As filed with the Securities and Exchange Commission on March 24, 2000
Registration Nos.: 333-26223
811-8199
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 8
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 10
MONUMENT SERIES FUND, INC.
(Exact Name of Registrant as Specified in Charter)
7920 Norfolk Avenue, Suite 500, Bethesda, Maryland 20814
(address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: 301-215-7550
DAVID A. KUGLER BETH ANN ROTH
President Beth-ann Roth, P.C.
The Monument Funds Group, Inc. 9204 Saint Marks Place
7920 Norfolk Avenue, Suite 500 Fairfax, Virginia 22031
Bethesda, Maryland 20814
(Name and Address of Agents for Service)
Approximate Date of Proposed Public Offering: As soon as
practicable after this Registration Statement becomes effective.
It is proposed that this filing will become effective: (check
appropriate box)
________ on _____ pursuant to paragraph (a)(1) of Rule 485
________ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
____X__ 75 days after filing pursuant to paragraph (a)(2) of Rule 485
________ on _____ days after filing pursuant to paragraph (a)(2) of Rule 485
________ immediately upon filing pursuant to paragraph (b) of Rule 485
________ on _____ pursuant to (b) of Rule 485
[MONUMENT FUNDS GROUP, INC. LOGO]
MONUMENT SERIES FUND, INC.
MONUMENT INTERNET FUND
MONUMENT MEDICAL SCIENCES FUND
MONUMENT TELECOMMUNICATIONS FUND
MONUMENT DIGITAL TECHNOLOGY FUND
MONUMENT NEW ECONOMY FUND
Prospectus dated June 8, 2000
This Prospectus describes the Monument Internet Fund, Monument Medical
Sciences Fund, Monument Telecommunications Fund, Monument Digital Technology
Fund, and the Monument New Economy Fund (each, a "Fund"; collectively, the
"Funds"). Each Fund represents a separate series of common stock of the Monument
Series Fund, Inc. (the "Company"). Each series offers four classes of shares:
Class A Shares with a front-end sales charge, Class B Shares subject to a
contingent deferred sales charge, Class C Shares with a reduced front-end sales
charge and a contingent deferred sales charge, and Class Y Shares for certain
institutional investors. Class A Shares, B Shares and C Shares are offered by
this prospectus. Class Y Shares are offered pursuant to a separate prospectus,
which may be obtained by contacting Monument Series Fund, Inc. (See "Buying Fund
Shares.")
Monument Internet Fund seeks to maximize long-term appreciation of capital
by investing primarily in a diversified portfolio of Internet company equity
securities.
Monument Medical Sciences Fund seeks to maximize long-term appreciation of
capital by investing primarily in a diversified portfolio of equity securities
of medical sciences companies.
Monument Telecommunications Fund seeks to maximize long-term appreciation
of capital by investing primarily in a diversified portfolio of equity
securities of telecommunications companies.
Monument Digital Technology Fund seeks to maximize long-term appreciation
of capital by investing primarily in a diversified portfolio of equity
securities of companies involved in or supporting digital technology industries.
Monument New Economy Fund seeks to maximize long-term appreciation of
capital by investing primarily in a diversified blend of equity securities
chosen from the Company's other Funds.
The U.S. Securities and Exchange Commission has not approved or
disapproved these securities or passed on the accuracy or completeness of this
Prospectus. It is a criminal offense to suggest otherwise.
<PAGE>
TABLE OF CONTENTS
The Funds
Investment Objectives
Principal Investment Strategies
Temporary Defensive Positions
Specific Risk Considerations
General Risk Considerations
Table of Fees and Expenses
The Company
Buying Fund Shares
Distribution Arrangements
Exchanging Fund Shares
Redeeming Fund Shares
Dividends and Distributions
Tax Considerations
Services To Help You Manage Your Account
Proper Form
Share Certificates
Retirement Plan Accounts
Financial Highlights Information
<PAGE>
THE FUNDS
The following discussion describes the investment objectives, principal
strategies and risks of each Fund. Investment objectives are fundamental
policies and cannot be changed without the approval of a majority of the
relevant Fund's outstanding shares. As with any mutual fund, there can be no
guarantee that investment objectives will be met.
Investment Objectives
Monument Internet Fund. The Internet Fund's investment objective is to
maximize long-term appreciation of capital.
Monument Medical Sciences Fund. The Medical Sciences Fund's investment
objective is to maximize long-term appreciation of capital.
Monument Telecommunications Fund. The Telecommunications Fund's
investment objective is to maximize long-term appreciation of capital.
Monument Digital Technology Fund seeks to maximize long-term appreciation
of capital by investing primarily in a diversified portfolio of equity
securities of companies involved in or supporting digital technology industries.
Monument New Economy Fund seeks to maximize long-term appreciation of
capital by investing primarily in a diversified blend of equity securities
chosen from the Company's other Funds.
Principal Investment Strategies
Internet Fund. The Fund seeks to achieve its objective by investing, under
normal circumstances, at least 65% of its total assets in equity securities of
companies principally engaged in Internet or Internet-related businesses. A
company is considered principally engaged in an Internet, Intranet or
Internet-related business if at least 50% of its assets, gross income, or net
profits are committed to, or derived from, the research, design, development,
manufacture, or distribution of products, processes or services for use with
Internet or Intranet-related businesses.
The Internet is a global matrix of computers and computer networks
connected by a high-speed infrastructure, which allows users to communicate
quickly, and easily with each other. An Intranet is the application of Internet
tools and concepts to a company's internal network. Currently, the most popular
application on the Internet is the World Wide Web ("WWW"), a
graphic-user-interface which allows information sharing and data transfer. Other
Internet applications include e-mail, Intranet, extranet, and electronic
commerce. Currently, development is occurring in such areas as infrastructure
deployment, Internet access, content provision, data security, and electronic
commerce.
When selecting investments for the Internet Fund, Monument Advisors, Ltd.,
the investment advisor of each of the Funds ("Advisors") will seek to identify
Internet companies that are developing new or innovative products, services, or
processes that will lead to a future growth in earnings. Such companies are
likely to be relatively unseasoned companies. These companies generally will
have no established history of paying dividends, and any dividend income is
likely to be incidental.
Medical Sciences Fund. The Fund seeks to achieve its objective by
investing, under normal circumstances, at least 65% of its total assets in
equity securities of companies principally engaged in research, development,
production and distribution of medical products and services. Companies in these
fields include, but are not limited to, pharmaceutical firms; companies that
design, manufacture or sell medical supplies, equipment and support services;
and companies engaged in medical, diagnostic, biochemical and biotechnological
research and development.
When selecting investments for the Fund, Advisors will seek to identify
medical sciences companies that it believes are likely to benefit from new or
innovative products, services or processes that can enhance the companies'
prospects for future earnings growth. Some of these companies may not have an
established history of revenue or earnings at the time of purchase. Dividend
income, if any, is likely to be incidental.
Telecommunications Fund. The Fund seeks to achieve its objective by
investing, under normal circumstances, at least 65% of its total assets in
equity securities of companies engaged in virtually all aspects of
communications services and technologies. These companies may provide network
systems and equipment; serve as public and private carriers, whether land-based,
wireless or satellite, or provide or distribute value-added services or
products.
When selecting investments for the Telecommunications Fund, Advisors will
seek to identify telecommunication companies that it believes are developing new
or innovative products, services, or processes that can enhance the companies'
prospects for future earnings growth. Some of these companies may not have an
established history or revenue or earnings at the time of purchase. Dividend
income, if any, is likely to be incidental.
Digital Technology Fund. The Fund seeks to achieve its objective by
investing, under normal market conditions, at least 65% of its assets in equity
securities of companies involved in or supporting digital technology industries.
Digital technology industries include, but are not limited to: communications
and communications equipment; computer hardware, peripherals and software;
networking equipment; digital consumer electronics; semiconductors and
semiconductor equipment; and other emerging technologies that utilize digital
processes.
New Economy Fund. The Fund seeks to achieve its objective by investing,
under normal circumstances, at least 65% of its assets in equity securities of
companies representing a diversified blend of the equity securities held by the
Company's other Funds. As a nonfundamental operating policy, the Fund intends to
have no more than 50% and no less than 10% of its assets in each of the
industries represented by the Company's other Funds.
When selecting investments for the New Economy Fund, Advisors will choose
from among the companies that it believes are developing new or innovative
products, services or processes that can enhance the companies' prospects for
future earnings growth. As with the Funds from which the New Economy Fund's
investments will be selected, some of the companies may not have an established
history of revenue or earnings at the time the Fund becomes an investor.
Dividend income, if any, is likely to be incidental.
TEMPORARY DEFENSIVE POSITIONS
For temporary defensive purposes, each Fund may make investments that are
inconsistent with its principal investment strategies in attempting to respond
to adverse market, economic, political or other conditions. If that occurs, the
Fund may not achieve its investment objective. The Funds may also engage in
transactions that are not part of their principal investment strategies, such as
trading in derivatives, including options, and lending portfolio securities.
These strategies are discussed in the Statement of Additional Information
("SAI").
<PAGE>
SPECIFIC RISK CONSIDERATIONS
Internet Fund. The Internet Fund invests primarily in companies engaged in
Internet and Intranet-related activities. The value of this type of company is
particularly vulnerable to rapidly changing technology, extensive government
regulation and relatively high risks of obsolescence caused by scientific and
technological advances. Therefore, the Internet Fund may experience greater
volatility than funds not subject to these types of risks. The Internet Fund is
diversified, and may also invest in small companies and technology and research
companies, the risks of which are described below under "General Risk
Considerations."
Medical Sciences Fund. The economic prospects of health sciences companies
can dramatically fluctuate due to changes in the regulatory and competitive
environment in which these companies operate. A substantial portion of health
services and research is funded or subsidized by the government, and so changes
in government policy at the federal or state level may affect the demand for
health care products or services, and the continuation or success of research
and development efforts. Regulatory approvals often entail lengthy application
and testing procedures and are generally required before new drugs and certain
medical devices may be introduced. Medical sciences companies face lawsuits
related to product liability and other issues. Also, many products and services
provided by medical science companies require substantial capital investment and
are subject to rapid obsolescence. The Medical Sciences Fund is diversified, and
may also invest in small companies and technology and research companies, the
risks of which are described below under "General Risk considerations."
Telecommunications Fund. The economic prospects of telecommunications
companies can dramatically fluctuate due to regulatory and competitive
environment changes around the world. Most products or services provided by
telecommunications companies require substantial investment and are subject to
competitive obsolescence. Telecommunications companies are particularly subject
to political and currency risks. The Telecommunications Fund is diversified, and
may also invest in small companies, the risks of which are described below under
"General Risk Considerations".
Digital Technology Fund. The companies in which the Digital Technology
Fund invest are vulnerable to rapid changing technology and government
regulation. Moreover, the competitive nature of this industry may cause many
company's products or services to become obsolete from competitors technological
advances. Therefore, the Digital Technology Fund may experience greater
volatility than funds not subject to these types of risks. The Digital
Technology Fund is diversified, and may also invest in small companies, the
risks of which are described below under "General Risk Considerations".
New Economy Fund. The New Economy Fund shares the specific risk
considerations of each of the other Monument Funds.
<PAGE>
GENERAL RISK CONSIDERATIONS
Small Companies. Each of the Funds may invest in companies with small
market capitalization (i.e., less than $500 million) or companies that have
relatively small revenues, limited product lines, and a small share of the
market for their products or services (collectively, "small companies"). Small
companies are also characterized by the following: (1) they may lack depth of
management; (2) they may be unable to internally generate funds necessary for
growth or potential development or to generate such funds through external
financing on favorable terms; and (3) they may be developing or marketing new
products or services for which markets are not yet established and may never
become established. Due to these and other factors, small companies may suffer
significant losses, as well as realize substantial growth. Thus, securities of
small companies present greater risks than securities of larger, more
established companies.
Historically, stocks of small companies have been more volatile than
stocks of larger companies and are, therefore, more speculative than investments
in larger companies. Among the reasons for the greater price volatility are the
following: (1) the less certain growth prospects of smaller companies; (2) the
lower degree of liquidity in the markets for such stocks; and (3) the greater
sensitivity of small companies to changing economic conditions. Besides
exhibiting greater volatility, small company stocks may, to a degree, fluctuate
independently of larger company stocks. Small company stocks may decline in
price as large company stocks rise, or rise in price as large company stocks
decline. You should therefore expect that the value of Digital Technology,
Internet, Medical Sciences, New Economy and Telecommunications Fund shares to be
more volatile than the shares of mutual fund investing primarily in larger
company stocks.
Technology And Research Companies. Consistent with its investment
objective, each of the Funds expects to invest a portion of its assets in
securities of companies involved in biological technologies, computing
technologies, or communication technologies (collectively, "technology
sectors"), and companies related to these industries. Typically, these
companies' products or services compete on a global, rather than a predominately
domestic or regional basis. The technology sectors historically have been
volatile and securities of companies in these sectors may be subject to abrupt
or erratic price movements. Advisors will seek to reduce such risks through
extensive research, and emphasis on more globally-competitive companies. In
addition, because these companies compete globally, the securities of these
companies may be subject to fluctuations in value due to the effect of changes
in the relative values of currencies on such companies' businesses. The history
of these markets reflect both decreases and increases in worldwide currency
valuations, and these may reoccur unpredictably in the future.
Industry Concentration. Each Fund may invest more than 25% of its assets
in what may be considered a single sector. Accordingly, each Fund may be more
susceptible to the effects of adverse economic, political or regulatory
developments affecting a single issuer or industry sector than funds that
diversify to a greater extent.
Other Investments. In addition to the investment strategies described
above, each of the Funds may engage in other strategies such as derivatives,
securities lending and foreign investing. Investments in derivatives, such as
options, can significantly increase a Fund's exposure to market risk or credit
risk of the counterparty, as well as improper valuation and imperfect
correlation. The risk in lending portfolio securities, as with other extensions
of secured credit, consists of possible delay in receiving additional
collateral, or in the recovery of the securities or possible loss of rights in
the collateral should the borrower fail financially. Foreign investing involves
currency risk and the possibility of adverse change in the investment or
political climate of the jurisdiction in which the securities are sold. The
Funds currently do not intend to purchase foreign securities, and take advantage
of investments in overseas businesses through the purchase of American
Depositary Receipts. See the SAI for more detail.
<PAGE>
[INTERNET FUND A SHARE GRAPH]
*During the period shown in the bar chart the highest return for a calendar
quarter was 91.86% (quarter ending 3/31/99) and the lowest return for a calendar
quarter was 1.17% (quarter ending 9/30/99).
Past performance is not predictive of future performance. Performance figures do
not include deduction of the maximum applicable sales charge of 4.75%, which was
in effect during the performance period. The Monument Internet Fund A Shares
currently charge a maximum sales charge of 5.75%, reduced sales charges may
apply. Had the sales charge been included, returns would have been less than
those shown.
Average Annual Total Returns
(for the periods ended December 31, 1999)
Since inception
1 Year (November 16, 1998)
Monument Internet 271.74% 313.65%
Fund Class A
S&P 500 20.98% 27.29%
Inter@ctive 167.57% 236.52%
- -------------------------------------------------------------
The S&P 500 is an unmanaged index containing common stocks of 500 industrial,
transportation, utility and financial companies, regarded as generally
representative of the United States market. The index reflects the reinvestment
of income dividends and capital gain distributions, if any, but does not reflect
fees, brokerage commissions, or other expenses of investing.
The Inter@ctive Week Internet Index is a modified capitalization-weighted
index of companies involved with providing digital interactive services,
developing and marketing digital interactive software, and manufacturing digital
interactive hardware, The index was developed with a base value of 66.66 as of
August 15, 1995. Effective on March 22, 1999, there was a 3-1 split of the
index.
<PAGE>
[MEDICAL SCIENCES FUND A SHARE GRAPH]
*During the period shown in the bar chart the highest return for a calendar
quarter was 33.25%
(quarter ending 12/31/99) and the lowest return for a calendar quarter was
6.56% (quarter ending 9/30/99).
Past performance is not predictive of future performance. Performance figures do
not include deduction of the maximum applicable sales charge of 4.75%, which was
in effect during the performance period. The Monument Medical Sciences Fund A
Shares currently charge a maximum sales charge of 5.75%, reduced sales charges
may apply. Had the sales charge been included, returns would have been less than
those shown.
Average Annual Total
Returns
(for the periods ended December 31, 1999)
Since inception
1 Year (January 6, 1998)
Monument Medical Sciences 66.96% 42.45%
Fund Class A
S&P 500 19.47% 24.40%
Russell 2000 21.29% 9.48%
- --------------------------------------------------------
The S&P 500 is an unmanaged index containing common stocks of 500 industrial,
transportation, utility and financial companies, regarded as generally
representative of the United States market. The index reflects the reinvestment
of income dividends and capital gain distributions, if any, but does not reflect
fees, brokerage commissions, or other expenses of investing.
The Russell 2000 Index is comprised of the smallest 2000 companies in the
Russell 3000 Index, representing approximately 11% of the Russell 3000 total
market capitalization.
<PAGE>
[TELECOMMUNICATIONS FUND A SHARE GRAPH]
*During the period shown in the bar chart the highest return for a calendar
quarter was 57.35% (quarter ending 12/31/99) and the lowest return for a
calendar quarter was (.98%) (quarter ending 3/31/99).
Past performance is not predictive of future performance. Performance figures do
not include deduction of the maximum applicable sales charge of 4.75%, which was
in effect during the performance period. The Monument Telecommunications Fund A
Shares currently charge a maximum sales charge of 5.75%, reduced sales charges
may apply. Had the sales charge been included, returns would have been less than
those shown.
Average Annual Total
Returns
(for periods ended December 31, 1999)
Since inception
1 Year (January 6, 1998)
Monument Telecommunications 90.58% 56.05%
Fund Class A
S&P 500 20.98% 25.19%
NASDAQ Telecommunications 102.47% 82.79%
- ------------------------------------------------------------
The S&P 500 is an unmanaged index containing common stocks of 500 industrial,
transportation, utility and financial companies, regarded as generally
representative of the United States market. The index reflects the reinvestment
of income dividends and capital gain distributions, if any, but does not reflect
fees, brokerage commissions, or other expenses of investing.
The NASDAQ Telecommunications Index is a capitalization-weighted index designed
to measure the performance of all NASDAQ stocks in the telecommunications
sector. The index was developed with a base value of 100 as of February 5, 1971.
TABLE OF FEES AND EXPENSES
The following table is designed to help you understand the fees and
expenses that you may pay, both directly and indirectly, by investing in the
Funds.
Shareholder Fees
(fees paid directly from your investment) Class Class Class
A B C
Maximum Sales Charge (Load)1 5.75% None 1.00%
Maximum Deferred Sales Charge (Load) None2 5.00%3 1.004
Maximum Sales Charge (Load) Imposed on Reinvested None None None
Dividends and Distributions
Redemption Fees None None None
Exchange Fees None None None
Annual Fund Operating Expenses1
(expenses that are deducted from fund assets as a percentage of average net
assets)
Internet Fund
-------------------
-------------------
Class Class Class
A B C
Advisory Fee 1.25% 1.25% 1.25%
Distribution (12b-1) Fees 0.50% 1.00% 1.00%
Other Expenses
Total Annual Fund Operating
Expenses
Fee Waivers and/or Expense
Reimbursements
Net Expenses
Medical Sciences
Fund
--------------------
--------------------
Class Class Class
A B C
Advisory Fee 1.25% 1.25% 1.25%
Distribution (12b-1) Fees 0.50% 1.00% 1.00%
Other Expenses
Total Annual Fund Operating
Expenses
Fee Waivers and/or Expense
Reimbursements
Net Expenses
Telecommunications
Fund
--------------------
--------------------
Class Class Class
A B C
Advisory Fee 1.25% 1.25% 1.25%
Distribution (12b-1) Fees 0.50% 1.00% 1.00%
Other Expenses
Total Annual Fund Operating
Expenses
Fee Waivers and/or Expense
Reimbursements
Net Expenses
- --------------------------------
Digital Technology
Fund
--------------------
--------------------
Class Class Class
A B C
Advisory Fee 1.25% 1.25% 1.25%
Distribution (12b-1) Fees 0.50% 1.00% 1.00%
Other Expenses 0.50% 0.75% 0.75%
Total Annual Fund Operating 2.25% 3.00% 3.00%
Expenses
Fee Waivers and/or Expense
Reimbursements
Net Expenses 2.25% 3.00% 3.00%
- --------------------------------
New Economy Fund
--------------------
--------------------
Class Class Class
A B C
Advisory Fee 1.25% 1.25% 1.25%
Distribution (12b-1) Fees 0.50% 1.00% 1.00%
Other Expenses 0.50% 0.75% 0.75%
Total Annual Fund Operating 2.25% 3.00% 3.00%
Expenses
Fee Waivers and/or Expense
Reimbursements
Net Expenses 2.25% 3.00% 3.00%
- -------------------
1 As a percentage of offering price. Reduced rates apply to purchases over
$50,000, and the sales charge is waived for certain classes of investors. See
"Buying Fund Shares-Public Offering Price" and "Buying Fund Shares-Rights of
Accumulation."
2 If you are in a category of investors who may purchase shares without a sales
charge, you will be subject to a 1% contingent deferred sales charge if you
redeem your shares within 1 year of purchase.
3 A 5.00% deferred sales charge as a percentage of the original purchase price
will apply to any redemption made within the first year. During the second
year, redeemed shares will incur a 4.00% sales charge. During years three and
four you will pay 3.00%, during year five 2.00%, and during year six 1.00%. The
contingent deferred sales charge is eliminated after the sixth year. Class B
Shares automatically convert to Class A Shares eight years after the calendar
month end in which the Class B Shares were purchased.
4 A contingent deferred sales charge of 1% is imposed on the proceeds of Class C
Shares redeemed within one year. The charge is a percentage of net asset value
at the time of purchase.
The Company has approved a Plan of Distribution Pursuant to Rule 12b-1 of
the 1940 Act for Class A, B and C Shares, providing for the payment of
distribution fees to Monument Distributors, Inc., the principal underwriter for
each Fund ("12b-1 Plan"). Class A Shares pay a maximum distribution fee of 0.50%
of average daily net assets, and Class B and Class C Shares pay a maximum
distribution fee of 1.00% of average daily net assets. See "Rule 12b-1 Fees."
The higher 12b-1 fees borne by Class B and Class C Shares may cause long-term
investors to pay more than the economic equivalent of the maximum front end
sales charge permitted by the National Association of Securities Dealers.
With respect to the Internet, Medical Sciences, Telecommunications,
Digital Technology and New Economy Funds, the Advisor has contractually agreed
to waive its fees and pay expenses to the extent necessary to cap Class A Share
total operating expenses at 2.25%, and Class B and Class C Share total operating
expenses at 3.00% of the Fund's average daily net assets until May 1, 2001.
Example. This example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds with
similar investment objectives. The example assumes that you invest $10,000 in a
class of shares of the Fund for the time periods indicated then redeem all of
your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the operating expenses of the
relevant class remain the same. Although your actual cost may be higher or
lower, based on these assumptions your cost would be:
1 Year*: 3 Years*: 5 Years*: 10 Years*:
Class Class Class Class
A B C A B C A B C A B C
-------------------------------------------------------
-------------------------------------------------------
Internet
Medical Sciences
Telecommunications
Digital Technology
New Economy
With respect to Class A Shares, the above examples assume payment of the
maximum initial sales charge of 5.75% at the time of purchase. The sales charge
varies depending upon the amount of Fund shares that an investor purchases.
Accordingly, your actual expenses may vary. With respect to Class B Shares, the
above examples assume payment of the deferred sales charge applicable at the
time of redemption. The ten-year figure takes into account the shares'
conversion to Class A Shares after eight years. For time periods during which
the contractual agreement to waive or reimburse fees is in place, your actual
expenses may be lower.
* Numbers reflect the cap imposed by the expense limitation agreement through
May 1, 2001. If the advisor continues this contractual agreement for the
periods shown below, your cost would be:
1 Year: 3 Years: 5 Years: 10 Years:
Class Class Class Class
A B C A B C A B C A B C
-------------------------------------------------------
-------------------------------------------------------
Internet
Medical Sciences
Telecommunications
THE COMPANY
The Company. Monument Series Fund, Inc. is a an open-end management
investment company registered with the Securities and Exchange Commission
("SEC"). The Company was originally organized as a Maryland corporation on
April 7, 1997, and converted to a Delaware business trust effective May 15,
2000.
The Advisor. Monument Advisors, Ltd. ("Monument Advisors" or
"Advisors") serves as each Fund's investment advisor and provides overall
management of the Company's business affairs. See "Investment Advisory and
Other Services" in the SAI.
Monument Advisors, located at 7920 Norfolk Avenue, Suite 500, Bethesda,
Maryland 20814, is a wholly-owned subsidiary of The Monument Group, Inc., which
in turn is principally-owned and controlled by David A. Kugler, President and a
director of both Advisors and the Company. Monument Advisors also manages the
portfolio investments of qualified individuals, retirement plans, and trusts. As
of March 31, 2000, Advisors managed or supervised in excess of $400 million in
assets.
In the interest of limiting expenses of the Internet, Medical Sciences,
Telecommunications, Digital Technology and New Economy Funds, Monument Advisors
has entered into an expense limitation agreement with the Company. Pursuant to
the agreement, Monument Advisors has agreed to waive or limit its fees and to
assume other expenses so that the total annual operating expenses for Class A, B
and C Shares of the Funds covered by the agreement are limited to 2.25% for
Class A Shares and 3.00% for Class B and C Shares through October 31, 2000. The
limit does not apply to interest, taxes, brokerage commissions, other
expenditures capitalized in accordance with generally accepted accounting
principles or other extraordinary expenses not incurred in the ordinary course
of business.
Portfolio Managers. Advisors uses a team approach to Management of the
Internet, Medical Sciences and New Economy Funds. The team serves under the
direction of _____________.
J. Michael Gallipo, CFA, serves as the portfolio manager of the
Telecommunications and Digital Technology Funds. Mr. Gallipo has over four
years of investment experience and joined Advisors in August 1999. Prior to
joining Advisors, Mr. Gallipo was an investment analyst at Van Eck Associates
Corp. Mr. Gallipo also served previously as a compliance analyst for Van Eck
and as a legal assistant for Brown & Wood, LLP.
Principal Underwriter. Monument Distributors, Inc., located at 7920
Norfolk Avenue, Suite 500, Bethesda, Maryland 20814, is a wholly-owned
subsidiary of The Monument Group, Inc. and an affiliate of Monument Advisors,
and serves as the principal underwriter of each Fund. David A. Kugler and
Peter L. Smith are officers of both the Company and Monument Distributors.
<PAGE>
BUYING FUND SHARES
Share Class Alternatives. The Fund offers investors four different classes
of shares. Class A, Class B and Class C Shares are offered by this Prospectus.
Class Y Shares are offered by a separate Prospectus. The different classes of
shares represent investments in the same portfolio of securities, but the
classes are subject to different expenses and may have different share prices.
When you buy shares be sure to specify the class of shares in which you choose
to invest. If you do not select a class your money will be invested in Class A
Shares. Because each share class has a different combination of sales charges,
expenses and other features, you should consult your financial advisor to
determine which class best meets your financial objectives. Additional details
about each of the share class alternatives may be found below under
"Distribution Arrangements."
Class A Shares Class B Shares Class C Shares
Max. initial 5.75% None 1%
sales charge. (Subject to
reductions
See "Distribution
beginning with
Arrangements" for
investments of a schedule
$50,000) itemizing
reduced sales charges.
Contingent None Year 1 5% Year 1 1%
deferred sales (Except for 1% Year 2 4% Years 2+ None
charge ("CDSC") on redemptions Year 3 3%
imposed when with 1 year) Year 4 3%
shares are Year 5 2%
redeemed Year 6 1%
(percentage based Year 7 None
on purchase Year 8 None
price). Years
are based on a
twelve-month
period.
See below for
information regarding
applicable waivers of
the CDSC.
Rule 12b-1 fees. 0.50% 1.00% 1.00%
See "Distribution
Arrangements" for
important information
about Rule 12b-1 fees.
Conversion to N/A Automatically No conversion
Class A after about 8 feature. Rule
years, at which 12b-1 fees
time applicable remain higher
Rule 12b-1 fees than those of
are reduced. Class A Shares
for life of
account.
