As Filed with the Securities and Exchange Commission on February
24, 1997.
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ___)
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or
Rule 14a-12
CONSECO FUND GROUP
(Name of Registrant as Specified in Its Charter)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
1) T i t le of each class of securities to
whichtransaction applies:
............................................
2) Aggregate number of securities to which
transaction applies:
...........................................
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
...........................................
4 ) Proposed maximum aggregate value of
transaction:
..............................................
5) Total fee paid:
...............................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as
provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee<PAGE>
was paid previously. Identify the previous filing
by registration statement number, or the Form or
Schedule and the date of its filing.
1) Amount Previously Paid:
.................................................
2) Form, Schedule or Registration Statement No.:
................................................
3) Filing Party:
....................... . . .....................
4) Date Filed:
................................................<PAGE>
CONSECO FUND GROUP
Equity Fund
Asset Allocation Fund
Fixed Income Fund
11815 North Pennsylvania Street
Carmel, Indiana 46032
March 7, 1997
Dear Shareholder:
You are cordially invited to attend a special shareholder meeting
of the Equity Fund, the Asset Allocation Fund and the Fixed
Income Fund on Friday, March 28, 1997, to be held at 1:00 p.m. in
your Fund's offices at the location shown on the enclosed proxy
statement. At this meeting, you will be asked to consider and
approve proposals pertaining to your Fund. The proposals are
highlighted below, and are discussed in more detail in your proxy
statement.
You will notice that this proxy statement addresses three Funds.
T h i s is part of our effort to minimize printing and
administrative expenses. However, if you invest in more than one
of the three Funds, you will receive more than one proxy card.
It is important that you review and vote each proxy card.
The proposals summarized below have been carefully reviewed by
the Board of Trustees. The Board of Trustees is responsible for
protecting your interests as a shareholder. The Trustees believe
that the proposals are in the best interests of the shareholders
of each Fund. They recommend that you vote for each proposal.
Proposal 1 is to approve the investment advisory agreements
between Conseco Fund Group, on behalf of each Fund, and Conseco
Capital Management, Inc., each Fund's investment adviser.
Proposal 2 is to approve the Rule 12b-1 distribution and service
plan for Class A shares of each Fund.
Proposal 3 is to ratify the selection of Coopers & Lybrand LLP as
independent accountants of Conseco Fund Group.
THESE PROPOSALS HAVE BEEN REVIEWED AND UNANIMOUSLY APPROVED BY
YOUR FUND'S BOARD OF TRUSTEES, WHO BELIEVE THAT THE PROPOSALS
WILL BE BENEFICIAL TO YOU AND YOUR FUND.
YOUR VOTE IS IMPORTANT!
No matter how large or small your investment may be, your vote
makes a difference. We urge you to review the enclosed proxy
statement carefully, and to vote by completing, signing and
returning the enclosed proxy card(s) to us immediately. Your
prompt response will help avoid the cost of additional mailings.
For your convenience, we have enclosed a postage-paid envelope.
If you have any questions, please call your Customer Service
Representative at 1-800-986-3384, [Monday through Friday between
8:00 a.m. and 8:00 p.m., Eastern time.]
Sincerely,<PAGE>
Maxwell E. Bublitz
President and Trustee<PAGE>
CONSECO FUND GROUP
Equity Fund
Asset Allocation Fund
Fixed Income Fund
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 28, 1997
To the Shareholders of the above Funds:
N O T I CE IS HEREBY GIVEN that a Special Meeting of
Shareholders (the "Meeting") of the Equity Fund, the Asset
Allocation Fund and the Fixed Income Fund (the "Funds") will be
held at the offices of Conseco Fund Group (the "Trust"), 11815
North Pennsylvania Street, Carmel, Indiana 46032, at 1:00 p.m.,
Eastern time, on Friday, March 28, 1997. The purpose of the
Meeting is to consider and act upon the following proposals, and
to transact such other business as may properly come before the
Meeting or any adjournments thereof:
1. To approve the investment advisory agreements
between the Trust, on behalf of each Fund,
and Conseco Capital Management, Inc.
2. To approve each Fund's Class A distribution
and service plan for Class A shares of each
Fund.
3. To ratify the selection of Coopers & Lybrand
LLP as independent accountants of the Trust.
YOUR BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
PROPOSALS.
Shareholders of record as of the close of business on February
21, 1997 are entitled to notice of, and to vote at, the Meeting
or any adjournments of the Meeting. The proxy statement and
proxy card are being mailed to shareholders on or about March 7,
1997.
By order of the Board of Trustees,
WILLIAM P. LATIMER, Secretary
Carmel, Indiana
March 7, 1997
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE
COMPLETE AND RETURN THE ENCLOSED PROXY CARD(S). YOU MAY STILL
VOTE IN PERSON IF YOU ATTEND THE MEETING.<PAGE>
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
CONSECO FUND GROUP:
Equity Fund
Asset Allocation Fund
Fixed Income Fund
11815 North Pennsylvania Street
Carmel, Indiana 46032
This Proxy Statement is furnished in connection with the
solicitation of proxies by, and on behalf of, the Board of
Trustees (the "Trustees") of Conseco Fund Group (the "Trust") to
be used at a Special Meeting of Shareholders of the Equity Fund,
the Asset Allocation Fund and the Fixed Income Fund (the "Funds")
and at any adjournments thereof (the "Meeting"), to be held at
the offices of the Trust, its investment adviser, Conseco Capital
Management, Inc. (the "Adviser"), and its distributor, Conseco
Equity Sales, Inc. (the "Distributor"), located at 11815 North
Pennsylvania Street, Carmel, Indiana 46032 at 1:00 p.m., Eastern
time, on Friday, March 28, 1997.
The purpose of the Meeting is set forth in the accompanying
Notice. The solicitation of proxies is being made primarily
through mailing this Proxy Statement and accompanying proxy card
on or about March 7, 1997. Additional solicitation may be made
by mail, telephone, or in person by officers or Trustees of the
Trust, and by employees, officers and/or directors of the
Adviser. It is not anticipated that any solicitations will be
made by specially-engaged employees or paid proxy solicitors.
The cost of the preparation of this Proxy Statement and proxy and
the costs of solicitation will be borne by the Adviser.
The Trust is registered with the Securities and Exchange
Commission as an open-end management investment company under the
Investment Company Act of 1940 (the "Act") and is organized as a
b u s i n ess trust under the laws of the Commonwealth of
Massachusetts. The Trust is comprised of the Funds, each of
which represents a separate investment portfolio (a "mutual
fund"). Each Fund offers two classes of shares: Class A and
Class Y. The Trust has authorized an unlimited number of shares
of beneficial interest having no par value. The shares of the
Trust do not have cumulative voting rights.
If the enclosed proxy card(s) is executed and returned, it
may nevertheless be revoked at any time prior to its use by
written notification received by the Trust, by the execution of a
later-dated proxy card, or by attending the Meeting and voting in
person.
All proxy cards solicited by the Trustees that are properly
executed and received by the Secretary prior to the Meeting, and
which are not revoked, will be voted at the Meeting. Shares<PAGE>
represented by such proxies will be voted in accordance with the
instructions thereon. If no specification is made on a proxy
card, it will be voted FOR the matters specified on the proxy
card. Only proxies that are voted will be counted towards
establishing a quorum. Broker non-votes are not considered voted
for this purpose. Shareholders should note that while votes to
ABSTAIN will count toward establishing a quorum, passage of any
proposal being considered at the Meeting will occur only if a
s u f f icient number of votes are cast FOR the proposal.
Accordingly, votes to ABSTAIN and votes AGAINST will have the
same effect in determining whether the proposal is approved.
The Trustees have fixed the close of business on February
21, 1997, as the record date (the "Record Date") for determining
the shareholders of the Trust entitled to notice of and to vote
at the Meeting. Shareholders of record of the Trust are entitled
to one vote per share and to a proportionate vote for each
fraction of a share at the Meeting. A quorum must be present for
the transaction of business at the Meeting. The holders of a
majority of the outstanding shares of Trust entitled to vote at
the Meeting, present in person or represented by proxy, shall
constitute a quorum for the Meeting. If either (i) a quorum is
not present at the Meeting or (ii) a quorum is present but
sufficient votes in favor of a matter proposed at the Meeting, as
set forth in the Notice of this Meeting, are not received by
12:00 p.m., Eastern time, on Friday, March 28, 1997, then the
persons named as attorneys and proxies in the enclosed proxy card
may propose one or more adjournments of the Meeting to permit
further solicitation of proxies. Any such adjournment will
require the affirmative vote of at least a majority of the shares
represented, in person or by proxy, at the session of the Meeting
to be adjourned. The persons named as proxies will vote those
proxies that are required to be voted FOR the proposal in favor
of such an adjournment and will vote those proxies required to be
voted AGAINST such proposal against such an adjournment. A
shareholder vote may be taken on one or more of the items in this
Proxy Statement if sufficient votes have been received and it is
otherwise appropriate.
As of the Record Date, shares of each Fund of the Trust
issued and outstanding are indicated in the following table:
Class A Class Y
Equity Fund _________ _ ______
Asset Allocation Fund _________ __________
Fixed Income Fund _________ __________
2<PAGE>
To the knowledge of the Trust, as of the Record Date,
substantial (5% or more) record ownership of each Fund was as
follows:
<TABLE>
<CAPTION>
Equity Fund
Number of Shares Percentage
Owned Ownership
<S> <C> <C> <C> <C> <C>
Name Address Class A Class Y Class A Class Y
Asset Allocation Fund
Number of Shares Percentage
Owned Ownership
Name Address Class A Class Y Class A Class Y
3<PAGE>
Fixed Income Fund
Number of Shares Percentage
Owned Ownership
Name Address Class A Class Y Class A Class Y
</TABLE>
As of the Record Date, Trustees and officers of the Trust owned
in the aggregate ___% of the outstanding shares of the Trust.
Summary of Proposals and Trustees' Recommendations
The following table summarizes each proposal to be presented
at the Meeting and the Funds solicited with respect to each
proposal:
Proposal Affected Funds
1. Approval of Advisory Agreements Each Fund*
2. Approval of Class A Distribution Class A Shareholders
and Service Plans of Each Fund**
3. Ratification of the Selection of All Funds***
Independent Accountant
* All shareholders of each Fund will vote separately from
shareholders of the other Funds.
** Class A shareholders of each Fund only will vote separately
from Class A shareholders of the other Funds.
*** All shareholders of each Fund will vote together.
The Board of Trustees recommends that you cast your vote :
- FOR approval of each investment advisory Agreement
4<PAGE>
- FOR approval of each Fund's Class A distribution and
service plan
- FOR ratification of the selection of Coopers & Lybrand
LLP as independent accountants for the Trust
Proposals
Each of the proposals is described in detail below. The
Exhibits are important parts of this Proxy Statement; please
consult them carefully as you review this Proxy Statement and
evaluate the proposals.
PROPOSAL 1. TO APPROVE INVESTMENT ADVISORY AGREEMENTS BETWEEN
THE TRUST, ON BEHALF OF EACH FUND, AND CONSECO
CAPITAL MANAGEMENT, INC.
For All Shareholders of the Equity Fund, the Asset Allocation
Fund, and the Fixed Income Fund, voting separately.
The Trustees are requesting that shareholders of each Fund
approve each Fund's investment advisory Agreement with the
Adviser (collectively, the "Advisory Agreements"). Shareholders
are not being asked, however, to approve any changes to the
Advisory Agreements, but are being asked to approve each Fund's
Advisory Agreement in its current form. Each Advisory Agreement
is attached to this Proxy Statement as Exhibit A for your review.
Also attached to this Proxy Statement for your review as Exhibit
B are audited financial statements of the Adviser.
The Act has certain provisions applicable to the board of
trustees and the shareholders of a mutual fund in respect of
investment advisory agreements. One provision requires that the
trustees of a mutual fund, including a majority of the trustees
who are not "interested persons" of the fund (the "Disinterested
Trustees"), vote, in person, to approve an investment advisory
Agreement. The Act also requires that the shareholders of a
mutual fund approve an investment advisory Agreement. In
accordance with their obligation under the Act, the Trustees
first approved the Advisory Agreements on December 5, 1996.
After approval by the Trustees, the sole shareholder of each
Fund, on December 31, 1996, voted to approve each Fund's Advisory
Agreement.
It has come to the Trustees' attention that there may have
been a flaw in their initial approval of the Advisory Agreements
on December 5, 1996. Therefore, on February 21, 1997, the
Trustees, including a majority of the Disinterested Trustees,
voted, in person, to re-approve each Advisory Agreement and to
submit those Agreements to the vote of shareholders of each Fund
in accordance with the requirements of the Act.
5<PAGE>
Required Vote
Approval of each Fund's Advisory Agreement by each Fund's
shareholders requires an affirmative vote of the lesser of (i)
67% or more of the voting securities present at the Meeting, if
the holders of more than 50% of the outstanding voting securities
of each Fund are present or represented by proxy; or (ii) more
than 50% of the outstanding voting securities of each Fund.
Shareholders of each Fund will vote separately. Therefore, three
votes will be taken; that is, separate votes will be taken with
respect to each of the three Advisory Agreements. If you are a
shareholder of more than one Fund, you are entitled to vote on
the proposal as it pertains to each of your Funds and you will
receive more than one proxy card for this purpose. Therefore, it
is important that you review, complete and sign each proxy card.
Descriptions of the Adviser and the Advisory Agreements
The Adviser has been retained to provide investment advice,
and, in general, to supervise the management and investment
program of the Trust and each Fund. The Adviser is a wholly-
owned subsidiary of Conseco, Inc., a publicly-owned financial
services company, the principal operations of which are in
development, marketing administration of specialized annuity,
life and health insurance products. The Adviser generally
manages the affairs of the Trust, subject to the supervision of
the Board of Trustees.
Under the Advisory Agreements, the Adviser is entitled to
receive an investment advisory fee equal to an annual rate of
0.70% of the daily net asset value of the Equity Fund, 0.70% of
the daily net asset value of the Asset Allocation Fund and 0.45%
of the daily net asset value of the Fixed Income Fund. The
Adviser also manages another registered investment company, all
of the invested assets of its parent company, Conseco, Inc.,
which owns or manages several life insurance subsidiaries, and
provides investment and servicing functions to the Conseco
companies and affiliates.
The Adviser will reduce its aggregate fees for any fiscal
year, or reimburse the Funds, to the extent required, so that the
Funds' expenses do not exceed the expense limitations applicable
to the Trust under the securities laws or regulations of those
states or jurisdictions in which the Funds' shares are registered
or qualified for sale. Expenses for purposes of these expense
limitations include the management fee, but exclude brokerage
commissions and fees, taxes, interest and extraordinary expenses
such as litigation, paid or incurred by the Funds. In addition,
the state with the most restrictive expense limitation allows the
Trust to exclude distribution expenses.
