PROXY STATEMENT
SEPTEMBER 23, 2004
This Proxy Statement is furnished by the Trust to the shareholders of The
Government Street Equity Fund, The Government Street Bond Fund and The Alabama
Tax Free Bond Fund (each a "Fund" and collectively, the "Funds"), each a series
of Williamsburg Investment Trust (the "Trust"), on behalf of the Trust's Board
of Trustees in connection with each Fund's solicitation of shareholders' proxies
for use at a Special Meeting to be held November 15, 2004, at 10:30 a.m.,
Eastern time, at the offices of Ultimus Fund Solutions, LLC, the Funds' transfer
agent, at 225 Pictoria Drive, Suite 450, Cincinnati, Ohio 45246, for the
purposes set forth below and in the accompanying Notice of Special Meeting. The
approximate mailing date of this Proxy Statement to shareholders is September
30, 2004.
At the Special Meeting, the shareholders of each Fund will be asked:
1. to approve or disapprove a new investment advisory agreement (each a
"New Advisory Agreement") by and between the Trust, on behalf of each
Fund, and T. Leavell & Associates, Inc. (the "Advisor"), under which
the Advisor will continue to act as investment advisor with respect to
the assets of each Fund;
2. to approve or disapprove of the retention of fees by, and payment of
fees to, the Advisor for the period April 15, 1998 through the
effective date of the proposed New Advisory Agreements; and
3. to transact such other business as may properly come before the
Special Meeting or any adjournments or postponement thereof.
RECORD DATE/SHAREHOLDERS ENTITLED TO VOTE. Each Fund is a separate
investment series, or portfolio, of the Trust, a Massachusetts business trust
and registered investment company under the Investment Company Act of 1940 (the
"1940 Act"). The record holders of outstanding shares of the Funds are entitled
to one vote per share (and a fractional vote per fractional share) on all
matters presented at the Special Meeting. Shareholders of the Funds at the close
of business on September 22, 2004 (the "Record Date") will be entitled to notice
of and to be present and vote at the Special Meeting. As of the Record Date,
there were: 2,791,264.138 shares of The Government Street Equity Fund
outstanding and entitled to vote, representing total net assets of $124,594,568;
2,918,098.599 shares of The Government Street Bond Fund outstanding and entitled
to vote, representing total net assets of $60,883,906; and 3,366,056.662 shares
of The Alabama Tax Free Bond Fund outstanding and entitled to vote, representing
total net assets of $36,390,035.
VOTING PROXIES. Whether you expect to be personally present at the Special
Meeting or not, we encourage you to vote by proxy. You can do this by executing,
dating and returning the enclosed proxy card. Properly executed proxies will be
voted as you instruct by the persons named in the accompanying proxy card. In
the absence of such direction, however, the persons named in the accompanying
proxy card intend to
5
vote FOR each of the two proposals and may vote in their discretion with respect
to other matters not now known to the Board of Trustees that may be properly
presented to the Special Meeting.
Shareholders who execute proxies may revoke them at any time before they
are voted, by executing a later dated proxy card, by writing to the Secretary of
the Trust, John F. Splain, c/o Ultimus Fund Solutions, LLC, P.O. Box 46707,
Cincinnati, Ohio 45246-0707, or by voting in person at the time of the Special
Meeting. If not so revoked, the shares represented by the proxy will be voted at
the Special Meeting, and any adjournments and postponement thereof, as
instructed. Attendance by a shareholder at the Special Meeting does not, in
itself, revoke a proxy.
With respect to each Fund, if a quorum (as described below) is represented
at the Special Meeting, the vote of a "majority of the outstanding shares" of
the Fund is required for approval of Proposal 1, and the vote of more than 50%
of the outstanding shares of the Fund is required for approval of Proposal 2.
The vote of a "majority of the outstanding shares" for purposes of Proposal 1
means the vote of the lesser of (1) 67% or more of the shares present or
represented by proxy at the Special Meeting, if the holders of more than 50% of
the outstanding shares are present or represented by proxy, or (2) more than 50%
of the outstanding shares.
All properly executed proxies received prior to the Special Meeting will be
voted at the Special Meeting in accordance with the instructions marked thereon.
Proxies received prior to the Special Meeting on which no vote is indicated will
be voted "for" each proposal as to which it is entitled to vote.
QUORUM REQUIRED TO HOLD MEETING. In order to transact business at the
Special Meeting, a "quorum" must be present. Under the Trust's By-Laws, a quorum
is constituted by the presence in person or by proxy of 50% of the outstanding
shares of the Fund entitled to vote at the Special Meeting.
Abstentions and broker non-votes (i.e., proxies from brokers or nominees
indicating that they have not received instructions from the beneficial owners
on an item for which the brokers or nominees do not have discretionary power to
vote) will be treated as present for determining whether a quorum is present
with respect to a particular matter. Abstentions and broker non-votes will not,
however, be counted as voting on any matter at the Meeting when the voting
requirement is based on achieving a percentage of the "voting securities
present." If any proposal requires the affirmative vote of the Fund's
outstanding shares for approval, a broker non-vote or abstention will have the
effect of a vote against the proposal.
If a quorum of shareholders of a Fund is not present at the Special
Meeting, or if a quorum is present but sufficient votes to approve a proposal
are not received, the persons named as proxies may, but are under no obligation
to, propose one or more adjournments of the Special Meeting for a period or
periods not more than ninety (90) days in the aggregate to permit further
solicitation of proxies. Any business that might have been transacted at the
Special Meeting may be transacted at any such adjourned session(s) at which a
quorum is present. The Special Meeting may also be adjourned from time to time
by a majority of the votes of a Fund properly cast upon the question of
adjourning the Special Meeting to another date and time, whether or not a quorum
is present. With respect to each proposal, the persons named as proxies will
vote all proxies in favor of adjournment that voted in favor of a particular
proposal, and vote against adjournment all proxies that voted against such
proposal (including abstentions and broker non-votes). Abstentions and broker
non-votes will have the same effect at any adjourned meeting as noted above.
METHOD AND COST OF PROXY SOLICITATION. The Funds have retained Management
Information Services Corp. ("MIS") to solicit proxies for the Special Meeting.
MIS is responsible for printing proxy cards and proxy statements, mailing proxy
materials to shareholders, soliciting brokers, custodians, nominees and
fiduciaries, tabulating the returned proxies and performing other proxy
solicitation services.
Proxies will be solicited primarily by mail, telephone and the internet.
Although it is not anticipated, the solicitation may also include facsimile or
oral communications by certain officers or employees of the Trust, the Advisor,
or Ultimus Fund Solutions, LLC, the Fund's administrator ("Ultimus"), who will
not be paid for these services.
6
The Advisor will pay the costs of the Special Meeting and the expenses
incurred in connection with the solicitation of proxies, which will include
reasonable fees paid to any proxy solicitation service used for its printing and
mailing efforts. The Funds anticipate that such fees will amount to
approximately $11,000. The Trust, the Advisor or Ultimus may also request
broker-dealer firms, custodians, nominees and fiduciaries to forward proxy
materials to the beneficial owners of the shares of the Funds held of record by
such persons. If requested, the Advisor shall reimburse such broker-dealer
firms, custodians, nominees and fiduciaries for their reasonable expenses
incurred in connection with such proxy solicitation, including reasonable
expenses in communicating with persons for whom they hold shares of the Funds.
PRINCIPAL SHAREHOLDERS. On the Record Date, Charles Schwab and Company,
Inc., 101 Montgomery Street, San Francisco, California 94104, owned of record
approximately 68.6% of the outstanding shares of The Government Street Equity
Fund; approximately 62.4% of the outstanding shares of The Government Street
Bond Fund; and approximately 49.1 % of the outstanding shares of The Alabama Tax
Free Bond Fund. On the Record Date, Saltco, P.O. Box 469, Brewton, Alabama
36427, owned of record approximately 10.3% of the outstanding shares of The
Government Street Equity Fund; approximately 9.6% of the outstanding shares of
The Government Street Bond Fund; and approximately 16.2% of the outstanding
shares of The Alabama Tax Free Bond Fund. No other persons owned of record and,
according to information available to the Funds, no other persons owned
beneficially 5% or more of any of the Fund's outstanding shares.
The Trustees of the Trust intend to vote all of their shares in favor of
the proposals described herein. All Trustees and officers as a group owned of
record or beneficially less than 1% of each Fund's outstanding shares on the
Record Date.
REPORTS TO SHAREHOLDERS. Copies of the Funds' most recent annual report are
available without charge by writing to the Funds at P.O. Box 46707, Cincinnati,
Ohio 45246-0707, or by calling the Funds nationwide (toll-free) at
1-866-738-1125.
OTHER INFORMATION. As noted above, each Fund's current investment advisor
is T. Leavell & Associates, Inc., located at 150 Government Street, Mobile,
Alabama 36633. The Funds' administrator and transfer agent, Ultimus Fund
Solutions, LLC, and the Funds' distributor, Ultimus Fund Distributors, LLC, are
located at P.O. Box 46707, Cincinnati, Ohio 45246-0707, Telephone: (866)
738-1125.
RESPONSIBILITIES OF THE BOARD
The Board of Trustees is responsible for the general oversight of the
Funds' business affairs. A majority of the Board's members are not affiliated
with the Advisor and are otherwise sufficiently independent so that they are
considered "non-interested" within the meaning of the 1940 Act. These
non-interested Trustees have primary responsibility for assuring that each Fund
is managed in a manner consistent with the best interests of its shareholders.
The Board meets in person at least quarterly to review the investment
performance of the Funds and other operational matters, including policies and
procedures designed to assure compliance with various regulatory requirements.