Appropriate for: All investors, Investors who Investors who
particularly plan to hold intend to hold
those who intend their shares at their shares for
to hold their least 6 years. at least 1 year,
shares for a but less than 6
long period of years.
time and/or
invest a
substantial
amount in the
Fund.
Share Transactions. You may purchase and redeem Fund shares, or exchange
shares of one Fund for those of another, by contacting any broker authorized by
the distributor to sell shares of the Company or by contacting Fund Services,
Inc., the Company's transfer and dividend disbursing agent, at 1500 Forest
Avenue, Suite 111, Richmond, VA 23229 or by telephoning 1-888-420-9950. A sales
charge may apply to your purchase. Brokers may charge transaction fees for the
purchase or sale of Fund shares, depending on your arrangement with the broker.
Minimum Investments. The following table provides you with information on
the various investment minimums, sales charges and expenses that apply to each
class. Under certain circumstances the Fund may waive the minimum initial
investment for purchases by officers, directors and employees of the Company,
and its affiliated entities and for certain related advisory accounts,
retirement accounts, custodial accounts for minors and automatic investment
accounts as detailed below under "Waiver of Sales Charges."
Class A Class B Class C
---------------- ---------------------------------
---------------- ---------------------------------
Minimum Initial $1,000 $1,000 $1,000
Investment
Minimum Subsequent $250* $250* $250*
Investment
* For automatic investments made at least quarterly, the minimum subsequent
investment is $100.
By Mail. You may buy shares of each Fund by sending a completed
application along with a check drawn on a U.S. bank in U.S. funds, to
"Monument Series Fund," c/o Fund Services, Inc., at 1500 Forest Avenue, Suite
111, Richmond, VA 23229. Fund Services, Inc. is the Company's transfer and
dividend disbursing agent. See "Proper Form." Third party checks are not
accepted for the purchase of Fund shares.
By Wire. You may also wire payments for Fund shares to the wire bank
account for the appropriate Fund. Before wiring funds, please call
1-888-420-9950 to advise the Fund of your investment and to receive further
instructions. Please remember to return your completed and signed
application to Fund Services, Inc., 1500 Forest Avenue, Suite 111, Richmond,
VA 23229. See "Proper Form."
Public Offering Price. When you buy shares of a Fund, you will receive the
public offering price per share as determined after your order is received in
proper form, as defined below under the section entitled "Proper Form." The
public offering price of Class A and Class C Shares is equal to the Fund's net
asset value plus the initial sales charge. The public offering price of Class B
Shares is equal to the respective Fund's net asset value.
When Shares Are Priced. Each Fund is open for business each day the New
York Stock Exchange ("Exchange") is open. Each Fund determines its share price
as of the close of regular trading on the Exchange, generally 4:00 p.m. EST. If
you purchase your shares through a broker, the Fund will be deemed to have
received your order when the order is accepted as being in proper form by the
broker. However, your broker must receive your request before the close of the
regular trading on the Exchange to receive that day's net asset value ("NAV").
Net Asset Value. Each Fund's share price is equal to the NAV per share of
the Fund. Each Fund calculates its NAV per share by valuing and totaling its
assets, subtracting any liabilities, and dividing the remainder, called net
assets, by the number of Fund shares outstanding. The value of each Fund's
portfolio securities is generally based on market quotes if they are readily
available. If they are not readily available, Advisors will determine their
market value in accordance with procedures adopted by the Board. For information
on how the Funds value their assets, see "Valuation of Fund Shares" in the SAI.
DISTRIBUTION ARRANGEMENTS
If you purchase your shares through a broker-dealer, the broker-dealer
firm is entitled to receive a percentage of the sales charge you pay in order to
purchase Fund shares. The following schedule governs the percentage to be
received by the selling broker-dealer firm.
Class A Sales Charge and Broker-Dealer Commission and Service Fee
Sales Charge Broker-Dealer
Percentage
Less than $50,000 5.75% 5.00%
$50,000 but less than $100,000 4.50% 3.75%
$100,000 but less than $250,000 3.50% 2.75%
$250,000 but less than $500,000 2.50% 2.00%
$500,000 but less than $1,000,000 2.00% 1.75%
$1,000,000 or more 1.00% 1.00%
After a one-year holding period, broker-dealers will be entitled to receive an
ongoing service fee of 0.25%, payable quarterly.
Class B Broker-Dealer Commission and Service Fee
Broker-Dealer Percentage
Up to $250,000 4.00%
After a one-year holding period, broker-dealers will be entitled to receive an
ongoing service fee of 0.25%, payable quarterly.
Class C Broker-Dealer Commission and Service Fee
Sales Charge Broker-Dealer
Percentage
All purchases 1.00% 1.00%
After a one-year holding period, broker-dealers will be entitled to receive an
ongoing service fee of 0.25%, payable quarterly.
Rule 12-B 1 Fees. The Board of Directors has adopted a Plan of
Distribution pursuant to Rule 12b-1 under the 1940 Act ("Rule 12b-1 Plan") for
each class of shares. Pursuant to the Rule 12b-1 Plans, each Fund may finance
any activity or expense that is intended primarily to result in the sale of its
shares. Each Fund may pay a fee ("Rule 12b-1 fee") to Distributors, on an
annualized basis of its average daily net assets, up to a maximum of 1.00% for
Class B and Class C Share expenses and 0.50% for Class A Share expenses. Up to
0.25% of the total Rule 12b-1 fee may be used to pay for certain shareholder
services provided by institutions that have agreements with the Funds'
distributor to provide those services. The Company may pay Rule 12b-1 fees for
activities and expenses borne in the past in connection with the distribution of
its shares as to which no Rule 12b-1 fee was paid because of the maximum
limitation. Because these fees are paid out of the Company's assets on an
ongoing basis, over time these fees will increase the cost of your investment
and may cost more than paying other types of sales charges.
Right Of Accumulation. After making an initial purchase in any Monument
Fund series, you may reduce the sales charge applied to any subsequent
purchases. Your shares in a Fund previously purchased will be taken into account
on a combined basis at the current net asset value per share of a Fund in order
to establish the aggregate investment amount to be used in determining the
applicable sales charge. Only previous purchases of Fund shares that are still
held in the Fund and that were sold subject to the sales charge will be included
in the calculation. To take advantage of this privilege, you must give notice at
the time you place your initial order and subsequent orders that you wish to
combine purchases. When you send your payment and request to combine purchases,
please specify your account number.
Waiver of Front-End Sales Charges. No sales charge shall apply to:
(1) reinvestment of income dividends and capital gain distributions;
(2) exchanges of one Fund's shares for those of another Fund;
(3) purchases of Fund shares made by current or former directors, officers,
or employees of the Company, Advisors, Monument Distributors, The Monument
Funds Group, Inc., or The Monument Group, Inc., and by members of their
immediate families, and employees (including immediate family members) of
a broker-dealer distributing Fund shares;
(4) purchases of Fund shares by Distributors for its own investment account
for investment purposes only;
(5) a "qualified institutional buyer," as that term is defined under Rule 144A
of the Securities Act of 1933, including, but not limited to, insurance
companies, investment companies registered under the 1940 Act, business
development companies registered under the 1940 Act, and small business
investment companies;
(6) a charitable organization, as defined in Section 501(c)(3) of the Internal
Revenue Code ("Code"), as well as other charitable trusts and endowments,
investing $50,000 or more;
(7) a charitable remainder trust, under Section 664 of the Code, or a life
income pool, established for the benefit of a charitable organization as
defined in Section 501(c)(3) of the Code;
(8) investment advisors or financial planners who place trades for their own
accounts or the accounts of their clients and who charge a management,
consulting or other fee for their services; and clients of those
investment advisors or financial planners who place trades for their own
accounts if the accounts are linked to the master account of the
investment advisor or financial planner on the books and records of the
broker or agent;
(9) institutional retirement and deferred compensation plans and trusts used
to fund those plans, including, but not limited to, those defined in
section 401(a), 403(b) or 457 of the Code and "rabbi trusts"; and
(10) the purchase of Fund shares, if available, through certain third-party
fund "supermarkets." Some fund supermarkets may offer Fund shares without
a sales charge or with a reduced sales charge. Other fees may be
charged by the service-provider sponsoring the fund supermarket, and
transaction charges may apply to purchases and sales made through a broker
-dealer.
Waiver Of Contingent Deferred Sales Charge. The contingent deferred
sales charge is waived for:
(1) certain post-retirement withdrawals from an IRA or other retirement plan
if you are over 70 1/2;
(2) redemptions by certain eligible 401 (a) and 401(k) plans and certain
retirement plan rollovers;
(3) withdrawals resulting from shareholder death or disability provided that
the redemption is requested within one year of death or disability; and
(4) withdrawals through Systematic Monthly Investment (systematic withdrawal
plan).
Additional information regarding the waiver of sales charges may be obtained
by calling 1-888-420-9950. All account information is subject to acceptance and
verification by Monument Distributors.
General. The Company reserves the right in its sole discretion to withdraw
all or any part of the offering of shares of any Fund when, in the judgment of
the Fund's management, such withdrawal is in the best interest of the Fund. An
order to purchase shares is not binding on, and may be rejected by, Distributors
until it has been confirmed in writing by Distributors and payment has been
received.
Exchanging Fund Shares
You can exchange shares of one fund for the same class of shares of any
other Monument fund, under the Company's exchange privilege ("Exchange
Privilege"), by submitting your order in proper form, as defined below under the
section entitled "Proper Form."
Exchange Price. Your exchange request will be processed based on the NAV
of the Fund shares to be exchanged and the Fund shares to be bought, as
determined after receipt of your order in proper form. Exchanges are taxable
transactions. See "Additional Information on Distributions and Taxes" in the
SAI.
Contingent Deferred Sales Charges. Shareholders may exchange their shares
for shares of the same class of another Monument Fund on the basis of the
relative net asset value per share, without the payment of any CDSC that would
otherwise be due as a result of the redemption of the outstanding shares. Class
B shareholders will continue to be subject to the CDSC and automatic conversion
schedules of the Fund from which shares have been redeemed, even if the CDSC and
automatic conversion schedules of the Fund into which they have exchanged is
lower. For the CDSC schedule see above under "Distribution Arrangements."
Minimum Account. The minimum amount permitted for each exchange between
existing accounts in the Funds is $250. The minimum amount permitted for an
exchange that establishes a new Fund account is $1,000.
Modification or Termination. Excessive trading can adversely impact Fund
performance and shareholders. Therefore, the Company reserves the right to
temporarily or permanently modify or terminate the Exchange Privilege. The
Company also reserves the right to refuse exchange requests by any person or
group if, in the Company's judgment, a Fund would be unable to invest the money
effectively in accordance with its investment objective and policies, or would
otherwise potentially be adversely affected. The Company further reserves the
right to restrict or refuse an exchange request if the Company has received or
anticipates simultaneous orders affecting significant portions of a Fund's
assets or detects a pattern of exchange requests that coincides with a "market
timing" strategy. Although the Company will attempt to give you prior notice
when reasonable to do so, the Company may modify or terminate the Exchange
Privilege at any time.
Redeeming Fund Shares
You can redeem shares of the Funds by submitting your order either through
your authorized broker or by submitting it directly to the Fund, either by
writing to Fund Services, Inc. at 1500 Forest Avenue, Suite 111, Richmond, VA
23229, or by telephoning 1-888-420-9950. See "Proper Form."
Small Account Redemptions. Due to the relatively high cost of maintaining
accounts with smaller holdings, each Fund reserves the right to redeem your
shares if, as a result of redemptions, the value of your account drops below
each Fund's $1,000 minimum balance requirement ($250 in the case of IRAs, or
other retirement plans and custodial accounts). Each Fund will give you 30 days
advance written notice and a chance to increase your Fund balance to the minimum
requirement before the Fund redeems your shares.
Redemption Price. Your redemption request will be processed based on the
net asset value ("NAV") of the applicable Fund's shares as determined after
receipt of your order in proper form, less any applicable CDSC.
Redemption Proceeds. Redemption proceeds will generally be paid by the
next business day after processing, but in no event later than three business
days after receipt by the Fund's transfer agent of your redemption order in
proper form. If you are redeeming shares that you just purchased and paid for by
personal check, the mailing of your redemption proceeds may be delayed for up to
ten (10) calendar days to allow your check to clear (this holding period does
not apply to cashier's, certified, or treasurer's checks). Additionally, the
Company, on behalf of each Fund, may suspend the right of redemption or postpone
the date of payment during any period that the Exchange is closed, trading in
the markets that a Fund normally utilizes is restricted, or redemption is
otherwise permitted to be suspended by the SEC.
Redemptions In Kind. The Company reserves the right to redeem its shares
in kind. In other words, upon tendering shares of a Fund, the Fund has the right
to pay you the value of your redemption in assets other than cash. The Company
will, however, pay cash in response to all requests for redemption by any
shareholder of record, limited in amount with respect to each shareholder during
any 90-day period to the lesser of $250,000 from a Fund or one percent of the
net asset value of a Fund at the beginning of such period. See "Buying,
Redeeming, and Exchanging Shares" in the SAI for more information.
DIVIDENDS AND DISTRIBUTIONS
Each of the Funds currently intends to declare and pay dividends from net
investment income, if any, on an annual basis. Each Fund currently intends to
make distributions of realized capital gains, if any, on an annual basis. You
may reinvest income dividends and capital gain distributions in additional Fund
shares at current net asset value (i.e., without payment of a sales charge).
Each of the Funds declares and pays income dividends from its net investment
income, usually in December. Capital gains distributions, if any, are also made
in December.
Income dividends and capital gain distributions are calculated and
distributed the same way for each Fund. The amount of any income dividends will
differ as a result of the individual investment strategies of each Fund. Income
dividend payments are not guaranteed, are subject to the Board's discretion, and
may vary from time to time. None of the funds pays "interest" or guarantees any
fixed rate of return on an investment in its shares.
Each Fund will automatically reinvest any income dividends and capital
gains distributions in additional shares of the Fund unless you select another
option on your application. You may change your distribution option at any time
by notifying the transfer agent by mail at 1500 Forest Avenue, Suite 111,
Richmond, VA, 23229.Please allow at least seven days prior to the record date
for us to process the new option.
TAX CONSIDERATIONS
The Funds. Each Fund intends to qualify for special tax treatment afforded
to regulated investment companies under the Code. To establish and continue its
qualification, each Fund intends to diversify its assets as the Code requires.
Each Fund also intends to distribute substantially all of its net investment
income and capital gains to its shareholders to avoid federal income tax on the
income and gains so distributed.
Shareholders. For federal income tax purposes, any income dividend that
you receive from the Funds, as well as any net short term capital gain
distribution, is generally taxable to you as ordinary income whether you have
elected to receive it in cash or in additional shares.
Distributions of net long-term capital gains are generally taxable to you
as long-term capital gains, regardless of how long you have owned your Fund
shares and regardless of whether you have elected to receive such distributions
in cash or in additional shares.
Dividends and certain interest income earned from foreign securities by
the Fund may be subject to foreign withholding or other taxes. The Fund may be
permitted to pass on to its shareholders the right to a credit or deduction for
income or other tax credits earned from foreign investments and currently
intends to do so if possible. These deductions or credits may be subject to tax
law limitations. Generally, distributions are taxable to you for the year in
which they are paid. In addition, certain distributions that are declared in
October, November or December, but which, for operational purposes, are paid the
following January, are taxable as though they were paid by December 31st of the
year in which they are declared.
Redemptions and exchanges of Fund shares are taxable events on which you
may realize a gain or loss.
Tax Information. The Funds will advise you promptly, after the close of
each calendar year, of the tax status for federal income tax purposes of all
income dividends and capital gain distributions paid for such year.
The foregoing is only a general discussion of applicable federal income
tax provisions. For further information, see "Additional Information on
Distributions and Taxes" in the SAI. You should consult with your tax advisor
about your particular tax situation.
SERVICES TO HELP YOU MANAGE YOUR ACCOUNT
Automatic Investment Plan. Our automatic investment plan offers a
convenient way to invest in the Funds. Under the plan, you can automatically
transfer money from your checking account to the Fund(s) each month to buy
additional shares. If you are interested in this plan, please refer to the
automatic investment plan application. The value of the Funds' shares will
fluctuate and the systematic investment plan will not assure a profit or protect
against a loss. You may discontinue the plan at any time by notifying the
transfer agent by mail.
Telephone Transactions. You may redeem shares of a Fund, or exchange
shares of one Fund for that of another Fund, by telephone. Please refer to the
sections of this Prospectus that discuss the transaction you would like to make,
or call 1-888-420-9950. We may only be liable for losses resulting from
unauthorized telephone transactions if we do not follow reasonable procedures
designed to verify the identity of the caller. When you call, we will request
personal or other identifying information, and may also record calls. For your
protection, we may delay a transaction or not implement one if we are not
reasonably satisfied that telephone instructions are genuine. If this occurs, we
will not be liable for any loss. If our lines are busy or you are otherwise
unable to reach us by phone, you may wish to send written instructions to us, as
described elsewhere in this Prospectus. If you are unable to execute a
transaction by telephone, we will not be liable for any loss.
Statements And Reports. You will receive transaction confirmations and
account statements on a regular basis. Confirmations and account statements will
reflect transactions in your account, including additional purchases and
reinvestments of income dividends and capital gain distributions. Please verify
the accuracy of your statements when you receive them. You will also receive
semi-annual financial reports for each Fund in which you have invested. To
reduce Fund expenses, we attempt to identify related shareholders within a
household and send only one copy of a report. Please call 1-888-420-9950 if you
would like an additional free copy of the Funds' financial reports.
Proper Form
Your order to buy shares is in proper form when your completed and signed
shareholder application and check or wire payment is received. Your written
request to sell or exchange shares is in proper form when written instructions
signed by all registered owners, with a signature guarantee if necessary, is
received.
Written Instructions. Registered owners must sign any written
instructions. To avoid any delay in processing your transaction, such
instructions should include:
o your name,
o the Fund's name,
o a description of the request,
o for exchanges, the name of the Fund into which you are exchanging,
o your account number, - the dollar amount or number of shares, and
o your daytime or evening telephone number.
Signature Guarantees. For our mutual protection, we require a signature
guarantee in the following situations:
o if you wish to redeem over $50,000 worth of shares,
o if you want redemption proceeds to be paid to someone other than the
registered owners,
o if you want redemption proceeds to be sent to an address other than the
address of record, a preauthorized bank account, or a preauthorized
brokerage firm account,
o if we receive instructions from an agent, not the registered owners, or
-if we believe a signature guarantee would protect us against potential
claims based on the instructions received.
A signature guarantee verifies the authenticity of your signature. You can
obtain a signature guarantee from certain banks, brokers or other eligible
guarantors. You should verify that the institution is an eligible guarantor
prior to signing. A notarized signature is not sufficient.
Share Certificates. We do not issue share certificates. This eliminates the
costly problem of replacing lost, stolen or destroyed certificates. The Company
reserves the right to issue share certificates on behalf of each of the Funds at
any time.
Retirement Plan Accounts. You may not change distribution options for
retirement plan accounts by telephone. While you may sell or exchange shares by
phone, certain restrictions may be imposed on other retirement plans. To obtain
any required forms or more information about distribution or transfer
procedures, please call 1-888-420-9950.
<PAGE>
FINANCIAL HIGHLIGHTS INFORMATION
The financial highlights table is intended to help you understand the
Company's financial performance for the period January 6, 1998 to October 31,
1999. Certain information reflects financial results for a single Fund share.
The total returns in the table represent the rate that an investor would have
earned or lost on an investment in the Fund (assuming reinvestment of all
dividends and distributions). This information has been audited by Deloitte &
Touche LLP, independent public accountants for each of the Funds. The report of
Deloitte & Touche LLP on the financial statements of each of the Funds appears
in the Company's Annual Report, which is incorporated by reference into the SAI
and is available upon request. The information that follows should be read in
conjunction with the financial statements contained in the Company's annual
report.
MONUMENT MEDICAL SCIENCES FUND
Financial Highlights
For a Share Outstanding Throughout The Period
- ------------------------------------------------------------------------------
Class A Shares Class B Shares
Year ended Period ended Period ended
October 31, October 31, October 31, *
1999 1998* 1999
------------- ---------------------------
Per Share Operating
Performance
Net asset value, $10.32 $10.00 $16.95
beginning of period
------------- ----------- -------------
Income from investment
operations-
Net investment (0.10) 0.04 (0.01)
income (loss)
Net realized and
unrealized
gain on investments 5.89 0.28 (0.83)
------------- ----------- -------------
Total from investment 5.79 0.32 (0.84)
operations
------------- ----------- -------------
Net asset value, end of $16.11 $10.32 $16.11
period
============= =========== =============
Total Return 56.11% 3.20% ***(4.98%) **
*
Ratios/Supplemental Data
Net assets, end of $1,401 $214 $25
period (000's)
Ratio to average net
assets-
Expenses 16.73% 51.07% ** 17.43% **
Expenses including 16.81% 17.43% **
soft dollars
Expenses-net 1.87% 0.00% 2.40% **
Net investment income (1.00%) 0.66% ** (1.51%) **
(loss)
Portfolio turnover rate 61.00% 82.00% 61.00%
* Commencement of operations January 6, 1998 for Class A shares and October
12,1999 for Class B shares.
** Annualized
***Not annualized
Average shares method used to calculate the financial highlights for Class B
shares.
MONUMENT TELECOMMUNICATIONS FUND
Financial Highlights
For a Share Outstanding Throughout The Period
- -------------------------------------------------------------------------
Class A Share Class B Share
Year ended Period ended Period ended
October 31, October 31, October 31, *
1999 1998* 1999
------------- --------------------------
Per Share Operating
Performance
Net asset value,
beginning of period $10.78 $10.00 $17.65
------------- ----------- -------------
Income from investment
operations-
Net investment income (0.14) 0.04 (0.02)
(loss)
Net realized and
unrealized
gain on investments 9.33 0.74 2.34
------------- ----------- -------------
Total from investment 9.19 0.78 2.32
operations
------------- ----------- -------------
Net asset value, end of $19.97 $10.78 $19.97
period
============= =========== =============
Total Return 85.24% 7.80% **13.17% ***
Ratios/Supplemental Data
Net assets, end of $593 $181 $65
period (000's)
Ratio to average net
assets-
Expenses 37.06% 58.25% **37.15% **
Expenses including 37.15% 58.25% **37.15% **
soft dollars
Expenses-net 1.84% 0.00% 2.40% **
Net investment income (1.40%) 0.70% **(1.95%) **
(loss)
Portfolio turnover rate 250.00% 88.00% 250.00%
* Commencement of operations January 6, 1998 for Class A shares and October 9,
1999 for Class B shares.
** Annualized
***Not annualized
Average shares method used to calculate the financial highlights for Class B
shares.
MONUMENT INTERNET FUND
Financial Highlights
For a Share Outstanding Throughout The Period
- -------------------------------------------------------------------
Class A Shares Class B Shares
Period ended Period ended
October October
31, 1999 * 31, 1999 *
------------ ------------
Per Share Operating
Performance
Net asset value,
beginning of period $10.00 $27.09
------------ ------------
Income from investment
operations-
Net investment income (0.58) (0.06)
(loss)
Net realized and
unrealized
gain on investments 20.56 2.92
------------ ------------
Total from investment 19.98 2.86
operations
------------ ------------
Net asset value, end of $29.98 $29.95
period
============ ============
Total Return 185.53% *** 10.55% ***
Ratios/Supplemental Data
Net assets, end of $63,745 $1,552
period (000's)
Ratio to average net
assets
Expenses 2.76% ** 2.40% **
Expenses including 2.84% ** 2.40% **
soft dollars
Net investment gain (2.45%) ** (3.23%) **
(loss)
Portfolio turnover rate 112.00% *** 112.00% ***
*Commencement of operations November 16, 1998 for A shares and October 6, 1999
for B shares.
** Annualized
***Not annualized
Average shares method used to calculate the financial highlights for Class A and
B shares.
Apart from the Prospectus and the SAI, the Company's registration statement
contains certain additional information that may be of interest to you. You may
view that information free of charge at the SEC's public reference room in
Washington, D.C., and you may, with payment of a duplicating fee, order copies
of the information.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL FUND SHARES IN ANY STATE OR
JURISDICTION IN WHICH THE FUNDS ARE NOT AUTHORIZED TO CONDUCT BUSINESS. NO SALES
REPRESENTATIVE, DEALER, OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE
SAI.
[Back Cover]
For more information about the Funds, you may wish to refer to the Company's
Statement of Additional Information ("SAI"), dated May 15, 2000, and the
Company's audited annual and unaudited semi-annual report, each of which is on
file with the Securities and Exchange Commission ("SEC") and incorporated by
reference into this Prospectus. You can obtain a free copy of the SAI by writing
to Monument Series Fund, Inc., 7920 Norfolk Avenue, Suite 500 Bethesda, Maryland
20814, or by calling 202-942-8090. General inquiries regarding the Funds may
also be directed to the above address or telephone number, and may be found on
the Company's website at http://www.monumentfunds.com. Information about the
Company, including the SAI, can be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information about the operation of the Public
Reference Room may be obtained by calling the SEC at 202-942-8090. The SEC
maintains a website (http://www.sec.gov) that contains reports, the Prospectus,
SAI, material incorporated by reference, and other information regarding the
Company.
[Legend]
This Prospectus does not constitute an offer to sell fund shares in any state or
jurisdiction in which the funds are not authorized to conduct business. no sales
representative, dealer, or other person is authorized to give any information or
make any representations other than those contained in this Prospectus or in the
SAI.
- --------
1 The annual fund operating expenses table has been restated to reflect current
fees.
[MONUMENT FUNDS GROUP, INC. LOGO]
MONUMENT SERIES FUND, INC.
MONUMENT INTERNET FUND
MONUMENT MEDICAL SCIENCES FUND
MONUMENT TELECOMMUNICATIONS FUND
MONUMENT DIGITAL TECHNOLOGY FUND
MONUMENT NEW ECONOMY FUND
Prospectus dated June 8, 2000
This Prospectus describes the Monument Internet Fund, Monument Medical
Sciences Fund, Monument Telecommunications Fund, Monument Digital Technology
Fund, and the Monument New Economy Fund (each, a "Fund"; collectively, the
"Funds"). Each Fund represents a separate series of common stock of the Monument
Series Fund, Inc. (the "Company"). Each series offers four classes of shares:
Class A Shares with a front-end sales charge, Class B Shares subject to a
contingent deferred sales charge, Class C Shares with a reduced front-end sales
charge and a contingent deferred sales charge, and Class Y Shares for certain
institutional investors. Class Y Shares are offered by this prospectus. Class A
Shares, B Shares and C Share are offered pursuant to a separate prospectus,
which may be obtained by contacting Monument Series Fund, Inc. (See "Buying Fund
Shares.")
Monument Internet Fund seeks to maximize long-term appreciation of capital
by investing primarily in a diversified portfolio of Internet company equity
securities.
Monument Medical Sciences Fund seeks to maximize long-term appreciation of
capital by investing primarily in a diversified portfolio of equity securities
of medical sciences companies.
Monument Telecommunications Fund seeks to maximize long-term appreciation
of capital by investing primarily in a diversified portfolio of equity
securities of telecommunications companies.
Monument Digital Technology Fund seeks to maximize long-term appreciation
of capital by investing primarily in a diversified portfolio of equity
securities of companies involved in or supporting digital technology industries.
Monument New Economy Fund seeks to maximize long-term appreciation of
capital by investing primarily in a diversified blend of equity securities
chosen from the Company's other Funds.
The U.S. Securities and Exchange Commission has not approved or
disapproved these securities or passed on the accuracy or completeness of this
Prospectus. It is a criminal offense to suggest otherwise.
<PAGE>
TABLE OF CONTENTS
The Funds
Investment Objectives
Principal Investment Strategies
Temporary Defensive Positions
Specific Risk Considerations
General Risk Considerations
Table of Fees and Expenses
The Company
Buying Fund Shares
Distribution Arrangements
Exchanging Fund Shares
Redeeming Fund Shares
Dividends and Distributions
Tax Considerations
Services To Help You Manage Your Account
Proper Form
Share Certificates
Retirement Plan Accounts
Financial Highlights Information
<PAGE>
THE FUNDS
The following discussion describes the investment objectives, principal
strategies and risks of each Fund. Investment objectives are fundamental
policies and cannot be changed without the approval of a majority of the
relevant Fund's outstanding shares. As with any mutual fund, there can be no
guarantee that investment objectives will be met.