6<PAGE>
The Adviser has voluntarily agreed to waive the investment
advisory fee payable by each Fund to the extent that the Funds'
ratios of total operating expenses to net assets on an annual
basis exceed: 1.50% and 1.00% for Class A shares and Class Y
shares of the Equity Fund, respectively; 1.50% and 1.00% for
Class A shares and Class Y shares of the Asset Allocation Fund,
respectively; and 1.25% and 0.60% for Class A shares and Class Y
shares of the Fixed Income Fund, respectively. These voluntary
limits may be discontinued at any time after April 30, 1998. The
voluntary commitment of the Adviser to waive its fees (as
described above) was undertaken in conjunction with similar
commitments made by the Distributor and the Trust's
administrator, Conseco Services LLC (the "Administrator"), 11815
North Pennsylvania Street, Carmel, Indiana 46032. In connection
with the Adviser's voluntary Agreement to waive its advisory fee,
as described above, the Adviser has reduced the advisory fee of
the Fixed Income Fund from 0.45% to 0.40% of the daily net assets
of the Fixed Income Fund. This voluntary limit also may be
discontinued at any time after April 30, 1998.
T r ustees' Evaluation of the Advisory Agreements and
Recommendation
I n approving each Advisory Agreement, the Trustees,
including the Disinterested Trustees, requested and evaluated
information provided by the Adviser which, in their opinion,
constituted all the information reasonably necessary for the
Trustees to form a judgment as to whether each Advisory Agreement
would be in the best interests of each respective Fund and its
shareholders.
In recommending that each Fund's shareholders approve their
respective Advisory Agreement, the Trustees took into account all
factors they deemed relevant, including: (i) the advisory fees
and other expenses that would be paid by the Funds under the
Advisory Agreements as compared to those of similar mutual funds
managed by other investment advisers; (ii) the nature, quality
and extent of the portfolio management and non-advisory services
furnished by the Adviser to the Funds; (iii) the Adviser's need
to maintain and enhance its ability to retain and attract capable
personnel to serve the Funds; (iv) the nature of the Adviser's
research capability and the related benefits to the Funds; (v)
brokerage and research services received by the Adviser as
described more fully below; (vi) the relationship of the advisory
f e e structures under the Advisory Agreements to the fee
structures of comparable mutual funds; (vii) the financial
strength of the Adviser; (viii) the cost and complexity of
providing portfolio management services; (ix) the Adviser's
experience and performance attained in managing comparable mutual
funds; and (x) payments to be made by the Funds to affiliates of
the Adviser or third parties for services other than investment
advisory services.
7<PAGE>
In addition, the Trustees considered that the Adviser, the
Distributor and the Administrator have each voluntarily agreed to
waive a portion of its fees and/or reimburse to the Funds a
portion of the fees due it through April 30, 1998 to the extent
that annual total operating expenses exceed 1.50% for Class A
shares of the Equity and Asset Allocation Funds and 1.25% for the
Class A shares of the Fixed Income Fund and 1.00% for Class Y
shares of the Equity and Asset Allocation Funds and 0.60% for
Class Y shares of the Fixed Income Fund.
With respect to the services to be provided on behalf of
each Fund, the Trustees determined that the compensation to be
paid to the Adviser under the Advisory Agreements is fair and
reasonable, and that the Advisory Agreements will allow the
Adviser to receive fees for its services that are competitive
with fees paid by other mutual funds to other investment
advisers.
As a result of their careful consideration of the above
factors and other relevant matters, the Trustees, including a
majority of the Disinterested Trustees, concluded, in the
exercise of their reasonable business judgment and in light of
their fiduciary duties under the Act, that the retention of the
Adviser to provide advisory and other services to each Fund under
the respective Advisory Agreement for each Fund would be in the
best interests of each Fund and its shareholders and recommended
that each Advisory Agreement be submitted to the shareholders of
the respective Fund for their approval. In the event that one or
more Advisory Agreements are not approved by shareholders, the
Trustees would seek to obtain for the Fund(s) interim investment
advisory services at the lesser of cost or the current fee rate
either from the Adviser or from another advisory organization.
Thereafter, the Trustees would either negotiate a new investment
a d v isory Agreement with the Adviser or another advisory
organization selected by the Trustees, in any event subject to
the approval of the shareholders of the Fund(s). Given the
uncertain validity of the Advisory Agreements approved at the
December 5, 1996 Trustees' meeting, no advisory fees will be paid
by a Fund until an Advisory Agreement is approved by shareholders
of that Fund.
8<PAGE>
Management of the Adviser
The names of the principal executive officer and directors
of the Adviser, their addresses and principal occupations are set
forth in the table immediately below:
<TABLE>
<CAPTION>
Name and Position
with Adviser Address Principal Occupation
<S> <C> <C>
Maxwell E. Bublitz,* 11815 N. Pennsylvania Street Chartered Financial
Director and President Carmel, IN 46032 Analyst
Rollin M. Dick 11815 N. Pennsylvania Street
Director Carmel, IN 46032
William P. Latimer,* 11815 N. Pennsylvania Street Attorney
Director, Chief Carmel, IN 46032
Compliance
Officer, Vice
President,
Secretary and Senior
Counsel
Gregory J. Hahn,* 11815 N. Pennsylvania Street Chartered Financial
Senior Vice President, Carmel, IN 46032 Analyst
Portfolio Analytics
</TABLE>
* The persons indicated with an asterisk also maintain
positions with the Trust as follows: Mr. Bublitz is the
President and a Trustee of the Trust; Mr. Hahn is Vice
President for Investments and a Trustee of the Trust; and
Mr. Latimer is Vice President and Secretary of the Trust. In
addition, both James S. Adams, the Treasurer of the Trust,
and William T. Devanney, Jr., a Vice President of the Trust,
beneficially own shares of Conseco, Inc. and are Senior Vice
Presidents of both Bankers National Life Insurance Company
and Great American Reserve Life Insurance, both of which
companies are affiliates of the Adviser.
Portfolio Allocation
Decisions regarding the placement of portfolio brokerage are
made by the Adviser with the primary considerations being to
obtain efficiency in execution of orders and the most favorable
net prices for each Fund. Consistent with those objectives,
transactions may be allocated to brokers and dealers who furnish
certain research services to the Adviser. Such research services
9<PAGE>
supplement the Adviser's own research activities and provide a
benefit to the Adviser which is not easily evaluated in terms of
dollar amount and is not reflected in a direct monetary benefit
to the Funds. Such research may be used to benefit any other
investment companies and accounts advised by the Adviser, as well
as the Funds. Transactions may also be executed through brokers
and dealers who sell shares of the Funds, but such sales will not
be a qualifying or disqualifying factor in the selection of
executing broker-dealers. The Adviser may place portfolio
transactions for the Fund with broker-dealers for commissions
which are greater than another broker or dealer might charge if
the Adviser determines in good faith that the commission paid was
reasonable in relation to the brokerage or research services
provided by such broker or dealer, viewed in terms of that
particular transaction or the Adviser's overall responsibilities
with respect to its accounts, including the Funds, as to which it
exercises investment discretion.
Other Information Pertaining to the Adviser
The Adviser is a wholly-owned subsidiary of Conseco, Inc.,
11815 North Pennsylvania Street, Carmel, Indiana 46032. Because
all of the outstanding securities of the Adviser are owned by
Conseco, Inc., no other person owns securities issued by the
Adviser.
T h e Distributor, Conseco Equity Sales, Inc., is an
affiliated person of the Adviser and will receive compensation
from each Fund pursuant to each Fund's plan of distribution, as
described more fully below under Proposal 2. The services
provided by the Distributor will continue after approval of each
Advisory Agreement by the shareholders of each Fund.
The Administrator, Conseco Services, LLC, is also an
affiliated person of the Adviser and receives compensation from
the Trust pursuant to an administration Agreement. Under that
Agreement, the Administrator supervises the preparation and
filing of all documents required for compliance by the Trust with
applicable laws and regulations, supervises the maintenance of
books and records of the Trust and provides other general and
administrative services. For providing these services, the
Administrator receives compensation at the annual rate of 0.20%
based on the average daily net assets attributable to Class A and
Y shares. The Administrator has voluntarily agreed to waive its
fees and/or reimburse the Funds a portion of the fees due it
under the administration Agreement with the Trust through April
30, 1998 to the extent that annual total operating expenses
exceed 1.50% for Class A shares of the Equity and Asset
Allocation Funds and 1.25% for the Class A shares of the Fixed
Income Fund and 1.00% for Class Y shares of the Equity and Asset
Allocation Funds and 0.60% for Class Y shares of the Fixed Income
Fund. This voluntary commitment of the Administrator was
10<PAGE>
undertaken in conjunction with similar commitments made by the
Adviser and the Distributor. The services provided by the
Administrator will continue after approval of each Advisory
Agreement by the shareholders of each Fund.
The Adviser also serves as investment adviser to Conseco
Series Trust (the "Series Trust"). The three Funds that comprise
the Conseco Fund Group (i.e., the Trust) have been modeled after
three funds of the Series Trust: the Equity Fund is modeled after
the Common Stock Portfolio of the Series Trust; the Asset
Allocation Fund is modeled after the Asset Allocation Portfolio
of the Series Trust; and the Fixed Income Fund is modeled after
the Corporate Bond Portfolio of the Series Trust (the Common
Stock, Asset Allocation and Corporate Bond Portfolios of the
Series Trust are collectively referred to hereafter as the
"Portfolios"). Each Portfolio, like each Fund, is managed by the
Adviser and has investment objectives and policies substantially
similar to its corresponding Fund. Under an advisory Agreement
with Conseco Series Trust, the Adviser receives compensation from
each Portfolio at the annual rate of 0.60% of the average daily
net assets of the Common Stock Portfolio, 0.55% of the average
daily net assets of the Asset Allocation Portfolio and 0.50% of
the average daily net assets of the Corporate Bond Portfolio. As
of December 31, 1996, the asset size of each of the Portfolios
was as follows: Common Stock Portfolio - $171,332,490; Asset
Allocation Portfolio - $16,732,206; and Corporate Bond Portfolio
- - - - $17,463,340. The Adviser has voluntarily agreed to reimburse
all expenses, including its advisory fees, in excess of the
following percentage of the average annual net assets of the
Portfolios: 0.80% for the Common Stock Portfolio; 0.75% of the
Asset Allocation Portfolio; and 0.70% for the Corporate Bond
Portfolio.
Conclusion
The Trustees are asking shareholders to approve each
Advisory Agreement as it presently exists and under which the
Adviser currently provides advisory and other services. The
Trustees are not proposing to modify, amend or change the
Advisory Agreements in any respect. The Trustees, including a
majority of the Disinterested Trustees, previously have reviewed
the Advisory Agreements, and other materials relating to the
Agreements, and found that terms of, and the compensation to be
paid by each Fund under, the Advisory Agreements are fair and
reasonable and that the retention of the Adviser pursuant to each
Advisory Agreement would be in the best interests of each Fund
and its shareholders.
The Trustees recommend that shareholders of each Fund vote FOR
approval of each Fund's Advisory Agreement.
11<PAGE>
PROPOSAL 2. TO APPROVE A DISTRIBUTION AND SERVICE PLAN FOR
EACH FUND'S CLASS A SHARES TO INCREASE
DISTRIBUTION FEES
For Class A Shareholders Only of the Equity Fund, the Asset
Allocation Fund, and the Fixed Income Fund, voting separately.
As noted above with respect to the Advisory Agreements, it
has come to the Trustees' attention that there may have been a
flaw in their initial approval of each Fund's Rule 12b-1 Class A
distribution and service plan (the "Old Distribution Plans") at
the Trustees' meeting on December 5, 1996. Therefore, on
February 21, 1997, the Trustees, including a majority of the
Trustees who are not interested persons of the Trust and have no
direct or indirect financial interest in the operation of the New
Distribution Plans (defined below) or in any agreements related
to those Plans (the "Independent Trustees"), approved, a new
distribution and service plan for each Fund's Class A shares
pursuant to Rule 12b-1 under the Act (the "New Distribution
P l ans"), and voted to recommend to each Fund's Class A
shareholders that they approve, each New Distribution Plan. In
addition, in the course of their review and evaluation on
February 21, 1997, the Trustees determined that an increase in
distribution fees for each Fund is reasonably likely to benefit
the Fund and its Class A shareholders for the reasons set forth
below. Therefore, the New Distribution Plans would increase the
maximum amount payable under the Equity Fund's and the Asset
Allocation Fund's Old Distribution Plans from 0.35% to 0.50% and
under the Fixed Income Fund's Old Distribution Plan from 0.35% to
0 . 6 5% annually of each Fund's average daily net assets
attributable to its Class A shares. As described more fully
below, in approving the New Distribution Plans, the Trustees
determined that the increased fee is likely to result in higher
levels of sales and, ultimately, lower levels of redemptions of
each Fund's Class A shares than would otherwise be obtainable.
This in turn should assist in the goal of achieving an increase
in Fund asset size. There can be no assurance, however, that the
Fund will achieve an increase in asset size. Upon shareholder
approval, each New Distribution Plan will become effective
immediately. Each Fund's New Distribution Plan is attached to
this Proxy Statement as Exhibit B for your review.
Required Vote
Approval of each Fund's New Distribution Plan by each Fund's
shareholders requires an affirmative vote of the lesser of (i)
67% or more of the Class A voting securities present at the
Meeting, if the holders of more than 50% of the outstanding Class
A voting securities of each Fund are present or represented by
proxy; or (ii) more than 50% of the outstanding Class A voting
securities of each Fund. Class A shareholders of each Fund will
vote separately. Therefore, three votes will be taken. If you
12<PAGE>
are a Class A shareholder of more than one Fund, you are entitled
to vote on the proposal as it pertains to each of your Funds and
you will receive more than one proxy card for this purpose.
Therefore, it is important that you review, complete and sign
each proxy card.
The New Distribution Plans
T h e New Distribution Plans set forth the terms and
conditions on which a Fund will pay, from the assets attributable
to Class A shares of the respective Fund, distribution fees and
service fees to the Distributor in connection with the provision
by the Distributor of certain services to each Fund and its Class
A shareholders. The terms of each New Distribution Plan
authorize the respective Funds to engage in any activity
primarily intended to result in the sale of their Class A shares.
Each Fund is authorized to engage in such activities directly, or
through other persons with whom the Fund or the Distributor
enters into agreements.
Distribution fees are used to reimburse the Distributor for
expenses primarily intended to result in sales of Class A shares
o f e ach Fund, including, but not limited to, printing
prospectuses, statements of additional information and reports
used for sales purposes, expenses of preparation of sales
literature and related expenses, advertisements, other
d i s tribution-related expenses (including personnel of the
Distributor), certain overhead expenses attributable to the
distribution of Class A shares of a Fund such as communications,
salaries, training, supplies, photocopying and similar types of
expenses. Service fees are used to reimburse the Distributor for
payments made to, or on account of, underwriters, dealers,
brokers, banks or selling entities who provide personal and
shareholder account maintenance services to Class A shareholders,
including, but not limited to, the establishment and maintenance
of shareholder accounts, processing purchase, redemption and
exchange orders, processing requests and orders with respect to
shareholder services and programs described in the Trust's
p r o s pectus and statement of additional information, and
responding to inquiries regarding the shareholders' accounts,
t h e policies of the Trust and the performance of their
investment. These payments represent compensation in addition
to any commissions the Distributor might receive on sales of each
Fund's Class A shares.
Under the Old Distribution Plans (approved at the Trustees'
December 5, 1996 meeting), each Fund would have been obligated to
pay up to an aggregate of 0.35% annually of its average daily net
assets attributable to its Class A shares for both distribution
fees and service fees. Within this maximum amount, 0.25% could
have been used as service fees and the remainder for distribution
fees. The Trustees had limited the fees to be paid under the Old
13<PAGE>
Distribution Plans to 0.25% of each Fund's average daily net
assets attributable to Class A shares.
