a majority of the trustees of the Fund who are not "interested persons" (as that term is defined in the Investment Company Act of 1940) of the Fund or the Advisor or the Sub-Advisor. The Sub-Advisory Agreement is subject to termination by the Fund or the Sub-Advisor on 60 days' written notice, and terminates automatically in the event of its assignment and in the event of termination of the Investment Advisory Agreement. OTHER ARRANGEMENTS BETWEEN THE ADVISOR AND SUB-ADVISOR The Advisor and Sub-Advisor entered into an Agreement, dated November 18, 1996 (the "November 18 Agreement"), under which, among other things, the Sub-Advisor agreed that, so long as Berger acts as the Fund's Advisor and PWM provides sub-advisory or other services in connection with the Fund, the Sub-Advisor will not manage or provide advisory services to any registered investment company that is in direct competition with the Fund. The November 18 Agreement also provides that at the end of the first five years under the Sub-Advisory Agreement (or at such earlier time if the Sub-Advisory Agreement is terminated or not renewed by the trustees other than for cause), Berger and PWM will enter into a consulting agreement for PWM to provide consulting services to Berger with respect to the Fund, subject to any requisite approvals under the Investment Company Act of 1940. Under the Consulting Agreement, PWM would provide training and assistance to Berger analysts and marketing support appropriate to the Fund and would be paid a fee at an annual rate of 0.10% of the first $100 million of average daily net assets of the Fund, 0.05% of the next $100 million and 0.02% on any part in excess of $200 million. No part of the consulting fee would be borne by the Fund. Berger and PWM have further agreed under the November 18 Agreement that if the Fund's assets do not reach $100 million at any time during the first five years after Berger becomes the Fund's advisor, Berger will use its reasonable best efforts, consistent with the fiduciary obligations of all parties, together with PWM, to obtain the required approvals of a new advisory agreement between PWM and the Trust for the Fund. TRADE ALLOCATIONS Investment decisions for the Fund and other accounts advised by the Advisor are made independently with a view to -17- achieving each of their respective investment objectives and after consideration of such factors as their current holdings, availability of cash for investment and the size of their investments generally. However, certain investments may be appropriate for the Fund and one or more such accounts. If the Fund and other accounts advised by the Advisor are contemporaneously engaged in the purchase or sale of the same security, the orders may be aggregated and/or the transactions averaged as to price and allocated equitably to the Fund and each participating account. While in some cases, this policy might adversely affect the price paid or received by the Fund or other participating accounts, or the size of the position obtained or liquidated, the Advisor will aggregate orders if it believes that coordination of orders and the ability to participate in volume transactions will result in the best overall combination of net price and execution. RESTRICTIONS ON PERSONAL TRADING Berger Associates permits its directors, officers, employees and other access persons (as defined below) of Berger Associates ("covered persons") to purchase and sell securities for their own accounts in accordance with provisions governing personal investing in Berger Associates' Code of Ethics. The Code requires all covered persons to conduct their personal securities transactions in a manner which does not operate adversely to the interests of the Fund or Berger Associates' other advisory clients. Directors and officers of Berger Associates (including those who also serve as trustees of the Fund), investment personnel and other designated covered persons deemed to have access to current trading information ("access persons") are required to pre-clear all transactions in securities not otherwise exempt under the Code. Requests for authority to trade will be denied pre-clearance when, among other reasons, the proposed personal transaction would be contrary to the provisions of the Code or would be deemed to adversely affect any transaction then known to be under consideration for or currently being effected on behalf of any client account, including the Fund. In addition to the pre-clearance requirements described above, the Code subjects those covered persons deemed to be access persons to various trading restrictions and reporting obligations. All reportable transactions are reviewed for compliance with Berger Associates' Code. Those covered persons also may be required under certain circumstances to forfeit their profits made from personal trading. The Code is administered by Berger Associates and the provisions of the Code are subject to interpretation by and exceptions authorized by its board of directors. The Sub-Advisor has also adopted a Code of Ethics which permits investment and other personnel to purchase and sell securities for their own accounts, subject to restrictions set forth in its Code. In addition, during a two-day "blackout" period prior to a securities trade by the Fund, the Code prohibits -18- securities trades by directors, officers and employees in securities which the Fund proposes to buy or sell. Further, the Code requires investment and other personnel to at all times conduct their personal investment activities in a manner which places the interest of the Fund and its shareholders first. 5. Expenses of the Fund -------------------- Under the Investment Advisory Agreement, the Fund has agreed to compensate Berger Associates for its investment advisory services to the Fund by the payment of a fee at the annual rate of .90 of 1% (0.90%) of the average daily net assets of the Fund. The fee is accrued daily and payable monthly. This fee may be higher than that paid by most other mutual funds. The Fund pays all of its expenses not assumed by Berger Associates, which normally would include, but not be limited to, investment advisor fees, custodian and transfer agent fees, legal and accounting expenses, administrative and record keeping expenses, interest charges, federal and state taxes, costs of share certificates, expenses of shareholders' meetings, compensation of trustees who are not interested persons of Berger Associates, expenses of printing and distributing reports to shareholders and federal and state administrative agencies, and all expenses incurred in connection with the execution of its portfolio transactions, including brokerage commissions on purchases and sales of portfolio securities, which are considered a cost of securities of the Fund. The Fund also pays all expenses incurred in complying with all federal and state laws and the laws of any foreign country applicable to the issue, offer or sale of shares of the Fund, including, but not limited to, all costs involved in preparing and printing prospectuses for shareholders of the Fund. The Fund has appointed Investors Fiduciary Trust Company ("IFTC") as its recordkeeping and pricing agent. In addition, IFTC also serves as the Fund's custodian, transfer agent and dividend disbursing agent. IFTC has engaged DST as sub-agent to provide transfer agency and dividend disbursing services for the Fund. As noted in the previous section, approximately 41% of the outstanding shares of DST are owned by KCSI. The addresses and telephone numbers for DST set forth in the Prospectus and this Statement of Additional Information should be used for correspondence with the transfer agent. As recordkeeping and pricing agent, IFTC calculates the daily net asset value of the Fund and performs certain accounting and recordkeeping functions required by the Fund. The Fund pays IFTC a monthly base fee plus an asset-based fee. IFTC is also reimbursed for certain out-of-pocket expenses. IFTC, as custodian, and its subcustodians have custody and provide for the safekeeping of the Fund's securities and cash, and receive and remit the income thereon as directed by the management of the Fund. The custodian and subcustodians do not -19- perform any managerial or policy-making functions for the Fund. For its services as custodian, IFTC receives an asset-based fee plus certain transaction fees and out-of-pocket expenses. Under the Custodian Agreement in effect for the Fund until January 1, 1997, PWM, the Fund's then investment advisor, acted as the Fund's custodian and was not compensated under that Agreement other than by the reimbursement of its costs in providing such services. As transfer agent and dividend disbursing agent, IFTC (through DST, as sub-agent) maintains all shareholder accounts of record; assists in mailing all reports, proxies and other information to the Fund's shareholders; calculates the amount of, and delivers to the Fund's shareholders, proceeds representing all dividends and distributions; and performs other related services. For these services, IFTC receives a fee from the Fund at an annual rate of $15.65 per open Fund shareholder account, subject to scheduled increases, plus certain transaction fees and fees for closed accounts, and is reimbursed for out-of-pocket expenses, which fees in turn are passed through to DST as sub-agent. All of IFTC's fees are subject to reduction pursuant to an agreed upon formula for certain earnings credits on the cash balances of the Fund. The trustees of the Fund have authorized Berger Associates to place portfolio transactions on an agency basis through DST Securities, Inc. ("DSTS"), a wholly-owned broker-dealer subsidiary of DST. When transactions are effected through DSTS, the commission received by DSTS is credited against, and thereby reduces, certain operating expenses that the Fund would otherwise be obligated to pay. No portion of the commission is retained by DSTS. See Section 6 Brokerage Policy for further information. The Fund and Berger Associates have entered into arrangements with certain organizations (broker-dealers, recordkeepers and administrators) to provide sub-transfer agency, recordkeeping, shareholder communications, sub-accounting and/or other services to investors purchasing shares of the Fund through investment programs or pension plans established or serviced by those organizations. The Fund and/or Berger Associates may pay fees to these organizations for their services. Any such fees paid by the Fund will be for services that otherwise would be provided or paid for by the Fund if all the investors who own Fund shares through these organizations were registered record holders of shares in the Fund. In addition, under a separate Administrative Services Agreement with respect to the Fund, Berger Associates performs certain administrative and recordkeeping services not otherwise performed by IFTC, including the preparation of financial statements and reports to be filed with the Securities and Exchange Commission and state regulatory authorities. The Fund pays Berger Associates a fee at an annual rate of 1/100 of 1% (0.01%) of its average daily net assets for such services. Those fees are in addition to the investment advisory fees paid under the Investment -20- Advisory Agreement. The administrative services fees may be changed by the trustees without shareholder approval. The following table shows the cost to the Fund of the previously applicable advisory fee for the last three fiscal years. For the fiscal years shown, all amounts were paid to PWM, the Fund's then investment advisor, now the Fund's Sub-Advisor. Fiscal Year Ended Advisory December 31, Fee(1) ------------ -------- 1994 $ 168,271 1995 275,236 1996 _________ ____________________ (1) Under the Investment Advisory Agreement in effect until February 14, 1997, the Fund paid an advisory fee at an annual rate of 1.00% of the Fund's average daily net assets. Distributor - ----------- The distributor (principal underwriter) of the Fund's shares is Berger Distributors, Inc. (the "Distributor"), 210 University Blvd., Suite 900, Denver, CO 80206. The Distributor may be reimbursed by Berger Associates for its costs in distributing Institutional Shares. 6. Brokerage Policy ---------------- Although the Fund retains full control over its own investment policies, under the terms of its Investment Advisory Agreement, Berger Associates is directed to place the portfolio transactions of the Fund. Berger Associates is required to report on the placement of brokerage business to the trustees of the Fund every quarter, indicating the brokers with whom Fund portfolio business was placed and the basis for such placement. Under the Investment Advisory Agreement in effect until February 14, 1997, the advisor was permitted to place the Fund's brokerage with affiliated brokers, subject to adhering to certain procedures adopted by the trustees and subject to obtaining prompt execution or orders at the most favorable net price. All brokerage commissions paid by the Fund during the most recent three fiscal years were paid to PWM, then the Fund's advisor, now the Fund's Sub-Advisor, which is also a registered broker-dealer. The amounts paid were as follows: -21- BROKERAGE COMMISSIONS --------------------- ================================================================= | FISCAL YEAR ENDED | PAID TO | | DECEMBER 31 | PWM | |---------------------------------------------------------------| | 1996 | $____________ | | 1995 | $ 342,121 | | 1994 | $ 229,459 | ================================================================= The Investment Advisory Agreement in effect since February 14, 1997, between the Fund and Berger Associates authorizes and directs Berger Associates to place portfolio transactions for the Fund only with brokers and dealers who render satisfactory service in the execution of orders at the most favorable prices and at reasonable commission rates. However, the Agreement specifically authorizes Berger Associates to place such transactions with a broker with whom it has negotiated a commission that is in excess of the commission another broker or dealer would have charged for effecting that transaction if Berger Associates determines in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such broker viewed in terms of either that particular transaction or the overall responsibilities of Berger Associates. In accordance with this provision of the Agreement, Berger Associates places portfolio brokerage business of the Fund with brokers who provide useful research services to Berger Associates. Such research services typically consist of studies made by investment analysts or economists relating either to the past record of and future outlook for companies and the industries in which they operate, or to national and worldwide economic conditions, monetary conditions and trends in investors' sentiment, and the relationship of these factors to the securities market. In addition, such analysts may be available for regular consultation so that Berger Associates may be apprised of current developments in the above-mentioned factors. The research services received from brokers are often helpful to Berger Associates in performing its investment advisory responsibilities to the Fund, but they are not essential, and the availability of such services from brokers does not reduce the respon- sibility of Berger Associates' advisory personnel to analyze and evaluate the securities in which the Fund invests. The research services obtained as a result of the Fund's brokerage business also will be useful to Berger Associates in making investment decisions for its other advisory accounts, and, conversely, information obtained by reason of placement of brokerage business of such other accounts may be used by Berger Associates in rendering investment advice to the Fund. Although such research services may be deemed to be of value to Berger -22- Associates, they are not expected to decrease the expenses that Berger Associates would otherwise incur in performing its investment advisory services for the Fund nor will the advisory fees that are received by Berger Associates from the Fund be reduced as a result of the availability of such research services from brokers. The trustees of the Fund have authorized Berger Associates to place portfolio transactions on an agency basis through DSTS, a wholly-owned broker-dealer subsidiary of DST. When transactions are effected through DSTS, the commission received by DSTS is credited against, and thereby reduces, certain operating expenses that the Fund would otherwise be obligated to pay. No portion of the commission is retained by DSTS. To date, the trustees have not authorized Berger Associates to place the Fund's brokerage with any other broker or dealer affiliated with Berger Associates or the Sub-Advisor. 7. Purchase of Shares In the Fund ------------------------------ Minimum Initial Investment for Institutional Shares: $100,000.00 Shares in the Fund may be purchased at the relevant net asset value without a sales charge. The minimum initial investment for Institutional Shares of the Fund is $100,000. (This requirement is inapplicable to shareholders who purchased shares prior to February 14, 1997, who met the initial investment minimum in effect for the Fund at the time of their initial purchase.) To purchase shares in the Fund, simply complete the application form enclosed with the Prospectus and mail it to the Fund in care of DST Systems, Inc., the Fund's transfer agent, as follows: Berger Funds c/o DST Systems, Inc. P.O. Box 419958 Kansas City, MO 64141 Payment for shares purchased may be made by wire, electronic funds transfer or mail. All purchase orders are effected at the relevant net asset value per share of the Fund next determined after receipt of the purchase order, completed application and payment. A purchase order, together with payment in proper form, received by the transfer agent, subtransfer agent or any other authorized agent of the Fund prior to the close of the New York Stock Exchange (the "Exchange") on a day the Fund is open for business will be effected at that day's net asset value. An order received after that time will be effected at the net asset value determined on the next business day. Additional investments may be made at any time by telephone or by mail at the relevant net asset value by calling or writing the Fund and making payment by wire or electronic funds transfer as outlined above. Unless effected through an Automatic -23- Investment Plan, subsequent purchases by shareholders must be in the minimum amount of $1,000. In addition, Fund shares may be purchased through certain broker-dealers that have established mutual fund programs and certain other organizations connected with pension and retirement plans. These broker-dealers and other organizations may charge investors a transaction or other fee for their services, may require different minimum initial and subsequent investments than the Fund and may impose other charges or restrictions different from those applicable to shareholders who invest in the Fund directly. Fees charged by these organizations will have the effect of reducing a shareholder's total return on an investment in Fund shares. No such charge will be paid by an investor who purchases the Fund shares directly from the Fund as described above. 8. Net Asset Value --------------- The net asset value of the Fund is determined once daily, at the close of the regular trading session of the Exchange (normally 4:00 p.m., New York time, Monday through Friday) each day that the Exchange is open. The Exchange is closed and the net asset value of the Fund is not determined on weekends and on New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day each year. The per share net asset value of the Institutional Shares is determined by dividing the Institutional Shares' pro rata portion of the total value of the Fund's securities and other assets, less the Institutional Shares' pro rata portion of the Fund's liabilities and the liabilities attributable to the Institutional Shares, by the total number of Institutional Shares outstanding. In determining net asset value, securities listed or traded primarily on national exchanges, The Nasdaq Stock Market and foreign exchanges are valued at the last sale price on such markets, or, if such a price is lacking for the trading period immediately preceding the time of determination, such securities are valued at the mean of their current bid and asked prices. Securities that are traded in the over-the-counter market are valued at the mean between their current bid and asked prices. The market value of individual securities held by the Fund will be determined by using prices provided by pricing services which provide market prices to other mutual funds or, as needed, by obtaining market quotations from independent broker/dealers. Short-term money market securities maturing within 60 days are valued on the amortized cost basis, which approximates market value. All assets and liabilities initially expressed in terms of non-U.S. dollar currencies are translated into U.S. dollars at the prevailing market rates as quoted by one or more banks or dealers shortly before the close of the Exchange. Securities and assets for which quotations are not readily available are valued at fair values determined in good faith pursuant to consistently applied procedures established by the trustees. -24- 9. Income Dividends, Capital Gains Distributions and Tax Treatment ------------------------------- It is the policy of the Fund to meet the requirements of Subchapter M of the Internal Revenue Code and to distribute to its investors all or substantially all of its taxable income as defined in the Code. The Fund met the requirements for the last fiscal year end, and intends to meet them in the future. If the Fund meets the Subchapter M requirements, it generally is not liable for Federal income taxes to the extent its earnings are distributed. Qualification as a regulated investment company under the Internal Revenue Code does not, however, involve any federal supervision of management or of the investment practices or policies of the Fund. If the Fund distributes annually less than 98% of its income and gain, it will be subject to a nondeductible excise tax equal to 4% of the shortfall. Advice as to the tax status of each year's dividends and distributions will be mailed annually to the shareholders of the Fund. Dividends paid by the Fund from net investment income and distributions from the Fund's net short-term capital gains in excess of any net long-term capital losses, whether received in cash or reinvested, generally will be taxable as ordinary income. Distributions received from the Fund designated as long-term capital gains (net of capital losses), whether received in cash or reinvested, will be taxable as long-term capital gains without regard to the length of time a shareholder has owned shares in the Fund. Any loss on the redemption or other sale or exchange of the Fund's shares held for six months or less will be treated as a long-term capital loss to the extent of any long-term capital gain distribution received on the shares. A portion of the dividends (but not capital gains distributions) paid by the Fund may be eligible for the dividends received deduction for corporate shareholders to the extent that the Fund's income consists of dividends paid by United States corporations. If a shareholder is exempt from Federal income tax, the shareholder will not generally be taxed on amounts distributed by the Fund. Dividends and interest received by the Fund on foreign securities may give rise to withholding and other taxes imposed by foreign countries. It is expected that foreign taxes paid by the Fund will be treated as expenses of the Fund. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. If the amount of the Fund's distributions for a taxable year exceeds the Fund's tax earnings and profits available for distribution, all or portion or the distributions may be treated as a return of capital or as capital gains. In the event a distribution is treated as a return of capital, the shareholder's basis in his or her Fund shares will be reduced to the extent the distribution is so treated. -25- At certain levels of taxable income, the Internal Revenue Code provides a preferential tax rate for long-term capital gains. Long-term capital gains of taxpayers other than corporations are taxed at a 28% maximum rate, whereas ordinary income is taxed at a 39.6% maximum rate. Capital losses continue to be deductible only against capital gains plus (in the case of taxpayers other than corporations) $3,000 of ordinary income annually ($1,500 for married individuals filing separately). 10. Suspension of Redemption Rights ------------------------------- The right of redemption may be suspended for any period during which the New York Stock Exchange is closed or the Securities and Exchange Commission determines that trading on the Exchange is restricted, or when there is an emergency as determined by the Securities and Exchange Commission as a result of which it is not reasonably practicable for the Fund to dispose of securities owned by it or to determine the value of its net assets, or for such other period as the Securities and Exchange Commission may by order permit for the protection of shareholders of the Fund. The Fund intends to redeem its shares only for cash, although it retains the right to redeem its shares in-kind under unusual circumstances, in order to protect the interests of the remaining shareholders, by the delivery of securities selected from its assets at its discretion. The Fund is, however, governed by Rule 18f-1 under the Investment Company Act of 1940 pursuant to which the Fund is obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of the net assets of the Fund during any 90-day period for any one shareholder. For purposes of this threshold, each underlying account holder whose shares are held of record in certain omnibus accounts is treated as one shareholder. Should redemptions by any shareholder during any 90-day period exceed such limitation, the Fund will have the option of redeeming the excess in cash or in-kind. If shares are redeemed in-kind, the redeeming shareholder generally will incur brokerage costs in converting the assets to cash. The method of valuing securities used to make redemption in-kind will be the same as the method of valuing portfolio securities described under Section 8. Shareholders have the ability to request in writing a review of the valuation of in-kind redemptions, which will be considered by the trustees of the Fund within 90 days of such written request. 11. Plans and Programs ------------------ The Fund offers several tax-qualified retirement plans for adoption by individuals and employers. The Fund also offers both a profit-sharing plan and a money purchase pension plan for employers and self-employed persons, an Individual Retirement Account ("IRA") and a 403(b) Custodial Account. In order to receive the necessary materials to create a profit-sharing or money purchase pension plan account, an IRA account or a 403(b) Custodial Account, please write to the Fund, -26- c/o Berger Associates, Inc., P.O. Box 5005, Denver, CO 80217, or call 1-800-706-0539. Trustees for 401(k) or other existing plans interested in utilizing Fund shares as an investment or investment alternative in their plans should contact the Fund at 1-800-551-5849. The Fund also offers an Automatic Investment Plan (minimum $100 per monthly or quarterly investment) and a Systematic Withdrawal Plan (for shareholders who own shares of the Fund worth at least $5,000; minimum of $50 withdrawn monthly, quarterly, semiannually or annually). Forms for these plans may be obtained by writing to the Fund, c/o DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141, or call 1-800-551-5849. 12. Exchange Privilege ------------------ Any shareholder may exchange any or all of the shareholder's shares in the Fund for shares of any of the other available Berger Funds, without charge, after receiving a current prospectus of the other fund. Exchanges into or out of the Fund are made at the net asset value per share next determined after the exchange request is received. Each exchange represents the sale of shares from one fund and the purchase of shares in another, which may produce a gain or loss for Federal income tax purposes. An exchange of shares may be made by written request directed to DST Systems, Inc., or simply by telephoning the Berger Funds at 1-800-551-5849. This privilege is revocable by the Fund, and is not available in any state in which the shares of the Berger Fund being acquired in the exchange are not eligible for sale. Shareholders automatically have telephone privileges to authorize exchanges unless they specifically decline this service in the account application or in writing. 13. Performance Information ----------------------- The Prospectus contains a brief description of how total return is calculated. Quotations of average annual total return for the Fund will be expressed in terms of the average annual compounded rate of return of a hypothetical investment in the Fund over periods of 1, 5 and 10 years, or for the period since the Fund's registration statement became effective, if shorter. These are the rates of return that would equate the initial amount invested to the ending redeemable value. These rates of return are calculated pursuant to the following formula: P(1 + T)(to the power of n) = ERV (where P = a hypothetical initial payment of $1,000, T = the average annual total return, n = the number of years and ERV = the ending redeemable value of a hypothetical $1,000 payment made at the beginning of the period). All total return figures reflect the deduction of a proportional share of Fund expenses on an annual basis, and assume that all dividends and distributions are reinvested when paid. -27- Shares of the Fund had no class designations until February 14, 1997, when all of the then-existing shares were designated as Institutional Shares and the Fund commenced offering another class of shares. Total return of the Institutional Shares and other classes of shares of the Fund will be calculated separately. Because each class of shares is subject to different expenses, the performance of each class for the same period will differ. For the 1- and 5-year periods ending December 31, 1996, and for the period from October 20, 1987 (date the Fund's registration statement became effective) through December 31, 1996, the average annual total returns for the Fund were [___]%, [___]% and [___]%, respectively. For the 10-year period ending December 31, 1996, and for the period from February 14, 1985 (commencement of operations) through December 31, 1996, the Fund's average annual total returns were [___]% and [___]%, respectively, both of which include performance of the Fund prior to October 20, 1987, when the Fund's initial registration statement became effective. During that period, the Fund was not registered under the Investment Company Act of 1940 and thus was not subject to certain investment restrictions that are imposed by that Act. If the Fund had been registered under that Act, the Fund's performance during that period might have been adversely affected. 14. Additional Information ---------------------- The Fund was originally organized in November 1984 as a Delaware corporation. In May 1990, the Fund was reorganized from a Delaware corporation into a Massachusetts business trust known as The Omni Investment Fund (the "Trust"). Pursuant to the Fund's reorganization, the Fund as a series of the Trust assumed all of the assets and liabilities of the Fund as a Delaware corporation, and Fund shareholders received shares of the Massachusetts business trust equal both in number and net asset value to their shares of the Delaware corporation. All references in this Statement of Additional Information to the Fund and all financial and other information about the Fund prior to such reorganization are to the Fund as a Delaware corporation; all references after such reorganization are to the Fund as a series of the Trust. On February 14, 1997, the name of the Trust was changed to Berger Omni Investment Trust and the name of the Fund was changed to the Berger Small Cap Value Fund. The Trust is authorized to issue an indefinite number of shares of beneficial interest having a par value of $0.01 per share, which may be issued in any number of series. Currently, the Fund is the only series established under the Trust, although others may be added in the future. The shares of each series of the Trust are permitted to be divided into classes. Currently, the Fund issues two classes of shares: The Institutional Shares, to which this Statement of Additional Information relates, are designed for pension and profit-sharing plans, employee benefit trusts, endowments, foundations and corporations, as well as high -28- net worth individuals, who are willing to maintain a minimum account balance of $100,000. Institutional Shares are also made available for purchase and dividend reinvestment to all holders of the Fund's shares as of February 14, 1997, when all the Fund's then outstanding shares were designated as Institutional Shares, subject to a minimum account balance requirement of $500. A separate class of shares, Investor Shares, are offered through a separate prospectus and statement of additional information and are available to the general public, subject to the Fund's regular minimum investment requirements as specified in that prospectus (currently $2,000 minimum initial investment). Under the Fund's Declaration of Trust, each trustee will continue in office until the termination of the Trust or his or her earlier death, resignation, incapacity, retirement or removal. Vacancies will be filled by a majority vote of the remaining trustees, subject to the provisions of the Investment Company Act of 1940. Therefore, no annual or regular meetings of shareholders normally will be held, unless otherwise required by the Declaration of Trust or the Investment Company Act of 1940. Subject to the foregoing, shareholders have the power to vote for the election and removal of trustees, to terminate or reorganize the Trust, to amend the Declaration of Trust, and on any other matters on which a shareholder vote is required by the Investment Company Act of 1940, the Declaration of Trust, the Trust's bylaws or the trustees. Shareholders are entitled to one vote for each full share held and fractional votes for fractional shares held on matters submitted to a vote of shareholders. Shares of the Fund do not have cumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of trustees can elect 100% of the trustees if they choose to do so, and in such event the holders of the remaining shares will not be able to elect any person as a trustee. Shares of the Fund are fully paid and non-assessable when issued. Dividends, distributions and the residual assets of the Fund in the event of liquidation are distributed to shareholders equally for each outstanding share of the Fund, subject to any applicable distinctions by class. Shares of the Fund have no preemptive rights and no conversion or subscription rights. Shares of the Fund may be transferred by endorsement or stock power as is customary, but the Fund is not required to recognize any transfer until it is recorded on the books. Under Massachusetts law, shareholders of the Fund could, under certain circumstances, be held personally liable for the obligations of the Fund. However, the Declaration of Trust disclaims shareholder liability for acts or obligations of the Fund and requires that notice of such disclaimer be given in each agreement, obligation, or instrument entered into or executed by the Fund or the trustees. The Fund's Declaration of Trust provides for indemnification out of the property of the Fund for all loss and expense of any shareholder of the Fund held personally liable -29- for the obligations of the Fund. Accordingly, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which the Fund would be unable to meet its obligations. The possibility that these circumstances would occur is remote. The trustees intend to conduct the operations of the Fund to avoid, to the extent possible, liability of shareholders for liabilities of the Fund. Insofar as the management of the Fund is aware, as of November 11, 1996, no person owned, beneficially or of record, more than 5% of the outstanding shares of the Fund, except for United Missouri Bank of Kansas City, N.A., P.O. Box 419692, Kansas City, MO 64141, as trustee of the Kansas City Southern Industries, Inc. Profit Sharing Trust, which held approximately 20% of the Fund's outstanding shares (now all designated as Institutional Shares). DISTRIBUTION The Distributor is the principal underwriter of the Fund's shares. The Distributor is a registered broker-dealer under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. The Distributor acts as the agent of the Fund in connection with the sale of its shares in all states in which the shares are registered and in which the Distributor is qualified as a broker-dealer. The Trust, on behalf of the Fund, and the Distributor are parties to a Distribution Agreement that continues through April 1998, and thereafter from year to year if such continuation is specifically approved at least annually by the trustees or by vote of a majority of the outstanding shares of the Fund and in either case by vote of a majority of the trustees of the Trust who are not "interested persons" (as that term is defined in the Investment Company Act of 1940) of the Trust or the Distributor. The Distribution Agreement is subject to termination by the Trust or the Distributor on not more than 60 days' prior written notice, and terminates automatically in the event of its assignment. Under the Distribution Agreement, the Distributor continuously offers the Fund's shares and solicits orders to purchase Fund shares at net asset value. OTHER INFORMATION Davis, Graham & Stubbs LLP, 370 Seventeenth Street, Denver, Colorado, acts as counsel to the Fund. Ernst & Young LLP, 233 South Wacker Drive, Chicago, Illinois, acted as independent accountants for the Fund for the fiscal year ended December 31, 1996. The Fund has filed with the Securities and Exchange Commission, Washington, D.C., a Registration Statement under the Securities Act of 1933, as amended, with respect to the securities of the Fund of which this Statement of Additional Information is -30- a part. If further information is desired with respect to the Fund or such securities, reference is made to the Registration Statement and the exhibits filed as a part thereof. Financial Statements - -------------------- The statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights for the Fund for the fiscal year ended December 31, 1996, and the Report of Independent Auditors thereon dated January ___, 1997, are incorporated by reference into this Statement of Additional Information from the Annual Report to Shareholders dated December 31, 1996, for the Fund. A copy of the 1996 Annual Report for the Fund is enclosed with this Statement of Additional Information. -31- APPENDIX A HIGH-YIELD/HIGH RISK CONVERTIBLE BONDS The Fund may purchase securities which are convertible into common stock when the Fund's management believes they offer the potential for a higher total return than nonconvertible securities. While fixed income securities generally have a priority claim on a corporation's assets over that of common stock, some of the convertible securities which the Fund may hold are high-yield/high- risk securities that are subject to special risks, including the risk of default in interest or principal payments which could result in a loss of income to the Fund or a decline in the market value of the securities. Convertible securities often display a degree of market price volatility that is comparable to common stocks. Specifically, corporate debt securities which are below investment grade (securities rated Ba or lower by Moody's or BB or lower by Standard & Poor's) and unrated securities which the Fund may purchase and hold are subject to a higher risk of non-payment of principal or interest, or both, than higher grade debt securities. Generally speaking, the lower the quality of a debt security (which may be reflected in its Moody's and/or Standard & Poor's ratings), the higher the yield it will provide, but the greater the risk that interest or principal payments will not be made when due. Thus, the lower the grade of a security, the more speculative characteristics it generally has. Information about the ratings of Moody's and Standard & Poor's, and the investment risks associated with the various ratings, is set forth below. The market prices of these lower grade convertible securities are generally less sensitive to interest rate changes than higher-rated investments, but more sensitive to economic changes or individual corporate developments. Periods of economic uncertainty and change can be expected to result in volatility of prices of these securities. Lower rated securities also may have less liquid markets than higher rated securities, and their liquidity as well as their value may be adversely affected by poor economic conditions. Adverse publicity and investor perceptions as well as new or proposed laws may also have a negative impact on the market for high-yield/high-risk bonds. CORPORATE BOND RATINGS The ratings of fixed-income securities by Moody's and Standard & Poor's are a generally accepted measurement of credit risk. However, they are subject to certain limitations. Ratings are generally based upon historical events and do not necessarily reflect the future. In addition, there is a period of time between the issuance of a rating and the update of the rating, during which time a published rating may be inaccurate. -32- KEY TO MOODY'S CORPORATE RATINGS Aaa-Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa-Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long- term risks appear somewhat larger than in Aaa securities. A-Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future. Baa-Bonds which are rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Ba-Bonds which are rated Ba are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate and thereby not well safeguarded during good and bad times over the future. Uncertainty of position characterizes bonds of this class. B-Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. Caa-Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest. Ca-Bonds which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings. -33- C-Bonds which are rated C are the lowest rated class of bonds and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing. Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating classification from Aa through B in its corporate bond rating system. The modifier 1 indicates that the security ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks in the lower end of its generic category. KEY TO STANDARD & POOR'S CORPORATE RATINGS AAA-Debt rated AAA has the highest rating assigned by Standard & Poor's. Capacity to pay interest and repay principal is extremely strong. AA-Debt rated AA has a very strong capacity to pay interest and repay principal and differs from the higher rated issues only in small degree. A-Debt rated A has a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories. BBB-Debt rated BBB is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions, or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher rated categories. BB, B, CCC, CC AND C-Debt rated BB, B, CCC, CC and C is regarded, on balance, as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation. BB indicates the lowest degree of speculation and C the highest degree of speculation. While such debt will likely have some quality and protective characteristics, these are out-weighed by the large uncertainties or major risk exposures to adverse conditions. C1-The rating C1 is reserved for income bonds on which no interest is being paid. D-Debt rated D is in default, and payment of interest and/or repayment of principal is in arrears. PLUS (+) OR MINUS (-)-The ratings from "AA" to "CCC" may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. -34- THE OMNI INVESTMENT FUND PART C. OTHER INFORMATION ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements. ____________________ In Part A of the Registration Statement (Prospectus): 1. Financial Highlights for the periods indicated. Incorporated by reference from the Fund's Annual Report dated December 31, 1996, into Part B of the Registration Statement (Statement of Additional Information): 1. Report of the Independent Accountants, dated January ___, 1997 2. Statement of Assets and Liabilities as of December 31, 1996 3. Portfolio of Investments as of December 31, 1996 4. Statement of Operations for the Year Ended December 31, 1996 5. Statement of Changes in Net Assets for the Years Ended December 31, 1996 and 1995 6. Notes to Financial Statements, December 31, 1996 7. Financial Highlights for the periods indicated. In Part C of the Registration Statement: None. (b) Exhibits. ________ The Exhibit Index following the signature page below is incorporated herein by reference. ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT. None. C-1 ITEM 26. NUMBER OF HOLDERS OF SECURITIES The number of record holders of shares of beneficial interest in the Registrant (the only class of securities outstanding) as of November 30, 1996, was as follows: (1) (2) Number of Title of Class Record Holders ______________ ______________ Shares of Beneficial 1,263 Interest in The Omni Investment Fund ITEM 27. INDEMNIFICATION. Article XII of the Amended and Restated Declaration of Trust of the Registrant, dated April 19, 1990, provides for indemnification of officers and trustees of the Trust against liabilities and expenses of litigation incurred by them in connection with any claim, action, suit or proceeding (or settlement of the same) in which they become involved by virtue of their office, unless their conduct is determined to constitute willful misfeasance, bad faith, gross negligence or reckless disregard of their duties or unless it has been determined that they have not acted in good faith in the reasonable belief that their actions were in or not opposed to the best interests of the Trust. The Trust also may advance money for these expenses, provided that the trustees or officers undertake to repay the Trust if it is ultimately determined that they are not entitled to indemnification. The Trust has the power to purchase insurance on behalf of its trustees and officers, whether or not it would be permitted or required to indemnify them for any such liability under the Declaration of Trust or applicable law, and the Trust has purchased and maintains an insurance policy covering such persons against certain liabilities incurred in their official capacities. ITEM 28. BUSINESS OR OTHER CONNECTIONS OF INVESTMENT ADVISER. The business of Berger Associates, Inc., the investment adviser of the Fund, is described in the Prospectus in Section 6 and in the Statement of Additional Information in Section 3 which are included in this Registration Statement. Information relating to the business and other connections of the officers and directors of Berger Associates (current and for the past two years) is listed in Schedules A and D of Berger Associates' Form ADV as filed with the Securities and Exchange Commission (File No. 801-9451, dated July 22, 1996), which information from such schedules is incorporated herein by reference. C-2 The business of Perkins, Wolf, McDonnell & Company ("PWM"), sub- advisor to the Fund, is also described in Section 6 of the Prospectus and in Section 3 of the Statement of Additional Information. Information relating to the business and other connections of the officers and directors of PWM (current and for the past two years) is listed in Schedules A and D of PWM's Form ADV as filed with the Securities and Exchange Commission (File No. 801-19974, dated July 26, 1994), which information from such schedules is incorporated herein by reference. ITEM 29. PRINCIPAL UNDERWRITER. (a) Investment companies (other than the Registrant) for which the Registrant's principal underwriter also acts as principal underwriter (or will act as principal underwriter, as of the effective date of this Registration Statement amendment): The One Hundred Fund, Inc. Berger One Hundred and One Fund, Inc. Berger Investment Portfolio Trust - --Berger Small Company Growth Fund - --Berger New Generation Fund Berger Institutional Products Trust - --Berger IPT - 100 Fund - --Berger IPT - Growth and Income Fund - --Berger IPT - Small Company Growth Fund Berger/BIAM Worldwide Funds Trust - --Berger/BIAM International Fund - --Berger/BIAM International Institutional Fund - --Berger/BIAM International CORE Fund (b) For Berger Distributors, Inc.: Name Positions and Positions and Offices with Offices with Underwriter Registrant Craig D. Cloyed President and Director Vice President David G. Mertens Vice President and and Director None David J. Schultz Chief Financial Officer Assistant Treasurer Brian S. Ferrie Chief Compliance Officer None Kevin R. Fay Director Vice President, Secretary and Treasurer C-3 The principal business address of Mr. Mertens is 1850 Parkway Place, Suite 420, Marietta, GA 30067. The principal business address of each of the other persons in the table above is 210 University Blvd., Suite 900, Denver, CO 80206. (c) Not applicable. ITEM 30. LOCATION OF ACCOUNTS AND RECORDS. The accounts, books and other documents required to be maintained by Section 31(a) of the 1940 Act and the rules promulgated thereunder are maintained as follows: (a) Shareholder records are maintained by the Registrant's sub- transfer agent, DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141; (b) Accounting records relating to cash and other money balances; asset, liability, reserve, capital, income and expense accounts; portfolio securities; purchases and sales; and brokerage commissions are maintained by the Registrant's Recordkeeping and Pricing Agent, Investors Fiduciary Trust Company ("IFTC"), 127 West 10th Street, Kansas City, Missouri 64105. Other records of the Registrant relating to purchases and sales; the Declaration of Trust; minute books and other trust records; brokerage orders; performance information and other records are maintained at the offices of the Registrant at 210 University Boulevard, Suite 900, Denver, Colorado 80206. (c) Certain records relating to day-to-day portfolio management of the Fund are kept at the offices of Perkins, Wolf, McDonnell & Company, 53 West Jackson Boulevard, Suite 818, Chicago, Illinois 60604. ITEM 31. MANAGEMENT SERVICES. None. ITEM 32. UNDERTAKINGS. (a) The Registrant undertakes to furnish each person to whom a prospectus is delivered with a copy of Registrant's latest annual report to shareholders, upon request and without charge. C-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this Post-Effective Amendment No. 11 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, and the State of Illinois, on the 13th day of December, 1996. THE OMNI INVESTMENT FUND By: Robert H. Perkins ____________________________________ Robert H. Perkins President Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 11 to the Registration Statement has been signed below by the following persons in the capacities and on the date indicated: Signatures Title Date __________ _____ ____ President (Principal Executive Officer) Robert H. Perkins and Trustee December 13, 1996 _________________________ Treasurer (Principal Financial and Accounting Officer) Gregory E. Wolf and Trustee December 13, 1996 _________________________ Burt W. Engelberg Trustee December 13, 1996 ________________________ John R. Hall Trustee December 13, 1996 ________________________ Keith L. Cook Trustee December 13, 1996 ________________________ C-5 THE OMNI INVESTMENT FUND EXHIBIT INDEX N-1A EDGAR Exhibit Exhibit No. No. Name of Exhibit _____________ __________ __________________________ * Exhibit 1 EX-99.B1 Amended and Restated Declaration of Trust * Exhibit 2 EX-99.B2 Bylaws Exhibit 3 Not applicable Exhibit 4 Not applicable * Exhibit 5.1 EX-99.B5.1 Form of Investment Advisory Agreement between the Trust and Berger Associates, Inc. * Exhibit 5.2 EX-99.B5.2 Form of Sub-Advisory Agreement between Berger Associates, Inc. and Perkins, Wolf, McDonnell & Co. * Exhibit 6 EX-99.B6 Form of Distribution Agreement between the Trust and Berger Distributors, Inc. Exhibit 7 Not applicable * Exhibit 8 EX-99.B8 Form of Custody Agreement between IFTC and the Trust ** Exhibit 9.1.1 EX-99.B9.1.1 New Account Application for Investor Shares ** Exhibit 9.1.2 EX-99.B9.1.2 New Account Application for Institutional Shares * Exhibit 9.2 EX-99.B9.2 Form of Administrative Services Agreement for Berger Small Cap Value Fund * Exhibit 9.3 EX-99.B9.3 Form of Recordkeeping and Pricing Agent Agreement between IFTC and the Trust * Exhibit 9.4 EX-99.B9.4 Form of (Transfer) Agency Agreement between IFTC and the Turst + Exhibit 10 Opinion and consent of Counsel ** Exhibit 11 EX-99.B11 Consent of Ernst & Young LLP Exhibit 12 Not applicable + Exhibit 13 Investment Letters from Initial Stockholders ++ Exhibit 14.1 EX-99.B14.1 Individual Retirement Account Application and Related Documents ++ Exhibit 14.2 EX-99.B14.2 Investment Company Institute Prototype Money Purchase Pension and Profit Sharing C-6 Plan Basic Document #01 and Related Documents ++ Exhibit 14.3 EX-99.B14.3 403(b)(7) Plan Custodial Account Agreement and Related Documents * Exhibit 15 EX-99.B15 Rule 12b-1 Plan for Berger Small Cap Value Fund Investor Shares + Exhibit 16 Schedule for Computation of Performance Data ** Exhibit 17.1 EX-27.1 Financial Data Schedule for the Berger Small Cap Value Fund Investor Shares ** Exhibit 17.2 EX-27.2 Financial Data Schedule for the Berger Small Cap Value Fund Institutional Shares * Exhibit 18 EX-99.B18 Rule 18f-3 Plan for the Berger Small Cap Value Fund ___________________________ * Filed herewith. ** To be filed by amendment. + Previously filed with Post-Effective Amendment No. 10 to Registrant's Registration Statement on Form N-1A, filed April 30, 1996, and incorporated herein by reference. ++ Previously filed with Pre-Effective Amendment No. 2 to the Registration Statement on Form N-1A of Berger/BIAM Worldwide Funds Trust, filed October 8, 1996, and incorporated herein by reference. C-7 EX-99.B1 2 AMENDED-RESTATED DECLARATION OF TRUST EXHIBIT 1 AMENDED AND RESTATED DECLARATION OF TRUST OF BERGER OMNI INVESTMENT TRUST (formerly known as THE OMNI INVESTMENT FUND) Original Date: April 19, 1990 As Amended and Restated through: February 14, 1997 TABLE OF CONTENTS ARTICLE I NAME AND DEFINITIONS. . . . . . . . . . . .2 NAME AND PRINCIPAL PLACE OF BUSINESS. . . . . . .2 DEFINITIONS. . . . . . . . . . . . . . . . . . . 2 ARTICLE II PURPOSE OF TRUST. . . . . . . . . . . .3 ARTICLE III BENEFICIAL INTEREST. . . . . . . . . . 3 SHARES OF BENEFICIAL INTEREST. . . . . . . . . . 3 ESTABLISHMENT OF SERIES AND CLASSES. . . . . . . 4 OWNERSHIP OF SHARES. . . . . . . . . . . . . . . 4 INVESTMENT IN THE TRUST. . . . . . . . . . . . . 4 ASSETS AND LIABILITIES OF SERIES AND CLASSES. . .4 NO PREEMPTIVE RIGHTS. . . . . . . . . . . . . . .5 STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY. . . . . . . . . . . . . . . . . . . . 5 ARTICLE IV THE TRUSTEES. . . . . . . . . . . . . .6 MANAGEMENT OF THE TRUST. . . . . . . . . . . . . 6 ELECTION: INITIAL TRUSTEES. . . . . . . . . . . .6 TERM OF OFFICE OF TRUSTEES. . . . . . . . . . . .6 RESIGNATION AND APPOINTMENT OF TRUSTEES. . . . . 7 TEMPORARY ABSENCE OF TRUSTEE. . . . . . . . . . .7 NUMBER OF TRUSTEES. . . . . . . . . . . . . . . .7 EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE. 8 OWNERSHIP OF ASSETS OF THE TRUST. . . . . . . . .8 ARTICLE V POWERS OF THE TRUSTEES. . . . . . . . . . . 8 POWERS. . . . . . . . . . . . . . . . . . . . . .8 TRUSTEES AND OFFICERS AS SHAREHOLDERS. . . . . .11 ACTION BY THE TRUSTEES. . . . . . . . . . . . . 11 CHAIRMAN OF THE TRUSTEES. . . . . . . . . . . . 11 ARTICLE VI EXPENSES OF THE TRUST. . . . . . . . . 11 TRUSTEE REIMBURSEMENT. . . . . . . . . . . . . . 11 ARTICLE VII INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND TRANSFER AGENT. . . . . . . . . . 12 INVESTMENT ADVISER. . . . . . . . . . . . . . . 12 PRINCIPAL UNDERWRITER. . . . . . . . . . . . . . 13 TRANSFER AGENT. . . . . . . . . . . . . . . . . 13 PARTIES TO CONTRACT. . . . . . . . . . . . . . . 13 PROVISIONS AND AMENDMENTS. . . . . . . . . . . . 13 ARTICLE VIII SHAREHOLDERS' VOTING POWERS AND MEETINGS. . . . . . . . . . . . . . . .14 VOTING POWERS. . . . . . . . . . . . . . . . . . 14 MEETINGS. . . . . . . . . . . . . . . . . . . . 14 QUORUM AND REQUIRED VOTE. . . . . . . . . . . . 15 ARTICLE IX CUSTODIAN. . . . . . . . . . . . . . . 15 APPOINTMENT AND DUTIES. . . . . . . . . . . . . 15 CENTRAL CERTIFICATE SYSTEM. . . . . . . . . . . 16 ARTICLE X DISTRIBUTIONS AND REDEMPTIONS. . . . . 16 DISTRIBUTIONS. . . . . . . . . . . . . . . . . .16 REDEMPTION OF SHARES. . . . . . . . . . . . . . 17 DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS. . . . . . . . . . . . . . .17 SUSPENSION OF THE RIGHT OF REDEMPTION. . . . . .18 -i- ARTICLE XI COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES COMPENSATION. . . . . . . .18 LIMITATION OF LIABILITY. . . . . . . . . . . . . 18 ARTICLE XII INDEMNIFICATION. . . . . . . . . . . . 19 COVERED PERSONS. . . . . . . . . . . . . . . . . 19 SHAREHOLDERS. . . . . . . . . . . . . . . . . . 21 ARTICLE XIII MISCELLANEOUS. . . . . . . . . . . . . 21 TRUST NOT A PARTNERSHIP; TRUSTEES, SHAREHOLDERS, ETC.NOT PERSONALLY LIABLE; NOTICE. . . . . . 21 TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY. . . . . . . . . . . . . . . . 22 ESTABLISHMENT OF RECORD DATES.. . . . . . . . . .22 TERMINATION OF TRUST. . . . . . . . . . . . . . .23 FILING OF COPIES, REFERENCES, HEADINGS, GENDER, ETC.. . . . . . . . . . . . . . . . . . .23 APPLICABLE LAW. . . . . . . . . . . . . . . . . 24 AMENDMENTS. . . . . . . . . . . . . . . . . . . 24 FISCAL YEAR. . . . . . . . . . . . . . . . . . . 24 SEVERABILITY. . . . . . . . . . . . . . . . . . 25 -ii- AMENDED AND RESTATED DECLARATION OF TRUST DATE: February 14, 1997 AMENDED AND RESTATED DECLARATION OF TRUST (the "Declaration of Trust"), made February 14, 1997, by Robert H. Perkins, Gregory E. Wolf, Burt W. Engelberg, John R. Hall and Keith L. Cook, as Trustees, and by the undersigned, as settlor. RECITALS ________ 1. This Trust was organized as a Massachusetts business trust on April 19, 1990 when its original Declaration of Trust was filed with the Secretary of State of the Commonwealth of Massachusetts. 2. On September 30, 1994, the original Declaration of Trust was amended and restated by the Trustees in accordance with Article XIII, Section 7 thereof for the purpose of reducing the par value per share of the Trust from $0.10 to $0.01 as a result of a 10 for 1 subdivision of the Trust's shares outstanding at that time. 3. On December 12, 1996, the Amended and Restated Declaration of Trust (adopted on September 30, 1994), was amended and restated by the Trustees in accordance with Article XIII, Section 7 thereof for the purpose of supplying omissions, curing defects and correcting or supplementing any defective or inconsistent provisions. 3. Pursuant to Article XIII, Section 7 of the Amended and Restated Declaration of Trust (adopted on December 12, 1996), this Amended and Restated Declaration of Trust (adopted on the date hereof) restates and integrates and further amends the Amended and Restated Declaration of Trust (adopted on December 12, 1996). 4. The text of the Amended and Restated Declaration of Trust, as heretofore amended or supplemented, is hereby restated and further amended to read in its entirety as follows: NOW, THEREFORE, the Trustees declare that all money and property contributed to the trust fund hereunder shall be held and managed in trust under this Declaration of Trust as herein set forth below. ARTICLE I NAME AND DEFINITIONS NAME AND PRINCIPAL PLACE OF BUSINESS 1. This Trust shall be known as the "Berger Omni Investment Trust", and the Trustees shall conduct the business of the Trust under that name or any other name as they may from time to time determine. The principal place of business of the Trust shall be Suite 818, 53 West Jackson Boulevard, Chicago, Illinois, or such other place as the Trustees may from time to time determine. DEFINITIONS 2. Wherever used herein, unless otherwise required by the context or specifically provided: (a) The terms "Affiliated Person", "Assignment", "Commission", "Interested Person", "Majority Shareholder Vote" (the 67 percent or 50 percent requirement of the third sentence of Section 2(a)(42) of the 1940 Act, whichever may be applicable) and "Principal Underwriter" shall have the meanings given them in the 1940 Act; (b) "Bylaws" means the Bylaws of the Trust, as amended from time to time; (c) "Class" means any class of Shares of a Series established pursuant to Article III; (d) "Net Asset Value" means the net asset value of each Series of the Trust determined in the manner provided in Article X, Section 3; (e) "Series" means a series of Shares established pursuant to Article III; (f) "Shareholder" means a record owner of Shares; (g) "Shares" means the equal proportionate transferable units of interest into which the beneficial interest of each Series or Class shall be divided from time to time, and includes fractions of shares as well as whole shares consistent with the requirements of Federal and/or other securities laws; (h) The "Trust" refers to The Omni Investment Fund and reference to the Trust, when applicable to one or more Series of the Trust, shall refer to any such Series; (i) The "Trustees" refer to the individual Trustees in their capacity as trustees hereunder of the Trust and their successor or successors for the time being in office as such trustee or trustees; and -2- (j) The "1940 Act" refers to the Investment Company Act of 1940 and the rules and regulations promulgated thereunder by the Securities and Exchange Commission, all as amended from time to time. ARTICLE II PURPOSE OF TRUST 1. The purpose of this Trust is to provide investors a continuous source of managed investment in securities and debt instruments selected by the Trustees or by an investment adviser under their direction to carry out the investment policies and achieve the investment objectives of the Trust or any Series thereof. ARTICLE III BENEFICIAL INTEREST SHARES OF BENEFICIAL INTEREST 1. The beneficial interest in the Trust shall be divided into such transferable Shares which may be of one or more separate and distinct Series or Classes established by the Trustees from time to time. The number of Shares of each Series or Class is unlimited and each Share shall have $0.01 par value or be without par value, as determined by resolution of the Trustees and, when duly issued and paid for in accordance with the terms and conditions of the Trust, shall be fully paid and nonassessable. The Trustees shall have full power and authority, in their sole discretion and without obtaining any prior authorization or vote of the Shareholders of the Trust: (a) to issue original or additional Shares at such times and for the amount and type of consideration and on such terms and conditions as they deem appropriate; (b) to establish and to change in any manner Shares of any Series or Classes with such preferences, terms of conversion, exchange privileges, voting powers, rights and privileges as the Trustees may determine (but without a vote of a majority of the outstanding Shares of the Series or Class, as the case may be, voting as a class, the Trustees may not change outstanding Shares in a manner materially adverse to the Shareholders of such Shares); (c) to divide or combine the Shares of any Series or Classes into a greater or lesser number; (d) to classify or reclassify any issued Shares into one or more Series or Classes of Shares; (e) to abolish any one or more Series or Classes of Shares; (f) to issue Shares to acquire other assets (including assets subject to, and in connection with, the assumption of liabilities) and businesses; (g) to issue fractional Shares and Shares held in the treasury; and (h) to take such other action consistent with the foregoing with respect to the Shares as the Trustees may deem desirable. -3- ESTABLISHMENT OF SERIES AND CLASSES 2. The Trust shall consist of one or more Series. The establishment of any Series shall be effective upon the adoption of a resolution of the Trustees setting forth such establishment and designation. The Trustees may divide the Shares of any Series into Classes. In such case, each Class of a Series shall represent interests in the assets of that Series. The Trustees by resolution may designate the relative rights and preferences of the Shares of each Series or Class. The Trust shall maintain separate and distinct records for each Series and hold and account for the assets thereof separately from the other assets of the Trust or of any other Series. A Series may issue any number of Shares and need not issue Shares. Each Share of a Series shall represent an equal beneficial interest in the net assets of such Series. Each holder of Shares of a Series or Class shall be entitled to receive his pro rata share of all distributions made with respect to such Series or Class. Upon redemption of his Shares, such Shareholder shall be paid solely out of the funds and property of such Series. The Trustees may change the name of any Series or Class. At any time that there are no Shares outstanding of any particular Series or Class previously established and designated, the Trustees may by resolution abolish that Series or Class and rescind the establishment and designation thereof. OWNERSHIP OF SHARES 3. The ownership of Shares shall be recorded in the books of the Trust or a transfer or similar agent. The Trustees may make such rules as they consider appropriate for the transfer of Shares and similar matters. The record books of the Trust shall be conclusive as to who are the record holders of Shares and as to the number of Shares held from time to time by each such Shareholder. INVESTMENT IN THE TRUST 4. The Trustees shall accept investments in the Trust from such persons and on such terms as they may from time to time authorize. Such investments may be in the form of cash or securities in which the appropriate Series is authorized to invest, valued in the same manner as are the Trust's portfolio securities as provided in Article X, Section 3. Upon the initial contribution of capital, the number of Shares to represent the initial contribution may in the Trustees' discretion be considered as outstanding and the amount received by the Trustees on account of the contribution shall be treated as an asset of the Trust. Subsequent investments in the Trust shall be credited to each Shareholder's account in the form of full or fractional Shares at the Net Asset Value per Share next determined after the investment is properly received in good form; provided, however, that the Trustees may, in their sole discretion, impose a sales charge upon investments in the Trust. ASSETS AND LIABILITIES OF SERIES AND CLASSES 5. All consideration received by the Trust for the issue or sale of Shares of a particular Series, together with all assets in which such consideration is invested or reinvested, all income, earnings, profits, and proceeds thereof (including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such -4- proceeds in whatever form the same may be), shall be referred to as "assets belonging to" that Series. In addition any assets, income, earnings, profits, and proceeds thereof, funds, or payments which are not readily identifiable as belonging to any particular Series shall be allocated by the Trustees between and among one or more of the Series in such manner as they, in their sole discretion, deem fair and equitable. Each such allocation shall be conclusive and binding upon the Shareholders of all Series for all purposes and shall be referred to as assets belonging to that Series. The assets belonging to each particular Series shall be charged with the liabilities of that Series and all expenses, costs, charges and reserves attributable to that Series, except that liabilities and expenses allocated solely to a particular Class shall be borne by that Class. Any general liabilities, expenses, costs, charges or reserves of the Trust which are not readily identifiable as belonging to any particular Series or Class shall be allocated and charged by the Trustees between or among any one or more of the Series or Classes or, if appropriate, between or among any one or more of the Series or Classes and any other investment company advised by the same investment adviser, in such manner as the Trustees in their sole discretion deem fair and equitable. In each case, each such allocation shall be conclusive and binding upon the Shareholders of all Series or Classes for all purposes. Any creditor of any Series may look only to the assets of that Series to satisfy such creditor's debt. NO PREEMPTIVE RIGHTS 6. Shareholders shall have no preemptive or other right to subscribe to any additional Shares or other securities issued by the Trust or the Trustees. STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY 7. Shares shall be deemed to be personal property giving only the rights provided in this instrument. Every Shareholder by virtue of having become a Shareholder shall be held to have expressly assented and agreed to the terms hereof and to have become a party hereto. The death of a Shareholder during the continuance of the Trust shall not operate to terminate the Trust or entitle the representative of any deceased Shareholder to an accounting or to take any action in court or elsewhere against the Trust or the Trustees. Ownership of Shares shall not entitle the Shareholder to any title in or to the whole or any part of the Trust property nor any right to call for a partition or division of the same or for an accounting. The Trustees shall have no power to bind any Shareholder personally or to call upon any Shareholder for the payment of any sum of money or assessment whatsoever other than such as the Shareholder may at any time personally agree to pay by way of subscription for any Shares or otherwise. Every note, bond, contract or other undertaking issued by or on behalf of the Trust or the Trustees relating to the Trust shall include a recitation limiting the obligation represented thereby to the Trust and its assets (but the omission of such a recitation shall not operate to bind any Shareholder). -5- ARTICLE IV THE TRUSTEES MANAGEMENT OF THE TRUST 1. The business and affairs of the Trust shall be managed by the Trustees, and they shall have all powers necessary and desirable to fully carry out that responsibility. ELECTION: INITIAL TRUSTEES 2. The initial Trustees shall be Robert H. Perkins, Gregory E. Wolf, Burt W. Engelberg, John R. Hall and Keith L. Cook and such other individuals as the Board of Trustees shall appoint pursuant to Section 4 of Article IV. The Trustees shall be elected by the Shareholders of the Trust at the first meeting of Shareholders immediately prior to the date that the Trust acquires assets in addition to the original contribution of the settlor, and the term of office of the initial Trustees in office before such election shall terminate at the time of such election. TERM OF OFFICE OF TRUSTEES 3. The Trustees shall hold office during the lifetime of this Trust, and until its termination as hereinafter provided; except (a) that any Trustee may resign his trust by written instrument signed by him and delivered to the other Trustees, which shall take effect upon such delivery or upon such later date as is specified therein; (b) that any Trustee may be removed at any time by written instrument, signed by at least three- fourths of the number of Trustees prior to such removal (but not including any Trustee who is the subject of the removal), specifying the date when such removal shall become effective; (c) that any Trustee who requests in writing to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees, specifying the date of his retirement; and (d) a Trustee may be removed at any special meeting of the Trust by a vote of two- thirds of the outstanding Shares or such lesser vote as may be mandated by the 1940 Act. As used herein, "incapacitated" and "incapacity" shall mean the inability of a Trustee, for a period of 90 days, whether or not consecutive, during a 180 day period, to perform his duties or obligations to the Trust, as determined by at least three-fourths of the number of the remaining Trustees. -6- RESIGNATION AND APPOINTMENT OF TRUSTEES 4. In case of the declination, death, resignation, retirement or removal of any of the Trustees, or in case a vacancy shall, by reason of an increase in number, or for any other reason, exist, the remaining Trustees shall fill such vacancy by appointing such other person as they in their discretion shall see fit consistent with the limitations under the 1940 Act. Such appointment shall be evidenced by a written instrument signed by a majority of the Trustees in office or by a recording in the records of the Trust, whereupon the appointment shall take effect. Within three (3) months of such appointment the Trustees shall cause notice of such appointment to be mailed to each Shareholder at his address as recorded on the books of the Trust. An appointment of a Trustee may be made by the Trustees then in office and notice thereof mailed to Shareholders as aforesaid in anticipation of a vacancy to occur by reason of retirement, resignation or increase in number of Trustees effective at a later date, provided that said appointment shall become effective only at or after the effective date of said retirement, resignation or increase in number of Trustees. As soon as any Trustee so appointed shall have accepted this trust, the trust estate shall vest in the new Trustee or Trustees, together with the continuing Trustees, without any further act or conveyance, and he shall be deemed a Trustee hereunder. The power of appointment is subject to the applicable provisions of the 1940 Act. TEMPORARY ABSENCE OF TRUSTEE 5. Any Trustee may, by power of attorney, delegate his powers hereunder for a period not exceeding six (6) months at any one time to any other Trustee or Trustees, provided that in no case shall less than two (2) Trustees personally exercise the other powers hereunder except as herein otherwise expressly provided. NUMBER OF TRUSTEES 6. The number of Trustees serving hereunder shall initially be five (5), but may hereafter be increased or decreased at any time by the Trustees provided that there shall be at least three (3). Whenever a vacancy in the Board of Trustees shall occur, until such vacancy is filled, or while any Trustee is absent from The Commonwealth of Massachusetts or, if not a domiciliary of Massachusetts, is absent from his state of domicile, or is incapacitated by reason of disease or otherwise, the other Trustees shall have all the power hereunder, and the certificate of the other Trustees of such vacancy, absence or incapacity, shall be conclusive, provided, however, that no vacancy shall remain unfilled for a period longer than nine (9) calendar months. -7- EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE 7. The death, declination, resignation, retirement, removal, incapacity, or disability of the Trustees, or any one of them, shall not operate to annul the Trust or to revoke any existing agency created pursuant to the terms of this Declaration of Trust. OWNERSHIP OF ASSETS OF THE TRUST 8. The assets of the Trust shall be held separate and apart from any assets now or hereafter held in any capacity other than as Trustee hereunder by the Trustees or any successor Trustees. All of the assets of the Trust shall at all times be considered as vested in the Trustees. No Shareholder shall be deemed to have a severable ownership in any individual asset of the Trust or any right of partition or possession thereof, but each Shareholder shall have a proportionate undivided beneficial interest in the Trust. ARTICLE V POWERS OF THE TRUSTEES POWERS 1. The Trustees in all instances shall act as principals, and are and shall be free from the control of the Shareholders. The Trustees shall have full power and authority to do any and all acts and to make and execute any and all contracts and instruments that they may consider necessary or appropriate in connection with the management of the Trust. The Trustees shall not in any way be bound or limited by present or future laws or customs in regard to trust investments, but shall have full authority and power to make any and all investments which they, in their uncontrolled discretion, shall deem proper to accomplish the purpose of this Trust. Subject to any applicable limitation in the Declaration of Trust or the Bylaws, the Trustees' power and authority shall include the power and authority: (a) To invest and reinvest cash and other property, and to hold cash or other property uninvested, without in any event being bound or limited by any present or future law or custom in regard to investments by Trustees, and to sell, exchange, lend, pledge, mortgage, hypothecate, write options on and lease any or all of the assets of the Trust. (b) To adopt Bylaws not inconsistent with this Declaration of Trust providing for the conduct of the business of the Trust and to amend and repeal them to the extent that right is not therein reserved to the Shareholders. (c) To elect and remove such officers and appoint and terminate such agents, independent contractors or delegates as they consider appropriate. -8- (d) To employ one or more banks, trust companies or other business firms as custodian of any assets of the Trust subject to any conditions set forth in the law, this Declaration of Trust or in the Bylaws, if any. (e) To retain a transfer agent and Shareholder servicing agent, or both. (f) To provide for the issuance and distribution of Shares of the Trust or Series or Class thereof, either through a Principal Underwriter in the manner hereinafter provided for or by the Trust itself (including issuances and distributions of Shares pursuant to any written plan which meets the requirements of Section 12 of the 1940 Act and Rule 12b-1 thereunder, and any written agreements relating to the implementation of such plan), or both, or to temporarily or permanently discontinue such issuance or distribution. (g) To set record dates in the manner hereinafter provided for. (h) To delegate such authority as they consider desirable to any officers of the Trust and to any agent, subagent, custodian, underwriter, independent contractor, delegatee, manager or investment adviser. (i) To sell or exchange any or all of the assets of the Trust, subject to the provisions of Article XIII, Section 4(b) hereof. (j) To vote or give assent, or exercise any rights of ownership, with respect to stock or other securities or property; and to execute and deliver powers of attorney to such person or persons as the Trustees shall deem proper, granting to such person or persons such power and discretion with relation to securities or property as the Trustees shall deem proper. (k) To exercise powers and rights of subscription or otherwise which in any manner arise out of ownership of securities. (l) To hold any security or property (i) in a form not indicating any trust, whether in bearer, bookkeeping entry, unregistered or other negotiable form, or (ii) either in its own name or in the name of a custodian or a nominee or nominees, subject in either case to proper safeguards according to the usual practice of investment companies. (m) To establish separate and distinct Series with separately defined investment objectives and policies and distinct investment purposes, and with separate Shares representing beneficial interests in such Series, and to establish separate Classes, all in accordance with the provisions of Article III. (n) To allocate assets, liabilities and expenses of the Trust to a particular Series or Class or to apportion the same between or among two or more Series or Classes, provided that any liabilities or expenses incurred by a particular Series or Class shall be payable solely out of the assets belonging to that Series or Class as provided for in Article III. -9- (o) To consent to or participate in any plan for the reorganization, consolidation or merger of any corporation, partnership, or concern, any security of which is held in the Trust; to consent to any contract, lease, mortgage, purchase, or sale of property by such corporation, partnership, or concern, and to pay calls or subscriptions with respect to any security held in the Trust. (p) To compromise, arbitrate, or otherwise adjust claims in favor of or against the Trust or any matter in controversy including, but not limited to, claims for taxes. (q) To pay dividends and other distributions of income and of capital gains to Shareholders in the manner hereinafter provided for. (r) To borrow money or securities to the extent permitted by the 1940 Act. The Trustees shall not pledge, mortgage or hypothecate the assets of the Trust except that, to secure borrowings, the Trustees may pledge securities. (s) To establish, from time to time, a minimum or maximum total, investment for Shareholders, and to require the redemption in whole or in part, of the Shares of any Shareholders (i) whose investment is less than or greater than such minimum or maximum, as the case may be, or (ii) by lot or other means the Trustees deem equitable, sufficient to maintain or bring the direct or indirect ownership of Shares into conformity with the requirements for qualification of any Series as a regulated investment company under the Internal Revenue Code of 1986, as amended (the "Code") and to refuse to transfer or issue any Shares to any person whose acquisition of Shares in question would, in the Trustee's judgment, result in such disqualification, upon giving notice to such Shareholder. (t) To adopt such form or forms of Share certificates as the Trustees may, from time to time, deem appropriate. (u) Such other powers and authority as are commonly exercised by or permitted to investment companies. The clauses above shall be construed as objects and powers, and the enumeration of specific powers shall not limit in any way the general powers of the Trustees. Any action by one or more of the Trustees in their capacity as such hereunder shall be deemed an action on behalf of the Trust or the applicable Series, and not an action in an individual capacity. No one dealing with the Trustees shall be under any obligation to make any inquiry concerning the authority of the Trustees, or to see to the application of any payments made or property transferred to the Trustees or upon their order. In construing this Declaration of Trust, the presumption shall be in favor of a grant of power to the Trustees. -10- TRUSTEES AND OFFICERS AS SHAREHOLDERS 2. Any Trustee, officer or agent of the Trust may acquire, own and dispose of Shares to the same extent as if he were not a Trustee, officer or agent; and the Trustees may issue and sell or cause to be issued and sold Shares to and buy such Shares from any such person or any firm or company in which he is interested, subject only to the general limitations herein contained as to the sale and purchase of such Shares, and all subject to any restrictions which may be contained in the Bylaws. ACTION BY THE TRUSTEES 3. The Trustees shall act by majority vote at a meeting duly called at which a quorum is present or by unanimous written consent without a meeting. Trustees may participate in any meeting in person or by telephone conference provided that all participants are able to hear one another, subject to any requirement under the 1940 Act that a particular action be taken at a meeting of the Trustees in person. At any meeting of the Trustees, a majority of the Trustees shall constitute a quorum. Meetings of the Trustees may be called orally or in writing by the Chairman of the Trustees or at his order or discretion or by any two other Trustees. Notice of the time, date and place of all meetings of the Trustees shall be given by the party calling the meeting to each Trustee in the manner provided in the Bylaws. Notice need not be given to any Trustee who attends the meeting without objecting to the lack of notice or who executes a written waiver of notice with respect to the meeting. Subject to the requirements of the 1940 Act, the Trustees by majority vote may delegate to any one of their number their authority to approve particular matters or take particular actions on behalf of the Trust. Any written consent or waiver may be provided and delivered to the Trust by facsimile or other similar electronic mechanism. CHAIRMAN OF THE TRUSTEES 4. The Trustees may appoint one of their number to be a non-officer Chairman of the Board of Trustees. The Chairman shall preside at all meetings of the Trustees, and he may be without limitation the chief executive, financial and accounting officer of the Trust. ARTICLE VI EXPENSES OF THE TRUST TRUSTEE REIMBURSEMENT 1. Subject to the provisions of Article III, Section 5, the Trustees shall be reimbursed from the Trust estate or the assets belonging to the appropriate Series for their expenses and disbursements, including, without limitation, interest expenses, taxes, fees and commissions of every kind, expenses of pricing Trust portfolio securities, expenses of issue, repurchase and redemption of shares including expenses attributable to a program of periodic repurchases or redemptions, under Federal and State laws and regulations, charges of custodians, transfer -11- agents, and registrars, expenses of preparing and setting up in type Prospectuses and Statements of Additional Information, expenses of printing and distributing Prospectuses sent to existing Shareholders, auditing and legal expenses, reports to Shareholders, expenses of meetings of Shareholders and proxy solicitations therefor, insurance expenses, association membership dues and for such non-recurring items as may arise, including litigation to which the Trust is a party, and for all losses and liabilities by them incurred in administering the Trust, and for the payment of such expenses, disbursements, losses and liabilities. The Trustees shall have a lien on the assets