MONUMENT SERIES FUND, INC.
Monument Internet Fund
Monument Medical Sciences Fund
Monument Telecommunications Fund
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
MONUMENT SERIES FUND, INC. will host a Special Meeting of Shareholders
of its Internet, Medical Sciences and Telecommunications Fund series (which we
will refer to each as a "Fund," and together as the "Funds") on May 26, 2000 at
1:00 p.m. The meeting will be held at the Funds' offices at 7920 Norfolk Avenue,
Suite 500, Bethesda, Maryland 20814. At the meeting we will ask shareholders to
consider the proposals listed below, and to transact other business that
properly comes before the meeting or any adjournments that may result.
1. Reorganize Monument Series Fund, Inc. into a Delaware business trust.
2. Elect a Board of Trustees.
3. Ratify the selection of Deloitte & Touche, LLP as independent
accountants for the Fund.
4. Approve an amended investment advisory agreement for each series of the
Fund.
5. Adjust the percentage of assets that must be invested consistent with
each series' principal investment strategy.
6. Restrict each Fund's investment strategy by requiring that portfolios
be deemed diversified under the Investment Company Act of 1940.
7. Convert an investment limitation on short sales of securities from
fundamental to nonfundamental.
The Board of Directors has fixed the close of business on April 7, 2000
as the record date for the determination of the shareholders of each Fund
entitled to notice of, and to vote at, the Meeting and any adjournments of the
Meeting.
By order of the Board of Directors,
David A. Kugler, President
April 17, 2000
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YOUR VOTE IS IMPORTANT!
You can vote easily and quickly by toll-free telephone call, at our
website, or by mail. Follow the instructions on your enclosed proxy card.
Please help your Fund avoid the expense of a follow-up mailing by voting
today!
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<PAGE>
11
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF
MONUMENT SERIES FUND, INC.
TO BE HELD ON MAY 26, 2000
We are sending you this proxy statement on behalf of the Board of
Directors of Monument Series Fund, Inc. Proxies will be used at the Special
Meeting of Shareholders of the Fund scheduled to be held on May 26, 2000 at 1:00
p.m. at 7920 Norfolk Avenue, Suite 500, Bethesda, Maryland 20814, and at any
adjournments of the meeting, if necessary.
CONTENTS
1. Overview of the proxy process........................................2
2. Proposals for vote:
Item 1. Reorganization of Fund into a Delaware business trust.......3
Item 2. Election of a Board of Trustees.............................5
Item 3. Ratification of the selection of Deloitte & Touche, LLP as
independent accountants.....................................7
Item 4. Amended Investment Advisory Agreement.......................7
Item 5. Adjustment of percentage of assets in principal investment
strategy...................................................10
Item 6. Conversion to diversified investment strategy..............10
Item 7. Conversion of short sales to nonfundamental investment
restriction................................................11
3. Exhibits:
a. Form of Declaration of Trust.......................Exhibit A
b. Amended and Restated Investment Advisory Agreement.Exhibit B
<PAGE>
1. OVERVIEW OF THE PROXY PROCESS
Methods of soliciting proxy votes. The Fund will solicit shareholder
proxies several ways. The primary method of soliciting votes will be by the
mailing of this proxy statement. In addition, employees of the Fund may solicit
proxies in person, by telephone, or through electronic means, such as by
facsimile and the Internet. If additional solicitation efforts are required, we
may contract an outside firm, Shareholder Communications Corporation, to solicit
shareholder votes by telephone on behalf of the Fund. If required to be used,
this procedure is expected to cost the Fund a total of approximately $40,000.
All shareholders are entitled to vote their proxies by returning the enclosed
proxy card to the Fund via U.S. mail. If the Fund records votes by telephone, it
will use procedures designed to authenticate shareholders' identities.
Costs of soliciting proxy votes. The Fund pays all costs associated
with soliciting proxies from the shareholders, including the printing, mailing
and tabulation of proxies. You can help save your Fund money by voting
immediately, which may help avoid the expense of having to solicit shareholders
a second time in the event a quorum is not reached before the scheduled meeting
date.
Quorum. In order for the meeting to proceed as scheduled, it is
necessary for there to be a "quorum" - in other words, enough of the
shareholders must be represented at the meeting, either in person or by proxy.
Specifically, a majority of the Fund's shares must be represented. In order for
a share to be represented by proxy, the proxy must be returned, whether by mail
or any other means. How the person voted the proxy is irrelevant for purposes of
obtaining the quorum. Abstentions are counted toward a quorum, as are broker
"non-votes."
Voting of proxies. All proxy cards that are properly executed and
received by the Fund prior to the meeting, and all votes received by telephone
or via the Internet, will be voted at the meeting in accordance with the
instructions you provide. If a shareholder does not provide specific voting
instructions, the vote will be cast IN FAVOR OF the item being considered.
Broker "non-votes." Some brokers hold proxy statements for customers
who have not voted their shares, and for whom the brokers have no discretionary
authority to vote on the matters before the special meeting. In those cases, the
brokers may submit "non-votes," which will count toward a quorum, but which will
not be counted in favor of any of the proposals.
Revoking your proxy or changing your vote. After you have voted by
proxy, you may revoke your proxy at any time up until the time the voting
results are announced at the meeting. You may revoke your proxy by submitting
your change in writing to the Fund (to be received prior to the meeting) at 7920
Norfolk Avenue, Suite 500, Bethesda, Maryland 20814, or by voting in person at
the meeting. If you have already voted but wish to change your vote, you may do
so by voting again electronically or by telephone, or by submitting the original
proxy card if you did not submit it the first time you voted.
Shareholder proposals. If you would like to submit a shareholder
proposal to be included in the Fund's next proxy statement, we must receive your
submission within a reasonable period prior to the next meeting. The Fund
currently does not intend to hold an annual or special meeting in 2001.
Reimbursement for forwarding proxy materials. The Fund will reimburse
brokerage firms and other nominees for reasonable expenses incurred in
forwarding proxy solicitation material to the beneficial owners of the Funds'
shares. Requests for reimbursement should be submitted to the Fund.
Annual and semi-annual reports. You may obtain a copy of the Fund's
annual and semi-annual reports at no charge to you. To receive a report, please
call the Fund toll-free at 888-420-9950. Alternatively, you may write to us at
7920 Norfolk Avenue, Suite 500, Bethesda, Maryland 20814.
Litigation. The Fund is not involved in any litigation.
Required vote. Some items are identified as requiring a vote of the
"majority of the outstanding voting securities of the Fund." Under the
Investment Company Act of 1940 ("1940 Act"), that requires the affirmative vote
of the lesser of (a) 67% or more of the voting securities present at the meeting
or represented by proxy if the holders of more than 50% of the outstanding
voting securities are present or represented by proxy, or (b) more than 50% of
the outstanding voting securities. Broker non-votes are not considered "present"
for this purpose.
* * *
2. PROPOSALS FOR VOTE
Item 1. Reorganize Monument Series Fund into a Delaware Business Trust
The Proposed Change
Monument Series Fund, Inc. (the "Fund") is currently organized as a
corporation under the laws of the state of Maryland. The Board has approved a
proposal to convert the Fund from a Maryland corporation to a Delaware business
trust. Given the growth of the Fund, the board believes it is in the best
interests of the Fund and its shareholders to reorganize the Fund into a
Delaware business trust. The conversion is designed to streamline the Trust's
governing and operating structure, thereby allowing the Fund to benefit from
various differences in the law of Delaware as it applies to business trusts. For
example, the change is likely to result in a cost savings to the Fund by
reducing administrative burdens associated with state compliance, while at the
same time retaining or perhaps even improving the protections afforded to the
Fund and its shareholders.
Adoption of the new form of organization will not alter in any way the
directors'/trustees' existing fiduciary obligations to act with due care in the
shareholders' interests.
How the Change Would Be Accomplished
Technically, the Fund will merge into an identical counterpart under
Delaware law pursuant to an Agreement and Plan of Merger. A Declaration of Trust
will be filed with the appropriate authorities in Delaware, and the assets of
Monument Series Fund, Inc. will be transferred into the newly-organized Delaware
business trust named Monument Series Fund, which will have series identical to
the ones that currently exist for the Fund. If approved by shareholders, it is
estimated that the conversion will become effective at the close of business on
June 7, 2000. The exact timing will depend on the date the staff of the
Securities and Exchange Commission ("SEC") grants effectiveness to the
registration statement of the Fund currently awaiting review.
When the merger of the Fund into the Delaware entity becomes effective,
the assets and liabilities of each series will automatically be reallocated to
its respective Delaware counterpart, and the then-outstanding shares of
beneficial interest of each series will automatically become identical shares of
beneficial interest of its respective Delaware counterpart. These mergers will
be tax-free reorganizations under Section 268(a)(1)(A) of the Internal Revenue
Code of 1986, as amended, so that neither the Fund nor its shareholders will
recognize any income, gain or loss as a result of the merger, and the tax bases
or costs of the each series' portfolio securities and other assets and of their
shareholders' shares will carry over unchanged. The merger will not require
action by any shareholder, so that shareholder accounts in the Fund will
automatically become shareholder accounts in their respective Delaware
counterpart series.
Since the assets and liabilities of the Fund and each of its series
will be automatically transferred to and assumed by, respectively, the Delaware
trust and each new counterpart series, the Fund's present investment advisory
agreement (subject to the changes being voted on at the Special Meeting of
Shareholders) and distribution arrangements will remain in full force and
effect. The newly-elected trustees of the Fund under Delaware law, who are
currently directors of the Fund under Maryland law, will automatically become
trustees of the Delaware trust. The officers of the Delaware trust, who are also
officers of the Fund, will also continue in office. Following the merger, each
new series will continue to have the same stated investment objectives, policies
and limitations as its Fund counterpart currently has, subject to the changes
being voted on in this Proxy Statement.
Each series will share the costs and expense of the merger in
proportion to its respective net assets.
General Information on Delaware Business Trusts
The Delaware trust will continue to be subject to the Investment
Company Act of 1940 (the "1940 Act") and other laws and rules that the
Securities and Exchange Commission ("SEC") has been charged with overseeing for
the benefit of public investors. The business and affairs of the Delaware trust
will, like those of the Fund, be managed by or under the direction of the
trustees, who serve indefinite terms and who have all powers necessary to carry
out that responsibility. The responsibilities, powers and fiduciary duties of
the trustees of will be substantially the same as those currently borne by the
directors.
Monument Series Fund as a Delaware business trust will not hold annual
shareholder meetings, just as it does not currently hold such meetings as a
Maryland corporation. Shareholders will have the power to vote only with respect
to the election or removal of trustees, the approval of any new or amended
investment advisory agreement, and on other matters relating to the trust or its
series as may be required or authorized by law, the Declaration of Trust or the
Bylaws or as determined by the trustees, such as changes in a series'
fundamental investment policies. Future transactions such as mergers may not
require a shareholder vote.
The business and affairs of the Delaware trust will be managed under
the direction of the newly-elected trustees. The trustees will hold office
without limit in time (unless otherwise determined by the board) except that:
(i) any trustee may resign; (ii) any trustee may be removed with or without
cause at any time by written instrument signed by at least two-thirds of the
other trustees; (iii) any trustee who requests to be retired, or who has become
physically or mentally incapacitated or is otherwise unable to serve, may be
retired by written instrument signed by a majority of the other trustees; and
(iv) any trustee may be removed with or without cause at any meeting of
shareholders by a vote of two-thirds of the outstanding shares of the trust.
Whenever a vacancy exists among the trustees, the remaining trustees may appoint
any person as they determine in their sole discretion to fill that vacancy,
consistent with the limitations under the 1940 Act.
This matter requires the affirmative vote of a majority of the
outstanding voting securities of the Fund. The Board of Directors recommends
that you vote FOR the proposal. In the event the required vote is not achieved,
the Fund will continue operations as a corporation organized under the laws of
Maryland.
Item 2. Elect a Board of Trustees
You are being asked to elect a Board of Trustees based on the Fund's
current Board of Directors. Each of the nominees for trustee has served in the
capacity of director of the Fund since originally elected or appointed. The
attorneys-in-fact as appointed on the proxy card will vote in favor of the
nominees unless your authority to cast those votes has been withheld in the
proxy card.
All of the nominees have agreed to serve. Each member will serve until
the next meeting of shareholders or until he or she retires or is otherwise
removed from the Board. If an unforeseen event prevents a nominee from serving,
your votes will be cast for the election of a substitute selected by the Board.
David A. Kugler was named as initial director with the formation of the
Fund in 1997, and Mr. Kugler, G. Frederick White II, Francine F. Carb, Victor
Dates, George DeBakey and Rhonda Wiles Roberson were named as members of the
Board of Directors at its organizational meeting in October 1997. Another
director, Herbert Klein, was also named to the Board at the organizational
meeting, but later ceased serving as a director. David Gregg III was appointed
to the Board effective March 2000. No nominee is related to any other nominee.