Subject to the approval of each Fund's Class A shareholders
at the Meeting, under the New Distribution Plans, the Equity Fund
and the Asset Allocation Fund would pay up to an aggregate of
0.50% annually of their average daily net assets attributable to
their Class A shares for both distribution and service fees;
under its New Distribution Plan, the Fixed Income Fund would pay
up to an aggregate of 0.65% annually of its average daily net
assets attributable to its Class A shares for both distribution
and service fees. Within these maximum amounts, each Fund may pay
up to 0.25% in service fees and the remainder in distribution
fees. Given the uncertain validity of the Old Distribution Plans
a p p roved at the December 5, 1996 Trustees' meeting, no
distribution fees will be paid by a Fund until its New
Distribution Plan is approved.
Expenditures under each New Distribution Plan will be
c a lculated and accrued daily, charged against the assets
attributable to Class A shares of a respective Fund only and paid
monthly or at such other intervals as the Trustees may determine.
Pursuant to each New Distribution Plan, the Distributor will
provide the Trust, at least quarterly, with a written report of
the amounts expended under each New Distribution Plan and the
purpose for which such expenditures were made together with such
other information as from time to time is reasonably requested by
the Trustees. The Trustees will review such reports on a
quarterly basis. In the event the Distributor is not fully
reimbursed for payments made or other expenses incurred by it
under each New Distribution Plan, such expenses may be carried
forward for no more than three years from the date such expenses
were first incurred. Reimbursement of expenses is calculated on
a "first in, first out" basis.
The expenditures made pursuant to each New Distribution
Plan, and the basis upon which such expenditures are made, will
be determined by the Trust in accordance with Rule 12b-1 under
the Act and the Conduct Rules of the National Association of
Securities Dealers, Inc. (the "NASD Rules"). If any amendment to
Rule 12b-1 or the NASD Rules is adopted, the Trustees will
consider what, if any, modification of each New Distribution
Plan or each Fund's distribution practices may be appropriate.
If approved by Class A shareholders, each New Distribution
Plan will continue in effect for successive annual periods
provided that it is approved at least annually by a vote of the
majority of the Trustees, including a majority of the Independent
Trustees. Each Fund may terminate its New Distribution Plan at
any time by vote of a majority of the Independent Trustees or a
majority of the outstanding voting Class A shares of the
respective Fund. No material amendment to a New Distribution
14<PAGE>
Plan will be effective unless it is approved by a vote of a
majority of the Trustees, including a majority of the Independent
Trustees. Each New Distribution Plan requires that amendments
which would materially increase the amount of compensation
payable thereunder be approved by a majority of the outstanding
voting Class A shares of the affected Fund.
Comparative Expense Tables
Set forth below are (1) the Shareholder Transaction Expenses
Table which applies to Class A shares of each Fund and which is
not proposed to be modified in any respect and (2) Comparative
Annual Operating Expenses Tables For Class A Shares showing the
amount of fees and expenses paid by each Fund with respect to its
Class A shares under the Old Distribution Plan as if it were in
effect and the amount of fees and expenses the Class A
shareholders would have paid indirectly if the New Distribution
Plan had been in effect for each Fund. The information
concerning "other expenses" in the fee tables is an estimate.
Shareholder Transaction Expenses Table For Class A Shares
Of Each Fund
<TABLE>
<CAPTION>
<S> <C>
Maximum Sales Charge Imposed on Purchase (as
a percentage of offering price) 5%
Maximum Sales Charge Imposed on Reinvested Dividends (as
a percentage of offering price) None
Deferred Sales Charge None
Redemption Fees None
</TABLE>
<TABLE>
<CAPTION>
Comparative Annual Operating Expenses Tables For Class A Shares
Equity Fund
Old New
Distribution Plan Distribution Plan
<S> <C> <C>
Annual Fund Operating Expenses
(as a percentage of average net
assets)
15<PAGE>
Management Fees 0.70% 0.70%
Administrative Fees 0.20% 0.20%
12b-1 Distribution and Service
Fees(1) 0.25% 0.50%
Other expenses (less voluntary fee
waivers 0.35% 0.10%
and reimbursements)
Total Equity Fund 1.50% 1.50%
Operating Expenses (2)
Asset Allocation Fund
Old New
Distribution Plan Distribution Plan
Annual Fund Operating Expenses
(as a percentage of average net
assets)
Management Fees 0.70% 0.70%
Administrative Fees 0.20% 0.20%
12b-1 Distribution and Service Fees(1) 0.25% 0.50%
Other expenses (less voluntary fee waivers 0.35% 0.10%
and reimbursements)
Total Asset Allocation Fund 1.50% 1.50%
Operating Expenses (2)
16<PAGE>
Fixed Income Fund
Old New
Distribution Plan Distribution Plan
Annual Fund Operating Expenses
(as a percentage of average net
assets)
Management Fees 0.45% 0.40%(3)
Administrative Fees 0.20% 0.20%
12b-1 Distribution and Service Fees(1) 0.25% 0.65%
Other expenses (less voluntary fee
waivers 0.35% 0.00%
and reimbursements)
Total Fixed Income Fund 1.25% 1.25%
Operating Expenses (2)
</TABLE>
Notes to Comparative Annual Operating Expenses Tables:
(1) As a result of Rule 12b-1 fees, a long-term shareholder in
the Funds may pay more than the economic equivalent of the
maximum sales charges permitted by the NASD Rules.
(2) The expense information set forth above reflects a voluntary
commitment of the Adviser, the Administrator and the
Distributor to waive their fees and/or reimburse to the
Funds a portion of the fees due them under the Investment
Advisory Agreement, Administration Agreement and/or New
Distribution Plans through April 30, 1998. The voluntary
commitment provides that the Total Operating Expenses for
the Funds, on an annual basis, will not exceed the amounts
set forth above. In the absence of such reimbursements, it
is estimated that the Total Operating Expenses under the Old
Distribution Plans would have been 1.85%, 1.85% and 1.60%
for the Equity, Asset Allocation and Fixed Income Funds,
respectively. In the absence of such reimbursements, it is
estimated that the Total Operating Expenses under the New
Distribution Plans would be 2.10%, 2.10% and 2.00% for the
Equity, Asset Allocation and Fixed Income Funds,
respectively
(3) The Adviser has voluntarily undertaken to reduce its
advisory fee with respect to the Fixed Income Fund to 0.40%
of the Fund's average daily net assets until April 30, 1998.
17<PAGE>
Absent such undertaking, the advisory fee would have been
0.45% of the Fund's average daily net assets.
Comparative Examples
Assuming a hypothetical investment of $1,000, a 5% annual return
and redemption at the end of each time period, an investor in
Class A shares of each of the Funds would have paid transaction
and operating expenses at the end of each year as follows:
1 Year 3 Years
Equity Fund
Old Distribution Plan $65 $96
New Distribution Plan $65 $96
Asset Allocation Fund
Old Distribution Plan $65 $96
New Distribution Plan $65 $96
Fixed Income Fund
Old Distribution Plan $62 $88
New Distribution Plan $62 $88
The same level of expenses would be incurred if the
investments were held throughout the period indicated. The above
examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may
vary.
T r u s tees' Evaluation of the New Distribution Plans and
Recommendation
In connection with their decision to approve the New
Distribution Plan for each Fund and to recommend to each Fund's
Class A shareholders that they do the same, the Trustees,
including a majority of the Independent Trustees, reviewed all
information which they deemed necessary to arrive at an informed
determination. The Independent Trustees consulted with their
legal counsel in determining whether to approve each Fund's New
Distribution Plan. Among the matters considered by the Trustees
w e r e: (1) the potential costs and benefits of the New
Distribution Plan to Class A shareholders of each Fund, including
the fact that payments made to the Distributor would ultimately
increase the level of expenses incurred by Class A shareholders
of each Fund; (2) whether the New Distribution Plan would assist
the Distributor in marketing Class A shares of each Fund and,
ultimately, reduce the level of share redemptions; (3) the
advantages to each Fund and its Class A shareholders that might
result from growth in the Fund's assets, including economies of
scale, reduced expense ratios, and greater portfolio
diversification; and (4) the fact that anticipated net positive
cash flow into each Fund as a result of new sales could
18<PAGE>
facilitate portfolio management by eliminating the need to
liquidate favorable portfolio positions in order to generate
sufficient cash to satisfy redemption requests. The Trustees
determined that the compensation in each Fund's New Distribution
Plan for additional sales and continuing shareholder service
incentives and the Distributor's expenses is likely to result in
h i gher levels of sales and, ultimately, lower levels of
redemptions of Class A shares of each Fund than would otherwise
occur. This in turn should assist each Fund in increasing its
asset size and achieving and maintaining net positive cash flow.
The Trustees found the fees to be paid under the New
Distribution Plan reasonable in view of the services that the
Distributor will provide and the anticipated expenses that the
Distributor will incur in distributing and marketing each Fund's
Class A shares and paying authorized broker-dealers and others
for ongoing service to Class A shareholders. The Trustees also
noted that the level of fees payable under each Fund's Old
Distribution Plan (if it were in effect) is comparable to or
below that of most other funds, whose shares are sold through
similar broker-dealer networks, as well as many funds with which
each Fund competes for the customers and sales efforts of
broker-dealers. The Trustees determined that the Rule 12b-1 fee
payable under each Fund's New Distribution Plan will enable the
Distributor to compensate broker-dealers in an amount comparable
to the compensation they receive in connection with sales of
shares of comparable mutual funds, while at the same time
affording the Distributor the means to effectively market Class A
shares to the public.
The Trustees also recognized and considered that possible
benefits may be realized by the Adviser as a result of the New
Distribution Plans. If a Fund's net assets grow more rapidly as
a result of the implementation of the New Distribution Plan, the
investment advisory fees payable to the Adviser (which fees are
calculated as a percentage of the Fund's net assets) will also
increase. The Trustees recognized that possible benefits may be
realized by the Distributor as a result of each Fund's New
Distribution Plan through the payment of sales charges to the
Distributor for sales and distribution of each Fund's Class A
shares.
T h e Trustees also considered that the Adviser, the
Distributor and the Administrator voluntarily have agreed, until
April 30, 1998, to reimburse the Equity Fund, the Asset
Allocation Fund and the Fixed Income Fund for total annual
o p e rating expenses which exceed 1.50%, 1.50% and 1.25%,
respectively. The New Distribution Plans will provide the
Distributor with the flexibility, in the future, to increase
marketing and distribution efforts, such as increased advertising
and compensation of broker-dealers for their distribution and
service-related activities in respect of Class A shares of the
19<PAGE>
Funds, which efforts are anticipated ultimately to increase the
assets of each of the Funds which in turn should result in
economies of scale (which means that total annual operating
expenses for each Fund will be spread over a greater amount of
assets thereby effectively reducing each Class A shareholder's
burden for the payment of these expenses).
As a result of their careful consideration of the above
factors and other relevant matters, the Trustees, including a
majority of the Independent Trustees, concluded, in the exercise
of their reasonable business judgment and in light of their
fiduciary duties under the Act, that each Fund's New Distribution
Plan is likely to benefit each Fund and its Class A shareholders
and recommended that it be submitted to the Class A shareholders
of each Fund for their approval. The New Distribution Plans will
not become effective as to a particular Fund unless approved by
that Fund's Class A shareholders. In the event that Class A
shareholders of each Fund do not approve their respective New
Distribution Plan, the Trustees will consider what action to
take, including proposing another distribution and service plan
for shareholder approval.
The Trustees recommend that Class A shareholders of each Fund
vote FOR
approval of each Fund's New Distribution Plan.
PROPOSAL 3. TO RATIFY THE SELECTION OF COOPERS & LYBRAND LLP
AS INDEPENDENT ACCOUNTANTS OF THE TRUST
For All Shareholders of the Equity Fund, the Asset Allocation
Fund and the Fixed Income Fund, voting together.
On February 21, 1997, the Disinterested Trustees selected
the firm of Coopers & Lybrand LLP to serve as independent
accountants for the Trust to sign or certify any financial
statements of the Trust required by any law or regulation to be
certified by an independent accountant and filed with the
Securities and Exchange Commission or any state. This selection
is being presented to shareholders for ratification. In
addition, as required by the Act, the vote of the Trustees is
subject to the right of the Trust, by vote of a majority of its
outstanding voting securities at any meeting called for the
purpose of voting on such action, to terminate such employment
without penalty. Coopers & Lybrand LLP has advised the Trust
that it has no direct or material indirect ownership interest in
the Trust.
T h e independent accountants examine annual financial
statements for the Trust and provide other audit and tax-related
s e rvices. In recommending the selection of the Trust's
accountants, the Disinterested Trustees reviewed the nature and
20<PAGE>
scope of the services to be provided (including non-audit
services) and whether the performance of such services would
affect the accountants' independence. Representatives of Coopers
& Lybrand LLP are not expected to be present at the Meeting, but
have been given the opportunity to make a statement if they so
desire and will be available should any matter arise requiring
their presence.
Required Vote
Approval of the proposal to ratify the selection of Coopers
& Lybrand LLP as independent accountants of the Trust by the
Trust's shareholders requires an affirmative vote of a majority
of the outstanding voting securities present at the Meeting. If
you are a shareholder of more than one Fund, you are entitled to
vote on the proposal as it pertains to each of your Funds and you
will receive more than one proxy card for this purpose.
Therefore, it is important that you review, complete and sign
each proxy card.
The Trustees recommend that shareholders of
the Trust vote FOR the proposal to ratify
the selection of Coopers & Lybrand LLP as the Trust's independent
accountants.
OTHER BUSINESS
The Trustees know of no business which will be presented for
consideration at the Meeting. However, if any other matters
properly come before the Meeting, it is the intention of the
persons named in the enclosed proxy to vote in accordance with
their best judgment.
SHAREHOLDERS' PROPOSALS
The Trust does not hold annual shareholder meetings.
Shareholders desiring to present a proposal for consideration at
the next shareholder meeting should send their written proposals
to the Secretary of the Trust, 11815 North Pennsylvania Street,
Carmel, Indiana 46032.
21<PAGE>
Vote this proxy card TODAY!
Return the proxy card in the enclosed envelope or mail to:
Conseco Fund Group
Attn: Proxy Department
11815 North Pennsylvania Street
Carmel, Indiana 46032
CONSECO FUND GROUP: EQUITY FUND
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s)
Maxwell E. Bublitz and William P. Latimer, or any one of them,
attorneys, with full power of substitution, to vote all shares of
Conseco Fund Group (the "Trust") as indicated above which the
undersigned is (are) entitled to vote at the Special Meeting of
Shareholders (the "Meeting") of the Trust to be held at 11815
North Pennsylvania Street, Carmel, Indiana 46032 on March 28,
1997 at 1:00 p.m., Eastern time, and at any adjournments of the
Meeting. All powers may be exercised by a majority of said proxy
holders or substitutes voting or acting, or, if only one votes
and acts, then by that one. This Proxy shall be voted on the
proposals described in the Proxy Statement as specified on the
reverse side. Receipt of the Notice of Meeting and the
accompanying Proxy Statement is hereby acknowledged. If not
revoked, this Proxy shall be voted.