At least annually, the non-interested Trustees review the fees paid to the
Advisor and its affiliates for investment advisory services and administrative
and distribution services.
BOARD COMMITTEES. The Board of Trustees has established the following
standing committees. The members of the Audit Committee, the Nominating
Committee and the Qualified Legal Compliance Committee are J. Finley Lee, Jr.,
Richard L. Morrill, Harris V. Morrissette, Erwin H. Will, Jr. and Samuel B. Witt
III. The members of the Ethics Committee are Charles M. Caravati, Jr., J. Finley
Lee, Jr. and Richard Morrill.
o Audit Committee, which oversees the Trust's accounting and financial
reporting policies and the independent audit of its financial
statements. The Audit Committee held six meetings during the fiscal
year ended March 31, 2004.
o Nominating Committee, which is responsible for nominating any future
Trustees of the Trust who are not "interested persons" of the Trust.
The Nominating Committee did not meet during the fiscal year
7
ended March 31, 2004. The Nominating Committee does not currently
consider for nomination candidates proposed by shareholders for
election as Trustees.
o Qualified Legal Compliance Committee, which is responsible for
receiving and investigating evidence from attorneys representing the
Trust of material violations of securities laws, a material breach of
fiduciary duty or a similar material violation. The Qualified Legal
Compliance Committee did not meet during the fiscal year ended March
31, 2004.
o Ethics Committee, which is responsible for interpreting,
investigating, resolving and reporting any existing or potential
violations of law or personal conflicts of interest involving the
Trust's principal executive and accounting officers or persons
performing similar functions. The Ethics Committee did not meet during
the fiscal year ended March 31, 2004.
TRUSTEE COMPENSATION. No director, officer or employee of the Advisor or
the Distributor will receive any compensation from the Trust for serving as an
officer or Trustee of the Trust. Each Trustee who is not affiliated with an
investment advisor or principal underwriter of the Trust receives from the Trust
an annual retainer of $8,000, payable quarterly, plus a fee of $1,500 for
attendance at each meeting of the Board of Trustees and $1,000 for attendance at
each meeting of any committee thereof, plus reimbursement of travel and other
expenses incurred in attending meetings. The following table provides
compensation amounts paid during the fiscal year ended March 31, 2004 to
Trustees who are not affiliated with an investment advisor or principal
underwriter of the Trust:
AGGREGATE PENSION OR ESTIMATED ANNUAL TOTAL COMPENSATION
COMPENSATION RETIREMENT BENEFITS UPON FROM THE FUNDS AND
TRUSTEE FROM THE FUNDS BENEFITS ACCRUED RETIREMENT FUND COMPLEX
---------------------------------------------------------------------------------------------------------------
Charles M. Caravati, Jr. $ 4,104 None None $ 14,000
J. Finley Lee, Jr. 5,823 None None 20,000
Richard L. Morrill 5,823 None None 20,000
Harris V. Morrissette 5,823 None None 20,000
Erwin H. Will, Jr. 5,823 None None 20,000
Samuel B. Witt III 6,682 None None 23,000
TRUSTEES AND EXECUTIVE OFFICERS
|
NUMBER OF
PORTFOLIOS IN
PRINCIPAL OCCUPATION(S) DURING FUND COMPLEX
LENGTH OF POSITION(S) HELD PAST 5 YEARS AND DIRECTORSHIPS OF OVERSEEN BY
NAME, ADDRESS AND AGE TIME SERVED WITH THE TRUST PUBLIC COMPANIES TRUSTEE
-----------------------------------------------------------------------------------------------------------------------------------
*AUSRIN BROCKENBROUGH III (age 67) Since Trustee President and Managing Director of 11
1802 Bayberry Court, Suite 400 September 1988 Lowe, Brockenbrough & Company, Inc,
Richmond, Virginia 23226 Richmond, Virginia; Director of
Tredegar Corporation (plastics
manufacturer) and Wilkinson O'Grady &
Co. Inc. (global asset manager);
Trustee of University of Richmond
*JOHN T. BRUCE Since Trustee Principal of Flippin, Bruce & Porter, 11
(age 50) September 1988 Inc, Lynchburg, Virginia
800 Main Street
Lynchburg, Virginia 24504
|
8
NUMBER OF
PORTFOLIOS IN
PRINCIPAL OCCUPATION(S) DURING FUND COMPLEX
LENGTH OF POSITION(S) HELD PAST 5 YEARS AND DIRECTORSHIPS OF OVERSEEN BY
NAME, ADDRESS AND AGE TIME SERVED WITH THE TRUST PUBLIC COMPANIES TRUSTEE
-----------------------------------------------------------------------------------------------------------------------------------
*CHARLES M. CARAVATI, JR. Since Chairman Retired physician; retired President 11
(age 67) June 1991 and Trustee of Dermatology Associates of
931 Broad Street Road Virginia, P.C.
Manakin-Sabot, Virginia 23103
*RICHARD MITCHELL Since Trustee and Principal of T. Leavell & Associates, 11
(age 55) June 1991 President Inc., Mobile, Alabama
150 Government Street
Mobile, Alabama 36602
INDEPENDENT (DISINTERESTED) TRUSTEES:
J. FIMLEY LEE, JR. Since Trustee Julian Price Professor Emeritus, 11
(age 64) September 1988 University of North Carolina
200 Westminster Drive
Chapel Hill, North Carolina 27514
RICHARD L. MORRILL Since Trustee Chancellor of the University of 11
(age 65) March 1993 Richmond; Director of Tredegar
G19 Boatwright Library Corporation (plastics manufacturer)
Richmond, Virginia 23173 and Albemarle Corporation (polymers
and chemicals manufacturer)
HARRIS V. MORRISSETTE Since Trustee President of Marshall Biscuit Co. 11
(age 44) March 1993 Inc.; Chairman of Azalea Aviation,
100 Jacintoport Boulevard Inc. (airplane fueling); Director of
Saraland, Alabama 36571 BancTrust Financial Group, Inc. (bank
holding company) and EnergySouth, Inc.
ERWIN H. WILL, JR. Since Trustee Retired Managing Director of Equities 11
(age 71) July 1997 of Virginia Retirement Systems (state
47 Willway Avenue pension fund)
Richmond, Virginia 23226
SAMUEL B. WITT III Since Trustee Senior Vice President and General 11
(age 68) November 1988 Counsel of Stateside Associates, Inc.
2300 Clarendon Boulevard, Suite (state government relations);
407 Director of The Swiss Helvetia Fund,
Arlington, Virginia 22201 Inc. (closed-end investment company)
|
9
PRINCIPAL OCCUPATION(S) DURING
LENGTH OF POSITION(S) HELD PAST 5 YEARS AND DIRECTORSHIPS OF
NAME, ADDRESS AND AGE TIME SERVED WITH THE TRUST PUBLIC COMPANIES
-----------------------------------------------------------------------------------------------------------------------------------
EXECUTIVE OFFICERS:
ROBERT G. DORSEY Since Vice President Managing Director of Ultimus Fund Solutions,
(age 47) November 2000 LLC (the Funds' administrator) and Ultimus
135 Merchant Street, Suite 230 Fund Distributors, LLC (the Funds' principal
Cincinnati, Ohio 45246 underwriter)
TIMOTHY S. HEALEY Since Vice President of The Principal of T. Leavell & Associates, Inc.,
(age 51) January 1995 Government Street Mobile, Alabama
800 Shades Creek Parkway, Suite 585 Mid-Cap Fund and
Birmingham, Alabama 35209 The Alabama Tax Free
Bond Fund
MARY SHANNON HOPE Since Vice President of Vice President and Portfolio Manager of T.
(age 40) February 2004 The Government Leavell & Associates, Inc., Mobile, Alabama
150 Government Street Street Bond Fund
Mobile, Alabama 36602
THOMAS W. LEAVELL Since Vice President of The President of T. Leavell & Associates, Inc.,
(age 61) February 2004 Government Street Mobile, Alabama
150 Government Street Equity Fund and The
Mobile, Alabama 36602 Government Street
Mid-Cap Fund
MARK J. SEGER Since Treasurer Managing Director of Ultimus Fund Solutions,
(age 42) November 2000 LLC (the Funds' administrator) and Ultimus
135 Merchant Street, Suite 230 Fund Distributors, LLC (the Funds' principal
Cincinnati, Ohio 45246 underwriter)
JOHN F. SPLAIN Since Secretary Managing Director of Ultimus Fund Solutions,
(age 48) November 2000 LLC (the Funds' administrator) and Ultimus
135 Merchant Street, Suite 230 Fund Distributors, LLC (the Funds' principal
Cincinnati, Ohio 45246 underwriter)
--------------------------------
* Austin Brockenbrough III, John T. Bruce and Richard Mitchell, as affiliated persons of investment advisors to the Trust,
are "interested persons" of the Trust within the meaning of Section 2(a)(19) of the 1940 Act. Charles M. Caravati, Jr.
is the father of Charles M. Caravati III, an affiliated person of an investment advisor to other series of the Trust,
and is an "interested person" of the Trust by virtue of such relationship.
|
10
PROPOSAL 1 -- APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENT
The original advisory agreements for the Funds (the "Original Advisory
Agreements") may be deemed to have been terminated on April 15, 1998 due to
possible technical assignments of those agreements resulting from a corporate
reorganization in which certain shareholders of the Advisor had their shares
redeemed. This is because Section 15 under the 1940 Act generally requires that
an investment advisory contract terminate upon its assignment to another person.