Mr. Kugler's name is followed by an asterisk (*), indicating that he is an
"interested person" of the Fund by virtue of his affiliation with the Fund's
investment adviser and distributor.
Nominee Year of Election or
(Age) Principal Occupation Appointment
David A. Kugler* President and Treasurer of the Fund; 1997
(40) President and Director, The Monument Group,
Inc. (a holding company), Monument Funds
Group, Inc. (a mutual funds development
company), Monument Advisors, Ltd.,
Monument Distributors, Inc., and Monument
Shareholder Services, Inc., 1997-present.
G. Frederick White II Business Manager, Trinity Episcopal 1997
(46) Parish, 1997-present
Francine F. Carb President, Markitects, Inc.(marketing 1997
(41) consulting 1994-present.
Victor Dates Adjunct Professor, Coppin State 1997
(62) College, 1998-present
George DeBakey Director, Business Development, 1997
(50) Techolognet.com, 2000-present.
David Gregg Chairman, Gator Broadcasting Corp., 1986-present.2000
(67)
Rhonda Wiles-Roberson Director of Development, FuturesIndustry 1997
(48) Institute, 1999-present.
Compensation Table
Aggregate Compensation
Directors from the Fund - 1999
- --------- --------------------
David A. Kugler $ 0
G. Frederick White II 5,000
Francine F. Carb 5,000
Victor Dates 5,000
George DeBakey 4,500
David Gregg III 0
Rhonda Wiles Roberson 3,000
In order for a nominee to be deemed approved, that person must receive
a plurality of all of the Fund's votes cast at the meeting.
Item 3. Ratify the Selection of Deloitte & Touche LLP as Independent
Accountants of the Fund
By a vote of the disinterested directors, the firm of Deloitte & Touche
LLP has been selected as independent accountants for the Fund to sign or certify
any financial statements of the Fund required by any law or regulation to be
certified by an independent accountant and filed with the SEC or any state.
Pursuant to the 1940 Act, the selection of independent accountants requires the
ratification of shareholders. In addition, as required by the 1940 Act, the vote
of the directors is subject to the right of the Fund, by vote of a majority of
its outstanding voting securities at any meeting called for the purpose of
voting on such action, to terminate the employment without penalty. Deloitte &
Touche LLP has advised the Fund that to the best of its knowledge and belief, as
of the record date, no Deloitte & Touche LLP professional had any direct or
material indirect ownership interest in the Fund inconsistent with the
independence standards pertaining to accountants.
The independent accountants examine annual financial statements for the
Fund and provide other audit and tax-related services. In recommending the
selection of the Fund's accountants the Audit Committee reviewed the nature and
scope of the services to be provided (including non-audit services) and whether
the performance of the services would affect the accountants' independence.
A majority of all votes cast at the meeting is sufficient to approve
this proposal. The Board urges you to vote FOR the proposal to ratify the
selection of Deloitte & Touche LLP. If the proposal does not pass, then the
Board will consider at a future meeting of the Board what action should be
taken.
Item 4. Approve an Amended Investment Advisory Agreement for the Fund
The Proposed Change
The Fund pays fees to Monument Advisors, Ltd. ("Advisors") under an
Investment Advisory Agreement (the "Agreement") for conducting day-to-day
investment advisory services for the Fund. The services performed by Advisors
include providing the personnel, equipment and office facilities necessary for
the management of the Fund's investment portfolio. Subject to the direction of
the Board and consistent with the Fund's investment policies, Advisors decides
what securities to buy, hold or sell. Advisors also executes buy and sell orders
and provides research and statistical data to support investment management
activities.
Investment strategies have changed since Advisors began providing
services to the Funds. First, the two Washington, D.C. regional funds have been
transformed into the Monument Medical Sciences Fund and the Monument
Telecommunications Fund, with portfolios of securities of companies spanning the
entire United States instead of taking a regional view. In addition, the
Monument Internet Fund was added to the family of funds, and two new funds are
being added (Monument Digital Technology Fund and Monument New Economy Fund) and
are presently scheduled to become available in early June 2000. As a result, the
nature of the services being provided to the Funds and its shareholders has
changed dramatically.
In order to compete for the benefit of its shareholders in this
competitive technological marketplace, Advisors has recommended to the Board
that the fee schedule under the Agreement be changed to help ensure that
Advisors receives fees for its services that will allow it to continue to:
o Attract and retain high quality investment management and research
personnel;
o Provide technology and other systems necessary to keep the Fund
operating at a high level of service; and
o Use resources necessary to work toward maintaining investment
performance that benefits the Fund's shareholders
Advisors believes that maintaining competitive management fees will,
over the long term, enable it to continue to continue to provide high-quality
management services to the Fund. Accordingly, Advisors has recommended, and the
Board has approved:
o An increase in the investment advisory fee to be charged by Advisors to
each of the Fund's series; and
o A change in the breakpoint structure that reduces fees as each series'
assets grow
Notwithstanding the proposed fee change, Advisors has contracted with the Fund
to maintain an expense limitation of 2.25% on Class A Shares, and 3.00% on Class
B and Class C Shares. That agreement has an original term through May 1, 2001,
but may be renewed by Advisors indefinitely.
The proposed changes to the investment advisory fees are as follows:
Current advisory fee structure Proposed advisory fee structure
Fee Assets Fee Assets
1.00% through $ 50M 1.25% through $250M
0.75% through 100M 1.00% through 500M
0.625% over 100M 0.87% through 750M
0.75% through 1B
0.625% over 1B
The following chart shows the sample effect of the proposed change, based on
calendar year 1999 figures. The numbers below do not take into account the
expense limitation agreement, which may cause the net result to be the same if
the Advisor is required to reimburse some of its fees in order to maintain the
limit.
Actual 1999 Advisory Fees Paid 1999 Fees Assuming New Rate Percent
------------------------------ --------------------------- difference
Internet Fund $283,039 Internet Fund $353,792 25 %
Medical Sciences Fund $6,009 Medical Sciences Fund $7,511 25 %
Telecommunications Fund $2,621 Telecommunications Fund $3,276 25 %
The Current Investment Advisory Agreement
The Agreement provides that the Advisor will furnish each series of the
Fund with an investment program on an ongoing basis. In this connection, the
Advisor is responsible for making decisions about portfolio security holdings,
voting rights relating to portfolio securities, and relaying those decisions to
the Board on a quarterly basis. The fee the Fund pays to Advisors for its
services under the Agreement is based on net assets of the Fund and decreases as
the size of the Fund increases. Pursuant to the Agreement, the Fund pays its own
taxes, brokerage commission and nonadvisory expenses, which include custodian
fees; audit and certain legal fees; fidelity bond premiums; registration fees
for shares; consultant fees; Board compensation; corporate filing fees; and
other expenses properly payable by the Fund, as approved by the Board. The
Agreement has not previously been submitted to shareholders for approval.
Differences Between the Existing Agreement and the Proposed Changes
The material difference between the existing Agreement and the proposed
amendment relates appears in Schedule A to the Agreement and relates to the fees
and breakpoint levels identified above. Some conforming changes have been made
in the body of the Agreement to reflect the proposed change in form of
organization from a Maryland corporation to a Delaware business trust, and some
minor changes have been made for purposes of clarification.
Information Considered by the Board in Reaching its Decision
In considering the Advisor's proposal to raise its fees and change the
breakpoint levels, the Board considered the changes to the investment strategies
of the Funds that require a different research approach. In addition, they
considered the need for additional resource support including travel, computer
facilities, publications and software and professional support personnel. The
Board looked at the need to offer a competitive portfolio manager compensation
package in order to attract and retain talented personnel, and they compared the
proposed fees to those of the Fund's peer group in the industry. With respect to
the analysis of peer group, the Board determined that the proposed fee increase
is in line with industry standards and accordingly appropriate for the benefit
of the Fund and its shareholders.
The Board met on December 11, 1999 to consider the proposed amendments
to the Agreement, and voted in favor of the changes. If approved by the
shareholders, the proposed Agreement will continue from year to year as long as
it is approved by a majority of the Board, including a majority of the
independent trustees. The proposed Agreement may be terminated at any time, by
the Board, Advisors or the shareholders and will terminate automatically if it
is assigned.
The Agreement must be approved by a majority of the outstanding voting
securities of the Fund, as defined on page 3 above. The Board recommends that
you vote FOR the proposal. If the proposed Agreement is not approved, the Fund
will continue to operate under the current Agreement.
Item 5. Adjust the Principal Investment Strategy to 65%
Each series of the Fund currently seeks to achieve its objective by
investing, under normal circumstances, at least 80% of its total assets in the
equity securities of companies principally engaged in the main focus of the
series' investments. While the SEC is considering mandating the 80% level, the
requirement is currently that only 65% of a fund's assets be required to be
invested in the fund's principal investment strategy.
To date, the series have not had difficulty maintaining the 80% level.
Nevertheless, under different market circumstances it may be beneficial for the
series to be able to rely on the flexibility that a lower percentage requirement
would provide. Accordingly, we are proposing that each series of the Fund be
required to hold a minimum of 65% of its assets in its principal investment
strategy.
The Board recommends that you FOR the proposal. In order to effectuate
this change, a majority of the outstanding voting securities of each series, as
defined on page 3 above, must vote in favor of the change. If the change is not
approved with respect to any of the series, that series will continue to apply
the 80% standard to its holdings.
Item 6. Convert Each Series to "Diversified" Status Under the 1940 Act
Each of the series is currently nondiversified under the 1940 Act. A
diversified mutual fund is one that has at least 75% of the value of its total
assets represented by cash and cash items, government securities, securities of
other investment companies, and other securities limited to any one issuer in an
amount not exceeding 5% of its total portfolio value. In addition, a diversified
fund may not own more than 10% of the outstanding voting securities of any
individual issuer. Any fund not falling within this definition is considered
"nondiversified."
When the series were established, the Board deemed it appropriate to
permit the flexibility accorded by a nondiversified designation. However, over
the period of their investment history, each series has in fact maintained
diversified status. Given that fact, the Advisor believes that each series
should be designated diversified rather than nondiversified, and in that manner,
among other things, be categorized with their appropriate peer groups in the
mutual fund industry.
While shareholders must approve a conversion from diversified to
nondiversified status, they are not technically required to approve a change
from nondiversified to diversified status. Nevertheless, we have chosen to
request your vote in connection with the proposed change, and ask that you
approve the change for the benefit of your series. Consistent with this request,
the Board recommends that you vote FOR the proposal. A majority of the shares
present at the meeting is required to approve this proposal. If the proposal
does not pass, the Board will meet to determine whether or not to implement the
change.
Item 7. Convert the Investment Restriction on Short Sales of
Securities to Nonfundamental Status
The original fundamental investment restrictions for the Fund included
a restriction relating to short sales of securities. Specifically, the current
restriction states that no series may engage in short sales, unless at the time
of the sale the series owns securities equivalent in kind and amount to those
sold.
We do not propose to change that restriction at this time. Rather, it
is not required that the restriction be "fundamental," i.e., requiring a
shareholder vote to change in the event the Advisor deems it appropriate to
engage in those transactions. Accordingly, the Board has considered and approved
a recommendation to convert the restriction to a nonfundamental investment
restriction. In that manner, should it become appropriate for one or more of the
series to engage in short sales of securities other than those for which the
series already owns the same securities, the change can be undertaken by a vote
of the Board, rather than requiring the expense of a shareholder vote.
Accordingly, the Board recommends that you vote FOR this proposal. A
majority of the shares represented at the meeting for each series is required to
implement the change.