Investment Objectives
Monument Internet Fund. The Internet Fund's investment
objective is to maximize long-term appreciation of capital.
Monument Medical Sciences Fund. The Medical Sciences Fund's
investment objective is to maximize long-term appreciation of
capital.
Monument Telecommunications Fund. The Telecommunications Fund's investment
objective is to maximize long-term appreciation of capital.
Monument Digital Technology Fund seeks to maximize long-term appreciation
of capital by investing primarily in a diversified portfolio of equity
securities of companies involved in or supporting digital technology industries.
Monument New Economy Fund seeks to maximize long-term appreciation of
capital by investing primarily in a diversified blend of equity securities
chosen from the Company's other Funds.
Principal Investment Strategies
Internet Fund. The Fund seeks to achieve its objective by investing, under
normal circumstances, at least 65% of its total assets in equity securities of
companies principally engaged in Internet or Internet-related businesses. A
company is considered principally engaged in an Internet, Intranet or
Internet-related business if at least 50% of its assets, gross income, or net
profits are committed to, or derived from, the research, design, development,
manufacture, or distribution of products, processes or services for use with
Internet or Intranet-related businesses.
The Internet is a global matrix of computers and computer networks
connected by a high-speed infrastructure, which allows users to communicate
quickly, and easily with each other. An Intranet is the application of Internet
tools and concepts to a company's internal network. Currently, the most popular
application on the Internet is the World Wide Web ("WWW"), a
graphic-user-interface which allows information sharing and data transfer. Other
Internet applications include e-mail, Intranet, extranet, and electronic
commerce. Currently, development is occurring in such areas as infrastructure
deployment, Internet access, content provision, data security, and electronic
commerce.
When selecting investments for the Internet Fund, Monument Advisors, Ltd.,
the investment advisor of each of the Funds ("Advisors") will seek to identify
Internet companies that are developing new or innovative products, services, or
processes that will lead to a future growth in earnings. Such companies are
likely to be relatively unseasoned companies. These companies generally will
have no established history of paying dividends, and any dividend income is
likely to be incidental.
Medical Sciences Fund. The Fund seeks to achieve its objective by
investing, under normal circumstances, at least 65% of its total assets in
equity securities of companies principally engaged in research, development,
production and distribution of medical products and services. Companies in these
fields include, but are not limited to, pharmaceutical firms; companies that
design, manufacture or sell medical supplies, equipment and support services;
and companies engaged in medical, diagnostic, biochemical and biotechnological
research and development.
When selecting investments for the Fund, Advisors will seek to identify
medical sciences companies that it believes are likely to benefit from new or
innovative products, services or processes that can enhance the companies'
prospects for future earnings growth. Some of these companies may not have an
established history of revenue or earnings at the time of purchase. Dividend
income, if any, is likely to be incidental.
Telecommunications Fund. The Fund seeks to achieve its objective by
investing, under normal circumstances, at least 65% of its total assets in
equity securities of companies engaged in virtually all aspects of
communications services and technologies. These companies may provide network
systems and equipment; serve as public and private carriers, whether land-based,
wireless or satellite, or provide or distribute value-added services or
products.
When selecting investments for the Telecommunications Fund, Advisors will
seek to identify telecommunication companies that it believes are developing new
or innovative products, services, or processes that can enhance the companies'
prospects for future earnings growth. Some of these companies may not have an
established history or revenue or earnings at the time of purchase. Dividend
income, if any, is likely to be incidental.
Digital Technology Fund. The Fund seeks to achieve its objective by
investing, under normal market conditions, at least 65% of its assets in equity
securities of companies involved in or supporting digital technology industries.
Digital technology industries include, but are not limited to: communications
and communications equipment; computer hardware, peripherals and software;
networking equipment; digital consumer electronics; semiconductors and
semiconductor equipment; and other emerging technologies that utilize digital
processes.
New Economy Fund. The Fund seeks to achieve its objective by investing,
under normal circumstances, at least 65% of its assets in equity securities of
companies representing a diversified blend of the equity securities held by the
Company's other Funds. As a nonfundamental operating policy, the Fund intends to
have no more than 50% and no less than 10% of its assets in each of the
industries represented by the Company's other Funds.
When selecting investments for the New Economy Fund, Advisors will choose
from among the companies that it believes are developing new or innovative
products, services or processes that can enhance the companies' prospects for
future earnings growth. As with the Funds from which the New Economy Fund's
investments will be selected, some of the companies may not have an established
history of revenue or earnings at the time the Fund becomes an investor.
Dividend income, if any, is likely to be incidental.
TEMPORARY DEFENSIVE POSITIONS
For temporary defensive purposes, each Fund may make investments that are
inconsistent with its principal investment strategies in attempting to respond
to adverse market, economic, political or other conditions. If that occurs, the
Fund may not achieve its investment objective. The Funds may also engage in
transactions that are not part of their principal investment strategies, such as
trading in derivatives, including options, and lending portfolio securities.
These strategies are discussed in the Statement of Additional Information
("SAI").
<PAGE>
SPECIFIC RISK CONSIDERATIONS
Internet Fund. The Internet Fund invests primarily in companies engaged in
Internet and Intranet-related activities. The value of this type of company is
particularly vulnerable to rapidly changing technology, extensive government
regulation and relatively high risks of obsolescence caused by scientific and
technological advances. Therefore, the Internet Fund may experience greater
volatility than funds not subject to these types of risks. The Internet Fund is
diversified, and may also invest in small companies and technology and research
companies, the risks of which are described below under "General Risk
Considerations."
Medical Sciences Fund. The economic prospects of health sciences companies
can dramatically fluctuate due to changes in the regulatory and competitive
environment in which these companies operate. A substantial portion of health
services and research is funded or subsidized by the government, and so changes
in government policy at the federal or state level may affect the demand for
health care products or services, and the continuation or success of research
and development efforts. Regulatory approvals often entail lengthy application
and testing procedures and are generally required before new drugs and certain
medical devices may be introduced. Medical sciences companies face lawsuits
related to product liability and other issues. Also, many products and services
provided by medical science companies require substantial capital investment and
are subject to rapid obsolescence. The Medical Sciences Fund is diversified, and
may also invest in small companies and technology and research companies, the
risks of which are described below under "General Risk considerations."
Telecommunications Fund. The economic prospects of telecommunications
companies can dramatically fluctuate due to regulatory and competitive
environment changes around the world. Most products or services provided by
telecommunications companies require substantial investment and are subject to
competitive obsolescence. Telecommunications companies are particularly subject
to political and currency risks. The Telecommunications Fund is diversified, and
may also invest in small companies, the risks of which are described below under
"General Risk Considerations".
Digital Technology Fund. The companies in which the Digital Technology
Fund invest are vulnerable to rapid changing technology and government
regulation. Moreover, the competitive nature of this industry may cause many
company's products or services to become obsolete from competitors technological
advances. Therefore, the Digital Technology Fund may experience greater
volatility than funds not subject to these types of risks. The Digital
Technology Fund is diversified, and may also invest in small companies, the
risks of which are described below under "General Risk Considerations".
New Economy Fund. The New Economy Fund shares the specific
risk considerations of each of the other Monument Funds.
<PAGE>
GENERAL RISK CONSIDERATIONS
Small Companies. Each of the Funds may invest in companies with small
market capitalization (i.e., less than $500 million) or companies that have
relatively small revenues, limited product lines, and a small share of the
market for their products or services (collectively, "small companies"). Small
companies are also characterized by the following: (1) they may lack depth of
management; (2) they may be unable to internally generate funds necessary for
growth or potential development or to generate such funds through external
financing on favorable terms; and (3) they may be developing or marketing new
products or services for which markets are not yet established and may never
become established. Due to these and other factors, small companies may suffer
significant losses, as well as realize substantial growth. Thus, securities of
small companies present greater risks than securities of larger, more
established companies.
Historically, stocks of small companies have been more volatile than
stocks of larger companies and are, therefore, more speculative than investments
in larger companies. Among the reasons for the greater price volatility are the
following: (1) the less certain growth prospects of smaller companies; (2) the
lower degree of liquidity in the markets for such stocks; and (3) the greater
sensitivity of small companies to changing economic conditions. Besides
exhibiting greater volatility, small company stocks may, to a degree, fluctuate
independently of larger company stocks. Small company stocks may decline in
price as large company stocks rise, or rise in price as large company stocks
decline. You should therefore expect that the value of Digital Technology,
Internet, Medical Sciences, New Economy and Telecommunications Fund shares to be
more volatile than the shares of mutual fund investing primarily in larger
company stocks.
Technology And Research Companies. Consistent with its investment
objective, each of the Funds expects to invest a portion of its assets in
securities of companies involved in biological technologies, computing
technologies, or communication technologies (collectively, "technology
sectors"), and companies related to these industries. Typically, these
companies' products or services compete on a global, rather than a predominately
domestic or regional basis. The technology sectors historically have been
volatile and securities of companies in these sectors may be subject to abrupt
or erratic price movements. Advisors will seek to reduce such risks through
extensive research, and emphasis on more globally-competitive companies. In
addition, because these companies compete globally, the securities of these
companies may be subject to fluctuations in value due to the effect of changes
in the relative values of currencies on such companies' businesses. The history
of these markets reflect both decreases and increases in worldwide currency
valuations, and these may reoccur unpredictably in the future.
Industry Concentration. Each Fund may invest more than 25% of its assets
in what may be considered a single sector. Accordingly, each Fund may be more
susceptible to the effects of adverse economic, political or regulatory
developments affecting a single issuer or industry sector than funds that
diversify to a greater extent.
Other Investments. In addition to the investment strategies described
above, each of the Funds may engage in other strategies such as derivatives,
securities lending and foreign investing. Investments in derivatives, such as
options, can significantly increase a Fund's exposure to market risk or credit
risk of the counterparty, as well as improper valuation and imperfect
correlation. The risk in lending portfolio securities, as with other extensions
of secured credit, consists of possible delay in receiving additional
collateral, or in the recovery of the securities or possible loss of rights in
the collateral should the borrower fail financially. Foreign investing involves
currency risk and the possibility of adverse change in the investment or
political climate of the jurisdiction in which the securities are sold. The
Funds currently do not intend to purchase foreign securities, and take advantage
of investments in overseas businesses through the purchase of American
Depositary Receipts. See the SAI for more detail.
<PAGE>
The following information reflects the performance for Class A Shares of the
Fund, which are offered pursuant to a different prospectus and which have a
longer operating history than Class Y Shares. Class Y Shares would have
substantially similar annual returns because the shares are invested in the same
portfolio of securities, and the annual returns would differ only to the extent
that the classes do not have the same expenses. In the case of Class Y Shares,
the Class Y Share returns would likely be slightly higher due to the lower level
of expenses applied to the class.
[INTERNET FUND A SHARE GRAPH]
*During the period shown in the bar chart the highest return for a calendar
quarter was 91.86% (quarter ending 3/31/99) and the lowest return for a calendar
quarter was 1.17% (quarter ending 9/30/99).
Past performance is not predictive of future performance. Performance figures do
not include deduction of the maximum applicable sales charge of 4.75%, which was
in effect during the performance period. The Monument Internet Fund A Shares
currently charge a maximum sales charge of 5.75%, reduced sales charges may
apply. Had the sales charge been included, returns would have been less than
those shown.
- -------------------------------------------------------------
Average Annual Total Returns
- -------------------------------------------------------------
- -------------------------------------------------------------
(for the periods ended December 31, 1999)
- -------------------------------------------------------------
- -------------------------------------------------------------
Since inception
- -------------------------------------------------------------
- -------------------------------------------------------------
1 Year (November 16, 1998)
- -------------------------------------------------------------
- -------------------------------------------------------------
Monument Internet 271.74% 313.65%
Fund Class A
- -------------------------------------------------------------
- -------------------------------------------------------------
S&P 500 20.98% 27.29%
- -------------------------------------------------------------
- -------------------------------------------------------------
Inter@ctive 167.57% 236.52%
- -------------------------------------------------------------
The S&P 500 is an unmanaged index containing common stocks of 500 industrial,
transportation, utility and financial companies, regarded as generally
representative of the United States market. The index reflects the reinvestment
of income dividends and capital gain distributions, if any, but does not reflect
fees, brokerage commissions, or other expenses of investing.
The Inter@ctive Week Internet Index is a modified capitalization-weighted
index of companies involved with providing digital interactive services,
developing and marketing digital interactive software, and manufacturing digital
interactive hardware, The index was developed with a base value of 66.66 as of
August 15, 1995. Effective on March 22, 1999, there was a 3-1 split of the
index.
<PAGE>
[MEDICAL SCIENCES FUND A SHARE GRAPH]
*During the period shown in the bar chart the highest return for a
calendar quarter was 33.25%
(quarter ending 12/31/99) and the lowest return for a calendar quarter was
6.56% (quarter ending 9/30/99).
Past performance is not predictive of future performance. Performance figures do
not include deduction of the maximum applicable sales charge of 4.75%, which was
in effect during the performance period. The Monument Medical Sciences Fund A
Shares currently charge a maximum sales charge of 5.75%, reduced sales charges
may apply. Had the sales charge been included, returns would have been less than
those shown.
- --------------------------------------------------------
Average Annual Total Returns
- --------------------------------------------------------
- --------------------------------------------------------
(for the periods ended December 31, 1999)
- --------------------------------------------------------
- --------------------------------------------------------
Since inception
- --------------------------------------------------------
- --------------------------------------------------------
1 Year (January 6, 1998)
- --------------------------------------------------------
- --------------------------------------------------------
Monument Medical Sciences 66.96% 42.45%
Fund Class A
- --------------------------------------------------------
- --------------------------------------------------------
S&P 500 19.47% 24.40%
- --------------------------------------------------------
- --------------------------------------------------------
Russell 2000 21.29% 9.48%
- --------------------------------------------------------
The S&P 500 is an unmanaged index containing common stocks of 500 industrial,
transportation, utility and financial companies, regarded as generally
representative of the United States market. The index reflects the reinvestment
of income dividends and capital gain distributions, if any, but does not reflect
fees, brokerage commissions, or other expenses of investing.
The Russell 2000 Index is comprised of the smallest 2000 companies in the
Russell 3000 Index, representing approximately 11% of the Russell 3000 total
market capitalization.
<PAGE>
[TELECOMMUNICATIONS FUND A SHARE GRAPH]
*During the period shown in the bar chart the highest return for a calendar
quarter was 57.35% (quarter ending 12/31/99) and the lowest return for a
calendar quarter was (.98%) (quarter ending 3/31/99).
Past performance is not predictive of future performance. Performance figures do
not include deduction of the maximum applicable sales charge of 4.75%, which was
in effect during the performance period. The Monument Telecommunications Fund A
Shares currently charge a maximum sales charge of 5.75%, reduced sales charges
may apply. Had the sales charge been included, returns would have been less than
those shown.
- ------------------------------------------------------------
Average Annual Total
Returns
- ------------------------------------------------------------
- ------------------------------------------------------------
(for periods ended December 31, 1999) Since inception
- ------------------------------------------------------------
- ------------------------------------------------------------
1 Year (January 6, 1998)
- ------------------------------------------------------------
- ------------------------------------------------------------
Monument Telecommunications 90.58% 56.05%
Fund Class A
- ------------------------------------------------------------
- ------------------------------------------------------------
S&P 500 20.98% 25.19%
- ------------------------------------------------------------
- ------------------------------------------------------------
NASDAQ Telecommunications 102.47% 82.79%
- ------------------------------------------------------------
The S&P 500 is an unmanaged index containing common stocks of 500 industrial,
transportation, utility and financial companies, regarded as generally
representative of the United States market. The index reflects the reinvestment
of income dividends and capital gain distributions, if any, but does not reflect
fees, brokerage commissions, or other expenses of investing.
The NASDAQ Telecommunications Index is a capitalization-weighted index designed
to measure the performance of all NASDAQ stocks in the telecommunications
sector. The index was developed with a base value of 100 as of February 5, 1971.
TABLE OF FEES AND EXPENSES
The following table is designed to help you understand the fees and
expenses that you may pay, both directly and indirectly, by investing in the
Funds.
Shareholder Fees
(fees paid directly from your investment) Class
Y
Maximum Sales Charge (Load) None
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) Imposed on Reinvested None
Dividends and Distributions
Redemption Fees None
Exchange Fees None
Annual Fund Operating Expenses1
(expenses that are deducted from fund assets as a percentage of
average net assets)
Internet Medical Telecom Digital New
Fund Sciences Fund TechnologEconomy
Fund Fund Fund
---------------------------------------------
---------------------------------------------
Advisory Fee 1.25% 1.25% 1.25% 1.25% 1.25%
Distribution (12b-1) None None None None None
Fees
Other Expenses
Total Annual Fund
Operating Expenses
Fee Waivers and/or
Expense Reimbursements
Net Expenses
- -------------------
Example. This example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds with
similar investment objectives. The example assumes that you invest $10,000 in a
class of shares of the Fund for the time periods indicated then redeem all of
your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the operating expenses of the
relevant class remain the same. Although your actual cost may be higher or
lower, based on these assumptions your cost would be:
1 Year*: 3 Years*: 5 Years*: 10 Years*:
Class Class Class Class
Internet
Medical Sciences
Telecommunications
Digital Technology
New Economy
THE COMPANY
The Company. Monument Series Fund, Inc. is a an open-end
management investment company registered with the Securities and
Exchange Commission ("SEC"). The Company was originally organized
as a Maryland corporation on April 7, 1997, and converted to a
Delaware business trust effective May 15, 2000.
The Advisor. Monument Advisors, Ltd. ("Monument Advisors"
or "Advisors") serves as each Fund's investment advisor and
provides overall management of the Company's business affairs. See
"Investment Advisory and Other Services" in the SAI.
Monument Advisors, located at 7920 Norfolk Avenue, Suite 500, Bethesda,
Maryland 20814, is a wholly-owned subsidiary of The Monument Group, Inc., which
in turn is principally-owned and controlled by David A. Kugler, President and a
director of both Advisors and the Company. Monument Advisors also manages the
portfolio investments of qualified individuals, retirement plans, and trusts. As
of March 31, 2000, Advisors managed or supervised in excess of $400 million in
assets.
Portfolio Managers. Advisors uses a team approach to
Management of the Internet, Medical Sciences and New Economy
Funds. The team serves under the direction of _____________.
J. Michael Gallipo, CFA, serves as the portfolio manager of
the Telecommunications and Digital Technology Funds. Mr. Gallipo
has over four years of investment experience and joined Advisors in
August 1999. Prior to joining Advisors, Mr. Gallipo was an
investment analyst at Van Eck Associates Corp. Mr. Gallipo also
served previously as a compliance analyst for Van Eck and as a
legal assistant for Brown & Wood, LLP.
Principal Underwriter. Monument Distributors, Inc., located
at 7920 Norfolk Avenue, Suite 500, Bethesda, Maryland 20814, is a
wholly-owned subsidiary of The Monument Group, Inc. and an
affiliate of Monument Advisors, and serves as the principal
underwriter of each Fund. David A. Kugler and Peter L. Smith are
officers of both the Company and Monument Distributors.
BUYING FUND SHARES
Share Class Alternatives. The Fund offers investors four different classes
of shares. Class Y Shares are offered by this Prospectus. Class A, Class B and
Class C Shares are offered by a separate Prospectus. The different classes of
shares represent investments in the same portfolio of securities, but the
classes are subject to different expenses and may have different share prices.
When you buy shares be sure to specify the class of shares in which you choose
to invest. If you do not select a class your money will be invested in Class A
Shares. Because each share class has a different combination of sales charges,
expenses and other features, you should consult your financial advisor to
determine which class best meets your financial objectives. Additional details
about each of the share class alternatives may be found below under
"Distribution Arrangements."
Max. initial None
sales charge.
See "Distribution
Arrangements" for a
schedule itemizing
reduced sales charges.
Contingent None
deferred sales
charge ("CDSC")
imposed when
shares are
redeemed
(percentage based
on purchase
price). Years
are based on a
twelve-month
period.
Rule 12b-1 fees. None
See "Distribution
Arrangements" for
important information
about Rule 12b-1 fees.
Minimum $_______________
investment.
Appropriate for:
Share Transactions. You may purchase and redeem Fund shares, or exchange
shares of one Fund for those of another, by contacting any broker authorized by
the distributor to sell shares of the Company or by contacting Fund Services,
Inc., the Company's transfer and dividend disbursing agent, at 1500 Forest
Avenue, Suite 111, Richmond, VA 23229 or by telephoning 1-888-420-9950. A sales
charge may apply to your purchase. Brokers may charge transaction fees for the
purchase or sale of Fund shares, depending on your arrangement with the broker.
Minimum Investments. Under certain circumstances the Fund may waive the
minimum initial investment for purchases by officers, directors and employees of
the Company, and its affiliated entities and for certain related advisory
accounts, retirement accounts, custodial accounts for minors and automatic
investment accounts as detailed below under "Waiver of Sales Charges."
By Mail. You may buy shares of each Fund by sending a completed application
along with a check drawn on a U.S. bank in U.S. funds, to "Monument Series
Fund," c/o Fund Services, Inc., at 1500 Forest Avenue, Suite 111, Richmond, VA
23229. Fund Services, Inc. is the Company's transfer and dividend disbursing
agent. See "Proper Form." Third party checks are not accepted for the purchase
of Fund shares.
By Wire. You may also wire payments for Fund shares to the wire bank
account for the appropriate Fund. Before wiring funds, please call
1-888-420-9950 to advise the Fund of your investment and to receive further
instructions. Please remember to return your completed and signed application to
Fund Services, Inc., 1500 Forest Avenue, Suite 111, Richmond, VA 23229. See
"Proper Form."
Public Offering Price. When you buy shares of a Fund, you will receive the
public offering price per share as determined after your order is received in
proper form, as defined below under the section entitled "Proper Form." The
public offering price of Class A and Class C Shares is equal to the Fund's net
asset value plus the initial sales charge. The public offering price of Class B
Shares is equal to the respective Fund's net asset value.
When Shares Are Priced. Each Fund is open for business each day the New
York Stock Exchange ("Exchange") is open. Each Fund determines its share price
as of the close of regular trading on the Exchange, generally 4:00 p.m. EST. If
you purchase your shares through a broker, the Fund will be deemed to have
received your order when the order is accepted as being in proper form by the
broker. However, your broker must receive your request before the close of the
regular trading on the Exchange to receive that day's net asset value ("NAV").
Net Asset Value. Each Fund's share price is equal to the NAV per share of
the Fund. Each Fund calculates its NAV per share by valuing and totaling its
assets, subtracting any liabilities, and dividing the remainder, called net
assets, by the number of Fund shares outstanding. The value of each Fund's
portfolio securities is generally based on market quotes if they are readily
available. If they are not readily available, Advisors will determine their
market value in accordance with procedures adopted by the Board. For information
on how the Funds value their assets, see "Valuation of Fund Shares" in the SAI.
DISTRIBUTION ARRANGEMENTS
If you purchase your shares through a broker-dealer, the broker-dealer
firm is entitled to receive a percentage of the sales charge you pay in order to
purchase Fund shares. The following schedule governs the percentage to be
received by the selling broker-dealer firm.
Class Y Sales Charge and Broker-Dealer Commission and Service Fee
Sales Charge Broker-Dealer Percentage
After a one-year holding period, broker-dealers will be entitled to receive an
ongoing service fee of 0.25%, payable quarterly.
Right Of Accumulation. After making an initial purchase in any Monument
Fund series, you may reduce the sales charge applied to any subsequent
purchases. Your shares in a Fund previously purchased will be taken into account
on a combined basis at the current net asset value per share of a Fund in order
to establish the aggregate investment amount to be used in determining the
applicable sales charge. Only previous purchases of Fund shares that are still
held in the Fund and that were sold subject to the sales charge will be included
in the calculation. To take advantage of this privilege, you must give notice at
the time you place your initial order and subsequent orders that you wish to
combine purchases. When you send your payment and request to combine purchases,
please specify your account number.
Waiver of Front-End Sales Charges. No sales charge shall apply to:
(1) reinvestment of income dividends and capital gain distributions;
(2) exchanges of one Fund's shares for those of another Fund;
(3) purchases of Fund shares made by current or former directors,
officers, or employees of the Company, Advisors, Monument
Distributors, The Monument Funds Group, Inc., or The Monument
Group, Inc., and by members of their immediate families, and
employees (including immediate family members) of a broker-dealer
distributing Fund shares;
(4) purchases of Fund shares by Distributors for its own
investment account for investment purposes only;
(5) a "qualified institutional buyer," as that term is defined under Rule 144A
of the Securities Act of 1933, including, but not limited to, insurance
companies, investment companies registered under the 1940 Act, business
development companies registered under the 1940 Act, and small business
investment companies;
(6) a charitable organization, as defined in Section 501(c)(3) of the Internal
Revenue Code ("Code"), as well as othercharitable trusts and endowments,
investing $50,000 or more;
(7) a charitable remainder trust, under Section 664 of the Code, or a life
income pool, established for the benefit of a charitable organization as
defined in Section 501(c)(3) of the Code;
(8) investment advisors or financial planners who place trades for their own
accounts or the accounts of their clients and who charge a management,
consulting or other fee for their services; and clients of those
investment advisors or financial planners who place trades for their own
accounts if the accounts are linked to the master account of the
investment advisor or financial planner on the books and records of the
broker or agent;
(9) institutional retirement and deferred compensation plans and trusts used
to fund those plans, including, but not limited to, those defined in
section 401(a), 403(b) or 457 of the Code and "rabbi trusts"; and
(10) the purchase of Fund shares, if available, through certain third-party
fund "supermarkets." Some fund supermarkets may offer Fund shares without
a sales charge or with a reduced sales charge. Other fees may be
charged by the service-provider sponsoring the fund supermarket, and
transaction charges may apply to purchases and sales made through a broker
-dealer.
Additional information regarding the waiver of sales charges may be obtained
by calling 1-888-420-9950. All account information is subject to acceptance and
verification by Monument Distributors.
General. The Company reserves the right in its sole discretion to withdraw
all or any part of the offering of shares of any Fund when, in the judgment of
the Fund's management, such withdrawal is in the best interest of the Fund. An
order to purchase shares is not binding on, and may be rejected by, Distributors
until it has been confirmed in writing by Distributors and payment has been
received.
Exchanging Fund Shares
You can exchange shares of one fund for the same class of shares of any
other Monument fund, under the Company's exchange privilege ("Exchange
Privilege"), by submitting your order in proper form, as defined below under the
section entitled "Proper Form."
Exchange Price. Your exchange request will be processed based on the NAV
of the Fund shares to be exchanged and the Fund shares to be bought, as
determined after receipt of your order in proper form. Exchanges are taxable
transactions. See "Additional Information on Distributions and Taxes" in the
SAI.
Contingent Deferred Sales Charges. Shareholders may exchange their shares
for shares of the same class of another Monument Fund on the basis of the
relative net asset value per share, without the payment of any CDSC that would
otherwise be due as a result of the redemption of the outstanding shares. Class
B shareholders will continue to be subject to the CDSC and automatic conversion
schedules of the Fund from which shares have been redeemed, even if the CDSC and
automatic conversion schedules of the Fund into which they have exchanged is
lower. For the CDSC schedule see above under "Distribution Arrangements."
Minimum Account. The minimum amount permitted for each exchange between
existing accounts in the Funds for Class Y Shares is $__________. The minimum
amount permitted for an exchange that establishes a new Fund account is
$___________.
Modification or Termination. Excessive trading can adversely impact Fund
performance and shareholders. Therefore, the Company reserves the right to
temporarily or permanently modify or terminate the Exchange Privilege. The
Company also reserves the right to refuse exchange requests by any person or
group if, in the Company's judgment, a Fund would be unable to invest the money
effectively in accordance with its investment objective and policies, or would
otherwise potentially be adversely affected. The Company further reserves the
right to restrict or refuse an exchange request if the Company has received or
anticipates simultaneous orders affecting significant portions of a Fund's
assets or detects a pattern of exchange requests that coincides with a "market
timing" strategy. Although the Company will attempt to give you prior notice
when reasonable to do so, the Company may modify or terminate the Exchange
Privilege at any time.
Redeeming Fund Shares
You can redeem shares of the Funds by submitting your order either through
your authorized broker or by submitting it directly to the Fund, either by
writing to Fund Services, Inc. at 1500 Forest Avenue, Suite 111, Richmond, VA
23229, or by telephoning 1-888-420-9950. See "Proper Form."