The Advisor has represented to the Trust that this transaction did not result in
a "change of actual control or management" of the Advisor and consequently, the
Advisor has concluded that Rule 2a-6 under the 1940 Act, under which the
transaction would not be deemed to have resulted in the termination of the
Original Advisory Agreements, should be applicable. Consequently, in an
abundance of caution and to avoid disruption of the Funds' investment management
programs, shareholders of each Fund are being asked to approve a new investment
advisory agreement between their Fund and the Advisor (each a "New Advisory
Agreement").
The proposed agreements are essentially identical to the Original Advisory
Agreements previously approved by each Fund's shareholders and the Board of
Trustees. Forms of the New Advisory Agreements for The Government Street Equity
Fund, The Government Street Bond Fund and The Alabama Tax Free Bond Fund are
attached to this proxy statement as Appendix A, Appendix B and Appendix C,
respectively.
LEGAL REQUIREMENTS
Section 15 of the 1940 Act generally requires that a fund's investment
advisory agreement be in writing and be approved initially by both (i) the
fund's board of trustees (including a majority of its independent trustees), and
(ii) the fund's shareholders. Each agreement may have an initial term of two
years, but must be approved annually thereafter at an in-person meeting by a
majority of the fund's board of trustees, including a majority of its
independent trustees. In the event that a fund's board fails to approve the
fund's investment advisory agreement at least annually, the agreements will
automatically lapse. As a result, the fund would no longer have a valid advisory
agreement and must arrange for a new agreement to be adopted by the fund's board
and shareholders, as required by Section 15 of the 1940 Act.
SEQUENCE OF EVENTS
The Advisor entered into the Original Advisory Agreements with The
Government Street Equity Fund and The Government Street Bond Fund on April 1,
1992 and The Alabama Tax Free Bond Fund on April 1, 1994.
In April 1998, Thomas W. Leavell became the sole shareholder of the Advisor
as a result of a reorganization transaction (the "1998 Transaction") in which
certain individuals or trusts for the benefit of individuals holding
approximately 90% of the shares of the Advisor as passive investors had their
shares redeemed. The 1998 Transaction was the first step in a plan ultimately
intended to allow other key employees to become additional owners of the
Advisor. At the time of the 1998 Transaction, no legal analysis or consideration
was undertaken on behalf of the Advisor or the Funds concerning the 1998
Transaction's impact on the Original Advisory Agreements because the personnel
of the Advisor believed in good faith that there was no change in actual control
or management of the Adviser.
The 1998 Transaction did not change any of the portfolio managers, the
investment philosophy, administration or any other operational activity related
to the Funds. Mr. Leavell has continuously served as the principal executive
officer, director and decision maker of the Advisor since its organization in
1979.
Since each Fund's inception, the Advisor has continued to provide the Funds
with uninterrupted investment advisory services called for under the Original
Advisory Agreements that include, but are not limited to, regularly providing
investment advice to each Fund and continuously supervising the investment and
reinvestment of cash, securities and other assets for the Funds.
In July 2004, in connection with the development of plans to expand the
ownership of the Advisor, the Advisor was informed that the 1998 Transaction may
have created a presumptive change of "control" of the
11
Advisor. This presumptive change of control may have caused a possible technical
assignment and thus resulted in a termination of the Original Advisory
Agreements. Under the 1940 Act, such an assignment terminates an existing
investment advisory agreement unless the transaction does not result in a change
of "actual" control or the management of the Advisor under the safe harbor
provisions of Rule 2a-6 under the 1940 Act.
From April 15, 1998 until June 30, 2004, each Fund has compensated the
Advisor for advisory services in an amount equal to the percentage of each
Fund's average daily net assets stated in the Original Advisory Agreements.
Since July 1, 2004, in light of the discovery of the potential invalidity of
these Original Advisory Agreements, the fees payable to the Advisor have been
retained by the Funds (but accrued as liabilities) pending the resolution of
this matter. During this same period, the Advisor has also continued to provide
services and honor its expense limitation commitments to the Funds as described
in the Original Advisory Agreements. Through late June 2004, neither the Trust,
its Board of Trustees and officers, Trust counsel, nor the Advisor were aware
that the Original Advisory Agreement may have terminated due to the possible
technical assignment described above. The Original Advisory Agreements were
presented to the Board and approved, without change, each year since April 1998.
Thus, the Funds' payments of the Advisor's fees were made under the belief that
the Advisor's services were being performed according to valid advisory
agreements.
At the time the contracts were presented to the Boards for approval, and
because they had not been approved by the shareholders of each Fund subsequent
to April 15, 1998, the Original Advisory Agreements may not have been in full
compliance with the requirements in the 1940 Act relating to approval of new
advisory contracts. The subsequent approvals each year since April 1998 by the
Board would not revive the Original Advisory Agreements if it were determined
that an assignment had in fact occurred.
CURRENT SHAREHOLDER APPROVAL
Having determined that each Fund may have not had a valid investment
advisory agreement, the Advisor ceased receiving fees under the Original
Advisory Agreements as of June 30, 2004. Then, the Advisor requested the Funds'
Board to consider approving a New Advisory Agreement substantially similar to
the one that may have inadvertently terminated in April 1998. The Advisor has
represented to the Trust that this transaction did not result in a "change of
actual control or management" of the Advisor and consequently, the Advisor has
concluded that Rule 2a-6 under the 1940 Act, under which the transaction would
not be deemed to have resulted in the termination of the Original Advisory
Agreements, should be applicable. However, the transaction may nonetheless be
deemed inadvertently to have caused the Original Advisory Agreements technically
to have terminated. In an abundance of caution and to avoid disruption of the
Funds' investment management programs, the Advisor requested that the Board and
the shareholders of each Fund vote on the approval of New Advisory Agreements.
At its August 17, 2004 meeting, the Board approved a New Advisory Agreement on
behalf of each Fund and determined that a New Advisory Agreement should be
submitted to each Fund's shareholders for their approval.
At the August 17, 2004 meeting, the Board was also asked to consider
whether the Advisor may retain those advisory fees that had been paid or which
were payable to the Advisor since April 15, 1998 under the Original Advisory
Agreements. Having so approved, the Board determined that each Fund's
shareholders should also vote on whether to permit the Advisor to retain those
fees received or which were payable since April 15, 1998 through the time that
the Fund's shareholders approve a New Advisory Agreement. The Board recommended
that the shareholders of each Fund vote in favor of this proposal.
ORIGINAL ADVISORY AGREEMENTS
Shareholders of The Government Street Equity Fund and The Government Street
Bond Fund, in accordance with the requirements of the 1940 Act, last approved
the Original Advisory Agreements between each of the Funds and the Advisor on
October 7, 1992. On April 1, 1994, the initial shareholder of The Alabama Tax
Free Bond Fund, in accordance with the requirements of the 1940 Act, approved
the Original Advisory Agreement between the Fund and the Advisor. The Original
Advisory Agreements provided that the
12
Agreements would remain in effect for a period of one year, and thereafter,
would be renewable for successive periods of one year each, provided such
continuance was specifically approved annually (i) by vote of a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of either a majority of the Board of
Trustees or a majority of the outstanding voting securities of the Fund.
When the Board approved the continuation of the Original Advisory
Agreements each year since April 1998, the Board was unaware that the agreements
may have already inadvertently terminated on April 15, 1998. At those Board
meetings the Board's intent, nonetheless, was to continue the Original Advisory
Agreements with the Advisor uninterrupted for the next year. Despite the
possible inadvertent termination of the Original Advisory Agreements, the
Advisor has continued to provide the Funds with the services called for under
those Agreements.
Under the Original Advisory Agreements, The Government Street Equity Fund
paid the Advisor a fee, which is computed and accrued daily and paid monthly, at
an annual rate of .60% of its average daily net assets up to $100 million and
.50% of such assets in excess of $100 million. The Government Street Bond Fund
paid the Advisor a fee at an annual rate of .50% of its average daily net assets
up to $100 million and .40% of such net assets in excess of $100 million. The
Alabama Tax Free Bond Fund paid the Advisor a fee at an annual rate of .35% of
its average daily net assets up to $100 million and .25% of such net assets in
excess of $100 million.
During the fiscal year ended March 31, 2004, The Government Street Equity
Fund, The Government Street Bond Fund and The Alabama Tax Free Bond Fund paid
the Advisor advisory fees of $670,074, $306,966 and $117,567 (which was net of
voluntary fee waivers of $9,117), respectively.
PROPOSED NEW ADVISORY AGREEMENTS
With the exceptions set forth below, the terms of the New Advisory
Agreement for each Fund approved by the Board on August 17, 2004 and proposed
for shareholder approval are identical in all material respects to the Original
Advisory Agreement for that Fund. The only differences between the two are their
effective and termination dates. The Advisor will continue to serve as
investment advisor to each of the Funds, retain ultimate responsibility for the
management of the Funds, and provide investment oversight and supervision. These
investment management services are to be provided in a manner that is identical
in all material respects to the services provided under the Original Advisory
Agreements. Likewise, the Advisor's compensation for these services, expressed
as an annual rate of each Fund's net assets, remains unchanged under the New
Advisory Agreements.
Pursuant to each New Advisory Agreement, subject to the supervision and
direction of the Board, the Advisor is responsible for managing each Fund in
accordance with the Fund's stated investment objective and policies. The Advisor
is responsible for providing investment advisory services as well as conducting
a continual program of investment, evaluation and, if appropriate, sale and
reinvestment of the Fund's assets. In addition to expenses that the Advisor may
incur in performing its services under a New Advisory Agreement, the Advisor
pays the compensation, fees and related expenses of all Trustees and officers
who are affiliated persons of the Advisor.
As noted above, under the New Advisory Agreements, the Advisor is entitled
to investment advisory fees that are identical to those under the Original
Advisory Agreements.