<PAGE>
EXHIBIT A
DECLARATION OF TRUST
of
Monument Series Fund
a Delaware Business Trust
Principal Place of Business:
7920 Norfolk Avenue, Suite 500
Bethesda, Maryland 20184
<PAGE>
TABLE OF CONTENTS
DECLARATION OF TRUST
ARTICLE I Name and Definitions..........................................1
1. Name .................................................1
2. Definitions...............................................1
(a) 1940 Act.........................................1
(b) Bylaws...........................................1
(c) Certificate of Trust.............................1
(d) Class............................................1
(e) Commission.......................................1
(f) Declaration of Trust.............................2
(g) Delaware Business Trust Act......................2
(h) Interested Person................................2
(i) Investment Adviser...............................2
(j) Person...........................................2
(k) Principal Underwriter............................2
(l) Series...........................................2
(m) Shareholder......................................2
(n) Shares...........................................2
(o) Trust............................................2
(p) Trust Property...................................2
(q) Trustees.........................................2
ARTICLE II Purpose of Trust.................................3
ARTICLE III Shares...........................................3
1. Shares of Beneficial Interest.............................3
2. Ownership of Shares.......................................4
3. Transfer of Shares........................................4
4. Investments in the Trust..................................5
5. Status of Shares and Limitation of Personal Liability.....5
6. Establishment and Designation of Series or Class..........5
(a) Assets Held with Respect to a Particular Series.........5
(b) Liabilities Held with Respect to a Particular Series....6
(c) Dividends, Distributions, Redemptions, and Repurchases..7
(d) Equality................................................7
(e) Fractions...............................................7
(f) Exchange Privilege......................................7
(g) Combination of Series...................................7
7. Indemnification of Shareholders.............................8
ARTICLE IV Trustees.........................................8
1. Number, Election, and Tenure..............................8
2. Effect of Death, Resignation, etc. of a Trustee...........9
3. Powers .................................................9
4. Payment of Expenses by the Trust.........................13
5. Payment of Expenses by Shareholders......................13
6. Ownership of Assets of the Trust.........................13
7. Service Contracts........................................14
8. Trustees and Officers as Shareholders....................15
ARTICLE V Shareholders' Voting Powers and Meetings........15
1. Voting Powers, Meetings, Notice and Record Dates.........15
2. Quorum and Required Vote.................................16
3. Record Dates.............................................16
4. Additional Provisions....................................17
ARTICLE VI Net Asset Value, Distributions and Redemptions..17
1. Determination of Net Asset Value, Net Income and
Distributions............................................17
2. Redemptions and Repurchases..............................17
ARTICLE VII Compensation and Limitation of Liability of
Trustees........................................18
1. Compensation.............................................18
2. Indemnification and Limitation of Liability..............19
3. Trustee's Good Faith Act, Expert Advice No Bond or Surety19
4. Insurance................................................20
ARTICLE VIII Miscellaneous............................................20
1. Liability of Third Persons Dealing with Trustees.........20
2. Termination of the Trust or Any Series or Class..........20
3. Reorganization...........................................21
4. Amendments...............................................21
5. Filing of Copies, References, Headings...................22
6. Applicable Law...........................................22
7. Provisions in Conflict with Law or Regulations...........23
8. Business Trust Only......................................23
<PAGE>
DECLARATION OF TRUST
OF
MONUMENT SERIES FUND
THIS DECLARATION OF TRUST is made and entered into by the Trustees of
Monument Series Fund as of the date set forth below for the purpose of forming a
Delaware business trust in accordance with the provisions set forth in this
document.
The Trustees hereby direct that the Certificate of Trust be filed with
the Office of the Secretary of State of the State of Delaware and do hereby
declare that the Trustees will hold IN TRUST all cash, securities, and other
assets which the Trust now possesses or may in the future acquire from time to
time in any manner and manage and dispose of those assets in accordance with the
following terms and conditions for the benefit of the holders of Shares of this
Trust.
ARTICLE I
NAME AND DEFINITIONS
NAME
Section 1. This Trust shall be known as "Monument Series Fund," and the
Trustees shall conduct the business of the Trust under that name or any other
name as they may from time to time determine.
DEFINITIONS
Section 2. Wherever used in this document, unless otherwise required by
the context or specifically provided:
(a) "1940 Act" means the Investment Company Act of 1940 and the rules
and regulations promulgated pursuant to that Act, all as amended from time to
time;
(b) "Bylaws" are the bylaws of the Trust, if any, as amended from time
to time. The Bylaws are expressly incorporated by reference into this document
and deemed to be part of the "governing instrument" within the meaning of the
Delaware Business Trust Act;
(c) "Certificate of Trust" means the certificate of trust, as amended
or restated from time to time, filed by the Trustees in the Office of the
Secretary of State of the State of Delaware in accordance with the Delaware
Business Trust Act;
(d) "Class" means a class of Shares of a Series of the Trust
established in accordance with the provisions of Article III of this document;
(e) "Commission" has the same meaning as in the 1940 Act;
(f) "Declaration of Trust" means this Declaration of Trust, as amended
or restated from time to time;
(g) "Delaware Business Trust Act" refers to chapter 38 of the Delaware
Code (Title 12, Section 3801, et seq., as amended from time to time), or any
future chapter identified under Delaware law as the Delaware Business Trust Act
or the body of law covering business trusts under Delaware law;
(h) "Interested Person" has the same meaning as in Section 2(a)(19) of
the 1940 Act, or in any successor to Section 2(a)(19) of the 1940 Act;
(i) "Investment Adviser" means a party furnishing services to the Trust
pursuant to any contract described in Article IV, Section 7(a) hereof;
(j) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures, estates, and other entities,
whether or not legal entities, and governments and agencies and their political
subdivisions, whether domestic or foreign;
(k) "Principal Underwriter" has the meaning as in the 1940 Act;
(l) "Series" means each Series of Shares established and designated
under or in accordance with the provisions of Article III of this document;
(m) "Shareholder" means a record owner of outstanding Shares;
(n) "Shares" means the equal proportionate transferable units of
interest into which the beneficial interest of the Trust or each Series shall be
divided from time to time, including such Class or Classes of Shares as the
Trustees may from time to time create and establish, and including fractions of
Shares as well as whole Shares as consistent with the requirements of federal
and/or state securities laws;
(o) "Trust" refers to Monument Series Fund, and reference to the Trust,
when applicable to one or more series of the Trust, shall refer to any such
Series;
(p) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is from time to time owned or held by or for the
account of the Trust; and
(q) "Trustees" refer to the individual trustees in their capacity as
trustees under this document and their successors for the time during which they
are in as trustees.
ARTICLE II
PURPOSE OF TRUST
The purpose of the Trust is to conduct, operate and carry on the
business of a management investment company registered under the 1940 Act
through one or more Series investing primarily in securities, and to carry on
such other business as the Trustees may from time to time determine pursuant to
their authority under this Declaration of Trust.
ARTICLE III
SHARES
SHARES OF BENEFICIAL INTEREST
Section 1. The beneficial interest in the Trust shall be divided into
one or more Series. The Trustees may divide each Series into two or more
Classes. Subject to the further provisions of this Article III and any
applicable requirements of the 1940 Act, the Trustees shall have full power and
authority, in their sole discretion, and without obtaining any authorization or
vote of the Shareholders of any Series or Class thereof:
(i) to divide the beneficial interest in each Series or Class
thereof into Shares, with or without par value as the Trustees shall determine;
(ii) to issue Shares without limitation as to number
(including fractional Shares) to such Persons and for such amount and type of
consideration, subject to any restriction set forth in the Bylaws, including
cash or securities, at such time or times and on such terms as the Trustees may
deem appropriate;
(iii) to establish and designate and to change in any manner
any Series or Class and to fix such preferences, voting powers, rights, duties
and privileges and business purpose of each Series or Class as the Trustees may
from time to time determine. The preferences, voting powers, rights, duties and
privileges may be senior or subordinate to (or in the case of business purpose,
different from) any existing Series or Class and may be limited to specified
property or obligations of the Trust or profits and losses associated with
specified property or obligations of the Trust;
(iv) to divide or combine the Shares of any Series or Class
into a greater or lesser number without thereby materially changing the
proportionate beneficial interest of the Shares of such Series or Class in the
assets held with respect to that Series;
(v) to classify or reclassify any issued Shares of any Series
or Class into shares of one or more Series or Classes;
(vi) to change the name of any Series or Class;
(vii) to abolish any one or more Series or Classes; and
(viii) to take such other action with respect to the Shares as
the Trustees may deem desirable.
Subject to the distinctions permitted among Classes of the same Series
as established by the Trustees, consistent with the requirements of the 1940
Act, each Share of a Series of the Trust shall represent an equal beneficial
interest in the net assets of such Series, and each holder of Shares of a Series
shall be entitled to receive such holder's pro rata share of distributions of
income and capital gains, if any, made with respect to such Series. Upon
redemption of the Shares of any Series, the applicable Shareholder shall be paid
solely out of the funds and property of such Series of the Trust.
All references to Shares in this Declaration of Trust shall be deemed
to be Shares of any or all Series or Classes thereof, as the context may
require. All provisions herein relating to the Trust shall apply equally to each
Series of the Trust and each Class thereof, except as the context otherwise
requires.
All Shares issued hereunder, including, without limitation, Shares
issued in connection with a dividend in Shares or a split or reverse split of
Shares, shall be fully paid and non-assessable. Except as otherwise provided by
the Trustees, Shareholders shall have no preemptive or other right to subscribe
to any additional Shares or other securities issued by the Trust.
OWNERSHIP OF SHARES
Section 2. The Ownership of Shares shall be recorded on the books of
the Trust or those of a transfer or similar agent for the Trust, which books
shall be maintained separately for the Shares of each Series or Class of the
Trust. No certificates certifying the ownership of Shares shall be issued except
as the Trustees may otherwise determine from time to time. The Trustees may make
such rules as they consider appropriate for the issuance of Share certificates,
the transfer of Shares of each Series or Class of the Trust and similar matters.
The record books of the Trust as kept by the Trust or any transfer or similar
agent, as the case may be, shall be conclusive as to the identity of the
Shareholders of each Series or Class of the Trust and as to the number of Shares
of each Series or Class of the Trust held from time to time by each Shareholder.
TRANSFER OF SHARES
Section 3. Except as otherwise provided by the Trustees, Shares shall
be transferable on the books of the Trust only by the record holder of the
Shares or by his or her duly authorized agent upon delivery to the Trustees or
the Trust's transfer agent of a duly executed instrument of transfer, together
with a Share certificate if one is outstanding, and such evidence of the
genuineness of each such execution and authorization and of such other matters
as may be required by the Trustees. Upon such delivery, and subject to any
further requirements specified by the Trustees or contained in the Bylaws, the
transfer shall be recorded on the books of the Trust. Until a transfer is so
recorded, the Shareholder of record of Shares shall be deemed to be the holder
of such Shares for all purposes hereunder and neither the Trustees nor the
Trust, nor any transfer agent or registrar or any officer, employee, or agent of
the Trust, shall be affected by any notice of a proposed transfer.
INVESTMENTS IN THE TRUST
Section 4. Investments may be accepted by the Trust from Persons, at
such times, on such terms, and for such consideration as the Trustees from time
to time may authorize.
STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY
Section 5. Shares shall be deemed to be personal property giving only
the rights provided in this instrument. Every Shareholder by virtue of having
become a Shareholder shall be held to have expressly assented and agreed to the
terms hereof. The death, incapacity, dissolution, termination, or bankruptcy of
a Shareholder during the existence of the Trust shall not operate to terminate
the Trust, nor entitle the representative of any such Shareholder to an
accounting or to take any action in court or elsewhere against the Trust or the
Trustees, but entitles such representative only to the rights of such
Shareholder under this Trust. Ownership of Shares shall not entitle the
Shareholder to any title in or to the whole or any part of the Trust Property or
right to call for a participation or division of the same or for an accounting,
nor shall the ownership of Shares constitute the Shareholders as partners. No
Shareholder shall be personally liable for the debts, liabilities, obligations
and expenses incurred by, contracted for, or otherwise existing with respect to,
the Trust or any Series. Neither the Trust nor the Trustees, nor any officer,
employee, or agent of the Trust shall have any power to bind personally any
Shareholders, nor, except as specifically provided herein, to call upon any
Shareholder for the payment of any sum of money or assessment whatsoever other
than such as the Shareholder may at any time personally agree to pay.
ESTABLISHMENT AND DESIGNATION OF SERIES OR CLASS
Section 6. The establishment and designation of any Series or Class of
Shares of the Trust shall be effective upon the adoption by a majority of the
then Trustees of a resolution that sets forth such establishment and designation
and the relative rights and preferences of such Series or Class of the Trust,
whether directly in such resolution or by reference to another document
including, without limitation, any registration statement of Trust, or as
otherwise provided in such resolution.
Shares of each Series or Class of the Trust established pursuant to
this Article III, unless otherwise provided in the resolution establishing such
Series or Class, shall have the following relative rights and preferences:
(a) Assets Held with Respect to a Particular Series. All
consideration received by the Trust for the issue or sale of Shares of a
particular Series, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits, and proceeds from
whatever source derived (including, without limitation, any proceeds derived
from the sale, exchange or liquidation of such assets and any funds or payments
derived from any reinvestment of such proceeds in whatever form the same may be)
shall irrevocably be held separately with respect to that Series for all
purposes, subject only to the rights of creditors of such Series from the assets
of the Trust and every other Series, and shall be so recorded upon the books of
account of the Trust. Such consideration, assets, income, earnings, profits and
proceeds thereof, from whatever source derived, (including, without limitation,
any proceeds derived from the sale, exchange or liquidation of such assets, and
any funds or payments derived from any reinvestment of such proceeds), in
whatever form the same may be, are referred to in this document as "assets held
with respect to" that Series. In the event that there are any assets, income,
earnings, profits and proceeds thereof, funds or payments which are not readily
identifiable as assets held with respect to any particular Series (collectively
"General Assets"), the Trustees shall allocate such General Assets to, between
or among any one or more of the Series in such manner and on such basis as the
Trustees, in their sole discretion, deem fair and equitable, and any General
Assets so allocated to a particular Series shall be held with respect to that
Series. Each allocation by the Trustees shall be conclusive and binding on the
Shareholders of all Series for all purposes. Separate and distinct records shall
be maintained for each Series and the assets held with respect to each Series
shall be held and accounted for separately from the assets held with respect to
all other Series and the General Assets of the Trust not allocated to such
Series.