belonging to the appropriate Series prior to any rights or interests of the Shareholders thereto. This section shall not preclude the Trust from directly paying any of the aforementioned fees and expenses. ARTICLE VII INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND TRANSFER AGENT INVESTMENT ADVISER 1. Subject to the requirements of the 1940 Act, the Trustees may in their discretion from time to time enter into one or more investment advisory or management contract(s) with respect to the Trust or any Series thereof whereby the other party(ies) to such contract(s) shall undertake to furnish the Trustees such management, investment advisory, statistical and research facilities and service and such other facilities and services, if any, and all upon such terms and conditions, as the Trustees may in their discretion determine. Notwithstanding any provisions of this Declaration of Trust, the Trustees may authorize the investment adviser(s) (subject to such general or specific instructions as the Trustees may from time to time adopt) to effect purchases, sales or exchanges pursuant to recommendations of the investment adviser (and all without further action by the Trustees). Any such purchases, sales and exchanges shall be deemed to have been authorized by all of the Trustees. The Trustees may, subject to applicable requirements of the 1940 Act, including those relating to Shareholder approval, authorize the investment adviser to employ one or more sub- advisers from time to time to perform such of the acts and services of the investment adviser, and upon such terms and conditions, as may be agreed upon between the investment adviser and subadviser. Any reference in this Declaration of Trust to the investment adviser shall be deemed to include such sub- advisers, unless the context otherwise requires. PRINCIPAL UNDERWRITER 2. The Trustees may in their discretion from time to time enter into contract(s) providing for the sale of the Shares, whereby the Trust may either agree to sell the Shares to the other party to the contract or appoint such other party its sales agent for such Shares. In either case, the contract shall be on such terms and conditions as may be prescribed in the Bylaws, if any, -12- and such further terms and conditions as the Trustees may in their discretion determine not inconsistent with the provisions of this Article VII, or of the Bylaws, if any; and such contract may also provide for the repurchase or sale of Shares by such other party as principal or as agent of the Trust. TRANSFER AGENT 3. The Trustees may in their discretion from time to time enter into one or more contracts whereby the other party shall undertake to furnish the Trustees with transfer agency and/or Shareholder services. The contracts shall be on such terms and conditions as the Trustees may in their discretion determine not inconsistent with the provisions of this Declaration of Trust or of the Bylaws, if any. Such services may be provided by one or more entities. PARTIES TO CONTRACT 4. The Trust may enter into any contract with any corporation, firm, partnership, trust or association, although one or more of the Trustees or officers of the Trust may be an officer, director, trustee, shareholder, partner or member of such other party to the contract, and no such contract shall be invalidated or rendered voidable by reason of the existence of any such relationship, nor shall any person holding such relationship be liable merely by reason of such relationship for any loss or expense to the Trust under or by reason of said contract or accountable for profit realized directly or indirectly therefrom, provided that the contract when entered into was reasonable and fair and not inconsistent with the provisions of this Article VII or the Bylaws, if any. PROVISIONS AND AMENDMENTS 5. Any contract entered into pursuant to Sections 1 and 2 of this Article VII and any amendments thereof shall be consistent with and subject to the requirements of the 1940 Act (including any amendments thereof or other applicable Act of Congress hereafter enacted) with respect to its continuance in effect, its termination, and the method of authorization and approval of such contract or renewal thereof. ARTICLE VIII SHAREHOLDERS' VOTING POWERS AND MEETINGS VOTING POWERS 1. The Shareholders shall have power to vote (i) for the election of Trustees as provided in Article IV, Section 2, (ii) for the removal of Trustees as provided in Article IV, Section 3(d), (iii) with respect to any investment advisory or management contract as provided in Article VII, Section 1, (iv) with respect to the amendment of this Declaration of Trust as provided in Article -13- XIII, Section 7, (v) to the same extent as the shareholders of a Delaware business corporation, as to whether or not a court action, proceeding or claim should be brought or maintained derivatively or as a class action on behalf of the Trust or the Shareholders, provided, however, that a Shareholder of a particular Series or Class shall not be entitled to bring any derivative or class action on behalf of any other Series or Class of the Trust, and (vi) with respect to such additional matters relating to the Trust as may be required or authorized by Federal or state law, by this Declaration of Trust, or the Bylaws, if any, or any registration of the Trust with the Securities and Exchange Commission (the "Commission"), as the Trustees may consider desirable. On any matter submitted to a vote of the Shareholders, all Shares shall be voted by individual Series or Class, except (i) when required by the 1940 Act, Shares shall be voted in the aggregate and not by individual Series or Class or (ii) when the Trustees have determined that the matter affects only the interests of one or more Series or Classes, then only the Shareholders of such Series or Classes shall be entitled to vote thereon. Each whole Share shall be entitled to one vote as to any matter on which it is entitled to vote, and each fractional Share shall be entitled to a proportionate fractional vote. There shall be no cumulative voting in the election of Trustees. The Bylaws may provide that proxies may be given by any electronic or telecommunications device or in any other manner, but if a proposal by anyone other than the officers or Trustees is submitted to a vote of the Shareholders of the Trust or of any Series or Class, or if there is a proxy contest or proxy solicitation or proposal in opposition to any proposal by the officers or Trustees, Shares may be voted only in person or by written proxy. Until Shares of a Series or Class are issued, as to that Series or Class the Trustees may exercise all rights of Shareholders and may take any action required or permitted to be taken by Shareholders by law, this Declaration of Trust or the Bylaws. MEETINGS 2. The first Shareholders' meeting shall be held at the time specified in Section 2 of Article IV at the principal office of the Trust or such other place as the Trustees may designate. Special meetings of the Shareholders of any Series or Class may be called by the Trustees and shall be called by the Trustees upon the written request of Shareholders owning at least one- fifth (1/5th) of the outstanding Shares of such Series or Class entitled to vote, except in cases where a lesser percentage of such Series of Class is required by the 1940 Act. Whenever ten (10) or more Shareholders meeting the qualifications set forth in Section 16(c) of the 1940 Act, as the same may be amended from time to time, seek the opportunity of furnishing materials to the other Shareholders with a view to obtaining signatures on such a request for a meeting, the Trustees shall comply with the provisions of said Section 16(c) with respect to providing such Shareholders access to the list of the Shareholders of record of the Trust or the mailing of such materials to such Shareholders of record. Shareholders shall be entitled to at least ten (10) days' notice of any meeting. -14- QUORUM AND REQUIRED VOTE 3. A majority of Shares entitled to vote in person or by proxy shall be a quorum for the transaction of business at a Shareholders' meeting, except that where any provision of law or of this Declaration of Trust permits or requires that holders of any Series or Class shall vote as a Series or Class, then a majority of the aggregate number of Shares of that Series or Class entitled to vote shall be necessary to constitute a quorum for the transaction of business by that Series or Class. Any lesser number shall be sufficient for adjournments. Any adjourned session or sessions may be held, within a reasonable time after the date set for the original meeting, without the necessity of further notice. Except when a larger vote is required by any provision of this Declaration of Trust or the Bylaws or the 1940 Act, a majority of the Shares voted in person or by proxy shall decide any questions and a plurality shall elect a Trustee, provided that where any provision of law or of this Declaration of Trust permits or requires that the holders of any Series or Class shall vote as a Series or Class, then a majority of the Shares of that Series or Class voted on the matter shall decide that matter insofar as that Series or Class is concerned. ARTICLE IX CUSTODIAN APPOINTMENT AND DUTIES 1. The Trustees shall at all times employ one or several banks, trust companies, or other business firms, which may be Interested Persons of the Trust, as custodian with authority as its agent, but subject to such restrictions, limitations and other requirements, if any, as may be contained in the Bylaws: (1) to hold the securities owned by the Trust and deliver the same upon written order; (2) to receive and give receipt for any moneys due to the Trust and deposit the same in its own banking department or elsewhere as the Trustees may direct; and (3) to disburse such funds upon orders or vouchers; and the Trust may also employ such custodian or custodians as its agent: (i) to keep the books and accounts of the Trust and furnish clerical and accounting services; and (ii) to compute, if authorized to do so by the Trustees, the Net Asset Value of any Series or Class in accordance with the provisions hereof; all upon such basis of compensation as may be agreed upon between the Trustees and the custodian(s). If so directed by a Majority Shareholder Vote, the custodian(s) shall deliver and pay over all property of the Trust held by it as specified in such vote. -15- The Trustees may also authorize the custodian(s) to employ one or more sub-custodians, which may be Interested Persons of the Trust from time to time to perform such of the acts and services of the custodians and upon such terms and conditions, as may be agreed upon between the custodian(s) and such sub- custodian(s) and approved by the Trustees, provided that in every case such sub-custodian shall be a bank, trust company or other business firm organized under the laws of the United States or one of the states thereof or such other person as may be permitted by the Commission, or otherwise in accordance with the 1940 Act. CENTRAL CERTIFICATE SYSTEM 2. Subject to such rules, regulations and order as the Commission may adopt, the Trustees may direct the custodian(s) to deposit all or any part of the securities owned by the Trust in a system for the central handling of securities established by a national securities exchange or a national securities association registered with the Commission under the Securities Exchange Act of 1934, or such other person as may be permitted by the Commission, or otherwise in accordance with the 1940 Act, pursuant to which system all securities of any particular class or series of any issuer deposited within the system are treated as fungible and may be transferred or pledged by bookkeeping entry without physical delivery of such securities, provided that all such deposits shall be subject to withdrawal only upon the order of the Trust. ARTICLE X DISTRIBUTIONS AND REDEMPTIONS DISTRIBUTIONS 1. (a) The Trustees may from time to time declare and pay dividends and other distributions. The amount of such dividends and other distributions and the payment of them shall be wholly in the discretion of the Trustees. (b) The Trustees shall have power, to the fullest extent permitted by the laws of Massachusetts, at any time to declare and cause to be paid dividends and other distributions on Shares of a particular Series, from the assets belonging to that Series, which dividends or other distributions, at the election of the Trustees, may be paid daily or otherwise pursuant to a standing resolution or resolutions adopted only once or with such frequency as the Trustees may determine, and may be payable in Shares of that Series at the election of the Trustees or each Shareholder of that Series. All dividends and other distributions on Shares of a particular Series shall be distributed pro rata to the Shareholders of that Series in proportion to the number of Shares of that Series they held on the record date established for such payment, except that such dividends and distributions shall appropriately reflect expenses allocated to a particular Class of such Series. -16- REDEMPTION OF SHARES 2. In case any holder of record of Shares of a particular Series desires to dispose of his Shares, he may deposit at the office of the transfer agent or other authorized agent of that Series, in accordance with any procedures established by the Trustees, a written request or such other form of request as the Trustees may from time to time authorize, requesting that the Series redeem or purchase the Shares in accordance with this Section 2; and the Shareholders so requesting shall be entitled to require the Series to redeem or purchase, and the Series or the Principal Underwriter of the Series shall redeem or purchase his said Shares, but only at the next determined Net Asset Value thereof (as described in Section 3 hereof). The Series shall make payment for any such Shares to be redeemed or purchased, as aforesaid, in cash or, if permitted by law, at the Trustees' election in kind from the assets of that Series and payment for such Shares shall be made by the Series or the Principal Underwriter of the Series to the Shareholder of record within seven (7) days after the date upon which the request is effective. DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS 3. The term "Net Asset Value" of any Series shall mean that amount which the assets of each Series or Class exceed its liabilities, all as determined by or under the direction of the Trustees. Such value per Share shall be determined separately for each Series or Class of Shares and shall be determined on such days and at such times as the Trustees may determine. Such determination shall be made with respect to securities for which market quotations are readily available, at the market value of such securities; and with respect to other securities and assets, at the fair value as determined in good faith by the Trustees, provided, however, that the Trustees, without Shareholder approval, may alter the method of appraising portfolio securities insofar as permitted under the 1940 Act and the interpretations thereof promulgated or issued by the Commission or insofar as permitted by any order of the Commission applicable to the Series. The Trustees may delegate any of their powers and duties under this Section 3 with respect to appraisal of assets and liabilities. At any time the Trustees may cause the value per Share last determined to be determined again in similar manner and may fix the time when such redetermined value shall become effective. SUSPENSION OF THE RIGHT OF REDEMPTION 4. The Trustees may declare a suspension of the right of redemption or postpone the date of payment as permitted under the 1940 Act. Such suspension shall take effect at such time as the Trustees shall specify but not later than the close of business on the business day next following the declaration or suspension, and thereafter there shall be no right of redemption or payment until the Trustees shall declare the suspension at an end. In the case of a suspension of the right of redemption, a Shareholder may either withdraw his request for redemption or receive payment based on the next-determined Net Asset Value per Share after the termination of the suspension. -17- ARTICLE XI COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES COMPENSATION 1. The Trustees as such shall be entitled to reasonable compensation from the Trust; they may fix the amount of their compensation. Nothing herein shall in any way prevent the employment of any Trustee for advisory, management, legal, accounting, investment banking or other services and payment for the same by the Trust. LIMITATION OF LIABILITY 2. Provided they have exercised reasonable care and have acted under the reasonable belief that their actions are in the best interest of the Trust, the Trustees shall not be responsible for or liable in any event for neglect or wrongdoing of them or any officer, agent, employee or investment adviser of the Trust, but nothing contained herein shall protect any Trustee against any liability to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office. Every note, bond, contract, instrument, certificate or undertaking and every other act or obligation whatsoever executed or performed by or on behalf of the Trust or the Trustees or any of them in connection with the Trust shall be conclusively deemed to have been executed or done only in or with respect to their or his capacity as Trustees or Trustee, and such Trustees or Trustee shall not be personally liable thereon. -18- ARTICLE XII INDEMNIFICATION COVERED PERSONS 1. (a) Subject to the exceptions and limitations contained in paragraph (b) of this Section 1 below: (i) every person who is, or has been, a Trustee or officer of the Trust (including persons who serve at the Trust's request as directors, officers or trustees of another organization in which the trust has any interest as a shareholder, creditor or otherwise) (hereinafter referred to as a "Covered Person") shall be indemnified by the appropriate Series to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection with any claim, action, suit or proceeding in which he becomes involved as a party or otherwise by virtue of his being or having been a Covered Person and against amounts paid or incurred by him in the settlement thereof; and (ii) the words "claim," "action," "suit," or "proceeding" shall apply to all claims, actions, suits or proceedings (civil, criminal, administrative or other, including appeals), actual or threatened while in office or thereafter, and the words "liability" and "expenses" shall include, without limitation, attorneys' fees, costs, judgments, amounts paid in settlement, fines, penalties and other liabilities. (b) No indemnification shall be provided hereunder to a Covered Person: (i) who shall have been adjudicated by a court or body before which the proceeding was brought (A) to be liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office, unless, and only to the extent that, such court or body shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, the Covered Person is fairly and reasonably entitled to indemnification or (B) not to have acted in good faith in the reasonable belief that his action was in the best interest of the Trust; or (ii) in the event of a settlement, unless there has been a determination that such Trustee or officer was not liable by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office, (A) by the court or other body approving the settlement; -19- (B) by at least a majority of those Trustees who are neither Interested Persons of the Trust nor are parties to the matter based upon a review of readily available facts (as opposed to a full trial-type inquiry); or (C) by written opinion of independent legal counsel based upon a review of readily available facts (as opposed to a full trial-type inquiry); provided, however, that any Shareholder may, by appropriate legal proceedings, challenge any such determination by the Trustees, or by independent counsel. (c) The rights of indemnification herein provided may be insured against by policies maintained by the Trust, shall be severable, shall not be exclusive of or affect any other rights to which any Covered Person may now or hereafter be entitled, shall continue as to a person who has ceased to be such Trustee or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. Nothing contained herein shall affect any rights to indemnification to which Trust personnel, other than Trustees and officers, and other persons may be entitled by contract or otherwise under law. (d) Expenses in connection with the preparation and presentation of a defense to any claim, action, suit or proceeding of the character described in paragraph (a) of this Section 1 may be paid by the applicable Series from time to time prior to final disposition thereof upon receipt of an undertaking by or on behalf of such Covered Person that such amount will be paid over by him to the applicable Series if it is ultimately determined that he is not entitled to indemnification under this Section 1; provided, however, that either (i) such Covered Person shall have provided appropriate security for such undertaking, (ii) the Trust is insured against losses arising out of any such advance payments or (iii) either a majority of the Trustees who are neither Interested Persons of the Trust nor parties to the matter, or independent legal counsel in a written opinion, shall have determined, based upon a review of readily available facts (as opposed to a trial type inquiry or full investigation), that there is reason to believe that such Covered Person will be found entitled to indemnification under this Section 1. (e) The Trust shall be entitled to assume the defense of any such claim, suit, action or proceeding, with counsel approved by the Covered Person to be indemnified, upon the delivery to such Covered Person of written notice of its election to do so. After delivery of such notice, approval of such counsel by the Covered Person to be indemnified, and the retention of such counsel by the Trust, the Trust will not be liable to the Covered Person to be indemnified for any fees of counsel subsequently incurred by such Covered Person with respect to the same proceeding, provided that (i) such Covered Person shall have the right to employ his own counsel in any such claim, suit, action or proceeding at his own expense and (ii) if (A) the employment of counsel by such Covered Person has been previously authorized by the Trust, (B) such Covered Person shall have reasonably concluded that there may be a conflict of interest between the Trust and such Covered Person in the conduct of any such defense, or (C) the Trust shall not, in fact, have employed counsel to assume the defense of such claim, suit, action or proceeding, then the fees and expenses of any counsel retained by such Covered Person shall be at the expense of the Trust. -20- (f) If this Section 1 is revoked or amended to eliminate or reduce the effect thereof, the indemnification and advancement of expenses provided by, or granted pursuant to, this Section 1 shall continue to be effective for Covered Persons entitled to indemnification hereunder prior to such revocation or amendment with respect to matters arising prior to such revocation or amendment. Nothing herein is intended to require or shall be construed as requiring the Trust to do or fail to do any act in violation of applicable law. SHAREHOLDERS 2. In case any Shareholder or former Shareholder of any Series of the Trust shall be held to be personally liable solely by reason of his being or having been a Shareholder and not because of his acts or omissions or for some other reason, the Shareholder or former Shareholder (or his heirs, executors, administrators or other legal representatives or in the case of a corporation or other entity, its corporate or other general successor) shall be entitled out of the assets belonging to the applicable Series to be held harmless from and indemnified against all loss and expenses arising from such liability. The Trust, on behalf of the Series, shall, upon request by the Shareholder, assume the defense of any such claim made against such Shareholder for any act or obligation of the Series and satisfy any judgment thereon from the assets of the Series. ARTICLE XIII MISCELLANEOUS TRUST NOT A PARTNERSHIP; TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE 1. It is hereby expressly declared that a trust and not a partnership is created hereby. No Trustee hereunder shall have any power to bind personally either the Trust's officers or any Shareholder. All persons extending credit to, contracting with or having any claim against the Trust or the Trustees shall look only to the assets of the appropriate Series for payment under such credit, contract or claim; and neither the Shareholders nor the Trustees, nor any of their agents, whether past, present or future, shall be personally liable therefor. Nothing in this Declaration of Trust shall protect a Trustee against any liability to which the Trustee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee hereunder. Every note, bond, contract, instrument, certificate or undertaking made or issued by the Trustees or by any officer or officers shall give notice that this Declaration of Trust is on file with the Secretary of The Commonwealth of Massachusetts and shall recite to the effect that the same was executed or made by or on behalf of the Trust or by them as Trustee or Trustees or as officer or officers and not individually and that the obligations of such instrument are not binding upon any of them or the Shareholders individually but are binding only upon the assets and property of the Trust, and may contain such further recital as he or they may deem appropriate, but the omission -21- thereof shall not operate to bind any Trustee or Trustees or officer or officers or Shareholder or Shareholders individually. TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY 2. The exercise by the Trustees of their powers and discretions hereunder in good faith and with reasonable care under the circumstances then prevailing, shall be binding upon everyone interested. Subject to the provisions of Section 1 of this Article XIII and to Article XII, the Trustees shall not be liable for errors of judgment or mistakes of fact or law. The Trustees may take advice of counsel or other experts with respect to the meaning and operation of this Declaration of Trust, and subject to the provisions of Section 1 of this Article XIII and to Article XII, shall be under no liability for any act or omission in accordance with such advice or for failing to follow such advice. The Trustees shall not be required to give any bond as such, nor any surety if a bond is obtained. ESTABLISHMENT OF RECORD DATES 3. The Trustees may close the stock transfer books of the Trust for a period not exceeding sixty (60) days preceding the date of any meeting of Shareholders, or the date for the payment of any dividends or other distributions, or the date for the allotment of rights, or the date when any change or conversion or exchange of Shares shall go into effect; or in lieu of closing the stock transfer books as aforesaid, the Trustees may fix in advance a date, not exceeding sixty (60) days preceding the date of any meeting of shareholders, or the date for payment of any dividend or other distribution, or the date for the allotment of rights, or the date when any change or conversion or exchange of Shares shall go into effect, as a record date for the determination of the Shareholders entitled to notice of, and to vote at, any such meeting, or entitled to receive payment of any such dividend or other distribution, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of Shares, and in such case such Shareholders and only such Shareholders as shall be Shareholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting, or to receive payment of such dividend or other distribution, or to receive such allotment or rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any Shares on the books of the Trust after any such record date fixed as aforesaid. -22- TERMINATION OF TRUST 4. (a) This Trust shall continue without limitation of time but subject to the provisions of paragraph (b) of this Section 4. (b) Subject to a Majority Shareholder Vote of each Series affected by the matter or, if applicable, to a Majority Shareholder Vote of the Trust, the Trustees may: (i) sell and convey all or substantially all the assets of the Trust or any affected Series to another trust, partnership, association or corporation organized under the laws of any state for adequate consideration which may include the assumption of all outstanding obligations, taxes and other liabilities, accrued or contingent, of the Trust or any affected Series, and which may include shares of beneficial interest or stock of such trust, partnership, association or corporation; or (ii) at any time sell and convert into money all of the assets of the Trust or any affected Series. Upon making provision for the payment of all such liabilities in either (i) or (ii), by such assumption or otherwise, the Trustees shall distribute the remaining proceeds or assets (as the case may be) ratably among the holders of the Shares of the Trust or any affected Series then outstanding; however, the payment to any particular Class of such Series may be reduced by any fees, expenses or charges allocated to that Class or Series. (c) Upon completion of the distribution of the remaining proceeds or the remaining assets as provided in paragraph (b), the Trust or any affected Series shall terminate and the Trustees shall be discharged of any and all further liabilities and duties hereunder and the right, title and interest of all parties shall be canceled and discharged. FILING OF COPIES, REFERENCES, HEADINGS, GENDER, ETC. 5. The original or a copy of this instrument and of each declaration of trust supplemental hereto shall be kept at the office of the Trust where it may be inspected by any Shareholder. A copy of this instrument and of each supplemental declaration of trust shall be filed by the Trustees with the Secretary of The Commonwealth of Massachusetts, as well as any other governmental office where such filing may from time to time be required. Anyone dealing with the Trust may rely on a certificate by an officer or Trustee of the Trust as to whether or not any such supplemental declarations of trust have been made and as to any matters in connection with the Trust hereunder, and with the same effect as if it were the original, may rely on a copy certified by an officer or Trustee of the Trust to be a copy of this instrument or of any such supplemental declaration of trust. In this instrument or in any such supplemental declaration of trust, references to this instrument, and all expressions like "herein," "hereof" and "hereunder," -23- shall be deemed to refer to this instrument as amended or affected by any such supplemental declaration of trust. Headings are placed herein for convenience of reference only and in case of any conflict, the text of this instrument, rather than the headings, shall control. This instrument may be executed in any number of counterparts, each of which shall be deemed an original. In the case of all terms used in this instrument, the singular shall include the plural and the masculine gender shall include the feminine and neuter, and vice versa, as the context requires. APPLICABLE LAW 6. The trust set forth in this instrument is made in The Commonwealth of Massachusetts, and it is created under and is to be governed by and construed and administered (a) according to the laws of said Commonwealth and (b) in a manner not inconsistent with the provisions of the 1940 Act. The Trust shall be of the type commonly called a Massachusetts business trust, and without limiting the provisions hereof, the Trust may exercise all powers whichare ordinarily exercised by such a trust. AMENDMENTS 7. If authorized by votes of the Trustees and a Majority Shareholder Vote, or by any larger vote which may be required by applicable law or this Declaration of Trust in any particular case, the Trustees shall amend or otherwise supplement this instrument, by making a declaration of trust supplemental hereto, which thereafter shall form a part hereof, except that an amendment which shall affect the Shareholders of one or more Series but not the Shareholders of all outstanding Series shall be authorized by vote of the Shareholders holding a majority of the Shares entitled to vote of each Series affected and no vote of Shareholders of a Series not affected shall be required. Amendments having the purpose of changing the name of the Trust or supplying any omission, curing any ambiguity or curing, correcting or supplementing any defective or inconsistent provision contained herein shall not require authorization by Shareholder vote. Copies of the supplemental declaration of trust shall be filed as specified in Section 5 of this Article XIII. FISCAL YEAR 8. The fiscal year of the Trust shall end on a specified date as set forth in the Bylaws, provided, however, that the Trustees may, without Shareholder approval, change the fiscal year of the Trust. The Trust's principal business address is: Suite 818 53 West Jackson Boulevard Chicago, Illinois 60604 or such other address as the Trustees may determine from time to time. The Trust's registered agent in Massachusetts is: CT Corporation System 2 Oliver Street -24- Boston, MA 02109 The Trust's principal business address in Massachusetts is: CT Corporation System 2 Oliver Street Boston, MA 02109 SEVERABILITY Section 9. The provisions of this Declaration of Trust are severable. If the Trustees determine, with the advice of counsel, that any provision hereof conflicts with the 1940 Act, the regulated investment company provisions of the Code or with other applicable laws and regulations, the conflicting provision shall be deemed never to have constituted a part of this Declaration of Trust; provided, however, that such determination shall not affect any of the remaining provisions of this Declaration of Trust or render invalid or improper any action taken or omitted prior to such determination. If any provision hereof shall be held invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall attach only to such provision only in such jurisdiction and shall not affect any other provision of this Declaration of Trust. -25- IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the Trust, have executed this instrument this 14th day of February, 1997. TRUSTEES: ___________________________________ KEITH L. COOK ___________________________________ BURT W. ENGELBERG ___________________________________ JOHN R. HALL ___________________________________ ROBERT H. PERKINS ___________________________________ GREGORY E. WOLF SETTLOR: ___________________________________ ROBERT H. PERKINS -26- ACKNOWLEDGMENTS THE STATE OF ILLINOIS Cook, ss. Chicago, February ___, 1997 Then personally appeared the above named Keith L. Cook, Jr. and acknowledged the foregoing instrument to be his free act and deed, before me, __________________________________ Notary Public My Commission expires: Suffolk, ss. Chicago, February ___, 1997 Then personally appeared the above named Burt W. Engelberg and acknowledged the foregoing instrument to be his free act and deed, before me, ___________________________________ Notary Public My Commission expires: Suffolk, ss. Chicago, February ___, 1997 Then personally appeared the above named John R. Hall and acknowledged the foregoing instrument to be his free act and deed, before me, ___________________________________ Notary Public My Commission expires: Suffolk, ss. Chicago, February ___, 1997 Then personally appeared the above named Robert H. Perkins and acknowledged the foregoing instrument to be his free act and deed, before me, ___________________________________ Notary Public My Commission expires: -28- Cook, ss. Chicago, February ___, 1997 Then personally appeared the above named Gregory E. Wolf and acknowledged the foregoing instrument to be his free act and deed, before me, ___________________________________ Notary Public My Commission expires: -29- EX-99.B2 3 BYLAWS EXHIBIT 2 AMENDED AND RESTATED BYLAWS OF THE OMNI INVESTMENT FUND (as of December 12, 1996) ARTICLE I _________ OFFICERS AND THEIR ELECTION SECTION 1. Officers. The officers of the Trust shall be a ________ President, a Treasurer, a Secretary, and such other officers with such other titles as provided for herein or as the Trustees may from time to time elect. It shall not be necessary for any Trustee or other officer to be a holder of shares in the Trust. SECTION 2. Election of Officers. The officers of the Trust ____________________ shall be chosen annually by the Trustees. The President shall be chosen annually by and from the Trustees. Two or more offices may be held by a single person except the offices of President and Secretary. The officers shall hold office until their successors are chosen and qualified. SECTION 3. Resignations and Removals. Any officer of the Trust _________________________ may resign by filing a written resignation with the President or with the Trustees or with the Secretary, which shall take effect on being so filed unless it is specified to be effective at some other time or upon the happening of some other event. Any officer may be removed at any time, with or without cause, by vote of a majority of the entire number of Trustees. SECTION 4. Vacancies. The Trustees may fill any vacancy _________ occurring in any office for any reason and may, in its discretion, leave unfilled for such period as it may determine any offices other than those of President, Treasurer and Secretary. Each such successor shall hold office until his successor is chosen and qualified. ARTICLE II __________ POWERS AND DUTIES OF OFFICERS AND TRUSTEES SECTION 1. Trustees. The business and affairs of the Trust ________ shall be managed by the Trustees, and they shall have all powers necessary and desirable to fully carry out that responsibility. SECTION 2. Executive and other Committees. The Trustees may ______________________________ elect from their own number an Executive Committee to consist of not less than two (2) nor more than three (3) members, which shall have the power and duty to conduct the current and ordinary business of the Trust, and such other powers and duties as the Trustees may from time to time delegate to such Committee. The Trustees may also elect from their own number other Committees from time to time, the number composing such Committees and the powers conferred upon the same to be determined by vote of the Trustees, Vacancies in a committee shall be filled by the Board of Trustees. SECTION 3. President. The President shall be the chief _________ operating officer of the Trust and, subject to the Trustees, shall have general supervision over the business and policies of the Trust. The President shall have full power and authority to bind the Trust and in connection therewith may execute and deliver in the name and on behalf of the Trust any and all agreements, instruments, notes and writings of any nature that he may consider necessary or appropriate in connection with the management of the Trust. The President shall perform such duties additional to all of the foregoing as the Trustees may from time to time designate. SECTION 4. Treasurer. Subject to Section 4 of Article V of the _________ Declaration of Trust, the Treasurer may be the principal financial and accounting officer of the Trust. He shall deliver all funds and securities of the Trust which may come into his hands to such bank(s) or trust companies) as the Trustees shall employ as Custodian(s) in accordance with Article IX of the Declaration of Trust and these Bylaws. He shall have the custody of the seal of the Trust. He shall make annual reports in writing of the business conditions of the Trust, which reports shall be preserved upon its records, and he shall furnish such other reports regarding its business and condition as the Trustees may from time to time require. The Treasurer shall perform such duties additional to all of the foregoing as the Trustees or the President may from time to time designate. SECTION 5. Secretary. The Secretary shall record in books kept _________ for the purpose all votes and proceedings of the Trustees and the shareholders at their respective meetings. The Secretary shall perform such duties and possess such powers additional to the foregoing as the Trustees or the President may from time to time designate. SECTION 6. Vice Presidents. Each Vice President of the Trust _______________ shall perform such duties and possess such powers as the Trustees or the President may from time to time designate. In the event of the absence, inability or refusal to act of the President, the Vice President (or if there shall be more than one, the Vice Presidents in the order elected by the Trustees) shall perform the duties of the President and when so performing shall have all the powers of and be subject to all the restrictions upon the President. SECTION 7. Assistant Treasurer. The Assistant Treasurer of the ___________________ Trust shall perform such duties and possess such powers as the Trustees, the President or the Treasurer may from time to time designate. SECTION 8. Assistant Secretary. The Assistant Secretary of the ___________________ Trust shall perform such duties and possess such powers as the Trustees, the President or the Secretary may from time to time designate. -2- ARTICLE III ___________ SHAREHOLDERS' MEETING SECTION 1. General. Voting powers and meetings of Shareholders _______ shall be governed by applicable provisions of law, the Declaration of Trust and as hereinafter provided by these Bylaws. SECTION 2. Special Meetings. A special meeting of the ________________ Shareholders of any Series shall be called by the Secretary whenever ordered by the Trustees or requested in writing by the holder or holders of at least one- fifth (1/5th) of the outstanding Shares of any such Series entitled to vote. If the Secretary, when so ordered or requested, refuses or neglects for more than two (2) days to call such special meeting, the Trustees or the Shareholders so requesting may, in the name of the Secretary, call the meeting by giving notice thereof in the manner required when notice is given by the Secretary. SECTION 3. Notices. Except as above provided, notices of any _______ special meeting of the Shareholders shall be given by the Secretary by delivery or mailing, postage prepaid, to each Shareholder entitled to vote at said meeting, a written or printed notification of such meeting, at least ten (10) days before the meeting, to such address as may be registered with the Trust by the Shareholder. SECTION 4. Place of Meeting. All special meetings of the ________________ Shareholders shall be held at the principal place of business of the Trust in Chicago, Illinois, or at such other place in the United States as the Trustees may designate. SECTION 5. Voting of Shares by Certain Shareholders. Shares ________________________________________ standing in the name of a deceased person may be voted by his