Date __________________, 1997
NOTE: Please sign exactly as your name
appears on this Proxy. When signing as
attorney, executor, administrator,
trustee or guardian, please give your
full title as such. If a corporation,
please sign in full corporate name by
president or other authorized officer.
I f a partnership, please sign in
partnership name by authorized person.
Signature(s) (Title(s), if applicable)<PAGE>
Please refer to the Proxy Statement for a discussion of the
proposal.
THIS PROXY SHALL BE VOTED FOR EACH PROPOSAL IF NO SPECIFICATION
IS MADE.
As to any other matter, said proxy or proxies shall vote in
accordance with their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING:
Please vote by filling in the appropriate box below using blue or
black ink or dark pencil. Do not use red ink.
1. To approve the investment advisory agreement between Conseco
Fund Group, on behalf of the Equity Fund, and Conseco
Capital Management, Inc.
FOR ______ AGAINST ______ ABSTAIN ______
2. CLASS A SHAREHOLDERS ONLY: To approve the Equity Fund's
C l a s s A distribution and service plan to increase
distribution fees for Class A shares.
FOR ______ AGAINST ______ ABSTAIN ______
3. To ratify the selection of Coopers & Lybrand LLP as
independent accountants for the Trust.
FOR ______ AGAINST ______ ABSTAIN ______
PLEASE DO NOT FORGET TO SIGN THE REVERSE SIDE OF THIS CARD.<PAGE>
Vote this proxy card TODAY!
Return the proxy card in the enclosed envelope or mail to:
Conseco Fund Group
Attn: Proxy Department
11815 North Pennsylvania Street
Carmel, Indiana 46032
CONSECO FUND GROUP: ASSET ALLOCATION FUND
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s)
Maxwell E. Bublitz and William P. Latimer, or any one of them,
attorneys, with full power of substitution, to vote all shares of
Conseco Fund Group (the "Trust") as indicated above which the
undersigned is (are) entitled to vote at the Special Meeting of
Shareholders (the "Meeting") of the Trust to be held at 11815
North Pennsylvania Street, Carmel, Indiana 46032 on March 28,
1997 at 1:00 p.m., Eastern time, and at any adjournments of the
Meeting. All powers may be exercised by a majority of said proxy
holders or substitutes voting or acting, or, if only one votes
and acts, then by that one. This Proxy shall be voted on the
proposals described in the Proxy Statement as specified on the
reverse side. Receipt of the Notice of Meeting and the
accompanying Proxy Statement is hereby acknowledged. If not
revoked, this Proxy shall be voted.
Date __________________, 1997
NOTE: Please sign exactly as your name
appears on this Proxy. When signing as
attorney, executor, administrator,
trustee or guardian, please give your
full title as such. If a corporation,
please sign in full corporate name by
president or other authorized officer.
I f a partnership, please sign in
partnership name by authorized person.
Signature(s) (Title(s), if applicable)<PAGE>
Please refer to the Proxy Statement for a discussion of the
proposal.
THIS PROXY SHALL BE VOTED FOR EACH PROPOSAL IF NO SPECIFICATION
IS MADE.
As to any other matter, said proxy or proxies shall vote in
accordance with their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING:
Please vote by filling in the appropriate box below using blue or
black ink or dark pencil. Do not use red ink.
1. To approve the investment advisory agreement between Conseco
Fund Group, on behalf of the Asset Allocation Fund, and
Conseco Capital Management, Inc.
FOR ______ AGAINST ______ ABSTAIN ______
2. CLASS A SHAREHOLDERS ONLY: To approve the Asset Allocation
Fund's Class A distribution and service plan to increase
distribution fees for Class A shares.
FOR ______ AGAINST ______ ABSTAIN ______
3. To ratify the selection of Coopers & Lybrand LLP as
independent accountants for the Trust.
FOR ______ AGAINST ______ ABSTAIN ______
PLEASE DO NOT FORGET TO SIGN THE REVERSE SIDE OF THIS CARD.<PAGE>
Vote this proxy card TODAY!
Return the proxy card in the enclosed envelope or mail to:
Conseco Fund Group
Attn: Proxy Department
11815 North Pennsylvania Street
Carmel, Indiana 46032
CONSECO FUND GROUP: FIXED INCOME FUND
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s)
Maxwell E. Bublitz and William P. Latimer, or any one of them,
attorneys, with full power of substitution, to vote all shares of
Conseco Fund Group (the "Trust") as indicated above which the
undersigned is (are) entitled to vote at the Special Meeting of
Shareholders (the "Meeting") of the Trust to be held at 11815
North Pennsylvania Street, Carmel, Indiana 46032 on March 28,
1997 at 1:00 p.m., Eastern time, and at any adjournments of the
Meeting. All powers may be exercised by a majority of said proxy
holders or substitutes voting or acting, or, if only one votes
and acts, then by that one. This Proxy shall be voted on the
proposals described in the Proxy Statement as specified on the
reverse side. Receipt of the Notice of Meeting and the
accompanying Proxy Statement is hereby acknowledged. If not
revoked, this Proxy shall be voted.
Date __________________, 1997
NOTE: Please sign exactly as your name
appears on this Proxy. When signing as
attorney, executor, administrator,
trustee or guardian, please give your
full title as such. If a corporation,
please sign in full corporate name by
president or other authorized officer.
I f a partnership, please sign in
partnership name by authorized person.
Signature(s) (Title(s), if applicable)<PAGE>
Please refer to the Proxy Statement for a discussion of the
proposal.
THIS PROXY SHALL BE VOTED FOR EACH PROPOSAL IF NO SPECIFICATION
IS MADE.
As to any other matter, said proxy or proxies shall vote in
accordance with their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING:
Please vote by filling in the appropriate box below using blue or
black ink or dark pencil. Do not use red ink.
1. To approve the investment advisory agreement between Conseco
Fund Group, on behalf of the Fixed Income Fund, and Conseco
Capital Management, Inc.
FOR ______ AGAINST ______ ABSTAIN ______
2. CLASS A SHAREHOLDERS ONLY: To approve the Fixed Income
Fund's Class A distribution and service plan to increase
distribution fees for Class A shares.
FOR ______ AGAINST ______ ABSTAIN ______
3. To ratify the selection of Coopers & Lybrand LLP as
independent accountants for the Trust
FOR ______ AGAINST ______ ABSTAIN ______
PLEASE DO NOT FORGET TO SIGN THE REVERSE SIDE OF THIS CARD.<PAGE>
Exhibit 1A
INVESTMENT ADVISORY AGREEMENT
Between CONSECO FUND GROUP
on behalf of EQUITY FUND
and
CONSECO CAPITAL MANAGEMENT, INC.
THIS INVESTMENT ADVISORY AGREEMENT is entered into as of
this ___ day of __________, 1997, by and between Conseco Fund
Group (the "Trust"), a Massachusetts business trust, on behalf
of its series Equity Fund (the "Fund"), and Conseco Capital
Management, Inc. (the "Adviser").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment
company, registered as such pursuant to the provisions of the
Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the Fund is a diversified series of the Trust
operating as an open-end management investment company under
the 1940 Act, and is currently divided into Class A and Class
Y shares to be offered to individual and institutional
investors, respectively;
WHEREAS, the Adviser is an investment adviser, registered
as such pursuant to the provisions of the Investment Advisers
Act of 1940, and is engaged in the business of rendering
investment advice and investment management services as an
independent contractor;
WHEREAS, the Fund desires and has agreed to retain the
Adviser to render advice and services to the Fund in
connection with management and operation of the Fund pursuant
to terms and conditions set forth herein; and
WHEREAS, the Adviser desires and has agreed to render
such advice and furnish such services pursuant to the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and of
the mutual promises, covenants, conditions and agreements
contained herein, and for such other good and valuable
consideration the receipt and sufficiency of which are hereby
acknowledged, the parties, each intending to be legally bound
hereby, mutually agree as follows:<PAGE>
1. Employment. The Fund hereby employs the Adviser
and the Adviser hereby accepts such employment, to render
investment advice and investment management services with
respect to the Fund, subject to the supervision and direction
of the Board of Trustees of the Trust (the "Trustees"). The
Adviser shall, except as otherwise provided herein, render or
make available all services needed for the management and
operation of the Fund, and shall, as part of its duties
hereunder, (i) furnish the Fund with advice and
recommendations with respect to the investment of the assets
of the Fund and the purchase and sale of the portfolio
securities of the Fund, including the taking of such other
steps as may be necessary to implement such advice and
r e c o mmendations, (ii) furnish the Fund with reports,
statements and other data on securities, economic conditions
and other pertinent subjects which the Trustees may request,
(iii) furnish such office space and personnel as is needed by
the Fund, and (iv) in general, superintend and manage the
investments of the Fund, subject to the ultimate supervision
and direction of the Trustees.
2. Best Efforts. The Adviser hereby agrees to use
its best judgment and efforts in rendering the advice and
services with respect to the Fund as contemplated by this
Agreement. The Adviser further agrees to use its best efforts
in the furnishing of such advice and recommendations with
respect to the Fund, in the preparation of reports and
information, and in the management of the respective assets of
the Fund pursuant to this Agreement. For this purpose the
Adviser shall, at its own expense, maintain such staff and
employ or retain such personnel and consult with such other
persons as it shall from time to time determine to be
necessary to the performance of its obligations under this
Agreement. Without limiting the generality of the foregoing,
the staff and personnel of the Adviser shall be deemed to
include persons employed or retained by the Adviser to furnish
statistical, research, and other factual information, advice
regarding economic factors and trends, information with
respect to technical and scientific developments, and such
other information, advice and assistance as the Adviser may
desire and request.
3. Independent Contractor Status. The Adviser shall,
for all purposes herein, be deemed to be an independent
contractor, and shall, unless otherwise expressly provided and
authorized, have no authority to act for or represent the
Trust or the Fund in any way, or in any way be deemed an agent
of the Trust or the Fund. It is expressly understood and
agreed that the services to be rendered by the Adviser to the
Fund pursuant to the provisions of this Agreement are not to
be deemed exclusive with respect to the Adviser's rendering of
services, and the Adviser shall therefore be free to render
similar or different services to others, provided that, its<PAGE>
ability to render the services described herein shall not be
impaired thereby.
4. Furnishing of Information. The Fund shall from
time to time furnish to the Adviser detailed statements of the
investments and assets of the Fund and information pertaining
to the investment objectives and needs of the Fund, and shall
make available to the Adviser such financial reports, proxy
statements, legal and other information in the possession of
or available to the Fund relating to its investments, as the
same may be relevant to the performance by the Adviser of its
obligations hereunder. The Fund shall furnish such other
information as the Adviser may reasonably request.
5. Fund Records. The Adviser agrees that all records
which it maintains for the Fund shall be the property of the
Fund and that it will surrender promptly to the designated
officers of the Fund any of such records upon request. The
Adviser further agrees to preserve for the period prescribed
by the rules and regulations of the Securities and Exchange
Commission all such records as are required to be maintained
pursuant to said rules. The Adviser agrees that it will
maintain all records and accounts regarding the investment
activities of the Fund in a confidential manner. All such
accounts or records shall be made available within five (5)
business days of request to the accountants or auditors of the
Fund during regular business hours at the Adviser's offices
upon reasonable prior written notice. In addition, the
Adviser will provide any materials reasonably related to the
investment advisory services provided hereunder as may be
reasonably requested in writing by the designated officers of
the Fund or as may be required by any governmental agency
having jurisdiction.
6. Tender Offers. The Adviser hereby agrees that
whenever the Adviser has determined that the Fund should
tender securities pursuant to a "tender offer solicitation,"
the Adviser shall designate an affiliate as the "tendering
dealer," so long as such affiliate is legally permitted to act
in such capacity under the federal securities laws, the rules
promulgated thereunder and the rules of any securities
exchange or association of which such affiliate may be a
member. Such affiliated dealer shall not be obligated to make
any additional commitments of capital, expense or personnel
beyond that committed as of the date of this Agreement (other
than normal periodic fees or payments necessary to maintain
its corporate existence and its membership in the National
Association of Securities Dealers, Inc.). This Agreement
shall not obligate the Adviser or such affiliate to (i) act
pursuant to the foregoing requirement under any circumstance
in which either might reasonably believe that liability might
be imposed upon it as a result of so acting, or (ii) institute
legal or other proceedings to collect fees which may be
considered to be due to it from others as a result of such a<PAGE>
tender, unless the Fund shall enter into an agreement with the
Adviser or such affiliate to reimburse it for all expenses
connected with attempting to collect such fees (including
legal fees and expenses and that portion of the compensation
due to their respective employees, which amount is directly
attributable to the time involved in attempting to collect
such fees).
7. Allocation of Costs and Expenses. The Adviser
shall bear and pay the costs of rendering its services
pursuant to the terms of this Agreement, including the fees
paid to any sub-adviser which the Adviser may retain and any
value added taxes due in connection therewith. The Fund shall
bear and pay for all other expenses of its operation,
including but not limited to, organizational and offering
expenses of the Fund and expenses incurred in connection with
the issuance and registration of shares of the Fund; fees of
the Fund's custodian, transfer and shareholder servicing
agent; costs and expenses of pricing and calculating the daily
net asset value of the shares of the Fund and of maintaining
the books of account required by the 1940 Act; expenditures in
connection with meetings of shareholders and Trustees, other
than those called solely to accommodate the Adviser; salaries
of officers and fees and expenses of Trustees or members of
any advisory board or committee who are not affiliated with or
interested persons of the Fund or the Adviser; salaries of
personnel involved in placing orders for the execution of the
p o r tfolio transactions of the Fund or in maintaining
registration of shares of the Fund under state securities
laws; insurance premiums on property or personnel of the Fund
which inure to its benefit; the cost of preparing and printing
reports, proxy statements and prospectuses of the Trust or
other communications for distribution to its shareholders;
legal, auditing, and accounting fees; trade association dues;
fees and expenses or registering and maintaining registration
of shares of the Fund for sale under applicable federal and
state securities laws; and all other charges and costs
associated with the Fund's operations, plus any extraordinary
and non-recurring expenses, except as otherwise prescribed
herein. To the extent the Adviser incurs any costs or
performs any services which are an obligation of the Fund as
set forth herein and to the extent such costs or services have
b e en reasonably rendered, (a) the Fund shall promptly
reimburse the Adviser for such costs and expenses, and (b) the
Adviser shall be entitled to recover from the Fund the actual
costs incurred by the Adviser in rendering such services.
8. Management Fees. (a) In exchange for the
rendering of advice and services pursuant hereto, the Fund
shall pay to the Adviser, and the Adviser shall accept as full
compensation for all investment management services furnished
or provided to the Fund and as full reimbursement for all
expenses assumed by the Adviser, a management fee computed at<PAGE>
the annual rate of .70% of the average daily net assets of the
Fund.
(b) The management fee shall be accrued daily by
the Fund and paid to the Adviser at the end of each calendar
month.
(c) In the case of termination of this Agreement
during any month, the management fee for that month shall be
calculated on the basis of the number of business days during
which it is in effect for that month.