(b) Liabilities Held with Respect to a Particular Series. The
assets of the Trust held with respect to each particular Series shall be charged
against the liabilities of the Trust held with respect to that Series and all
expenses, costs, charges, and reserves attributable to that Series, except that
liabilities and expenses allocated solely to a particular Class shall be borne
by that Class.
(1) Any general liabilities of the Trust which are
not readily identifiable as being held with respect to any particular Series or
class shall be allocated and charged by the Trustees to and among any one or
more of the Series or Classes in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable.
(2) All liabilities, expenses, costs, charges, and
reserves so charged to a Series or Class are herein referred to as "liabilities
held with respect to" that Series or Class.
(3) Each allocation of liabilities, expenses, costs,
charges, and reserves by the Trustees shall be conclusive and binding upon the
shareholders of all Series or Classes for all purposes. Without limiting the
foregoing, but subject to the right of the Trustees to allocate general
liabilities, expenses, costs, charges or reserves as provided in this
document, the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a particular Series
shall be enforceable against the assets held with respect to such Series
only and not against the assets of the Trust generally or against the assets
held with respect to any other Series.
(4) Notice of this contractual limitation on
liabilities among Series may, in the Trustees' discretion, be set forth in the
certificate of trust of the Trust (whether originally or by amendment) as
filed or to be filed in the Office of the Secretary of State of the State of
Delaware pursuant to the Delaware Business Trust Act, and upon the giving of
such notice in the certificate of trust, the statutory provisions of
Section 3804 of the Delaware Act relating to limitations on liabilities among
Series (and the statutory effect under Section 3804 of setting forth such notice
in the certificate of trust) shall become applicable to the Trust and each
Series.
(5) Any person extending credit to, contracting with
or having any claim against any Series may look only to the assets of that
Series to satisfy or enforce any debt, with respect to that Series.
(6) No Shareholder or former Shareholder of any
Series shall have a claim on or any right to any assets allocated or belonging
to any other Series.
(c) Dividends, Distributions, Redemptions, and Repurchases.
Notwithstanding any other provisions of this Declaration of Trust, including,
without limitation, Article VI relating to "Net Asset Value, Distributions and
Redemptions," no dividend or distribution, including, without limitation, any
distribution paid upon termination of the Trust or of any Series or Class with
respect to, nor any redemption or repurchase of, the Shares of any Series or
Class, shall be effected by the Trust other than from the assets held with
respect to such Series, nor shall any Shareholder or any particular Series or
Class otherwise have any right or claim against the assets held with respect to
any other Series except to the extent that such Shareholder has such a right or
claim hereunder as a Shareholder of such other Series. The Trustees shall have
full discretion, to the extent not inconsistent with the 1940 Act, to determine
which items shall be treated as income and which items as capital, and each such
determination and allocation shall be conclusive and binding upon the
Shareholders.
(d) Equality. All the Shares of each particular Series shall
represent an equal proportionate interest in the assets held with respect to
that Series (subject to the liabilities held with respect to that Series or
Class thereof and such rights and preferences as may have been established and
designated with respect to any Class within such Series), and each Share of any
particular Series shall be equal to each other Share of that Series. With
respect to any Class of a Series, each such Class shall represent interests in
the assets of that Series and have identical voting, dividend, liquidation and
other rights and the same terms and conditions, except that expenses allocated
to a Class may be borne solely by such Class as determined by the Trustees and a
Class may have exclusive voting rights with respect to matters affecting only
that Class.
(e) Fractions. Any fractional Share of a Series or Class shall
carry proportionately all the rights and obligations of a whole Share of that
Series or Class, including rights with respect to voting, receipt of dividends
and distributions, redemption of Shares and termination of the Trust.
(f) Exchange Privilege. The Trustees shall have the authority
to provide that the holders of Shares of any Series or Class shall have the
right to exchange said Shares for Shares of one or more other Series of Shares
or Class of Shares of the Trust or of other investment companies registered
under the 1940 Act in accordance with such requirements and procedures as may be
established by the Trustees.
(g) Combination of Series. The Trustees shall have the
authority, without the approval of the Shareholders of any Series or Class
unless otherwise required by applicable law, to combine the assets and
liabilities held with respect to any two or more Series or Classes into assets
and liabilities held with respect to a single Series or Class.
INDEMNIFICATION OF SHAREHOLDERS
Section 7. If any Shareholder or former Shareholder shall be exposed to
liability by reason of a claim or demand relating to such Person being or having
been a Shareholder, and not because of such Person's acts or omissions, the
Shareholder or former Shareholder (or such Person's heirs, executors,
administrators, or other legal representatives or in the case of a corporation
or other entity, its corporate or other general successor) shall be entitled to
be held harmless from and indemnified out of the assets of the Trust against all
loss and expense arising from such claim or demand, but only out of the assets
held with respect to the particular Series of Shares of which such Person is or
was a Shareholder and from or in relation to which such liability arose.
ARTICLE IV
TRUSTEES
NUMBER, ELECTION AND TENURE
Section 1.
(a) The number of Trustees shall at all times be at least one
and no more than ________ as determined, from time to time, by the Trustees
pursuant to Section 3 of this Article IV.
(b) Each Trustee shall serve during the lifetime of the Trust
until he or she dies, resigns, has reached the mandatory retirement age as set
by the Trustees, is declared bankrupt or incompetent by a court of appropriate
jurisdiction, or is removed, or, if sooner, until the next meeting of
Shareholders called for the purpose of electing Trustees and until the election
and qualification of his or her successor.
(c) In the event that less than the majority of the Trustees
holding office have been elected by the Shareholders, the Trustees then in
office shall call a Shareholders' meeting for the election of Trustees.
(d) Any Trustee may resign at any time by written instrument
signed by him or her and delivered to any officer of the Trust or to a meeting
of the Trustees.
(1) Such resignation shall be effective upon receipt
unless specified to be effective at some other time.
(2) Except to the extent expressly provided in a
written agreement with the Trust, no Trustee resigning and no Trustee removed
shall have any right to any compensation for any period following his or her
resignation or removal, or any right to damages on account of such removal.
(e) The Shareholders may elect Trustees at any meeting of
Shareholders called by the Trustees for that purpose. Any Trustee may be removed
at any meeting of Shareholders by a vote of two-thirds of the outstanding Shares
of the Trust.
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
Section 2. The death, declination to serve, resignation, retirement,
removal or incapacity of one or more Trustees, or all of them, shall not operate
to annul the Trust or to revoke any existing agency created pursuant to the
terms of this Declaration of Trust. Whenever there shall be fewer than the
designated number of Trustees, until additional Trustees are elected or
appointed as provided herein to bring the total number of Trustees equal to the
designated number, the Trustees in office, regardless of their number, shall
have all the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by this Declaration of Trust. As conclusive evidence
of such vacancy, a written instrument certifying the existence of such vacancy
may be executed by an officer of the Trust or by a majority of the Trustees. In
the event of the death, declination, resignation, retirement, removal, or
incapacity of all the then Trustees within a short period of time and without
the opportunity for at least one Trustee being able to appoint additional
Trustees to replace those no longer serving, the Trust's Investment Adviser(s)
are empowered to appoint new Trustees subject to the provisions of Section 16(a)
of the 1940 Act.
POWERS
Section 3.1. Subject to the provisions of this Declaration of Trust,
the business of the Trust shall be managed by the Trustees, and the Trustees
shall have all powers necessary or convenient to carry out that responsibility
including the power to engage in securities transactions of all kinds on behalf
of the Trust. Without limiting the foregoing, the Trustees may:
(a) adopt Bylaws not inconsistent with this Declaration of
Trust providing for the management of the affairs of the Trust and may amend and
repeal such Bylaws to the extent that such Bylaws do not reserve that right to
the Shareholders;
(b) enlarge or reduce the number of Trustees; remove any
Trustee with or without cause at any time by written instrument signed by a
least two-thirds of the number of Trustees prior to such removal, specifying the
date when such removal shall become effective, and fill vacancies caused by
enlargement of their number or by the death, resignation, retirement or removal
of a Trustee;
(c) elect and remove, with or without cause, such officers and
appoint and terminate such agents as they consider appropriate; appoint from
their own number and establish and terminate one or more committees, consisting
of two or more Trustees, that may exercise the powers and authority of the Board
of Trustees to the extent that the Trustees so determine;
(d) employ one or more custodians of the assets of the Trust
and may authorize such custodians to employ subcustodians and to deposit all or
any part of such assets in a system or systems for the central handling of
securities or with a Federal Reserve Bank;
(e) employ an administrator for the Trust and may authorize
such administrator to employ subadministrators; employ a Investment Adviser to
the Trust and may authorize such Investment Adviser to employ subadvisers;
retain a transfer agent or a shareholder servicing agent, or both; provide for
the issuance and distribution of Shares by the Trust directly or through one or
more Principal Underwriters or otherwise; redeem, repurchase and transfer Shares
pursuant to applicable law;
(f) set record dates for the determination of Shareholders
with respect to various matters;
(g) declare and pay dividends and distributions to
Shareholders of each Series from the assets of such Series; and in general
delegate such authority as they consider desirable to any officer of the Trust,
to any committee of the Trustees and to any agent or employee of the Trust or to
any such custodian, transfer or shareholder servicing agent, or Principal
Underwriter.
Section 3.2. Any determination as to what is in the interests of the
Trust made by the Trustees in good faith shall be conclusive. In construing the
provisions of this Declaration of Trust, the presumption shall be in favor of a
grant of power to the Trustees. Unless otherwise specified herein or in the
Bylaws or required by law, any action by the Trustees shall be deemed effective
if approved or taken by a majority of the Trustees present at a meeting of
Trustees at which a quorum of Trustees is present, within or without the State
of Delaware. Without limiting the foregoing, the Trustees shall have the power
and authority to cause the Trust (or to act on behalf of the Trust):
(a) To invest and reinvest cash, to hold cash uninvested, and
to subscribe for, invest in, reinvest in, purchase or otherwise acquire, own,
hold, pledge, sell, assign, transfer, exchange, distribute, write options on,
lend or otherwise deal in or dispose of contracts for the future acquisition or
delivery of fixed income or other securities, and securities of every nature and
kind, including, without limitation, all types of bonds, debentures, stocks,
negotiable or non-negotiable instruments, obligations, evidences of
indebtedness, certificates of deposit or indebtedness, commercial papers,
repurchase agreements, bankers' acceptances, and other securities of any kind,
issued, created, guaranteed, or sponsored by any and all Persons, including
without limitation, states, territories, and possessions of the United States
and the District of Columbia and any political subdivision, agency, or
instrumentality thereof, and foreign government or any political subdivision of
the United States Government or any foreign government, or any international
instrumentality, or by any bank or savings institution, or by any corporation or
organization organized under the laws of the United States or of any state,
territory, or possession thereof, or by any corporation or organization
organized under any foreign law, or in "when issued" contracts for any such
securities, to change the investments of the assets of the Trust; and to
exercise any and all rights, powers, and privileges of ownership or interest in
respect of any and all such investments of every kind and description,
including, without limitation, the right to consent and otherwise act with
respect thereto, with power to designate one or more Persons, to exercise any of
said rights, powers, and privileges in respect of any of said instruments;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate,
lease, or write options (including, options on futures contracts) with respect
to or otherwise deal in any property rights relating to any or all of the assets
of the Trust or any Series;
(c) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property; and to execute
and deliver proxies or powers of attorney to such Person or Persons as the
Trustees shall deem proper, granting to such Person or Persons such power and
discretion with relation to securities or property as the Trustees shall deem
proper;
(d) To exercise powers and right of subscription or otherwise
which in any manner arise out of ownership or securities;
(e) To hold any security or property in a form not indicating
any trust, whether in bearer, unregistered or other negotiable form, or in its
own name or in the name of a custodian or subcustodian or a nominee or nominees
or otherwise;
(f) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or issuer of any
security which is held in the Trust; to consent to any contract, lease,
mortgage, purchase or sale of property by such corporation or issuer; and to pay
calls or subscriptions with respect to any security held in the Trust;
(g) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority with
relation to any security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay, such portion of the
expenses and compensation of such committee, depositary or trustee as the
Trustees shall deem proper;
(h) To compromise, arbitrate or otherwise adjust claims in
favor of or against the Trust or any matter in controversy, including, but not
limited to, claims for taxes;
(i) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(j) To borrow funds or other property in the name of the Trust
exclusively for Trust purposes and in connection therewith issue notes or other
evidence of indebtedness; and to mortgage and pledge the Trust Property or any
part thereof to secure any or all of such indebtedness;
(k) To endorse or guarantee the payment of any notes or other
obligations of any Person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and pledge the
Trust Property or any part thereof to secure any of or all of such obligations;
(l) To purchase any pay for entirely out of Trust Property
such insurance as the Trustees may deem necessary or appropriate for the conduct
of the business, including, without limitation, insurance policies insuring the
assets of the Trust or payment of distributions and principal on its portfolio
investments, and insurance polices insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers, principal underwriters, or
independent contractors of the Trust, individually against all claims and
liabilities of every nature arising by reason of holding, being or having held
any such office or position, or by reason of any action alleged to have been
taken or omitted by any such Person as Trustee, officer, employee, agent,
investment adviser, principal underwriter, or independent contractor, including
any action taken or independent contractor, including any action taken or
omitted that may be determined to constitute negligence, whether or not the
Trust would have the power to indemnify such Person against liability;
(m) To adopt, establish and carry out pension, profit-sharing,
share bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans and trusts, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits, for any or
all of the Trustees, officers, employees and agents of the Trust;
(n) To operate as and carry out the business of an investment
company, and exercise all the powers necessary or appropriate to the conduct of
such operations;
(o) To enter into contracts of any kind and description;
(p) To employ as custodian of any assets of the Trust one or
more banks, trust companies or companies that are members of a national
securities exchange or such other entities as the Commission may permit as
custodians of the Trust, subject to any conditions set forth in this Declaration
of Trust or in the Bylaws;
(q) To employ auditors, counsel or other agents of the Trust,
subject to any conditions set forth in this Declaration of Trust or in the
Bylaws;
(r) To interpret the investment policies, practices, or
limitations of any Series or Class;
(s) To establish separate and distinct Series with separately
defined investment objectives and policies and distinct investment purposes, and
with separate Shares representing beneficial interests in such Series, and to
establish separate Classes, all in accordance with the provisions of Article
III;
(t) To the full extent permitted by Section 3804 of the
Delaware Business Trust Act, to allocate assets, liabilities and expenses of the
Trust to a particular Series and liabilities and expenses to a particular Class
or to apportion the same between or among two or more Series or Classes,
provided that any liabilities or expenses incurred by a particular Series or
Class shall be payable solely out of the assets belonging to that Series or
Class as provided for in Article III;
(u) Subject to the 1940 Act, to engage in any other lawful act
or activity in which a business trust organized under the Delaware Business
Trust Act may engage.