personal representative either in person or by proxy. Shares standing in the name of a conservator or trustee may be voted by such fiduciary, either in person or by proxy, but no such fiduciary shall be entitled, as such fiduciary, to vote shares held by him without a transfer of such shares into his name. Shares standing in the name of a receiver may be voted by such receiver and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his name if authority to do so be contained in an appropriate order of the court by which such receiver was appointed. A Shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred. Shares standing in the name of another corporation, domestic or foreign, may be voted by such officer, agent or proxy as the Bylaws of such corporation may prescribe, or in the absence of such provision, as the Board of Directors of such corporation may determine. -3- SECTION 6. Consent Actions. Any actions required to be taken at _______________ a meeting of the Shareholders of this Trust or any action which may be taken at a meeting of the Shareholders may be taken without a meeting if consents in writing, setting forth the action so taken, shall be signed by all the Shareholders entitled to vote with respect to the subject matter thereof. Such consents shall have the same force and effect as a unanimous vote of the Shareholders at a meeting duly held and may be stated as such on any certificate or document. The Secretary shall file the consents with the minutes of the meetings of the Shareholders. SECTION 7. Conducting Meetings. The President or, in the ___________________ President's absence, one of the other officers shall call meetings of the Shareholders to order and shall act as Chairman of such meetings. In the absence of the President and all other officers, any of the persons calling the meeting by a notice given as herein provided may call the meeting to order, and a Chairman shall be elected. The Secretary of the Corporation or any Assistant Secretary shall act as Secretary of all meetings of the Shareholders; and if the Secretary and all Assistant Secretaries shall be absent, then such person as may be designated by the Chairman of the meeting shall act as Secretary thereof. ARTICLE IV __________ TRUSTEES' MEETINGS SECTION 1. Meetings. Meetings of the Trustees shall be called ________ orally or in writing by the President or at his order or direction or by any two other Trustees, and if the Secretary when so requested refuses or fails for more than one (1) day to call such meeting, the President, or such two other Trustees, may in the name of the Secretary call such meeting by giving due notice in the manner required when notice is given by the Secretary. SECTION 2. Quorum. A majority of the Trustees shall constitute ______ a quorum for the transaction of business. SECTION 3. Notices. Except as otherwise provided, notice of any _______ meeting of the Trustees shall be given by the Secretary to each Trustee, (a) by mailing to him, postage prepaid, addressed to him at his address as registered on the books of the Trust or, if not so registered, at his last known address, a written or printed notification of such meeting at least three (3) days before the meeting, or (b) by delivering such notice to him at least two (2) days before the meeting, or (c) by telephoning him or by sending to his at least one (1) day before the meeting, by prepaid telegram, addressed to him at his said registered address, if any, or if he has no such registered address, as his last known address, notice of such meeting. SECTION 4. Place of Meeting. All meetings of the Trustees shall ________________ be held at the principal place of business of the Trustees in Chicago, Illinois or such other place in the United States as the person or persons requesting said meeting to be called may designate, but any meeting may adjourn to any other place. -4- SECTION 5. Special Action. When all the Trustees shall be ______________ present at any meeting, however called, or wherever held, or shall assent to the holding of the meeting without notice, or after the meeting shall sign a written assent thereto on the record of such meeting, the acts of such meeting shall be valid as if such meeting had been regularly held. SECTION 6. Action by Consent. Any action by the Trustees may be _________________ taken without a meeting if a written consent thereto is signed by all the Trustees and filed with the records of the Trustees meetings, or by telephone consent provided a quorum of Trustees participate in any such telephone meeting. Such consent shall be treated as a vote of the Trustees for all purposes. ARTICLE V _________ SHARES OF BENEFICIAL INTEREST SECTION 1. Beneficial Interest. The beneficial interest in the ___________________ Trust and the status of the owners thereof shall be defined, establishment and governed by applicable provisions of law, the Declaration of Trust and as herein provided by these Bylaws. SECTION 2. Certificate of Shares of Beneficial Interest. ____________________________________________ Subject to certain minimum investment requirements as may be set by the Trustees, each Shareholder shall be entitled to a certificate of shares of beneficial interest of the Trust in such form as may be prescribed from time to time by the Trustees. The certificate shall be signed by the President or a Vice President, certificate is countersigned by a transfer agent or a registrar, other than a Trustee, officer or employee of the Trust, such signature may be a facsimile. In case any officer who has signed or whose facsimile signatures has been placed upon such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Trust with the same effect as if he were such officer at the time of its issue. Every certificate for shares of beneficial interest which are subject to any restriction or transfer pursuant to the Declaration of Trust, the Bylaws, applicable securities laws or any agreement to which the Trust is a party, shall have conspicuously noted on the face or back of the certificate either the full text of the restriction or a statement of the existence of such restrictions and a statement that the Trust will furnish a copy of the restrictions to the holder of such certificate upon written request and without charge. Every certificate issued when the Trust is authorized to issue more than one class or series of shares of beneficial interest shall set forth on its face or back either the full text of the preferences, voting powers, qualifications and special and relative rights of the shares of each class and series authorized to be issued or a statement of the existence of such preferences, powers, qualifications and rights and a statement that the Trust will furnish a copy thereof to the holder of such certificate upon written request and without charge. SECTION 3. Transfers. Subject to the restrictions, if any, _________ stated or noted on the Share certificates, Shares may be transferred on the books of the Trust by the surrender to the Trust or its transfer agent of the certificate representing such shares properly endorsed or accompanied by a written assignment or power of attorney properly executed, and with such proof of authority or the authenticity of signature as the Trust or its transfer agent may reasonably -5- require. Except as may be otherwise required by law, by the Declaration of Trust or by these Bylaws, the Trust shall be entitled to treat the record holder of Shares of beneficial interest as shown on its books as the owner of such Shares for all purposes, including the payment the owner of such Shares for all purposes, including the payment of dividends and the right to vote with respect thereto, regardless of any transfer, pledge or other disposition of such Shares until the Shares have been transferred on the books of the Trust in accordance with the requirements of these Bylaws. SECTION 4. Replacement of Certificates. In case of the alleged ___________________________ loss or destruction or the mutilation of a certificate of shares of beneficial interest, a duplicate certificate may be issued in place of the lost, destroyed or mutilated certificate, upon such terms as the Trustees may prescribe, including the presentation of reasonable evidence of such loss, destruction or mutilation and the giving of such indemnity as the Trustees may require for the protection of the Trust or any transfer agent or registrar. ARTICLE VI __________ INSPECTION OF BOOKS The Trustees shall from time to time determine whether and to what extent, and at what time and places, and under what conditions and regulations the accounts and books of the Trust or any of them shall be open to the inspection of the Shareholders; and no Shareholder shall have any right to inspect any account or book or document of the Trust except as conferred by law or otherwise by the Trustees or by resolution of the Shareholders. ARTICLE VII ___________ CUSTODIAN The Custodian(s) employed by the Trust pursuant to Article IX of the Declaration of Trust shall be required to enter into a contract with the Trust which shall contain in substance the following provisions: (a) The Trust will cause securities and funds owned by the Trust to be delivered or paid to the Custodian(s). (b) The Custodian(s) will receive and give receipt for any moneys due to the Trust and deposit the same in its own banking department, if any, or elsewhere as the Custodian(s) and the Trustees may approve. The Custodian(s) shall have the sole power to draw upon any such account. (c) The Custodian(s) shall release and deliver securities owned by the Trust and make payments of money of the Trust only upon the instructions of the Trust. -6- The contract between the Trust and the Custodian(s) may contain any such other provisions not inconsistent with the provisions of Article IX of the Declaration of Trust or with these Bylaws as the Trustees may approve. Such contract shall be terminable by either party upon written notice to the other within such time not exceeding sixty (60) days as may be specified in the contract; provided, however, that upon termination of the contract or inability of the Custodian(s) to continue to serve, the Custodian(s) shall, upon written notice of appointment of another bank, trust company or other business firm as custodian, deliver and pay over to such successor Custodian all securities and moneys held by it for account of the Trust. In such case, the Trustees shall promptly appoint a successor Custodian, but in the event that no successor Custodian can be found having the required qualifications and willing to serve, it shall be the duty of the Trustees to call as promptly as possible a special meeting of the Shareholders to determine whether the Trust shall function without a Custodian or shall be liquidated. If so directed by vote of the holders of a majority of the outstanding Shares, the Custodian(s) shall deliver and pay over all property of the Trust held by its as specified in such vote. Pending appointment of a successor Custodian or a vote of the Shareholders specifying some other disposition of the funds and property, the Custodian(s) shall not deliver funds and property of the Trust to the Trust, but it may deliver them to a bank, trust company or other business firm doing business in Chicago, Illinois, of its own selection as the property of the Trust to be held under terms similar to those which they were held by the retiring Custodian. Any sub-custodian employed by the Custodian(s) pursuant to authorization to do so granted by the Trust pursuant to Article IX of the Declaration of Trust shall be required to enter into a contract with the Custodian containing in substance the same provisions as those described in paragraphs (a) through (c) above, except that any contract with a sub-custodian performing its duties outside the United States and its territories and possessions, may omit or limit any of such conditions, provided that, any such omission or limitation shall be expressly approved by a majority of the Trustees of the Trust. ARTICLE VIII ____________ MISCELLANEOUS PROVISIONS SECTION 1. Seal. The seal of the Trust of Series thereof shall ____ be circular in form and shall have inscribed on its surface the name of the Trust or Series and the following words: "A MASSACHUSETTS BUSINESS TRUST" or "A SERIES OF A MASSACHUSETTS BUSINESS TRUST." SECTION 2. Reports to Shareholders. The Trustees shall at least _______________________ semi-annually submit to the Shareholders a written financial report of the transactions of the Trust including financial statements which shall at least annually be certified by independent public accountants. -7- SECTION 3. Voting of Securities. Except as the Trustees may ____________________ otherwise designate, the President or Treasurer may waive notice of, and act as, or appoint any person or persons to act as, proxy or attorney-in- fact for the Trust (with or without power of substitution) at any meeting of stockholders or shareholders of any corporation or other organization, the securities of which may be held by the Trust. SECTION 4. Evidence of Authority. A certificate by the _____________________ Secretary or Assistant Secretary, or a temporary Secretary, as to any action taken by the Shareholders, Trustees, any committee or any officer or representative of the Trust shall as to all persons who rely on the certificate in good faith be conclusive evidence of such action. SECTION 5. Declaration of Trust. All references in these Bylaws ____________________ to the Declaration of Trust shall be deemed to refer to the Declaration of Trust of the Trust dated April 19, 1990, as amended and known as "The Omni Investment Fund," as amended and in effect from time to time. SECTION 6. Severability. Any determination that any provision ____________ of these Bylaws is for any reason inapplicable, illegal or ineffective shall not affect or invalidate any other provision of these Bylaws or the Declaration of Trust. SECTION 7. Pronouns. All pronouns used in these Bylaws shall be ________ deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require. SECTION 8. Amendments. Subject to the rights of the __________ Shareholders to amend these Bylaws, these Bylaws may be amended by the vote of a majority of the Trustees at any meeting of the Board of Trustees. -8- CERTIFICATION The above and foregoing is a true and correct copy of the Bylaws of The Omni Investment Fund. N. Theodore Hans _________________________________ Secretary Dated: December 12, 1996. -9- EX-99.B5.1 4 FORM OF INVESTMENT ADVISORY AGREEMENT EXHIBIT 5.1 INVESTMENT ADVISORY AGREEMENT BERGER OMNI INVESTMENT TRUST THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this ____ day of _________, 1997, between BERGER ASSOCIATES, INC., a Delaware corporation ("Berger Associates"), and BERGER OMNI INVESTMENT TRUST, a Massachusetts business trust (the "Trust"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Trust is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), currently consisting of one portfolio series (the "Fund") having its own investment policies, and has registered its shares for public offering under the Securities Act of 1933, as amended (the "1933 Act"); and WHEREAS, the Trust is authorized to create separate series of shares, each with its own separate investment portfolio, one of such series created by the Trust being the Fund; and WHEREAS, the Trust and Berger Associates deem it mutually advantageous that Berger Associates should assist the Trustees and officers of the Trust in the management of the securities portfolio of the Fund. NOW, THEREFORE, the parties agree as follows: 1. Appointment. The Trust hereby appoints Berger ----------- Associates as investment adviser and manager with respect to the Fund for the period and on the terms set forth in this Agreement. Berger Associates hereby accepts such appointment and agrees to render the services herein set forth, for the compensation herein provided. 2. Investment Advisory Functions. Subject to the ----------------------------- approval of the Trustees of the Trust and, if required, the shareholders of the Fund, Berger Associates is authorized to engage one or more sub- advisers in connection with Berger Associates' duties and responsibilities under this Agreement, which sub-advisers may be affiliates of Berger Associates. In its capacity as investment adviser to the Fund, Berger Associates shall have the following duties and responsibilities: (a) To manage the investment operations of the Fund and the composition of its investment portfolio, and to determine without prior consultation with the Trust, what securities and other assets of the Fund will be acquired, held, disposed of or loaned, in conformity with the investment objective, policies and restrictions and the other statements concerning the Fund in the Trust's declaration of trust, as amended from time to time (the "Declaration of Trust"), bylaws, and registration statements under the -1- 1940 Act and the 1933 Act, the Investment Advisers Act of 1940, as amended (the "Advisers Act"), the rules thereunder, and all other applicable federal and state laws and regulations, and the provisions of the Internal Revenue Code of 1986, as amended, applicable to the Fund as a regulated investment company; (b) To cause its officers to attend meetings and furnish oral or written reports, as the Trust may reasonably require, in order to keep the Trustees and appropriate officers of the Trust fully informed as to the condition of the investment portfolio of the Fund, the investment recommendations of Berger Associates, and the investment considerations which have given rise to those recommendations; (c) To supervise the purchase and sale of securities as directed by the appropriate officers of the Trust or any sub-adviser engaged by Berger Associates pursuant to the authority granted in this Section 2; (d) To maintain all books and records required to be maintained by Berger Associates pursuant to the 1940 Act and the rules and regulations promulgated thereunder, as the same may be amended from time to time, with respect to transactions on behalf of the Fund, and shall furnish the Trustees with such periodic and special reports as the Trustees reasonably may request. Berger Associates agrees that all records which it maintains for the Fund or the Trust are the property of the Trust, agrees to permit the reasonable inspection thereof by the Trust or its designees and agrees to preserve for the periods prescribed under the 1940 Act any records which it maintains for the Trust and which are required to be maintained under the 1940 Act, and further agrees to surrender promptly to the Trust or its designees any records which it maintains for the Trust upon request by the Trust; and (e) At such times as shall be reasonably requested by the Trustees, to provide the Trustees with economic, operational and investment data and reports, including without limitation all information and materials reasonably requested by or requested to be delivered to the Trustees of the Trust pursuant to Section 15(c) of the 1940 Act, and make available to the Trustees any economic, statistical and investment services normally available to similar investment company clients of Berger Associates. 3. Further Obligations. In all matters relating to the ------------------- performance of this Agreement, Berger Associates shall act in conformity with the Trust's Declaration of Trust, bylaws and currently effective registration statements under the 1940 Act and the 1933 Act and any amendments or supplements thereto (the "Registration Statements") and with the written policies, procedures and guidelines of the Fund, and written instructions and directions of the Trustees -2- of the Trust and shall comply with the requirements of the 1940 Act, the Advisers Act, the rules thereunder, and all other applicable federal and state laws and regulations. The Trust agrees to provide Berger Associates with copies of the Trust's Declaration of Trust, bylaws, Registration Statements, written policies, procedures and guidelines, and written instructions and directions of the Trustees, and any amendments or supplements to any of them at, or, if practicable, before the time such materials become effective. 4. Obligations of Trust. The Trust shall have the -------------------- following obligations under this Agreement: (a) To keep Berger Associates continuously and fully informed as to the composition of the investment portfolio of the Fund and the nature of all of the Fund's assets and liabilities from time to time; (b) To furnish Berger Associates with a certified copy of any financial statement or report prepared for the Fund by certified or independent public accountants and with copies of any financial statements or reports made to the Fund's shareholders or to any governmental body or securities exchange; (c) To furnish Berger Associates with any further materials or information which Berger Associates may reasonably request to enable it to perform its function under this Agreement; and (d) To compensate Berger Associates for its services in accordance with the provisions of paragraph 5 hereof. 5. Compensation. The Trust shall pay to Berger Associates ------------ for its services under this Agreement a fee, payable in United States dollars, at an annual rate of 0.90% of the average daily net asset value of the Fund. This fee shall be computed and accrued daily and payable monthly on the last day of each month during which or part of which this Agreement is in effect. For the month during which this Agreement becomes effective and the month during which it terminates, however, there shall be an appropriate proration of the fee payable for such month based on the number of calendar days of such month during which this Agreement is effective. 6. Expenses. -------- (a) Expenses Paid by the Trust. The Trust assumes and -------------------------- shall pay all expenses incidental to its operations and business not specifically assumed or agreed to be paid by Berger Associateshereunder or otherwise, including, but not limited to, any compensation, fees or reimbursements which the Trust pays to its Trustees who are not interested persons of Berger Associates; compensation of the Fund's custodian, transfer agent, registrar and dividend disbursing agent and other service providers; legal, accounting, audit and printing expenses; administrative, clerical, recordkeeping and bookkeeping expenses; brokerage commissions and -3- all other expenses in connection with execution of portfolio transactions (including any appropriate commissions paid to Berger Associates or its affiliates for effecting exchange listed, over-the-counter or other securities transactions); interest; all federal, state and local taxes (including stamp, excise, income and franchise taxes); costs of stock certificates and expenses of delivering such certificates to the purchasers thereof; expenses of local representation in Massachusetts; expenses of shareholders' meetings and of preparing, printing and distributing proxy statements, notices, and reports to shareholders; expenses of preparing and filing reports and tax returns with federal and state regulatory authorities; all expenses incurred in complying with all federal and state laws and the laws of any foreign country applicable to the issue, offer or sale of shares of the Fund, including, but not limited to, all costs involved in preparing, printing and mailing prospectuses and statements of additional information to shareholders of the Fund; and all fees, dues and other expenses incurred by the Trust in connection with the membership of the Trust in any trade association or other investment company organization. To the extent that Berger Associates shall perform any of the above described administrative and clerical functions, including transfer agency, registry, dividend disbursing, recordkeeping, bookkeeping, accounting and blue sky monitoring and registration functions, and the preparation of reports and returns, the Trust shall pay to Berger Associates compensation for, or reimburse Berger Associates for its expenses incurred in connection with, such services as Berger Associates and the Trust shall agree from time to time, any other provision of this Agreement notwithstanding. (b) Expenses Paid by Berger Associates. Berger Associates ---------------------------------- shall pay all its own costs and expenses incurred in rendering the services required under this Agreement. In addition to such costs and expenses, Berger Associates shall incur and pay the following expenses relating to the Fund's operations: (i) Reasonable compensation, fees and related expenses of the Trust's officers and Trustees, except for such Trustees who are not interested persons of Berger Associates; (ii) Rental of offices of the Trust; and (iii) Fees of any sub-adviser engaged by Berger pursuant to the authority granted in Section 2 hereof. 7. Brokerage Commissions. For purposes of this Agreement, --------------------- brokerage commissions paid by the Fund upon the purchase or sale of its portfolio securities shall be considered a cost of securities of the Fund and shall be paid by the Fund. Absent instructions from the Trust to the contrary, Berger Associates is authorized and directed to place Fund portfolio transactions only with brokers and dealers who render satisfactory service in the execution of orders at the most favorable prices and at reasonable commission rates, provided, however, that Berger Associates may pay a broker an amount of commission for effecting a securities transaction in excess of the amount of commission another broker would have charged for effecting that transaction if Berger Associates determines in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such -4- broker viewed in terms of either that particular transaction or the overall responsibilities of Berger Associates. Berger Associates is also authorized to consider sales of Fund shares as a factor in selecting broker-dealers to execute Fund portfolio transactions. In placing portfolio business with such broker- dealers, Berger Associates shall seek the best execution of each transaction. Subject to the terms of this Agreement and the applicable requirements and provisions of the law, including the 1940 Act and the Securities Exchange Act of 1934, as amended, and in the event that Berger Associates or an affiliate is registered as a broker-dealer, Berger Associates may select a broker with which it or any of its affiliates or the Fund is affiliated. Berger Associates or such affiliated broker may effect or execute Fund portfolio transactions, whether on a securities exchange or in the over-the-counter market, and receive separate compensation from the Fund therefor. Notwithstanding the foregoing, the Trust shall retain the right to direct the placement of all portfolio transactions, and the Trustees of the Trust may establish policies or guidelines to be followed by Berger Associates in placing portfolio transactions for the Trust pursuant to the foregoing provisions. Berger Associates shall report on the placement of portfolio transactions in the prior fiscal quarter at each quarterly meeting of such Trustees. To the extent consistent with applicable law, purchase or sell orders for the Fund may be aggregated with simultaneous purchase or sell orders for other clients of Berger Associates. Whenever Berger Associates simultaneously places orders to purchase or sell the same security on behalf of the Fund and one or more other clients of Berger Associates, such orders will be allocated as to price and amount among all such clients in a manner reasonably believed by Berger Associates to be fair and equitable to each client. The Trust recognizes that in some cases, this procedure may adversely affect the results obtained for the Fund. 8. Termination. This Agreement may be terminated at any ----------- time, without penalty, by the Trustees of the Trust, or by the shareholders of the Fund acting by vote of at least a majority of its outstanding voting securities, provided in either case that sixty (60) days' advance written notice of termination be given to Berger Associates at its principal place of business. This Agreement may be terminated by Berger Associates at any time, without penalty, by giving sixty (60) days' advance written notice of termination to the Trust, addressed to its principal place of business. The Trust agrees that, consistent with the terms of the Trust's Declaration of Trust, the Trust shall cease to use the name "Berger" in connection with the Fund as soon as reasonably practicable following any termination of this Agreement if Berger Associates does not continue to provide investment advice to the Fund after such termination. 9. Assignment. This Agreement shall terminate ---------- automatically in the event of any assignment of this Agreement. 10. Term. This Agreement shall continue in effect until ---- April 30, 1998, unless sooner terminated in accordance with its terms, and shall continue in effect from year to year thereafter only so long as such continuance is specifically approved at least annually by the vote of a majority of the Trustees of the Trust who are not parties hereto or interested persons of any such party, cast in person at a meeting called for the purpose of voting on the approval of the terms of such renewal, and by either the Trustees of the Trust or the affirmative vote of a majority of the outstanding voting securities of the Fund. -5- 11. Amendments. This Agreement may be amended by the ---------- parties only if such amendment is specifically approved (i) by a majority of the Trustees, including a majority of the Trustees who are not interested persons of the Fund or Berger Associates and, (ii) if required by applicable law, by the affirmative vote of a majority of the outstanding voting securities of the Fund. 12. Allocation of Expenses. The Trustees shall determine ---------------------- the basis for making an appropriate allocation of the Trust's expenses (other than those directly attributable to the Fund) between the Fund and any other series of the Trust and between the Fund and other investment companies managed by Berger Associates. 13. Limitation on Personal Liability. NOTICE IS HEREBY -------------------------------- GIVEN that the Trust is a business trust organized under the laws of the Commonwealth of Massachusetts pursuant to a Declaration of Trust filed in the office of the Secretary of State of the Commonwealth of Massachusetts. All parties to this Agreement acknowledge and agree that this Agreement was made by and on behalf of the Trust by the person executing below as an officer of the Trust and not individually, that the Trust is a series trust and all debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series shall be enforceable against the assets held with respect to such series only, and not against the assets of the Trust generally or against the assets held with respect to any other series and further that no trustee, officer or holder of shares of beneficial interest of the Trust shall be personally liable for any of the foregoing. 14. Limitation of Liability of Berger Associates. Berger -------------------------------------------- Associates shall not be liable for any error of judgment or mistake of law or for any loss arising out of any investment or for any act or omission taken with respect to the Fund, except for willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of reckless disregard of its obligations and duties hereunder and except to the extent otherwise provided by law. As used in this Section 14, "Berger Associates" shall include any affiliate of Berger Associates performing services for the Trust contemplated hereunder and directors, officers and employees of Berger Associates and such affiliates. 15. Activities of Berger Associates. The services of ------------------------------- Berger Associates to the Trust hereunder are not to be deemed to be exclusive, and Berger Associates and its affiliates are free to render services to other parties, so long as its services under this Agreement are not materially adversely affected or otherwise impaired thereby. Nothing in this Agreement shall limit or restrict the right of any director, officer or employee of Berger Associates to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business, whether of a similar nature or a dissimilar nature. It is understood that trustees, officers and shareholders of the Trust are or may become interested in Berger Associates as directors, officers and shareholders of Berger Associates, that directors, officers, employees and shareholders of Berger Associates are or may become similarly interested in the Trust, and that Berger Associates may become interested in the Trust as a shareholder or otherwise. -6- 16. Certain Definitions. The terms "vote of a majority of ------------------- the outstanding voting securities", "assignment", "approved at least annually" and "interested persons" when used herein, shall have the respective meanings specified in the 1940 Act, as now in effect or hereafter amended, and the rules and regulations thereunder, subject to such orders, exemptions and interpretations as may be issued by the Securities and Exchange Commission under said Act and as may be then in effect. Where the effect of a requirement of the federal securities laws reflected in any provision of this Agreement is made less restrictive by a rule, regulation, order, interpretation or other authority of the Securities and Exchange Commission, whether of special or general application, such provision shall be deemed to incorporate the effect of such rule, regulation, order, interpretation or other authority. 17. Governing Law. This Agreement shall be construed in ------------- accordance with the laws of the State of Colorado (without giving effect to the conflicts of laws principles thereof) and the 1940 Act. To the extent that the applicable laws of the State of Colorado conflict with the applicable provisions of the 1940 Act, the latter shall control. 18. Miscellaneous. The headings in this Agreement are ------------- included for convenience of reference only and in no way define or limit any of the provisions thereof or otherwise affect their construction or effect. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors. IN WITNESS WHEREOF, the parties have caused their duly authorized officers to execute this Investment Advisory Agreement as of the date and year first above written. BERGER ASSOCIATES, INC. By:_________________________ Gerard M. Lavin President BERGER OMNI INVESTMENT TRUST By:_________________________ Name: Title: -7- EX-99.B5.2 5 SUB-ADVISORY AGREEMENT EXHIBIT 5.2 SUB-ADVISORY AGREEMENT This SUB-ADVISORY AGREEMENT (the "Agreement") is entered into effective as of the _____ day of _______________, 1997, by and between BERGER ASSOCIATES, INC., a Delaware corporation ("Berger") and PERKINS, WOLF, MCDONNELL & COMPANY, a Delaware corporation ("PWM"). WHEREAS, Berger has entered into an Investment Advisory Agreement (the "Advisory Agreement") with Berger Omni Investment Trust, a Massachusetts business trust (the "Trust") and an open- end, management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"), with respect to the Berger Small Cap Value Fund, a series of the Trust (the "Fund") pursuant to which Berger has agreed to provide investment advisory services with respect to the Fund; and WHEREAS, PWM is engaged in the business of rendering investment advisory services and is registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act"); and WHEREAS, Berger desires to retain PWM to furnish investment advisory services with respect to the Fund, and PWM is willing to furnish such services; NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Duties of PWM. Berger hereby engages the services of ------------- PWM as subadviser in furtherance of the Advisory Agreement. PWM agrees to perform the following duties, subject to the oversight of Berger and to the overall control of the officers and the Board of Trustees (the "Trustees") of the Trust: (a) PWM shall manage the investment operations of the Fund and the composition of its investment portfolio, shall determine without prior consultation with the Trust or Berger, what securities and other assets of the Fund will be acquired, held, disposed of or loaned, and shall direct Berger with respect to the execution of trades in connection with such determinations, in conformity with the investment objectives, policies and restrictions and the other statements concerning the Fund in the Trust's declaration of trust, as amended from time to time (the "Declaration of Trust"), bylaws and registration statements under the 1940 Act and the Securities Act of 1933, as amended (the "1933 Act"), the Advisers Act, the rules thereunder and all other applicable federal and state laws and regulations, and the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), applicable to the Fund as a regulated investment company; -1- (b) PWM shall cause its officers to attend meetings and furnish oral or written reports, as the Trust or Berger may reasonably require, in order to keep Berger, the Trustees and appropriate officers of the Trust fully informed as to the condition of the investment portfolio of the Fund, the investment decisions of PWM, and the investment considerations which have given rise to those decisions; (c) PWM shall maintain all books and records required to be maintained by PWM pursuant to the 1940 Act, the Advisers Act, and the rules and regulations promulgated thereunder, as the same may be amended from time to time, with respect to transactions on behalf of the Fund, and shall furnish the Trustees and Berger with such periodic and special reports as the Trustees or Berger reasonably may request. PWM hereby agrees that all records which it maintains for the Fund or the Trust are the property of the Trust, agrees to permit the reasonable inspection thereof by the Trust or its designees and agrees to preserve for the periods prescribed under the 1940 Act and the Advisers Act any records which it maintains for the Trust and which are required to be maintained under the 1940 Act and the Advisers Act, and further agrees to surrender promptly to the Trust or its designees any records which it maintains for the Trust upon request by the Trust; and (d) At such times as shall be reasonably requested by the Trustees or Berger, PWM shall provide the Trustees and Berger with economic, operational and investment data and reports, including without limitation all information and materials reasonably requested by or requested to be delivered to the Trustees of the Trust pursuant to Section 15(c) of the 1940 Act, and shall make available to the Trustees and Berger any economic, statistical and investment services normally available to similar investment company clients of PWM. (e) PWM will provide to Berger for regulatory filings and other appropriate uses materially accurate and complete information relating to PWM as may reasonably be requested by Berger from time to time and, notwithstanding anything herein to the contrary, PWM shall be liable to Berger for all damages, costs and expenses, including without limitation reasonable attorneys' fees (hereinafter referred to collectively as "Damages"), incurred by Berger as a result of any material inaccuracies or omissions in such information provided by PWM to Berger; provided, however, that PWM shall not be liable to the extent that any Damages are based upon inaccuracies or omissions made in reliance upon information furnished to PWM by Berger. 2. Further Obligations. In all matters relating to the ------------------- performance of this Agreement, PWM shall act in conformity with the Trust's Declaration of Trust, bylaws and currently effective registration statements under the 1940 Act and the 1933 Act and any amendments or supplements thereto (the "Registration Statements") and with the written policies, procedures and guidelines of the Fund, and written instructions and directions of the Trustees and Berger and shall comply with the requirements of the 1940 Act, the Advisers Act, the rules thereunder, and all other applicable federal and state laws and regulations. Berger agrees to provide to PWM copies of the Trust's Declaration of Trust, bylaws, Registration Statement, written policies, procedures and guidelines and written instructions and directions of the Trustees and Berger, and -2- any amendments or supplements to any of them at, or, if practicable, before the time such materials become effective. 3. Obligations of Berger. Berger shall have the following --------------------- obligations under this Agreement: (a) To keep PWM continuously and fully informed (or cause the custodian of the Fund's assets to keep PWM so informed) as to the composition of the investment portfolio of the Fund and the nature of all of the Fund's assets and liabilities from time to time; (b) To furnish PWM with a certified copy of any financial statement or report prepared for the Fund by certified or independent public accountants and with copies of any financial statements or reports made to the Fund's shareholders or to any governmental body or securities exchange; (c) To furnish PWM with any further materials or information which PWM may reasonably request to enable it to perform its function under this Agreement; and (d) To compensate PWM for its services in accordance with the provisions of Section 4 hereof. 4. Compensation. ------------ (a) Except as set forth in Section 4(b) hereof, Berger shall pay to PWM for its services under this Agreement a fee, payable in United States dollars, at an annual rate of 0.90% of the first $75,000,000 of average daily net assets of the Fund, 0.50% of the next $125,000,000 of average daily net assets of the Fund and 0.20% on any part of the average daily net assets of the Fund in excess of $200,000,000. Such fee shall be computed and accrued daily and payable monthly as of the last day of each month during which or part of which this Agreement is in effect. For the month during which this Agreement becomes effective and the month during which it terminates, however, there shall be an appropriate proration of the fee payable for such month based on the number of calendar days of such month during which this Agreement is effective. (b) Notwithstanding any provision in Section 4(a) hereof to the contrary, in the event this Agreement continues in effect, pursuant to Section 8, for more than four years from the date first set forth above, the fee payable by Berger to PWM after such four-year period for PWM's services under this Agreement shall be at an annual rate of 0.50% of the first $200,000,000 of average daily net assets of the Fund and 0.20% of the average daily net assets of the Fund in excess of $200,000,000. 