Small Account Redemptions. Due to the relatively high cost of maintaining
accounts with smaller holdings, each Fund reserves the right to redeem your
shares if, as a result of redemptions, the value of your account drops below
each Fund's $____________ minimum balance requirement ($________ in the case of
IRAs, or other retirement plans and custodial accounts). Each Fund will give you
30 days advance written notice and a chance to increase your Fund balance to the
minimum requirement before the Fund redeems your shares.
Redemption Price. Your redemption request will be processed based on the
net asset value ("NAV") of the applicable Fund's shares as determined after
receipt of your order in proper form, less any applicable CDSC.
Redemption Proceeds. Redemption proceeds will generally be paid by the
next business day after processing, but in no event later than three business
days after receipt by the Fund's transfer agent of your redemption order in
proper form. If you are redeeming shares that you just purchased and paid for by
personal check, the mailing of your redemption proceeds may be delayed for up to
ten (10) calendar days to allow your check to clear (this holding period does
not apply to cashier's, certified, or treasurer's checks). Additionally, the
Company, on behalf of each Fund, may suspend the right of redemption or postpone
the date of payment during any period that the Exchange is closed, trading in
the markets that a Fund normally utilizes is restricted, or redemption is
otherwise permitted to be suspended by the SEC.
Redemptions In Kind. The Company reserves the right to redeem its shares
in kind. In other words, upon tendering shares of a Fund, the Fund has the right
to pay you the value of your redemption in assets other than cash. The Company
will, however, pay cash in response to all requests for redemption by any
shareholder of record, limited in amount with respect to each shareholder during
any 90-day period to the lesser of $250,000 from a Fund or one percent of the
net asset value of a Fund at the beginning of such period. See "Buying,
Redeeming, and Exchanging Shares" in the SAI for more information.
DIVIDENDS AND DISTRIBUTIONS
Each of the Funds currently intends to declare and pay dividends from net
investment income, if any, on an annual basis. Each Fund currently intends to
make distributions of realized capital gains, if any, on an annual basis. You
may reinvest income dividends and capital gain distributions in additional Fund
shares at current net asset value (i.e., without payment of a sales charge).
Each of the Funds declares and pays income dividends from its net investment
income, usually in December. Capital gains distributions, if any, are also made
in December.
Income dividends and capital gain distributions are calculated and
distributed the same way for each Fund. The amount of any income dividends will
differ as a result of the individual investment strategies of each Fund. Income
dividend payments are not guaranteed, are subject to the Board's discretion, and
may vary from time to time. None of the funds pays "interest" or guarantees any
fixed rate of return on an investment in its shares.
Each Fund will automatically reinvest any income dividends and capital
gains distributions in additional shares of the Fund unless you select another
option on your application. You may change your distribution option at any time
by notifying the transfer agent by mail at 1500 Forest Avenue, Suite 111,
Richmond, VA, 23229.Please allow at least seven days prior to the record date
for us to process the new option.
TAX CONSIDERATIONS
The Funds. Each Fund intends to qualify for special tax treatment afforded
to regulated investment companies under the Code. To establish and continue its
qualification, each Fund intends to diversify its assets as the Code requires.
Each Fund also intends to distribute substantially all of its net investment
income and capital gains to its shareholders to avoid federal income tax on the
income and gains so distributed.
Shareholders. For federal income tax purposes, any income dividend that
you receive from the Funds, as well as any net short term capital gain
distribution, is generally taxable to you as ordinary income whether you have
elected to receive it in cash or in additional shares.
Distributions of net long-term capital gains are generally taxable to you
as long-term capital gains, regardless of how long you have owned your Fund
shares and regardless of whether you have elected to receive such distributions
in cash or in additional shares.
Dividends and certain interest income earned from foreign securities by
the Fund may be subject to foreign withholding or other taxes. The Fund may be
permitted to pass on to its shareholders the right to a credit or deduction for
income or other tax credits earned from foreign investments and currently
intends to do so if possible. These deductions or credits may be subject to tax
law limitations. Generally, distributions are taxable to you for the year in
which they are paid. In addition, certain distributions that are declared in
October, November or December, but which, for operational purposes, are paid the
following January, are taxable as though they were paid by December 31st of the
year in which they are declared.
Redemptions and exchanges of Fund shares are taxable events on which you
may realize a gain or loss.
Tax Information. The Funds will advise you promptly, after the close of
each calendar year, of the tax status for federal income tax purposes of all
income dividends and capital gain distributions paid for such year.
The foregoing is only a general discussion of applicable federal income
tax provisions. For further information, see "Additional Information on
Distributions and Taxes" in the SAI. You should consult with your tax advisor
about your particular tax situation.
SERVICES TO HELP YOU MANAGE YOUR ACCOUNT
Automatic Investment Plan. Our automatic investment plan offers a
convenient way to invest in the Funds. Under the plan, you can automatically
transfer money from your checking account to the Fund(s) each month to buy
additional shares. If you are interested in this plan, please refer to the
automatic investment plan application. The value of the Funds' shares will
fluctuate and the systematic investment plan will not assure a profit or protect
against a loss. You may discontinue the plan at any time by notifying the
transfer agent by mail.
Telephone Transactions. You may redeem shares of a Fund, or exchange
shares of one Fund for that of another Fund, by telephone. Please refer to the
sections of this Prospectus that discuss the transaction you would like to make,
or call 1-888-420-9950. We may only be liable for losses resulting from
unauthorized telephone transactions if we do not follow reasonable procedures
designed to verify the identity of the caller. When you call, we will request
personal or other identifying information, and may also record calls. For your
protection, we may delay a transaction or not implement one if we are not
reasonably satisfied that telephone instructions are genuine. If this occurs, we
will not be liable for any loss. If our lines are busy or you are otherwise
unable to reach us by phone, you may wish to send written instructions to us, as
described elsewhere in this Prospectus. If you are unable to execute a
transaction by telephone, we will not be liable for any loss.
Statements And Reports. You will receive transaction confirmations and
account statements on a regular basis. Confirmations and account statements will
reflect transactions in your account, including additional purchases and
reinvestments of income dividends and capital gain distributions. Please verify
the accuracy of your statements when you receive them. You will also receive
semi-annual financial reports for each Fund in which you have invested. To
reduce Fund expenses, we attempt to identify related shareholders within a
household and send only one copy of a report. Please call 1-888-420-9950 if you
would like an additional free copy of the Funds' financial reports.
Proper Form
Your order to buy shares is in proper form when your completed and signed
shareholder application and check or wire payment is received. Your written
request to sell or exchange shares is in proper form when written instructions
signed by all registered owners, with a signature guarantee if necessary, is
received.
Written Instructions. Registered owners must sign any written
instructions. To avoid any delay in processing your transaction,
such instructions should include:
o your name,
o the Fund's name,
o a description of the request,
o for exchanges, the name of the Fund into which you are exchanging,
o your account number, - the dollar amount or number of shares, and
o your daytime or evening telephone number.
Signature Guarantees. For our mutual protection, we require a
signature guarantee in the following situations:
o if you wish to redeem over $50,000 worth of shares,
o if you want redemption proceeds to be paid to someone other
than the registered owners,
o if you want redemption proceeds to be sent to an address other than the
address of record, a preauthorized bank account, or a preauthorized
brokerage firm account,
o if we receive instructions from an agent, not the registered owners, or
-if we believe a signature guarantee would protect us against potential
claims based on the instructions received.
A signature guarantee verifies the authenticity of your signature. You can
obtain a signature guarantee from certain banks, brokers or other eligible
guarantors. You should verify that the institution is an eligible guarantor
prior to signing. A notarized signature is not sufficient.
Share Certificates. We do not issue share certificates. This eliminates the
costly problem of replacing lost, stolen or destroyed certificates. The Company
reserves the right to issue share certificates on behalf of each of the Funds at
any time.
Retirement Plan Accounts. You may not change distribution options for
retirement plan accounts by telephone. While you may sell or exchange shares by
phone, certain restrictions may be imposed on other retirement plans. To obtain
any required forms or more information about distribution or transfer
procedures, please call 1-888-420-9950.
<PAGE>
FINANCIAL HIGHLIGHTS INFORMATION
The financial highlights table is intended to help you understand the
Company's financial performance for the period January 6, 1998 to October 31,
1999. Certain information reflects financial results for a single Fund share.
The total returns in the table represent the rate that an investor would have
earned or lost on an investment in the Fund (assuming reinvestment of all
dividends and distributions). This information has been audited by Deloitte &
Touche LLP, independent public accountants for each of the Funds. The report of
Deloitte & Touche LLP on the financial statements of each of the Funds appears
in the Company's Annual Report, which is incorporated by reference into the SAI
and is available upon request. The information that follows should be read in
conjunction with the financial statements contained in the Company's annual
report.
MONUMENT MEDICAL SCIENCES FUND
Financial Highlights
For a Share Outstanding Throughout The Period
- ------------------------------------------------------------------------------
Class A Shares Class B Shares
Year ended Period ended Period ended
October 31, October 31, October 31,
1999 1998* 1999 *
------------- ---------------------------
Per Share Operating
Performance
Net asset value, $10.32 $10.00 $16.95
beginning of period
------------- ----------- -------------
Income from investment
operations-
Net investment (0.10) 0.04 (0.01)
income (loss)
Net realized and
unrealized
gain on investments 5.89 0.28 (0.83)
------------- ----------- -------------
Total from investment 5.79 0.32 (0.84)
operations
------------- ----------- -------------
Net asset value, end of $16.11 $10.32 $16.11
period
============= =========== =============
Total Return 56.11% 3.20% ***(4.98%) **
Ratios/Supplemental Data
Net assets, end of $1,401 $214 $25
period (000's)
Ratio to average net
assets-
Expenses 16.73% 51.07% ** 17.43% **
Expenses including 16.81% 17.43% **
soft dollars
Expenses-net 1.87% 0.00% 2.40% **
Net investment income (1.00%) 0.66% ** (1.51%) **
(loss)
Portfolio turnover rate 61.00% 82.00% 61.00%
* Commencement of operations January 6, 1998 for Class A shares and October
12,1999 for Class B shares.
** Annualized
***Not annualized
Average shares method used to calculate the financial highlights for Class B
shares.
MONUMENT TELECOMMUNICATIONS FUND
Financial Highlights
For a Share Outstanding Throughout The Period
- -------------------------------------------------------------------------
Class A Share Class B Share
Year ended Period ended Period ended
October 31, October 31, October 31,
1999 1998* 1999 *
------------- --------------------------
Per Share Operating
Performance
Net asset value,
beginning of period $10.78 $10.00 $17.65
------------- ----------- -------------
Income from investment
operations-
Net investment income (0.14) 0.04 (0.02)
(loss)
Net realized and
unrealized
gain on investments 9.33 0.74 2.34
------------- ----------- -------------
Total from investment 9.19 0.78 2.32
operations
------------- ----------- -------------
Net asset value, end of $19.97 $10.78 $19.97
period
============= =========== =============
Total Return 85.24% 7.80% **13.17% ***
Ratios/Supplemental Data
Net assets, end of $593 $181 $65
period (000's)
Ratio to average net
assets-
Expenses 37.06% 58.25% **37.15% **
Expenses including 37.15% 58.25% **37.15% **
soft dollars
Expenses-net 1.84% 0.00% 2.40% **
Net investment income (1.40%) 0.70% **(1.95%) **
(loss)
Portfolio turnover rate 250.00% 88.00% 250.00%
* Commencement of operations January 6, 1998 for Class A shares and October 9,
1999 for Class B shares.
** Annualized
***Not annualized
Average shares method used to calculate the financial highlights for Class B
shares.
MONUMENT INTERNET FUND
Financial Highlights
For a Share Outstanding Throughout The Period
- -------------------------------------------------------------------
Class A Shares Class B Shares
Period ended Period ended
October October
31, 1999 31, 1999
------------ ------------
Per Share Operating
Performance
Net asset value,
beginning of period $10.00 $27.09
------------ ------------
Income from investment
operations-
Net investment income (0.58) (0.06)
(loss)
Net realized and
unrealized
gain on investments 20.56 2.92
------------ ------------
Total from investment 19.98 2.86
operations
------------ ------------
Net asset value, end of $29.98 $29.95
period
============ ============
Total Return 185.53% *** 10.55% ***
Ratios/Supplemental Data
Net assets, end of $63,745 $1,552
period (000's)
Ratio to average net
assets
Expenses 2.76% ** 2.40% **
Expenses including 2.84% ** 2.40% **
soft dollars
Net investment gain (2.45%) ** (3.23%) **
(loss)
Portfolio turnover rate 112.00% *** 112.00% ***
*Commencement of operations November 16, 1998 for A shares and October 6, 1999
for B shares.
** Annualized
***Not annualized
Average shares method used to calculate the financial highlights for Class A and
B shares.
Apart from the Prospectus and the SAI, the Company's registration statement
contains certain additional information that may be of interest to you. You may
view that information free of charge at the SEC's public reference room in
Washington, D.C., and you may, with payment of a duplicating fee, order copies
of the information.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL FUND SHARES IN ANY STATE OR
JURISDICTION IN WHICH THE FUNDS ARE NOT AUTHORIZED TO CONDUCT BUSINESS. NO SALES
REPRESENTATIVE, DEALER, OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE
SAI.
[Back Cover]
For more information about the Funds, you may wish to refer to the Company's
Statement of Additional Information ("SAI"), dated May 15, 2000, and the
Company's audited annual and unaudited semi-annual report, each of which is on
file with the Securities and Exchange Commission ("SEC") and incorporated by
reference into this Prospectus. You can obtain a free copy of the SAI by writing
to Monument Series Fund, Inc., 7920 Norfolk Avenue, Suite 500 Bethesda, Maryland
20814, or by calling 202-942-8090. General inquiries regarding the Funds may
also be directed to the above address or telephone number, and may be found on
the Company's website at http://www.monumentfunds.com. Information about the
Company, including the SAI, can be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information about the operation of the Public
Reference Room may be obtained by calling the SEC at 202-942-8090. The SEC
maintains a website (http://www.sec.gov) that contains reports, the Prospectus,
SAI, material incorporated by reference, and other information regarding the
Company.
[Legend]
This Prospectus does not constitute an offer to sell fund shares in any state or
jurisdiction in which the funds are not authorized to conduct business. no sales
representative, dealer, or other person is authorized to give any information or
make any representations other than those contained in this Prospectus or in the
SAI.
- --------
1 The annual fund operating expenses table has been restated to reflect current
fees.
20
MONUMENT SERIES FUND, INC.
MONUMENT INTERNET FUND
MONUMENT MEDICAL SCIENCES FUND
MONUMENT TELECOMMUNICATIONS FUND
MONUMENT DIGITAL TECHNOLOGY FUND
MONUMENT NEW ECONOMY FUND
STATEMENT OF ADDITIONAL INFORMATION DATED _______, 2000
This Statement of Additional Information ("SAI") is not a Prospectus. It
contains additional information that you should read in conjunction with the
prospectus, dated _______, 2000 ("Prospectus"), for the Monument Series Fund,
Inc. Capitalized terms appearing in this SAI that are not otherwise defined in
this document have the same meaning given to them in the Prospectus. You may
obtain a copy of the Prospectus by writing Monument Series Fund, Inc. 7920
Norfo1k Avenue, Suite 500, Bethesda, Maryland 20814, or by calling (888)
420-9950.
TABLE OF CONTENTS
Investment Policies...........................................
Potential Risks...............................................
Investment Restrictions.......................................
Trustees and Officers.........................................
Committees Established by the Board of Trustees...............
Principal Holders of Securities...............................
Investment Advisory and Other Services........................
Portfolio Transactions and Brokerage..........................
Further Description of the Company's Shares...................
Buying, Redeeming, and Exchanging Shares......................
Valuation of Fund Shares......................................
Additional Information On Distributions and Taxes.............
Performance Information.......................................
Performance Comparisons.......................................
Financial Information.........................................
THE COMPANY. Effective ______, 2000, the Company became a Delaware business
trust. It was previously organized as a Maryland corporation on April 7, 1997.
The Company is registered with the SEC as a open-end management investment
company. Each of its Funds is diversified. The Company currently offers, on a
continuous basis, the common stock of five series: Monument Internet Fund,
Monument Medical Sciences Fund, Monument Telecommunications Fund, Monument
Digital Technology Fund, and Monument New Economy Fund. Each series is
authorized to offer four separate classes of shares:
>> Class A Shares imposing a front-end sales charge up to a maximum of
5.75%, and a sales charge of 1% if shares are redeemed within
the first year after purchase;
>> Class B Shares charging a maximum back-end sales charge of 5% if redeemed
within six years of purchase, carrying a higher Rule 12b-1 fee than Class
A Shares but converting to Class A Shares in approximately eight years
after purchase;
>> Class C Shares charging a front-end sales charge of 1%, and a sales charge
of 1% if shares are redeemed within the first year after purchase, and
carrying a higher Rule 12b-1 fee than Class A Shares with no conversion
feature; and
>> Class Y Shares for certain institutional investors.
The Company may offer additional series or classes of shares in the future.
When issued, shares of each Fund are fully-paid, non-assessable, and have equal
rights as to redemption and participation in income dividends, earnings, and
assets remaining in liquidation. Shareholders have no preemptive or conversion
rights.
INVESTMENT STRATEGIES AND RISKS
The Prospectus describes the fundamental investment objectives and certain
investment policies and restrictions applicable to each Fund. The following is
additional information for your consideration.
DEPOSITARY RECEIPTS. Each of the Funds may invest on a global basis to take
advantage of investment opportunities both within the U.S. and other countries.
The Funds will buy foreign securities indirectly through the use of depositary
receipts. The Funds may invest in sponsored and unsponsored American Depository
Receipts ("ADRs"), and other similar depositary receipts to the extent they are
traded in the U.S. market in U.S. currency. ADRs are issued by an American bank
or trust company and evidence ownership of underlying securities of a foreign
company. The foreign country may withhold taxes on dividends or distributions
paid on the securities underlying ADRs, thereby reducing the dividend or
distribution amount received by shareholders.
Unsponsored ADRs are issued without the participation of the issuer of the
underlying securities. As a result, information concerning the issuer may not be
as current as for sponsored ADRs. Holders of unsponsored ADRs generally bear all
the costs of the ADR facilities. The depositary of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited securities or to pass through voting
rights to the holders of such receipts in respect of the deposited securities.
Therefore, there may not be a correlation between information concerning the
issuer of the security and the market value of an unsponsored ADR.
FOREIGN SECURITIES.
General. Foreign investments involve certain risks that are not present in
domestic securities. For example, foreign securities may be subject to currency
risks or to foreign government taxes which reduce their attractiveness. There
may be less information publicly available about a foreign issuer than about a
United States issuer, and a foreign issuer is not generally subject to uniform
accounting, auditing and financial reporting standards and practices comparable
to those in the United States. Other risks of investing in foreign securities
include political or economic instability in the country involved, the
difficulty of predicting international trade patterns and the possibility of
imposition of exchange controls. The prices of foreign securities may be more
volatile than those of domestic securities. With respect to certain foreign
countries, there is a possibility of expropriation of assets or nationalization,
imposition of withholding taxes on dividend or interest payments, difficulty in
obtaining and enforcing judgments against foreign entities or diplomatic
developments which could affect investment in these countries. Losses and other
expenses may be incurred in converting between various currencies in connection
with purchases and sales of foreign securities.
Foreign stock markets are generally not as developed or efficient as, and may be
more volatile than, those in the United States. While growing in volume, they
usually have substantially less volume than United States markets and a Fund's
investment securities may be less liquid and subject to more rapid and erratic
price movements than securities of comparable United States companies. Equity
securities may trade at price/earnings multiples higher than comparable United
States securities, and those levels may not be sustainable. There is generally
less government supervision and regulation of foreign stock exchanges, brokers,
banks and listed companies abroad than in the United States. Moreover,
settlement practices for transactions in foreign markets may differ from those
in United States markets. Such differences may include delays beyond periods
customary in the United States and practices, such as delivery of securities
prior to receipt of payment, which increase the likelihood of a "failed
settlement", which can result in losses to a Fund.
The value of foreign investments and the investment income derived from them may
also be affected unfavorably by changes in currency exchange control
regulations. Although the Funds will invest only in securities denominated in
foreign currencies that are fully exchangeable into United States dollars
without legal restriction at the time of investment, there can be no assurance
that currency controls will not be imposed subsequently. In addition, the value
of foreign fixed income investments may fluctuate in response to changes in
United States and foreign interest rates.
Foreign brokerage commissions, custodial expenses and other fees are also
generally higher than for securities traded in the United States. Consequently,
the overall expense ratios of international or global funds are usually somewhat
higher than those of typical domestic stock funds. Moreover, investments in
foreign government debt securities, particularly those of emerging market
country governments, involve special risks. Certain emerging market countries
have historically experienced, and may continue to experience, high rates of
inflation, high interest rates, exchange rate fluctuations, large amounts of
external debt, balance of payments and trade difficulties and extreme poverty
and unemployment. See "Emerging Market Securities" below for information on
additional risks.
Fluctuations in exchange rates may also affect the earning power and asset value
of the foreign entity issuing a security, even one denominated in United States
dollars. Dividend and interest payments will be repatriated based on the
exchange rate at the time of disbursement, and restrictions on capital flows may
be imposed.
In less liquid and well developed stock markets, such as those in some Eastern
European, Southeast Asian, and Latin American countries, volatility may be
heightened by actions of a few major investors. For example, substantial
increases or decreases in cash flows of mutual funds investing in these markets
could significantly affect stock prices and, therefore, share prices.
Additionally, investments in emerging market and certain other regions are
subject to more specific risks.
Emerging Markets. Investments in emerging market country securities involve
special risks. The economies, markets and political structures of emerging
market countries generally do not compare favorably with those of the United
States and other mature economies in terms of wealth and stability. Therefore,
investments in these countries may be riskier than U.S. investments, and pricing
may be more volatile. Emerging market economies are less well developed and less
diverse than those of more developed countries, and more vulnerable to
circumstances relating to international trade, trade barriers and other
protectionist or retaliatory measures. Many countries are also subject to
inflation, recession, high levels of national debt, currency exchange problems
and government instability. In addition, governmental authorities may choose not
to repay debt, and the relative size of the debt service burden to the economy
may be excessive. Investments in some countries may be deemed speculative. Under
such circumstances, a Fund may have limited legal recourse against the issuer or
guarantor. The ability to seek recourse in a foreign jurisdiction may be
influenced by the current political climate.
ILLIQUID AND RESTRICTED SECURITIES. Each Fund may invest up to 15% of its net
assets in illiquid securities, including repurchase agreements with maturities
in excess of seven days. Subject to this limitation, the Board of Trustees has
authorized each Fund to invest in restricted securities where such investment is
consistent with that Fund's investment objective, and has authorized such
securities to be considered liquid to the extent Advisors determines that there
is a liquid institutional or other market for such securities -- for example,
restricted securities that may be freely transferred among qualified
institutional buyers under Rule 144A of the Securities Act of 1933 ("1933 Act"),
and for which a liquid institutional market has developed. The Board of Trustees
will review any determination by Advisors to treat a restricted security as a
liquid security on an ongoing basis, including Advisors' assessment of current
trading activity and the availability of reliable price information. In
determining whether a restricted security is properly considered a liquid
security, Advisors and the Board of Trustees will take into account the
following factors: (1) the frequency of trades and quotes for the security; (2)
the number of dealers willing to buy or sell the security and the number of
other potential buyers; (3) dealer undertakings to make a market in the
security; (4) the nature of the security and marketplace trades, including the
time needed to dispose of the security, the method of soliciting offers, and the
mechanics of transfer; and (5) other such factors as Advisors may determine to
be relevant.
OPTIONS. The Funds may purchase put and call options and engage in the writing
of covered call options and put options on securities that meet each Fund's
investment criteria, and may employ a variety of other investment techniques,
such as options on futures. The Funds will engage in options transactions only
to hedge existing positions, and not for purposes of speculation or leverage. As
described below, the Funds may write "covered options" on securities in standard
contracts traded on national exchanges, or in individually-negotiated contracted
traded over-the-counter for the purpose of receiving the premiums from options
that expire and to seek net gains from closing purchase transactions with
respect to such options.
BUYING CALL AND PUT OPTIONS. Each Fund may purchase call options. Such
transactions may be entered into in order to limit the risk of a substantial
increase in the market price of the security that the Fund intends to purchase.
Prior to its expiration, a call option may be sold in a closing sale
transaction. Any profit or loss from the sale will depend on whether the amount
received is more or less than the premium paid for the call option plus the
related transaction costs.
Each Fund may purchase put options. By buying a put, the Fund has the right to
sell the security at the exercise price, thus limiting its risk of loss through
a decline in the market value of the security until the put expires. The amount
of any appreciation in the value of the underlying security will be partially
offset by the amount of the premium paid for the put option and any related
transaction costs. Prior to its expiration, a put option may be sold in a
closing sale transaction and any profit or loss from the sale will depend on
whether the amount received is more or less than the premium paid for the put
option plus the related transaction costs.
WRITING (SELLING) CALL AND PUT OPTIONS. Each Fund may write covered options on
equity and debt securities and indices. This means that, in the case of call
options, so long as the Fund is obligated as the writer of a call option, it
will own the underlying security subject to the option and, in the case of put
options, it will, through its custodian, deposit and maintain either cash or
securities with a market value equal to or greater than the exercise price of
the option.
Covered call options written by a Fund give the holder the right to buy the
underlying securities from the Fund at a stated exercise price. A call option
written by a Fund is "covered" if the Fund owns the underlying security that is
subject to the call or has an absolute and immediate right to acquire that
security without additional cash consideration (or for additional cash
consideration held in a segregated account by its custodian bank) upon
conversion or exchange of other securities held in its portfolio. A call option
is also covered if a Fund holds a call on the same security and in the same
principal amount as the call written where the exercise price of the call held
(a) is equal to or less than the exercise price of the call written or (b) is
greater than the exercise price of the call written if the difference is
maintained by the Fund in cash and high grade debt securities in a segregated
account with its custodian bank. Each Fund may purchase securities which may be
covered with call options solely on the basis of considerations consistent with
the investment objectives and policies of the Fund. The Fund's turnover may
increase through the exercise of a call option; this will generally occur if the
market value of a "covered" security increases and the Fund has not entered in
to a closing purchase transaction.
As a writer of an option, the Fund receives a premium less a commission, and in
exchange foregoes the opportunity to profit from any increase in the market
value of the security exceeding the call option price. The premium serves to
mitigate the effect of any depreciation in the market value of the security. The
premium paid by the buyer of an option will reflect, among other things, the
relationship of the exercise price to the market price, the volatility of the
underlying security, the remaining term of the option, the existing supply and
demand, and the interest rates.
The writer of a call option may have no control over when the underlying
securities must be sold because the writer may be assigned an exercise notice at
any time prior to the termination of the obligation. Exercise of a call option
by the purchaser will cause the Fund to forego future appreciation of the
securities covered by the option. Whether or not an option expires unexercised,
the writer retains the amount of the premium. This amount may, in the case of a
covered call option, be offset by a decline in the market value of the
underlying security during the option period. If a call option is exercised, the
writer experiences a profit or loss from the sale of the underlying security.
Thus, during the option period, the writer of a call option gives up the
opportunity for appreciation in the market value of the underlying security or
currency above the exercise price. It retains the risk of loss should the price
of the underlying security or foreign currency decline. Writing call options
also involves risks relating to a Fund's ability to close out options it has
written.
Each Fund may write exchange-traded call options on its securities. Call options
may be written on portfolio securities, securities indices, or foreign
currencies. With respect to securities and foreign currencies, the Fund may
write call and put options on an exchange or over-the-counter. Call options on
portfolio securities will be covered since the Fund will own the underlying
securities. Call options on securities indices will be written only to hedge in
an economically appropriate way portfolio securities that are not otherwise
hedged with options or financial futures contracts and will be "covered" by
identifying the specific portfolio securities being hedged. Options on foreign
currencies will be covered by securities denominated in that currency. Options
on securities indices will be covered by securities that substantially replicate
the movement of the index.
A put option on a security, security index, or foreign currency gives the
purchaser of the option, in return for the premium paid to the writer (seller),
the right to sell the underlying security, index, or foreign currency at the
exercise price at any time during the option period. When the Fund writes a
secured put option, it will gain a profit in the amount of the premium, less a
commission, so long as the price of the underlying security remains above the
exercise price. However, the Fund remains obligated to purchase the underlying
security from the buyer of the put option (usually in the event the price of the
security falls below the exercise price) at any time during the option period.