The Trust shall not be limited to investing in obligations maturing
before the possible termination of the Trust or one or more of its Series. The
Trust shall not in any way be bound or limited by any present or future law or
custom in regard to investment by fiduciaries. The Trust shall not be required
to obtain any court order to deal with any assets of the Trust or take any other
action hereunder.
PAYMENT OF EXPENSES BY THE TRUST
Section 4. The Trustees are authorized to pay or cause to be paid out
of the principal or income of the Trust, or partly out of the principal and
partly out of income, as they deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust, or in connection
with the management thereof, including, but not limited to, the Trustees'
compensation and such expenses and charges for the services of the Trust's
officers, employees, Investment Adviser, Principal Underwriter, auditors,
counsel, custodian, transfer agent, shareholder servicing agent, and such other
agents or independent contractors and such other expenses and charges as the
Trustees may deem necessary or proper to incur, which expenses, fees, charges,
taxes and liabilities shall be allocated in accordance with Article III, Section
6 of this document.
PAYMENT OF EXPENSES BY SHAREHOLDERS
Section 5. The Trustees shall have the power, as frequently as they may
determine, to cause each Shareholder, or each Shareholder of any particular
Series, to pay directly, in advance or arrears, expenses of the Trust as
described in Section 4 of this Article IV ("Expenses"), in an amount fixed from
time to time by the Trustees, by setting off such Expenses due from such
Shareholder from declared but unpaid dividends owed such Shareholder and/or by
reducing the number of Shares in the account of such Shareholder by that number
of full and/or fractional Shares which represents the outstanding amount of such
Expenses due from such Shareholder, provided that the direct payment of such
Expenses by Shareholders is permitted under applicable law.
OWNERSHIP OF ASSETS OF THE TRUST
Section 6. Title to all of the assets of the Trust shall at all times
be considered as vested in the Trust, except that the Trustees shall have power
to cause legal title to any Trust Property to be held by or in the name of one
or more of the Trustees, or in the name of the Trust, or in the name of any
other Person as nominee, on such terms as the Trustees may determine. The right,
title and interest of the Trustees in the Trust Property shall vest
automatically in each Person who may hereafter become a Trustee. Upon the
resignation, removal or death of a Trustee, he or she shall automatically cease
to have any right, title or interest in any of the Trust Property, and the
right, title and interest of such Trustee in the Trust Property shall vest
automatically in the remaining Trustees. Such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered.
SERVICE CONTRACTS
Section 7.
(a) Subject to such requirements and restrictions as may be
set forth under federal and/or state law and in the Bylaws, including, without
limitation, the requirements of Section 15 of the 1940 Act, the Trustees may, at
any time and from time to time, contract for exclusive or nonexclusive advisory,
management and/or administrative services for the Trust or for any Series (or
Class thereof) with any corporation, trust, association, or other organization;
and any such contract may contain such other terms as the Trustees may
determine, including, without limitation, authority for the Investment
Adviser(s) or administrator to delegate certain or all of its duties under such
contracts to qualified investment advisers and administrators and to determine
from time to time without prior consultation with the Trustees what investments
shall be purchased, held sold or exchanged and what portion, if any, of the
assets of the Trust shall be held uninvested and to make changes in the Trust's
investments, or such other activities as may specifically be delegated to such
party.
(b) The Trustees may also, at any time and from time to time,
contract with any corporation, trust, association, or other organization,
appointing it exclusive or nonexclusive distributor or Principal Underwriter for
the Shares of one or more of the Series (or Classes) or other securities to be
issued by the Trust. Every such contract shall comply with such requirements and
restrictions as may be set forth under federal and/or state law and in the
Bylaws, including, without limitation, the requirements of Section 15 of the
1940 Act; and any such contract may contain such other terms as the Trustees may
determine.
(c) The Trustees are also empowered, at any time and from time
to time, to contract with any corporations, trusts, associations or other
organizations, appointing it or them the custodian, transfer agent and/or
shareholder servicing agent for the Trust or one or more of its Series. Every
such contract shall comply with such requirements and restrictions as may be set
forth under federal and/or state law and in the Bylaws or stipulated by
resolution of the Trustees.
(d) Subject to applicable law, the Trustees are further
empowered, at any time and from time to time, to contract with any entity to
provide such other services to the Trust or one or more of the Series, as the
Trustees determine to be in the best interests of the Trust and the applicable
Series.
(e) The fact that:
(i) any of the Shareholders, Trustees, or officers of
the Trust is a shareholder, director, officer, partner, trustee, employee,
Investment Adviser, adviser, Principal Underwriter, distributor, or affiliate
or agent of or for any corporation, trust, association, or other
organization, or for any parent or affiliate of any organization with which
an advisory, management, or administration contract, or Principal Underwriter's
or distributor's contract, or transfer agent, shareholder servicing agent
or other type of service contract may have been or may hereafter be made, or
that any such organization, or any parent or affiliate thereof, is a Shareholder
or has an interest in the Trust; or that
(ii) any corporation, trust, association or other
organization with which an advisory, management, or administration contract or
Principal Underwriter's or distributor's contract, or transfer agent or
shareholder servicing agent contract may have been or may hereafter be made
also has an advisory, management, or administration contract, or Principal
Underwriter's or distributor's or other service contract with one or more other
corporations, trusts, associations, or other organizations, or has other
business or interests, shall not affect the validity of any such contract or
disqualify any Shareholder, Trustee or officer of the Trust from voting upon
or executing the same, or create any liability or accountability to the Trust or
its Shareholders, provided approval of each such contract is made pursuant to
the requirements of the 1940 Act.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
Section 8. Any Trustee, officer or agent of the Trust may acquire, own
and dispose of Shares to the same extent as if he were not a Trustee, officer or
agent; and the Trustees may issue and sell and cause to be issued and sold
Shares to, and redeem such Shares from, any such Person or any firm or company
in which such Person is interested, subject only to the general limitations
contained herein or in the Bylaws relating to the sale and redemption of such
Shares.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS, MEETINGS, NOTICE, AND RECORD DATES
Section 1.
(a) The Shareholders shall have power to vote only: (i) for
the election or removal of Trustees as provided in Article IV, Section 1 of this
document, and (ii) with respect to such additional matters relating to the Trust
as may be required by applicable law, this Declaration of Trust, the Bylaws or
any registration of the Trust with the Commission (or any successor agency), or
as the Trustees may consider necessary or desirable.
(b) Each whole Share shall be entitled to one vote as any
matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote.
(c) Notwithstanding any other provision of this Declaration of
Trust, on any matters submitted to a vote of the Shareholders, all Shares of the
Trust then entitled to vote shall be voted in aggregate, except: (i) when
required by the 1940 Act, Shares shall be voted by individual Series; (ii) when
the matter involves the termination of a Series or any other action that the
Trustees have determined will affect only the interests of one or more Series,
then only Shareholders of such Series shall be entitled to vote thereon; and
(iii) when the matter involves any action that the Trustees have determined will
affect only the interests of one or more Classes, then only the Shareholders of
such Class or Classes shall be entitled to vote thereon.
(d) There shall be no cumulative voting in the election of
Trustees.
(e) Shares may be voted in person or by proxy. A proxy may be
given in writing. The Bylaws may provide that proxies may also, or may instead,
be given by an electronic or telecommunications device or in any other manner.
(f) Notwithstanding anything else contained herein or in the
Bylaws, in the event a proposal by anyone other than the officers or Trustees of
the Trust is submitted to a vote of the Shareholders of one or more Series or
Classes or of the Trust, or in the event of any proxy contest or proxy
solicitation or proposal in opposition to any proposal by the officers or
Trustees of the Trust, Shares may be voted only by written proxy or in person at
a meeting. Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required by law, this Declaration of Trust
or the Bylaws to be taken by the Shareholders. Meetings of the Shareholders
shall be called and notice and record dates for the meetings shall be given and
set as provided in the Bylaws.
QUORUM AND REQUIRED VOTE
Section 2. Except when a larger quorum is required by applicable law,
by the Bylaws or by this Declaration of Trust, thirty-three and one-third
percent (33 1/3%) of the Shares entitled to vote shall constitute a quorum at a
Shareholders' meeting. When any one or more Series (or Classes) is to vote as a
single Class separate from any other Shares, thirty-three and one-third percent
(33-1/3%) of the Shares of each such Series (or Class) entitled to vote shall
constitute a quorum at a Shareholders' meting of that Series (or Class). Except
when a larger vote is required by any provision of this Declaration of Trust or
the Bylaws or by applicable law, when a quorum is present at any meeting, a
majority of the Shares voted shall decide any questions and a plurality of the
Shares voted shall elect a Trustee, provided that where any provision of law or
of this Declaration of Trust requires that the holders of any Series shall vote
as a Series (or that holders of a Class shall vote as a Class), then a majority
of the Shares of that Series (or Class) voted on the matter (or a plurality with
respect to the election of a Trustee) shall decide that matter insofar as that
Series (or Class) is concerned.
RECORD DATES
Section 3. For the purpose of determining the Shareholders of any
Series (or Class) who are entitled to receive payment of any dividend or of any
other distribution, the Trustees may from time to time fix a date, which shall
be before the date for the payment of such dividend or such other payment, as
the record date for determining the Shareholders of such Series (or Class)
having the right to receive such dividend or distribution. Without fixing a
record date, the Trustees may for distribution purposes close the register or
transfer books for one or more Series (or Classes) at any time prior to the
payment of a distribution. Nothing in this Section shall be construed as
precluding the Trustees from setting different record dates for different Series
(or Classes).
ADDITIONAL PROVISIONS
Section 4. The Bylaws may include further provisions for Shareholders'
votes and meetings and related matters.
ARTICLE VI
NET ASSET VALUE, DISTRIBUTIONS AND REDEMPTIONS
DETERMINATION OF NET ASSET VALUE, NET INCOME, AND DISTRIBUTIONS
Section 1. Subject to applicable law and Article III, Section 6 if this
document, the Trustees, in their absolute discretion, may prescribe and shall
set forth in the Bylaws or in a duly adopted vote of the Trustees such bases and
time for determining the per Share or net asset value of the Shares of any
Series or Class or net income attributable to the Shares of any Series or Class,
or the declaration and payment of dividends and distributions on the Shares of
any Series or Class, as they may deem necessary or desirable.