(d) To the extent that the gross operating costs
and expenses of the Fund (excluding any interest, taxes,
brokerage commissions, distribution expenses and, to the
e x t ent permitted, any extraordinary expenses, such as
litigation and non-recurring expenses) exceed the allowable
expense limitations of the state in which shares of the Fund
are registered for sale having the most stringent expenses
reimbursement provisions, the Adviser shall reimburse the Fund
for the amount of such excess.
(e) T h e management fee payable by the Fund
hereunder shall be reduced to the extent that an affiliate of
the Adviser has actually received cash payments of tender
offer solicitation fees (less certain costs and expenses
incurred in connection therewith) as referred to in Paragraph
6 hereof.
9. Prohibition on Purchase of Shares. The Adviser
agrees that neither it nor any of its officers or employees
shall take any short position in the shares of beneficial
interest of the Fund. This prohibition shall not prevent the
purchase of such shares by any of the officers and directors
or bona fide employees of the Adviser or any trust, pension,
profit-sharing or other benefit plan for such persons or
affiliates thereof, at a price not less than the net asset
value thereof at the time of purchase, as allowed pursuant to
rules promulgated under the 1940 Act.
10. Compliance with Applicable Law. Nothing contained
herein shall be deemed to require the Fund to take any action
contrary to (a) the Agreement and Declaration of Trust of the
Trust, (b) the By-laws of the Trust, or (c) any applicable
statute or regulation. Nothing contained herein shall be
d e e m ed to relieve or deprive the Trustees of their
responsibility for and control of the conduct of the affairs
of the Fund.
11. Liability. (a) In the absence of willful
m i s feasance, bad faith, gross negligence, or reckless
disregard of obligations or duties hereunder on the part of
the Adviser, the Adviser shall not be subject to liability to
the Fund or to any shareholder of the Fund for any act or<PAGE>
omission in the course of or in connection with rendering
services hereunder or for any losses that may be sustained in
the purchase, holding or sale of any security by the Fund.
(b) Notwithstanding the foregoing, the Adviser
agrees to reimburse the Fund for any and all costs, expenses,
and counsel and Trustees' fees reasonably incurred by the Fund
in connection with (i) preparation, printing and distribution
of proxy statements, (ii) amendments to its Registration
Statement, (iii) the holding of meetings of shareholders or
Trustees, (iv) the conduct of factual investigations, (v) any
l e gal or administrative proceedings (including any
a p p l ications for exemptions or determinations by the
Securities and Exchange Commission) which the Fund incurs as a
result of action or inaction on the part of the Adviser or any
of its shareholders where the action or inaction necessitating
such expenditures is (A) directly or indirectly related to any
transactions or proposed transaction in the shares or control
of the Adviser or its affiliates (or litigation related to any
transactions or proposed transaction involving such shares or
control) which shall have been undertaken without the prior
express approval of the Trustees, or (B) within the sole
control of the Adviser or any of its affiliates or any of
t h eir respective officers, directors, employees or
shareholders. The Adviser shall not be obligated pursuant to
the provisions of this Subparagraph 10(b) to reimburse the
Fund for any expenditures related to the institution of an
administrative proceeding or related to civil litigation by
the Fund or by a shareholder of the Trust seeking to recover
all or a portion of the proceeds derived by any shareholder of
the Adviser or any of its affiliates from the sale of shares
of the Adviser or similar matters. So long as this Agreement
remains in effect, the Adviser shall pay to the Fund the
amount due for expenses subject to this Subparagraph 10(b)
within thirty (30) days after a bill or statement has been
received by the Fund therefor. This provision shall not be
deemed to be a waiver of any claim which the Fund may have or
may assert against the Adviser or others for costs, expenses,
or damages heretofore incurred by the Trust or for costs,
expenses, or damages the fund may hereafter incur which are
not reimbursable to it hereunder.
(c) N o provision of this Agreement shall be
construed to protect any Trustee of the Trust or officer of
the Fund, or any director or officer of the Adviser, from
liability in violation of Sections 17(h) and (i) of the 1940
Act.
(d) The Adviser understands that the obligations of
this Agreement are not personally binding upon any shareholder
of the Fund, but bind only the Trust's property. The Adviser
represents that it has notice of the provisions of the
Declaration of Trust of the Trust disclaiming shareholder
liability for acts or obligations of the Trust.<PAGE>
12. Term of Agreement. This Agreement shall become
effective on the date hereof and shall continue in effect for
t w o years from such date unless sooner terminated as
hereinafter provided, and shall continue in effect from year
to year thereafter so long as such continuation is approved at
least annually by (i) the Trustees of the Trust or by the vote
of a majority of the outstanding voting securities of the
Fund, and (ii) the vote of a majority of the Trustees of the
Trust who are not parties to this Agreement or interested
persons of any such party, with such vote being cast in person
at a meeting called for the purpose of voting on such
approval.
13. Termination. This Agreement may be terminated at
any time without payment of any penalty (a) by the Trustees of
the Trust or by vote of a majority of the outstanding voting
securities of the Fund, upon delivery of sixty (60) days'
written notice to the Adviser, or (b) by the Adviser upon
sixty (60) days' written notice to the Fund. This Agreement
shall terminate automatically in the event of any transfer or
assignment hereof, as defined in the 1940 Act.
14. No Waiver. The waiver by any party of any breach
of or default under any provision or portion of this Agreement
shall not operate as or be construed to be a waiver of any
subsequent breach or default.
15. Severability. The provisions of this Agreement
shall be considered severable and if for any reason any
provision of this Agreement which is not essential to the
effectuation of the basic purpose of this Agreement is deemed
to be invalid or contrary to any existing or future law, such
invalidity shall not impair the operation of or affect any
other provision of this Agreement which is valid.
16. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be an original,
but all of which together shall constitute one and the same
agreement.
17. Entire Agreement. This Agreement represents the
entire understanding and agreement between the parties hereto
with respect to the subject matter hereof and supersedes all
p r ior understandings or agreements between the parties
pertaining to the subject matter hereof, whether oral or
written. This Agreement may only be modified or amended by
mutual written agreement of the parties hereto and, as
required, upon approval of a majority of the outstanding
voting securities of the Fund.
18. Definitions. For purposes of application and
operation of the provisions of this Agreement, the term
"majority of the outstanding voting securities" shall have the
meaning as set forth in the 1940 Act.<PAGE>
19. Use of Name. In consideration of the execution of
this Agreement, the Adviser hereby grants to the Trust the
right to use the name "Conseco" as part of its name and the
names of series thereof. The Trust agrees that in the event
this Agreement is terminated, it shall immediately take such
steps as are necessary to amend its name to remove the
reference to "Conseco."
20. Applicable Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Indiana.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested by their duly
authorized officers on the day and year first above written.
CONSECO FUND GROUP,
on behalf of Equity Fund
ATTEST: By:
[Title]
_____________________
CONSECO CAPITAL MANAGEMENT,
INC.
ATTEST: By:
[Title]
______________________<PAGE>
Exhibit 1B
INVESTMENT ADVISORY AGREEMENT
Between CONSECO FUND GROUP
on behalf of ASSET ALLOCATION FUND
and
CONSECO CAPITAL MANAGEMENT, INC.
THIS INVESTMENT ADVISORY AGREEMENT is entered into as of
this ___ day of ________, 1997, by and between Conseco Fund
Group (the "Trust"), a Massachusetts business trust, on behalf
of its series Asset Allocation Fund (the "Fund"), and Conseco
Capital Management, Inc. (the "Adviser").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment
company, registered as such pursuant to the provisions of the
Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the Fund is a diversified series of the Trust
operating as an open-end management investment company under
the 1940 Act, and is currently divided into Class A and Class
Y shares to be offered to individual and institutional
investors, respectively;
WHEREAS, the Adviser is an investment adviser, registered
as such pursuant to the provisions of the Investment Advisers
Act of 1940, and is engaged in the business of rendering
investment advice and investment management services as an
independent contractor;
WHEREAS, the Fund desires and has agreed to retain the
Adviser to render advice and services to the Fund in
connection with management and operation of the Fund pursuant
to terms and conditions set forth herein; and
WHEREAS, the Adviser desires and has agreed to render
such advice and furnish such services pursuant to the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and of
the mutual promises, covenants, conditions and agreements
contained herein, and for such other good and valuable
consideration the receipt and sufficiency of which are hereby
acknowledged, the parties, each intending to be legally bound
hereby, mutually agree as follows:<PAGE>
1. Employment. The Fund hereby employs the Adviser
and the Adviser hereby accepts such employment, to render
investment advice and investment management services with
respect to the Fund, subject to the supervision and direction
of the Board of Trustees of the Trust (the "Trustees"). The
Adviser shall, except as otherwise provided herein, render or
make available all services needed for the management and
operation of the Fund, and shall, as part of its duties
hereunder, (i) furnish the Fund with advice and
recommendations with respect to the investment of the assets
of the Fund and the purchase and sale of the portfolio
securities of the Fund, including the taking of such other
steps as may be necessary to implement such advice and
r e c o mmendations, (ii) furnish the Fund with reports,
statements and other data on securities, economic conditions
and other pertinent subjects which the Trustees may request,
(iii) furnish such office space and personnel as is needed by
the Fund, and (iv) in general, superintend and manage the
investments of the Fund, subject to the ultimate supervision
and direction of the Trustees.
2. Best Efforts. The Adviser hereby agrees to use
its best judgment and efforts in rendering the advice and
services with respect to the Fund as contemplated by this
Agreement. The Adviser further agrees to use its best efforts
in the furnishing of such advice and recommendations with
respect to the Fund, in the preparation of reports and
information, and in the management of the respective assets of
the Fund pursuant to this Agreement. For this purpose the
Adviser shall, at its own expense, maintain such staff and
employ or retain such personnel and consult with such other
persons as it shall from time to time determine to be
necessary to the performance of its obligations under this
Agreement. Without limiting the generality of the foregoing,
the staff and personnel of the Adviser shall be deemed to
include persons employed or retained by the Adviser to furnish
statistical, research, and other factual information, advice
regarding economic factors and trends, information with
respect to technical and scientific developments, and such
other information, advice and assistance as the Adviser may
desire and request.
3. Independent Contractor Status. The Adviser shall,
for all purposes herein, be deemed to be an independent
contractor, and shall, unless otherwise expressly provided and
authorized, have no authority to act for or represent the
Trust or the Fund in any way, or in any way be deemed an agent
of the Trust or the Fund. It is expressly understood and
agreed that the services to be rendered by the Adviser to the
Fund pursuant to the provisions of this Agreement are not to
be deemed exclusive with respect to the Adviser's rendering of
services, and the Adviser shall therefore be free to render
similar or different services to others, provided that, its<PAGE>
ability to render the services described herein shall not be
impaired thereby.
4. Furnishing of Information. The Fund shall from
time to time furnish to the Adviser detailed statements of the
investments and assets of the Fund and information pertaining
to the investment objectives and needs of the Fund, and shall
make available to the Adviser such financial reports, proxy
statements, legal and other information in the possession of
or available to the Fund relating to its investments, as the
same may be relevant to the performance by the Adviser of its
obligations hereunder. The Fund shall furnish such other
information as the Adviser may reasonably request.
5. Fund Records. The Adviser agrees that all records
which it maintains for the Fund shall be the property of the
Fund and that it will surrender promptly to the designated
officers of the Fund any of such records upon request. The
Adviser further agrees to preserve for the period prescribed
by the rules and regulations of the Securities and Exchange
Commission all such records as are required to be maintained
pursuant to said rules. The Adviser agrees that it will
maintain all records and accounts regarding the investment
activities of the Fund in a confidential manner. All such
accounts or records shall be made available within five (5)
business days of request to the accountants or auditors of the
Fund during regular business hours at the Adviser's offices
upon reasonable prior written notice. In addition, the
Adviser will provide any materials reasonably related to the
investment advisory services provided hereunder as may be
reasonably requested in writing by the designated officers of
the Fund or as may be required by any governmental agency
having jurisdiction.
6. Tender Offers. The Adviser hereby agrees that
whenever the Adviser has determined that the Fund should
tender securities pursuant to a "tender offer solicitation,"
the Adviser shall designate an affiliate as the "tendering
dealer," so long as such affiliate is legally permitted to act
in such capacity under the federal securities laws, the rules
promulgated thereunder and the rules of any securities
exchange or association of which such affiliate may be a
member. Such affiliated dealer shall not be obligated to make
any additional commitments of capital, expense or personnel
beyond that committed as of the date of this Agreement (other
than normal periodic fees or payments necessary to maintain
its corporate existence and its membership in the National
Association of Securities Dealers, Inc.). This Agreement
shall not obligate the Adviser or such affiliate to (i) act
pursuant to the foregoing requirement under any circumstance
in which either might reasonably believe that liability might
be imposed upon it as a result of so acting, or (ii) institute
legal or other proceedings to collect fees which may be
considered to be due to it from others as a result of such a<PAGE>
tender, unless the Fund shall enter into an agreement with the
Adviser or such affiliate to reimburse it for all expenses
connected with attempting to collect such fees (including
legal fees and expenses and that portion of the compensation
due to their respective employees, which amount is directly
attributable to the time involved in attempting to collect
such fees).
7. Allocation of Costs and Expenses. The Adviser
shall bear and pay the costs of rendering its services
pursuant to the terms of this Agreement, including the fees
paid to any sub-adviser which the Adviser may retain and any
value added taxes due in connection therewith. The Fund shall
bear and pay for all other expenses of its operation,
including but not limited to, organizational and offering
expenses of the Fund and expenses incurred in connection with
the issuance and registration of shares of the Fund; fees of
the Fund's custodian, transfer and shareholder servicing
agent; costs and expenses of pricing and calculating the daily
net asset value of the shares of the Fund and of maintaining
the books of account required by the 1940 Act; expenditures in
connection with meetings of shareholders and Trustees, other
than those called solely to accommodate the Adviser; salaries
of officers and fees and expenses of Trustees or members of
any advisory board or committee who are not affiliated with or
interested persons of the Fund or the Adviser; salaries of
personnel involved in placing orders for the execution of the
p o r tfolio transactions of the Fund or in maintaining
registration of shares of the Fund under state securities
laws; insurance premiums on property or personnel of the Fund
which inure to its benefit; the cost of preparing and printing
reports, proxy statements and prospectuses of the Trust or
other communications for distribution to its shareholders;
legal, auditing, and accounting fees; trade association dues;
fees and expenses or registering and maintaining registration
of shares of the Fund for sale under applicable federal and
state securities laws; and all other charges and costs
associated with the Fund's operations, plus any extraordinary
and non-recurring expenses, except as otherwise prescribed
herein. To the extent the Adviser incurs any costs or
performs any services which are an obligation of the Fund as
set forth herein and to the extent such costs or services have
b e en reasonably rendered, (a) the Fund shall promptly
reimburse the Adviser for such costs and expenses, and (b) the
Adviser shall be entitled to recover from the Fund the actual
costs incurred by the Adviser in rendering such services.
8. Management Fees. (a) In exchange for the
rendering of advice and services pursuant hereto, the Fund
shall pay to the Adviser, and the Adviser shall accept as full
compensation for all investment management services furnished
or provided to the Fund and as full reimbursement for all
expenses assumed by the Adviser, a management fee computed at<PAGE>
the annual rate of .70% of the average daily net assets of the
Fund.
(b) The management fee shall be accrued daily by
the Fund and paid to the Adviser at the end of each calendar
month.