If the price of the underlying security falls below the exercise price, the Fund
may realize a loss in the amount of the difference between the exercise price
and the sale price of the security, less the premium received. Upon exercise by
the purchaser, the writer of a put option has the obligation to purchase the
underlying security or foreign currency at the exercise price. A put option on a
securities index is similar to a put option on an individual security, except
that the value of the option depends on the weighted value of the group of
securities comprising the index and all settlements are made in cash.
During the option period, the writer of a put option has assumed the risk that
the price of the underlying security or foreign currency will decline below the
exercise price. However, the writer of the put option has retained the
opportunity for an appreciation above the exercise price should the market price
of the underlying security or foreign currency increase. Writing put options
also involves risks relating to a Fund's ability to close out options it has
written.
The writer of an option who wishes to terminate his or her obligation may effect
a "closing purchase transaction" by buying an option of the same series as the
option previously written. The effect of the purchase is that the writer's
position will be canceled by the clearing corporation. However, a writer may not
effect a closing purchase transaction after being notified of the exercise of an
option. There is also no guarantee that a Fund will be able to effect a closing
purchase transaction for the options it has written.
Effecting a closing purchase transaction in the case of a written call option
will permit a Fund to write another call option on the underlying security with
either a different exercise price, expiration date, or both. Effecting a closing
purchase transaction will also permit the Fund to use cash or proceeds from the
concurrent sale of any securities subject to the option to make other
investments. If a Fund desires to sell a particular security from its portfolio
on which it has written a call option, it will effect a closing purchase
transaction before or at the same time as the sale of the security.
A Fund will realize a profit from a closing purchase transaction if the price of
the transaction is less than the premium received from writing the option. A
Fund will realize a loss from a closing purchase transaction if the price of the
transaction is more than the premium received from writing the option. Because
increases in the market price of a call option will generally reflect increases
in the market price of the underlying security, any loss resulting from the
repurchase of a call option is likely to be offset in whole or in part by
appreciation of the underlying security owned by a Fund.
WRITING OVER-THE-COUNTER ("OTC") OPTIONS. A Fund may engage in options
transactions that trade on the OTC market to the same extent that it intends to
engage in exchange traded options. Just as with exchange traded options, OTC
options give the holder the right to buy an underlying security from, or sell an
underlying security to, an option writer at a stated exercise price. However,
OTC options differ from exchange traded options in certain material respects.
OTC options are arranged directly with dealers and not, as is the case with
exchange traded options, through a clearing corporation. Thus, there is a risk
of non-performance by the dealer. Because there is no exchange, pricing is
typically done by reference to information from market makers. Since OTC options
are available for a greater variety of securities and in a wider range of
expiration dates and exercise prices, the writer of an OTC option is paid the
premium in advance by the dealer.
A writer or purchaser of a put or call option can terminate it voluntarily only
by entering into a closing transaction. There can be no assurance that a
continuously liquid secondary market will exist for any particular option at any
specific time. Consequently, a Fund may be able to realize the value of an OTC
option it has purchased only by exercising it or entering into a closing sale
transaction with the dealer that issued it. Similarly, when a Fund writes an OTC
option, it generally can close out that option prior to its expiration only by
entering into a closing purchase transaction with the dealer to which it
originally wrote the option. If a covered call option writer cannot effect a
closing transaction, it cannot sell the underlying security or foreign currency
until the option expires or the option is exercised. Therefore, the writer of a
covered OTC call option may not be able to sell an underlying security even
though it might otherwise be advantageous to do so. Likewise, the writer of a
secured OTC put option may be unable to sell the securities pledged to secure
the put for other investment purposes while it is obligated as a put writer.
Similarly, a purchaser of an OTC put or call option might also find it difficult
to terminate its position on a timely basis in the absence of a secondary
market.
The staff of the Securities and Exchange Commission ("SEC") has been deemed to
have taken the position that purchased OTC options and the assets used to
"cover" written OTC options are illiquid securities. The Funds will adopt
procedures for engaging in OTC options transactions for the purpose of reducing
any potential adverse effect of such transactions on the liquidity of the Fund.
FUTURES CONTRACTS. Each Fund may buy and sell stock index futures contracts
traded on domestic stock exchanges to hedge the value of its portfolio against
changes in market conditions. A stock index futures contract is an agreement
between two parties to take or make delivery of an amount of cash equal to a
specified dollar amount, times the difference between the stock index value at
the close of the last trading day of the contract and the price at which the
futures contract is originally struck. A stock index futures contract does not
involve the physical delivery of the underlying stocks in the index. Although
stock index futures contracts call for the actual taking or delivery of cash, in
most cases each Fund expects to liquidate its stock index futures positions
through offsetting transactions, which may result in a gain or a loss, before
cash settlement is required.
A Fund will incur brokerage fees when it purchases and sells stock index futures
contracts, and at the time a Fund purchases or sells a stock index futures
contract, it must make a good faith deposit known as the "initial margin".
Thereafter, a Fund may need to make subsequent deposits, known as "variation
margin," to reflect changes in the level of the stock index. A Fund may buy or
sell a stock index futures contract so long as the sum of the amount of margin
deposits on open positions with respect to all stock index futures contracts
does not exceed 5% of the Fund's net assets.
To the extent a Fund enters into a stock index futures contract, it will
maintain with its custodian bank (to the extent required by the rules of the
SEC) assets in a segregated account to cover its obligations. Such assets may
consist of cash, cash equivalents, or high quality debt securities from its
portfolio in an amount equal to the difference between the fluctuating market
value of such futures contract and the aggregate value of the initial and
variation margin payments.
RISKS ASSOCIATED WITH OPTIONS AND FUTURES. Although each Fund may write covered
call options and purchase and sell stock index futures contracts to hedge
against declines in market value of its portfolio securities, the use of these
instruments involves certain risks. As the writer of covered call options, a
Fund receives a premium but loses any opportunity to profit from an increase in
the market price of the underlying securities above the exercise price during
the option period. A Fund also retains the risk of loss if the price of the
security declines, though the premium received may partially offset such loss.
Although stock index futures contracts may be useful in hedging against adverse
changes in the value of a Fund's portfolio securities, they are derivative
instruments that are subject to a number of risks. During certain market
conditions, purchases and sales of stock index futures contracts may not
completely offset a decline or rise in the value of a Fund's Portfolio. In the
futures markets, it may not always be possible to execute a buy or sell order at
the desired price, or to close out an open position due to market conditions,
limits on open positions and/or daily price fluctuations. Changes in the market
value of a Fund's portfolio may differ substantially from the changes
anticipated by the Fund when it established its hedged positions, and
unanticipated price movements in a futures contract may result in a loss
substantially greater than a Fund's initial investment in such a contract.
Successful use of futures contracts depends upon Advisors' ability to correctly
predict movements in the securities markets generally or of a particular segment
of a securities market. No assurance can be given that Advisors' judgment in
this respect will be correct.
The CFTC and the various exchanges have established limits referred to as
"speculative position limits" on the maximum net long or net short position that
any person may hold or control in a particular futures contract. Trading limits
are imposed on the number of contracts that any person may trade on a particular
trading day. An exchange may order the liquidation of positions found to be in
violation of these limits and it may impose sanctions or restrictions. These
trading and positions limits will not have an adverse impact on a Fund's
strategies for hedging its securities.
REPURCHASE AGREEMENTS. Each Fund may enter into repurchase agreements.
Repurchase agreements allow a Fund to acquire ownership of a debt security which
the seller agrees (at the time of the sale) to repurchase at a mutually agreed
upon time and price. The security's yield during the Fund's holding period is
thus predetermined.
SECURITIES LOANS. All securities loans will be made pursuant to agreements
requiring the loans to be continuously secured by collateral in cash or high
grade debt obligations at least equal at all times to the market value of the
loaned securities. The borrower pays to the Portfolios an amount equal to any
dividends or interest received on loaned securities. The Portfolios retain all
or a portion of the interest received on investment of cash collateral or
receive a fee from the borrower. Lending portfolio securities involves risks of
delay in recovery of the loaned securities or in some cases loss of rights in
the collateral should the borrower fail financially.
Securities loans are made to broker-dealers or institutional investors or other
persons, pursuant to agreements requiring that the loans be continuously secured
by collateral at least equal at all times to the value of the loaned securities
marked to market on a daily basis. The collateral received will consist of cash,
United States Government securities, letters of credit or such other collateral
as may be permitted under a Portfolio's investment program.
While the securities are being loaned, a Portfolio will continue to receive the
equivalent of the interest or dividends paid by the issuer on the securities, as
well as interest on the investment of the collateral or a fee from the borrower.
A Portfolio has a right to call each loan and obtain the securities on five
business days' notice or, in connection with securities trading on foreign
markets, within such longer period for purchases and sales of such securities in
such foreign markets. A Portfolio will generally not have the right to vote
securities while they are being loaned, but its Manager or Adviser will call a
loan in anticipation of any important vote.
REPURCHASE AGREEMENTS. Although each Fund will enter into repurchase agreements
only with institutions that Advisors believes present minimal credit risks, it
is conceivable that a repurchase agreement issuer could seek relief under
bankruptcy laws or otherwise default on its obligations under its repurchase
agreement. In that event, a Fund could experience both delays in liquidating the
underlying securities, and losses including: (1) a possible decline in the value
of the underlying security while the Fund seeks to enforce its rights thereto;
(2) possible subnormal levels of income and lack of access to income during this
period; (3) a possible loss on the sale of the underlying collateral; and (4)
the expense of enforcing its rights.
SECURITIES LOANS. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving additional
collateral or in the recovery of the securities or possible loss of rights in
the collateral should the borrower fail financially. Loans will only be made to
firms deemed by Advisors to be of good standing and will not be made unless, in
the judgment of Advisors, the consideration to be earned from such loans would
justify the risk.
WARRANTS. Each Fund may invest in warrants. A warrant is a security that gives
the holder the right, but not the obligation, to purchase a given number of
shares of a particular company at a fixed price within a certain period of time.
Warrants generally trade in the open market and may be sold rather than
exercised.
The purchaser of a warrant expects the market price of the security underlying
the warrant to exceed the purchase price of the warrant plus the exercise price
of the warrant, thus yielding a profit. It is possible, however, that the market
price of the security underlying a warrant will not exceed the exercise price of
the warrant before the expiration date. Consequently, the purchaser of a warrant
risks the loss of the entire purchase price. Price movements in the security
underlying a warrant are generally not as great as the warrant's price
movements. Therefore, the price of a warrant tends to be more volatile and may
not correlate exactly to the price of its underlying security.
INVESTMENT RESTRICTIONS
Fundamental Investment Restrictions
The Company has adopted the following restrictions as fundamental policies for
each Fund. These restrictions may not be changed for any given Fund without the
approval of the lesser of (1) more than 50% of the outstanding voting securities
of the Fund or (2) 67% or more of the voting securities present at a shareholder
meeting of the Fund if more than 50% of the outstanding voting securities of the
Fund are represented at the meeting in person or by proxy, or as otherwise
provided by law, governing documentation or applicable interpretation. Under the
restrictions, each Fund MAY NOT:
1. with respect to 75% of the Fund's assets, purchase securities of any
issuer (other than obligations of, or guaranteed by, the United States
government, its agencies or instrumentalities) if, as a result, more than
5% of the value of the Fund's total assets would be invested in the
securities of that issuer;
2. with respect to 75% of the Fund's assets, purchase more than
10% of the outstanding voting securities of any issuer;
3. issue senior securities, except to the extent permitted by the
1940 Act, including permitted borrowings;
4. make loans, except for collateralized loans of portfolio
securities in an amount not exceeding 33 1/3% of the Fund's
total assets (at the time of the most recent loan). This
limitation does not apply to purchases of debt securities or
to repurchase agreements;
5. borrow money, except for temporary or emergency purposes in an amount not
exceeding 33 1/3% of the Fund's total assets (including the amount
borrowed) less liabilities (other than borrowings). As a nonfundamental
operating policy, no Fund will purchase securities when its borrowings
exceed 5% of its total assets;
6. underwrite the securities of other issuers, except to the
extent that (in connection with the disposition of portfolio
securities) the Fund may be deemed to be an underwriter for
purposes of the 1933 Act;
7. invest in securities for the purpose of exercising management or control
of the issuer, except that each Fund may purchase securities of other
investment companies to the extent permitted by the 1940 Act, regulations
thereunder, or applicable exemptions;
8. purchase or sell commodity contracts, except that each Fund may (as
appropriate and consistent with its investment objectives and policies)
enter into financial futures contracts, options on such futures contracts,
forward foreign currency exchange contracts, forward commitments, and
repurchase agreements;
9. or sell real estate or any interest therein, except that each
Fund may (as appropriate and consistent with its investment
objectives and policies) invest in securities of corporate and
governmental entities secured by real estate or marketable
interests therein, or securities of issuers that engage in
real estate operations or interests therein, and may hold and
sell real estate acquired as a result of ownership of such
securities; or
10. in the securities of other investment companies, except that
each Fund may acquire securities of another investment company
pursuant to a plan of reorganization, merger, consolidation or
acquisition, or except where the Fund would not own,
immediately after the acquisition, securities of other
investment companies which exceed in the aggregate: (1) more
than 3% of the issuer's outstanding voting stock; (2) more
than 5% of the Fund's total assets,; and (3) together with the
securities of all other investment companies held by the Fund,
exceed, in the aggregate, more than 10% of the Fund's total
assets, or except as otherwise permitted by the 1940 Act and
the regulations thereunder or exemptions therefrom.
Nonfundamental Investment Policies
In addition to the fundamental policies identified above, it is the present
operating policy of each Fund (which may be changed without shareholder
approval) not to:
1. pledge, mortgage or hypothecate its assets as security for loans, or
engage in joint or joint and several trading accounts in securities,
except that it may participate in joint repurchase arrangements, invest
its short-term cash in shares of a money market mutual fund (pursuant to
the terms of any order, and any conditions therein, issued by the SEC
permitting such investments);
2. invest more than 5% of its net assets (valued at the lower of
cost or market) in warrants, nor more than 2% of its net
assets in warrants not listed on either the New York or
American Stock Exchange; or
3. engage in short sales, unless at the time the Fund owns
securities equivalent in kind and amount to those sold.
PORTFOLIO TURNOVER. There are no limitations on the length of time that a Fund
must hold a portfolio security. A Fund may sell a portfolio security and
reinvest the proceeds whenever Advisors deems such action prudent from the
viewpoint of a Fund's investment objective. A Fund's annual portfolio turnover
rate may vary significantly from year to year. A higher rate of portfolio
turnover may result in higher transaction costs, including brokerage
commissions. Also, to the extent that higher portfolio turnover results in a
higher rate of net realized capital gains to a Fund, the portion of a Fund's
distributions constituting taxable capital gains may increase. Monument Advisors
does not expect the annual portfolio turnover rates for a Fund to exceed 120%.
TRUSTEES AND OFFICERS
The Board of Trustees has the responsibility for the overall management of the
Company, including general supervision and review of its investment activities.
The Board of Trustees also elects the officers of the Company, who are
responsible for administering day-to-day operations. Affiliations for the
Officers and Board of Trustees (including principal occupations for the past
five years) are shown below. Members of the Board of Trustees who are considered
"interested persons" of the Company under the 1940 Act are indicated by as
asterisk (*).
<PAGE>
Name (Age) Position Principal Occupation During the
Address Held with Past Five Years
Company
- --------------------------------------------------------------------
- --------------------------------------------------------------------
*David A. Kugler Trustee, President and Director, The
(40) President Monument Group, Inc. (a holding
7920 Norfolk and company); Monument Funds Group,
Avenue Treasurer, Inc. (a mutual funds development
Suite 500 1997 - company); Monument Advisors, Ltd.;
Bethesda, MD present Monument Distributors, Inc.;
20814 Monument Shareholder Services,
Inc., 1997 - present; Account Vice
President, Paine Webber, Inc.,
1994 - 1997; Financial Consultant,
Merrill Lynch & Co., 1990 - 1994.
Peter L. Smith Vice Senior Vice President and
(68) President Secretary, The Monument Group,
7920 Norfolk and Inc.; Monument Funds Group, Inc.;
Avenue Assistant Monument Advisors, Ltd.; Monument
Suite 500 Secretary Distributors, Inc.; Monument
Bethesda, MD Shareholder Services, Inc., 1998 -
20814 present; Special Investigator
(Senior Examiner), National
Association of Securities Dealers
Regulation, Inc., District 10 (New
York City), 1997 - 1998; Senior
Staff Accountant, Office of
Compliance and Examinations, U.S.
Securities and Exchange
Commission, Washington, D.C., 1974
- 1997.
G. Frederick Trustee, Business Manager, Trinity
White II (46) Secretary Episcopal Parish, 1997 - present;
3107 Albemarle Management Consultant, Small
Road Business Management, 1985 - 1996.
Wilmington, DE
19808
Francine F. Carb Trustee President, Markitects, Inc.
(41) (marketing consulting), 1994 -
421 Woodland present; Francine Carb &
Circle Associates (marketing consulting),
Radnor, PA 19087 1992 - 1994.
Victor Dates (62) Trustee Adjunct Professor, Coppin State
2107 Carter Dale College, 1998 - present; Assistant
Road Professor, Howard University, 1988
Baltimore, MD - 1998.
21209
<PAGE>
- ------------------
Name (Age) Position Principal Occupation During the
Address Held with Past Five Years
Company
- --------------------------------------------------------------------
- --------------------------------------------------------------------
George DeBakey Trustee Director, Business Development,
(50) Technolognet.com, 2000 - present;
19 Blue Hosta Way Director of International
Rockville, MD Operations, ESI International,
20850 Inc., 1998 - 1999; Instructor,
American University, 1992 - 1998.
- ------------------
- ------------------
David Gregg III Trustee Chairman, Gator Broadcasting
(67) Corp., 1986 - present; Managing
2200 Clarendon Director, Pierce Financial Corp.,
Blvd. 1984 - present.
Suite 1410
Arlington, VA
22201
- ------------------
Ivan Inerfeld Trustee Chairman, Interactive Enterprises,
(58) Ltd., 1999 - present; Independent
625 Twin Arch investor and consultant, 1998 -
Lane present; Principal, Internet
Bryn Mawr, PA Capital Group, LLP, 1996 - 1997;
19010 Independent consultant (mergers
and acquisitions), 1995 - 1996;
CEO, Regal Communications Corp.,
1994 - 1995; Senior Partner and
Director of Mergers and
Acquisitions, Coopers & Lybrand,
1988 - 1994; Senior Partner and
National Director of the Media
Industry Practice, Touche Ross &
Co., 1984 - 1988.
- ------------------
Rhonda Wiles Trustee Director of Development, Futures
Roberson, Esq. Industry Institute, 1999 -
(48) present; Senior Vice President,
2001 Institutional Funding and
Pennsylvania Development, Hispanic Radio
Ave., N.W., Network, Inc., 1998 - 1999;
Suite 600 Principal, RWR Consults (Business
Washington, Advisors), 1995 - present;
D.C. 20006 Counsel, NAPWA Services
(pharmaceutical company) 1995;
Associate General Counsel, Calvert
Group, Ltd. (mutual fund sponsor),
1990 - 1993.
Trustees and officers of the Company who are affiliated with Advisors and/or
Distributors receive no remuneration from the Company. Each Trustee who is not
an interested person of the Company receives a fee of $2,000 annually, plus an
additional fee of $500 per day for attendance at any meeting of the Board of
Trustees or one of its committees (including any meeting held by telephonic
conference). Trustees also receive reimbursement for any expenses incurred in
attending board and committee meetings. The Board of Trustees generally meets
quarterly.
In addition, those Trustees and officers of the Company who are also
shareholders of The Monument Group, Inc., the parent company of Advisors and
Distributors, may also receive indirect remuneration by virtue of their indirect
interests in Advisors and Distributors, respectively.
Trustee White provided business consultation services to Monument Advisors on
two limited projects in 1997 for compensation totaling less than $1,500.
COMMITTEES ESTABLISHED BY THE BOARD OF TRUSTEES
The Company has an Audit Committee, an Executive Committee, a Pricing and
Investment Committee, and a Nominating Committee. The duties of these four
Committees and their present membership are as follows:
AUDIT COMMITTEE: The Audit Committee assists the Board of Trustees in fulfilling
its responsibilities for the Company's accounting and financial reporting
practices, and acts as a liaison between the Board of Trustees and Deloitte &
Touche LLP, the Company's independent public accountant. Trustees Carb, Dates,
DeBakey, White, and Wiles-Roberson are members of the Audit Committee.
EXECUTIVE COMMITTEE: The Executive Committee may exercise its powers during
those intervals between meetings of the full Board of Trustees. The Executive
Committee possesses all of the powers of the Board of Trustees in the management
of the Company except as to those matters that specifically require action by
the Board of Trustees. Trustees Kugler and Wiles-Roberson are members of the
Executive Committee.
PRICING AND INVESTMENT COMMITTEE: The Pricing and Investment Committee
determines in good faith a fair value for any of the Company's portfolio
investments that do not have a readily available market quotation or sales
price. The Committee then presents such valuations and the basis therefor at the
next meeting of the Board of Trustees for their good faith confirmation or
change. Trustee Kugler is a member of the Pricing and Investment Committee.
Alexander Cheung, an employee of Monument Advisors, is also a member of the
Pricing and Investment Committee.
NOMINATING COMMITTEE: The Nominating Committee nominates candidates for election
to the Board of Trustees, whether such candidates be interested or
non-interested persons of the Company. Trustees Carb, Dates, DeBakey, White, and
Wiles-Roberson are members of the Nominating Committee.
PRINCIPAL HOLDERS OF SECURITIES
As of March 31, 2000, Samuel M. Hunn of 7909 Hermitage Road, Richmond, Virginia,
23228, owned (both record and beneficially) ___% of the Medical Sciences Fund
Class A shares.
As of March 31, 2000, U.S. Clearing Corp., 26 Broadway, New York, N.Y. 10004
owned of record: ___% of the Medical Sciences Fund Class A Shares; ___% of the
Medical Sciences Fund Class B Shares; and ___% of the Telecommunications Fund
Class A Shares.
As of March 31, 2000, Lewco Securities Corp, 34 Exchange Place, Jersey City,
N.J. 07311 owned of record ___% of the Medical Sciences Class B Shares.
As of March 31, 2000, The Joseph B. Haddad Profit Sharing Plan, Joseph B. Haddad
Trustee, 5901 Patterson Avenue, Richmond, VA 23226 owned of record ___% of the
Internet Fund Class B Shares.
As of March 31, 2000; the following owned (both of record and beneficially)
shares of the Telecommunications Fund Class B Shares: Kathy Farr, 2312 Rogers
Avenue, Fort Worth, TX 76109, ___%; Largoza Family Living Trust, 3232 So West,
Visalia, CA 93277, ___%; William Z. Shulman, 32 Esmond Place, Tenafly, N.J.
07670, ___%, George H. Vago, 111 East Kilbourn Avenue, Milwaukee, WI 53202,
___%.
As of March 31, 2000, Bear Stearns Securities Corp, 1 Metrotech Center North,
Brooklyn, N.Y. 11201, owned of record ___% of the Telecommunications Class B
Shares and ___% of the Medical Sciences Fund Class B Shares.
As of March 31, 2000, National Financial Services, Corp. 82 Devonshire Street
Boston, Massachusetts 02109 owned of record ___% of the Telecommunications Fund
Class A Shares.
As of March 31, 2000the Company's Trustees and officers, as a group, had
beneficial ownership of ____% of the shares of the Medical Sciences Fund Class A
Shares, ___% of the shares of the Telecommunications Fund Class A Shares and
less than 1% of the Internet Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISOR. Monument Advisors, LLC, ("Advisor") located at 7920 Norfolk
Avenue, Suite 500, Bethesda, Maryland 20814, is a wholly-owned subsidiary of The
Monument Group, Inc., which in turn is principally owned and controlled by David
A. Kugler, President of Advisors, and President of the Company. David A. Kugler
is an affiliate of the Company and Advisors. Advisors is a recently organized
company that also manages the portfolio investments of qualified individuals,
retirement plans, and trusts. As of March 31, 2000, Advisors managed or
supervised in excess of $70 million in assets.
Under to the Advisory Agreement with the Company, Advisors receives a monthly
fee from each Fund. This fee is calculated as an annualized rate of 1.25% of the
monthly average net assets of each Fund through $250 million; 1.00% of the
monthly average net assets between $250 and $500 million; 0.875% of the monthly
average net assets between $500 million and $750 million; 0.75% of the monthly
average net assets between $750 and $1 billion; and 0.625% of the monthly
average net assets over $1 billion. An Expense Limitation Agreement is in effect
through October 31, 2000, pursuant to which the Advisor has agreed to waive or
reimburse the fund for certain expenses. See the Prospectus for further details.
ADVISORY AGREEMENT. Pursuant to the Advisory Agreement, Advisors provides the
following services to each Fund: (1) furnishing an investment program (a)
determining what investments a Fund should purchase, hold, sell, or exchange;
(b) determining the manner in which to exercise any voting rights, rights to
consent to corporate action, or other rights pertaining to a Fund's investment
securities; (c) rendering regular reports to the Company regarding the decisions
that it has made with respect to the investment of the assets of each Fund and
the purchase and sale of its investment securities (including the reasons for
such decisions, the extent to which it has implemented such decisions, and the
manner in which it has exercised any voting rights, rights to consent to
corporate action, or other rights pertaining to a Fund's investment securities);
(d) placing orders for the execution of each Fund's securities transactions (in
accordance with any applicable directions from the Board of Trustees) and
rendering certain reports to the Company regarding brokerage business placed by
Advisors; (e) using its best efforts to recapture all available tender offer
solicitation fees in connection with tenders of the securities of any Fund, and
any similar payments; (4) advising the Board of Trustees of any fees or payments
of whatever type that it may be possible for Advisors or an affiliate thereof to
receive in connection with the purchase or sale of investment securities for any
Fund; (5) assisting the Custodian with the valuation of the securities of each
Fund, and in calculating the net asset value of each Fund; (6) providing
assistance to the Company with respect to the Company's registration statement,
regulatory reports, periodic reports to shareholders and other documents
(including tax returns), required by applicable law; (7) providing assistance to
the Company with respect to the development, implementation, maintenance, and
monitoring of a compliance program; and (8) furnishing, at its own expense,
adequate facilities and personnel for the Trustees and officers of the Company
to manage the Company's affairs.
The Advisory Agreement for both the Medical Sciences Fund and the
Telecommunications Fund was originally approved by the Board of Trustees on
October 27, 1997. The Advisory Agreement for the Internet Fund was originally
approved by the Board of Trustees on June 30, 1998. Each agreement was
subsequently approved by the initial shareholder of each Fund, following his
investment of each Fund's initial capitalization. A revision of the Advisory
Agreement was approved as to each of the Funds on March 18, 2000, and by the
shareholders of the Internet, Medical Sciences and Telecommunications Funds on
_____________. The Advisory Agreement will remain in effect from year to year as
long as its continuance is specifically approved at least annually by a vote of
the Board of Trustees (on behalf of each Fund) or by a vote of the holders of a
majority of each Fund's outstanding voting securities (as defined by the 1940
Act). In either case, the vote must be cast by a majority of Board members who
are not interested persons or Advisors of the Company (other than as members of
the Board of Trustees). Voting must occur in person at a meeting specifically
called for that purpose. The Advisory Agreement may be terminated without
penalty at any time by the Board of Trustees or Advisors. With respect to an
individual Fund, the Advisory Agreement may be terminated by a vote of a
majority of the Fund's shareholders. Termination either occurs on 60 days
written notice, or automatically in the event of an assignment of the agreement,
as defined in the 1940 Act.
PRINCIPAL UNDERWRITER. Monument Distributors, located at 7920 Norfolk Avenue,
Suite 500, Bethesda, Maryland 20814, is a wholly-owned subsidiary of The
Monument Group, Inc. Monument Advisors, and serves as the principal underwriter
of each Fund. David A. Kugler is an affiliate of the Company and Monument
Distributors.