REDEMPTIONS AND REPURCHASES
Section 2.
(a) The Trust shall purchase such Shares as are offered by any
Shareholder for redemption, upon the presentation of a proper instrument of
transfer together with a request directed to the Trust, or a Person designated
by the Trust, that the Trust purchase such Shares or in accordance with such
other procedures for redemption as the Trustees may from time to time authorize;
and the Trust will pay therefor the net asset value thereof as determined by the
Trustees (or on their behalf), in accordance with any applicable provisions of
the Bylaws and applicable law. Unless extraordinary circumstances exist, payment
for said Shares shall be made by the Trust to the Shareholder in accordance with
the 1940 Act and any rules and regulations thereunder or as otherwise required
by the Commission. The obligation set forth in this Section 2 is subject to the
provision that, in the event that any time the New York Stock Exchange (the
"Exchange") is closed for other than weekends or holidays, or if permitted by
the rules and regulations or an order of the Commission during periods when
trading on the Exchange is restricted or during any emergency which makes it
impracticable for the Trust to dispose of the investments of the applicable
Series or to determine fairly the value of the net assets held with respect to
such Series or during any other period permitted by order of the Commission for
the protection of investors, such obligation may be suspended or postponed by
the Trustees. In the case of a suspension of the right of redemption as provided
herein, a Shareholder may either withdraw the request for redemption or receive
payment based on the net asset value per share next determined after the
termination of such suspension.
(b) The redemption price may in any case or cases be paid
wholly or partly in kind if the Trustees determine that such payment is
advisable in the interest of the remaining Shareholders of the Series or Class
thereof for which the Shares are being redeemed. Subject to the foregoing, the
fair value, selection and quantity of securities or other property so paid or
delivered as all or part of the redemption price may be determined by or under
authority of the Trustees. In no case shall the Trust be liable for any delay of
any Investment Adviser or other Person in transferring securities selected for
delivery as all or part of any payment-in-kind.
(c) If the Trustees shall, at any time and in good faith,
determine that direct or indirect ownership of Shares of any Series or Class
thereof has or may become concentrated in any Person to an extent that would
disqualify any Series as a regulated investment company under the Internal
Revenue Code of 1986, as amended (or any successor statute), then the Trustees
shall have the power (but not the obligation) by such means as they deem
equitable:
(i) to call for the redemption by any such Person of
a number, or principal amount, of Shares sufficient to maintain or bring the
direct or indirect ownership of Shares into conformity with the requirements for
such qualification,
(ii) to refuse to transfer or issue Shares of any
Series or Class thereof to such Person whose acquisition of the Shares in
question would result in such disqualification, or
(iii) to take such other actions as they deem
necessary and appropriate to avoid such disqualification.
Any such redemption shall be effected at the redemption price
and in the manner provided in this Article VI.
(d) The holders of Shares shall upon demand disclose to the
Trustees in writing such information with respect to direct and indirect
ownership of Shares as the Trustees deem necessary to comply with the provisions
of the Internal Revenue Code of 1986, as amended (or any successor statute
thereto), or to comply with the requirements of any other taxing authority.
ARTICLE VII
COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES
COMPENSATION
Section 1. The Trustees in such capacity shall be entitled to
reasonable compensation from the Trust and they may fix the amount of such
compensation. However, the Trust will not compensate those Trustees who are
Interested Persons of the Trust, its Investment Adviser, subadvisers,
distributor or Principal Underwriter. Nothing in this document shall in any way
prevent the employment of any Trustee for advisory, management, legal,
accounting, investment banking or other services and payment for such services
by the Trust.
INDEMNIFICATION AND LIMITATION OF LIABILITY
Section 2. A Trustee, when acting in such capacity, shall not be
personally liable to any Person, other than the Trust or a Shareholder to the
extent provided in this Article VII, for any act, omission or obligation of the
Trust, of such Trustee or of any other Trustee. The Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any officer,
agent, employee, Investment Adviser, or Principal Underwriter of the Trust. The
Trust shall indemnify each Person who is serving or has served at the Trust's
request as a director, officer, trustee, employee, or agent of another
organization in which the Trust has any interest as a shareholder, creditor, or
otherwise to the extent and in the manner provided in the Bylaws.
All persons extending credit to, contracting with or having any claim
against the Trust of the Trustees shall look only to the assets of the
appropriate Series of the Trust for payment under such credit, contract, or
claim; and neither the Trustees nor the Shareholders, nor any of the Trust's
officers, employees, or agents, whether past, present, or future, shall be
personally liable therefor.
Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees by any of them in connection with the Trust shall
conclusively be deemed to have been executed or done only in or with respect to
his or their capacity as Trustee or Trustees, and such Trustee or Trustees shall
not be personally liable thereon. At the Trustees' discretion, any note, bond,
contract, instrument, certificate or undertaking made or issued by the Trustees
or by any officer or officers may give notice that the Certificate of Trust is
on file in the Office of the Secretary of State of the State of Delaware and
that a limitation on liability of Series exists and such note, bond, contract,
instrument, certificate or undertaking may, if the Trustees so determine, recite
that the same was executed or made on behalf of the Trust by a Trustee or
Trustees in such capacity and not individually and that the obligations of such
instrument are not binding upon any of them or the Shareholders individually but
are binding only on the assets and property of the Trust or a Series thereof,
and may contain such further recital as such Person or Persons may deem
appropriate. The omission of any such notice or recital shall in no way operate
to bind any Trustees, officer, or Shareholders individually.
TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
Section 3 . The exercise by the Trustees of their powers and
discretions hereunder shall be binding upon everyone interested. A Trustee shall
be liable to the Trust and to any Shareholder solely for his or her own willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee, and shall not be liable for
errors of judgment or mistakes of fact or law. The Trustees may take advice of
counsel or other experts with respect to the meaning and operation of this
Declaration of Trust, and shall be under no liability for any act or omission in
accordance with such advice nor for failing to follow such advice. The Trustees
shall not be required to give any bond as such, nor any surety if a bond is
required.
INSURANCE
Section 4. The Trustees shall be entitled and empowered to the fullest
extent permitted by law to purchase with Trust assets insurance for liability
and for all expenses reasonably incurred or paid or expected to be paid by a
Trustee, officer, employee, or agent of the Trust in connection with any claim,
action, suit, or proceeding in which he or she may become involved by virtue of
his or her capacity or former capacity as a Trustee of the Trust.
ARTICLE VIII
MISCELLANEOUS
LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES
Section 1. No Person dealing with the Trustees shall be bound to make
any inquiry concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.
TERMINATION OF THE TRUST OR ANY SERIES OR CLASS
Section 2.
(a) Unless terminated as provided herein, the Trust shall
continue without limitation of time. The Trust may be terminated at any time by
vote of a majority of the Shares of each Series entitled to vote, voting
separately by Series, or by the Trustees by written notice to the Shareholders.
Any Series of Shares or Class thereof may be terminated at any time by vote of a
majority of the Shares of such Series or Class entitled to vote or by the
Trustees by written notice to the Shareholders of such Series or Class.
(b) Upon the requisite Shareholder vote or action by the
Trustees to terminate the Trust or any one or more Series of Shares or any Class
thereof, after paying or otherwise providing for all charges, taxes, expenses,
and liabilities, whether due or accrued or anticipated, of the Trust or of the
particular Series or any Class thereof as may be determined by the Trustees, the
Trust shall in accordance with such procedures as the Trustees may consider
appropriate reduce the remaining assets of the Trust or of the affected Series
or Class to distributable form in cash or Shares (if any Series remain) or other
securities, or any combination thereof, and distribute the proceeds to the
Shareholders of the Series or Classes involved, ratably according to the number
of Shares of such Series or Class held by the Shareholders of such Series or
Class on the date of distribution. Thereupon, the Trust or any affected Series
or Class shall terminate and the Trustees and the Trust shall be discharged of
any and all further liabilities and duties relating thereto or arising
therefrom, and the right, title, and interest of all parties with respect to the
Trust or such Series or Class shall be canceled and discharged.
(c) Upon termination of the Trust, following completion of
winding up of its business, the Trustees shall cause a certificate of
cancellation of the Trust's Certificate of Trust to be filed in accordance with
the Delaware Business Trust Act, which Certificate of Cancellation may be signed
by any one Trustee.
REORGANIZATION
Section 3.
(a) Notwithstanding anything else herein, the Trustees may,
without Shareholder approval unless such approval is required by applicable law,
(i) cause the Trust to merge or consolidate with or into one or more trusts (or
series thereof to the extent permitted by law), partnerships, associations,
corporations or other business entities (including trusts, partnerships,
associations, corporations or other business entities created by the Trustees to
accomplish such merger or consolidation) so long as the surviving or resulting
entity is an investment company as defined in the 1940 Act, or is a series
thereof, that will succeed to or assume the Trust's registration under the 1940
Act and that is formed, organized, or existing under the laws of the United
States or of a state, commonwealth, possession or territory of the United
States, unless otherwise permitted under the 1940 Act, (ii) cause any one or
more Series (or Classes) of the Trust to merge or consolidate with or into any
one or more other Series (or Classes) of the Trust, one or more trusts (or
series or classes thereof to the extent permitted by law), partnerships,
associations, corporations, (iii) cause the Shares to be exchanged under or
pursuant to any state or federal statute to the extent permitted by law or (iv)
cause the Trust to reorganize as a corporation, limited liability company or
limited liability partnership under the laws of Delaware or any other state or
jurisdiction. Any agreement of merger or consolidation or exchange or
certificate or merger may be signed by a majority of the Trustees and facsimile
signatures conveyed by electronic or telecommunication means shall be valid.
(b) Pursuant to and in accordance with the provisions of
Section 3815(f) of the Delaware Business Trust Act, and notwithstanding anything
to the contrary contained in this Declaration of Trust, an agreement of merger
or consolidation approved by the Trustees in accordance with this Section 3 may
(i) effect any amendment to the governing instrument of the Trust or (ii) effect
the adoption of a new governing instrument of the Trust if the Trust is the
surviving or resulting trust in the merger or consolidation.
(c) The Trustees may create one or more business trusts to
which all or any part of the assets, liabilities, profits, or losses of the
Trust or any Series or Class thereof may be transferred and may provide for the
conversion of Shares in the Trust or any Series or Class thereof into beneficial
interests in any such newly created trust or trusts or any series of classes
thereof.
AMENDMENTS
Section 4. Except as specifically provided in this Section 4, the
Trustees may, without Shareholder vote, restate, amend, or otherwise supplement
this Declaration of Trust. Shareholders shall have the right to vote on (i) any
amendment that would affect their right to vote granted in Article V, Section 1
hereof, (ii) any amendment to this Section 4 of Article VIII; (iii) any
amendment that may require their vote under applicable law or by the Trust's
registration statement, as filed with the Commission, and (iv) any amendment
submitted to them for their vote by the Trustees. Any amendment required or
permitted to be submitted to the Shareholders that, as the Trustees determine,
shall affect the Shareholders of one or more Series shall be authorized by a
vote of the Shareholders of each Series affected and no vote of Shareholders of
a Series not affected shall be required. Notwithstanding anything else herein,
no amendment hereof shall limit the rights to insurance provided by Article VII,
Section 4 hereof with respect to any acts or omissions of Persons covered
thereby prior to such amendment nor shall any such amendment limit the rights to
indemnification referenced in Article VII, Section 2 hereof as provided in the
Bylaws with respect to any actions or omissions of Persons covered thereby prior
to such amendment. The Trustees may, without Shareholder vote, restate, amend,
or otherwise supplement the Certificate of Trust as they deem necessary or
desirable.
FILING OF COPIES, REFERENCES, HEADINGS
Section 5. The original or a copy of this instrument and of each
restatement and/or amendment hereto shall be kept at the office of the Trust
where it may be inspected by any Shareholder. Anyone dealing with the Trust may
rely on a certificate by an officer of the Trust as to whether or not any such
restatements and/or amendments have been made and as to any matters in
connection with the Trust hereunder; and, with the same effect as if it were the
original, may rely on a copy certified by an officer of the Trust to be a copy
of this instrument or of any such restatements and/or amendments. In this
instrument and in any such restatements and/or amendments, references to this
instrument, and all expressions such as "herein," "hereof," and "hereunder,"
shall be deemed to refer to this instrument as amended or affected by any such
restatements and/or amendments. Headings are placed herein for convenience of
reference only and shall not be taken as a part hereof or control or affect the
meaning, construction or effect of this instrument. Whenever the singular number
is used herein, the same shall include the plural; and the neuter, masculine and
feminine genders shall include each other, as applicable. This instrument may be
executed in any number of counterparts each of which shall be deemed an
original.