(c) In the case of termination of this Agreement
during any month, the management fee for that month shall be
calculated on the basis of the number of business days during
which it is in effect for that month.
(d) To the extent that the gross operating costs
and expenses of the Fund (excluding any interest, taxes,
brokerage commissions, distribution expenses and, to the
e x t ent permitted, any extraordinary expenses, such as
litigation and non-recurring expenses) exceed the allowable
expense limitations of the state in which shares of the Fund
are registered for sale having the most stringent expenses
reimbursement provisions, the Adviser shall reimburse the Fund
for the amount of such excess.
(e) T h e management fee payable by the Fund
hereunder shall be reduced to the extent that an affiliate of
the Adviser has actually received cash payments of tender
offer solicitation fees (less certain costs and expenses
incurred in connection therewith) as referred to in Paragraph
6 hereof.
9. Prohibition on Purchase of Shares. The Adviser
agrees that neither it nor any of its officers or employees
shall take any short position in the shares of beneficial
interest of the Fund. This prohibition shall not prevent the
purchase of such shares by any of the officers and directors
or bona fide employees of the Adviser or any trust, pension,
profit-sharing or other benefit plan for such persons or
affiliates thereof, at a price not less than the net asset
value thereof at the time of purchase, as allowed pursuant to
rules promulgated under the 1940 Act.
10. Compliance with Applicable Law. Nothing contained
herein shall be deemed to require the Fund to take any action
contrary to (a) the Agreement and Declaration of Trust of the
Trust, (b) the By-laws of the Trust, or (c) any applicable
statute or regulation. Nothing contained herein shall be
d e e m ed to relieve or deprive the Trustees of their
responsibility for and control of the conduct of the affairs
of the Fund.
11. Liability. (a) In the absence of willful
m i s feasance, bad faith, gross negligence, or reckless
disregard of obligations or duties hereunder on the part of
the Adviser, the Adviser shall not be subject to liability to
the Fund or to any shareholder of the Fund for any act or<PAGE>
omission in the course of or in connection with rendering
services hereunder or for any losses that may be sustained in
the purchase, holding or sale of any security by the Fund.
(b) Notwithstanding the foregoing, the Adviser
agrees to reimburse the Fund for any and all costs, expenses,
and counsel and Trustees' fees reasonably incurred by the Fund
in connection with (i) preparation, printing and distribution
of proxy statements, (ii) amendments to its Registration
Statement, (iii) the holding of meetings of shareholders or
Trustees, (iv) the conduct of factual investigations, (v) any
l e gal or administrative proceedings (including any
a p p l ications for exemptions or determinations by the
Securities and Exchange Commission) which the Fund incurs as a
result of action or inaction on the part of the Adviser or any
of its shareholders where the action or inaction necessitating
such expenditures is (A) directly or indirectly related to any
transactions or proposed transaction in the shares or control
of the Adviser or its affiliates (or litigation related to any
transactions or proposed transaction involving such shares or
control) which shall have been undertaken without the prior
express approval of the Trustees, or (B) within the sole
control of the Adviser or any of its affiliates or any of
t h eir respective officers, directors, employees or
shareholders. The Adviser shall not be obligated pursuant to
the provisions of this Subparagraph 10(b) to reimburse the
Fund for any expenditures related to the institution of an
administrative proceeding or related to civil litigation by
the Fund or by a shareholder of the Trust seeking to recover
all or a portion of the proceeds derived by any shareholder of
the Adviser or any of its affiliates from the sale of shares
of the Adviser or similar matters. So long as this Agreement
remains in effect, the Adviser shall pay to the Fund the
amount due for expenses subject to this Subparagraph 10(b)
within thirty (30) days after a bill or statement has been
received by the Fund therefor. This provision shall not be
deemed to be a waiver of any claim which the Fund may have or
may assert against the Adviser or others for costs, expenses,
or damages heretofore incurred by the Trust or for costs,
expenses, or damages the fund may hereafter incur which are
not reimbursable to it hereunder.
(c) N o provision of this Agreement shall be
construed to protect any Trustee of the Trust or officer of
the Fund, or any director or officer of the Adviser, from
liability in violation of Sections 17(h) and (i) of the 1940
Act.
(d) The Adviser understands that the obligations of
this Agreement are not personally binding upon any shareholder
of the Fund, but bind only the Trust's property. The Adviser
represents that it has notice of the provisions of the
Declaration of Trust of the Trust disclaiming shareholder
liability for acts or obligations of the Trust.<PAGE>
12. Term of Agreement. This Agreement shall become
effective on the date hereof and shall continue in effect for
t w o years from such date unless sooner terminated as
hereinafter provided, and shall continue in effect from year
to year thereafter so long as such continuation is approved at
least annually by (i) the Trustees of the Trust or by the vote
of a majority of the outstanding voting securities of the
Fund, and (ii) the vote of a majority of the Trustees of the
Trust who are not parties to this Agreement or interested
persons of any such party, with such vote being cast in person
at a meeting called for the purpose of voting on such
approval.
13. Termination. This Agreement may be terminated at
any time without payment of any penalty (a) by the Trustees of
the Trust or by vote of a majority of the outstanding voting
securities of the Fund, upon delivery of sixty (60) days'
written notice to the Adviser, or (b) by the Adviser upon
sixty (60) days' written notice to the Fund. This Agreement
shall terminate automatically in the event of any transfer or
assignment hereof, as defined in the 1940 Act.
14. No Waiver. The waiver by any party of any breach
of or default under any provision or portion of this Agreement
shall not operate as or be construed to be a waiver of any
subsequent breach or default.
15. Severability. The provisions of this Agreement
shall be considered severable and if for any reason any
provision of this Agreement which is not essential to the
effectuation of the basic purpose of this Agreement is deemed
to be invalid or contrary to any existing or future law, such
invalidity shall not impair the operation of or affect any
other provision of this Agreement which is valid.
16. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be an original,
but all of which together shall constitute one and the same
agreement.
17. Entire Agreement. This Agreement represents the
entire understanding and agreement between the parties hereto
with respect to the subject matter hereof and supersedes all
p r ior understandings or agreements between the parties
pertaining to the subject matter hereof, whether oral or
written. This Agreement may only be modified or amended by
mutual written agreement of the parties hereto and, as
required, upon approval of a majority of the outstanding
voting securities of the Fund.
18. Definitions. For purposes of application and
operation of the provisions of this Agreement, the term
"majority of the outstanding voting securities" shall have the
meaning as set forth in the 1940 Act.<PAGE>
19. Use of Name. In consideration of the execution of
this Agreement, the Adviser hereby grants to the Trust the
right to use the name "Conseco" as part of its name and the
names of series thereof. The Trust agrees that in the event
this Agreement is terminated, it shall immediately take such
steps as are necessary to amend its name to remove the
reference to "Conseco."
20. Applicable Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Indiana.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested by their duly
authorized officers on the day and year first above written.
CONSECO FUND GROUP,
on behalf of Asset Allocation
Fund
ATTEST:
By:
[Title]
CONSECO CAPITAL MANAGEMENT,
INC.
ATTEST:
By:
[Title]<PAGE>
Exhibit 1C
INVESTMENT ADVISORY AGREEMENT
Between CONSECO FUND GROUP
on behalf of FIXED INCOME FUND
and
CONSECO CAPITAL MANAGEMENT, INC.
THIS INVESTMENT ADVISORY AGREEMENT is entered into as of
this ___ day of ________, 1997, by and between Conseco Fund
Group (the "Trust"), a Massachusetts business trust, on behalf
of its series Fixed Income Fund (the "Fund"), and Conseco
Capital Management, Inc. (the "Adviser").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment
company, registered as such pursuant to the provisions of the
Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the Fund is a diversified series of the Trust
operating as an open-end management investment company under
the 1940 Act, and is currently divided into Class A and Class
Y shares to be offered to individual and institutional
investors, respectively;
WHEREAS, the Adviser is an investment adviser, registered
as such pursuant to the provisions of the Investment Advisers
Act of 1940, and is engaged in the business of rendering
investment advice and investment management services as an
independent contractor;
WHEREAS, the Fund desires and has agreed to retain the
Adviser to render advice and services to the Fund in
connection with management and operation of the Fund pursuant
to terms and conditions set forth herein; and
WHEREAS, the Adviser desires and has agreed to render
such advice and furnish such services pursuant to the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and of
the mutual promises, covenants, conditions and agreements
contained herein, and for such other good and valuable
consideration the receipt and sufficiency of which are hereby
acknowledged, the parties, each intending to be legally bound
hereby, mutually agree as follows:<PAGE>
1. Employment. The Fund hereby employs the Adviser
and the Adviser hereby accepts such employment, to render
investment advice and investment management services with
respect to the Fund, subject to the supervision and direction
of the Board of Trustees of the Trust (the "Trustees"). The
Adviser shall, except as otherwise provided herein, render or
make available all services needed for the management and
operation of the Fund, and shall, as part of its duties
hereunder, (i) furnish the Fund with advice and
recommendations with respect to the investment of the assets
of the Fund and the purchase and sale of the portfolio
securities of the Fund, including the taking of such other
steps as may be necessary to implement such advice and
r e c o mmendations, (ii) furnish the Fund with reports,
statements and other data on securities, economic conditions
and other pertinent subjects which the Trustees may request,
(iii) furnish such office space and personnel as is needed by
the Fund, and (iv) in general, superintend and manage the
investments of the Fund, subject to the ultimate supervision
and direction of the Trustees.
2. Best Efforts. The Adviser hereby agrees to use
its best judgment and efforts in rendering the advice and
services with respect to the Fund as contemplated by this
Agreement. The Adviser further agrees to use its best efforts
in the furnishing of such advice and recommendations with
respect to the Fund, in the preparation of reports and
information, and in the management of the respective assets of
the Fund pursuant to this Agreement. For this purpose the
Adviser shall, at its own expense, maintain such staff and
employ or retain such personnel and consult with such other
persons as it shall from time to time determine to be
necessary to the performance of its obligations under this
Agreement. Without limiting the generality of the foregoing,
the staff and personnel of the Adviser shall be deemed to
include persons employed or retained by the Adviser to furnish
statistical, research, and other factual information, advice
regarding economic factors and trends, information with
respect to technical and scientific developments, and such
other information, advice and assistance as the Adviser may
desire and request.
3. Independent Contractor Status. The Adviser shall,
for all purposes herein, be deemed to be an independent
contractor, and shall, unless otherwise expressly provided and
authorized, have no authority to act for or represent the
Trust or the Fund in any way, or in any way be deemed an agent
of the Trust or the Fund. It is expressly understood and
agreed that the services to be rendered by the Adviser to the
Fund pursuant to the provisions of this Agreement are not to
be deemed exclusive with respect to the Adviser's rendering of
services, and the Adviser shall therefore be free to render
similar or different services to others, provided that, its<PAGE>
ability to render the services described herein shall not be
impaired thereby.
4. Furnishing of Information. The Fund shall from
time to time furnish to the Adviser detailed statements of the
investments and assets of the Fund and information pertaining
to the investment objectives and needs of the Fund, and shall
make available to the Adviser such financial reports, proxy
statements, legal and other information in the possession of
or available to the Fund relating to its investments, as the
same may be relevant to the performance by the Adviser of its
obligations hereunder. The Fund shall furnish such other
information as the Adviser may reasonably request.
5. Fund Records. The Adviser agrees that all records
which it maintains for the Fund shall be the property of the
Fund and that it will surrender promptly to the designated
officers of the Fund any of such records upon request. The
Adviser further agrees to preserve for the period prescribed
by the rules and regulations of the Securities and Exchange
Commission all such records as are required to be maintained
pursuant to said rules. The Adviser agrees that it will
maintain all records and accounts regarding the investment
activities of the Fund in a confidential manner. All such
accounts or records shall be made available within five (5)
business days of request to the accountants or auditors of the
Fund during regular business hours at the Adviser's offices
upon reasonable prior written notice. In addition, the
Adviser will provide any materials reasonably related to the
investment advisory services provided hereunder as may be
reasonably requested in writing by the designated officers of
the Fund or as may be required by any governmental agency
having jurisdiction.
6. Tender Offers. The Adviser hereby agrees that
whenever the Adviser has determined that the Fund should
tender securities pursuant to a "tender offer solicitation,"
the Adviser shall designate an affiliate as the "tendering
dealer," so long as such affiliate is legally permitted to act
in such capacity under the federal securities laws, the rules
promulgated thereunder and the rules of any securities
exchange or association of which such affiliate may be a
member. Such affiliated dealer shall not be obligated to make
any additional commitments of capital, expense or personnel
beyond that committed as of the date of this Agreement (other
than normal periodic fees or payments necessary to maintain
its corporate existence and its membership in the National
Association of Securities Dealers, Inc.). This Agreement
shall not obligate the Adviser or such affiliate to (i) act
pursuant to the foregoing requirement under any circumstance
in which either might reasonably believe that liability might
be imposed upon it as a result of so acting, or (ii) institute
legal or other proceedings to collect fees which may be
considered to be due to it from others as a result of such a<PAGE>
tender, unless the Fund shall enter into an agreement with the
Adviser or such affiliate to reimburse it for all expenses
connected with attempting to collect such fees (including
legal fees and expenses and that portion of the compensation
due to their respective employees, which amount is directly
attributable to the time involved in attempting to collect
such fees).
7. Allocation of Costs and Expenses. The Adviser
shall bear and pay the costs of rendering its services
pursuant to the terms of this Agreement, including the fees
paid to any sub-adviser which the Adviser may retain and any
value added taxes due in connection therewith. The Fund shall
bear and pay for all other expenses of its operation,
including but not limited to, organizational and offering
expenses of the Fund and expenses incurred in connection with
the issuance and registration of shares of the Fund; fees of
the Fund's custodian, transfer and shareholder servicing
agent; costs and expenses of pricing and calculating the daily
net asset value of the shares of the Fund and of maintaining
the books of account required by the 1940 Act; expenditures in
connection with meetings of shareholders and Trustees, other
than those called solely to accommodate the Adviser; salaries
of officers and fees and expenses of Trustees or members of
any advisory board or committee who are not affiliated with or
interested persons of the Fund or the Adviser; salaries of
personnel involved in placing orders for the execution of the
p o r tfolio transactions of the Fund or in maintaining
registration of shares of the Fund under state securities
laws; insurance premiums on property or personnel of the Fund
which inure to its benefit; the cost of preparing and printing
reports, proxy statements and prospectuses of the Trust or
other communications for distribution to its shareholders;
legal, auditing, and accounting fees; trade association dues;
fees and expenses or registering and maintaining registration
of shares of the Fund for sale under applicable federal and
state securities laws; and all other charges and costs
associated with the Fund's operations, plus any extraordinary
and non-recurring expenses, except as otherwise prescribed
herein. To the extent the Adviser incurs any costs or
performs any services which are an obligation of the Fund as
set forth herein and to the extent such costs or services have
b e en reasonably rendered, (a) the Fund shall promptly
reimburse the Adviser for such costs and expenses, and (b) the
Adviser shall be entitled to recover from the Fund the actual
costs incurred by the Adviser in rendering such services.