Pursuant to a "Distribution Agreement," Monument Distributors has agreed to use
its best efforts as principal underwriter to promote the sale of each Fund's
shares in a continuous public offering. On October 27, 1997, the Distribution
Agreement (dated November 27, 1997) was approved as to each Fund in existence at
that time by the Board of Trustees. The Distribution Agreement was approved as
to each subsequently-formed Fund at the time the Board authorized the Fund's
creation. The Distribution Agreement is in effect for two years from the date of
its execution and will continue to be in effect thereafter if approved annually
by a vote of the Board of Trustees, or by a vote of the holders of a majority of
the Company's outstanding voting securities. In either case, votes must be cast
by a majority of Board members who are not parties to the Distribution Agreement
or interested persons of any such party (other than as members of the Board of
Trustees). Votes must also be cast in person at a meeting called specifically
for that purpose. The Distribution Agreement terminates automatically in the
event of its assignment and may be terminated by either party on 60 days written
notice.
Monument Distributors pays the expenses of distributing the Company's shares,
including advertising expenses and the cost of printing sales materials and
prospectuses. The Company pays the expenses of preparing and printing amendments
to its registration statements and prospectuses (other than those necessitated
by the activities of Monument Distributors) and of sending prospectuses to
existing shareholders.
For its services, Monument Distributors receives a commission for the sale of
each Fund's shares (in the amount set forth, and as described, in the
Prospectus).
PLAN OF DISTRIBUTION (RULE 12b-1 PLANS). The Board of Trustees has adopted a
Plan of Distribution pursuant to Rule 12b-1 under the 1940 Act ("Rule 12b-1
Plan") for the Class A, Class B and Class C Shares of each Fund. A Plan was
adopted with respect to the Class A Shares of the Medical Sciences and
Telecommunications Funds on October 27, 1997. A Plan of Distribution was
approved on behalf of the Class A Shares of the Internet Fund on June 30, 1998.
Rule 12b-1 Plans were approved for Class B Shares of the above Funds effective
October 1, 1999. Plans were approved for Class C Shares of the Funds listed
above, as well as for Classes A, B and C of the Digital Technology and New
Economy Funds, effective _____, 2000.
Pursuant to these Distribution Plans, Monument Distributors is entitled to
receive a 12b-1 fee for certain activities and expenses that are intended to
result in the sale of Fund shares. The Board of Trustees adopted the
Distribution Plan for the purpose of increasing the sale of each Fund's shares,
thereby lowering overall Fund expenses through economies of scale. Each Plan is
in effect for an initial one year period, and will remain in effect provided
that the Board of Trustees (including a majority of Rule 12b-1 Trustees
described below) approves its continuance by votes cast in person at an annual
meeting called for that purpose. Rule 12b-1 Trustees include those Trustees who
are not interested persons of the Company, and who have no direct or indirect
financial interest in the operation of the Plan or any related agreements.
Pursuant to each Plan, each Fund may finance any activity or expense that is
intended primarily to result in the sale of its shares. Under the Plans, each
Fund may pay a fee ("12b-1 fee") to Distributors up to a maximum of 0.50%, on an
annualized basis, of its average daily net assets for Class A Shares, and up to
a maximum of 1.00% for Class B and Class C Shares. The Company may pay the 12b-1
fee for activities and expenses borne in the past in connection with its shares
as to which no 12b-1 fee was paid because of the maximum limitation.
The activities and expenses financed by the 12b-1 fee may include, but are not
limited to: (1) compensation for expenses (including overhead and telephone
expenses) incurred by employees of Distributors who engage in the distribution
of the shares of each Fund; (2) printing and mailing of prospectuses, statements
of additional information, and periodic reports to prospective shareholders of
each Fund; (3) expenses relating to the development, preparation, printing, and
mailing of advertisements, sales literature, and other promotional materials
describing and/or relating to each Fund; (4) compensation to financial
intermediaries and broker-dealers to pay or reimburse them for their services or
expenses in connection with the distribution of the shares of each Fund; (5)
expenses of holding seminars and sales meetings designed to promote the
distribution of the shares of each Fund; (6) expenses of obtaining information
and providing explanations to prospective shareholders of each Fund regarding
its investment objectives and policies and other information pertaining to it,
including its performance; (7) expenses of training sales personnel offering and
selling each Fund's shares; and (8) expenses of personal services and/or
maintenance of shareholder accounts with respect to the shares of each Fund.
A majority of Rule 12b-1 Trustees must approve material amendments to the Plan.
In addition, the amount payable by a Fund under the Plan may not materially
increase without the approval of a majority of the outstanding voting securities
of that Fund. With respect to each individual, the Plan may be terminated at any
time by a majority of Rule 12b-1 Trustees or by a majority of the outstanding
voting securities of that Fund.
RULE 18f-3 PLAN. At a meeting held on August 7, 1999, the Board adopted a Rule
18f-3 Multiple Class Plan on behalf of the Fund for the benefit of each of its
series. The key features of the Rule 18f-3 plan are as follows: (i) shares of
each class of the Fund represent an equal pro rata interest in the Fund and
generally have identical voting, dividend, liquidation, and other rights,
preferences, powers, restrictions, limitations qualifications, terms and
conditions, except that each class bears certain-specific expenses and has
separate voting rights on certain matters that relate solely to that class or in
which the interests of shareholders of one class differ from the interests of
shareholders of another class; (ii) subject to certain limitations described in
the Prospectus, shares of a particular class of the Fund may be exchanged for
shares of the same class of another Fund; and (iii) the Fund's Class B Shares
will convert automatically into Class A shares of the Fund after a period of
eight years, based on the relative net asset value of such shares at the time of
conversion. At present, each Fund offers Class A Shares charging a front-end
sales charge, Class B Shares imposing a sales charge upon the sale of shares
within six years of purchase, and Class C Shares for certain institutional
shareholders.
CUSTODIAN, ACCOUNTING AGENT AND TRANSFER AGENT. Star Bank, N.A. located at 425
Walnut Street, Cincinnati, Ohio 45202, Star Bank, N.A. acts as custodian of the
assets of each Fund, including securities and cash received in connection with
the purchase of Fund shares. The custodian does not participate in decisions
relating to the purchase and sale of portfolio securities. Commonwealth Fund
Accounting, Inc., 1500 Forest Avenue, Suite 111, Richmond, VA 23229, serves as
an investment accounting agent for each Fund's portfolio securities and other
assets. Fund Services, Inc., 1500 Forest Avenue, Suite 111, Richmond, VA 23229,
serves as the transfer agent and dividend dispersing agent for each Fund.
FUND ADMINISTRATION. Pursuant to an Administrative Services Agreement with the
Company dated October 20, 1998 (the "Administrative Agreement"), Commonwealth
Shareholder Services, Inc. ("CSS"), 1500 Forest Avenue, Suite 223, Richmond,
Virginia 23229 serves as administrator of the Fund and supervises all aspects of
the operation of the Fund except those performed by the Investment Advisor. CSS
provides certain administrative services and facilities for the Fund, including
preparing and maintaining certain books, records, and monitoring compliance with
state and federal regulatory requirements. As administrator, CSS receives an
assets-based administrative fee, computed daily and paid monthly, at the annual
rate of 0.20% subject to a minimum amount of $18,000 per year for a period of
two years from the date of the Administrative Agreement. CSS receives an hourly
rate, plus certain out-of-pocket expenses, for shareholder servicing and state
securities law matters.
INDEPENDENT PUBLIC ACCOUNTANT. Deloitte & Touche LLP, located at 116-300 Village
Boulevard, Princeton, New Jersey 08540, serves as the Company's independent
public accountant.
INDEPENDENT COUNSEL. Beth-ann Roth, P.C., located at 9204 Saint Marks Place,
Fairfax, Virginia 22031, serves as independent counsel to the Funds and to the
Trustees.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Advisors, pursuant to the Advisory Agreement and subject to the general control
of the Board of Trustees, places all orders for the purchase and sale of
securities of each Fund. In executing portfolio transactions and selecting
brokers and dealers, it is the Company's policy to seek the best combination of
price and execution ("best execution") available. Advisors will consider such
factors as it deems relevant, including the extent of the security market, the
financial condition and execution capability of the broker-dealer, and the
reasonableness of any commission.
In the allocation of brokerage business used to purchase securities for a Fund,
Advisors may give preference to those broker-dealers who provide brokerage,
research, or other services to Advisors as long as there is no sacrifice in
obtaining best execution. Such services may include the following: (1) advice
concerning the value of securities (the advisability of investing in,
purchasing, or selling securities, and the availability of securities or the
purchasers or sellers of securities); (2) analyses and reports concerning
issuers, industries, securities, economic factors and trends, portfolio
strategy, and performance of accounts; and (3) various functions incidental to
effecting securities transactions, such as clearance and settlement. Research
generated by broker-dealers who execute transactions on behalf of the Company
may be useful to Advisors in rendering investment management services to other
clients (including affiliates of Advisors). Conversely, such research provided
by broker-dealers who have executed transaction orders on behalf of other
clients may be useful to Advisors in carrying out its obligations to the
Company. While such research may be used by Advisors in providing investment
advice to all its clients (including affiliates of Advisors), not all of it may
be used by Advisors for the benefit of the Company. Such research and services
will be in addition to and not in lieu of research and services provided by
Advisors, and the expenses of Advisors will not necessarily be reduced by the
receipt of supplemental research.
When portfolio transactions are executed on a securities exchange, the amount of
commission paid by a Fund is negotiated between Advisors and the broker
executing the transaction. Advisors will ordinarily place orders to buy and sell
over-the-counter securities on a principal rather than agency basis with a
principal market maker unless, in the opinion of Advisors, a better price and
execution can otherwise be obtained. Purchases of portfolio securities from
underwriters will include a commission or concession paid by the issuer to the
underwriter, and purchases from dealers will include a spread between the bid
and ask price. Occasionally, securities may be purchased directly from the
issuer, which does not involve the payment of commissions.
Monument Advisors may sometimes receive certain fees when a Fund tenders
portfolio securities pursuant to a tender offer solicitation. As a means of
recapturing brokerage for the benefit of such Fund, any portfolio securities
tendered by the Fund will be tendered through Advisors if it is legally
permissible to do so. The next advisory fee payable to Advisors will be reduced
by the cash amount received by Advisors, less any costs and expenses incurred in
connection with the tender. Securities of the same issuer may be purchased,
held, or sold at the same time by the Company for any of its Funds, or by other
accounts or companies for which Advisors provides investment advice (including
affiliates of Advisors). On occasions when Advisors deems the purchase or sale
of a security to be in the best interest of the Company, as well as Advisors'
other clients, Advisors, to the extent permitted by applicable laws and
regulations, may aggregate such securities to be sold or purchased for the
Company with those to be sold or purchased for other customers in order to
obtain best execution and lower brokerage commissions (if any). In such event,
Advisors will allocate the securities so purchased or sold, as well as the
expenses incurred in the transaction, in the manner it considers to be most
equitable and consistent with its fiduciary obligations to all customers,
including the Company. In some instances, this procedure may impact the price
and size of the position obtainable for the Company.
VOTING. Shares of each Fund have equal voting rights, except that shareholders
of each Fund will vote separately on matters affecting only that Fund.
Fractional shares have proportionately the same rights as do full shares. The
voting rights of each Fund's shares are non-cumulative, which means that the
holders of more than 50% of the shares of the Funds voting for the election of
Trustees have the ability to elect all of the Trustees, with the result that the
holders of the remaining voting shares will not be able to elect any Trustee.
The Company does not intend to hold annual shareholder meetings, though it may,
from time to time, hold special meetings of Fund shareholders, as required by
applicable law. The Board of Trustees, in its discretion, as well as the holders
of at least 10% of the outstanding shares of a Fund, may also call a
shareholders meeting. The federal securities laws require that the Funds help
you communicate with other shareholders in connection with the election or
removal of members of the Board.
FURTHER DESCRIPTION OF THE COMPANY'S SHARES
VOTING RIGHTS. According to the Company's By-Laws, and under Delaware law, an
annual shareholder meeting need not be held in any year in which Trustees must
be elected (as dictated by the 1940 Act). On any matter submitted to the
shareholders, each shareholder is entitled to one vote per share (with
proportionate voting for fractional shares) regardless of the relative NAV of
the Fund's shares. On matters affecting one Fund differently from the another
Fund, a separate vote of the shareholders of that Fund is required. Shareholders
of a Fund are not entitled to vote on any matter that does not affect that Fund.
Shares do not have cumulative voting rights. In other words, holders of more
than 50% of the shares elect 100% of the Board of Trustees, while the holders of
less than 50% of the shares may not elect any person as a Trustee. Shareholders
of a particular Fund may have the power to elect all of the Company's Trustees
if that Fund has a majority of the total outstanding shares of the Company.
DIVIDEND RIGHTS. Income dividends and capital gain distributions on shares of a
particular Fund may be paid with such frequency as the Board of Trustees
determines. This may occur daily, or with such frequency as the Board of
Trustees determines by resolution. Dividends and distributions may be paid to
shareholders of a particular Fund from the income and capital gains, accrued or
realized, attributable to the assets belonging to that Fund, after the Board of
Trustees provides for the Fund's actual and accrued liabilities. All dividends
and distributions on shares of a particular series or class will be distributed
pro rata to the shareholders in proportion to the number of shares held by them
on the date and time of record established for the payment of such dividends or
distributions. The Board of Trustees may declare and distribute a stock dividend
to shareholders of Fund through the distribution of shares of another Fund.
LIQUIDATION RIGHTS. In the event of the liquidation of a Fund, the shareholders
of that Fund will be entitled to receive (when and as declared by the Board of
Trustees) any of a Fund's assets that are in excess of its liabilities. The
shareholders of one Fund will therefore not be entitled to any distribution upon
liquidation of another Fund. The assets distributed to the shareholders of a
Fund will be in proportion to the number of shares of that Fund held by each
shareholder as recorded on the Company books. The liquidation of any particular
Fund in which there are outstanding shares may be authorized by an instrument in
writing signed by a majority of the Trustees then in office, subject to the
affirmative vote of "a majority of the outstanding voting securities" of that
Fund, as the quoted phrase is defined in the 1940 Act.
PREEMPTIVE, CONVERSION, AND TRANSFER RIGHTS. When issued, each Fund's shares are
fully paid, non-assessable, have no pre-emptive or subscription rights, and are
fully transferable (the Board of Trustees may, however, adopt lawful rules and
regulations with reference to the method of transfer). Subject to the 1940 Act,
the Board of Trustees has the authority to allow a shareholder the option of
exchanging his or her shares for shares of the another Fund in accordance with
such requirements and procedures as the Board of Trustees may establish.
BUYING, REDEEMING, AND EXCHANGING SHARES
ADDITIONAL INFORMATION ON BUYING SHARES. The Company currently offers shares of
the Funds through advertisements and mailings. In the future, shares may be
offered on the Internet. When you buy shares, if you submit a check or a draft
that is returned unpaid to the Company we may impose a $50 charge against your
account for each returned item. Brokers through which you buy shares may
designate intermediaries to accept orders on behalf of the Funds.
REINVESTMENT DATE. Fund shares acquired through the reinvestment of dividends
will be purchased at the Fund's net asset value, as determined on the business
day following the dividend record date (sometimes known as the "ex-dividend
date"). The processing date for the reinvestment of dividends may vary and does
not affect the amount or value of the shares acquired.
ADDITIONAL INFORMATION ON REDEEMING SHARES: REDEMPTIONS IN KIND. The Company, on
behalf of the Funds, will pay in cash (by check) all requests for redemption by
any shareholder of record of a Fund. The amount is limited, however, during any
90-day period, to the lesser of $250,000 or 1% of the value of a Fund's net
assets at the beginning of the 90-day period. This commitment is irrevocable
without the prior permission of the SEC. If redemption requests exceed these
amounts, the Board of Trustees reserves the right to make payments in whole or
in part using securities or other assets of a Fund (if there is an emergency, or
if a cash payment would be detrimental to the existing shareholders of the
Fund). In these circumstances, the securities distributed would be valued at the
price used to compute the Fund's net assets and you may incur brokerage fees as
a result of converting the securities to cash. The Company does not intend to
redeem illiquid securities in kind. If this happens, however, you may not be
able to recover your investment in a timely manner.
ADDITIONAL INFORMATION ON EXCHANGING SHARES. If you request the exchange of the
total value of your account from one Fund to another, we will reinvest any
declared but unpaid income dividends and capital gain distributions in the new
Fund at its net asset value. Backup withholding and information reporting may
apply. Information regarding the possible tax consequences of an exchange
appears in the tax section in this SAI.
If a substantial number of shareholders sell their shares of a Fund under the
exchange privilege, within a short period, the Fund may have to sell portfolio
securities that it would otherwise have held, thus incurring additional
transactional costs. Increased use of the exchange privilege may also result in
periodic large inflows of money. If this occurs, it is each Fund's general
policy to initially invest in short-term, interest-bearing money market
instruments. However, if Advisors believes that attractive investment
opportunities (consistent with a Fund's investment objective and policies) exist
immediately, then it will invest such money in portfolio securities in as
orderly a manner as is possible.
The proceeds from the sale of shares of each Fund may not be available until the
third business day following the sale. The Fund you are seeking to exchange into
may also delay issuing shares until that third business day. The sale of Fund
shares to complete an exchange will be effected at net asset value of the Fund
next computed after your request for exchange is received in proper form. See
"Buying, Redeeming, and Exchanging Shares" in the Prospectus.
ADDITIONAL INFORMATION ON SALES CHARGES. Unless otherwise described in the
Prospectus, the offering price of each Fund's shares is based on that Fund's NAV
per share, plus an initial sales charge that is paid to Monument Distributors.
See "Public Offering Price," "Redemption Price," "Buying Fund Shares", and "Net
Asset Value" in the Prospectus.
Initial sales charges do not apply to certain share classes, classes of persons,
or transactions, as described in the Prospectus. A sales charge may be waived
because a transaction involves a different level of expense than the sale of
Fund shares to the general public. See "Waiver of Sales Charge" in the
Prospectus. In addition, as shown in the table under "Public Offering Price" in
the Prospectus, initial sales charges decline as the amount of Fund shares
purchased increases to reflect certain economies of scale in the selling effort
associated with larger purchases.
CONVERSION OF CLASS B SHARES TO CLASS A SHARES. Class B Shares of the Fund will
automatically convert to Class A Shares of the respective Fund, based on the
relative net asset values per share of the aforementioned classes, eight years
after the end of the calendar month in which your Class B share order was
accepted. For the purpose of calculating the holding period required for
conversion of Class B Shares, order acceptance shall mean: (1) the date on which
such Class B Shares were issued, or (2) for Class B Shares obtained through an
exchange, or a series of exchanges, (subject to the exchange privileges for
Class B Shares) the date on which the original Class B Shares were issued. For
purposes of conversion of Class B Shares, Class B Shares purchased through the
reinvestment of dividends and capital gain distribution paid in respect of Class
B Shares, Class B Shares will be held in a separate sub-account. Each time any
Class B Shares in the shareholder's regular account (other than those shares in
the sub-account) convert to Class A shares, a pro rata portion of the Class B
Shares in the sub-account will also convert to Class A Shares. The portion will
be determined by the ratio that the shareholder's Class B Shares converting to
Class A Shares bears to the shareholder's total Class B Shares not acquired
through the reinvestment of dividends and capital gain distributions. The
conversion of Class B to Class A is not a taxable event for federal income tax
purposes.
WHETHER A CONTINGENT DEFERRED SALES CHARGE APPLIES. In determining whether a
CDSC is applicable to a redemption, the calculation will be made in a manner
that results in the lowest possible rate. It will be assumed that the redemption
is made first of amounts representing (1) shares acquired by reinvestment of
dividends and capital gains distributions, (2) shares held for over six years,
and (3) shares held the longest during the six-year period.
GENERAL INFORMATION. We will consider dividend and capital gain distribution
checks that the U.S. Postal Service returns marked "unable to forward" as a
request by you to change your dividend option to reinvest all distributions. We
will reinvest the proceeds in additional shares at the net asset value of the
applicable Fund(s) until we receive new instructions.
Your account may be classified as "lost" if first class mailings are returned
twice within 30 days as "undeliverable" and the Postal Service is unable to
provide any forwarding information. In that event the Fund's transfer agent, at
no cost to you will make at least two searches against national data bases to
attempt to determine your current address. If we are then still unable to
determine your current mailing address, we may deduct from your account the cost
of our efforts to find you, as, for example, when a search company charges a
percentage fee in exchange for its location services.
All checks, drafts, wires and any other available payment mediums that you use
buy or sell shares of a Fund must be denominated in U.S. dollars. We may, in our
sole discretion, either (a) reject any order to buy or sell shares denominated
in any other currency or (b) honor the transaction or make adjustments to your
account for the transaction as of a date and with a foreign currency exchange
factor determined by the drawee bank.
VALUATION OF FUND SHARES
For the purpose of determining the aggregate net assets of a Fund, cash and
receivables are valued at their realizable amounts. Interest is recorded as
accrued and dividends are recorded on the ex-dividend date. Portfolio securities
listed on a securities exchange or on the NASDAQ National Market System (for
which market quotations are readily available) are valued at the last quoted
sale price of the day, or if there is no such reported sale, at the mean between
the closing bid and asked prices on that day. Over-the-counter portfolio
securities (other than securities reported on the NASDAQ National Market System)
are valued at the mean between the last bid and asked prices based upon quotes
furnished by market makers for such securities. Portfolio securities that are
traded both on the over-the-counter market and on a stock exchange are valued
according to the broadest and most representative market as determined by
Advisors. Exchange listed convertible debt securities are valued at the mean
between the last bid and asked prices obtained from broker-dealers or a
comparable alternative, such as Bloomberg or Telerate.
Portfolio securities underlying actively traded call options are valued at their
market price as determined above. The current market value of any option held by
a Fund is its last sale price on the relevant exchange prior to the time when
assets are valued. Lacking any sales that day or if the last sale price is
outside the bid and asked prices, options are valued within the range of the
current closing bid and asked prices if the valuation is believed to fairly
reflect the contract's market value.
In most cases, trading in corporate bonds, U.S. government securities, and money
market instruments is substantially completed each day at various times before
the scheduled close of the Exchange. The values used in computing the net asset
value of each Fund is determined as of those times. Occasionally, events which
affect the values of these securities occur between the times they are
determined and the scheduled close of the Exchange and are therefore not
reflected in the computation of the net asset value of a Fund. If events
materially affecting the values of these securities occur during this period,
the securities will be valued at their fair value as determined in good faith by
the Board of Trustees or their designees.
Securities for which market quotations are readily available are valued at the
current market price, which may be obtained from a pricing service. In this
case, the security's is based on a variety of factors including recent trades,
institutional size trading in similar types of securities (considering yield,
risk, and maturity) and/or developments related to specific issues. Securities
and other assets for which market prices are not readily available are valued at
fair value as determined by procedures approved by the Board of Trustees. With
the Board's approval, a Fund may utilize a pricing service to perform any of the
above described functions.
ADDITIONAL INFORMATION ON DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. You may receive two types of distributions from a
Fund:
1. Income dividends. Each Fund receives income in the form of dividends,
interest, and other investment-derived income. The total income, less
expenses incurred in the Fund's operation, is its net investment income,
from which income dividends may be distributed. Thus, the amount of
dividends paid per share may vary with each distribution.
2. Capital gain distributions. The Funds may derive capital
gains or losses in connection with sales or other dispositions
of their portfolio securities. Distributions derived from net
short-term and net long-term capital gains (after taking into
account any capital loss carry forward or post-October loss
deferral) may be made annually in December, and reflect any
net short-term and net long-term capital gains realized by the
Fund as of October 31 of the current fiscal year as well as
any undistributed capital gains from the prior fiscal year.
Each Fund may make more than one capital gain distribution in
any year or adjust the timing of these distributions for
operational or other reasons.
TAXES. Each Fund has elected to be treated as a regulated investment company
under Subchapter M of the Code. The Board of Trustees reserves the right to
alter a Fund's qualified status as a regulated investment company if this is
deemed more beneficial to the shareholders. If the Board elected to take such
action, that individual Fund would be subject to federal and possibly state
corporate taxes on its taxable income and gains. In either case, distributions
to shareholders are taxable to the extent of the Fund's available earnings and
profits.
In addition to the limitations discussed below, all or a portion of the income
dividends paid by a Fund may be treated by corporate shareholders as qualifying
dividends for purposes of the dividends received deduction under federal income
tax law. If the aggregate qualifying dividends received by a Fund (generally
dividends from U.S. domestic corporations stock which is not debt-financed by
the Fund and is held for a minimum period) is less than 100% of its
distributable income, then the amount of income dividends paid to corporate
shareholders which is eligible for such deduction may not exceed the aggregate
amount of qualifying dividends received by the Fund for the taxable year. The
amount or percentage of income qualifying for the corporate dividends-received
deduction will be declared by each Fund in the Company's annual report to
shareholders.
Corporate shareholders should note that income dividends and distributions paid
by a Fund from sources other than the qualifying dividends it receives will not
qualify for the dividends-received deduction. For example, any interest income
and net short-term capital gain (in excess of any net long-term capital loss or
capital loss carryover) included in investment company taxable income and
distributed by a Fund as a dividend will not qualify for the dividends-received
deduction. Corporate shareholders should also note that the availability of the
corporate dividends-received deduction is subject to certain restrictions. For
example, the deduction is eliminated unless Fund shares have been held (or
deemed held) for more than 45 days in a substantially unhedged manner. The
dividends-received deduction may also be reduced to the extent interest paid or
accrued by a corporate shareholder is directly attributable to its investment in
shares of a Fund. Corporate shareholders whose investment in a Fund is
"debt-financed" for tax purposes should consult with their tax advisors
concerning the availability of the dividends-received deduction. The entire
income dividend and capital gain distribution, including the portion which is
treated as a deduction, may be included in the tax base on which the alternative
minimum tax is computed. Under certain circumstances, this may also result in a
reduction in the shareholder's tax basis in its Fund shares, if the shares have
been held for less than two years.
The Code requires each Fund to distribute at least 98% of its taxable ordinary
income earned during the calendar year, and at least 98% of its capital gain net
income earned during the 12 month period ending October 31 of each year (in
addition to amounts from the prior year that were neither distributed nor taxed
to the Fund). These amounts must be distributed to you by December 31 of each
year in order to avoid the imposition of a federal excise tax. For tax purposes,
under these rules those capital gain distributions that are declared in October,
November, or December but for operational reasons may not be paid to you until
the following January, will be treated as if paid by the Fund and received by
you on December 31 of the calendar year in which they are declared. Each Fund
intends as a matter of policy to declare any such capital gain distributions in
December and to pay them in either December or January in order to avoid the
imposition of this tax. Each Fund does not guarantee, however, that its capital
gain distributions will be sufficient to avoid any or all federal excise taxes.
Redemptions of a Fund's shares and exchanges of shares of one Fund for those of
another may result in a gain or loss for federal and state income tax purposes.
For most shareholders, gain or loss will be an amount equal to the difference
between the shareholder's basis in the shares and the amount realized from the
transaction, subject to the rules described below. If such shares are a capital
asset in the hands of the shareholder, gain or loss will be capital gain or loss
and will be long-term for federal income tax purposes if the shares have been
held for more than one year.
All or a portion of a loss realized upon a redemption of shares of a Fund will
be disallowed to the extent that other shares of the Fund are purchased (through
reinvestment of income dividends, capital gain distributions or otherwise)
within 30 days before or after such redemption. Any loss disallowed under these
rules will be added to the tax basis of the shares repurchased. All or a portion
of the sales charge incurred in buying shares of a Fund will not be included in
the federal tax basis of any of such shares sold or exchanged within 90 days of
their purchase (for purposes of determining gain or loss with respect to such
shares) if the sales proceeds are reinvested in another Fund of the Company and
a sales charge which would otherwise apply to the reinvestment is reduced or
eliminated. Any portion of such sales charge excluded from the tax basis of the
shares sold will be added to the tax basis of the shares acquired in the
reinvestment. You should consult with your tax advisor concerning the tax rules
applicable to the redemption or exchange of a Fund's shares.
A Fund's investment in options and futures contracts, including any stock
options, stock index options, stock index futures, and options on stock index
futures are subject to many complex and special tax rules. For example, OTC
options on debt securities and equity options, including options on stock and on
narrow-based stock indexes, will be subject to tax under Section 1234 of the
Code, generally producing a long-term or short-term capital gain or loss upon
exercise, lapse, or closing out of the option or sale of the underlying stock or
security. By contrast, a Fund's treatment of certain other options, futures, and
forward contracts entered into by a Fund is generally governed by Section 1256
of the Code. These Section 1256 positions generally include listed options on
debt securities, options on broad-based stock indexes, options on securities
indexes, options on futures contracts, regulated futures contracts, and certain
foreign currency contracts and options thereon.