5. Expenses and Excluded Expenses. PWM shall pay all its ------------------------------ own costs and expenses incurred in rendering the services required under this Agreement. -3- 6. Representations of PWM. PWM hereby represents, ---------------------- warrants and covenants to Berger as follows: (a) PWM: (i) is registered as an investment adviser under the Advisers Act and will continue to be so registered for so long as this Agreement remains in effect; (ii) is not prohibited by the 1940 Act or the Advisers Act from performing the services contemplated by this Agreement; (iii) has met, and will continue to meet for so long as this Agreement remains in effect, any other applicable federal or state requirements, or the applicable requirements of any regulatory or industry self-regulatory organization necessary to be met in order to perform the services contemplated by this Agreement; (iv) has the legal and corporate authority to enter into and perform the services contemplated by this Agreement; and (v) will immediately notify Berger of the occurrence of any event that would disqualify PWM from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act or otherwise, and of the institution of any administrative, regulatory or judicial proceeding against PWM that could have a material adverse effect upon PWM's ability to fulfill its obligations under this Agreement. (b) PWM has adopted a written code of ethics complying with the requirements of Rule 17j-1 under the 1940 Act and will provide Berger with a copy of such code of ethics, together with evidence of its adoption. Within 45 days after the end of the last calendar quarter of each year that this Agreement is in effect, the president or a vice president of PWM shall certify to Berger that PWM has complied with the requirements of Rule 17j-1 during the previous year and that there has been no violation of PWM's code of ethics or, if such a violation has occurred, that appropriate action was taken in response to such violation. Upon the written request of Berger, PWM shall permit Berger, its employees or its agents to examine the reports required to be made to PWM by Rule 17j-1(c)(1) and all other records relevant to PWM's code of ethics. (c) PWM has provided Berger with a copy of its Form ADV as most recently filed with the U.S. Securities and Exchange Commission ("SEC") and will, promptly after filing any amendment to its Form ADV with the SEC, furnish a copy of such amendment to Berger. (d) PWM will notify Berger of any change in the identity or control of its shareholders owning a 10% or greater interest in PWM, or any change that would constitute a change in control of PWM under the 1940 Act, prior to any such change if PWM is aware, or should be aware, of any such change, but in any event as soon as any such change becomes known to PWM. 7. Representations of Berger. Berger hereby represents, ------------------------- warrants and covenants to PWM as follows: (a) Berger: (i) is registered as an investment adviser under the Advisers Act and will continue to be so registered for so long as this Agreement remains in effect; (ii) is not prohibited by the 1940 Act or the Advisers Act from fulfilling its obligations under this Agreement; (iii) has met, and will continue to meet for so long as this Agreement remains in -4- effect, any other applicable federal or state requirements, or the applicable requirements of any regulatory or industry self- regulatory organization necessary to be met in order to fulfill its obligations under this Agreement; (iv) has the legal and corporate authority to enter into and perform this Agreement; and (v) will immediately notify PWM of the occurrence of any event that would disqualify Berger from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act or otherwise, and of the institution of any administrative, regulatory or judicial proceeding against Berger that could have a material adverse effect upon Berger's ability to fulfill its obligations under this Agreement. (b) Berger has adopted a written code of ethics complying with the requirements of Rule 17j-1 under the 1940 Act and will provide PWM with a copy of such code of ethics, together with evidence of its adoption. (c) Berger has provided PWM with a copy of its Form ADV as most recently filed with the U.S. Securities and Exchange Commission ("SEC") and will, promptly after filing any amendment to its Form ADV with the SEC, furnish a copy of such amendment to PWM. (d) Berger will notify PWM of any change in the identity or control of its shareholders owning a 10% or greater interest in Berger, or any change that would constitute a change in control of Berger under the 1940 Act, prior to any such change if Berger is aware, or should be aware, of any such change, but in any event as soon as any such change becomes known to Berger. 8. Term. This Agreement shall become effective as of the ---- date first set forth above and shall continue in effect until April 30, 1998, unless sooner terminated in accordance with its terms, and shall continue in effect from year to year thereafter for a period of three years or longer only so long as such continuance is specifically approved at least annually by the vote of a majority of the Trustees of the Trust who are not parties hereto or interested persons of the Trust, Berger or PWM, cast in person at a meeting called for the purpose of voting on the approval of the terms of such renewal, and by either the Trustees of the Trust or the affirmative vote of a majority of the outstanding voting securities of the Fund. Berger shall use its best efforts consistent with the fiduciary obligations of all parties to obtain such annual approvals of this Agreement. 9. Termination. This Agreement may be terminated at any ----------- time, without penalty, by the Trustees or by the shareholders of the Fund acting by vote of at least a majority of its outstanding voting securities, provided in any such case that 60 days' advance written notice of termination be given to PWM at its principal place of business. This Agreement may also be terminated by Berger or the Trust: (i) upon a material breach by PWM of any of the representations and warranties set forth in Section 6 of this Agreement, if such breach shall not have been cured within a 20-day period after notice of such breach; or (ii) if PWM becomes unable to discharge its duties and obligations under this Agreement. This Agreement may be terminated by PWM at any time, without penalty: (i) by giving 60 days' advance written notice of termination to Berger and to the Trust, or (ii) upon a material breach by Berger of any of the -5- representations and warranties set forth in Section 7 of this Agreement, if such breach shall not have been cured within a 20- day period after notice of such breach. In addition, this Agreement shall terminate, without penalty, upon the termination of the Advisory Agreement. 10. Assignment. This Agreement shall automatically ---------- terminate in the event of its assignment. 11. Amendments. This Agreement may be amended by the ---------- parties only in a written instrument signed by the parties to this Agreement and only if such amendment is specifically approved (i) by a majority of the Trustees, including a majority of the Trustees who are not interested persons of the Trust or Berger, PWM or their affiliates, and (ii) if required by applicable law, by the affirmative vote of a majority of the outstanding voting securities of the Fund. 12. Limitation on Personal Liability. NOTICE IS HEREBY -------------------------------- GIVEN that the Trust is a business trust organized under the laws of the Commonwealth of Massachusetts pursuant to a Declaration of Trust filed in the Office of the Secretary of State of the Commonwealth of Massachusetts. The parties hereto acknowledge and agree that the Trust is a series trust and all debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series shall be enforceable against the assets held with respect to such series only, and not against the assets of the Trust generally or against the assets held with respect to any other series and further that no Trustee, officer or holder of shares of beneficial interest of the Trust shall be personally liable for any of the foregoing. 13. Limitation of Liability of PWM. Berger will not seek ------------------------------ to hold PWM, and PWM shall not be, liable for any error of judgment or mistake of law or for any loss arising out of any investment or for any act or omission taken with respect to the Fund, except for willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of reckless disregard of its obligations and duties hereunder and except to the extent otherwise provided by law. As used in this section, "PWM" shall include any affiliate of PWM performing services for the Fund contemplated hereunder and directors, officers and employees of PWM and such affiliates. 14. Activities of PWM. The services of PWM hereunder are ----------------- not to be deemed to be exclusive, and PWM is free to render services to other parties, so long as its services under this Agreement are not materially adversely affected or otherwise impaired thereby. Nothing in this Agreement shall limit or restrict the right of any director, officer or employee of PWM to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business, whether of a similar or a dissimilar nature. It is understood that Trustees, officers and shareholders of the Trust are or may become interested in PWM as directors, officers and shareholders of PWM, that directors, officers, employees and shareholders of PWM are or may become similarly interested in the Trust, and that PWM may become interested in the Trust as a shareholder or otherwise. -6- 15. Third Party Beneficiary. The parties expressly ----------------------- acknowledge and agree that the Trust is a third party beneficiary of this Agreement and that the Trust shall have the full right to sue upon and enforce this Agreement in accordance with its terms as if it were a signatory hereto. 16. Notices. Any notice or other communication required to ------- be given pursuant to this Agreement shall be deemed duly given if delivered personally or by overnight delivery service or mailed by certified or registered mail, return receipt requested and postage prepaid, or sent by facsimile addressed to the parties at their respective addresses set forth below, or at such other address as shall be designated by any party in a written notice to the other party. (a) To Berger at: Berger Associates, Inc. 210 University Boulevard Denver, Colorado 80206 Attention: President Phone: (303) 329-0200 Fax: (303) 394-4397 with a copy to: Diane M. Bono, Esq. Sonnenschein Nath & Rosenthal 4520 Main Street, 11th Floor Kansas City, Missouri 64111 Phone: (816) 932-4400 Fax: (816) 531-7545 (b) To PWM at: Perkins, Wolf, McDonnell & Company 53 W. Jackson Boulevard Suite 818 Chicago, Illinois 60604 Attention: President Phone: (312) 922-0355 Fax: (312) 922-0418 with a copy to: Leslie J. Parrette, Jr., Esq. Blackwell Sanders Matheny Weary & Lombardi L.C. 2300 Main Street, Suite 1100 -7- Kansas City, Missouri 64108 Phone: (816) 274-6800 Fax: (816) 274-6914 (c) To the Trust at: Berger Omni Investment Trust 210 University Boulevard Suite 900 Denver, Colorado 80206 with a copy to: Lester R. Woodward, Esq. Davis, Graham & Stubbs LLP 370 Seventeenth Street, Suite 4700 Denver, Colorado 80202 Phone: (303) 892-9400 Fax: (303) 892-7400 17. Certain Definitions. As used in this Agreement, the ------------------- terms "vote of a majority of the outstanding voting securities," "assignment," "approved at least annually," and "interested persons" shall have the respective meanings specified in the 1940 Act, as now in effect or hereafter amended, and the rules and regulations thereunder, subject to such orders, exemptions and interpretations as may be issued by the SEC under the 1940 Act and as may be then in effect. Where the effect of a requirement of the federal securities laws reflected in any provision of this Agreement is made less restrictive by a rule, regulation, order, interpretation or other authority of the SEC, whether of special or general application, such provision shall be deemed to incorporate the effect of such rule, regulation, order, interpretation or other authority. 18. Governing Law. This Agreement shall be construed in ------------- accordance with the laws of the State of Colorado (without giving effect to the conflicts of laws principles thereof) and the 1940 Act. To the extent that the applicable laws of the State of Colorado conflict with the applicable provisions of the 1940 Act, the latter shall control. 19. Miscellaneous. The headings in this Agreement are ------------- included for convenience of reference only and in no way define or limit any of the provisions thereof or otherwise affect their construction or effect. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors. 20. Counterparts. This Agreement may be executed in two or ------------ more counterparts, each of which shall be deemed an originally, but all of which taken together shall constitute one -8- and the same instrument. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers designated below as of the day and year first above written. BERGER ASSOCIATES, INC. By:________________________________ Gerard M. Lavin President PERKINS, WOLF, MCDONNELL & COMPANY By:________________________________ Gregory E. Wolf President -9- EX-99.B6 6 DISTRIBUTION AGREEMENT EXHIBIT 6 DISTRIBUTION AGREEMENT THIS DISTRIBUTION AGREEMENT (the "Agreement") is made effective as of the ______ day of February, 1997, by and between BERGER OMNI INVESTMENT TRUST, a business trust organized and existing under the laws of the Commonwealth of Massachusetts (the "Trust"), and BERGER DISTRIBUTORS, INC., a corporation organized and existing under the laws of the State of Colorado (the "Distributor"). This Agreement applies separately to each series of the Trust, whether now existing or hereafter created, listed on Exhibit A hereto as it may be amended from time to time (each a "Fund" and collectively the "Funds"). RECITALS A. The Trust is engaged in business as an open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"). B. The Distributor is registered as a broker-dealer under the Securities Exchange Act of 1934, as amended (the "1934 Act") and is registered as a broker-dealer under the laws of each state of the United States and in each other jurisdiction in which the Distributor engages in business to the extent that the laws of such states and such jurisdictions require such registration, and is a member of the National Association of Securities Dealers, Inc. (the "NASD") (such registration and membership are referred to collectively as the "Registrations"). C. The Trust and the Distributor desire the Distributor to act as the principal underwriter for the public offering of the shares of beneficial interest (the "Shares") of each Fund, whether now existing or hereafter created. AGREEMENT For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Appointment. The Trust appoints the Distributor to act ----------- as distributor of the Shares of each Fund. 2. Trust to Furnish Documents. The Trust shall furnish -------------------------- the Distributor with copies of any registration statements, prospectuses or statements of additional information pertaining to any Fund filed by the Trust with the Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "1933 Act"), or the 1940 Act, together with any financial statements and exhibits included therein, and all amendments or supplements thereto hereafter filed. -1- The Trust shall also furnish the Distributor with such other certificates or documents as the Distributor may from time to time, in its discretion, reasonably deem necessary or appropriate in order to perform its duties under this Agreement properly. 3. Solicitation of Orders for Purchase of Shares. --------------------------------------------- (a) Subject to the provisions of Sections 4 and 7 hereof, and to such minimum purchase requirements as may from time to time be indicated in each Fund's prospectus or statement of additional information, the Distributor is authorized to solicit, as agent on behalf of the Trust, unconditional orders for purchases of each Fund's Shares authorized for issuance and registered under the 1933 Act, provided that: (1) The Distributor shall act solely as a disclosed agent on behalf of and for the account of the Trust; (2) The Distributor shall confirm or arrange with the transfer agent for the Shares to confirm all purchases of the Shares. Such confirmation shall conform to the requirements of the 1934 Act and the rules thereunder and shall clearly state that the Distributor is acting as agent in the transaction; (3) The Distributor shall have no liability for payment for purchases of Shares it sells as agent, but will use reasonable efforts to assure that each Fund receives payment for Shares purchased through the Distributor in accordance with the requirements of applicable law and regulations; and (4) Each order to purchase Shares of a Fund received by the Distributor shall be subject to acceptance by the Trust and entry of the order on such Fund's records or shareholder accounts and is not binding until so accepted and entered. The purchase price of a Fund's Shares to the public shall be the public offering price described in Section 6 hereof. (b) The Distributor shall use reasonable efforts (but only in states and jurisdictions in which the Distributor may lawfully do so) to solicit from investors unconditional orders to purchase Shares of each Fund. 4. Solicitation of Orders to Purchase Shares by Trust. -------------------------------------------------- The rights granted to the Distributor shall be non-exclusive in that the Trust reserves the right to otherwise solicit purchases from, and sell Shares to, investors, including without limitation the right to issue Shares in connection with the merger or consolidation of any other investment company, trust or personal holding company with a Fund, or a Fund's acquisition, by the purchase or otherwise, of all or substantially all of the assets of an investment company, trust or personal holding company, or substantially all of the outstanding shares or interests of any such entity. 5. No Compensation; Payment of Expenses. The Distributor ------------------------------------ will not be entitled to any compensation with respect to its services under this Agreement. The Distributor -2- shall pay its own expenses incurred in the discharge of its duties hereunder, but shall not be responsible to pay any expenses of the Trust or any Fund, including without limitation, any charges of the Trust's transfer, recordkeeping, dividend disbursing and redemption agents, if any; any expenses of preparation, printing and mailing of confirmations; any expenses of preparation and printing of annual or more frequent revisions of each Fund's prospectus and statement of additional information and of supplying copies thereof to shareholders; any expenses of registering and maintaining the registrations of the Trust under the 1940 Act and the sale of the Trust's Shares under the 1933 Act; and any expenses of registering or qualifying and maintaining registrations or qualifications of each Fund and of the Shares for sale under securities laws of various states or other jurisdictions and of registration or qualification of the Trust and each Fund under all laws applicable to the Trust or its business activities. 6. Public Offering Price. All solicitations by the --------------------- Distributor pursuant to this Agreement shall be for orders to purchase Shares of a Fund at the public offering price. The public offering price for each accepted order for a Fund's Shares will be the net asset value per Share next determined by the Trust after it or its authorized agent accepts such order. The net asset value per Share of the Shares shall be determined in the manner provided in the Trust's Declaration of Trust and Bylaws as now in effect or as may be amended, and as reflected in the then current prospectus and statement of additional information pertaining to such Fund. 7. Suspension of Sales. If and whenever the determination ------------------- of a Fund's net asset value is suspended and until such suspension is terminated, no further orders for Shares shall be accepted by the Trust except such unconditional orders placed with the Trust and accepted by it before the suspension. In addition, the Trust reserves the right to suspend sales of Shares of a Fund if, in the judgment of the Trustees, it is in the best interest of the Fund to do so, such suspension to continue for such period as may be determined by the Trustees; and in that event, (i) at the direction of the Trust, the Distributor shall suspend its solicitation of orders to purchase Shares of such Fund until otherwise instructed by the Trust and (ii) no orders to purchase Shares of such Fund shall be accepted by the Trust while such suspension remains in effect unless otherwise directed by its Trustees. 8. Solicitation Materials; Authorized Representations. -------------------------------------------------- (a) The Trust shall make available to the Distributor, without cost to the Trust, such number of copies of each Fund's currently effective prospectus and statement of additional information and reports to shareholders and copies of all other information that the Distributor may reasonably request for use in connection with the distribution of Shares. (b) The Distributor is not authorized by the Trust to give with respect to any Fund any information or to make any representations in connection with the sale of Shares other than the information and representations contained in the Trust's registration statement, or such Fund's prospectus or statement of additional information, as amended or supplemented from time to time, or contained in shareholder reports or other material pertaining to such Fund that may be prepared by or on behalf of the Trust or approved by the Trust for the Distributor's use. -3- 9. Registration of Additional Shares. The Trust hereby --------------------------------- agrees to register either (i) an indefinite number of Shares pursuant to Rule 24f-2 under the 1940 Act, or (ii) a definite number of Shares as the Trust shall deem advisable pursuant to Rule 24e-2 under the 1940 Act, or both. The Trust will, in cooperation with the Distributor, take such action as may be necessary from time to time to register or qualify the Shares of each Fund (so registered or otherwise qualified for sale under the 1933 Act), in any state or jurisdiction mutually agreeable to the Distributor and the Trust, and to maintain such registration or qualification; provided, however, that nothing herein shall be deemed to prevent the Trust from registering or qualifying the Shares without approval of the Distributor in any state or jurisdiction it deems appropriate. 10. Conformity With Law. The Distributor agrees that in ------------------- soliciting orders to purchase Shares it shall duly conform in all respects with applicable federal and state laws and with the rules and regulations of the NASD. The Distributor will use its best efforts to maintain its Registrations in good standing during the term of this Agreement and will promptly notify the Trust in the event of (i) the suspension or termination of any of the Registrations, (ii) the occurrence of any event that would disqualify the Distributor from acting as the principal underwriter of the Trust or any of its Funds pursuant to Section 9(a) of the 1940 Act or otherwise, or (iii) the institution of any administrative, regulatory or judicial proceeding against the Distributor. 11. Independent Contractor. The Distributor shall be an ---------------------- independent contractor and none of its officers, directors, employees or representatives shall be acting as an employee or other agent of the Trust in the performance of the Distributor's duties hereunder. The Distributor shall be responsible for its own conduct and the employment, control and conduct of its agents and employees and for injury to such agents or employees or to others through its agents and employees and agrees to pay or to insure that persons other than the Trust will pay all compensation and taxes due with respect to the activities of its agents and employees. 12. Indemnification. The Distributor agrees to indemnify --------------- and hold harmless the Trust and each of its Trustees, officers, employees and representatives, and each person, if any, who controls the Trust within the meaning of Section 15 of the 1933 Act, against any and all losses, liabilities, damages, claims and expenses (including the reasonable costs of investigating or defending any alleged loss, liability, damage, claim or expense and reasonable legal counsel fees incurred in connection therewith) to which the Trust or such Trustees, officers, employees, representatives, or controlling person or persons may become subject under the 1933 Act, under any other statute, at common law, or otherwise, arising out of the offer or sale of any Shares of any Fund or any other security to any person which (i) may be based upon any wrongful act by the Distributor or any of the Distributor's directors, officers, employees or representatives, or (ii) may be based upon any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, statement of additional information, shareholder report or other information covering Shares of such Fund filed or made public by the Trust or any amendment thereof or supplement thereto or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such statement or omission was made in reliance upon written information furnished or confirmed by the Distributor to the Trust. In no case is the -4- Distributor's indemnity in favor of the Trust or any person indemnified to be deemed to protect the Trust or such indemnified person against any liability to which the Trust or such person would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its or such person's duties or by reason of its or such person's reckless disregard of its or such person's obligations and duties under this Agreement. The Trust or any person indemnified, as the case may be, shall notify the Distributor in writing of the claim within a reasonable time after the summons or other first written notification giving information of the nature of the claim is served upon the Trust or upon such person (or after the Trust or such person shall have received notice of such service on any designated agent); however, failure to so notify the Distributor of any such claim shall not relieve the Distributor from any liability hereunder unless and to the extent that its ability to defend against such claim is prejudiced by such failure, nor from any liability that the Distributor may have to the Trust or any person against whom such action is brought otherwise than on account of the Distributor's indemnity agreement contained in this section. The Distributor shall be entitled to participate, at its own expense, in the defense or, if Distributor so elects, to assume the defense of any action brought to enforce any such claim but, if the Distributor elects to assume the defense, such defense shall be conducted by legal counsel chosen by the Distributor and reasonably satisfactory to the persons indemnified who are defendants in the action. In the event that the Distributor elects to assume the defense of any such action and retain such legal counsel, persons indemnified who are defendants in the action shall bear the fees and expenses of any additional legal counsel retained by them. If the Distributor does not elect to assume the defense of any such action, the Distributor shall reimburse persons indemnified who are defendants in such action for the reasonable fees of any legal counsel retained by them in such litigation. The Trust agrees to indemnify and hold harmless the Distributor and each of its directors, officers, employees and representatives, and each person, if any, who controls the Distributor within the meaning of Section 15 of the 1933 Act, against any and all losses, liabilities, damages, claims or expenses (including the reasonable costs of investigating or defending any alleged loss, liability, damage, claim or expenses and reasonable legal counsel fees incurred in connection therewith) to which the Distributor or such of its directors, officers, employees, representatives or controlling person or persons may become subject under the 1933 Act, under any other statute, at common law, or otherwise, arising out of the offer or sale of any Shares of any Fund to any person which (i) may be based upon any wrongful act by the Trust or any of its Trustees, officers, employees or representatives other than the Distributor, or (ii) may be based upon any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, statement of additional information, shareholder report or other information covering Shares filed or made public by the Trust or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, unless such statement or omission was made in reliance upon written information furnished or confirmed by the Distributor to the Trust. In no case is the Trust's indemnity in favor of the Distributor or any person indemnified to be deemed to protect the Distributor or such indemnified person against any liability to which the Distributor or such indemnified person would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in -5- the performance of its or such person's duties or by reason of its or such person's reckless disregard of its or such person's obligations and duties under this Agreement. The Distributor or any person indemnified, as the case may be, shall notify the Trust in writing of the claim within a reasonable time after the summons or other first written notification giving information of the nature of the claim is served upon the Distributor or upon such person (or after the Distributor or such person shall have received notice of such service on any designated agent); however, failure to so notify the Trust of any such claim shall not relieve the Trust from any liability hereunder unless and to the extent that its ability to defend against such claim is prejudiced by such failure, nor from any liability which the Trust may have to the Distributor or any person against whom such action is brought otherwise than on account of the Trust's indemnity agreement contained in this section. The Trust shall be entitled to participate, at its own expense, in the defense or, if the Trust so elects, to assume the defense of any action brought to enforce such claim but, if the Trust elects to assume the defense, such defense shall be conducted by legal counsel chosen by the Trust and reasonably satisfactory to the persons indemnified who are defendants in the action. In the event that the Trust elects to assume the defense of any such action and retain such legal counsel, the persons indemnified who are defendants in the action shall bear the fees and expenses of any additional legal counsel retained by them. If the Trust does not elect to assume the defense of any such action, the Trust shall reimburse the persons indemnified who are defendants in such action for the reasonable fees and expenses of any legal counsel retained by them in such litigation. 13. Duration and Termination of this Agreement. This ------------------------------------------ Agreement shall become effective with respect to each Fund on the Effective Date specified on Exhibit A hereto with respect to such Fund, and unless terminated as provided herein, shall remain in effect until the Termination Date specified on Exhibit A hereto with respect to such Fund, and shall continue thereafter from year to year, but only so long as such continuance is specifically approved at least annually (a) by a vote of a majority of the Trustees who are not interested persons of the Distributor or of the Trust, voting in person at a meeting called for the purpose of voting on such approval, and (b) by the vote of either the Trustees or a majority of the outstanding voting securities of the Fund. If the continuance of this Agreement is not approved as to a Fund, this Agreement shall nonetheless continue with respect to those Funds as to which such continuance has been approved. This Agreement may be terminated with respect to an individual Fund at any time, without the payment of any penalty (a) on 60 days' written notice, by the Trustees or by a vote of a majority of the outstanding voting securities of such Fund, or by the Distributor, or (b) immediately, on written notice by the Trustees, in the event of termination or suspension of any of the Registrations. This Agreement will automatically terminate in the event of its assignment. In interpreting the provisions of this Section 13, the terms "assignment," "approved at least annually," "interested persons" and "vote of a majority of the outstanding voting securities" shall have same meanings as when used in the 1940 Act (in each case as the 1940 Act is now in effect or hereafter may be amended) and the rules and regulations thereunder, subject to such orders, exemptions and interpretations as may be issued by the SEC under the 1940 Act and as may be then in effect. Where the effect of a requirement of the -6- federal securities laws reflected in any provision of this Agreement is made less restrictive by a rule, regulation, order, interpretation or other authority of the SEC, whether of special or general application, such provisions shall be deemed to incorporate the effect of such rule, regulation or order. 14. Amendment of this Agreement. No provision of this --------------------------- Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by each party against which enforcement of the change, waiver, discharge or termination is sought. If the Trust should at any time deem it necessary or advisable in the best interests of a Fund that any amendment of this Agreement be made in order to comply with the recommendations or requirements of the SEC or any other governmental authority or to obtain any advantage under state or federal or tax laws and notifies the Distributor of the form of such amendment, and the reasons therefor, and if the Distributor should decline to assent to such amendment, the Trust may immediately thereupon terminate this Agreement as to that Fund. 15. Limitation on Personal Liability. NOTICE IS HEREBY -------------------------------- GIVEN that the Trust is a business trust organized under the law of the Commonwealth of Massachusetts pursuant to a Declaration of Trust filed in the office of the Secretary of State of the Commonwealth of Massachusetts. All parties to this Agreement acknowledge and agree that this Agreement was made by and on behalf of the Trust by the person whose name is set forth below as an officer of the Trust and not individually, that the Trust is a series trust and all debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series shall be enforceable against the assets held with respect to such series only, and not against the assets of the Trust generally or against the assets held with respect to any other series and further that no Trustee, officer or holder of shares of beneficial interest of the Trust shall be personally liable for any of the foregoing. 16. Notification by the Trust. The Trust agrees to advise ------------------------- the Distributor immediately: (a) of any request by the SEC for amendments to the Trust's registration statement insofar as it relates to any of the Funds, the prospectus or the statement of additional information pertaining to any Fund or for additional information, (b) in the event of the issuance by the SEC of any stop order suspending the effectiveness of the Trust's registration statement insofar as it relates to any of the Funds, the prospectus or the statement of additional information pertaining to any Fund or the initiation of any proceeding for that purpose, (c) of the occurrence of any material event which makes untrue any statement made in the Trust's registration statement insofar as it relates to any of the Funds, the prospectus or the statement of additional information pertaining to any Fund or which requires the making of a change in order to make the statements therein not misleading, and (d) of all actions of the SEC with respect to any amendments to the Trust's registration statement insofar as it relates to any of the Funds, the prospectus or the -7- statement of additional information pertaining to any Fund which may from time to time be filed with the SEC under the 1933 Act. 17. Governing Law. This Agreement shall be construed in ------------- accordance with the laws of the State of Colorado (without giving effect to the conflicts of laws principles thereof) and the 1940 Act. To the extent that the applicable laws of the State of Colorado conflict with the applicable provisions of the 1940 Act, the latter shall control. 18. Miscellaneous. The captions in this Agreement are ------------- included for convenience of reference only, and in no way define or limit any of the provisions hereof or otherwise affect their construction or effect. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 19. Notice. Any notice required or permitted to be given ------ by a party to this Agreement or to any other party hereunder shall be deemed sufficient if delivered in person or sent by registered or certified mail, postage prepaid, addressed by the party giving notice to each such other party at the address provided below or to the last address furnished by each such other party to the party giving notice. If to the Trust: 210 University Boulevard, #900 Denver, Colorado 80206 Attn: Secretary If to the Distributor: 210 University Boulevard, #900 Denver, Colorado 80206 Attn: Secretary IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. BERGER DISTRIBUTORS, INC. By:____________________________ BERGER OMNI INVESTMENT TRUST By:____________________________ -8- EXHIBIT A EFFECTIVE TERMINATION FUND DATE DATE Berger Small Cap Value __________, 1997 April 30, 1998 Fund (all classes) -9- EX-99.B8 7 FORM OF CUSTODY AGREEMENT EXHIBIT 8 CUSTODY AGREEMENT _________________ THIS AGREEMENT made effective as of the 1st day of January, 1997, by and between INVESTORS FIDUCIARY TRUST COMPANY, a trust company chartered under the laws of the state of Missouri, having its trust office located at 127 West 10th Street, Kansas City, Missouri 64105 ("Custodian"), and BERGER OMNI INVESTMENT TRUST, a Massachusetts business trust (the "Fund"), which consists of separate portfolios represented by separate series of one or more classes of shares of beneficial interest (referred to herein, together with any such portfolios hereafter constituted, where appropriate, individually as a "Portfolio," or collectively as the "Portfolios,") having its principal office and place of business at 53 West Jackson Boulevard, Suite 818, Chicago, Illinois 60604. WITNESSETH: WHEREAS, Fund desires to appoint Investors Fiduciary Trust Company as Custodian of the securities and monies of each Portfolio; and WHEREAS, Investors Fiduciary Trust Company is willing to accept such appointment; NOW THEREFORE, for and in consideration of the mutual promises contained herein, the parties hereto, intending to be legally bound, mutually covenant and agree as follows: 1. APPOINTMENT OF CUSTODIAN. Fund hereby constitutes and ________________________ appoints Custodian as custodian of the Fund which is to include appointment as custodian of the securities and monies at any time owned by the Fund, including all existing and future Portfolios, which are delivered to Custodian hereunder. 