13
NEW ADVISORY AGREEMENT FEES
FUND INVESTMENT ADVISORY FEE*
---- ------------------------
The Government Street Equity Fund 0.60% up to $100 Million
0.50% over $100 Million
The Government Street Bond Fund 0.50% up to $100 Million
0.40% over $100 Million
The Alabama Tax Free Bond Fund 0.35% up to $100 Million
0.25% over $100 Million
|
* As a percentage of average daily net assets.
In addition, each New Advisory Agreement will run for an initial term of
two years and annually thereafter so long as it is approved by a majority of the
Trustees of the Funds, including a majority of the Independent Trustees. The New
Advisory Agreement for each Fund is terminable at any time on 60 days' written
notice without penalty by the Trustees, by vote of a majority of the outstanding
shares of the Fund, or upon 60 days' written notice by the Advisor. Each New
Advisory Agreement also terminates automatically in the event of any assignment,
as defined in the 1940 Act.
BOARD DELIBERATIONS
In approving each Fund's New Advisory Agreement, the Board of that Fund is
required to act solely in the best interests of the Fund and the Fund's
shareholders in evaluating the terms of that New Advisory Agreement. The Board
is required to judge the terms of the arrangement in light of those that would
be reached as a result of arm's-length bargaining.
At the August 17, 2004 Board meeting, the Trustees of each Fund considered
the similarity of the New Advisory Agreement to the Original Advisory Agreement
for the Fund and the fact that the Board had intended to continue the Original
Advisory Agreement each year since April 1998. In determining whether or not it
was appropriate to approve the New Advisory Agreement and to recommend approval
to shareholders, the Trustees considered various materials and representations
provided by the Advisor, with respect to each Fund separately, including
information relating to the following factors: (i) the extent and quality of
investment advisory services each Fund will receive for the advisory fee payable
under the Agreement; (ii) the fees charged by other investment advisors
providing comparable services to similar investment companies; (iii) comparative
information on the net asset value, yield and total return per share of each
Fund with those of other funds with comparable investment objectives and size;
(iv) the total of all assets managed by the Advisor and the total number of
investment companies and other clients that it services; (v) the Advisor's
profitability; (vi) the extent to which the Advisor receives benefits such as
research services as a result of the brokerage generated by the Funds; (vii) the
organizational and financial soundness of the Advisor in light of the needs of
each Fund on an on-going basis; (viii) the conditions and trends prevailing
generally in the economy, the securities markets and the mutual fund industry;
(ix) the historical relationship between each Fund and the Advisor; and (x)
other factors deemed relevant by the Board.
The Board noted that the fees under the New Advisory Agreements were
unchanged from those under the Original Advisory Agreements and that those fees
were within the range of fees charged by other investment advisors with respect
to similar funds. The Board also viewed the fees as reasonable and fair in
relation to the advisory services provided, having reviewed both fund
performance and fund expenses, among other things. After considering relevant
factors, the Trustees, including all of the Independent Trustees, approved the
New Advisory Agreement for each Fund. No single factor reviewed by the Board was
identified by the Board as the principal factor in determining whether to
approve the New Advisory Agreements. As part of their deliberations, the
Independent Trustees met in executive session (without personnel of the Advisor)
to consider the proposal and recommendations of the Advisor. The Independent
Trustees were advised by separate independent legal counsel throughout the
process.
14
INFORMATION ABOUT T. LEAVELL & ASSOCIATES, INC.
T. Leavell & Associates, Inc. (the "Advisor") was established in 1979 in
Mobile, Alabama. Today, the firm employs eleven investment professionals, has an
additional office in Birmingham, and has become one of the largest independent
investment counseling firms in Alabama. The Advisor is privately owned (100% by
Thomas W. Leavell) and has no affiliation with any bank, broker, dealer, or
other investment advisory firm.
The Advisor provides a continuous program of supervision of each Fund's
assets, including the composition of its portfolio, and furnishes advice and
recommendations with respect to investments, investment policies and the
purchase and sale of securities. The Advisor is also responsible for the
selection of broker-dealers through which each Fund executes portfolio
transactions, subject to brokerage policies established by the Trustees, and
provides certain executive personnel to the Funds.
In addition to acting as investment advisor to the Funds, the Advisor also
serves as investment advisor to The Government Street Mid-Cap Fund (the "Mid-Cap
Fund"). The Mid-Cap Fund has investment objectives which are similar to The
Government Street Equity Fund. The net assets of the Mid-Cap Fund as of June 30,
2004 were approximately $21,800,000. The contractual advisory fee paid by the
Mid-Cap Fund (as a percentage of average daily net assets) is 0.75% per annum;
however, the Advisor has agreed to waive its fees to the extent necessary to
limit the Fund's total operating expenses to 1.10% per annum.
The Advisor also provides investment advice to corporations, trusts,
pension and profit sharing plans, other business and institutional accounts and
individuals.
EXECUTIVE OFFICERS AND DIRECTORS OF THE ADVISOR. Information regarding the
principal executive officers and directors of the Advisor is set forth below.
The address of the Advisor is 150 Government Street, Mobile, Alabama 36633. The
following tables sets for the name, address, and principal occupation of each
officer and director of the Advisor.
NAME ADDRESS POSITION WITH ADVISOR*
--------------------------------------------------------------------------------
Thomas W. Leavell 150 Government Street President / Director
Mobile, Alabama 36633
Timothy S. Healey 150 Government Street Executive Vice President
Mobile, Alabama 36633
Richard Mitchell** 150 Government Street Executive Vice President
Mobile, Alabama 36633
Barbara K. Leavell 150 Government Street Director
Mobile, Alabama 36633
--------------------
|
* The positions that the executive officers hold with the Advisor are also
their principal occupations.
** Richard Mitchell serves on the Board of Trustees of the Trust, and as an
affiliated person of the Advisor, is an "interested person" of the Trust
within the meaning of Section 2(a)(19) of the 1940 Act.
REQUIRED VOTE
With respect to Proposal 1, if a quorum (at least 50% of the outstanding
shares of the Fund) is represented at the Special Meeting, the vote of a
"majority of the outstanding shares" of the Fund is required for approval of
Proposal 1. The vote of a "majority of the outstanding shares" for purposes of
Proposal 1 means the vote of the lesser of (1) 67% or more of the shares present
or represented by proxy at the Special Meeting, if the holders of more than 50%
of the outstanding shares are present or represented by proxy, or (2) more than
50% of the outstanding shares.
THE BOARD OF TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY
RECOMMENDS THAT THE SHAREHOLDERS OF EACH FUND VOTE "FOR" APPROVAL OF THE NEW
ADVISORY AGREEMENTS.
15
PROPOSALS OF SHAREHOLDERS
Shareholders wishing to submit proposals for inclusion in a proxy statement
for a shareholder meeting subsequent to the Special Meeting, if any, should send
their written proposals to John F. Splain, Secretary of the Trust, c/o Ultimus
Fund Solutions, P.O. Box 46707, Cincinnati, Ohio 45246, within a reasonable time
before the solicitation of proxies for such meeting. The timely submission of a
proposal does not guarantee its inclusion.
OTHER MATTERS TO COME BEFORE THE SPECIAL MEETING
The Board is not aware of any matters that will be presented for action at
the Special Meeting other than the matters set forth herein. Should any other
matters requiring a vote of shareholders arise, the proxy in the accompanying
form will confer upon the person or persons entitled to vote the shares
represented by such proxy the discretionary authority to vote the shares as to
any such other matters in accordance with their best judgment in the interest of
each Fund.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY CARD(S) PROMPTLY. NO POSTAGE
IS REQUIRED IF MAILED IN THE UNITED STATES.
By order of the Board of Trustees,
/s/ John F. Splain
John F. Splain
Secretary
Dated: September 23, 2004
|
18
APPENDIX A
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, entered into as of ___________, 2004, by and between the
GOVERNMENT STREET EQUITY FUND of WILLIAMSBURG INVESTMENT TRUST, a Massachusetts
Business Trust (the "Trust"), and T. Leavell & Associates, Inc., an Alabama
corporation (the "Adviser"), registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act").
WHEREAS, the Trust is registered as a no-load, diversified, open-end
management investment company of the series type under the Investment Company
Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust desires to retain the Adviser to furnish investment
advisory and administrative services to The Government Street Equity Fund series
of the Trust, and the Adviser is willing to so furnish such services;
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Trust hereby appoints the Adviser to act as investment
adviser to The Government Street Equity Fund series of the Trust (the
"Fund") for the period and on the terms set forth in this Agreement. The
Adviser accepts such appointment and agrees to furnish the services herein
set forth, for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Trust has furnished the Investment Adviser with
copies properly certified or authenticated of each of the following:
(a) The Trust's Declaration of Trust, as filed with the State of
Massachusetts (such Declaration, as presently in effect and as it
shall from time to time be amended, is herein called the
"Declaration");
(b) The Trust's By-Laws (such By-Laws, as presently in effect and as they
shall from time to time be amended, are herein called the "By-Laws");
(c) Resolutions of the Trust's Board of Trustees authorizing Agreement;
(d) The Trust's Registration Statement on Form N-1A under the 1940 Act and
under the Securities Act of 1933 as amended (the "1933 Act"), relating
to shares of beneficial interest of the Trust (herein called the
"Shares") as filed with the Securities and Exchange Commission ("SEC")
and all amendments thereto;
(e) The Trust's Prospectus (such Prospectus, as presently in effect and
all amendments and supplements thereto are herein called the
"Prospectus").
The Trust will furnish the Adviser from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing at the same time as such documents are required to be filed with
the SEC.