APPLICABLE LAW
Section 6.
(a) The Trust is created under, and this Declaration of Trust
is to be governed by, and construed and enforced in accordance with, the laws of
the State of Delaware. The Trust shall be of the type commonly called a business
trust, and without limiting the provisions hereof, the Trust specifically
reserves the right to exercise any of the powers or privileges afforded to
business trusts or actions that may be engaged in by business trusts under the
Delaware Business Trust Act, and the absence of a specific reference herein to
any such power, privilege, or action shall not imply that the Trust may not
exercise such power or privilege or take such actions.
(b) Notwithstanding the first sentence of Section 6(a) of this
Article VIII, there shall not be applicable to the Trust, the Trustees, or this
Declaration of Trust either the provisions of Section 3540 of Title 12 of the
Delaware Code or any provisions of the laws (statutory or common) of the State
of Delaware (other than the Delaware Business Trust Act) pertaining to trusts
that relate to or regulate: (i) the filing with any court or governmental body
or agency of trustee accounts or schedules of trustee fees and charges; (ii)
affirmative requirements to post bonds for trustees, officers, agents, or
employees of a trust; (iii) the necessity for obtaining a court or other
governmental approval concerning the acquisition, holding, or disposition of
real or personal property; (iv) fees or other sums applicable to trustees,
officers, agents or employees of a trust; (v) the allocation of receipts and
expenditures to income or principal; (vi) restrictions or limitations on the
permissible nature, amount, or concentration of trust investments or
requirements relating to the titling, storage, or other manner of holding of
trust assets; or (vii) the establishment of fiduciary or other standards or
responsibilities or limitations on the acts or powers or liabilities or
authorities and powers of trustees that are inconsistent with the limitations or
liabilities or authorities and powers of the Trustees set forth or referenced in
this Declaration of Trust.
PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS
Section 7.
(a) The provisions of this Declaration of Trust are severable,
and if the Trustees shall determine, with the advice of counsel, that any such
provision is in conflict with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code of 1986, as amended (or any successor
statute thereto), and the regulations thereunder, the Delaware Business Trust
Act or with other applicable laws and regulations, the conflicting provision
shall be deemed never to have constituted a part of this Declaration of Trust;
provided, however, that such determination shall not affect any of the remaining
provisions of this Declaration of Trust or render invalid or improper any action
taken or omitted prior to such determination.
(b) If any provision of this Declaration of Trust shall be
held invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction and
shall not in any manner affect such provision in any other jurisdiction or any
other provision of this Declaration of Trust in any jurisdiction.
BUSINESS TRUST ONLY
Section 8. It is the intention of the Trustees to create a business
trust pursuant to the Delaware Business Trust Act. It is not the intention of
the Trustees to create a general partnership, limited partnership, joint stock
association, corporation, bailment, or any form of legal relationship other than
a business trust pursuant to the Delaware Business Trust Act. Nothing in this
Declaration of Trust shall be construed to make the Shareholders, either by
themselves or with the Trustees, partners, or members of a joint stock
association.
IN WITNESS WHEREOF, the Trustees named below have executed this
Declaration of Trust as of the ________ day of __________, 2000.
<PAGE>
EXHIBIT B
AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
Investment Advisory Agreement ("Agreement") made this _____ day of June, 2000
between MONUMENT SERIES FUND, a Delaware business trust (the "Company"), and
MONUMENT ADVISORS, LTD., a Maryland corporation (the "Advisor") (collectively,
the "Parties").
WHEREAS, the Company is organized and intends to operate as an open-end
management investment company and is so registered under the Investment Company
Act of 1940, as amended, (the "Act"), and will register shares of each Portfolio
(defined below) under the Securities Act of 1933 ("1933 Act"), to the extent
required thereby, on Form N-1A (collectively, "Registration Statement"); and
WHEREAS, the Company's Declaration of Trust permits the Company's Board
of Trustees ("Board" or "Trustees") to establish and authorize the issuance of
shares of one or more series of common stock ("series") representing separate
investment portfolios, each with its own investment objectives, program,
policies and restrictions, as well as classes of shares of those series; and
WHEREAS, the Board has established and authorized the issuance of the
shares of the series listed on Schedule A to this Agreement (each a "Portfolio"
and collectively, the "Portfolios"), as may be amended from time to time by
mutual written agreement of the Parties ("Schedule A"); and
WHEREAS, the Advisor is registered as an investment adviser under the
Investment Advisers Act of 1940, and is engaged principally in the business of
rendering investment advisory services; and
WHEREAS, the Company desires to have the Advisor perform the investment
advisory services and provide the facilities described herein, and the Advisor
desires to provide these services and facilities to the Company and each
Portfolio thereof; and
WHEREAS, the Company has entered into a Custody and Investment
Accounting Agreement, a Transfer Agency and Service Agreement, and an
Administration Agreement with other entities pursuant to which these entities
have agreed to provide a range of services to the Company and each Portfolio
thereof.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration the receipt of which is
hereby acknowledged, the Parties agree as follows:
1. APPOINTMENT OF THE ADVISOR.
(a) The Company hereby appoints the Advisor, and the Advisor hereby
accepts such appointment, to act as the investment adviser to each Portfolio for
the period and on the terms herein set forth, for the compensation provided on
Schedule A to this Agreement.
(b) The Advisor shall for all purposes relating to this Agreement be
deemed to be an independent contractor and shall, except as expressly provided
or authorized (whether in this Agreement or otherwise), have no authority to act
for or represent the Company or any Portfolio in any way or otherwise be deemed
an agent of the Company, except to the extent authorized to do so by the Board
of Trustees.
2. SERVICES AND FACILITIES TO BE PROVIDED BY THE ADVISOR.
The Advisor, at its own expense or pursuant to arrangements with others
to bear the expenses, shall furnish the services and facilities described below
to the Company, on behalf of each Portfolio, subject to the overall supervision
and review of the Company's Board of Trustees and in accordance with, as in
effect from time to time, the provisions of the Company's Declaration of Trust,
By-Laws, Registration Statement, and applicable law (including, without
limitation, the Act, the 1933 Act, and the Internal Revenue Code) and, to the
extent necessary or appropriate, in coordination with service agreements entered
into by the Company with other entities, such as, for example, the Company's
Custody and Investment Accounting Agreement, Transfer Agency and Service
Agreement, and Administration Agreement. The Advisor shall give the Company and
each Portfolio the benefit of its best judgment and efforts in rendering its
services as investment adviser.
(a) INVESTMENT PROGRAM. The Advisor shall continuously furnish
an investment program for each Portfolio. In connection therewith, the Advisor
shall:
(i) determine what investments each Portfolio shall purchase,
hold, sell, or exchange and what portion, if any, of each Portfolio's assets
shall remain uninvested, and shall take such steps as may be necessary to
implement the same;
(ii) determine the manner in which to exercise any voting
rights, rights to consent to corporate action, or other rights pertaining to a
Portfolio's investment securities; and
(iii) render regular reports to the Company, at regular
meetings of its Board and at such other times as may be reasonably requested by
the Board, of (w) the decisions which it has made with respect to the investment
of the assets of each Portfolio and the purchase and sale of its investment
securities, (x) the reasons for such decisions, (y) the extent to which it has
implemented those decisions, and (z) the manner in which it has exercised any
voting rights, rights to consent to corporate action, or other rights pertaining
to a Portfolio's investment securities.
(b) PORTFOLIO SECURITIES TRANSACTIONS. The Advisor, subject to and in
accordance with any directions that the Board may issue from time to time, shall
place orders for the execution of each Portfolio's securities transactions. When
placing orders, the Advisor shall seek to obtain the best net price and
execution ("best execution") for each Portfolio, but this requirement shall not
be deemed to obligate the Advisor to place any order solely on the basis of
obtaining the lowest commission rate if the other standards set forth in this
section have been satisfied. The Parties recognize that there are likely to be
many cases in which different broker-dealers are equally able to provide best
execution and that, in selecting among such broker-dealers with respect to
particular trades, it may be desirable to choose those broker-dealers who
furnish research, statistical, quotations and other information to the Company
and its Portfolios, as well as the Advisor, in accordance with the standards set
forth below. Moreover, to the extent that it continues to be lawful to do so and
so long as the Board determines that a Portfolio will benefit, directly or
indirectly, by doing so, the Advisor may place orders with a broker-dealer who
charges a commission for a securities transaction which is in excess of the
amount of commission that another broker-dealer would have charged for effecting
that transaction, provided that the excess commission is reasonable in relation
to the value of "brokerage and research services" (as defined in Section
28(e)(3) of the Securities Exchange Act of 1934 or any successor provision)
provided by that broker-dealer. Accordingly, the Company, on behalf of each
Portfolio, and the Advisor agree that the Advisor shall select broker-dealers
for the execution of each Portfolio's transactions from among:
(i) those broker-dealers who provide quotations and other
services to the Company, with respect to one or more Portfolios, specifically
including the quotations necessary to determine the net assets of the
Portfolios, in such amount of total brokerage as may reasonably be required in
light of such services; and
(ii) those broker-dealers who supply research, statistical and
other data to the Advisor or its affiliates, which the Advisor or its affiliates
may lawfully and appropriately use in their investment advisory capacities,
which relate directly to securities, actual or potential, of the Portfolios, or
which place the Advisor in a better position to make decisions in connection
with the management of each Portfolio's assets, whether or not such data may
also be useful to the Advisor and its affiliates in managing other portfolios or
advising other clients, in such amount of total brokerage as may reasonably be
required. The Advisor also may consider the sale of Portfolio shares as a factor
in the selection of broker-dealers to execute each Portfolio's securities
transactions, subject to the Advisor's obligation to seek best execution for
each Portfolio.
The Advisor shall render regular reports to the Company, not less
frequently than quarterly, of how much total brokerage business has been placed
by the advisor with broker-dealers falling into each of the categories referred
to above and the manner in which the allocation has been accomplished. The
Advisor agrees that no investment decision will be made or influenced by a
desire to provide brokerage for allocation in accordance with the foregoing, and
that the right to make such allocation of brokerage shall not interfere with the
Advisor's paramount duty to obtain the best execution for the Company.
(c) TENDER OFFER SOLICITATION FEES. The Advisor shall use its best
efforts to recapture all available tender offer solicitation fees in connection
with tenders of the securities of any Portfolio, and any similar payments,
provided, however, that neither the Advisor, nor any affiliate of the Advisor
shall be required to register as a broker-dealer for this purpose.
The Advisor shall advise the Board of any fees or payments of whatever
type that it may be possible for the Advisor or an affiliate of the Advisor to
receive in connection with the purchase or sale of investment securities for any
Portfolio.
(d) VALUATION OF INVESTMENTS. The Advisor shall assist the custodian of
the Company's assets ("Custodian") or its designee in (i) valuing the securities
of each Portfolio in such manner and on such basis as described in the
then-current prospectus and statement of additional information of the Company
and (ii) calculating the net asset value per share of each Portfolio, as
described in the then-current prospectus and statement of additional information
of the Company, at the close of the regular trading of the New York Stock
Exchange (the "Exchange"), usually 4:00 p.m. Eastern time, each Monday through
Friday, except days on which the Exchange is closed. The Company shall provide,
or arrange for others to provide, all necessary information for the calculation
of the net asset value per share of each Portfolio, including the total number
of shares outstanding of each Portfolio. The Company shall arrange for the
Custodian to provide the Advisor or its designee with the net asset value per
share of each Portfolio as soon as reasonably practical each day after the net
asset value per share has been calculated.
(e) ASSISTANCE WITH REGULATORY MATTERS. The Advisor shall provide
such assistance, cooperation, and information to the Company or its designee, as
the same may reasonably request from time to time, with respect to the following
matters:
(i) the preparation, amendment, filing, and/or delivery of the
Company's registration statement, regulatory reports, periodic reports to
shareholders and other documents (including tax returns), required by applicable
law; and
(ii) the development, implementation, maintenance, and
monitoring of a compliance program for assuring compliance with all federal and
state securities law matters.
The Parties acknowledge that the Company or its designee shall have primary
responsibility for the foregoing matters.
(f) INFORMATION, RECORDS, AND CONFIDENTIALITY.
(i) The Company or its designees shall provide timely
information to the Advisor regarding such matters as purchases and redemptions
of shares of each Portfolio, the cash requirements and cash available for
investment in each Portfolio, and all other information as may be reasonably
necessary or appropriate for the Advisor to perform its responsibilities
hereunder.
(ii) The Company shall own and control all records maintained
hereunder by the Advisor on the Company's behalf and, upon request of the
Company or in the event of termination of this Agreement with respect to any
Portfolio for any reason, the Advisor shall promptly return to the Company all
records relating to that Portfolio, free from any claim or retention of rights
by the Advisor and without charge by the Advisor except for the Advisor's direct
expense.