Absent a tax election to the contrary, each Section 1256 position held by a Fund
will be marked-to-market (i.e., treated as if it were sold for fair market
value) on the last business day of the Fund's fiscal year, and all gain or loss
associated with fiscal year transactions and mark-to-market positions at fiscal
year end (except certain foreign currency gain or loss covered by Section 988 of
the Code) will generally be treated as 60% long-term capital gain or loss and
40% short-term capital gain or loss. The effect of Section 1256 mark-to-market
rules may be to accelerate income or to convert what otherwise would have been
long-term capital gains into short-term capital gains or short-term capital
losses into long-term capital losses within a Fund. The acceleration of income
on Section 1256 positions may require a Fund to accrue taxable income without
the corresponding receipt of cash. In order to generate cash to satisfy the
distribution requirements of the Code, a Fund may be required to dispose of
portfolio securities that it otherwise would have continued to hold or to use
cash flows from other sources such as the sale of its shares. In these ways, any
or all of these rules may affect the amount, character and timing of income
distributed to you by a Fund.
When a Fund holds an option or other contract that substantially diminishes the
Fund's risk of loss with respect to another position of the Fund (as might occur
in some hedging transactions), this combination of positions could be treated as
a straddle for tax purposes, resulting in possible deferral of losses,
adjustments in the holding periods of Fund securities, and conversion of
short-term capital losses into long-term capital losses. Certain tax elections
exist for mixed straddles (i.e., straddles comprised of at least one Section
1256 position and at least one non-Section 1256 position) which may reduce or
eliminate the operation of these straddle rules.
In order for each Fund to qualify as a regulated investment company, at least
90% of each Fund's annual gross income must consist of dividends, interest, and
certain other types of qualifying income. Foreign exchange gains earned through
a Fund's investment in stock or securities, as well as options or futures based
on those stocks or securities, is considered qualifying income for purposes of
this 90% limitation.
The Funds may be subject to foreign withholding taxes or other foreign taxes on
income (including capital gains) on certain of its foreign investments, thus
reducing the return on those investments. In any year in which a Fund qualifies,
it may elect to allow certain shareholders to take a credit or a deduction for
their shares of qualified foreign taxes paid by the Fund in their gross income
total. Each shareholder would then include in his or her gross income (in
addition to dividends actually received) his or her share of the amount of
qualified foreign taxes paid by the Fund. If this election is made, the Fund
will notify its shareholders annually as to their share of the amount of
qualified foreign taxes paid and the foreign source income of the Fund.
PERFORMANCE INFORMATION
From time to time, each Fund may state its average annual and cumulative total
returns in advertisements and sales literature. SUCH PERFORMANCE DOES NOT
REPRESENT THE ACTUAL EXPERIENCE OF ANY PARTICULAR INVESTOR, AND IS NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS.
AVERAGE ANNUAL TOTAL RETURN. Each Fund computes its average annual total return
according to the following formula prescribed by the SEC:
P(l+T)n = ERV
Where:
P = a hypothetical initial investment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
investment made at the beginning of the one-, five-,
ten-year or shorter period shown
Average annual total return calculations reflect the deduction of a maximum
front-end sales charge, where applicable, from the hypothetical initial $1,000
purchase, and the reinvestment of income dividends and capital gain
distributions at net asset value. In calculating the ending redeemable value for
Class A Shares and assuming complete redemption at the end of the applicable
period, the maximum 5.75% sales charge is deducted from the initial $1,000
payment and, for Class B Shares, the applicable CDSC imposed upon redemption of
Class B Shares held for the period is deducted. For Class C Shares the maximum
1% front-end sales charge is deducted. The calculations do not reflect the
deduction for the Rule 12b-1 fee until such charge is actually assessed. Each
Fund may also show average annual total return calculations.
CUMULATIVE TOTAL RETURN. Each Fund may also quote its cumulative total return in
advertisements and sales literature. Each Fund computes cumulative total return
in a manner similar to that used to average annual total return, except that it
will not annualize the results. The SEC has not prescribed a standard formula
for computing cumulative total return. The Funds calculate cumulative total
return according to the following formula:
C = (ERV/P) -1
Where:
P = a hypothetical initial investment of $1,000
C = cumulative total return
ERV = ending redeemable value of a hypothetical $1,000
investment made at the beginning of the one-, five-,
ten-year or shorter period shown
Cumulative total return calculations also reflect the deduction of a maximum
front-end sales charge from the hypothetical initial $1,000 purchase, and the
reinvestment of income dividends and capital gain distributions at net asset
value. The calculations do not reflect the deduction for the Rule 12b-1 fee
until such charge is actually assessed.
OTHER PERFORMANCE QUOTATIONS. Each Fund may, from time to time, quote average
annual and cumulative total returns using different assumptions about applicable
sales charges.
VOLATILITY. Occasionally, a Fund may include in advertisements and sales
literature statistics that show the volatility or risk of an investment in the
Fund, as compared to a market index. One measure of volatility is beta. Beta is
the volatility of a Fund relative to the total market, as represented by an
index considered representative of the types of securities in which the Fund
invests. A beta of more than 1.00 indicates volatility greater than the market
and a beta of less than 1.00 indicates volatility less than the market. Another
measure of volatility or risk is standard deviation. Standard deviation measures
the variability of net asset value or total return of a Fund around an average
over a specified period of time. The greater the standard deviation, the greater
the assumed risk in achieving performance.
PERFORMANCE COMPARISONS
To help you better evaluate how an investment in a Fund may satisfy your
investment objectives, advertisements and sales materials about a Fund may
discuss certain measures of performance as reported by various financial
publications. These materials also may compare a Fund's performance to that of
other investments, indices, performance rankings, averages and other information
prepared by recognized mutual fund statistical services. In addition,
advertisements and sales literature for each Fund may discuss certain
performance information set out in the various financial publications listed
below.
1. Dow Jones Composite Average or its component averages - an unmanaged index
composed of 30 blue-chip industrial corporation stocks (Dow Jones
Industrial Average), 15 utilities company stocks (Dow Jones Utilities
Average), and 20 transportation company stocks. Comparisons of performance
assume reinvestment of dividends.
2. Standard & Poor's 500 Stock Index or its component indices an unmanaged
index composed of 400 industrial stocks, 40 financial stocks, 40 utilities
stocks, and 20 transportation stocks. Comparisons of performance assume
reinvestment of dividends.
3. The New York Stock Exchange composite or component indices - an unmanaged
index of all industrial, utilities, transportation, and finance stocks
listed on the New York Stock Exchange.
4. Wilshire 5000 Equity Index - represents the return on the market value of
all common equity securities for which daily pricing is available.
Comparisons of performance assume reinvestment of dividends.
5. Lipper - Mutual Fund Performance Analysis and Lipper - Fixed Income Fund
Performance Analysis - measure of total return and average current yield
for the mutual fund industry and ranks individual mutual fund performance
over specified time periods, assuming reinvestment of all distributions,
exclusive of any applicable sales charges.
6. CDA Mutual Fund Report, published by CDA Investment Technologies, Inc.
analyzes price, current yield, risk, total return, and average rate of
return (average annual compounded growth rate) over specified time periods
for the mutual fund industry.
7. Mutual Fund Source Book, published by Morningstar, Inc. -
analyzes price, yield, risk, and total return for equity Fund.
8. Value Line Index - an unmanaged index which follows the stock
of approximately 1,700 companies.
9. Consumer Price Index (or Cost of Living Index), published by the U.S.
Bureau of Labor Statistics a statistical measure of change, over time, in
the price of goods and services in major expenditure groups.
10. Historical data supplied by the research departments of First
Boston Corporation, the J.P. Morgan companies, Salomon
Brothers, Merrill Lynch, Lehman Brothers and Bloomberg L.P.
11. Financial publications: The Wall Street Journal, Business Week, Changing
Times, Financial World, Forbes, Fortune, and Money magazines provide
performance statistics over specified time periods.
12. Russell 3000 Index - composed of 3,000 large U.S. companies by
market capitalization, representing approximately 98% of the
U.S. equity market. The average market capitalization (as of
May 1995) is $1.74 billion.
13. Russell 2000 Small Stock Index - consists of the smallest 2,000 companies
in the Russell 3000 Index, representing approximately 11% of the Russell
3000 total market capitalization. The average market capitalization (as of
May 1995) is $288 million.
14. Stocks, Bonds, Bills, and Inflation, published by Ibbotson
Associates-historical measure of yield, price, and total return for common
and small company stock, long-term government bonds, Treasury bills, and
inflation.
15. Morningstar - information published by Morningstar, Inc., including
Morningstar proprietary mutual fund ratings. The ratings reflect
Morningstar's assessment of the historical risk adjusted performance of a
fund over specified time periods relative to other funds within its class.
Advertisements also may compare a Fund's performance to the return on
certificate of deposits ("CDs") or other investments. You should be aware,
however, that an investment in a Fund involves the risk of fluctuation of
principal value, a risk generally not present in an investment in a CD issued by
a bank. For example, as the general level of interest rates rise, the value of a
Fund's fixed-income investments, if any, as well as the value of its shares that
are based upon the value of such portfolio investments, can be expected to
decrease. Conversely, when interest rates decrease, the value of a Fund's shares
can be expected to increase. CDs are frequently insured by an agency of the U.S.
Government. An investment in a Fund is not insured by any federal, state or
private entity.
FINANCIAL INFORMATION
Financial Highlights, Statements and Reports of Independent Accountants. You can
receive free copies of reports, request other information and discuss your
questions about the Funds by contacting the Funds directly at:
The Monument Funds Group, Inc.
7920 Norfolk Avenue, Suite 500
Bethesda, Maryland 20814
The books of each Fund will be audited at least once each year by Deloitte &
Touche LLP, of Princeton, New Jersey.
The Fund's audited financial statements and associated notes for the year ended
October 31, 1999, and the unqualified report of Deloitte & Touche LLP on the
financial statements (the "Report"), are incorporated by reference into this SAI
and are included in the Fund's 1999 annual report to shareholders (the "Annual
Report"). An investor may obtain a copy of the Annual Report free of charge by
writing to the Fund or calling (888) 420-9950.
PART C - OTHER INFORMATION
ITEM 23. EXHIBITS
(a) Declaration of Trust of the Registrant is filed with this
registration statement as Exhibit 23(a).
(b) By-Laws of the Registrant are incorporated into this registration
statement by reference to the Registrant's Registration Statement on
Form N-1A (File Nos. 333-26233 and 811-8199) filed with the SEC on
April 30, 1997.
(c) Not Applicable.
(d) Amended and Restated Investment Advisory Agreement
dated May [XX] between Monument Advisors, Ltd. and the
Registrant is filed with this registration statement as
Exhibit 23(d).
(e) (1) Distribution Agreement dated November 27, 1997
between Monument Distributors, Inc. and the
Registrant is incorporated into this registration
statement by reference to Pre-Effective Amendment
No. 2 to Registrant's Registration Statement on
Form N-1A (File Nos. 333-26233 and 811-8199) as
filed with the SEC on December 22, 1997.
(2) Amendment to the Distribution Agreement dated November 27, 1997
between Monument Distributors, Inc. and the Registrant is
incorporated into this registration statement by reference to
Post-Effective Amendment No. 3 to Registrant's Registration
Statement on Form N-1A (File Nos. 333-26233 and 811-8199) as
filed with the SEC on November 3, 1998.
(3) Revised schedule to the Distribution Agreement dated November
27, 1997 is filed with this registration statement as Exhibit
23(e).
(4) The form of Dealer Agreement in use between Monument
Distributors, Inc. and third-party broker-dealers is attached to
this registration statement as Exhibit 23(e)(2).
(f) Not Applicable.
(g) (1) Custody Agreement dated October 15, 1998 between Star Bank, N.A.
and the Registrant is incorporated into this registration
statement by reference to Post Effective Amendment No. 5 to
Registrant's Registration Statement on Form N-1A File Nos.
333-26223 and 811-8199 as filed with the SEC on April 15, 1999.
(h) (1) Transfer Agency Service Agreement dated October 1, 1998 between
Fund Services, Inc. and the Registrant is incorporated into
this registration statement by reference to Post-Effective
Amendment No. 3 to Registrant's Registration Statement on
Form N-1A (File Nos. 333-26233 and 811-8199) as filed with the
SEC on November 3, 1998.
(2) Administrative Services Agreement dated October 20, 1998 between
Commonwealth Shareholder Services, Inc. and the Registrant is
herein incorporated by reference to Post-Effective Amendment No.
3 to Registrant's Registration Statement on Form N-1A (file Nos.
333-26233 and 811-8199) as filed with the SEC on November 3,
1998.
(3) Accounting Services Agreement between Commonwealth Fund
Accounting and the Registrant is incorporated into this
registration statement by reference to Post Effective Amendment
No. 3 to Registrant's Registration Statement on Form N-1A (File
Nos. 333-26233 and 811-8 8199 as filed with the SEC on November
3, 1998.
(4) Expense Limitation Agreement dated May 1, 1999 between Monument
Advisors, Ltd. and Monument Series Fund, Inc. is incorporated
into this registration statement by reference to Exhibit 23(h)4
of Post-Effective Amendment No. 6 to the Registrant's
Registration Statement on Form N-1A (File Nos. 333-26233 and
811-8199) as filed with SEC on August 3, 1999. Revised Schedule
A to the Expense Limitation Agreement is filed herewith as
Exhibit 23(h)(4) incorporated into this registration statement
by reference to Exhibit 23(h)(4) of Post-Effective Amendment
No. 7 to the Registrant's Registration Statement as filed with
the SEC on January 18, 2000. A revised schedule to the Expense
Limitation Agreement is filed with this registration statement
as exhibit 23(h)(4).
(i) Opinion and Consent of Counsel as to the legality of the securities
being registered is filed herewith this registration statement as
Exhibit 23(i).
(j) Consent of Independent Accountants is filed with this registration
statement as Exhibit 23(j).
(k) Not Applicable.
(l) (1) Subscription Agreement, dated November 17, 1997,
by and between Monument Series Fund, Inc. and The
Monument Group, Inc. is incorporated into this
registration statement by reference to
Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A (File Nos.
333-26233 and 811-8199) as filed with the SEC on
December 22, 1997.
(2) Subscription Agreement, dated December 11, 1997,
by and between Monument Series Fund, Inc. and The
Monument Group, Inc. is incorporated into this
registration statement by reference to
Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A (File Nos.
333-26233 and 811-8199) as filed with the SEC on
December 22, 1997.
(3) Subscription Agreement, dated December 12, 1997,
by and between Monument Series Fund, Inc. and The
Monument Group, Inc. is incorporated into this
registration statement by reference to
Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A (File Nos.
333-26233 and 811-8199) as filed with the SEC on
December 22, 1997.
(4) Subscription Agreement, dated November 26, 1997,
by and between Monument Series Fund, Inc. and
David A. Kugler is incorporated into this
registration statement by reference to
Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A (File Nos.
333-26233 and 811-8199) as filed with the SEC on
December 22, 1997.
(5) Subscription Agreement, dated November 21, 1997, by and between
Monument Series Fund, Inc. and Herbert Klein, III is
incorporated into this registration statement by reference to
Pre-Effective Amendment No.2 to Registrant's Registration
Statement on Form N-1A (File Nos. 333-26233 and 811-8199) as
filed with the SEC on December 22, 1997.
(6) Subscription Agreement, dated December 5, 1997, by
and between Monument Series Fund, Inc. and
Herbert Klein, III is incorporated into this
registration statement by reference to
Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A (File Nos.
333-26233 and 811-8199) as filed with the SEC on
December 22, 1997.
(7) Subscription Agreement, dated November 18, 1997,
by and between Monument Series Fund, Inc. and
John H. Vivadelli is incorporated into this
registration statement by reference to Pre-
Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A (File Nos.
333-26233 and 811-8199) as filed with the SEC on
December 22, 1997.
(8) Subscription Agreement, dated November 18, 1997,
by and between Monument Series Fund, Inc. and
John B. Siewers, II is incorporated into this
registration statement by reference to
Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A (File Nos.
333-26233 and 811-8199) as filed with the SEC on
December 22, 1997.
(9) Subscription Agreement, dated November 24, 1997,
by and between Monument Series Fund, Inc. and
Francine and Brian Carb is incorporated into this
registration statement by reference to
Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A (File Nos.
333-26233 and 811-8199)as filed with the SEC on
December 22, 1997.
(10) Subscription Agreement, dated November 25, 1997,
by and between Monument Series Fund, Inc. and
Richard E. and Sarah H. Collier is incorporated
into this registration statement by reference to
Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A (File Nos.
333-26233 and 811-8199) as filed with the SEC on
December 22, 1997.
(11) Subscription Agreement, dated November 26, 1997,
by and between Monument Series Fund, Inc. and G.
Frederic White, III is incorporated into this
registration statement by reference to
Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A (File Nos.
333-26233 and 811-8199) as filed with the SEC on
December 22, 1997.
(12) Subscription Agreement, dated December 2, 1997, by and between
Monument Series Fund, Inc. and Victor H. Dates is incorporated
into this registration statement by reference to Pre-Effective
Amendment No. 2 to Registrant's Registration Statement on Form
N-1A (File Nos.333-26233 and 811-8199) as filed with the SEC on
December 22, 1997.
(13) Subscription Agreement, dated December 3, 1997, by
and between Monument Series Fund, Inc. and
Heather and Thomas Young is incorporated into this
registration statement by reference to
Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A (File Nos.
333-2633 and 811-8199) s filed with the SEC on
December 22, 1997.
(14) Subscription Agreement, dated December 5, 1997, by
and between Monument Series Fund, Inc. and Janine
and Jeff Coyle is incorporated into this
registration statement by reference to
Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A (File Nos.
333-26233 and 811-8199) as filed with the SEC on
December 22, 1997.
(15) Subscription Agreement, dated December 5, 1997, by
and between Monument Series Fund, Inc. and Paul
E. Raposo is incorporated into this registration
statement by reference to Pre-Effective Amendment
No. 2 to Registrant's Registration Statement on
Form N-1A (File Nos. 333-26233 and 811-8199) as
filed with the SEC on December 22, 1997.
(16) Subscription Agreement, dated December 5, 1997, by
and between Monument Series Fund, Inc. and Lynda
F. Williams is incorporated into this
registration statement by reference to
Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A (File Nos.
333-26233 and 811-8199) as filed with the SEC on
December 22, 1997.
(17) Subscription Agreement, dated December 5, 1997, by
and between Monument Series Fund, Inc. and Jason
Alexander is incorporated into this registration
statement by reference to Pre-Effective Amendment
No. 2 to Registrant's Registration Statement on
Form N-1A (File Nos. 333-26233 and 811-8199) as
filed with the SEC on December 22, 1997.
(18) Subscription Agreement, dated December 10, 1997,
by and between Monument Series Fund, Inc. and
Alexander C. Cheung is incorporated into this
registration statement by reference to
Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A (File Nos.
333-26233 and 811-8199) as filed with the SEC on
December 22, 1997.
(19) Subscription Agreement, dated December 11, 1997,
by and between Monument Series Fund, Inc. and
George DeBakey is incorporated into this
registration statement by reference to
Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A (File Nos.
333-26233 and 811-8199) as filed with the SEC on
December 22, 1997.
(m) (1) Distribution Plan pursuant to Rule 12b-1 relating to Class A
Shares accompanies this Registration Statement as Exhibit
23(m)(1).
(2) Distribution Plan pursuant to Rule 12b-1 relating to Class B
Shares accompanies this Registration Statement as Exhibit
23(m)(2).
(3) Distribution Plan pursuant to Rule 12b-1 relating to Class C
Shares accompanies this Registration Statement as Exhibit
23(m)(3).
(n) Rule 18f-3 Multiple Class Plan relating to Class A, Class B, Class C
and Class Y accompanies this Registration Statement as Exhibit 23(n).
(o) Not Applicable.
(p) Combined Code of Ethics of Monument Series Fund,
Monument Advisors, Ltd. and Monument Distributors, Inc.
is attached to this registration statement as Exhibit
23(p).
(q) Powers of Attorney of Francine Carb, Victor Dates,
George DeBakey, G. Frederic White, III and Rhonda
Wiles-Roberson are incorporated by reference to
Exhibits 23(p) 1 through 5 of Post-Effective Amendment
No. 6 to the Registrant's Registration Statement on
Form N-1A (File Nos. 333-26233 and 811-8199) as filed
with SEC on August 3, 1999. Power of Attorney of David
Gregg is attached to this registration statement as
Exhibit 23(q).
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH
REGISTRANT.
None.
ITEM 25. INDEMNIFICATION.
Under Section 3817 of the Delaware Business Trust Act, a corporation business
trust may indemnify any trustee or beneficial owner or other person, subject to
the standards and restrictions, if any, set forth in the governing instrument.
The Registrant has entered into agreements with various service providers,
pursuant to which trustees, officers and employees of the Registrant have been
indemnified, to the extent permitted by applicable law. These agreements have
been filed as exhibits to this Registration Statement, and are hereby
incorporated by reference into this Item to the extent necessary.
Insofar as indemnification for liabilities arising under Securities Act of 1933
(the "1933 Act") may be permitted to trustees, officers and controlling persons
of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
1933 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Director, officer of controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by a controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISOR.
Monument Advisors, Ltd., ("Advisors"), the Registrant's investment adviser,
located 7920 Norfolk Avenue, Suite 500, Bethesda, Maryland 20814, acts as
manager or adviser to qualified individuals, retirement plans, charitable
foundations and trusts. David A. Kugler is an officer of Advisors. Mr. Kugler
was an account executive for Paine Webber, Inc., located at 100 East Pratt
Street, Baltimore, Maryland 21202, from September 1994 through January 1997. Mr.
Kugler now serves as President of The Monument Group, Inc., Monument
Distributors, Inc., and the Registrant, in addition to Advisors. The principal
business address for each of the Monument entities listed above is identical to
that of Advisors.
ITEM 27. PRINCIPAL UNDERWRITERS
(a) None
(b)
- ------------------------------------------------------------------------
(1) (2) (3)
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Fund
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
David A. Kugler President, Treasurer Chairman, President,
7920 Norfolk Avenue and Director and Treasurer
Suite 500
Bethesda, Maryland
20814
- ------------------------------------------------------------------------
(c) Not Applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
The accounts, books or other documents of the Registrant required to be
maintained by Section 31 (a) of the Investment Company Act of 1940, as amended,
and the rules promulgated thereunder are kept in several locations:
(a) Shareholder account records (including share ledgers,
duplicate confirmations, duplicate account statements and
applications (forms)of the Registrant are maintained by its
transfer agent, Fund Services, Inc., at 1500 Forest Avenue,
Suite 111, Richmond, VA. 23229.
(b) Investment records including research information, records
relating to the placement of brokerage transactions,
memorandums regarding investment recommendations for
supporting and/or authorizing the purchase or sale of
assets, information relating to the placement of securities
transactions, certain records and compliance records
concerning investment recommendations of the Monument Series
Fund are maintained at the series' investment advisor,
Monument Advisors, Ltd., at 7929 Norfolk Avenue, Suite 500,
Bethesda, Maryland 20814.
(c) Accounts and records for portfolio securities and other
investment assets, including cash, are maintained in the
custody of the Registrant's custodian bank, Star Bank, N.A.,
425 Walnut Street, P.O. Box 1118, Cincinnati, Ohio
45201-1118.
(d) Accounting records, including general ledgers, supporting ledgers, pricing
computations, etc. are maintained by the Registrant's accounting services
agent, Commonwealth Fund Accounting, 1500 Forest Avenue, Suite 111,
Richmond, Virginia 23229.
(e) Administrative records, including copies of the charter,
by-laws, agreements, and reports, certain shareholder
communications, etc., are kept by the Registrant's
Administrator, Commonwealth Shareholder Services, Inc. at
1500 Forest Avenue, Suite 223, Richmond, Virginia 23229.
(f) Records relating to distribution of shares of the Registrant
are maintained by the Registrant's distributor, Monument
Distributors, Inc. at 7920 Norfolk Avenue, Suite 500,
Bethesda, Maryland 20814
ITEM 29. MANAGEMENT SERVICES
There are no management-related service contracts not discussed in Parts A or B
of this Form.
ITEM 30. UNDERTAKINGS.
The Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to shareholders,
upon request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 8 to the Registration Statement has been signed by the following
persons in the capacities and on the date indicated below.
(Signature) (Title) (Date)
/s/David A. Kugler Director, President March 24, 2000
David A. Kugler and Treasurer
* Director March 24, 2000
Francine F. Carb
* Director March 24, 2000
Victor Dates
* Director March 24, 2000
George DeBakey
* Director March 24, 2000
G. Frederic White, III
* Director March 24, 2000
Rhonda Wiles-Roberson
*By ___________________
David A. Kugler
(Attorney-in-Fact)
Exhibit No. EXHIBIT INDEX EDGAR
EXHIBIT #
- -----------------------------------------------------------------------------
Exhibit 23(a) Declaration of Trust Ex-99.23(a)
Exhibit 23(d) Amended and Restated Investment Advisory Ex-99.23(d)
Agreement
Exhibit 23(e)(1) Revised schedule to the Distribution Agreement Ex-99.23(e)(1)
Exhibit 23(e)(2) Form of Dealer Agreement Ex-99.23(e)(2)
Exhibit 23(h)(4) Revised Schedule A to the Expense Limitation Ex-99.23(h)(4)
Agreement
Exhibit 23(i) Opinion and Consent of Counsel Ex-23.23(i)
Exhibit 23(j) Consent of Independent Accountants Ex-23.23(j)
Exhibit 23(m)(1) Distribution Plan pursuant to Rule 12b-1 Ex-99.23(m)(1)
relating to Class A Shares
Exhibit 23(m)(2) Distribution Plan pursuant to Rule 12b-1 Ex-99.23(m)(2)
relating to Class B Shares
Exhibit 23(m)(3) Distribution Plan pursuant to Rule 12b-1 Ex-99.23(m)(3)
relating to Class C Shares
Exhibit 23(n) Multiple Class Plan pursuant to Rule 18f-3 Ex-99.23(n)
Exhibit 23(p) Code of Ethics Ex-99.23(p)
Exhibit 23(q) Power of Attorney: David Gregg Ex-24.23(q)
<PAGE>
Exhibit 23(a)
DECLARATION OF TRUST
DRAFT *
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 Surety 19
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 orClass
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 23(d)
AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT
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
ATTEST
By: ---------------------
MONUMENT ADVISORS, LTD.
By:/s/DAVID A. KUGLER
---------------------
David A. Kugler
President
ATTEST
<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%
<PAGE>
Exhibit 23(e)(1)
REVISED SCHEDULE TO THE DISTRIBUTION AGREEMENT
SCHEDULE A
June 8, 2000
This Schedule A 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 A sets forth the names of
the Portfolios covered by the Agreement and the compensation of Distributors for
the services rendered with respect thereto.
NAMES OF PORTFOLIOS
Monument Internet Fund
Monument Medical Sciences Fund
Monument Telecommunications Fund
Monument Digital Technology Fund
Monument New Economy Fund
COMPENSATION
For its services rendered pursuant to the Agreement, Distributors shall be
entitled to receive, as full compensation therefor, the sales commissions set
forth in the Company's Prospectus.
If shares of a Portfolio are tendered to the Company for redemption or
repurchase within seven (7) business days after Distributors' acceptance of the
original purchase order for such shares, Distributors shall immediately return
to the Company the full sales commission (net of any allowances to brokers or
dealers) allowed to Distributors on the original sale, and shall promptly, upon
receipt thereof, pay to the Company any reallowance from brokers or dealers of
the balance of the sales commission reallowed by Distributors. The Company shall
notify Distributors, or cause Distributors to be notified, of such tender for
redemption within 10 days of the day on which the Company receives notice of
such tender for redemption.
<PAGE>
Exhibit 23(e)(2)
FORM OF DEALER AGREEMENT
7
FOR BROKER-DEALER USE ONLY
FOR BROKER-DEALER USE ONLY
SALES AND COMPENSATION AGREEMENT
This Sales and Compensation Agreement is between Monument Distributors, Inc.,
("MDI"), principal underwriter for each of the registered investment companies
and their respective portfolios within the Monument Funds Group ("Funds"),
and______________________________("Company"), the person or entity making
Monument Funds available to customers pursuant to the terms enumerated below.