2. DUTIES AND RESPONSIBILITIES OF CUSTODIAN. ________________________________________ A. Delivery of Assets. Fund will deliver or cause to be __________________ delivered to Custodian on the effective date of this Agreement, or as soon thereafter as practicable, and from time to time thereafter, all portfolio securities acquired by it and monies then owned by it except as permitted by the Investment Company Act of 1940 or from time to time coming into its possession during the term of this Agreement. Custodian shall have no responsibility or liability whatsoever for or on account of securities or monies not so delivered. All securities so delivered to Custodian (other than bearer securities) shall be registered in the name of the applicable Portfolio or its nominee, or of a nominee of Custodian, or shall be properly endorsed and in form for transfer satisfactory to Custodian. B. Delivery of Accounts and Records. Fund shall turn over ________________________________ to Custodian all of each Portfolio's relevant accounts and records. Custodian shall be entitled to rely conclusively on the completeness and correctness of such accounts and records, and Fund shall indemnify and hold Custodian harmless of and from any and all expenses, damages and losses whatsoever arising out of or in connection with any error, omission, inaccuracy or other deficiency of such accounts and records or in the failure of Fund to provide any portion of such or to provide any information needed by the Custodian knowledgeably to perform its function hereunder. C. Delivery of Assets to Third Parties. Custodian will ___________________________________ receive delivery of and keep safely the assets of each Portfolio delivered to it from time to time segregated in a separate account. Custodian will not deliver, assign, pledge or hypothecate any such assets to any person except as permitted by the provisions of this Agreement or any agreement executed by it according to the terms of Section 2.S of this Agreement. Upon delivery of any such assets to a subcustodian pursuant to Section 2.S of this Agreement, Custodian will create and maintain records identifying those assets which have been delivered to the subcustodian as belonging to each such Portfolio. The Custodian is responsible for the securities and monies of Fund only until they have been transmitted to and received by other persons as permitted under the terms of this Agreement, except for securities and monies transmitted to subcustodians appointed under Section 2.S of this Agreement for which Custodian remains responsible to the extent provided in Section 2.S of this Agreement. Custodian may participate directly or indirectly through a subcustodian in the Depository Trust Company, Treasury/Federal Reserve Book Entry System or Participant Trust Company (PTC) or other depository (as such entities are defined at 17 CFR Section 270.17f-4(b)) (each a "Depository" and collectively the "Depositories"). D. Registration of Securities. Custodian will hold stocks __________________________ and other registerable portfolio securities of Fund registered in the name of the applicable Portfolio or in the name of any nominee of Custodian for whose fidelity and liability Custodian will be fully responsible, or in street certificate form, so-called "street-name", with or without any indication of fiduciary capacity. Unless otherwise instructed, Custodian will register all such portfolio securities in the name of its authorized nominee. All securities, and the ownership -2- thereof by Fund, which are held by Custodian hereunder, however, shall at all times be identifiable on the records of the Custodian. The Fund agrees to hold Custodian and its nominee harmless for any liability arising solely from Custodian or its nominee acting as a recordholder of securities held in custody. E. Exchange of Securities. Upon receipt of instructions ______________________ as defined herein in Section 3.A, Custodian will exchange, or cause to be exchanged, portfolio securities held by it for the Fund for other securities or cash issued or paid in connection with any reorganization, recapitalization, merger, consolidation, split-up of shares, change of par value, conversion or otherwise, and will deposit any such securities in accordance with the terms of any reorganization or protective plan. Without instructions, Custodian is authorized to exchange securities held by it in temporary form for securities in definitive form, to effect an exchange of shares when the par value of the stock is changed, and, upon receiving payment therefor, to surrender bonds or other securities held by it at maturity or when advised of earlier call for redemption, except that Custodian shall receive instructions prior to surrendering any convertible security. F. Purchases of Investments of the Fund. Fund will, on ____________________________________ each business day on which a purchase of securities shall be made by it, deliver to Custodian instructions which shall specify with respect to each such purchase: 1. The name of the Portfolio making such purchase; 2. The name of the issuer and description of the security; 3. The number of shares or the principal amount purchased, and accrued interest, if any; 4. The trade date; 5. The settlement date; 6. The purchase price per unit and the brokerage commission, taxes and other expenses payable in connection with the purchase; 7. The total amount payable upon such purchase; 8. The name of the person from whom or the broker or dealer through whom the purchase was made; and 9. Whether the security is to be received in certificated form and/or via a specified Depository. -3- In accordance with such instructions, Custodian will pay for out of monies held for the Portfolio, but only insofar as monies are available therein for such purpose, and receive the securities so purchased by or for the Portfolio except that Custodian or a subcustodian appointed hereunder may in its sole discretion advance funds for the Portfolio which may result in an overdraft because the monies held for the Portfolio are insufficient to pay the total amount payable upon such purchase. Except as otherwise instructed by Fund, such payment shall be made by the Custodian only upon receipt of securities: (a) by the Custodian; (b) by a clearing corporation of a national exchange of which the Custodian is a member; or (c) by a Depository. Notwithstanding the foregoing, (i) in the case of a repurchase agreement, the Custodian may release funds to a Depository prior to the receipt of advice from the Depository that the securities underlying such repurchase agreement have been transferred by book-entry into the account maintained with such Depository by the Custodian, on behalf of its customers, provided that the Custodian's instructions to the Depository require that the Depository make payment of such funds only upon transfer by book-entry of the securities underlying the repurchase agreement in such account; (ii) in the case of time deposits, call account deposits, currency deposits and other deposits, foreign exchange transactions, futures contracts or options, the Custodian may make payment therefor before receipt of an advice or confirmation evidencing said deposit or entry into such transaction; and (iii) in the case of the purchase of securities, the settlement of which occurs outside of the United States of America, the Custodian may make, or cause a subcustodian appointed pursuant to Section 2.S.2 of this Agreement to make, payment therefor in accordance with generally accepted local custom and market practice. G. Sales and Deliveries of Investments of the Fund - Other _______________________________________________________ than Options and Futures. Fund will, on each business ________________________ day on which a sale of investment securities of Fund has been made, deliver to Custodian instructions specifying with respect to each such sale: 1. The name of the Portfolio making such sale; 2. The name of the issuer and description of the securities; 3. The number of shares or principal amount sold, and accrued interest, if any; -4- 4. The date on which the securities sold were purchased or other information identifying the securities sold and to be delivered; 5. The trade date; 6. The settlement date; 7. The sale price per unit and the brokerage commission, taxes or other expenses payable in connection with such sale; 8. The total amount to be received by Fund upon such sale; and 9. The name and address of the broker or dealer through whom or person to whom the sale was made. In accordance with such instructions, Custodian will deliver or cause to be delivered the securities thus designated as sold for the Portfolio to the broker or other person specified in the instructions relating to such sale. Except as otherwise instructed by Fund, such delivery shall be made upon receipt of: (a) payment therefor in such form as is satisfactory to the Custodian; (b) credit to the account of the Custodian with a clearing corporation of a national securities exchange of which the Custodian is a member; or (c) credit to the account of the Custodian, on behalf of its customers, with a Depository. Notwithstanding the foregoing: (i) in the case of securities held in physical form, such securities shall be delivered in accordance with "street delivery custom" to a broker or its clearing agent; or (ii) in the case of the sale of securities, the settlement of which occurs outside of the United States of America, the Custodian may make, or cause a subcustodian appointed pursuant to Section 2.S.2 of this Agreement to make, such delivery upon payment therefor in accordance with generally accepted local custom and market practice. H. Purchases or Sales of Security Options, Options on __________________________________________________ Indices and Security Index Futures Contracts. Fund ____________________________________________ will, on each business day on which a purchase or sale of the following options and/or futures shall be made by it, deliver to Custodian instructions which shall specify with respect to each such purchase or sale: 1. The name of the Portfolio making such purchase or sale; 2. In the case of security options: a. The underlying security; b. The price at which purchased or sold; -5- c. The expiration date; d. The number of contracts; e. The exercise price; f. Whether the transaction is an opening, exercising, expiring or closing transaction; g. Whether the transaction involves a put or call; h. Whether the option is written or purchased; i. Market on which option traded; j. Name and address of the broker or dealer through whom the sale or purchase was made. 3. In the case of options on indices: a. The index; b. The price at which purchased or sold; c. The exercise price; d. The premium; e. The multiple; f. The expiration date; g. Whether the transaction is an opening, exercising, expiring or closing transaction; h. Whether the transaction involves a put or call; i. Whether the option is written or purchased; j. The name and address of the broker or dealer through whom the sale or purchase was made, or other applicable settlement instructions. 4. In the case of security index futures contracts: a. The last trading date specified in the contract and, when available, the closing level, thereof; b. The index level on the date the contract is entered into; c. The multiple; d. Any margin requirements; -6- e. The need for a segregated margin account (in addition to instructions, and if not already in the possession of Custodian, Fund shall deliver a substantially complete and executed custodial safekeeping account and procedural agreement which shall be incorporated by reference into this Custody Agreement); and f. The name and address of the futures commission merchant through whom the sale or purchase was made, or other applicable settlement instructions. 5. In the case of options on index future contracts: a. The underlying index futures contract; b. The premium; c. The expiration date; d. The number of options; e. The exercise price; f. Whether the transaction involves an opening, exercising, expiring or closing transaction; g. Whether the transaction involves a put or call; h. Whether the option is written or purchased; and i. The market on which the option is traded. I. Securities Pledged or Loaned. If specifically allowed ____________________________ for in the prospectus of Fund: 1. Upon receipt of instructions, Custodian will release or cause to be released securities held in custody to the pledgee designated in such instructions by way of pledge or hypothecation to secure any loan incurred by Fund; provided, however, that the securities shall be released only upon payment to Custodian of the monies borrowed, except that in cases where additional collateral is required to secure a borrowing already made, further securities may be released or caused to be released for that purpose upon receipt of instructions. Upon receipt of instructions, Custodian will pay, but only from funds available for such purpose, any such loan upon redelivery to it of the securities pledged or hypothecated therefor and upon surrender of the note or notes evidencing such loan. -7- 2. Upon receipt of instructions, Custodian will release securities held in custody to the borrower designated in such instructions; provided, however, that the securities will be released only upon deposit with Custodian of full cash collateral as specified in such instructions, and that Fund will retain the right to any dividends, interest or distribution on such loaned securities. Upon receipt of instructions and the loaned securities, Custodian will release the cash collateral to the borrower. J. Routine Matters. Custodian will, in general, attend to _______________ all routine and mechanical matters in connection with the sale, exchange, substitution, purchase, transfer, or other dealings with securities or other property of Fund except as may be otherwise provided in this Agreement or directed from time to time by the Trustees of Fund. K. Deposit Account. Custodian will open and maintain one _______________ or more special purpose deposit accounts for each Portfolio in the name of Custodian ("Accounts"), subject only to draft or order by Custodian upon receipt of instructions. Funds received and held for the account of different Portfolios shall be maintained in separate Accounts established for each Portfolio. All monies received by Custodian from or for the Portfolio shall be deposited in the appropriate Account. Barring events not in the control of the Custodian such as strikes, lockouts or labor disputes, riots, war or equipment or transmission failure or damage, fire, flood, earthquake or other natural disaster, action or inaction of governmental authority or other causes beyond its control, at 9:00 a.m., Kansas City time, on the second business day after deposit of any check into a Portfolio's Account, Custodian agrees to make Fed Funds available to such Portfolio in the amount of the check. Deposits made by Federal Reserve wire will be available to the Fund immediately and ACH wires will be available to the Fund on the next business day. Income earned on the portfolio securities will be credited to the Account of the applicable Portfolio based on the schedule attached as Exhibit A. The Custodian will be entitled to reverse any credited amounts where credits have been made and monies are not finally collected, provided that the Custodian has made reasonable efforts to collect such uncollected income. If monies are collected after such reversal, the Custodian will credit the applicable Portfolio in that amount. Custodian may open and maintain Accounts in State Street Bank and Trust Company, and in such other banks or trust companies (including, without limitation, affiliates of Custodian) as may be designated by -8- it and as authorized by the Fund in writing, such Accounts, however, to be in the name of Custodian and subject only to its draft or order. L. Income and other Payments to the Portfolio. Custodian __________________________________________ will: 1. Collect, claim and receive and deposit for the Portfolio all income and other payments which become due and payable on or after the effective date of this Agreement with respect to the securities deposited under this Agreement, and credit the applicable Portfolio in accordance with the schedule attached hereto as Exhibit A. If, for any reason, a Portfolio is credited with income that is not subsequently collected, Custodian may reverse that credited amount provided that the Custodian has made reasonable efforts to collect such uncollected income; 2. Execute ownership and other certificates and affidavits for all federal, state and local tax purposes in connection with the collection of bond and note coupons; and 3. Take such other action as may be necessary or proper in connection with: a. the collection, receipt and deposit of such income and other payments, including but not limited to the presentation for payment of all coupons and other income items requiring presentation; and all other securities which may mature or be called, redeemed, retired or otherwise become payable and regarding which the Custodian has actual knowledge, or notice of which is contained in publications of the type to which it normally subscribes for such purpose; and b. the endorsement for collection, in the name of Fund, of all checks, drafts or other negotiable instruments. Custodian, however, will not be required to institute suit or take other extraordinary action to enforce collection except upon receipt of instructions and upon being indemnified to its satisfaction against the costs and expenses of such suit or other actions. Custodian will receive, claim and collect all stock dividends, rights and other similar items and will deal with the same pursuant to instructions. Unless prior instructions have been received to the contrary, Custodian will, without further instructions, sell any rights held for a Portfolio on the last trade date prior to the date of expiration of such rights. -9- M. Payment of Dividends and other Distributions. On the ____________________________________________ declaration of any dividend or other distribution on the shares of the Fund ("Fund Shares") by the Trustees of Fund, Fund shall deliver to Custodian instructions with respect thereto, including such documentation as Custodian deems necessary, setting forth the record date as of which shareholders entitled to receive such dividend or other distribution shall be determined, the date of payment of such dividend or distribution, and the amount payable per share on such dividend or distribution. Except if the ex- dividend date and the reinvestment date of any dividend are the same, in which case funds shall remain in the Custody Account, on the date specified in such instructions for the payment of such dividend or other distribution, Custodian will pay out of the monies held for the applicable Portfolio, insofar as the same shall be available for such purposes, and credit to the Dividend Disbursing Agent for Fund, such amount as may be necessary to pay the amount per share payable in cash on Fund Shares issued and outstanding on the record date established by such Resolution. N. Shares of Fund Purchased by Fund. Whenever any Fund ________________________________ Shares are repurchased or redeemed by Fund, Fund or its agent shall advise Custodian of the aggregate dollar amount to be paid for such shares and shall confirm such advice in writing. Upon receipt of such advice, Custodian shall charge such aggregate dollar amount to the Account of the applicable Portfolio and either deposit the same in the account maintained for the purpose of paying for the repurchase or redemption of Fund Shares or deliver the same in accordance with such advice. Custodian shall not have any duty or responsibility to determine that Fund Shares have been removed from the proper shareholder account or accounts or that the proper number of such shares have been cancelled and removed from the shareholder records. N. Shares of Fund Purchased from Fund. Whenever Fund __________________________________ Shares are purchased from Fund, Fund will deposit or cause to be deposited with Custodian the amount received for such shares. Custodian shall not have any duty or responsibility in its capacity as Custodian of the Fund to determine that Fund Shares purchased from Fund have been added to the proper shareholder account or accounts or that the proper number of such shares have been added to the shareholder records. O. Proxies and Notices. Custodian will promptly deliver ___________________ or mail or have delivered or mailed to Fund all proxies properly signed, all notices of meetings, all proxy statements and -10- other notices, requests or announcements affecting or relating to securities held by Custodian for Fund and will, upon receipt of instructions, execute and deliver or cause its nominee to execute and deliver or mail or have delivered or mailed such proxies or other authorizations as may be required. Except as provided by this Agreement or pursuant to instructions hereafter received by Custodian, neither it nor its nominee will exercise any power inherent in any such securities, including any power to vote the same, or execute any proxy, power of attorney, or other similar instrument voting any of such securities, or give any consent, approval or waiver with respect thereto, or take any other similar action. Q. Disbursements. Custodian will pay or cause to be paid _____________ insofar as funds are available for the purpose, bills, statements and other obligations of Fund (including but not limited to obligations in connection with the conversion, exchange or surrender of securities owned by Fund, interest charges, dividend disbursements, taxes, management fees, custodian fees, legal fees, auditors' fees, transfer agents' fees, brokerage commissions, compensation to personnel, and other operating expenses of Fund) pursuant to instructions of Fund setting forth the name of the person to whom payment is to be made, the amount of the payment, and the purpose of the payment. R. Daily Statement of Accounts. Custodian will, within a ___________________________ reasonable time, render to Fund as of the close of business on each day, a detailed statement of the amounts received or paid and of securities received or delivered for the Portfolio during said day. Custodian will, from time to time, upon request by Fund, render a detailed statement of the securities and monies held for the Portfolios under this Agreement, and Custodian will maintain such books and records as are necessary to enable it to do so and will permit such persons as are authorized by Fund, including Fund's independent public accountants, access to such records or confirmation of the contents of such records; and if demanded, will permit federal and state regulatory agencies to examine the securities, books and records. Upon the written instructions of Fund or as demanded by federal or state regulatory agencies, Custodian will instruct any subcustodian to give such persons as are authorized by the Fund, including Fund's independent public accountants, access to such records or confirmation of the contents of such records; and if demanded, to permit federal and state regulatory agencies to examine the books, records and securities held by subcustodian which relate to Fund. -11- S. Appointment of Subcustodian. ___________________________ 1. Notwithstanding any other provisions of this Agreement, all or any of the monies or securities of Fund may be held in Custodian's own custody or in the custody of one or more other banks or trust companies (including, without limitation, affiliates of Custodian) selected by Custodian. Any such subcustodian selected by the Custodian must have the qualifications required for custodian under the Investment Company Act of 1940, as amended. Custodian shall be responsible to the Fund for any loss, damage or expense suffered or incurred by the Fund resulting from the actions or omissions of any subcustodians selected and appointed by Custodian (except subcustodians appointed at the request of Fund and as provided in Subsection 2 below) to the same extent Custodian would be responsible to the Fund under Section 4 of this Agreement if it committed the act or omission itself. Upon request of the Fund, Custodian shall be willing to contract with other subcustodians reasonably acceptable to the Custodian for purposes of (a) effecting third- party repurchase transactions with banks, brokers, dealers, or other entities through the use of a common custodian or subcustodian, or (b) providing depository and clearing agency services with respect to certain variable rate demand note securities, or (c) for other reasonable purposes specified by Fund; provided, however, that the Custodian shall be responsible to the Fund for any loss, damage or expense suffered or incurred by the Fund resulting from the actions or omissions of any such subcustodian only to the same extent such subcustodian is responsible to the Custodian. The Fund shall be entitled to review the Custodian's contracts with any such subcustodians appointed at the request of Fund. 2. Notwithstanding any other provisions of this Agreement, Fund's foreign securities (as defined in Rule 17f-5(c)(1) under the Investment Company Act of 1940) and Fund's cash or cash equivalents, in amounts reasonably necessary to effect Fund's foreign securities transactions, may be held in the custody of one or more banks or trust companies acting as subcustodians, according to Section 2.S.1; and thereafter may be transferred to an account maintained by such subcustodian with an -12- eligible foreign custodian, as defined in Rule 17f- 5(c)(2), provided that any such arrangement involving a foreign custodian shall be in accordance with the provisions of Rule 17f-5 under the Investment Company Act of 1940 as that Rule may be amended from time to time. The Fund shall be provided the contract with the domestic subcustodian who shall contract with the eligible foreign subcustodians. The Custodian shall be responsible for the monies and securities of the Fund held by eligible foreign subcustodians to the extent the domestic subcustodian with which the Custodian contracts is responsible to Custodian. T. Accounts and Records Property of Fund. Custodian _____________________________________ acknowledges that all of the accounts and records maintained by Custodian pursuant to this Agreement are the property of Fund, and will be made available to Fund for inspection or reproduction within a reasonable period of time, upon demand. Custodian will assist Fund's independent auditors, or upon approval of Fund, or upon demand, any regulatory body having jurisdiction over the Fund or Custodian, in any requested review of Fund's accounts and records but shall be reimbursed for all expenses and employee time invested in any such review outside of routine and normal periodic reviews. U. Adoption of Procedures. Custodian and Fund may from ______________________ time to time adopt procedures as they agree upon, and Custodian may conclusively assume that no procedure approved by Fund, or directed by Fund, conflicts with or violates any requirements of its prospectus, Trust Instrument, Bylaws, or any rule or regulation of any regulatory body or governmental agency. Fund will be responsible to notify Custodian of any changes in statutes, regulations, rules or policies not specifically governing custodians or banks which might necessitate changes in Custodian's responsibilities or procedures. V. Advances. In the event Custodian or any subcustodian ________ shall, in its sole discretion, advance cash or securities for any purpose (including but not limited to securities settlements, purchase or sale of foreign exchange or foreign exchange contracts and assumed settlement) for the benefit of any Portfolio, the advance shall be payable by the Fund on demand. Any such cash advance shall be subject to an overdraft charge at the rate set forth in the then-current fee schedule from the date advanced until the date repaid. As security for each such advance, Fund hereby grants Custodian and such subcustodian -13- a lien on and security interest in all property at any time held for the account of the applicable Portfolio, including without limitation all assets acquired with the amount advanced. Should the Fund fail to promptly repay the advance, the Custodian and such subcustodian shall be entitled to utilize available cash and to dispose of such Portfolio's assets pursuant to applicable law to the extent necessary to obtain reimbursement of the amount advanced and any related overdraft charges. W. Exercise of Rights; Tender Offers. Upon receipt of _________________________________ instructions, the Custodian shall: (a) deliver warrants, puts, calls, rights or similar securities to the issuer or trustee thereof, or to the agent of such issuer or trustee, for the purpose of exercise or sale, provided that the new securities, cash or other assets, if any, are to be delivered to the Custodian; and (b) deposit securities upon invitations for tenders thereof, provided that the consideration for such securities is to be paid or delivered to the Custodian or the tendered securities are to be returned to the Custodian. 3. INSTRUCTIONS. ____________ A. The term "instructions", as used herein, means written (including telecopied or telexed) or oral instructions to Custodian from a designated representative of Fund. Certified copies of resolutions of the Trustees of Fund naming one or more designated representatives to give instructions in the name and on behalf of Fund, may be received and accepted from time to time by Custodian as conclusive evidence of the authority of any designated representative to act for Fund and may be considered to be in full force and effect (and Custodian will be fully protected in acting in reliance thereon) until receipt by Custodian of notice to the contrary. Unless the resolution delegating authority to any person to give instructions specifically requires that the approval of anyone else will first have been obtained, Custodian will be under no obligation to inquire into the right of the person giving such instructions to do so. Notwithstanding any of the foregoing provisions of this Section 3, no authorizations or instructions received by Custodian from Fund will be deemed to authorize or permit any trustee, officer, employee, or agent of Fund to withdraw any of the securities or similar investments of Fund upon the mere receipt of such authorization or instructions from such trustee, officer, employee or agent. Notwithstanding any other provision of this Agreement, Custodian, upon receipt (and acknowledgment if required at the -14- discretion of Custodian) of the instructions of a designated representative of Fund will undertake to deliver for Fund's account monies, (provided such monies are on hand or available) in connection with Fund's transactions and to wire transfer such monies to such broker, dealer, subcustodian, bank or other agent specified in such instructions by a designated representative of Fund. B. No later than the next business day immediately following each oral instruction, Fund will send Custodian written confirmation of such oral instruction. At Custodian's sole discretion, Custodian may record on tape, or otherwise, any oral instruction whether given in person or via telephone, each such recording identifying the parties, the date and the time of the beginning and ending of such oral instruction. C. If Custodian shall provide Fund direct access to any computerized recordkeeping and reporting system used hereunder or if Custodian and Fund shall agree to utilize any electronic system of communication, Fund shall be fully responsible for any and all consequences of the use or misuse of the terminal device, passwords, access instructions and other means of access to such system(s) which are utilized by, assigned to or otherwise made available to the Fund. Fund agrees to implement and enforce appropriate security policies and procedures to prevent unauthorized or improper access to or use of such system(s). Custodian shall be fully protected in acting hereunder upon any instructions, communications, data or other information received by Custodian by such means as fully and to the same effect as if delivered to Custodian by written instrument signed by the requisite authorized representative(s) of Fund. Fund shall indemnify and hold Custodian harmless from and against any and all losses, damages, costs, charges, counsel fees, payments, expenses and liability which may be suffered or incurred by Custodian as a result of the use or misuse, whether authorized or unauthorized, of any such system(s) by Fund or by any person who acquires access to such system(s) through the terminal device, passwords, access instructions or other means of access to such system(s) which are utilized by, assigned to or otherwise made available to the Fund, except to the extent attributable to any negligence or willful misconduct by Custodian. -15- 4. LIMITATION OF LIABILITY OF CUSTODIAN. ____________________________________ A. Notwithstanding any other provisions of this Agreement, Custodian will hold harmless and indemnify Fund from and against any loss or liability, including attorney's fees, arising out of Custodian's breach of this Agreement or its negligence, willful misconduct or bad faith. Custodian shall not be liable for consequential, special, or punitive damages. Custodian may request and obtain the advice and opinion of counsel for Fund, or of its own counsel with respect to questions or matters of law, and it shall be without liability to Fund for any action taken or omitted by it in good faith, in conformity with such advice or opinion. If Custodian reasonably believes that it could not prudently act according to the instructions of the Fund or the Fund's counsel, it may in its discretion, with notice to the Fund, not act according to such instructions. B. Fund shall hold harmless and indemnify Custodian from and against any loss or liability, including attorney's fees, arising out of Fund's breach of this Agreement or its negligence, willful misconduct or bad faith. C. Custodian may rely upon the advice of Fund and upon statements of Fund's public accountants and other persons believed by it in good faith, to be expert in matters upon which they are consulted, and Custodian shall not be liable for any actions taken, in good faith, upon such statements. D. If Fund requires Custodian in any capacity to take, with respect to any securities, any action which involves the payment of money by it, or which in Custodian's opinion might make it or its nominee liable for payment of monies or in any other way, Custodian, upon notice to Fund given prior to such actions, shall be and be kept indemnified by Fund in an amount and form satisfactory to Custodian against any liability on account of such action. E. Custodian shall be entitled to receive, and Fund agrees to pay to Custodian, on demand, reimbursement for such cash disbursements, costs and expenses as may be agreed upon from time to time by Custodian and Fund. F. Custodian shall be protected in acting as custodian hereunder upon any instructions, advice, notice, request, consent, certificate or other instrument or paper reasonably appearing to it to be genuine and to have been properly executed and shall, unless otherwise -16- specifically provided herein, be entitled to receive as conclusive proof of any fact or matter required to be ascertained from Fund hereunder, a certificate signed by the Fund's President, or other officer specifically authorized for such purpose. G. Without limiting the generality of the foregoing, Custodian shall be under no duty or obligation to inquire into, and shall not be liable for: 1. The validity of the issue of any securities purchased by or for Fund, the legality of the purchase thereof or evidence of ownership required by Fund to be received by Custodian, or the propriety of the decision to purchase or amount paid therefor; 2. The legality of the sale of any securities by or for Fund, or the propriety of the amount for which the same are sold; 3. The legality of the issue or sale of any shares of beneficial interest of Fund, or the sufficiency of the amount to be received therefor; 4. The legality of the repurchase or redemption of any Fund Shares, or the propriety of the amount to be paid therefor; or 5. The legality of the declaration of any dividend by Fund, or the legality of the issue of any Fund Shares in payment of any stock dividend. H. Custodian shall not be liable for, or considered to be Custodian of, any money represented by any check, draft, wire transfer, clearinghouse funds, uncollected funds, or instrument for the payment of money received by it on behalf of Fund, until Custodian actually receives such money, provided only that it shall advise Fund promptly if it fails to receive any such money in the ordinary course of business, and use its best efforts and cooperate with Fund toward the end that such money shall be received. I. Except as otherwise provided in this Agreement, Custodian shall not be responsible for loss occasioned by the acts, neglects, defaults or insolvency of any broker, bank, trust company, or any other person with whom Custodian may deal in the absence of negligence, or bad faith on the part of Custodian. J. Custodian shall be responsible to the Fund for any loss, damage or expense suffered or incurred by the Fund resulting from the actions or omissions of any Depository only to the same extent such Depository is responsible to Custodian. -17- K. Notwithstanding anything herein to the contrary, Custodian may, and with respect to any foreign subcustodian appointed under Section 2.S.2 must, provide Fund for its approval, agreements with banks or trust companies which will act as subcustodians for Fund pursuant to Section 2.S. of this Agreement. 5. COMPENSATION. Fund will pay to Custodian such compensation ____________ as is stated in the Fee Schedule attached hereto as Exhibit B which may be changed from time to time as agreed to in writing by Custodian and Fund. Custodian may charge such compensation against monies held by it for the account of Fund. Custodian will also be entitled, notwithstanding the provisions of Sections 4.C. or 4.D. hereof, to charge against any monies held by it for the account of Fund the amount of any loss, damage, liability, advance, or expense for which it shall be entitled to reimbursement from the Fund under the provisions of this Agreement including fees or expenses due to Custodian for other services provided to the Fund by the Custodian. 6. TERMINATION. Either party to this Agreement may terminate ___________ the same by notice in writing, delivered or mailed, postage prepaid, to the other party hereto and received not less than sixty (60) days prior to the date upon which such termination will take effect; provided, however, that the Fund may terminate this Agreement forthwith if the Fund does not receive shareholder approval and enter into an investment advisory agreement with Berger Associates, Inc. and a sub- advisory agreement with Perkins, Wolf, McDonnell & Company on or before February _____, 1997. Upon termination of this Agreement, Fund will pay to Custodian such compensation for its reimbursable disbursements, costs and expenses paid or incurred to such date and Fund will use its best efforts to obtain a successor custodian. The Trustees of Fund will, forthwith upon giving or receiving notice of termination of this Agreement, appoint a successor custodian meeting the qualifications set forth in the Investment Company Act of 1940 and such other qualifications for custodian as may be set forth in the governing documents of Fund. Custodian will, upon termination of this Agreement, deliver to the successor custodian so specified or appointed, at Custodian's office, all securities then held by Custodian hereunder, duly endorsed and in form for transfer, all funds and other properties of Fund deposited with or held by Custodian hereunder, or will co-operate in effecting changes in book-entries at the Depository Trust Company or in the Treasury/Federal Reserve Book-Entry System or other depository pursuant to 31 CFR Sec. 306.118. In the event no designation of a successor custodian has been delivered to Custodian on or before the date when -18- such termination becomes effective, then Custodian will deliver the securities, funds and properties of the Fund to a bank or trust company at the selection of Custodian and meeting the qualifications for custodian, if any, set forth in the governing documents of Fund and having not less than Two Million Dollars ($2,000,000) aggregate capital, surplus and undivided profits, as shown by its last published report. Upon either such delivery to a successor custodian, Custodian will have no further obligations or liabilities under this Agreement. Thereafter such bank or trust company will be the successor custodian under this Agreement and will be entitled to reasonable compensation for its services. In the event that no such successor custodian can be found, Fund will submit to its shareholders, before permitting delivery of the cash and securities owned by Fund to anyone other than a successor custodian, the question of whether Fund will be liquidated or function without a custodian. Notwithstanding the foregoing requirement as to delivery upon termination of this Agreement, Custodian may make any other delivery of the securities, funds and property of Fund which is permitted by the Investment Company Act of 1940, Fund's Trust Instrument and Bylaws then in effect or apply to a court of competent jurisdiction for the appointment of a successor custodian. 7. NOTICES. Notices, requests, instructions and other writings _______ received by Fund at 53 West Jackson Boulevard, Suite 818, Chicago, Illinois 60604 or at such other address as Fund may have designated to Custodian in writing, will be deemed to have been properly given to Fund hereunder; and notices, requests, instructions and other writings received by Custodian at its offices at 127 West 10th Street, Kansas City, Missouri 64105, or to such other address as it may have designated to Fund in writing, will be deemed to have been properly given to Custodian hereunder. 8. LIMITATION OF LIABILITY. Notice is hereby given that the _______________________ Fund is a business trust organized under the laws of the Commonwealth of Massachusetts pursuant to a Declaration of Trust filed in the office of the Secretary of State of the Commonwealth of Massachusetts. All parties to this Agreement acknowledge and agree that the Fund is a series Fund and all debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series shall be enforceable against the assets held with respect to such series only, and not against the assets of the Fund generally or against the assets held with respect to any other series and further that no trustee, officer or holder of shares of beneficial interest of the Fund shall be personally liable for any of the foregoing. -19- 9. NOTICES. Notices, requests, instructions and other writings _______ received by Fund at 53 West Jackson Boulevard, Suite 818, Chicago, Illinois 60604, or at such address as Fund may have designated to IFTC in writing, shall be deemed to have been properly given to Fund hereunder; and notices, requests, instructions and other writings received by IFTC at its offices at 127 West 10th Street, Kansas City, Missouri 64105, or to such other address as it may have designated to Fund in writing, shall be deemed to have been properly given to IFTC hereunder. 10. MISCELLANEOUS. _____________ A. This Agreement is executed and delivered in the State of Missouri and shall be governed by the laws of said state. B. All the terms and provisions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the respective successor and assigns of the parties hereto. C. No provisions of the Agreement may be amended or modified, in any manner except by a written agreement properly authorized and executed by both parties hereto. D. The captions in this Agreement are included for convenience of reference only, and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. E. This Agreement may be executed simultaneously in two or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument. F. If any part, term or provision of this Agreement is by the courts held to be illegal, in conflict with any law or otherwise invalid, the remaining portion or portions shall be considered severable and not be affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term or provision held to be illegal or invalid. G. Custodian will not release the identity of Fund to an issuer which requests such information pursuant to the Shareholder Communications Act of 1985 for the specific purpose of direct communications between such issuer and Fund unless the Fund directs the Custodian otherwise. H. This Agreement may not be assigned by either party without prior written consent of the other party. -20- I. If any provision of the Agreement, either in its present form or as amended from time to time, limits, qualifies, or conflicts with the Investment Company Act of 1940 and the rules and regulations promulgated thereunder, such statutes, rules and regulations shall be deemed to control and supersede such provision without nullifying or terminating the remainder of the provisions of this Agreement. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective duly authorized officers. INVESTORS FIDUCIARY TRUST COMPANY By: _______________________________ Allen R. Strain, Executive Vice President BERGER OMNI INVESTMENT TRUST By:_______________________________ Title:_____________________________ -21- EXHIBIT A _________
INVESTORS FIDUCIARY TRUST COMPANY AVAILABILITY SCHEDULE BY TRANSACTION TYPE TRANSACTION DTC PHYSICAL FED ___________ ___ ________ ___ TYPE CREDIT DATE FUNDS TYPECREDIT DATE FUNDS TYPECREDIT DATE FUNDS TYPE ____ ___________ _____________________ _____________________ __________ Calls Puts As ReceivedC or F*As ReceivedC or F* Maturities As ReceivedC or F*Mat. DateC or F* Mat. Date F Tender Reorgs. As ReceivedC As ReceivedC N/A Dividends Paydate C Paydate C N/A Floating Rate Int.PaydateC Paydate C N/A Floating Rate Int. (No Rate) N/A As Rate Received C N/A Mtg. Backed P&IPaydate C Paydate + 1 Bus. DayC Paydate F Fixed Rate Int.Paydate C Paydate C Paydate F Euroclear N/A C Paydate C Legend ______ C = Clearinghouse Funds F = Fed Funds N/A = Not Applicable * Availability based on how received.