(iii) The Advisor shall not disclose or use any records or
information obtained pursuant to this Agreement except as expressly authorized
herein, and shall keep confidential any information obtained pursuant to this
Agreement, and disclose such information only if the Company has authorized such
disclosure, or if such disclosure is expressly required by applicable federal or
state regulatory authorities.
(g) FACILITIES AND PERSONNEL. The Advisor shall, at its expense,
furnish to the Company adequate facilities and personnel necessary for the
Trustees and officers of the Company to manage the affairs and conduct of the
Company's business, including maintaining all internal bookkeeping, accounting
and auditing services and records in connection with the Company's investment
and business activities. The foregoing shall not be construed to require the
Advisor to provide facilities or personnel to any third party service provider
retained by the Company. Such facilities and personnel shall include:
(i) office space, which may be space within the offices of the
Advisor or in such other place as may be agreed upon from time to time,
(ii) office furnishings and supplies, including telephone
service, utilities, and simple business equipment, and
(iii) executive, secretarial and clerical personnel as may be
reasonably requested by the Company.
The Advisor shall compensate all Trustees, officers and employees of the Company
who are directors, officers, stockholders, or employees of the Advisor or its
affiliates.
(h) DELEGATION TO SUBADVISORS. Subject to the approval of the
Board and the shareholders of the Portfolios, the Advisor may delegate to a sub-
advisor certain of its duties herein, provided that the Advisor shall continue
to supervise the performance of any such subadvisor.
3. EXPENSES OF THE COMPANY.
Except for expenses that the Advisor expressly assumes pursuant to this
Agreement or any other agreement, the Company shall bear, or cause others to
bear, all expenses for its operations and activities, and shall cause the
Advisor to be reimbursed, by the Company or others, for any such expense that
the Advisor incurs. The expenses borne by the Company include, without
limitation:
(a) fees and expenses paid to the Advisor as provided pursuant to this
Agreement;
(b) expenses of all audits by independent public accountants;
(c) expenses of transfer or dividend disbursing agent, registrar,
Custodian, or depository appointed for safekeeping of each Portfolio's cash,
securities, and other property, and shareholder recordkeeping services,
including the expenses of issuing, repurchasing or redeeming Portfolio shares;
(d) expenses of obtaining quotations for calculating the value of the
net assets of each Portfolio;
(e) salaries and other compensation of executive officers of the
Company who are not directors, officers, stockholders or employees of the
Advisor or its affiliates;
(f) all taxes levied against the Company, including issuance and
transfer taxes, and corporate fees payable by the Company to federal, state or
other governmental agencies;
(g) brokerage fees and commissions in connection with the purchase and
sale of securities for each Portfolio, and similar fees and charges for the
acquisition, disposition, lending or borrowing of such securities;
(h) costs, including the interest expense, of borrowing money;
(i) costs incident to meetings of the Board and shareholders of the
Company, (exclusive of costs of those Trustees and employees of the Company who
are "interested persons" of the Company within the meaning of the Act);
(j) fees and expenses of Trustees who are not "interested persons" of
the Company within the meaning of the Act;
(k) legal fees, including the legal fees related to the registration
and continued qualification of the shares of each Portfolio for sale;
(l) costs and expense of registering and maintaining the registration
of the Company and the shares of each Portfolio under federal law, and making
and maintaining any notice filings and fees required under any applicable State
laws;
(m) the preparation, setting in type, printing in quantity and
distribution of materials distributed to then-current shareholders of each
Portfolio of such materials as prospectuses, statements of additional
information, supplements to prospectuses and statements of additional
information, periodic reports, communications, and proxy materials (including
proxy statements and proxy cards) relating to the Company or the Portfolio and
the processing, including tabulation, of the results of voting instruction and
proxy solicitations;
(n) the fees and expenses involved in the preparation of all reports
as required by federal or state law;
(o) postage;
(p) extraordinary or non-recurring expenses, such as legal claims and
liabilities and litigation costs and indemnification payments by the Company in
connection therewith;
(q) trade association dues for the Investment Company Institute or
similar organizations; and
(r) the cost of the fidelity bond required by Rule 17g-1 under the Act,
and any errors and omissions or other liability insurance premiums covering the
Trustees, officers, and employees.
4. COMPENSATION OF THE ADVISOR.
As compensation to the Advisor for services rendered and facilities
furnished hereunder, the Company shall pay the Advisor a fee in the amount and
manner set forth in Schedule A. The fee shall be reduced by any tender
solicitation fees received by the Advisor, or any affiliated person of the
Advisor, in connection with the tender of investments of any Portfolio or any
similar payments (less any direct expenses incurred by the Advisor, or any
affiliated person of the Advisor, in connection with such fees or payments).
5. ACTIVITIES OF THE ADVISOR.
The services of the Advisor to the Company under this Agreement are not
exclusive, and the Advisor and any of its affiliates shall be free to render
similar services to others, so long as its services hereunder are not impaired
thereby. Subject to and in accordance with the Company's Declaration of Trust,
By-Laws, the Declaration of Trust and By-Laws of the Adviser, and any applicable
requirements of the Act, it is understood that Trustees, officers, agents and
shareholders of the Company are or may be interested persons of the Advisor or
its affiliates as directors, officers, agents, or stockholders, or otherwise;
that directors, officers, agents, or stockholders, of the Advisor or its
affiliates are or may be interested persons of the Company as Trustees,
officers, agents, shareholders or otherwise; that the Advisor or its affiliates
may be interested in the Company as shareholders or otherwise; and the effect of
such interest shall be governed by the Act.
6. LIABILITIES OF THE ADVISOR.
The Advisor shall indemnify and hold harmless the Company and each of
its Trustees and officers (or former Directors or Trustees and officers) and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act (collectively, "Indemnitees") from all loss, cost, liability,
claim, damage, or expense (including the reasonable cost of investigating and
defending against the same and any counsel fees reasonably incurred in
connection therewith) incurred by any Indemnitees under the 1933 Act or under
common law or otherwise which arise out of or are based upon or are a result of
(i) the Advisor's willful misfeasance, bad faith, or negligence in the
performance of its duties, or (ii) the reckless disregard of its obligations and
duties under this Agreement, or that of its officers, agents, and employees, in
the performance of this Agreement, or (iii) the failure at any time of any
Portfolio to operate as a regulated investment company in compliance with
Subchapter M of the Internal Revenue Code. This indemnity provision, however,
shall not operate to protect any officer or Director of the Company from any
liability to the Company or any shareholder by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of his or her duties.
In case any action shall be brought against any Indemnitee, the Advisor
shall not be liable under its indemnity agreement contained in this paragraph
with respect to any claim made against any Indemnitee, unless the Indemnitee
shall have notified the Advisor in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon the Indemnitee (or after the Indemnitee shall
have received notice of such service on any designated agent), but failure to
notify the Advisor of any such claim shall not relieve it from liability to the
Indemnitees against whom such action is brought otherwise than on account of
this Section 6. The Advisor shall be entitled to participate at its own expense
in the defense, or, if it so elects, to assume the defense of any suit brought
to enforce any such liability, but if the Advisor elects to assume the defense,
such defense shall be conducted by counsel chosen by it and satisfactory to the
Indemnitees that are defendants in the suit. In the event the Advisor elects to
assume the defense of any such suit and retain such counsel, the Indemnitees
that are defendants in the suit shall bear the fees and expenses of any
additional counsel retained by them, but, in case the Advisor does not elect to
assume the defense of any such suit, the Advisor will reimburse the Indemnitees
that are defendants in the suit for the reasonable fees and expenses of any
counsel retained by them. The Advisor shall promptly notify the Company of the
commencement of any litigation or proceedings in connection with the issuance or
sales of the shares.
7. TERM AND TERMINATION.
(a) TERM. This Agreement shall become effective with respect to each
Portfolio on the date hereof, or, with respect to any Portfolio subsequently
included on Schedule A ("additional Portfolio"), on the date the Schedule is
amended to include such Portfolio. Unless terminated as herein provided, this
Agreement shall remain in full force and effect for two years from the date of
its execution with respect to each Portfolio and, with respect to each
additional Portfolio, until two years following the date on which such Portfolio
becomes a Portfolio hereunder, and shall continue in full force and effect
thereafter with respect to each Portfolio so long as such continuance with
respect to the Portfolio is approved at least annually (a) by either the
Trustees of the Company or by vote of a majority of the outstanding voting
securities of the Portfolio, and (b) in either event by the vote of a majority
of the Trustees of the Company who are not parties to this Agreement or
"interested persons" of any such party, cast in person at a meeting called for
the purpose of voting on such approval. Notwithstanding the foregoing, the
Trustees may, from time to time, establish a new effective date for the
continuance of this Agreement with respect to any Portfolio and/or additional
Portfolio; provided, that such new effective date precedes the then current
termination date of the Agreement. Any approval of this Agreement by the holders
of a majority of the outstanding voting securities of any Portfolio shall be
effective to continue this Agreement with respect to that Portfolio
notwithstanding (i) that this Agreement has not been approved by the vote of a
majority of the outstanding voting securities of any other Portfolio affected
thereby, and (ii) that this Agreement has not been approved by the vote of a
majority of the outstanding voting securities of the Company, unless such
approval shall be required by any other applicable law or otherwise.
(b) TERMINATION. This Agreement:
(i) may at any time be terminated with respect to any
Portfolio without the payment of any penalty either by vote of the Board or by
vote of a .......majority of the outstanding voting securities of such
Portfolio, on 60 days' written notice to the Advisor;
(ii) shall automatically and immediately terminate in the
event of its assignment; and
(iii) may be terminated with respect to any Portfolio by the
Advisor on 60 days' written notice to the Company.
8. DEFINITIONS.
As used herein, the terms "net asset value," "offering price,"
"investment company," "open-end management investment company," "assignment,"
"investment adviser," "interested person," "affiliated person," and "majority of
the outstanding voting securities" shall have the meanings set forth in the 1933
Act or the Act, and the rules and regulations thereunder. Nothing herein
contained shall require the Company to take any action contrary to any provision
of its Declaration of Trust, By-Laws, or any applicable statute or regulation.
9. NOTICES.
Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage prepaid, to the other party at such address as the
other party may designate for the receipt of notices. Until further notice to
the other party, it is agreed that the address of both the Company and the
Advisor shall be 7920 Norfolk Avenue, Suite 500, Bethesda, Maryland 20814.
10. SEVERABILITY.
If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
11. CONFIDENTIALITY.
The Advisor shall not disclose or use any records or information
obtained pursuant to this Agreement, pursuant to its relationship with the
Company, or in the course of discharging its obligations hereunder, in any
manner whatsoever except as expressly authorized by this Agreement or in a
writing by the Company, or as expressly required by applicable federal or state
regulatory authorities.
12. APPLICABLE LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Maryland, notwithstanding the conflict of laws
provisions thereof, and shall be construed to promote the operation of the
Company as an open-end management investment company. Questions relating to the
status of the Company will be resolved by resort to the law governing Delaware
business trusts.
13. PARTIES TO COOPERATE.
The Company and the Advisor agree to fully cooperate with each other in
assuring compliance under this Agreement with all federal and state laws and
regulations.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
effective as of the date first written above.
......... ......... MONUMENT SERIES FUND
......... ......... By: DAVID A. KUGLER
......... ......... President
......... ......... MONUMENT ADVISORS, LTD.
......... ......... By:/s/DAVID A. KUGLER
......... ......... ---------------------
......... ......... David A. Kugler
......... ......... President
<PAGE>
SCHEDULE A
June ___, 2000
This schedule is an integral part of the Agreement to which it is
attached. Capitalized terms used herein have the same meaning as given to them
in the Agreement, except as otherwise noted. This schedule sets forth the names
of the Portfolios covered by the Agreement and the compensation of the Advisor
for services rendered and facilities furnished to the Portfolios.
The Company shall pay the Advisor, as full compensation for all
services rendered and all facilities furnished under the Agreement, an annual
fee, accruable daily and payable two times per calendar month, determined by
applying the annual rates set out below to the average daily net assets of each
Portfolio named below. The average daily net asset value of the Portfolios shall
be determined in the manner set forth in the Company's Declaration of Trust and
Registration Statement.
PORTFOLIOS:
Monument Internet Fund
Monument Medical Sciences Fund
Monument Telecommunications Fund
Monument Digital Technology Fund
Monument New Economy Fund
ADVISORY FEES:
Assets Under Management ......... ......... Advisory Fee
Up to $250 million ......... ......... 1.25%
$250 million to $500 million........ ......... 1.00%
$500 million to $750 million........ ......... 0.87%
$750 million to $1 billion ......... ......... 0.75%
Over $1 billion ......... ......... 0.625%