8. Management Fees. (a) In exchange for the
rendering of advice and services pursuant hereto, the Fund
shall pay to the Adviser, and the Adviser shall accept as full
compensation for all investment management services furnished
or provided to the Fund and as full reimbursement for all
expenses assumed by the Adviser, a management fee computed at<PAGE>
the annual rate of .45% of the average daily net assets of the
Fund.
(b) The management fee shall be accrued daily by
the Fund and paid to the Adviser at the end of each calendar
month.
(c) In the case of termination of this Agreement
during any month, the management fee for that month shall be
calculated on the basis of the number of business days during
which it is in effect for that month.
(d) To the extent that the gross operating costs
and expenses of the Fund (excluding any interest, taxes,
brokerage commissions, distribution expenses and, to the
e x t ent permitted, any extraordinary expenses, such as
litigation and non-recurring expenses) exceed the allowable
expense limitations of the state in which shares of the Fund
are registered for sale having the most stringent expenses
reimbursement provisions, the Adviser shall reimburse the Fund
for the amount of such excess.
(e) T h e management fee payable by the Fund
hereunder shall be reduced to the extent that an affiliate of
the Adviser has actually received cash payments of tender
offer solicitation fees (less certain costs and expenses
incurred in connection therewith) as referred to in Paragraph
6 hereof.
9. Prohibition on Purchase of Shares. The Adviser
agrees that neither it nor any of its officers or employees
shall take any short position in the shares of beneficial
interest of the Fund. This prohibition shall not prevent the
purchase of such shares by any of the officers and directors
or bona fide employees of the Adviser or any trust, pension,
profit-sharing or other benefit plan for such persons or
affiliates thereof, at a price not less than the net asset
value thereof at the time of purchase, as allowed pursuant to
rules promulgated under the 1940 Act.
10. Compliance with Applicable Law. Nothing contained
herein shall be deemed to require the Fund to take any action
contrary to (a) the Agreement and Declaration of Trust of the
Trust, (b) the By-laws of the Trust, or (c) any applicable
statute or regulation. Nothing contained herein shall be
d e e m ed to relieve or deprive the Trustees of their
responsibility for and control of the conduct of the affairs
of the Fund.
11. Liability. (a) In the absence of willful
m i s feasance, bad faith, gross negligence, or reckless
disregard of obligations or duties hereunder on the part of
the Adviser, the Adviser shall not be subject to liability to
the Fund or to any shareholder of the Fund for any act or<PAGE>
omission in the course of or in connection with rendering
services hereunder or for any losses that may be sustained in
the purchase, holding or sale of any security by the Fund.
(b) Notwithstanding the foregoing, the Adviser
agrees to reimburse the Fund for any and all costs, expenses,
and counsel and Trustees' fees reasonably incurred by the Fund
in connection with (i) preparation, printing and distribution
of proxy statements, (ii) amendments to its Registration
Statement, (iii) the holding of meetings of shareholders or
Trustees, (iv) the conduct of factual investigations, (v) any
l e gal or administrative proceedings (including any
a p p l ications for exemptions or determinations by the
Securities and Exchange Commission) which the Fund incurs as a
result of action or inaction on the part of the Adviser or any
of its shareholders where the action or inaction necessitating
such expenditures is (A) directly or indirectly related to any
transactions or proposed transaction in the shares or control
of the Adviser or its affiliates (or litigation related to any
transactions or proposed transaction involving such shares or
control) which shall have been undertaken without the prior
express approval of the Trustees, or (B) within the sole
control of the Adviser or any of its affiliates or any of
t h eir respective officers, directors, employees or
shareholders. The Adviser shall not be obligated pursuant to
the provisions of this Subparagraph 10(b) to reimburse the
Fund for any expenditures related to the institution of an
administrative proceeding or related to civil litigation by
the Fund or by a shareholder of the Trust seeking to recover
all or a portion of the proceeds derived by any shareholder of
the Adviser or any of its affiliates from the sale of shares
of the Adviser or similar matters. So long as this Agreement
remains in effect, the Adviser shall pay to the Fund the
amount due for expenses subject to this Subparagraph 10(b)
within thirty (30) days after a bill or statement has been
received by the Fund therefor. This provision shall not be
deemed to be a waiver of any claim which the Fund may have or
may assert against the Adviser or others for costs, expenses,
or damages heretofore incurred by the Trust or for costs,
expenses, or damages the fund may hereafter incur which are
not reimbursable to it hereunder.
(c) N o provision of this Agreement shall be
construed to protect any Trustee of the Trust or officer of
the Fund, or any director or officer of the Adviser, from
liability in violation of Sections 17(h) and (i) of the 1940
Act.
(d) The Adviser understands that the obligations of
this Agreement are not personally binding upon any shareholder
of the Fund, but bind only the Trust's property. The Adviser
represents that it has notice of the provisions of the
Declaration of Trust of the Trust disclaiming shareholder
liability for acts or obligations of the Trust.<PAGE>
12. Term of Agreement. This Agreement shall become
effective on the date hereof and shall continue in effect for
t w o years from such date unless sooner terminated as
hereinafter provided, and shall continue in effect from year
to year thereafter so long as such continuation is approved at
least annually by (i) the Trustees of the Trust or by the vote
of a majority of the outstanding voting securities of the
Fund, and (ii) the vote of a majority of the Trustees of the
Trust who are not parties to this Agreement or interested
persons of any such party, with such vote being cast in person
at a meeting called for the purpose of voting on such
approval.
13. Termination. This Agreement may be terminated at
any time without payment of any penalty (a) by the Trustees of
the Trust or by vote of a majority of the outstanding voting
securities of the Fund, upon delivery of sixty (60) days'
written notice to the Adviser, or (b) by the Adviser upon
sixty (60) days' written notice to the Fund. This Agreement
shall terminate automatically in the event of any transfer or
assignment hereof, as defined in the 1940 Act.
14. No Waiver. The waiver by any party of any breach
of or default under any provision or portion of this Agreement
shall not operate as or be construed to be a waiver of any
subsequent breach or default.
15. Severability. The provisions of this Agreement
shall be considered severable and if for any reason any
provision of this Agreement which is not essential to the
effectuation of the basic purpose of this Agreement is deemed
to be invalid or contrary to any existing or future law, such
invalidity shall not impair the operation of or affect any
other provision of this Agreement which is valid.
16. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be an original,
but all of which together shall constitute one and the same
agreement.
17. Entire Agreement. This Agreement represents the
entire understanding and agreement between the parties hereto
with respect to the subject matter hereof and supersedes all
p r ior understandings or agreements between the parties
pertaining to the subject matter hereof, whether oral or
written. This Agreement may only be modified or amended by
mutual written agreement of the parties hereto and, as
required, upon approval of a majority of the outstanding
voting securities of the Fund.
18. Definitions. For purposes of application and
operation of the provisions of this Agreement, the term
"majority of the outstanding voting securities" shall have the
meaning as set forth in the 1940 Act.<PAGE>
19. Use of Name. In consideration of the execution of
this Agreement, the Adviser hereby grants to the Trust the
right to use the name "Conseco" as part of its name and the
names of series thereof. The Trust agrees that in the event
this Agreement is terminated, it shall immediately take such
steps as are necessary to amend its name to remove the
reference to "Conseco."
20. Applicable Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Indiana.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested by their duly
authorized officers on the day and year first above written.
CONSECO FUND GROUP,
on behalf of Fixed Income
Fund
By:
ATTEST:
[Title]
CONSECO CAPITAL MANAGEMENT,
INC.
ATTEST:
By:
[Title]<PAGE>
Exhibit 2
Financial Statements of
Conseco Capital Management, Inc.
[to be included in the Definitive Proxy Filing]<PAGE>
Exhibit 3A
Class A
Plan of Distribution and Service
Pursuant to Rule 12b-1
CONSECO FUND GROUP
Equity Fund
March ___, 1997
WHEREAS, Conseco Fund Group, a Massachusetts business trust (the
"Trust"), engages in business as an open-end management investment company
and is registered as such with the Securities and Exchange Commission;
WHEREAS, the Trust has engaged Conseco Equity Sales, Inc. (the
"Distributor") as distributor of the shares of the Trust pursuant to an
Underwriting Agreement dated as of ______________ ___, 1997;
WHEREAS, the Trust is authorized to issue shares in separate series
(the "Series"); the Trustees, to date, have created three Series of shares
one of which series is the Equity Fund (the "Fund"); and the Trustees may
create additional Series in the future as the Trustees deem necessary and
appropriate;
WHEREAS, the Trust is authorized to issue shares of each Series in
one or more classes, and to date, the Trustees have created two classes:
"Class A Shares" and "Class Y Shares";
WHEREAS, the Trust desires to adopt a Plan of Distribution and
Service pursuant to Rule 12b-1 under the Investment Company Act of 1940
(the "Act") on behalf of the Fund and the Trustees of the Trust have
determined that there is a reasonable likelihood that adoption of this Plan
will benefit the Fund and its shareholders; and
WHEREAS, expenditures under the Plan of Distribution and Service
are primarily intended to result in the sale of Class A Shares of the Fund
within the meaning of paragraph (a)(2) of Rule 12b-1 under the Act.
NOW, THEREFORE, the Trust hereby adopts, on behalf of the Fund, and
the Distributor hereby agrees to the terms of, this Plan of Distribution
and Service (the "Plan") in accordance with Rule 12b-1, on the following
terms and conditions:
1. (a) The Trust is authorized to compensate the Distributor for
services performed and expenses incurred by the Distributor in
connection with the distribution of Class A Shares of the Fund
and the servicing of accounts holding such Shares of the Fund.
(b) The Fund shall pay to the Distributor, at the end of each
month, an amount equal to the average daily net assets of the
Fund multiplied by that portion of 0.50% which the number of
days in the month bears to 365. Such payment represents<PAGE>
reimbursement for (i) expenses incurred by the Distributor for
the promotion and distribution of Class A Shares of the Fund
("Distribution Fee") and (ii) fees paid to Authorized Dealers
(defined below).
(c) Such compensation shall be calculated and accrued daily and
paid monthly or at such other intervals as the Board of
Trustees may determine.
(d) The Distributor shall:
(i) (1) retain that portion of the Distribution Fee necessary
t o c ompensate it for costs associated with the
distribution of Class A Shares of the Fund; and (2)
d i sburse that portion of the Distribution Fee to
Authorized Dealers necessary to reimburse expenses of
A u t horized Dealers incurred in the promotion and
distribution of Class A Shares of the Fund; and
(ii) pay any Service Fee it receives under the Plan for which
a particular underwriter, dealer, broker, bank or selling
entity having a Selling Group Agreement in effect (the
"Authorized Dealers") is the dealer of record (which may
include the Distributor) to such Authorized Dealers to
compensate such Authorized Dealers for providing personal
services to shareholders relating to their investment
and/or maintaining shareholder accounts.
(e) Expenses for which the Distributor, or an Authorized Dealer,
may receive Distribution Fee payments include, but are not
limited to, the printing of prospectuses, statements of
additional information and reports used for sales purposes,
expenses of preparation of sales literature and related
expenses, advertisements, other distribution-related expenses
(including personnel of the Distributor), certain overhead
expenses attributable to the distribution of Class A Shares of
the Fund such as communications, salaries, training, supplies,
photocopying and similar types of expenses and fees paid to
Authorized Dealers.
(f) Services for which Authorized Dealers may receive Service Fee
payments include, but are not limited to, any or all of the
following: maintaining account records for shareholders who
beneficially own Shares; answering inquiries relating to the
shareholders' accounts, the policies of the Trust and the
performance of their investment; providing assistance and
handling transmission of funds in connection with purchase,
redemption and exchange orders for Shares; providing assistance
in connection with changing account setups and enrolling in
various optional Trust services; producing and disseminating
shareholder communications or servicing materials; the ordinary
or capital expenses, such as equipment, rent, fixtures,
salaries, bonuses, reporting and recordkeeping and third party
consultancy or similar expenses, relating to any activity for<PAGE>
which payment is authorized by the Board of Trustees; and the
financing of any other activity for which payment is authorized
by the Board of Trustees.
(g) In no event shall the sum of the Distribution Fee and Service
Fee exceed the Distributor's actual expenses incurred during
the period for which such Fees will be paid. Notwithstanding
the foregoing, the sum of the Distribution Fee and Service Fee
may exceed actual expenses incurred by the Distributor,
p r o v ided, that such excess represents payment to the
Distributor for unreimbursed expenses incurred under this Plan
not more than three years prior to the date upon which the Fund
will make payment of Distribution Fees and Service Fees to the
Distributor. Reimbursement of expenses shall be calculated on
a "first-in, first-out" basis.
2. This Plan shall not take effect until the Plan, together with any
related agreement(s), has been approved by votes of a majority of
both (a) the Board of Trustees of the Trust, and (b) those Trustees
of the Trust who are not "interested persons" of the Trust (as
defined in the Act) and who have no direct or indirect financial
interest in the operation of the Plan or any agreements related to
the Plan (the "Rule 12b-1 Trustees") cast in person at a meeting
called for the purpose of voting on the Plan and such related
agreement(s).
3. This Plan shall remain in effect until March ___, 1998, and shall
continue in effect thereafter so long as such continuance is
specifically approved at least annually in the manner provided for
approval of this Plan in paragraph 2.
4. The Distributor shall provide to the Trustees of the Trust and the
Trustees shall review, at least quarterly, a written report of
distribution and service related activities, Distribution Fees,
Service Fees, and the purposes for which such activities were
performed and expenses incurred.
5. This Plan may be terminated at any time by vote of a majority of the
Rule 12b-1 Trustees or by vote of a majority (as defined in the Act)
of the Class A outstanding voting securities of the Fund.
6. This Plan may not be amended to increase materially the amount of
compensation payable by the Trust with respect to Class A Shares of
the Fund under paragraph 1 hereof unless such amendment is approved
by a vote of at least a majority (as defined in the Act) of the Class
A outstanding voting securities of the Fund. No material amendment
to the Plan shall be made unless approved in the manner provided in
paragraph 2 hereof.
7. While this Plan is in effect, the selection and nomination of the
Trustees who are not interested persons (as defined in the Act) of
the Trust shall be committed to the discretion of the Trustees who
are not such interested persons.<PAGE>
8. The Trust shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 4 hereof, for a
period of not less than six years from the date of the Plan, any such
agreement, or any such report, as the case may be, the first two
years in an easily accessible place.
9. Any agreement related to this Plan shall be in writing and shall
provide that (a) the agreement may be terminated at any time upon
sixty (60) days' written notice, without the payment of any penalty,
by vote of a majority of the Rule 12b-1 Trustees, or by vote of a
majority of the Class A outstanding voting securities of the Fund,
(b) the agreement shall automatically terminate in the event of its
assignment (as defined in the Act), and (c) the agreement shall
continue in effect for a period of more than one year from the date
of its execution or adoption only so long as such continuance is
specifically approved at least annually by a majority of Trustees of
the Trust and a majority of the Rule 12b-1 Trustees by votes cast in
person at a meeting called for the purpose of voting on such
agreement.
IN WITNESS WHEREOF, the Trust and Distributor have executed this
Plan of Distribution and Service as of the day and year first above
written.
CONSECO FUND GROUP
By:______________________
CONSECO EQUITY SALES, INC.