3. MANAGEMENT. Subject to the supervision of the Trust's Board of Trustees,
the Adviser will provide a continuous investment program for the Fund,
including investment research and management with respect to all
securities, investments, cash and cash equivalents in the Fund. The Adviser
will determine from time to time what securities and other investments will
be purchased, retained or sold by the Fund. The Adviser will provide the
services under this Agreement in accordance with the Fund's investment
objectives, policies and restrictions as stated in its Prospectus. The
Adviser further agrees that it:
(a) Will conform its activities to all applicable Rules and Regulations of
the Securities and Exchange Commission and will, in addition, conduct
its activities under this Agreement in accordance with regulations of
any other Federal and State agencies which may now or in the future
have jurisdiction over its activities under this Agreement;
A-1
(b) Will place orders pursuant to its investment determinations for the
Fund either directly with the issuer or with any broker or dealer. In
placing orders with brokers or dealers, the Adviser will attempt to
obtain the best net price and the most favorable execution of its
orders. Consistent with this obligation, when the Adviser believes two
or more brokers or dealers are comparable in price and execution, the
Adviser may prefer: (i) brokers and dealers who provide the Fund with
research advice and other services, or who recommend or sell Fund
shares, and (ii) Brokers who are affiliated with the Trust or its
Adviser(s), PROVIDED, HOWEVER, that in no instance will portfolio
securities be purchased from or sold to the Adviser or any affiliated
person of the Adviser in principal transactions;
(c) Will provide certain executive personnel for the Trust as may be
mutually agreed upon from time to time with the Board of Trustees, the
salaries and expenses of such personnel to be borne by the Adviser
unless otherwise mutually agreed upon; and
(d) Will provide, at its own cost, all office space, facilities and
equipment necessary for the conduct of its advisory activities on
behalf of the Trust.
Notwithstanding the foregoing, the Adviser may obtain the services of an
investment counselor or sub-advisor of its choice subject to the approval
of the Board of Trustees. The cost of employing such counselor or
sub-advisor will be paid by the Adviser and not by the Trust.
4. SERVICES NOT EXCLUSIVE. The advisory services furnished by the Adviser
hereunder are not to be deemed exclusive, and the Adviser shall be free to
furnish similar services to others as long as its services under this
Agreement are not impaired thereby PROVIDED, HOWEVER, the without the
written consent of the Trustees, the Adviser will not serve as investment
adviser to any other investment company having a similar investment
objective to that of the Fund.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Adviser hereby agrees that all records which it maintains
for the benefit of the Trust are the property of the Trust and further
agrees to surrender promptly to the Trust any of such records upon the
Trust's request. The Adviser further agrees to preserve for the periods
prescribed by it pursuant to Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the Act that are not
maintained by others on behalf of the Trust.
6. EXPENSES. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its investment advisory services
pertaining to the Trust. In the event that there is no distribution plan
under Rule 12b-1 of the 1940 Act in effect for the Fund, the Adviser will
pay, out of the Adviser's resources generated from sources other than fees
received from the Trust, the entire cost of the promotion and sale of Fund
shares.
Notwithstanding the foregoing, the Trust shall pay the expenses and costs
of the following:
(a) Taxes, interest charges, and extraordinary expenses;
(b) Brokerage fees and commissions with regard to portfolio transactions
of the Fund;
(c) Fees and expenses of the custodian of the Fund's portfolio securities;
(d) Fees and expenses of the Fund's administrative agent, the Fund's
transfer and shareholder servicing agent and the Fund's accounting
agent or, if the Trust performs any such services without an agent,
the costs of the same;
(e) Auditing and legal expenses;
(f) Cost of maintenance of the Trust's existence as a legal entity;
(g) Compensation of trustees who are not interested persons of the Adviser
as that term is defined by law;
(h) Costs of Trust meetings;
A-2
(i) Federal and State registration or qualification fees and expenses;
(j) Costs of setting in type, printing and mailing Prospectuses, reports
and notices to existing shareholders;
(k) The investment advisory fee payable to the Adviser, as provided in
paragraph 7 herein; and
(l) Distribution expenses, but only in accordance with any Distribution
Plan as and if approved by the shareholders of the Fund.
It is understood that the Trust may desire to register the Fund's shares
for sale in certain states which impose expense limitations on mutual
funds. The Trust agrees that it will register the Fund's shares in such
states only with the prior written consent of the Adviser. It is further
understood that the Trustees desire to limit Fund expenses to 2% of average
daily net assets, if such state limitations are not so restrictive. The
Adviser agrees to reimburse the Trust an amount equal to any excess
expenses incurred over the lesser of either (i) the most stringent of such
states' limitations in which the Fund's shares are registered, or (ii) 2%
of average daily net assets. The Adviser shall in no event be required to
reimburse an amount greater than its fees received from the Trust pursuant
to paragraph 7, below.
7. COMPENSATION. For the services provided to the Fund and for the expenses
assumed by the Adviser pursuant to this Agreement, the Trust will pay the
Adviser and the Adviser will accept as full compensation an investment
advisory fee, based upon the daily average net assets of the Fund, computed
at the end of each month and payable within five (5) business days
thereafter, according to the following schedule:
NET ASSETS ANNUAL RATE
---------- -----------
First $100 Million 0.60%
All over $100 Million 0.50%
|
8. (a) LIMITATION OF LIABILITY. The Adviser shall not be liable for any error
of judgment, mistake of law or for any other loss whatsoever suffered by
the Trust in connection with the performance of this Agreement, except a
loss resulting from a breach of fiduciary duty with respect to the receipt
of the compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Adviser in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
8. (b) INDEMNIFICATION OF ADVISER. Subject to the limitations set forth in
this Subsection 8(b), the Trust shall indemnify, defend and hold harmless
(from the assets of the Fund or Funds to which the conduct in question
relates) the Adviser against all loss, damage and liability, including but
not limited to amounts paid in satisfaction of judgments, in compromise or
as fines and penalties, and expenses, including reasonable accountants' and
counsel fees, incurred by the Adviser in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or legislative body, related
to or resulting from this Agreement or the performance of services
hereunder, except with respect to any matter as to which it has been
determined that the loss, damage or liability is a direct result of (i) a
breach of fiduciary duty with respect to the receipt of compensation for
services; or (ii) willful misfeasance, bad faith or gross negligence on the
part of the Adviser in the performance of its duties or from reckless
disregard by it of its duties under this Agreement (either and both of the
conduct described in clauses (i) and (ii) above being referred to
hereinafter as "DISABLING CONDUCT"). A determination that the Adviser is
entitled to indemnification may be made by (i) a final decision on the
merits by a court or other body before whom the proceeding was brought that
the Adviser was not liable by reason of Disabling Conduct, (ii) dismissal
of a court action or an administrative proceeding against the Adviser for
insufficiency of evidence of Disabling Conduct, or (iii) a reasonable
determination, based upon a review of the facts, that the Adviser was not
liable by reason of Disabling Conduct by, (a) vote of a majority of a
quorum of Trustees who are neither "interested persons" of the Trust as the
quoted phrase is defined in Section 2(a)(19) of the 1940 Act nor parties to
the action, suit or other proceeding on the
A-3
same or similar grounds that is then or has been pending or threatened
(such quorum of such Trustees being referred to hereinafter as the
"INDEPENDENT TRUSTEES"), or (b) an independent legal counsel in a written
opinion. Expenses, including accountants' and counsel fees so incurred by
the Adviser (but excluding amounts paid in satisfaction of judgments, in
compromise or as fines or penalties), may be paid from time to time in
advance of the final disposition of any such action, suit or proceeding;
PROVIDED, that the Adviser shall have undertaken to repay the amounts so
paid if it is ultimately determined that indemnification of such expenses
is not authorized under this Subsection 8(b) and if (i) the Adviser shall
have provided security for such undertaking, (ii) the Trust shall be
insured against losses arising by reason of any lawful advances, or (iii) a
majority of the Independent Trustees, or an independent legal counsel in a
written opinion, shall have determined, based on a review of readily
available facts (as opposed to a full trial-type inquiry), that there is
reason to believe that the Adviser ultimately will be entitled to
indemnification hereunder.
As to any matter disposed of by a compromise payment by the Adviser
referred to in this Subsection 8(b), pursuant to a consent decree or
otherwise, no such indemnification either for said payment or for any other
expenses shall be provided unless such indemnification shall be approved
(i) by a majority of the Independent Trustees or (ii) by an independent
legal counsel in a written opinion. Approval by the Independent Trustees
pursuant to clause (i) shall not prevent the recovery from the Adviser of
any amount paid to the Adviser in accordance with either of such clauses as
indemnification of the Adviser is subsequently adjudicated by a court of
competent jurisdiction not to have acted in good faith in the reasonable
belief that the Adviser's action was in or not opposed to the best
interests of the Trust or to have been liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in its conduct under the
Agreement.
The right of indemnification provided by this Subsection 8(b) shall not be
exclusive of or affect any of the rights to which the Adviser may be
entitled. Nothing contained in this Subsection 8(b) shall affect any rights
to indemnification to which Trustees, officers or other personnel to which
Trustees, officers or other personnel of the Trust, and other persons may
be entitled by contract or otherwise under law, nor the power of the Trust
to purchase and maintain liability insurance on behalf of any such person.
The Board of Trustees of the Trust shall take all such action as may be
necessary and appropriate to authorize the Trust hereunder to pay the
indemnification required by this Subsection 8(b) including, without
limitation, to the extent needed, to determine whether the Adviser is
entitled to indemnification hereunder and the reasonable amount of any
indemnity due it hereunder, or employ independent legal counsel for that
purpose.