-22- EX-99.B9.2 8 FORM OF ADMINISTRATIVE SERVICES AGREEMENT EXHIBIT 9.2 ADMINISTRATIVE SERVICES AGREEMENT This Administrative Services Agreement (the "Agreement") is entered into effective as of the _____ day of _____________, 1997, by and between Berger Associates, Inc. ("Berger Associates"), and Berger Omni Investment Trust, a Massachusetts business trust (the "Trust") with respect to the Berger Small Cap Value Fund, a series of the Trust (the "Fund"). Recitals A. The Trust is a Massachusetts business trust and an open-end, management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"). B. The Fund is a series of the Trust for which Berger Associates acts as investment adviser. C. The parties desire that in addition to its duties as investment adviser, Berger Associates provide certain administrative services to the Trust with respect to the Fund, on the terms and conditions set forth herein. Agreement For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Appointment. The Trust hereby appoints ----------- Berger Associates as the administrator of the Fund, to provide to the Fund, at Berger Associates' expense except as specifically set forth below, all services specified herein, for the period and on the terms set forth in this Agreement. Berger Associates hereby accepts such appointment and agrees to render the services and assume the responsibilities herein set forth, for the compensation herein provided. In performing its services under this Agreement, Berger Associates shall comply with all relevant provisions of the 1940 Act and all other applicable federal and state laws and regulations. 2. Services to be Provided. Berger Associates shall ----------------------- provide the following services to the Fund at Berger Associates' own expense: (a) coordinating all matters relating to the operations of the Fund, including any necessary coordination among the investment advisor, sub-advisor, transfer agent, dividend disbursing agent, fund accounting agent, accountants, attorneys and other parties -1- performing services or operational functions for the Fund; (b) providing personnel and assistance necessary to maintain the qualification and/or registration to sell shares under the federal securities laws and in each state where Berger Associates has determined such qualification and/or registration to be advisable; (c) monitoring the Fund's compliance with (i) its Declaration of Trust, as amended ("Trust Instrument"), bylaws and currently effective registration statement under the Securities Act of 1933, as amended (the "1933 Act") and the 1940 Act and any amendments or supplements thereto ("Registration Statement"); (ii) the written policies, procedures and guidelines of the Fund, and the written instructions from the Trustees of the Trust; (iii) the requirements of the 1933 Act, the 1940 Act, the rules thereunder, and all other applicable federal and state laws and regulations; and (iv) the provisions of Subchapter M of the Internal Revenue Code, applicable to the Fund as a regulated investment company; (d) supervising the preparation of any or all registration statements (including prospectuses and statements of additional information), tax returns, proxy materials, financial statements, notices and reports for filings with regulatory authorities and distribution to shareholders of the Fund; (e) issuing certain correspondence to shareholders; (f) maintaining or supervising the maintenance of certain books and records; (g) providing the Trust with adequate personnel, office space, communications facilities and other facilities necessary for operation of the Fund as contemplated by this Agreement; and (h) preparing and rendering to the Trustees of the Trust such periodic and special reports as the Trustees may reasonably request. 3. Expenses and Excluded Expenses. Berger Associates ------------------------------ shall pay all its own costs and expenses incurred in rendering the services required under this Agreement. Notwithstanding any other provision hereof, it is expressly agreed that Berger Associates shall not be responsible to pay, except as the parties may otherwise agree, directly or on behalf of the Fund, any of the Fund's expenses which shall remain the Trust's own obligation and responsibility to pay. 4. Compensation. The Trust shall pay to Berger Associates ------------ for the services provided under this Agreement a fee, payable in United States dollars, at an annual rate of 0.01% of the average daily net asset value of the Fund. Such fee shall be computed and accrued daily and payable monthly on the last day of each month during which or part of which this Agreement is in effect. -2- 5. Books and Records. Berger Associates hereby agrees ----------------- that all records which it maintains for the Fund or the Trust hereunder are the property of the Trust, agrees to permit the reasonable inspection thereof by the Trust or its designees and agrees to preserve for the periods prescribed under the 1940 Act any records which it maintains for the Fund or the Trust and which are required to be maintained under the 1940 Act. Berger Associates further agrees to surrender promptly to the Trust or its designees any records which it maintains for the Fund or the Trust upon request by the Trust. 6. Term and Termination. This Agreement shall become -------------------- effective as of the date first set forth above and shall continue until terminated by either party on 60 days' written notice to the other party. This Agreement may also be terminated by the Trustees of the Trust at any time if Berger Associates becomes unable to discharge it duties and obligations under this Agreement. 7. Assignment and Amendments. This Agreement shall not be ------------------------- assigned by either party without the prior written consent of the other party to the Agreement. This Agreement may be amended in writing by the parties, provided that all such amendments shall be subject to the approval of the Trustees of the Trust. 8. Limitation of Liability of Berger Associates. Berger -------------------------------------------- Associates shall not be liable for any error of judgment or mistake of law or for any act or omission taken with respect to the Fund, except for willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of reckless disregard of its obligations and duties hereunder and except to the extent otherwise provided by law. As used in this section, "Berger Associates" shall include directors, officers and employees of Berger Associates. 9. Activities of Berger Associates. The services of ------------------------------- Berger Associates hereunder are not to be deemed to be exclusive, and Berger Associates is free to render services to other parties, so long as its services under this Agreement are not materially adversely affected or otherwise impaired thereby. Nothing in this Agreement shall limit or restrict the right of any director, officer or employee of Berger Associates to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business, whether of a similar nature or a dissimilar nature. 10. Limitation on Personal Liability. NOTICE IS HEREBY -------------------------------- GIVEN that the Trust is a business trust organized under the laws of the Commonwealth of Massachusetts pursuant to a Declaration of Trust filed in the office of the Secretary of State of the Commonwealth of Massachusetts. All parties to this Agreement acknowledge and agree that this Agreement was made by and on behalf of the Trust by the person executing below as an officer of the Trust and not individually, that the Trust is a series trust and all debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series shall be enforceable against the assets held with respect to such series only, and not against the assets of the Trust generally or against the assets held -3- with respect to any other series and further that no trustee, officer or holder of shares of beneficial interest of the Trust shall be personally liable for any of the foregoing. 11. Governing Law. This Agreement shall be construed in ------------- accordance with the laws of the State of Colorado (without giving effect to the conflicts of laws principles thereof) and the 1940 Act. To the extent that the applicable laws of the State of Colorado conflict with the applicable provisions of the 1940 Act, the latter shall control. 12. Miscellaneous. The headings in this Agreement are ------------- included for convenience of reference only and in no way define or limit any of the provisions thereof or otherwise affect their construction or effect. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement effective as of the date first above written. BERGER ASSOCIATES, INC. By:____________________________ Gerard M. Lavin President BERGER OMNI INVESTMENT TRUST By:____________________________ Name: Title: -4- EX-99.B9.3 9 FORM OF RECORDKEEPING AND PRICING AGENT AGREEMENT EXHIBIT 9.3 RECORDKEEPING AND PRICING AGENT AGREEMENT __________________________________________ THIS AGREEMENT made effective as of this 1st day of January, 1997, by and between BERGER OMNI INVESTMENT TRUST, a Massachusetts business trust (the "Fund"), which consists of separate portfolios represented by separate series of shares, and each series of which may be comprised of one or more classes of shares of beneficial interest, (each such class, and each portfolio that has only one class being referred to herein, together with any such portfolios and classes hereafter constituted, where appropriate, individually as a "Portfolio," and collectively as the "Portfolios"), having its place of business at 53 West Jackson Boulevard, Suite 818, Chicago, Illinois 60604, and INVESTORS FIDUCIARY TRUST COMPANY, a state chartered trust company organized and existing under the laws of the State of Missouri, having its principal place of business at 127 West 10th Street, Kansas City, Missouri, 64105 ("IFTC"): WITNESSETH: WHEREAS, Fund desires to appoint IFTC as Recordkeeping and Pricing Agent and IFTC desires to accept such appointment; NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties hereto, intending to be legally bound, mutually covenant and agree as follows: 1. APPOINTMENT OF RECORDKEEPING AND PRICING AGENT. Fund hereby ______________________________________________ constitutes and appoints IFTC as Recordkeeping and Pricing Agent to calculate the daily net asset value of each Portfolio and to perform certain accounting and recordkeeping functions required of Fund as a registered investment company under the Investment Company Act of 1940, as amended (the "Act"); to provide certain information necessary for Fund to file financial and other reports; to prepare, maintain and preserve certain required books, accounts and records as the basis for such reports; to perform certain daily functions in connection with such accounts and records; and, upon request, to act as liaison with the Fund's independent auditors. 2. INSTRUCTIONS. Fund shall deliver a resolution of the ____________ Trustees of the Fund designating certain persons to give instructions on behalf of the Fund to IFTC, and authorizing IFTC to rely upon written instructions over his/her/their signatures. 3. REPRESENTATIONS AND WARRANTIES OF FUND. ______________________________________ A. Fund represents and warrants that it is a business trust duly organized as an investment company and existing and in good standing under the laws of the Commonwealth of Massachusetts; B. Fund represents and warrants that it has the power and authority under applicable laws, its Trust Instrument and bylaws, and has taken all action necessary to enter into and perform this Agreement, including appropriate authorization from the Fund's Trustees; C. Fund represents and warrants that it has determined that the automated data processing system on which IFTC shall prepare, maintain and preserve the books and records of the Fund (the "System") is suitable for its needs; D. Fund acknowledges that IFTC has licensed the System from a third party and that both IFTC and the licensor have proprietary rights in and to the System and that the System and the programs, documentation, books, records, lists, pricing schedules, designs, plans and other information relating to the System or the business of IFTC ("IFTC Confidential Information") are confidential and constitute trade secrets of IFTC; E. During the term of this Agreement and for a period of five years after termination of this Agreement, Fund shall preserve the confidentiality of the IFTC Confidential Information and prevent its disclosure to persons other than its own employees and agents who reasonably have a need to know or have access to the IFTC Confidential Information pursuant to this Agreement, and shall take appropriate action to protect the rights of IFTC and the licensor as to the IFTC Confidential Information, including, but not limited to notification to all employees and agents of the Fund of the necessity to maintain the confidentiality of IFTC Confidential Information, provided, that IFTC shall be solely responsible for protecting any trademarks, patents, copyrights and licenses against unauthorized use and infringement by parties other than the Fund, its employees and agents. 4. REPRESENTATION AND WARRANTIES OF IFTC _____________________________________ A. IFTC is a trust company duly organized and existing and in good standing under the laws of the State of Missouri. -2- B. IFTC has the power and authority under applicable laws, its charter and bylaws, and has taken all action necessary, to enter into this Agreement and perform the services contemplated herein, and this Agreement constitutes a legal, valid and binding obligation of IFTC, enforceable in accordance with its terms. C. IFTC has obtained and shall maintain throughout the term of this Agreement all necessary proprietary rights and approvals, licenses and permits which are required for IFTC to perform its duties and obligations hereunder and to use the System. D. IFTC presently has, and shall maintain throughout the term of this Agreement, facilities, equipment, computer hardware and software, and personnel necessary to perform its duties and obligations under this Agreement, and shall maintain or otherwise have readily available, reasonable back-up facilities and equipment to ensure that there is no material interruption in the services contemplated by this Agreement, except as provided in Section 7 hereof. 5. DUTIES AND RESPONSIBILITIES OF IFTC ___________________________________ A. Delivery of Records. Fund shall turn over, of cause to ___________________ be turned over, to IFTC all of Fund's accounts and records previously maintained relating to the services to be provided by IFTC hereunder. IFTC shall be entitled to rely conclusively on the completeness and correctness of the accounts and records turned over to it by Fund or its previous service provider and Fund shall indemnify and hold IFTC harmless of and from any and all costs, expenses, damages, losses and liabilities whatsoever, including attorney's fees (collectively, "Damages"), arising out of or in connection with any error, omission, inaccuracy or other deficiency of such accounts and records or in the failure of Fund or its previous service provider to provide any portion of such account and records or to provide any information needed by IFTC to perform its function hereunder. B. Accounting and Portfolio Duties. IFTC shall perform _______________________________ the duties specified on Schedule A attached hereto. C. Accounts and Records. ____________________ 1. IFTC, with the direction of the Fund, its accountants and/or its advisors, shall prepare, maintain and preserve all books, records, ledgers, journals, accounts and other documents, containing such information as may be required from time -3- to time under the Act relating to the activities performed by IFTC pursuant to Schedule A (the "Records"); preserve the Records in an readily accessible location for at least the periods required under the Act, at all times during the term of this Agreement and, as may be reasonably necessary, following the termination of this Agreement, make the Records available for examination by the Securities and Exchange Commission ("SEC"), the Fund, the Fund's accountants and such other persons as the Fund may deem appropriate; and maintain facilities and equipment necessary for producing readable projections or hard copies of Records. Notwithstanding the terms of this Section C.1 as heretofore provided, IFTC shall not be responsible for maintaining or furnishing such Records after termination of the Agreement to the extent that such Records have been forwarded to the Fund or its agent. Hard copies of Records will be furnished to the Fund without additional cost unless such requests for Records are unusual, repetitive, require special handling, or otherwise reasonably warrant the Fund's reimbursement for the costs associated therewith. The Fund shall pay for the costs of maintaining microfiche records. 2. It shall be the responsibility of Fund to furnish IFTC with the declaration, record and payment dates and amounts of any dividends or other distributions, other special actions, and the value or price of the securities in the Portfolios to the extent such information is not available from generally accepted securities industry services or publications. IFTC shall incur no liability and Fund shall indemnify and hold IFTC harmless from any liability in connection with the Fund's furnishing of such information. 3. The accounts, books and records prepared, maintained and preserved by IFTC pursuant to this Agreement shall be the property of the Fund and shall be made available to the Fund for inspection or reproduction promptly upon demand. 4. IFTC shall assist Fund's independent accountants, and upon instruction from Fund or upon proper demand, shall assist any court or regulatory body, in any requested review of Fund's accounts and records prepared and maintained by IFTC. Fund shall reimburse IFTC for all reasonable expenses and employee time -4- associated with any such review which is not part of routine or normal periodic reviews, unless such expenses are incurred as a result of a breach of this Agreement by IFTC or IFTC's negligence or willful misconduct. For purposes of this Agreement, routine or normal periodic reviews include the annual audit of the Fund and routine interim audits or reviews by the Fund's independent accountants and the routine reviews by the SEC. 5. IFTC shall provide Fund with information for tax returns, questionnaires, and periodic reports to shareholders and such other reports and information as Fund may request in conjunction with IFTC's stated duties hereunder. IFTC shall provide such information as soon as reasonably practicable following the Fund's request or as may be otherwise agreed to by the parties. 6. IFTC and Fund may from time to time adopt procedures as they may agree upon, and IFTC may conclusively assume that any procedure approved by Fund, or directed by Fund in the manner prescribed by Section 6.B, does not conflict with or violate any requirements of Fund's prospectus, Trust Instrument, bylaws, or any law, rule or regulation applicable to Fund. Fund shall be responsible to notify IFTC of any changes in its prospectus, Trust Instrument, bylaws, or policies applicable to the Fund which may necessitate changes in IFTC's responsibilities or procedures. The Fund may conclusively assume that any procedure adopted by IFTC does not conflict with or violate any requirements of IFTC's charter, bylaws, or any law, rule or regulation applicable to IFTC. IFTC shall be responsible to notify the Fund of any changes in its charter, bylaws, or policies which may affect the Fund's responsibilities or procedures. 7. IFTC will calculate Portfolio's daily closing net asset value, in accordance with the Fund's prospectus. IFTC will prepare and maintain a daily valuation of securities held in the Portfolios for which market quotations are available by the use of outside services normally used and contracted for this purpose; all other securities will be valued in accordance with Fund's instructions. -5- 6. LIMITATION OF LIABILITY OF IFTC _______________________________ A. IFTC shall not be liable for any loss or damage resulting from its action or omission to act or otherwise, except for any loss or damage arising from any breach of this Agreement or any negligent act or omission or willful misconduct of IFTC and IFTC shall indemnify and hold harmless Fund from and against any Damages arising from such breach, negligence or willful misconduct. Without limiting the generality of the foregoing, IFTC will use best efforts to resolve to the satisfaction of the Fund the effect on shareowners of any IFTC error which causes an incorrect calculation of the net asset value of the Portfolios and which effect is considered material, as such term is generally used by accountants in the mutual fund industry. IFTC shall not be liable for consequential, special, or punitive damages. IFTC may request and obtain the advice and opinion of counsel for Fund or its own counsel at the reasonable expense of Fund with respect to questions or matters of law relating to its performance of this Agreement, and it shall be without liability to Fund for any action taken or omitted by it in good faith, in conformity with such advice or opinion. B. IFTC may rely, and be protected in acting in reliance upon any instruction, advice, notice, consent, resolution, opinion, certificate or other written instrument appearing to be genuine and properly executed by an authorized representative of the Fund or any oral instruction from an authorized representative of the Fund ("Instruction"), except trade instructions and adjustments to the Fund's trial balance sheet, general ledger or balance sheet, which must be in writing executed by two authorized representatives of the Fund, unless IFTC has actual knowledge that any such Instruction is incorrect or unauthorized. C. IFTC shall be entitled to receive and Fund agrees to pay to IFTC, on demand, reimbursement for such cash disbursements, costs and expenses as may be agreed upon in writing from time to time by IFTC and Fund. D. During the term of this Agreement and for a period of five years after termination of this Agreement, IFTC shall not use and shall preserve the confidentiality of all accounting and financial information, investment portfolio records including, but not limited to, transactional information, share subscription and redemption records, and other -6- records made available to or created by IFTC under the terms of this Agreement ("Fund Confidential Information"), other than for purposes of complying with its duties and responsibilities under this Agreement or as specifically authorized by Fund in writing. IFTC shall prevent disclosure of Fund Confidential Information to persons other than its own agents and employees who reasonably have a need to know or have access to Fund Confidential Information pursuant to this Agreement, and shall take appropriate action to protect the rights of Fund in such Fund Confidential Information including, but not limited to, notification to all its employees and agents of the necessity to maintain the confidentiality of Fund Confidential Information, provided, that Fund shall be solely responsible for protecting any trademarks, patents, copyrights and licenses against unauthorized use and infringement by parties other than IFTC, its employees and agents. 7. FORCE MAJEURE. IFTC shall not be responsible or liable for _____________ any failure or delay in performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including without limitation any interruption, loss or malfunction of any utility, transportation, computer (hardware or software) or communication service; or inability to obtain labor, material, equipment or transportation; nor shall any such failure or delay give Fund any additional right to terminate this Agreement. 8. ADDITIONAL FUNDS. IFTC shall act as Recordkeeping and ________________ Pricing Agent for additional Portfolios upon 30 days notice to IFTC provided that IFTC consents in writing in advance to such arrangement. Rates or charges for serving as Recordkeeping and Pricing Agent for any such additional Portfolios shall be as agreed to by IFTC and Fund in writing. 9. COMPENSATION. Fund shall pay to IFTC such compensation at ____________ such time as may from time to time be agreed upon in writing by IFTC and Fund. The initial compensation schedule is attached hereto as Schedule B. 10. TERMINATION. Either party to this Agreement may terminate ___________ same by notice in writing received by the other party not less than sixty (60) days prior to the date upon which such termination shall take effect; provided, however, that the Fund may terminate this Agreement forthwith if the Fund does not receive shareholder approval to enter into an investment advisory agreement with Berger Associates, Inc. and a sub-advisory agreement with Perkins, Wolf, McDonnell & Company on or before February ____, 1997. Upon termination of this Agreement, -7- Fund shall pay to IFTC such compensation for its reimbursable disbursements, costs and expenses paid or incurred to such date and Fund shall use its best efforts to obtain a successor agent. IFTC shall, upon termination of this Agreement, deliver to the successor so specified or appointed, or to Fund, at IFTC's office, all books, records, ledgers, accounts, journals and other documents and information then held by IFTC hereunder, all money, instruments and other funds and other properties of Fund deposited with or held by IFTC hereunder. In the event no written order designating a successor (which may be Fund) shall have been delivered to IFTC on or before the date when such termination shall become effective, then IFTC shall deliver such records, funds and properties of Fund to a bank or trust company at the selection of IFTC having not less than $2,000,000 aggregate capital, surplus and undivided profits as shown by its most recent published report, and meeting the requirements of the Act, or if a satisfactory successor cannot be obtained, IFTC may deliver the assets to the Fund, at IFTC's offices or as otherwise agreed to between the parties. Thereafter the Fund or such bank or trust company shall be the successor under this Agreement and shall be entitled to reasonable compensation for its services. Notwithstanding the foregoing requirement as to delivery upon termination of this Agreement, IFTC may make any other delivery of the records, funds and property of Fund which shall be permitted by the Act and Fund's Trust Instrument or bylaws then in effect. 11. NOTICES. Notices, requests, instructions and other writings _______ received by Fund at 53 West Jackson Boulevard, Suite 818, Chicago, Illinois 60604, or at such address as Fund may have designated to IFTC in writing, shall be deemed to have been properly given to Fund hereunder; and notices, requests, instructions and other writings received by IFTC at its offices at 127 West 10th Street, Kansas City, Missouri 64105, or to such other address as it may have designated to Fund in writing, shall be deemed to have been properly given to IFTC hereunder. 12. LIMITATION OF LIABILITY. Notice is hereby given that the _______________________ Fund is a business trust organized under the laws of the Commonwealth of Massachusetts pursuant to a Declaration of Trust filed in the office of the Secretary of State of the Commonwealth of Massachusetts. All parties to this Agreement acknowledge and agree that the Fund is a series Fund and all debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series shall be enforceable against the assets held with respect to such series only, and not against the assets of the Fund generally or against the assets held with respect to any other -8- series; and further that no trustee, officer or holder of shares of beneficial interest of the Fund shall be personally liable for any of the foregoing. 13. MISCELLANEOUS. _____________ A. This Agreement is executed and delivered in the State of Missouri and shall be governed by the laws of said state. B. All terms and provisions of this Agreement shall be binding upon, inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto. C. No provisions of the Agreement may be amended or modified in any manner except by a written agreement properly authorized and executed by both parties hereto. D. The captions in the Agreement are included for convenience of reference only, and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. E. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. F. If any part, term or provision of this Agreement is by the courts held to be illegal, in conflict with any law or otherwise invalid, the remaining portion or portions shall be considered severable and not be affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term or provision held to be illegal or invalid. G. This Agreement may not be assigned by either party without prior written consent of the other party. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective and duly authorized corporate or trust officers. BERGER OMNI INVESTMENT TRUST By: ______________________________ Title: ____________________________ INVESTORS FIDUCIARY TRUST COMPANY By: _______________________________ Allen R. Strain, Executive Vice President -9- Schedule - A--ACCOUNTING AND PORTFOLIO DUTIES In its capacity as the Recordkeeping and Pricing Agent for the Fund, IFTC shall perform the following responsibilities:* A. On a Daily Basis. ________________ 1. Post Fund share receivables and payables to the Fund's general ledger; send general ledger reflecting all the day's activities to Fund preferably by 3:30 p.m. Mountain time but in no event later than 8 a.m. Mountain time the next day. 2. Reconcile ending share balance from transfer agent reports to general ledger; report differences to fund and resolve with the transfer agent. 3. Post manual journal entries to the general ledger. 4. Prepare Net Asset Value rollforward. 5. Review individual components of the change in each Portfolio's Net Asset Value for accuracy and reasonableness. 6. Review income and expense accruals and posting of gains and losses for proper recording. Send Fund complete pricing sheet for the Portfolios preferably by 3:30 p.m. Mountain time but in no event later than 8:00 a.m. Mountain time the next day. 7. Communicate required pricing information to Fund, quotation/publication services and to transfer agents. Communicate NAV to newspapers and quotation services in time for publication and to the transfer agent in time to run the shareowner accounts by the beginning of the next day. Communicate the NAV and corresponding worksheet to the Fund preferably by 3:30 p.m. Mountain time but in no event later than 8:00 a.m. Mountain time the next day. 8. Attend to routine matters in connection with the calculation of the net asset value and aggregate asset value of each Portfolio. B. On a Periodic Basis. ___________________ 1. Provide information prepared by IFTC during the performance of its duties hereunder for Fund's semiannual reports within 15 calendar days after June 30th and December 31st or the end of the reporting period of the Fund, as applicable. 2. As agreed upon, deliver information to Fund on days when the NYSE is not open. 3. Prepare allocation of realized and unrealized security gains and losses according to partnership rules using the aggregate method, subject to review by fund auditors. *Information shall be provided by IFTC's normal means as acceptable to the Fund. Costs for communicating routine information shall be borne by IFTC; costs other than routine information, including microfiche, shall be borne by the Fund. EX-99.B9.4 10 FORM OF (TRANSFER) AGENCY AGREEMENT EXHIBIT 9.4 AGENCY AGREEMENT THIS AGREEMENT made as of the 1st day of January, 1997, by and between BERGER OMNI INVESTMENT TRUST, a Massachusetts business trust (the "Fund"), which consists of separate portfolios represented by separate series of shares, and each series of which may be comprised of one or more classes of shares of beneficial interest (each such class, and each portfolio that has only one class being referred to herein, together with any such portfolios and classes hereafter constituted, where appropriate, individually as a "Portfolio," or collectively as the "Portfolios") having its principal place of business at 53 West Jackson Boulevard, Suite 818, Chicago, Illinois 60604, and INVESTORS FIDUCIARY TRUST COMPANY, a state chartered trust company organized and existing under the laws of the State of Missouri, having its principal place of business at 127 West 10th Street, Kansas City, Missouri 64105 ("IFTC"): WITNESSETH: WHEREAS, Fund desires to appoint IFTC as Transfer Agent and Dividend Disbursing Agent, and IFTC desires to accept such appointment; NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows: 1. CERTAIN REPRESENTATIONS AND WARRANTIES OF IFTC. IFTC ______________________________________________ represents and warrants to Fund that: A. It is a trust company duly organized and existing and in good standing under the laws of Missouri. B. It is duly qualified to carry on its business in the State of Missouri. C. It is empowered under applicable laws and by its Trust Instrument and bylaws to enter into and perform the services contemplated in this Agreement. D. It is registered as a transfer agent to the extent required under the Securities Exchange Act of 1934. E. All requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement. F. It has and will continue to have and maintain the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement. -1- 2. CERTAIN REPRESENTATIONS AND WARRANTIES OF FUND. Fund ______________________________________________ represents and warrants to IFTC that: A. It is a business trust duly organized and existing and in good standing under the laws of the Commonwealth of Massachusetts. B. It is an open-end management investment company registered under the Investment Company Act of 1940, as amended. C. A registration statement under the Securities Act of 1933 has been filed and will be effective with respect to all shares of Fund being offered for sale. D. All requisite steps have been or will be taken to register Fund's shares for sale in all applicable states. E. Fund is empowered under applicable laws and by its Trust Instrument and bylaws to enter into and perform this Agreement. 3. SCOPE OF APPOINTMENT. ____________________ A. Subject to the conditions set forth in this Agreement, Fund hereby employs and appoints IFTC as Transfer Agent and Dividend Disbursing Agent. B. IFTC hereby accepts such employment and appointment and agrees that it will act as Fund's Transfer Agent and Dividend Disbursing Agent. IFTC agrees that it will also act as agent in connection with each Portfolio's periodic withdrawal payment accounts and other open accounts or similar plans for shareholders, if any. C. IFTC agrees to provide the necessary facilities, equipment and personnel to perform its duties and obligations hereunder in accordance with industry practice. D. Fund agrees to use its best efforts to deliver to IFTC in Kansas City, Missouri, as soon as they are available, all of its shareholder account records. E. Subject to the provisions of Sections 17 and 18 hereof, IFTC agrees that it will perform all of the usual and ordinary services of Transfer Agent and Dividend Disbursing Agent and as Agent for the various shareholder accounts, including, without limitation, the following: issuing, transferring and canceling beneficial interest certificates, if any, maintaining all shareholder accounts, preparing shareholder meeting lists, mailing proxies, receiving and tabulating proxies, mailing shareholder reports and prospectuses, withholding taxes on nonresident alien and foreign corporation accounts, for pension and -2- deferred income, backup withholding or other instances agreed upon by the parties, preparing and mailing checks for disbursement of redemptions, income dividends and capital gains distributions, preparing and filing U.S. Treasury Department Form 1099 for all shareholders, preparing and mailing confirmation forms to shareholders and dealers with respect to all purchases and redemptions of Fund shares and other transactions in shareholder accounts for which confirmations are required, recording reinvestments of dividends and distributions in Fund shares, and cooperating with broker-dealers and financial intermediaries who represent shareholders of the Fund. 4. UNLIMITED SHARES. Unless otherwise expressly limited by the ________________ Fund, the appointment of IFTC as Transfer Agent will be construed to cover an unlimited number of authorized shares of beneficial interest. 5. COMPENSATION AND EXPENSES. _________________________ A. In consideration for its services hereunder as Transfer Agent and Dividend Disbursing Agent, Fund will pay to IFTC from time to time a reasonable compensation for all services rendered as Agent, and also, all its reasonable out-of- pocket expenses, charges, counsel fees, and other disbursements (Compensation and Expenses) incurred in connection with the agency. Such compensation is set forth in a separate schedule, a copy of which is attached hereto and incorporated herein by reference. IFTC shall make reasonable efforts to bill the Fund as soon as practicable after the end of each calendar month for the Compensation and Expenses due for that month and said billing shall be detailed in accordance with the such schedule. If the Fund has not paid such Compensation and Expenses to IFTC within a reasonable time, IFTC may charge against any monies held under this Agreement, the amount of any Compensation and/or Expenses for which it shall be entitled to reimbursement under this Agreement. B. Fund agrees to promptly reimburse IFTC for all reasonable out-of-pocket expenses or advances incurred by IFTC in connection with the performance of services under this Agreement, for postage (and first class mail insurance in connection with mailing share certificates), envelopes, check forms, continuous forms, forms for reports and statements, stationery, and other similar items, telephone and telegraph charges incurred in answering inquiries from dealers or shareholders, microfilm used each year to record the previous -3- year's transactions in shareholder accounts and computer tapes used for permanent storage of records and cost of insertion of materials in mailing envelopes by outside firms. IFTC will provide to Fund no less often than monthly a detailed accounting of all such expenses on behalf of the Fund. 6. OPERATION OF IFTC SYSTEM. In connection with the ________________________ performance of its services under this Agreement, IFTC is responsible for such items as: A. The accuracy of entries in IFTC's records reflecting orders and instructions received by IFTC from dealers, shareholders, Fund or its principal underwriter; B. The availability and the accuracy of shareholder lists, shareholder account verifications, confirmations and other shareholder account information to be produced from its records or data; C. The accurate and timely issuance of dividend and distribution checks in accordance with instructions received from Fund; D. The accuracy of redemption transactions and payments in accordance with redemption instructions received from dealers, shareholders or Fund; E. The deposit daily in Fund's appropriate special bank account of all checks and payments received from dealers or shareholders for investment in shares; F. The requiring of proper forms of instructions, signatures and signature guarantees and any necessary documents supporting the legality of transfers, redemptions and other shareholder account transactions, all in conformance with IFTC's and the Fund's present procedures with such changes as may be required or approved by Fund; and G. The maintenance of a current duplicate set of Fund's essential records at a secure distant location, in a form available and usable forthwith in the event of any breakdown or disaster disrupting its main operation. 7. INDEMNIFICATION. _______________ A. IFTC will not be responsible for, and Fund will hold harmless and indemnify IFTC from and against any loss by or liability to the Fund or a third party, including reasonable attorney's fees, in connection with any claim or suit asserting any such liability arising out of or attributable to actions taken or omitted by IFTC pursuant to this Agreement, unless IFTC has acted negligently or in bad faith. The matters covered by this indemnification -4- include but are not limited to those of Section 13 hereof. Fund will be responsible for, and will have the right to conduct or control the defense of any litigation asserting liability, including reasonable attorney's fees, against which IFTC is indemnified hereunder. IFTC will not be under any obligation to prosecute or defend any action or suit in respect of the agency relationship hereunder, which, in its opinion, may involve it in expense or liability, unless Fund will, as often as requested, furnish IFTC with reasonable, satisfactory security and indemnity against such expense or liability. B. IFTC will hold harmless and indemnify Fund from and against any loss or liability arising out of IFTC's negligence or bad faith in performing its duties under this Agreement, including reasonable attorney's fees. 8. CERTAIN COVENANTS OF IFTC AND FUND. __________________________________ A. All requisite steps will be taken by Fund from time to time when and as necessary to register the Fund's shares for sale in all states in which Fund's shares shall at the time be offered for sale and require registration. If at any time Fund will receive notice of any stop order or other proceeding in any such state affecting such registration or the sale of Fund's shares, or of any stop order or other proceeding under the federal securities laws affecting the sale of Fund's shares, Fund will give prompt notice thereof to IFTC. B. IFTC hereby agrees to perform such transfer agency functions as are set forth in Section 3.E above and establish and maintain facilities and procedures reasonably acceptable to Fund for safekeeping of shares of beneficial interest certificates, check forms, and facsimile signature imprinting devices, if any; and for the preparation or use, and for keeping account of, such certificates, forms and devices, and to carry such insurance as it considers adequate and reasonably available and not to substantially reduce such level of insurance without prior notice to the Fund. C. To the extent required by Section 31 of the Investment Company Act of 1940 as amended and Rules thereunder, IFTC agrees that all records maintained by IFTC relating to the services to be performed by IFTC under this Agreement are the property of Fund and will be preserved and will be surrendered promptly to Fund on request. D. IFTC agrees to furnish Fund semiannual reports of its financial condition, consisting of a balance sheet, earnings statement and any other financial information -5- reasonably requested by Fund. The annual financial statements will be certified by IFTC's certified public accountants. E. IFTC represents and agrees that it will use its best efforts to keep current on the trends of the investment company industry relating to shareholder services and will use its best efforts to continue to modernize and improve. F. IFTC will permit Fund and its authorized representatives to make periodic inspections of its operations as such would involve the Fund at reasonable times during business hours. 9. RECAPITALIZATION OR READJUSTMENT. In case of any ________________________________ recapitalization, readjustment or other change in the capital structure of Fund requiring a change in the form of beneficial interest certificates, IFTC will issue or register certificates in the new form in exchange for, or in transfer of, the outstanding certificates in the old form, upon receiving written instructions from an officer of Fund, along with such written documentation as IFTC deems necessary. 