By: <PAGE>
Exhibit 3B
Class A
Plan of Distribution and Service
Pursuant to Rule 12b-1
CONSECO FUND GROUP
Asset Allocation Fund
March ___, 1997
WHEREAS, Conseco Fund Group, a Massachusetts business trust (the
"Trust"), engages in business as an open-end management investment company
and is registered as such with the Securities and Exchange Commission;
WHEREAS, the Trust has engaged Conseco Equity Sales, Inc. (the
"Distributor") as distributor of the shares of the Trust pursuant to an
Underwriting Agreement dated as of ______________ ___, 1997;
WHEREAS, the Trust is authorized to issue shares in separate series
(the "Series"); the Trustees, to date, have created three Series of shares
one of which series is the Asset Allocation Fund (the "Fund"); and the
Trustees may create additional Series in the future as the Trustees deem
necessary and appropriate;
WHEREAS, the Trust is authorized to issue shares of each Series in
one or more classes, and to date, the Trustees have created two classes:
"Class A Shares" and "Class Y Shares";
WHEREAS, the Trust desires to adopt a Plan of Distribution and
Service pursuant to Rule 12b-1 under the Investment Company Act of 1940
(the "Act") on behalf of the Fund and the Trustees of the Trust have
determined that there is a reasonable likelihood that adoption of this Plan
will benefit the Fund and its shareholders; and
WHEREAS, expenditures under the Plan of Distribution and Service are
primarily intended to result in the sale of Class A Shares of the Fund
within the meaning of paragraph (a)(2) of Rule 12b-1 under the Act.
NOW, THEREFORE, the Trust hereby adopts, on behalf of the Fund, and
the Distributor hereby agrees to the terms of, this Plan of Distribution
and Service (the "Plan") in accordance with Rule 12b-1, on the following
terms and conditions:
1. (a) The Trust is authorized to compensate the Distributor for
services performed and expenses incurred by the Distributor in
connection with the distribution of Class A Shares of the Fund
and the servicing of accounts holding such Shares of the Fund.<PAGE>
(b) The Fund shall pay to the Distributor, at the end of each
month, an amount equal to the average daily net assets of the
Fund multiplied by that portion of 0.50% which the number of
days in the month bears to 365. Such payment represents
reimbursement for (i) expenses incurred by the Distributor for
the promotion and distribution of Class A Shares of the Fund
("Distribution Fee") and (ii) fees paid to Authorized Dealers
(defined below).
(c) Such compensation shall be calculated and accrued daily and
paid monthly or at such other intervals as the Board of
Trustees may determine.
(d) The Distributor shall:
(i) (1) retain that portion of the Distribution Fee necessary
t o c ompensate it for costs associated with the
distribution of Class A Shares of the Fund; and (2)
d i sburse that portion of the Distribution Fee to
Authorized Dealers necessary to reimburse expenses of
A u t horized Dealers incurred in the promotion and
distribution of Class A Shares of the Fund; and
(ii) pay any Service Fee it receives under the Plan for which
a particular underwriter, dealer, broker, bank or selling
entity having a Selling Group Agreement in effect (the
"Authorized Dealers") is the dealer of record (which may
include the Distributor) to such Authorized Dealers to
compensate such Authorized Dealers for providing personal
services to shareholders relating to their investment
and/or maintaining shareholder accounts.
(e) Expenses for which the Distributor, or an Authorized Dealer,
may receive Distribution Fee payments include, but are not
limited to, the printing of prospectuses, statements of
additional information and reports used for sales purposes,
expenses of preparation of sales literature and related
expenses, advertisements, other distribution-related expenses
(including personnel of the Distributor), certain overhead
expenses attributable to the distribution of Class A Shares of
the Fund such as communications, salaries, training, supplies,
photocopying and similar types of expenses and fees paid to
Authorized Dealers.
(f) Services for which Authorized Dealers may receive Service Fee
payments include, but are not limited to, any or all of the
following: maintaining account records for shareholders who
beneficially own Shares; answering inquiries relating to the
shareholders' accounts, the policies of the Trust and the
performance of their investment; providing assistance and
handling transmission of funds in connection with purchase,<PAGE>
redemption and exchange orders for Shares; providing assistance
in connection with changing account setups and enrolling in
various optional Trust services; producing and disseminating
shareholder communications or servicing materials; the ordinary
or capital expenses, such as equipment, rent, fixtures,
salaries, bonuses, reporting and recordkeeping and third party
consultancy or similar expenses, relating to any activity for
which payment is authorized by the Board of Trustees; and the
financing of any other activity for which payment is authorized
by the Board of Trustees.
(g) In no event shall the sum of the Distribution Fee and Service
Fee exceed the Distributor's actual expenses incurred during
the period for which such Fees will be paid. Notwithstanding
the foregoing, the sum of the Distribution Fee and Service Fee
may exceed actual expenses incurred by the Distributor,
p r o v ided, that such excess represents payment to the
Distributor for unreimbursed expenses incurred under this Plan
not more than three years prior to the date upon which the Fund
will make payment of Distribution Fees and Service Fees to the
Distributor. Reimbursement of expenses shall be calculated on
a "first-in, first-out" basis.
2. This Plan shall not take effect until the Plan, together with any
related agreement(s), has been approved by votes of a majority of
both (a) the Board of Trustees of the Trust, and (b) those Trustees
of the Trust who are not "interested persons" of the Trust (as
defined in the Act) and who have no direct or indirect financial
interest in the operation of the Plan or any agreements related to
the Plan (the "Rule 12b-1 Trustees") cast in person at a meeting
called for the purpose of voting on the Plan and such related
agreement(s).
3. This Plan shall remain in effect until March ___, 1998, and shall
continue in effect thereafter so long as such continuance is
specifically approved at least annually in the manner provided for
approval of this Plan in paragraph 2.
4. The Distributor shall provide to the Trustees of the Trust and the
Trustees shall review, at least quarterly, a written report of
distribution and service related activities, Distribution Fees,
Service Fees, and the purposes for which such activities were
performed and expenses incurred.
5. This Plan may be terminated at any time by vote of a majority of the
Rule 12b-1 Trustees or by vote of a majority (as defined in the Act)
of the Class A outstanding voting securities of the Fund.
6. This Plan may not be amended to increase materially the amount of
compensation payable by the Trust with respect to Class A Shares of
the Fund under paragraph 1 hereof unless such amendment is approved
by a vote of at least a majority (as defined in the Act) of the Class<PAGE>
A outstanding voting securities of the Fund. No material amendment
to the Plan shall be made unless approved in the manner provided in
paragraph 2 hereof.
7. While this Plan is in effect, the selection and nomination of the
Trustees who are not interested persons (as defined in the Act) of
the Trust shall be committed to the discretion of the Trustees who
are not such interested persons.
8. The Trust shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 4 hereof, for a
period of not less than six years from the date of the Plan, any such
agreement, or any such report, as the case may be, the first two
years in an easily accessible place.
9. Any agreement related to this Plan shall be in writing and shall
provide that (a) the agreement may be terminated at any time upon
sixty (60) days' written notice, without the payment of any penalty,
by vote of a majority of the Rule 12b-1 Trustees, or by vote of a
majority of the Class A outstanding voting securities of the Fund,
(b) the agreement shall automatically terminate in the event of its
assignment (as defined in the Act), and (c) the agreement shall
continue in effect for a period of more than one year from the date
of its execution or adoption only so long as such continuance is
specifically approved at least annually by a majority of Trustees of
the Trust and a majority of the Rule 12b-1 Trustees by votes cast in
person at a meeting called for the purpose of voting on such
agreement.
IN WITNESS WHEREOF, the Trust and Distributor have executed this
Plan of Distribution and Service as of the day and year first above
written.
CONSECO FUND GROUP
By:
CONSECO EQUITY SALES, INC.
By: <PAGE>
Exhibit 3C
Class A
Plan of Distribution and Service
Pursuant to Rule 12b-1
CONSECO FUND GROUP
Fixed Income Fund
March __, 1997
WHEREAS, Conseco Fund Group, a Massachusetts business trust (the
"Trust"), engages in business as an open-end management investment company
and is registered as such with the Securities and Exchange Commission;
WHEREAS, the Trust has engaged Conseco Equity Sales, Inc. (the
"Distributor") as distributor of the shares of the Trust pursuant to an
Underwriting Agreement dated as of ___________ ___, 1997;
WHEREAS, the Trust is authorized to issue shares in separate series
(the "Series"); the Trustees, to date, have created three Series of shares
one of which series is the Fixed Income Fund (the "Fund"); and the Trustees
may create additional Series in the future as the Trustees deem necessary
and appropriate;
WHEREAS, the Trust is authorized to issue shares of each Series in
one or more classes, and to date, the Trustees have created two classes:
"Class A Shares" and "Class Y Shares";
WHEREAS, the Trust desires to adopt a Plan of Distribution and
Service pursuant to Rule 12b-1 under the Investment Company Act of 1940
(the "Act") on behalf of the Fund and the Trustees of the Trust have
determined that there is a reasonable likelihood that adoption of this Plan
will benefit the Fund and its shareholders; and
WHEREAS, expenditures under the Plan of Distribution and Service are
primarily intended to result in the sale of Class A Shares of the Fund
within the meaning of paragraph (a)(2) of Rule 12b-1 under the Act.
NOW, THEREFORE, the Trust hereby adopts, on behalf of the Fund, and
the Distributor hereby agrees to the terms of, this Plan of Distribution
and Service (the "Plan") in accordance with Rule 12b-1, on the following
terms and conditions:
1. (a) The Trust is authorized to compensate the Distributor for
services performed and expenses incurred by the Distributor in
connection with the distribution of Class A Shares of the Fund
and the servicing of accounts holding such Shares of the Fund.<PAGE>
(b) The Fund shall pay to the Distributor, at the end of each
month, an amount equal to the average daily net assets of the
Fund multiplied by that portion of 0.65% which the number of
days in the month bears to 365. Such payment represents
reimbursement for (i) expenses incurred by the Distributor for
the promotion and distribution of Class A Shares of the Fund
("Distribution Fee") and (ii) fees paid to Authorized Dealers
(defined below).
(c) Such compensation shall be calculated and accrued daily and
paid monthly or at such other intervals as the Board of
Trustees may determine.
(d) The Distributor shall:
(i) (1) retain that portion of the Distribution Fee necessary
t o c ompensate it for costs associated with the
distribution of Class A Shares of the Fund; and (2)
d i sburse that portion of the Distribution Fee to
Authorized Dealers necessary to reimburse expenses of
A u t horized Dealers incurred in the promotion and
distribution of Class A Shares of the Fund; and
(ii) pay any Service Fee it receives under the Plan for which
a particular underwriter, dealer, broker, bank or selling
entity having a Selling Group Agreement in effect (the
"Authorized Dealers") is the dealer of record (which may
include the Distributor) to such Authorized Dealers to
compensate such Authorized Dealers for providing personal
services to shareholders relating to their investment
and/or maintaining shareholder accounts.
(e) Expenses for which the Distributor, or an Authorized Dealer,
may receive Distribution Fee payments include, but are not
limited to, the printing of prospectuses, statements of
additional information and reports used for sales purposes,
expenses of preparation of sales literature and related
expenses, advertisements, other distribution-related expenses
(including personnel of the Distributor), certain overhead
expenses attributable to the distribution of Class A Shares of
the Fund such as communications, salaries, training, supplies,
photocopying and similar types of expenses and fees paid to
Authorized Dealers.
(f) Services for which Authorized Dealers may receive Service Fee
payments include, but are not limited to, any or all of the
following: maintaining account records for shareholders who
beneficially own Shares; answering inquiries relating to the
shareholders' accounts, the policies of the Trust and the
performance of their investment; providing assistance and
handling transmission of funds in connection with purchase,<PAGE>
redemption and exchange orders for Shares; providing assistance
in connection with changing account setups and enrolling in
various optional Trust services; producing and disseminating
shareholder communications or servicing materials; the ordinary
or capital expenses, such as equipment, rent, fixtures,
salaries, bonuses, reporting and recordkeeping and third party
consultancy or similar expenses, relating to any activity for
which payment is authorized by the Board of Trustees; and the
financing of any other activity for which payment is authorized
by the Board of Trustees.
(g) In no event shall the sum of the Distribution Fee and Service
Fee exceed the Distributor's actual expenses incurred during
the period for which such Fees will be paid. Notwithstanding
the foregoing, the sum of the Distribution Fee and Service Fee
may exceed actual expenses incurred by the Distributor,
p r o v ided, that such excess represents payment to the
Distributor for unreimbursed expenses incurred under this Plan
not more than three years prior to the date upon which the Fund
will make payment of Distribution Fees and Service Fees to the
Distributor. Reimbursement of expenses shall be calculated on
a "first-in, first-out" basis.
2. This Plan shall not take effect until the Plan, together with any
related agreement(s), has been approved by votes of a majority of
both (a) the Board of Trustees of the Trust, and (b) those Trustees
of the Trust who are not "interested persons" of the Trust (as
defined in the Act) and who have no direct or indirect financial
interest in the operation of the Plan or any agreements related to
the Plan (the "Rule 12b-1 Trustees") cast in person at a meeting
called for the purpose of voting on the Plan and such related
agreement(s).
3. This Plan shall remain in effect until March ___, 1998, and shall
continue in effect thereafter so long as such continuance is
specifically approved at least annually in the manner provided for
approval of this Plan in paragraph 2.
4. The Distributor shall provide to the Trustees of the Trust and the
Trustees shall review, at least quarterly, a written report of
distribution and service related activities, Distribution Fees,
Service Fees, and the purposes for which such activities were
performed and expenses incurred.
5. This Plan may be terminated at any time by vote of a majority of the
Rule 12b-1 Trustees or by vote of a majority (as defined in the Act)
of the Class A outstanding voting securities of the Fund.
6. This Plan may not be amended to increase materially the amount of
compensation payable by the Trust with respect to Class A Shares of
the Fund under paragraph 1 hereof unless such amendment is approved<PAGE>
by a vote of at least a majority (as defined in the Act) of the Class
A outstanding voting securities of the Fund. No material amendment
to the Plan shall be made unless approved in the manner provided in
paragraph 2 hereof.
7. While this Plan is in effect, the selection and nomination of the
Trustees who are not interested persons (as defined in the Act) of
the Trust shall be committed to the discretion of the Trustees who
are not such interested persons.
8. The Trust shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 4 hereof, for a
period of not less than six years from the date of the Plan, any such
agreement, or any such report, as the case may be, the first two
years in an easily accessible place.
9. Any agreement related to this Plan shall be in writing and shall
provide that (a) the agreement may be terminated at any time upon
sixty (60) days' written notice, without the payment of any penalty,
by vote of a majority of the Rule 12b-1 Trustees, or by vote of a
majority of the Class A outstanding voting securities of the Fund,
(b) the agreement shall automatically terminate in the event of its
assignment (as defined in the Act), and (c) the agreement shall
continue in effect for a period of more than one year from the date
of its execution or adoption only so long as such continuance is
specifically approved at least annually by a majority of Trustees of
the Trust and a majority of the Rule 12b-1 Trustees by votes cast in
person at a meeting called for the purpose of voting on such
agreement.
IN WITNESS WHEREOF, the Trust and Distributor have executed this
Plan of Distribution and Service as of the day and year first above
written.
CONSECO FUND GROUP
By:
CONSECO EQUITY SALES, INC.
By: <PAGE>