8.(c)The provisions contained in Section 8 shall survive the expiration or
other termination of this Agreement, shall be deemed to include and protect
the Adviser and its directors, officers, employees and agents and shall
inure to the benefit of its/their respective successors, assigns and
personal representatives.
9. DURATION AND TERMINATION. This Agreement shall become effective on the date
of its execution and, unless sooner terminated as provided herein, shall
continue in effect until April 1, 2006. Thereafter, this Agreement shall be
renewable for successive periods of one year each, PROVIDED such
continuance is specifically approved annually:
(a) By the vote of a majority of those members of the Board of Trustees
who are not parties to this Agreement or interested persons of any
such party (as that term is defined in the 1940 Act), cast in person
at a meeting called for the purpose of voting on such approval; and
(b) By vote of either the Board or a majority (as that term is defined in
the 1940 Act) of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated by the Fund
or by the Adviser at any time on sixty (60) days' written notice, without
the payment of any penalty, provided that termination by the Fund must be
authorized either by vote of the Board of the Board of Trustees or by vote
of a
A-4
majority of the outstanding voting securities of the Fund. This Agreement
will automatically terminate in the event of its assignment (as that term
is defined in the 1940 Act).
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by a written instrument
signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No material amendment of this Agreement
shall be effective until approved by vote of the holders of a majority of
the Fund's outstanding voting securities (as defined in the 1940 Act).
11. MISCELLANEOUS. The captions of this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect. If any provision
of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of the Agreement shall not be
affected thereby. This Agreement shall be binding and shall inure to the
benefit of the parties hereto and their respective successors.
12. APPLICABLE LAW. This Agreement shall be construed in accordance with, and
governed by, the laws of the State of North Carolina.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
ATTEST: WILLIAMSBURG INVESTMENT TRUST
By: By:
--------------------------- ---------------------------
Title: Title:
--------------------------- ---------------------------
|
ATTEST: T. LEAVELL & ASSOCIATES, INC.
By: By:
--------------------------- ---------------------------
Title: Title:
--------------------------- ---------------------------
|
A-5
APPENDIX B
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, entered into as of ____________, 2004, by and between the
GOVERNMENT STREET BOND FUND of WILLIAMSBURG INVESTMENT TRUST, a Massachusetts
Business Trust (the "Trust"), and T. Leavell & Associates, Inc., an Alabama
corporation (the "Adviser"), registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act").
WHEREAS, the Trust is registered as a no-load, diversified, open-end
management investment company of the series type under the Investment Company
Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust desires to retain the Adviser to furnish investment
advisory and administrative services to The Government Street Bond Fund series
of the Trust, and the Adviser is willing to so furnish such services;
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Trust hereby appoints the Adviser to act as investment
adviser to The Government Street Bond Fund series of the Trust (the "Fund")
for the period and on the terms set forth in this Agreement. The Adviser
accepts such appointment and agrees to furnish the services herein set
forth, for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Trust has furnished the Investment Adviser with
copies properly certified or authenticated of each of the following:
(a) The Trust's Declaration of Trust, as filed with the State of
Massachusetts (such Declaration, as presently in effect and as it
shall from time to time be amended, is herein called the
"Declaration");
(b) The Trust's By-Laws (such By-Laws, as presently in effect and as they
shall from time to time be amended, are herein called the "By-Laws");
(c) Resolutions of the Trust's Board of Trustees authorizing Agreement;
(d) The Trust's Registration Statement on Form N-1A under the 1940 Act and
under the Securities Act of 1933 as amended (the "1933 Act"), relating
to shares of beneficial interest of the Trust (herein called the
"Shares") as filed with the Securities and Exchange Commission ("SEC")
and all amendments thereto;
(e) The Trust's Prospectus (such Prospectus, as presently in effect and
all amendments and supplements thereto are herein called the
"Prospectus").
The Trust will furnish the Adviser from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing at the same time as such documents are required to be filed with
the SEC.
3. MANAGEMENT. Subject to the supervision of the Trust's Board of Trustees,
the Adviser will provide a continuous investment program for the Fund,
including investment research and management with respect to all
securities, investments, cash and cash equivalents in the Fund. The Adviser
will determine from time to time what securities and other investments will
be purchased, retained or sold by the Fund. The Adviser will provide the
services under this Agreement in accordance with the Fund's investment
objectives, policies and restrictions as stated in its Prospectus. The
Adviser further agrees that it:
(a) Will conform its activities to all applicable Rules and Regulations of
the Securities and Exchange Commission and will, in addition, conduct
its activities under this Agreement in accordance with regulations of
any other Federal and State agencies which may now or in the future
have jurisdiction over its activities under this Agreement;
B-1
(b) Will place orders pursuant to its investment determinations for the
Fund either directly with the issuer or with any broker or dealer. In
placing orders with brokers or dealers, the Adviser will attempt to
obtain the best net price and the most favorable execution of its
orders. Consistent with this obligation, when the Adviser believes two
or more brokers or dealers are comparable in price and execution, the
Adviser may prefer: (i) brokers and dealers who provide the Fund with
research advice and other services, or who recommend or sell Fund
shares, and (ii) Brokers who are affiliated with the Trust or its
Adviser(s), PROVIDED, HOWEVER, that in no instance will portfolio
securities be purchased from or sold to the Adviser or any affiliated
person of the Adviser in principal transactions;
(c) Will provide certain executive personnel for the Trust as may be
mutually agreed upon from time to time with the Board of Trustees, the
salaries and expenses of such personnel to be borne by the Adviser
unless otherwise mutually agreed upon; and
(d) Will provide, at its own cost, all office space, facilities and
equipment necessary for the conduct of its advisory activities on
behalf of the Trust.
Notwithstanding the foregoing, the Adviser may obtain the services of an
investment counselor or sub-advisor of its choice subject to the approval
of the Board of Trustees. The cost of employing such counselor or
sub-advisor will be paid by the Adviser and not by the Trust.
4. SERVICES NOT EXCLUSIVE. The advisory services furnished by the Adviser
hereunder are not to be deemed exclusive, and the Adviser shall be free to
furnish similar services to others as long as its services under this
Agreement are not impaired thereby PROVIDED, HOWEVER, the without the
written consent of the Trustees, the Adviser will not serve as investment
adviser to any other investment company having a similar investment
objective to that of the Fund.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Adviser hereby agrees that all records which it maintains
for the benefit of the Trust are the property of the Trust and further
agrees to surrender promptly to the Trust any of such records upon the
Trust's request. The Adviser further agrees to preserve for the periods
prescribed by it pursuant to Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the Act that are not
maintained by others on behalf of the Trust.
6. EXPENSES. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its investment advisory services
pertaining to the Trust. In the event that there is no distribution plan
under Rule 12b-1 of the 1940 Act in effect for the Fund, the Adviser will
pay, out of the Adviser's resources generated from sources other than fees
received from the Trust, the entire cost of the promotion and sale of Fund
shares.
Notwithstanding the foregoing, the Trust shall pay the expenses and costs
of the following:
(a) Taxes, interest charges, and extraordinary expenses;
(b) Brokerage fees and commissions with regard to portfolio transactions
of the Fund;
(c) Fees and expenses of the custodian of the Fund's portfolio securities;
(d) Fees and expenses of the Fund's administrative agent, the Fund's
transfer and shareholder servicing agent and the Fund's accounting
agent or, if the Trust performs any such services without an agent,
the costs of the same;
(e) Auditing and legal expenses;
(f) Cost of maintenance of the Trust's existence as a legal entity;
(g) Compensation of trustees who are not interested persons of the Adviser
as that term is defined by law;
B-2
(h) Costs of Trust meetings;
(i) Federal and State registration or qualification fees and expenses;
(j) Costs of setting in type, printing and mailing Prospectuses, reports
and notices to existing shareholders;
(k) The investment advisory fee payable to the Adviser, as provided in
paragraph 7 herein; and
(l) Distribution expenses, but only in accordance with any Distribution
Plan as and if approved by the shareholders of the Fund.
It is understood that the Trust may desire to register the Fund's shares
for sale in certain states which impose expense limitations on mutual
funds. The Trust agrees that it will register the Fund's shares in such
states only with the prior written consent of the Adviser. It is further
understood that the Trustees desire to limit Fund expenses to 2% of average
daily net assets, if such state limitations are not so restrictive. The
Adviser agrees to reimburse the Trust an amount equal to any excess
expenses incurred over the lesser of either (i) the most stringent of such
states' limitations in which the Fund's shares are registered, or (ii) 2%
of average daily net assets. The Adviser shall in no event be required to
reimburse an amount greater than its fees received from the Trust pursuant
to paragraph 7, below.