10. BENEFICIAL INTEREST CERTIFICATES. Fund will furnish IFTC ________________________________ with a sufficient supply of blank beneficial interest certificates and from time to time will renew such supply upon the request of IFTC. Such certificates will be signed manually or by facsimile signatures of the officers of Fund authorized by law and by bylaws to sign such certificates, and if required, will bear the corporate seal or facsimile thereof. 11. DEATH, RESIGNATION OR REMOVAL OF SIGNING OFFICER. Fund will ________________________________________________ file promptly with IFTC written notice of any change in the officers authorized to sign certificates, written instructions or requests, together with two signature cards bearing the specimen signature of each newly authorized officer. In case any officer of Fund who will have signed manually or whose facsimile signature will have been affixed to blank certificates will die, resign, or be removed prior to the issuance of such certificates, IFTC may issue or register such certificates as the certificates of Fund notwithstanding such death, resignation, or removal, until specifically directed to the contrary by Fund in writing. In the absence of such direction, Fund will file promptly with IFTC such approval, adoption, or ratification as may be required by law. -6- 12. FUTURE AMENDMENTS OF TRUST INSTRUMENT AND BYLAWS. Fund will ________________________________________________ promptly file with IFTC copies of all material amendments to its Trust Instrument or bylaws made after the date of this Agreement. 13. INSTRUCTIONS, OPINION OF COUNSEL AND SIGNATURES. At any _______________________________________________ time IFTC may apply to any person authorized by the Fund to give instructions to IFTC, and may with the approval of a Fund officer consult with legal counsel for Fund or its own legal counsel at the expense of Fund, with respect to any matter arising in connection with the agency and it will not be liable for any action taken or omitted by it in good faith in reliance upon such instructions or upon the opinion of such counsel. IFTC will be protected in acting upon any paper or document reasonably believed by it to be genuine and to have been signed by the proper person or persons and will not be held to have notice of any change of authority of any person, until receipt of written notice thereof from Fund. It will also be protected in recognizing beneficial interest certificates which it reasonably believes to bear the proper manual or facsimile signatures of the officers of Fund, and the proper countersignature of any former Transfer Agent or Registrar, or of a co-Transfer Agent or co- Registrar. 14. PAPERS SUBJECT TO APPROVAL OF COUNSEL. The acceptance by _____________________________________ IFTC of its appointment as Transfer Agent and Dividend Disbursing Agent and all documents filed in connection with such appointment and thereafter in connection with the agencies will be subject to the approval of legal counsel for IFTC (which approval will be not unreasonably withheld). 15. RECORDS. IFTC will maintain customary records in connection _______ with its agency, and particularly will maintain those records required to be maintained pursuant to subparagraph (2) (iv) of paragraph (b) of Rule 31a-1 for the period and in the manner prescribed by Rule 31a-2 under the Investment Company Act of 1940, if any. 16. DISPOSITION OF BOOKS, RECORDS AND CANCELED CERTIFICATES. _______________________________________________________ IFTC will send periodically to Fund, or to where designated by the Secretary or an Assistant Secretary of Fund, all books, documents, and all records no longer deemed needed for current purposes and beneficial interest certificates which have been canceled in transfer or in exchange, upon the understanding that such books, documents, records, and beneficial interest certificates will not be destroyed by Fund without the consent of IFTC (which consent will not be unreasonably withheld), but will be safely stored for possible future reference. -7- 17. PROVISIONS RELATING TO IFTC AS TRANSFER AGENT. _____________________________________________ A. IFTC will make original issues of beneficial interest certificates upon written request of an officer of Fund and such other written documentation as IFTC deems necessary, and receipt of necessary funds for the payment of any original issue tax. B. Before making any original issue of certificates Fund will furnish IFTC with sufficient funds to pay all required taxes on the original issue of the shares of beneficial interest, if any. Fund will furnish IFTC such evidence as may be required by IFTC to show the actual value of such shares. If no taxes are payable IFTC will be furnished with an opinion of outside counsel to that effect. C. Shares of beneficial interest will be transferred and new certificates issued in transfer, or shares of beneficial interest accepted for redemption and funds remitted therefor, upon surrender of the old certificates in form deemed by IFTC properly endorsed for transfer or redemption accompanied by such documents as IFTC may deem necessary to evidence that authority of the person making the transfer or redemption, and bearing satisfactory evidence of the payment of any applicable transfer taxes. IFTC reserves the right to refuse to transfer or redeem shares until it is satisfied that the endorsement or signature on the certificate or any other document is valid and genuine, and for that purpose it may require a guaranty of signature by a financial institution as permitted by the Fund's prospectus or as otherwise required by applicable law. IFTC also reserves the right to refuse to transfer or redeem shares until it is satisfied that the requested transfer or redemption is legally authorized, and it will incur no liability for the refusal in good faith to make transfers or redemptions which, in its judgment, are improper or unauthorized. IFTC may, in effecting transfers or redemptions, rely upon Simplification Acts or other statutes which protect it and Fund in not requiring complete fiduciary documentation. In cases in which IFTC is not directed or otherwise required to maintain the consolidated records of shareholder's accounts, IFTC will not be liable for any loss which may arise by reason of not having such records, provided that such loss could not have been prevented by the exercise of ordinary diligence. D. When mail is used for delivery of beneficial interest certificates IFTC will forward certificates in -8- "nonnegotiable" form by first class or registered mail and certificates in "negotiable" form by registered mail, all such mail deliveries to be covered while in transit to the addressee by insurance arranged for by IFTC. 18. IFTC will issue and mail subscription warrants, certificates representing dividends, exchanges or split ups, or act as Conversion Agent upon receiving written instructions from any officer of Fund and such other documents as IFTC deems necessary. A. IFTC will issue, transfer, and split up certificates and will issue certificates of beneficial interest representing full shares upon surrender of scrip certificates aggregating one full share or more when presented to IFTC for that purpose upon receiving written instructions from an officer of Fund and such other documents as IFTC may deem necessary. B. IFTC may issue new certificates in place of certificates represented to have been lost, destroyed, stolen or otherwise wrongfully taken upon receiving instructions from Fund and indemnity satisfactory to IFTC and Fund, and may issue new certificates in exchange for, and upon surrender of, mutilated certificates. Such instructions from Fund will be in such form as will be approved by the Trustees of Fund and will be in accordance with the provisions of law and the bylaws of Fund governing such matter. C. IFTC will supply a shareholder's list to Fund for its annual meeting upon receiving a request from an officer of Fund. It will also supply lists at such other times as may be requested by an officer of Fund. D. Upon receipt of written instructions of an officer of Fund, IFTC will address and mail notices to shareholders. E. In case of any request or demand for the inspection of the shareholder records of Fund or any other books in the possession of IFTC, IFTC will endeavor to notify Fund and to secure instructions as to permitting or refusing such inspection. IFTC reserves the right, however, to exhibit the shareholder records or other books to any person in case it is advised by its counsel that it may be held responsible for the failure to exhibit the shareholder records or other books to such person. F. In the event that any check or other order for the payment of money is returned unpaid for any reason, IFTC will: (i) within three days give written notice of such return to the Fund or its designee; (ii) place a stop transfer order against all Fund shares issued -9- in certificate form as a result of such check or order or cancel the purchase of Fund shares issued in book-entry form as a result of such check or order, (iii) take such other steps as IFTC may, in its discretion, deem appropriate or as the Fund or its designee may instruct. G. Upon receipt of all necessary information and documentation relating to a redemption, IFTC will issue to the Fund's custodian an advice setting forth the number of shares of the Fund received by IFTC for redemption. IFTC shall, upon notification that the custodian has transferred funds for the redemption of shares to a redemption account at IFTC or at another bank, pay such moneys to the shareholder, his authorized agent or legal representative. H. IFTC is authorized to review and process transfers of shares of the Fund and exchanges between the Fund and other mutual funds for which IFTC acts as transfer agent as permitted in the prospectus for the Fund, on the records of the Fund maintained by IFTC. If shares to be transferred are represented by outstanding certificates, IFTC shall, upon surrender to it of the certificates in proper form for transfer, and upon cancellation thereof, countersign and issue new certificates for a like number of shares (if so requested by the registered holder thereof) and deliver the same. If the shares to be transferred are not represented by outstanding certificates, IFTC shall upon an order thereof by or on behalf of the registered holder thereof in proper form, credit the same to the transferee on its books. If shares are to be exchanged for shares of another mutual fund, IFTC will process such shares exchanged in the same manner as a redemption and sale of shares, except that it may in its discretion waive requirements for information and documentation. I. Unless otherwise instructed by the Fund, IFTC shall maintain records showing for each investor's account the following: (i) names, addresses, tax identifying numbers and assigned account numbers; (ii) numbers of shares held; (iii) historical information regarding the account of each shareholder, including dividends paid and date and price of all transactions on a shareholder's account; (iv) any stop or restraining order placed against a shareholder's account or on lost and/or replaced certificates; (v) information with respect to withholdings in the case of a foreign account; (vi) any capital gain or dividend reinvestment order, account application, dividend address and correspondence relating to the current maintenance of a shareholder's account; (vii) certificate numbers and -10- denominations for any shareholders holding certificates; and (viii) any information required in order to permit the Fund to confirm that IFTC has properly performed the calculations contemplated or required by this Agreement. J. IFTC will maintain records necessary to reflect the crediting of dividends which are reinvested in shares of the Fund. K. IFTC will investigate all shareholder inquiries related to shareholder accounts and respond promptly to correspondence from shareholders. L. If requested and as directed by the Fund, IFTC will address and mail all communications to shareholders or their nominees, including proxy material and periodic reports to shareholders. M. In connection with special and annual meetings of shareholders, IFTC will prepare shareholder lists, mail and certify as to the mailing of proxy materials, process and tabulate returned proxy cards, report on proxies voted and received by IFTC prior to meetings as stated in the proxy statement, and certify to the Secretary of the Fund shares to be voted at meetings. N. In addition to the duties expressly provided for herein, IFTC shall perform such other duties and functions as are set forth in the Compensation and Expenses schedule hereto from time to time. 19. PROVISIONS RELATING TO DIVIDEND DISBURSING AGENCY. _________________________________________________ A. IFTC will maintain one or more deposit accounts as Agent for the Fund, into which the funds for payment of dividends, distributions, redemptions or other disbursements provided for hereunder will be deposited, and against which checks for the foregoing purposes will be drawn (Accounts). Such Accounts may be maintained in IFTC's own banking department, in State Street Bank and Trust Company, and in such other banks or trust companies as may be designated by IFTC and as properly authorized by resolution of the Trustees of the Fund, such Accounts, however, to be in the name of IFTC as agent of the Fund and subject only to its draft or order. B. Upon the receipt of proper instructions, as described below, which may be continuing instructions when deemed appropriate by the parties, IFTC shall pay out monies of the Fund in such Accounts in the following cases only: -11- 1. For the redemption of Fund shares according to the Fund's then current prospectus; 2. For the payment of any dividends declared by the Fund or other distributions to shareholders of the Fund; and 3. For any other proper purpose, but only upon receipt of proper instructions specifying the amount of such payment, setting forth the purpose for which such payment is to be made, declaring such purpose to be a proper purpose, and naming the person or persons to whom such payment is to be made. IFTC shall disburse funds from such Accounts as directed upon receipt of instructions from the Fund. All instructions shall be given only by persons designated in writing to IFTC by the Fund to be authorized to give instructions to IFTC under this Agreement. Instructions may be in writing executed by an authorized representative of the Fund or, if IFTC reasonably believes such instructions to be by an authorized representative of the Fund, via telecommunications. C. The Fund will promptly notify IFTC of the declaration of any dividend or distribution. The Fund shall furnish to IFTC a written document specifying the date of the declaration of such dividend or distribution, the date of payment thereof, the record date as of which shareholders entitled to payment shall be determined, the amount payable per share to shareholders of record as of that date, and the total amount payable to IFTC on the payment date. D. IFTC will, on or before the payable date of any dividend or distribution, notify the Fund's custodian and the Fund of the estimated amount of cash required to pay said dividend or distribution. On or before the mailing date of such dividend or distribution, Fund shall instruct the custodian to place in a dividend disbursing account at IFTC or another bank, funds equal to the cash amount to be paid out. IFTC will calculate, prepare and mail checks to, or (where appropriate) credit such dividend or distribution to the account of, Fund shareholders, and maintain and safeguard all required underlying records. -12- E. As directed by the Fund, IFTC shall prepare and mail to each Fund shareholder such information with respect to each dividend or distribution as is required by applicable federal income tax laws and regulations and by the Investment Company Act of 1940. F. As directed by the Fund, IFTC shall file such appropriate information returns concerning the payment of dividends and capital gain distributions with the proper federal authorities as are required by federal law to be filed by the Fund and shall withhold such sums as are required to be withheld by federal law. G. IFTC will, at the expense of the Fund, provide a special form of check containing the imprint of any device or other matter desired by Fund. Such form of checks must, however, be compatible with the equipment employed by IFTC and its agents. H. If the Fund desires to include additional printed matter, financial statements, etc. with the dividend checks, the same will be furnished to IFTC within a reasonable time prior to the date of mailing of the dividend checks, at the expense of the Fund. I. If the Fund desires that its distributions be mailed in any special form of envelopes, a sufficient supply of the same will be furnished to IFTC, but the size and form of said envelopes will be subject to the approval of IFTC. If stamped envelopes are used, they must be furnished by Fund or, if postage stamps are to be affixed to the envelopes, the stamps or the cash necessary for such stamps must be furnished by the Fund prior to mailing. J. IFTC is authorized and directed to stop payment of checks theretofore issued hereunder, but not presented for payment, when the payees thereof allege either that they have not received the checks or that such checks have been mislaid, lost, stolen, destroyed or through no fault of theirs, are otherwise beyond their control, and cannot be produced by them for presentation and collections, and, to issue and deliver duplicate checks in replacement thereof upon receipt of properly executed affidavits. 20. ASSUMPTION OF DUTIES BY THE FUND. The Fund may assume ________________________________ certain duties and responsibilities of IFTC or those usual and ordinary services of Transfer Agent and Dividend Disbursement Agent as those terms are referred to in Section 3.E of this Agreement including but not limited to accepting shareholder instructions and transmitting orders based on such instructions to IFTC, preparing and mailing confirmations, obtaining certified TIN numbers, and disbursing -13- monies of the Fund. To the extent the Fund or its agent or affiliate assumes such duties and responsibilities, IFTC shall be relieved from all responsibility and liability therefor. 21. TERMINATION OF AGREEMENT. ________________________ A. This Agreement may be terminated by either party upon receipt of sixty (60) days written notice from the other party. B. Fund, in addition to any other rights and remedies, shall have the right to terminate this Agreement forthwith upon the occurrence at any time of any of the following events: (1) Any interruption or cessation of operations by IFTC or its assigns which materially interferes with the business operation of Fund; (2) The bankruptcy of IFTC or its assigns or the appointment of a receiver for IFTC or its assigns; (3) Any merger, consolidation or sale of substantially all the assets of IFTC or its assigns; (4) The acquisition of a controlling interest in IFTC or its assigns, by any broker, dealer, investment adviser or investment company except as may presently exist; or (5) Failure by IFTC or its assigns to perform its duties in accordance with the Agreement, which failure materially adversely affects the business operations of Fund and which failure continues for thirty (30) days after receipt of written notice from Fund; or (6) The Fund does not receive shareholder approval to enter into an investment advisory agreement with Berger Associates, Inc. and a sub-advisory agreement with Perkins, Wolf, McDonnell & Company on or before February _____, 1997. C. In the event of termination, Fund will promptly pay IFTC all amounts due to IFTC hereunder. D. In the event of termination, IFTC will use its best efforts to transfer the books and records of the Fund to the designated successor transfer agent and to provide other information relating to its service provided hereunder for reasonable compensation therefor. -14- 22. ASSIGNMENT. Neither this Agreement nor any rights or __________ obligations hereunder may be assigned by IFTC without the written consent of Fund; provided, however, no assignment will relieve IFTC of any of its obligations hereunder. IFTC may, however, employ agents to assist it in performing its duties hereunder. This Agreement will inure to the benefit of and be binding upon the parties and their respective successors and assigns. 23. CONFIDENTIALITY. _______________ A. IFTC agrees that, except as provided in the last sentence of Section 17.J hereof, or as otherwise required by law, IFTC will keep confidential all records of and information in its possession relating to Fund or its shareholders or shareholder accounts and will not disclose the same to any person except at the request or with the consent of Fund. B. Fund agrees to keep confidential all financial statements and other financial records (other than statements and records relating solely to Fund's business dealings with IFTC) and all manuals, systems and other technical information and data, not publicly disclosed, relating to IFTC's operations and programs furnished to it by IFTC pursuant to this Agreement and will not disclose the same to any person except at the request or with the consent of IFTC. C. The Fund acknowledges that IFTC and DST Systems, Inc. (DST) have proprietary rights in and to the computerized data processing recordkeeping system used by IFTC to perform services hereunder including, but not limited to the maintenance of shareholder accounts and records, processing of related information and generation of output (the MFS System), including, without limitation any changes or modifications of the MFS System and any other IFTC or DST programs, data bases, supporting documentation, or procedures ("collectively IFTC Protected Information") which the Fund's access to the MFS System or computer hardware or software may permit the Fund or its employees or agents to become aware of or to access and that the IFTC Protected Information constitutes confidential material and trade secrets of IFTC. The Fund agrees to maintain the confidentiality of the IFTC Protected Information. The Fund acknowledges that any unauthorized use, misuse, disclosure or taking of IFTC Protected Information which is confidential as provided by law, or which is a trade secret, residing or existing internal or -15- external to a computer, computer system, or computer network, or the knowing and unauthorized accessing or causing to be accessed of any computer, computer system, or computer network, may be subject to civil liabilities and criminal penalties under applicable state law. The Fund will advise all of its employees and agents who have access to any IFTC Protected Information or to any computer equipment capable of accessing IFTC or DST hardware or software of the foregoing. IFTC and DST are intended to be, and shall be, third party beneficiaries of the Fund's obligations and undertakings contained in this Section. 24. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All __________________________________________ representations and warranties by either party herein contained will survive the execution and delivery of this Agreement. 25. LIMITATION OF LIABILITY. Notice is hereby given that the _______________________ Fund is a business trust organized under the laws of the Commonwealth of Massachusetts pursuant to a Declaration of Trust filed in the office of the Secretary of State of the Commonwealth of Massachusetts. All parties to this Agreement acknowledge and agree that the Fund is a series Fund and all debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series shall be enforceable against the assets held with respect to such series only, and not against the assets of the Fund generally or against the assets held with respect to any other series and further that no trustee, officer or holder of shares of beneficial interest of the Fund shall be personally liable for any of the foregoing. 26. MISCELLANEOUS. _____________ A. This Agreement is executed and delivered in the State of Missouri and shall be governed by the laws of said state. B. All the terms and provisions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the respective successors and assigns of the parties hereto. C. No provisions of the Agreement may be amended or modified, in any manner except by a written agreement properly authorized and executed by both parties hereto. -16- D. The captions in this Agreement are included for convenience of reference only, and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. E. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. F. If any part, term or provision of this Agreement is by the courts held to be illegal, in conflict with any law or otherwise invalid, the remaining portion or portions shall be considered severable and not be affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term or provision held to be illegal or invalid. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective duly authorized officers. INVESTORS FIDUCIARY TRUST COMPANY By: ______________________________ Allen R. Strain, Executive Vice President BERGER OMNI INVESTMENT TRUST By:________________________________ Title: ___________________________ -17- EX-99.B15 11 RULE 12B-1 PLAN FOR THE INVESTOR SHARES EXHIBIT 15 RULE 12b-1 PLAN FOR THE INVESTOR SHARES OF THE BERGER SMALL CAP VALUE FUND 1. The Plan. The Trustees of Berger Omni Investment -------- Trust, a Massachusetts business trust (the "Trust"), have adopted this Rule 12b-1 Plan (the "Plan") pursuant to the terms of Rule 12b-1 under the Investment Company Act of 1940, as amended (the "Act"), with respect to the class of shares designated as Investor Shares of the Trust's series known as the Berger Small Cap Value Fund (the "Fund"). In accordance with the terms of this Plan, the Trust may act as a "distributor" (as that term is used in said Rule 12b-1) of the Investor Shares of the Fund. 2. Authorized Payments. During each fiscal year of the ------------------- Fund, the Trust is hereby authorized to pay out of the assets of the Fund on a monthly basis, an amount computed at an annual rate of twenty-five one- hundredths of one percent (.25%) of the average daily net assets of the Fund represented by Investor Shares ("12b-1 Payments"), to Berger Associates, Inc. ("Berger Associates") to finance activities primarily intended to result in the sale of the Fund's Investor Shares, which shall include, but not be limited to: payments made to, and costs incurred by, the Fund's principal underwriter in connection with the distribution of the Fund's Investor Shares, including payments made to and expenses of officers and registered representatives of Berger Distributors, Inc.; payments made to and expenses of other persons (including employees of Berger Associates) who are engaged in, or provide support services in connection with, the distribution of the Fund's Investor Shares, such as answering routine telephone inquiries and processing prospective investor requests for information; compensation paid to securities dealers, financial institutions and other organizations which render distribution and administrative services in connection with the distribution of the Fund's Investor Shares, including services to shareholders of the Investor Shares of the Fund and prospective investors; costs related to the formulation and implementation of marketing and promotional activities, including direct mail promotions and television, radio, newspaper, magazine and other mass media advertising; costs of printing and distributing prospectuses and reports to prospective shareholders of Investor Shares of the Fund; costs involved in preparing, printing and distributing sales literature for Investor Shares of the Fund; costs involved in obtaining whatever information, analyses and reports with respect to marketing and promotional activities on behalf of the Fund relating to its Investor Shares that Berger Associates deems advisable; and such other costs relating to the Investor Shares of the Fund as the Trust may from time to time reasonably deem necessary or appropriate in order to finance activities primarily intended to result in the sale of Investor Shares. 12b-1 Payments shall be made by the Trust to Berger Associates with respect to each fiscal year of the Fund without regard to the actual distribution expenses incurred by Berger Associates in such year; i.e., if distribution expenditures incurred by Berger Associates are less than the total of such 12b-1 Payments in such year, the difference shall not be reimbursed to the Trust by Berger Associates, and if distribution expenditures incurred by Berger Associates are more than the total of such 12b-1 Payments, the excess shall not be reimbursed to Berger Associates by the Trust. 12b-1 Payments made pursuant to this Plan shall be -1- imposed only against the assets of the Fund represented by Investor Shares. 3. Trustee Approval. This Plan shall not take effect ---------------- until it has been approved, together with any related agreements, by votes of a majority of both (a) the Trustees of the Trust and (b) those Trustees of the Trust who are not "interested persons" of the Trust or the Fund (as defined in the Act) and have no direct or indirect financial interest in the operation of this Plan or any agreements related to it (the "Rule 12b-1 Trustees"), cast in person at a meeting (or meetings) called for the purpose of voting on this Plan and such related agreements. 4. Annual Reapproval. Unless sooner terminated pursuant ----------------- to paragraph 5, this Plan shall continue in effect for so long as such continuance is specifically approved at least annually in the manner provided for approval of this Plan in paragraph 3. 5. Termination of Plan. This Plan may be terminated at ------------------- any time by a vote of a majority of the Rule 12b-1 Trustees, or by vote of a majority of the Fund's outstanding Investor Shares. 6. Amendments. This Plan may not be amended to increase ---------- materially the amount of distribution expenses provided for in paragraph 2 hereof without approval of the holders of Investor Shares as provided in Rule 12b-1 under the Act (or any successor provision), and no material amendment to the Plan shall be made unless approved in the manner provided for approval of this Plan in paragraph 3 hereof. 7. Quarterly Reports. Any person authorized to direct the ----------------- disposition of monies paid or payable by the Trust pursuant to this Plan or any related agreements shall provide to the Trustees of the Trust, and the Trustees shall review at least quarterly, a written report of the amounts so expended and the purposes for which such expenditures were made. Unless directed otherwise by the Trustees with respect to a particular expenditure or type of expenditure, any expenditure made by Berger Associates which jointly promotes the sale of Investor Shares of the Fund and the sale of other classes of shares or shares of other investment companies for which Berger Associates or its affiliate serves as investment adviser or administrator, and which expenditures are not readily identifiable as related to the Investor Shares of the Fund or one or more of such other classes or investment companies, shall be allocated to the Investor Shares of the Fund and such other classes or other investment companies on a basis such that the Investor Shares of the Fund will be allocated only their proportional share of such expenditures based upon the relative net assets of the Fund represented by Investor Shares as compared to the net assets of such other classes and all such other investment companies thus promoted. 8. Selection and Nomination of Trustees. While this Plan ------------------------------------ is in effect, the selection and nomination of Trustees of the Trust who are not interested persons (as defined in the Act) of the Fund shall be committed to the discretion of the Trustees who are not interested persons of the Fund. 9. Records. The Trust shall preserve copies of this Plan ------- and any related agreements and all reports made pursuant to paragraph 7 hereof for a period of not less than six -2- years from the date of this Plan, or the agreements or such reports, as the case may be, and shall preserve the Plan, agreement or report the first two years in an easily accessible place. 10. Limitation on Personal Liability. NOTICE IS HEREBY -------------------------------- GIVEN that the Trust is a business trust organized under the laws of the Commonwealth of Massachusetts pursuant to a Declaration of Trust filed in the office of the Secretary of State of the Commonwealth of Massachusetts. This Plan was executed by the person whose name is set forth below as an officer of the Trust and not individually. The Trust is a series trust and all debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series shall be enforceable against the assets held with respect to such series only, and not against the assets of the Trust generally or against the assets held with respect to any other series and further that no trustee, officer or holder of shares of beneficial interest of the Trust shall be personally liable for any of the foregoing. IN WITNESS WHEREOF, the adoption of this Rule 12b-1 Plan by the Trustees of the Trust with respect to the Investor Shares of the Fund is hereby confirmed as of the day and year set forth below. BERGER OMNI INVESTMENT TRUST with respect to the series known as the Berger Small Cap Value Fund Date: ______________, 1997 By_________________________ Gerard M. Lavin, President -3- EX-99.B18 12 RULE 18F-3 PLAN EXHIBIT 18 RULE 18f-3 PLAN FOR MULTIPLE CLASSES OF SHARES OF THE BERGER SMALL CAP VALUE FUND 1. Introduction. The Trustees of Berger Omni Investment ------------ Trust, a Massachusetts business trust (the "Trust"), have adopted this Rule 18f-3 Plan (the "Plan") pursuant to the terms of Rule 18f-3 under the Investment Company Act of 1940, as amended (the "Act"), with respect to the shares of the Trust's series known as the Berger Small Cap Value Fund (the "Fund"). In accordance with the terms of this Plan, the Trust may offer from time to time multiple classes of shares of the Fund. 2. Class Characteristics. Except as otherwise provided in --------------------- this Plan, each share of a class will represent an identical interest in the investment portfolio of the Fund and shall have identical voting, dividend, liquidation and other rights and obligations as each other class. 3. Class Designations. The Fund shall initially issue two ------------------ classes of shares, consisting of Institutional Shares and Investor Shares. Institutional Shares shall be offered at their net asset value, without any initial sales charge, and shall not bear any expenses of distribution. Investor Shares shall be offered at their net asset value, without any initial sales charge, and shall bear the expense of distribution provided in a separate Rule 12b-1 plan adopted with respect to such class. Each class is subject to such investment minimums and other conditions of eligibility as are set forth in the prospectus for such class, as it may be amended from time to time. Subject to the Trust's Declaration of Trust and any other applicable provisions, the Trustees of the Trust have the authority to create additional classes, or change existing classes, from time to time, in accordance with Rule 18f-3 under the Act. 4. Allocations of Income and Expenses. The gross income, ---------------------------------- realized and unrealized capital gains and losses and expenses (other than "Class Expenses," as defined below) of the Fund shall be allocated to each class on the basis of the net asset value of the Fund attributable to shares of that class relative to the net asset value of the Fund as a whole. Expenses to be so allocated shall include expenses of the Fund that are not attributable to a particular class but are allocated to the Fund, including but not limited to Trustees' fees, insurance costs and certain legal fees. "Class Expenses" shall include (a) payments made pursuant to a Rule 12b-1 plan adopted with respect to a particular class, and fees and expenses of other arrangements for shareholder services or the distribution of shares adopted with respect to a particular class; (b) payments of fees and expenses made for transfer agency and dividend disbursing agency services incurred with respect to a particular class; (c) expenses related to preparing, printing and distributing materials such as shareholder reports, prospectuses and proxy statements to current shareholders of a specific class; (d) expenses of administrative personnel and services required to support shareholders of a specific class (including, but not limited to, maintaining telephone lines and personnel to answer shareholder inquiries about their accounts or about the Fund); (e) SEC, Blue Sky or -1- foreign registration or other fees incurred with respect to a specific class; (f) litigation or other legal expenses relating to a specific class; (g) fees or expenses of the Trustees of the Trust and of counsel and consultants to the Trustees, incurred as a result of issues relating to a specific class; (h) accounting and consulting expenses relating to a specific class; and (i) any other expenses that are actually incurred in a different amount by a particular class or that vary by class as a result of services received by a particular class of a different kind or to a different degree than other classes and are classified by the Trustees of the Trust as Class Expenses; provided that in no event shall Class Expenses include advisory or custodial fees, tax return preparation fees or other expenses related to the management of the Fund's assets. Class Expenses shall be separately allocated to the class that incurred such expense. 5. Voting Rights. Each class of shares shall have ------------- exclusive voting rights as a class on any matter submitted to shareholders of the Fund that relates solely to such class or to any 12b-1 plan adopted with respect to such class, or to the arrangements contained in this Plan concerning allocation of expenses to such class. Each class shall have separate voting rights as a class on any matter submitted to shareholders of the Fund in which the interest of one class differs from the interest of any other class. 6. Dividends and Other Distributions. To the extent any --------------------------------- dividends are paid or other distributions are made by the Fund with respect to its shares, such dividends and distributions shall be calculated with respect to each class in the same manner, at the same time and shall be in the same amount, except that any payments under a Rule 12b-1 plan adopted with respect to a class of shares and any Class Expenses relating to a class shall be borne exclusively by that class. 7. Waivers or Reimbursements of Expenses. Expenses may be ------------------------------------- waived or reimbursed by the Fund's advisor, underwriter or any other provider of services to the Fund. 8. Exchange Privileges. Shareholders of any class of the ------------------- Fund may exchange their shares for shares of any other fund made available by the Fund's advisor or distributor for this purpose, with no sales charge, on the basis of relative net asset value, subject to any investment minimums and other conditions of eligibility as are set forth in the then current prospectus of the fund into which the shareholder wishes to exchange. 9. Conversion Feature. There shall be no conversion ------------------ feature associated with the Institutional Shares or the Investor Shares of the Fund, except that shareholders of any class of the Fund may convert their shares into shares of any other class of the Fund in the event and only in the event the shareholder ceases to be eligible to purchase or hold shares of the original class, or becomes eligible to purchase shares of a different class, by reason of a change in the shareholder's status under the conditions of eligibility in effect for such class at that time. 10. Trustee Monitoring. On an ongoing basis, the Trustees ------------------ shall monitor the Fund for the existence of any material conflicts between the interests of the various classes of shares of the Fund. The Trustees, including a majority of the Trustees who are not "interested persons" of the Fund or its advisor, as defined in the Act (the "Independent Trustees"), shall take such action as is reasonably necessary to reconcile fairly any such conflict that may develop. The Fund's advisor and its distributor shall be responsible for alerting the Trustees to any material conflicts of which they become aware. The Trustees shall further monitor on an ongoing basis the use of any waivers or reimbursements by the advisor or distributor of expenses to guard against cross-subsidization between classes. If an irreconcilable conflict arises, the advisor and the distributor, at their own cost, shall remedy such conflict by appropriate action, up to and including establishing one or more new series or funds. 11. Reports. At least annually, the Trustees shall receive ------- a report with respect to the methodology and procedures for calculating the net asset value, dividends and distributions for the various classes of the Fund, and the proper allocation of income and expenses among the classes. The report to the Trustees shall also address whether the Fund has adequate facilities in place to ensure the implementation of the methodology and procedures for proper calculation of the net asset value, dividends and distributions for the classes, and the proper allocation of income and expense among the classes. 12. Amendments. This Plan may be amended from time to time ---------- in accordance with the provisions and requirements of Rule 18f-3 under the Act. 13. Limitation on Personal Liability. NOTICE IS HEREBY -------------------------------- GIVEN that the Trust is a business trust organized under the laws of the Commonwealth of Massachusetts pursuant to a Declaration of Trust filed in the office of the Secretary of State of the Commonwealth of Massachusetts. This Plan was executed by the person whose name is set forth below as an officer of the Trust and not individually. The Trust is a series trust and all debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series shall be enforceable against the assets held with respect to such series only, and not against the assets of the Trust generally or against the assets held with respect to any other series and further that no trustee, officer or holder of shares of beneficial interest of the Trust shall be personally liable for any of the foregoing. IN WITNESS WHEREOF, the adoption of this Rule 18f-3 Plan by the Trustees of the Trust with respect to the Fund is hereby confirmed as of the day and year set forth below. BERGER OMNI INVESTMENT TRUST with respect to the series known as the Berger Small Cap Value Fund Date: _______________, 1997 By _______________________ Gerard M. Lavin, President -3- -----END PRIVACY-ENHANCED MESSAGE-----