7. COMPENSATION. For the services provided to the Fund and for the expenses
assumed by the Adviser pursuant to this Agreement, the Trust will pay the
Adviser and the Adviser will accept as full compensation an investment
advisory fee, based upon the daily average net assets of the Fund, computed
at the end of each month and payable within five (5) business days
thereafter, according to the following schedule:
NET ASSETS ANNUAL RATE
---------- -----------
First $100 Million 0.50%
All over $100 Million 0.40%
|
8. (a) Limitation of Liability. The Adviser shall not be liable for any error
of judgment, mistake of law or for any other loss whatsoever suffered by
the Trust in connection with the performance of this Agreement, except a
loss resulting from a breach of fiduciary duty with respect to the receipt
of the compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Adviser in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
8. (b) Indemnification of Adviser. Subject to the limitations set forth in
this Subsection 8(b), the Trust shall indemnify, defend and hold harmless
(from the assets of the Fund or Funds to which the conduct in question
relates) the Adviser against all loss, damage and liability, including but
not limited to amounts paid in satisfaction of judgments, in compromise or
as fines and penalties, and expenses, including reasonable accountants' and
counsel fees, incurred by the Adviser in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or legislative body, related
to or resulting from this Agreement or the performance of services
hereunder, except with respect to any matter as to which it has been
determined that the loss, damage or liability is a direct result of (i) a
breach of fiduciary duty with respect to the receipt of compensation for
services; or (ii) willful misfeasance, bad faith or gross negligence on the
part of the Adviser in the performance of its duties or from reckless
disregard by it of its duties under this Agreement (either and both of the
conduct described in clauses (i) and (ii) above being referred to
hereinafter as "DISABLING CONDUCT"). A determination that the Adviser is
entitled to indemnification may be made by (i) a final decision on the
merits by a court or other body before whom the proceeding was brought that
the Adviser was not liable by reason of Disabling Conduct, (ii) dismissal
of a court action or an administrative proceeding against the Adviser for
insufficiency of evidence of Disabling Conduct, or (iii) a reasonable
determination, based upon a review of the facts, that the Adviser was not
liable by reason of Disabling Conduct by, (a) vote of a majority of a
quorum of Trustees who are neither "interested persons" of the Trust as the
quoted phrase
B-3
is defined in Section 2(a)(19) of the 1940 Act nor parties to the action,
suit or other proceeding on the same or similar grounds that is then or has
been pending or threatened (such quorum of such Trustees being referred to
hereinafter as the "INDEPENDENT TRUSTEES"), or (b) an independent legal
counsel in a written opinion. Expenses, including accountants' and counsel
fees so incurred by the Adviser (but excluding amounts paid in satisfaction
of judgments, in compromise or as fines or penalties), may be paid from
time to time in advance of the final disposition of any such action, suit
or proceeding; PROVIDED, that the Adviser shall have undertaken to repay
the amounts so paid if it is ultimately determined that indemnification of
such expenses is not authorized under this Subsection 8(b) and if (i) the
Adviser shall have provided security for such undertaking, (ii) the Trust
shall be insured against losses arising by reason of any lawful advances,
or (iii) a majority of the Independent Trustees, or an independent legal
counsel in a written opinion, shall have determined, based on a review of
readily available facts (as opposed to a full trial-type inquiry), that
there is reason to believe that the Adviser ultimately will be entitled to
indemnification hereunder.
As to any matter disposed of by a compromise payment by the Adviser
referred to in this Subsection 8(b), pursuant to a consent decree or
otherwise, no such indemnification either for said payment or for any other
expenses shall be provided unless such indemnification shall be approved
(i) by a majority of the Independent Trustees or (ii) by an independent
legal counsel in a written opinion. Approval by the Independent Trustees
pursuant to clause (i) shall not prevent the recovery from the Adviser of
any amount paid to the Adviser in accordance with either of such clauses as
indemnification of the Adviser is subsequently adjudicated by a court of
competent jurisdiction not to have acted in good faith in the reasonable
belief that the Adviser's action was in or not opposed to the best
interests of the Trust or to have been liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in its conduct under the
Agreement.
The right of indemnification provided by this Subsection 8(b) shall not be
exclusive of or affect any of the rights to which the Adviser may be
entitled. Nothing contained in this Subsection 8(b) shall affect any rights
to indemnification to which Trustees, officers or other personnel to which
Trustees, officers or other personnel of the Trust, and other persons may
be entitled by contract or otherwise under law, nor the power of the Trust
to purchase and maintain liability insurance on behalf of any such person.
The Board of Trustees of the Trust shall take all such action as may be
necessary and appropriate to authorize the Trust hereunder to pay the
indemnification required by this Subsection 8(b) including, without
limitation, to the extent needed, to determine whether the Adviser is
entitled to indemnification hereunder and the reasonable amount of any
indemnity due it hereunder, or employ independent legal counsel for that
purpose.
8.(c)The provisions contained in Section 8 shall survive the expiration or
other termination of this Agreement, shall be deemed to include and protect
the Adviser and its directors, officers, employees and agents and shall
inure to the benefit of its/their respective successors, assigns and
personal representatives.
9. DURATION AND TERMINATION. This Agreement shall become effective on the date
of its execution and, unless sooner terminated as provided herein, shall
continue in effect until April 1, 2006. Thereafter, this Agreement shall be
renewable for successive periods of one year each, PROVIDED such
continuance is specifically approved annually:
(a) By the vote of a majority of those members of the Board of Trustees
who are not parties to this Agreement or interested persons of any
such party (as that term is defined in the 1940 Act), cast in person
at a meeting called for the purpose of voting on such approval; and
(b) By vote of either the Board or a majority (as that term is defined in
the 1940 Act) of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated by the Fund
or by the Adviser at any time on sixty (60) days' written notice, without
the payment of any penalty, provided that termination
B-4
by the Fund must be authorized either by vote of the Board of the Board of
Trustees or by vote of a majority of the outstanding voting securities of
the Fund. This Agreement will automatically terminate in the event of its
assignment (as that term is defined in the 1940 Act).
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by a written instrument
signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No material amendment of this Agreement
shall be effective until approved by vote of the holders of a majority of
the Fund's outstanding voting securities (as defined in the 1940 Act).
11. MISCELLANEOUS. The captions of this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect. If any provision
of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of the Agreement shall not be
affected thereby. This Agreement shall be binding and shall inure to the
benefit of the parties hereto and their respective successors.
12. APPLICABLE LAW. This Agreement shall be construed in accordance with, and
governed by, the laws of the State of North Carolina.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
ATTEST: WILLIAMSBURG INVESTMENT TRUST
By: By:
--------------------------- ---------------------------
Title: Title:
--------------------------- ---------------------------
|
ATTEST: T. LEAVELL & ASSOCIATES, INC.
By: By:
--------------------------- ---------------------------
Title: Title:
--------------------------- ---------------------------
|
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, entered into as of ____________, 2004, by and between the
ALABAMA TAX FREE BOND FUND of WILLIAMSBURG INVESTMENT TRUST, a Massachusetts
Business Trust (the "Trust"), and T. Leavell & Associates, Inc., an Alabama
corporation (the "Adviser"), registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act").
WHEREAS, the Trust is registered as a no-load, diversified, open-end
management investment company of the series type under the Investment Company
Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust desires to retain the Adviser to furnish investment
advisory and administrative services to The Alabama Tax Free Bond Fund series of
the Trust, and the Adviser is willing to so furnish such services;
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Trust hereby appoints the Adviser to act as investment
adviser to The Alabama Tax Free Bond Fund series of the Trust (the "Fund")
for the period and on the terms set forth in this Agreement. The Adviser
accepts such appointment and agrees to furnish the services herein set
forth, for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Trust has furnished the Investment Adviser with
copies properly certified or authenticated of each of the following:
(a) The Trust's Declaration of Trust, as filed with the State of
Massachusetts (such Declaration, as presently in effect and as it
shall from time to time be amended, is herein called the
"Declaration");
(b) The Trust's By-Laws (such By-Laws, as presently in effect and as they
shall from time to time be amended, are herein called the "By-Laws");
(c) Resolutions of the Trust's Board of Trustees authorizing Agreement;
(d) The Trust's Registration Statement on Form N-1A under the 1940 Act and
under the Securities Act of 1933 as amended (the "1933 Act"), relating
to shares of beneficial interest of the Trust (herein called the
"Shares") as filed with the Securities and Exchange Commission ("SEC")
and all amendments thereto;
(e) The Trust's Prospectus (such Prospectus, as presently in effect and
all amendments and supplements thereto are herein called the
"Prospectus").
The Trust will furnish the Adviser from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing at the same time as such documents are required to be filed with
the SEC.
3. MANAGEMENT. Subject to the supervision of the Trust's Board of Trustees,
the Adviser will provide a continuous investment program for the Fund,
including investment research and management with respect to all
securities, investments, cash and cash equivalents in the Fund. The Adviser
will determine from time to time what securities and other investments will
be purchased, retained or sold by the Fund. The Adviser will provide the
services under this Agreement in accordance with the Fund's investment
objectives, policies and restrictions as stated in its Prospectus. The
Adviser further agrees that it:
(a) Will conform its activities to all applicable Rules and Regulations of
the Securities and Exchange Commission and will, in addition, conduct
its activities under this Agreement in accordance with regulations of
any other Federal and State agencies which may now or in the future
have jurisdiction over its activities under this Agreement;
C-1
(b) Will place orders pursuant to its investment determinations for the
Fund either directly with the issuer or with any broker or dealer. In
placing orders with brokers or dealers, the Adviser will attempt to
obtain the best net price and the most favorable execution of its
orders. Consistent with this obligation, when the Adviser believes two
or more brokers or dealers are comparable in price and execution, the
Adviser may prefer: (i) brokers and dealers who provide the Fund with
research advice and other services, or who recommend or sell Fund
shares, and (ii) Brokers who are affiliated with the Trust or its
Adviser(s), PROVIDED, HOWEVER, that in no instance will portfolio
securities be purchased from or sold to the Adviser or any affiliated
person of the Adviser in principal transactions;
(c) Will provide certain executive personnel for the Trust as may be
mutually agreed upon from time to time with the Board of Trustees, the
salaries and expenses of such personnel to be borne by the Adviser
unless otherwise mutually agreed upon; and
(d) Will provide, at its own cost, all office space, facilities and
equipment necessary for the conduct of its advisory activities on
behalf of the Trust.
Notwithstanding the foregoing, the Adviser may obtain the services of an
investment counselor or sub-advisor of its choice subject to the approval
of the Board of Trustees. The cost of employing such counselor or
sub-advisor will be paid by the Adviser and not by the Trust.
4. SERVICES NOT EXCLUSIVE. The advisory services furnished by the Adviser
hereunder are not to be deemed exclusive, and the Adviser shall be free to
furnish similar services to others as long as its services under this
Agreement are not impaired thereby PROVIDED, HOWEVER, the without the
written consent of the Trustees, the Adviser will not serve as investment
adviser to any other investment company having a similar investment
objective to that of the Fund.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Adviser hereby agrees that all records which it maintains
for the benefit of the Trust are the property of the Trust and further
agrees to surrender promptly to the Trust any of such records upon the
Trust's request. The Adviser further agrees to preserve for the periods
prescribed by it pursuant to Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the Act that are not
maintained by others on behalf of the Trust.
6. EXPENSES. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its investment advisory services
pertaining to the Trust. In the event that there is no distribution plan
under Rule 12b-1 of the 1940 Act in effect for the Fund, the Adviser will
pay, out of the Adviser's resources generated from sources other than fees
received from the Trust, the entire cost of the promotion and sale of Fund
shares.
Notwithstanding the foregoing, the Trust shall pay the expenses and costs
of the following:
(a) Taxes, interest charges, and extraordinary expenses;
(b) Brokerage fees and commissions with regard to portfolio transactions
of the Fund;
(c) Fees and expenses of the custodian of the Fund's portfolio securities;
(d) Fees and expenses of the Fund's administrative agent, the Fund's
transfer and shareholder servicing agent and the Fund's accounting
agent or, if the Trust performs any such services without an agent,
the costs of the same;
(e) Auditing and legal expenses;
(f) Cost of maintenance of the Trust's existence as a legal entity;
(g) Compensation of trustees who are not interested persons of the Adviser
as that term is defined by law;
C-2
(h) Costs of Trust meetings;
(i) Federal and State registration or qualification fees and expenses;
(j) Costs of setting in type, printing and mailing Prospectuses, reports
and notices to existing shareholders;
(k) The investment advisory fee payable to the Adviser, as provided in
paragraph 7 herein; and
(l) Distribution expenses, but only in accordance with any Distribution
Plan as and if approved by the shareholders of the Fund.
It is understood that the Trust may desire to register the Fund's shares
for sale in certain states which impose expense limitations on mutual
funds. The Trust agrees that it will register the Fund's shares in such
states only with the prior written consent of the Adviser.
7. COMPENSATION. The Trust will pay the Adviser and the Adviser will accept as
full compensation an investment advisory fee, based upon the daily average
net assets of the Fund, computed at the end of each month and payable
within five (5) business days thereafter, according to the following
schedule:
NET ASSETS ANNUAL RATE
---------- -----------
First $100 Million 0.35%
All over $100 Million 0.25%
|
8. (a) LIMITATION OF LIABILITY. The Adviser shall not be liable for any error
of judgment, mistake of law or for any other loss whatsoever suffered by
the Trust in connection with the performance of this Agreement, except a
loss resulting from a breach of fiduciary duty with respect to the receipt
of the compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Adviser in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
8. (b) INDEMNIFICATION OF ADVISER. Subject to the limitations set forth in
this Subsection 8(b), the Trust shall indemnify, defend and hold harmless
(from the assets of the Fund or Funds to which the conduct in question
relates) the Adviser against all loss, damage and liability, including but
not limited to amounts paid in satisfaction of judgments, in compromise or
as fines and penalties, and expenses, including reasonable accountants' and
counsel fees, incurred by the Adviser in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or legislative body, related
to or resulting from this Agreement or the performance of services
hereunder, except with respect to any matter as to which it has been
determined that the loss, damage or liability is a direct result of (i) a
breach of fiduciary duty with respect to the receipt of compensation for
services; or (ii) willful misfeasance, bad faith or gross negligence on the
part of the Adviser in the performance of its duties or from reckless
disregard by it of its duties under this Agreement (either and both of the
conduct described in clauses (i) and (ii) above being referred to
hereinafter as "DISABLING CONDUCT"). A determination that the Adviser is
entitled to indemnification may be made by (i) a final decision on the
merits by a court or other body before whom the proceeding was brought that
the Adviser was not liable by reason of Disabling Conduct, (ii) dismissal
of a court action or an administrative proceeding against the Adviser for
insufficiency of evidence of Disabling Conduct, or (iii) a reasonable
determination, based upon a review of the facts, that the Adviser was not
liable by reason of Disabling Conduct by, (a) vote of a majority of a
quorum of Trustees who are neither "interested persons" of the Trust as the
quoted phrase is defined in Section 2(a)(19) of the 1940 Act nor parties to
the action, suit or other proceeding on the same or similar grounds that is
then or has been pending or threatened (such quorum of such Trustees being
referred to hereinafter as the "INDEPENDENT TRUSTEES"), or (b) an
independent legal counsel in a written opinion. Expenses, including
accountants' and counsel fees so incurred by the Adviser (but excluding
amounts paid in satisfaction of judgments, in compromise or as fines or
penalties), may be paid from time to time in advance of the final
disposition of any such action, suit or proceeding;
C-3
PROVIDED, that the Adviser shall have undertaken to repay the amounts so
paid if it is ultimately determined that indemnification of such expenses
is not authorized under this Subsection 8(b) and if (i) the Adviser shall
have provided security for such undertaking, (ii) the Trust shall be
insured against losses arising by reason of any lawful advances, or (iii) a
majority of the Independent Trustees, or an independent legal counsel in a
written opinion, shall have determined, based on a review of readily
available facts (as opposed to a full trial-type inquiry), that there is
reason to believe that the Adviser ultimately will be entitled to
indemnification hereunder.
As to any matter disposed of by a compromise payment by the Adviser
referred to in this Subsection 8(b), pursuant to a consent decree or
otherwise, no such indemnification either for said payment or for any other
expenses shall be provided unless such indemnification shall be approved
(i) by a majority of the Independent Trustees or (ii) by an independent
legal counsel in a written opinion. Approval by the Independent Trustees
pursuant to clause (i) shall not prevent the recovery from the Adviser of
any amount paid to the Adviser in accordance with either of such clauses as
indemnification of the Adviser is subsequently adjudicated by a court of
competent jurisdiction not to have acted in good faith in the reasonable
belief that the Adviser's action was in or not opposed to the best
interests of the Trust or to have been liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in its conduct under the
Agreement.
The right of indemnification provided by this Subsection 8(b) shall not be
exclusive of or affect any of the rights to which the Adviser may be
entitled. Nothing contained in this Subsection 8(b) shall affect any rights
to indemnification to which Trustees, officers or other personnel to which
Trustees, officers or other personnel of the Trust, and other persons may
be entitled by contract or otherwise under law, nor the power of the Trust
to purchase and maintain liability insurance on behalf of any such person.
The Board of Trustees of the Trust shall take all such action as may be
necessary and appropriate to authorize the Trust hereunder to pay the
indemnification required by this Subsection 8(b) including, without
limitation, to the extent needed, to determine whether the Adviser is
entitled to indemnification hereunder and the reasonable amount of any
indemnity due it hereunder, or employ independent legal counsel for that
purpose.
8.(c)The provisions contained in Section 8 shall survive the expiration or
other termination of this Agreement, shall be deemed to include and protect
the Adviser and its directors, officers, employees and agents and shall
inure to the benefit of its/their respective successors, assigns and
personal representatives.
9. DURATION AND TERMINATION. This Agreement shall become effective on the date
of its execution and, unless sooner terminated as provided herein, shall
continue in effect until April 1, 2006. Thereafter, this Agreement shall be
renewable for successive periods of one year each, PROVIDED such
continuance is specifically approved annually:
(a) By the vote of a majority of those members of the Board of Trustees
who are not parties to this Agreement or interested persons of any
such party (as that term is defined in the 1940 Act), cast in person
at a meeting called for the purpose of voting on such approval; and
(b) By vote of either the Board or a majority (as that term is defined in
the 1940 Act) of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated by the Fund
or by the Adviser at any time on sixty (60) days' written notice, without
the payment of any penalty, provided that termination by the Fund must be
authorized either by vote of the Board of the Board of Trustees or by vote
of a majority of the outstanding voting securities of the Fund. This
Agreement will automatically terminate in the event of its assignment (as
that term is defined in the 1940 Act).
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by a written instrument
signed by the party against which
C-4
enforcement of the change, waiver, discharge or termination is sought. No
material amendment of this Agreement shall be effective until approved by
vote of the holders of a majority of the Fund's outstanding voting
securities (as defined in the 1940 Act).
11. MISCELLANEOUS. The captions of this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect. If any provision
of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of the Agreement shall not be
affected thereby. This Agreement shall be binding and shall inure to the
benefit of the parties hereto and their respective successors.
12. APPLICABLE LAW. This Agreement shall be construed in accordance with, and
governed by, the laws of the State of Alabama.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
ATTEST: WILLIAMSBURG INVESTMENT TRUST
By: By:
--------------------------- ---------------------------
Title: Title:
--------------------------- ---------------------------
|
ATTEST: T. LEAVELL & ASSOCIATES, INC.
By: By:
--------------------------- ---------------------------
Title: Title:
--------------------------- ---------------------------
|
C-5
WILLIAMSBURG INVESTMENT TRUST
THE GOVERNMENT STREET EQUITY FUND,
THE GOVERNMENT STREET BOND FUND AND
THE ALABAMA TAX FREE BOND FUND
SPECIAL MEETING OF SHAREHOLDERS
NOVEMBER 15, 2004
[FUND NAME PRINTS HERE]
Next Section
Previous Section