The Company represents that it is a (check all that apply):
A. Registered broker-dealer/NASD member __________
B. Registered investment advisor __________
C. Bank __________
D. other non-NASD member __________
1. Availability of Monument Funds
MDI wishes to have the Fund shares available for purchase and redemption by
Company's customers. In connection with making Fund shares available to
customers, Company has no authority to act as agent for the issuer, MDI or
any other dealer (except to receive instructions for the purchase and
redemption of Fund shares). All orders are subject to acceptance by MDI and
become effective only upon confirmation by MDI. MDI reserves the unqualified
right not to accept any specific order for the purchase or exchange of
shares.
2. Offering Price of Funds
Company is authorized to make available to customers, at Company's own
expense, shares of the Funds at their respective public offering prices in
accordance with terms and conditions of a current prospectus of the
appropriate Fund. Company may offer shares on a forward-pricing basis only;
that is, orders for the purchase of shares accepted by Company prior to the
close of the New York Stock Exchange and placed with MDI the same day prior
to closing time will be confirmed at the closing price for that business day.
Company will confirm the transaction with its customer at the price confirmed
in writing by MDI. In the event of a difference between verbal and written
price confirmations, the written confirmation will be considered final.
Prices of the Fund's shares are computed by and are subject to withdrawal by
the Funds in accordance with their current prospectus.
<PAGE>
3. Compensation
a. General Provisions:
i. MDI Compliance . MDI represents and warrants to Company as
follows: (1) that all Funds comply with Rule 2830 of the
NASD Rules of Fair Practice regarding prospectus
disclosure on and payment of sales charges and service
fees. (2) that the Funds are, and will be, registered as
investment companies under the Investment Company Act of
1940 and shares of the Funds are, and will be, registered
under the Securities Act of 1933, and that the Funds will
otherwise comply with all applicable federal and state
laws, rulings, administrative rules, and orders; (3) that
each prospectus, statement of additional information,
annual report, brochure, proxy statements, and any item of
advertising or marketing materials relating to the Funds
shall be in compliance with all applicable laws, rulings,
administrative rules and orders; and (4) notwithstanding
the foregoing, MDI shall not have the authority to incur
any expense or liability on behalf of the Company.
ii. Service Fees. Companies and its customers will be
responsible for published service fees in connection with
maintaining accounts in the Funds. The Company represents
that it provides personal or account maintenance service
to its customers invested in Monument Funds. MDI will
provide the Company, within 15 business days of the close
of each quarter, with a statement showing the aggregate
value of Company's customer accounts bearing the Company's
code or as to which the investor has indicated in writing
is of the Company.
iii. MDI as Agent. Company hereby authorizes MDI to act as its agent in
connection with all transactions in accounts in the Funds for which
Company is designated as entity of record. All such designations and all
authorizations of MDI to act as Company's agent cease upon termination
of this Agreement or upon the shareholder's instructions to transfer his
or her account to another entity of record.
b. Specific Applications:
i. Registered broker-dealer/ NASD members.
(1) Company claiming compensation under this paragraph
represents that it is a member of the National Association of
Securities Dealers, Inc., ("NASD") and hereby undertakes to notify
MDI in the event its membership terminates for any reason. In the
event membership terminates, Company acknowledges that this Agreement
automatically terminates. All rules or regulations of the NASD now in
effect or adopted in the future, which are binding on underwriters
and dealers in the distribution of the securities of open-end
investment companies, are deemed to be part of this Agreement to the
same extent as set forth in full.
(2) For the duration of this Agreement, MDI will pay commissions on the
sale of shares of each Fund in accordance with terms of each Fund's
current prospectus. No commissions will be paid on unsettled trades.
(3) MDI will not pay Company any commission with respect to
certain transactions which are exempt from sales
charges (e.g., Company accounts, qualified tax plans,
charitable organizations, etc.) and will pay the
reduced commissions which correspond to the reduced
sales charges to certain types of transactions as
described more fully in the Fund's prospectus.
(4) MDI may elect to pay commissions on Funds previously sold by Company,
but Company has no vested right to receive any such continuing fees
or commissions.
(5) Company may not share or rebate any portion of its commissions or
otherwise grant any concessions, discounts or other allowances to any
person who is not a broker or dealer actually engaged in the
investment banking or securities business.
(6) In the event a shareholder withdraws within one hundred eighty (180)
days funds invested as part of a no-load or reduced-load sale,
Company may not be entitled to a reallowance. If this occurs after
MDI has already paid the Company, MDI reserves the right to offset
recoverable amounts against future payments due Company.
ii. Registered investment advisor. A Company who renders investment advice
as part of a "fee-based" program, where the investors pays a fee for the
advisor's service, may receive initial concessions or commission on
sales.
4. Payment of Purchases
Payment for all Fund shares purchased from MDI are payable to the Fund and
must be received by MDI within three business days after the acceptance of
Company's order or such shorter time as may be required by law. If MDI does
not receive timely payment, MDI reserves the right, without notice, to cancel
the sale or, at MDI's option, to sell the shares ordered by the Company back
to the Fund, in which cases MDI may hold Company responsible for any loss,
including loss of profit, suffered by MDI or by the Fund resulting from
Company's failure to make payment.
5. Placement of Orders
a. Company shall place orders with MDI only through Company's
central order department unless MDI accepts Company's
written Power of Attorney authorizing others to place
order(s) on Company's behalf. MDI reserves the right to
reject wire orders for the exchange of shares of the Fund
for shares of another Monument Funds Group unless a Power of
Attorney in a form acceptable to MDI has been fully executed
by the shareholder for that specific purpose.
b. Company shall not withhold placing with MDI orders received from Company's
customers so as to profit itself as a result of such withholding.
c. MDI will not accept from Company conditional orders for
shares.
d. If any shares sold to Company under the terms of this Agreement are
repurchased by the Fund, or are tendered for redemption, within seven
business days after the date of MDI's confirmation of the original
purchase by Company, it is agreed that Company shall forfeit its right to
any commissions on such sales, where applicable.
e. MDI will notify Company of any such repurchase or redemption within ten
business days after the date on which written request for redemption is
delivered to MDI or to the Fund, and Company shall refund to MDI the full
amount of any commission received on the sale, where applicable.
f. Shares sold to Company pursuant to this Agreement may not be
issued until payment has been received by the Fund. If
transfer instructions are not received from Company within
15 days after MDI's acceptance of Company's order, MDI
reserves the right to instruct the transfer agent for the
Fund to register in book-entry form the shares sold to
Company in Company's name. Company agrees to hold harmless
and indemnify MDI, the Fund and its transfer agent for any
loss or expense resulting from such registration.
6. Product Representations
Company shall use its best efforts in the development and promotion of
the Funds being made available to customers under this Agreement.
Company is responsible for educating its sales personnel about Monument
Funds and the requirements for this Agreement. No person is
authorized to make any representations concerning Monument Funds
except for representations contained in the current applicable
prospectus in the case of the Funds and in sales literature issued by
MDI supplemental to such documents. In purchasing Funds from MDI,
Company and its customers shall be entitled to rely solely on the
representations contained in the appropriate prospectus and statement of
additional information and in such sales literature. MDI will
furnish additional copies of the current prospectus and statement of
additional information, sales literature, and other releases and
information issued by MDI in reasonable quantities upon request.
Company shall in all respects duly conform with all laws and regulations
applicable to the sale of the Funds and undertakes to indemnify and to
hold harmless the Fund, its director/trustees and MDI and its
affiliates from any damage or expenses on account of any wrongful act by
Company or Company's representatives, agents or sub-agent, in
connection with any orders or solicitation of orders of the
Funds by Company or Company's representatives, agents or sub-agents.
7. Account Servicing
a. Each customer is entitled to receive all regular mailings to owners of the
same type of Fund, including confirmations, financial statements, proxy
materials and other communications required by law or regulation.
b. Excluding accounts opened or modified electronically through the National
Securities Clearing Corporation, Company shall promptly furnish MDI with
the original or a copy of the account application in the form provided by
MDI for each Fund (unless the customer delivers the application directly
to Monument's Order Department), including the customer tax identification
certification.
c. Company will receive all reports and statements as the Fund
may furnish with respect to Fund accounts.
d. In the course of its mailings to shareholders, MDI may mail
to Company's customers sales literature and other
Monument-related information.
8. Compliance Matters
Company will not make shares of Fund available to customers in any state or
jurisdiction where the shares may not be lawfully offered or sold under "blue
sky" laws and regulations, or where Company is not legally enabled to do
business. MDI will inform the Company in which states the Fund are qualified
for sale. As of January 1998, the Funds are registered in Maryland, Virginia,
Washington D.C., New York, Pennsylvania, New Jersey, and Delaware.
Company agrees to comply with standards regarding classes of shares that MDI
may adopt in the future and furnish to Company.
Excluding ad slicks provided by MDI, Company shall furnish MDI with an
advance copy of each advertisement, sales piece or other communication to the
public to be used by or on behalf of the Company with respect to a Monument
Fund. However, receipt by MDI of such material must not be construed as
authorization or approval of such material, and MDI and its affiliates shall
have no liability with respect to any such material used by on behalf of
Company.
9. Use of Names
MDI will not use Company's name in any material relating to MDI, its Funds or
affiliates in any manner without prior approval by Company, except that
Company hereby approves all uses of its name by MDI that refer in accurate
terms to Company's services under this Agreement or that are required by
regulatory authority. Approval, where required, will not be unreasonably
withheld or delayed. Company may not use MDI's name or the names of Monument
Funds, or other affiliated entities in public advertising material except if
the material is provided or reviewed by MDI, or after written approval by
MDI's senior executive.
10. Indemnification
a. Company shall indemnify and hold harmless MDI, its
affiliates and the Funds in the event the Company or its
representatives should violate any law, rule or regulation,
or any provision of this Agreement, that may result in
losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses) to MDI, is affiliates
or the Funds. In the event the Fund, MDI or its duly
authorized agent determines to refund any amount paid by any
investor by reason of any such violation on the Company's
part, Company shall return to Monument any payments under
this Agreement previously paid or allowed by MDI to Company
with respect to the transaction for which the refund is made.
b. Company shall indemnify and hold harmless MDI, its
affiliates and the Funds against any losses, claims, damage,
liabilities or expenses (including reasonable counsel fees
and expenses) resulting from (i) the negligence or
misfeasance of Company or (ii) MDI's acting on any
information (including taxpayer identification number or
other information relating to certifications provided
pursuant to the Interest and Dividend Tax Compliance Act of
1983) or instructions reasonably believed by MDI to have
been executed or communicated by a person or person duly
authorized by Company or by the customer, except those
losses, claims, damages, liabilities or expenses resulting
from MDI's negligence or misfeasance.
c. MDI reserves the right at its discretion, without notice, to cancel or
suspend sales or withdraw offering of shares entirely, or to modify or
cancel this agreement.
11. Prior Agreements
This Agreement supersedes and cancels any prior agreement with respect to the
sale of any Funds underwritten or administered by MDI and may be amended at
any time by written agreement of the parties, or automatically after notice
to Company by MDI. Company shall accept the term of an automatic amendment by
placing orders of a Fund covered by the amendment.
12. Termination
Company may terminate this Agreement upon thirty (30) days written notice to
Monument Distributors Inc.
13. Non-assignability
This Agreement is not assignable by either party without prior written
consent.
14. Execution; Applicable Law
This Agreement shall be effective upon acceptance by MDI in Laurel, Maryland.
This Agreement is made in the State of New York and shall be interpreted in
accordance with the laws of New York. Each party represents that the
undersigned has the authority to act and to execute this Agreement on behalf
of the respective party.
15. Communications
All communications to MDI should be sent to the address below. Any notice to
Company shall be duly given if sent to the Company address below, or to the
facsimile number specified by Company below as long as a copy of the
facsimile is delivered as soon as practicable by U.S. Postal Service or some
other carrier.
Please print or type information:
Signed: Accepted:
______________________________ Laurel, Maryland as of
Company Name
- ------------------------------ ---------------------------
Street Address Monument Distributors,
Inc.
_____________________________ 7920 Norfolk Avenue
City State Zip Bethesda, Maryland 20814
________________________________ By:
- --------------------------
Phone Number Authorized
Signature
- ---------------------------------
Fax Number
TIN# CRD# Title
-----------------------------
Print Name
By: ______________________________
- ------------------------------
Authorized Signature Date
Title
Print Name
Date
Schedule A: Fee Schedule
QUESTIONNAIRE
Broker Dealer
Bank
FIRM NAME
- ------------------------------------------------------
CONTACT
- ------------------------------------------------------
ADDRESS
- ------------------------------------------------------
CITY____________________________STATE__________ZIP____________________
PHONE NUMBER
- ------------------------------------------------------
FAX NUMBER ______________________________________________________
Please give a brief reply to each of the following questions.
1. What is your taxpayer identification number?
- ------------------------------
2. Who is your main service contact?
- ------------------------------
3. Who is your main sales contact? ______________________________
4. Who is your compensation contact?
- ------------------------------
5. Who is your back office contact?
- ------------------------------
6. Do you have internal office and/or representative numbers?
(If yes, please send us a
printed list for our database.) ______________________________
7. Will your accounts be opened in street name or customer
name? _________________
8. Will your taxpayer identification number be given for the
customer or firm? _______
---------------------------------------------------------------------
9. How will wire order trades be settled (gross or net)?
--------------------------
10. Will you send individual wires, bulk wires, or checks for
payment?______________
---------------------------------------------------------------------
11. If NASD registered, what is your NASD #?
---------------------------------
12. Do you intend to establish a house account?
---------------------------------
13. What category best resembles the type of distribution you are?
______Wirehouse ______Financial Planning
______Discount Broker ______Regional Broker Dealer
______Insurance Broker Dealer ______Bank Broker Dealer
______Registered Investment Advisor ______Clearing
14. Do you have a standard format for your branch and/or
registered representatives numbers? If so, please describe.
15. Do you trade through NSCC? If yes, list contact for
Fund/Serv trading at your firm.
16. Do you currently participate in Networking? If yes, please
list your Networking contact and the levels you maintain.
<PAGE>
Exhibit 23(h)(4)
REVISED SCHEDULE A TO THE EXPENSE LIMITATION AGREEMENT
SCHEDULE A
OPERATING EXPENSE LIMITS
This Agreement relates to the following Portfolios of the Fund:
Maximum Operating
Expense Limit
(as a percentage of
Name of Portfolio average net
assets)
Monument Telecommunications Fund A 2.25%
Monument Telecommunications Fund B 3.00%
Monument Telecommunications Fund C 3.00%
Monumet Medical Sciences Fund A 2.25%
Monument Medical Sciences Fund B 3.00%
Monument Medical Sciences Fund C 3.00%
Monument Digital Technology Fund A 2.25%
Monument Digital Technology Fund B 3.00%
Monument Digital Technology Fund C 3.00%
Monument New Economy Fund A 2.25%
Monument New Economy Fund B 3.00%
Monument New Economy Fund C 3.00%
Revised as of June 8, 2000
<PAGE>
Exhibit 23(i)
OPINION AND CONSENT OF COUNSEL
March 23, 2000
Monument Series Fund
7920 Norfolk Avenue
Suite 500
Bethesda, Maryland 20814
Ladies and Gentlemen:
This opinion is given in connection with the filing with the Securities
and Exchange Commission ("SEC") by Monument Series Fund, Inc., a Maryland
corporation ("Company") converting to a Delaware business trust, of
Post-Effective Amendment No. 8 to the Registration Statement on Form N-1A
("Registration Statement") under the Securities Act of 1933 ("1933 Act") and
Amendment No. 10 under the Investment Company Act of 1940 ("1940 Act") (File
Nos. 333-26223 and 811-8199). This filing relates to existing Class A, Class B
and Class Y shares of beneficial interest, plus Class C shares proposed to be
added by this filing. In addition, the filing relates to three separate existing
series of the Company: (i) Monument Medical Sciences Fund; (ii) Monument
Telecommunications Fund; and (iii) Monument Internet Fund. In addition, the
Company is addition two additional series by this filing: Monument Digital
Technology Fund, and Monument New Economy Fund. The authorized shares of
beneficial interest of the Portfolios are referred to in this opinion as the
"Shares."
This firm has examined the following documents: Articles of Incorporation;
Articles of Amendment; proposed Declaration of Trust; By-Laws; Registration
Statement on Form N-1A filed on April 30, 1997; Pre-Effective Amendment No. 1 to
the Registration Statement on Form N-1A filed on October 21, 1997; Pre-Effective
Amendment No. 2 to the Registration Statement on Form N-1A filed on December 27,
1997; Post-Effective Amendment No. 1 to the Registration Statement on Form N-1A
filed on June 12, 1998; Post-Effective Amendment No. 2 to the Registration
Statement on Form N-1A filed on September 29, 1998; Post-Effective Amendment No.
3 to the Registration Statement on Form N-1A filed on November 3, 1998;
Post-Effective Amendment No. 4 to the Registration Statement on Form N-1A filed
on March 1, 1999; Post-Effective Amendment No. 5 to the Registration Statement
on Form N-1A filed on April 15, 1999; Post-Effective Amendment No. 6 to the
Registration Statement on Form N-1A filed on August 3, 1999; Post-Effective
Amendment No. 7 to the Registration Statement on Form N-1A filed on or about
January 18, 2000; and Post-Effective Amendment No. 8 to the Registration
Statement on Form N-1A filed on or about March 10, 2000; pertinent provisions of
the laws of the State of Maryland and the State of Delaware; and such other
corporate records, certificates, documents and statutes that this firm has
deemed relevant in order to render the opinion expressed in this letter.
Based on the examination, this firm is of the opinion that:
1. The Company is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Maryland; and
2. The Shares to be offered for sale by the Company, when issued in the manner
contemplated by the Registration Statement, as amended, will be legally issued,
fully-paid and non-assessable.
This letter expresses the firm's opinion as to the Maryland General
Corporation Law and the Delaware Business Trust Act governing matters such as
the due organization of the Company and the authorization and issuance of the
Shares, but does not extend to the securities or "Blue Sky" laws of Maryland or
Delaware or to federal securities or other laws.
This firm consents to the use of this opinion as an exhibit to the
Registration Statement, as amended.
Very truly yours,
BETH-ANN ROTH, P.C.
<PAGE>
Exhibit 23(j)
CONSENT OF INDEPENDENT AUDITORS
CONSENT OF INDEPENDENT AUDITORS
Monument Series Fund, Inc.:
We consent to the incorporation by reference in this Post-Effective Amendment
No. 8 to Registration Statement No. 333-26223 of our auditors' reports, dated
December 23, 1999, included in the Annual Report to Shareholders for the year
ended October 31, 1999 and to the reference to us under the caption "Financial
Highlights Information" appearing in the Prospectus, which is a part of such
Registration Statement.
DELOITTE & TOUCHE LLP
Princeton, New Jersey
March 24, 2000
<PAGE>
Exhibit 23(m)(1)
DISTRIBUTION PLAN PURSUANT TO RULE 12b-1 RELATING TO CLASS A
SHARES
4
PLAN OF DISTRIBUTION
PURSUANT TO RULE 12B-1
Monument Series Fund
Class A Shares
I. INTRODUCTION
This Plan sets out the terms and conditions by which Monument Series Fund,
Inc., a Maryland corporation (the "Company"), may, in effect, act as distributor
of the shares of which it is the issuer, pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "Act"), with respect to those classes of
shares designated as Class A Shares.
The Board of Directors ("Board") of the Company, including all of the
Independent Directors (as defined in this Plan), has approved this Plan on
behalf of the Class A Shares of each series of the Company listed on Schedule A
hereto (each, a "Portfolio," collectively, "Portfolios"), which may be amended
from time to time in accordance with this Plan ("Schedule A"). The Board
approved this Plan, with respect to the Class A Shares of each Portfolio, at an
in-person meeting, held on October 27, 1997, that was called for the purpose of
voting on this Plan.
In approving this Plan, the Board concluded, in the exercise of reasonable
business judgment, and in light of its fiduciary duties under applicable law,
including state law and Sections 36(a) and (b) of the Act, that there is a
reasonable likelihood that the Plan will benefit the Class A Shares of each
Portfolio and the shareholders those Portfolios.
II. AUTHORIZED PAYMENTS
The Company, on behalf of the Class A Shares of each Portfolio, shall pay
a fee ("Distribution Fee") to the principal underwriter and distributor of the
shares of the Portfolio ("Distributor"), for the activities and expenses
described in Section III. below. The maximum Distribution Fee payable by the
Company, on behalf of each Portfolio, is 0.50% on an annualized basis of the
average daily net assets of the Class A Shares of each Portfolio. Of that 0.50%,
the Portfolios may pay a service fee of 0.25%.
The average daily net assets of the Class A Shares of each Portfolio will
be computed in the manner described in the then-current prospectus for the
Portfolio, as effective under the Securities Act of 1933. Each Portfolio will
accrue the Distribution Fee daily, as appropriate, and will pay the Fee monthly
or at such other intervals as the Board, in its sole discretion, determines to
be in the best interests of the Portfolio. Subject to maximum limit set forth
above, the Company, on behalf of a Portfolio, may pay the Distribution Fee for
activities and expenses borne in the past in connection with its shares as to
which no Distribution Fee was paid on account of such limitation.
III. ACTIVITIES AND EXPENSES
The Company, on behalf of each Portfolio, may use some or all of the
Distribution Fee to finance, directly or indirectly, any activity or expense
that is primarily intended to result in the sale of shares of the Class A Shares
of the Portfolio (within the meaning of Rule 12b-1(a)(2) under the Act),
including, for example:
(a) compensation to and expenses, including overhead and telephone
expenses, of employees of Distributor who engage in the distribution
of the Class A Shares of the Portfolio;
(b) printing and mailing of prospectuses, statements of additional
information, and periodic reports to prospective shareholders of
Class A Shares of the Portfolio;
(c) expenses relating to the development, preparation, printing, and
mailing of advertisements, sales literature, and other promotional
materials describing and/or relating to Class A Shares of the
Portfolio;
(d) compensation to financial intermediaries and broker-dealers to pay or
reimburse them for their services or expenses in connection with the
distribution of Class A Shares of the Portfolio;
(e) expenses of holding seminars and sales meetings
designed to promote the distribution of Class A Shares
of the Portfolio;
(f) expenses of obtaining information and providing explanations to
prospective shareholders of Class A Shares of the Portfolio regarding
its investment objectives and policies and other information
pertaining to it, including its performance;
(g) expenses of training sales personnel offering and
selling the Portfolio's Class A Shares; and
(h) expenses of personal services and/or maintenance of shareholder
accounts with respect to Class A Shares of the Portfolio.
IV. TERM AND TERMINATION
A. Term. The Plan shall take effect, with respect to the Class A Shares of
each Portfolio, as of the effective date ("Effective Date") set out next to the
name of the Portfolio on Schedule A. The Plan shall remain in effect, with
respect to the Class A Shares of each Portfolio, for a period of more than one
year after the Effective Date, only for so long as its continuance is
specifically approved, along with any related agreement(s), at least annually by
vote of a majority (or whatever greater or lesser percentage that may, from time
to time, be required by Section 12(b) of the Act and/or the rules thereunder, as
administered by the Securities and Exchange Commission ("SEC")) of both (a) the
Board, and (b) the Independent Directors, cast in person, at a meeting called
for the purpose of voting on the Plan and any related agreement(s).
B. Termination. The Plan may be terminated at any time, with respect to
each Portfolio, by vote of a majority of the Independent Directors or by vote of
a majority of the outstanding Class A voting securities of that Portfolio. If
this Plan is terminated, the obligation of the Company, on behalf of a
Portfolio, to make payments pursuant to this Plan shall also cease and the
Company shall not be required to make any payments beyond the termination date
even with respect to expenses incurred prior to the termination date.
V. REPORTS TO BOARD
Distributor shall provide to the Directors and the Directors shall review,
at least quarterly, a written report of the amounts of the Distribution Fee
expended and the purposes for which such expenditures were made.
VI. AMENDMENT OF PLAN
The Plan may not be amended, with respect to any Portfolio, to materially
increase the amount of the Distribution Fee permitted by Section II. of this
Plan until such amendment has been approved by a vote of at least the majority
of the outstanding voting securities of the Class A Shares of that Portfolio.
All material amendments to the Plan must be approved in the manner described in
Section IV.A above.
VII. SELECTION OF DIRECTORS
To the extent required by Rule 12b-1(c) under the Act, or any successor
provision, as administered by the SEC, while the Plan is in effect, the
selection and nomination of the Independent Directors shall be committed solely
to the discretion of the Independent Directors then in office.
VIII. RECORDS
The Company shall preserve copies of the Plan, any related agreements and
all reports made pursuant to Section V of this Plan, for a period of not less
than six years from the date of the Plan, any such agreement, or any such
report, as the case may be. During the first two years, these records must be
stored in an easily accessible place.
IX. AGREEMENTS RELATED TO PLAN
Any agreement related to the Plan shall be in writing, and shall provide,
with respect to the Class A Shares of each Portfolio, that:
(a) the agreement may be terminated at any time, without the payment of
any penalty, by vote of a majority of the Independent Directors, or
by a majority of the outstanding voting securities of that Portfolio,
on not more than sixty (60) days' written notice;
(b) the agreement shall automatically terminate in the event of its
assignment; and
(c) the agreement shall continue in effect for a period of more than one
year from the date of its execution or adoption only so long as such
continuance is specifically approved at least annually by the Board
and the Independent Directors, in the manner described in Section
IV.A., above.
X. TERMINOLOGY
As used in this Plan, the terms "assignment," "interested person," and "majority
of the outstanding voting securities" shall have the respective meanings
specified in the Act and the rules and regulations thereunder, subject to such
exemptions as may be granted by the SEC. The term "Independent Directors" shall
mean those Directors of the Company who are not "interested persons" of the
Company (as that term is defined by Section 2(a)(19) of the Act) and who have no
direct or indirect financial interest in the operation of the Plan or any
agreements related thereto.
<PAGE>
SCHEDULE A
October 1, 1999
This Schedule is an integral part of the Plan Of Distribution Pursuant To
Rule 12b-1 of Monument Series Fund Class A Shares. Capitalized terms used in
this Schedule have the same meaning as given to them in the Agreement, except as
otherwise noted.
Name Of Portfolio Effective Date
Monument Internet Fund October 1, 1999
Monument Medical Sciences Fund October 1, 1999
Monument Telecommunications Fund October 1, 1999
<PAGE>
Exhibit 23(m)(2)
DISTRIBUTION PLAN PURSUANT TO RULE 12b-1 RELATING TO CLASS B
SHARES
4
PLAN OF DISTRIBUTION
PURSUANT TO RULE 12B-1
Monument Series Fund
Class B Shares
I. INTRODUCTION
This Plan sets out the terms and conditions by which Monument Series Fund,
Inc., a Maryland corporation (the "Company"), may, in effect, act as distributor
of the shares of which it is the issuer, pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "Act"), with respect to those classes of
shares designated as Class B Shares.
The Board of Directors ("Board") of the Company, including all of the
Independent Directors (as defined in this Plan), has approved this Plan on
behalf of the Class B Shares of each series of the Company listed on Schedule A
hereto (each, a "Portfolio," collectively, "Portfolios"), which may be amended
from time to time in accordance with this Plan ("Schedule A"). The Board
approved this Plan, with respect to the Class B Shares of each Portfolio, at an
in-person meeting, held on September 24, 1999, that was called for the purpose
of voting on this Plan.
In approving this Plan, the Board concluded, in the exercise of reasonable
business judgment, and in light of its fiduciary duties under applicable law,
including state law and Sections 36(a) and (b) of the Act, that there is a
reasonable likelihood that the Plan will benefit the Class B Shares of each
Portfolio and the shareholders those Portfolios.
II. AUTHORIZED PAYMENTS
The Company, on behalf of the Class B Shares of each Portfolio, shall pay
a fee ("Distribution Fee") to the principal underwriter and distributor of the
shares of the Portfolio ("Distributor"), for the activities and expenses
described in Section III. below. The maximum Distribution Fee payable by the
Company, on behalf of each Portfolio, is 1.00% on an annualized basis of the
average daily net assets of the Class B Shares of each Portfolio. Of that 1.00%,
the Portfolios may pay a fee for distribution of Class B Shares of 0.75%, and a
service fee of 0.25%.
The average daily net assets of the Class B Shares of each Portfolio will
be computed in the manner described in the then-current prospectus for the
Portfolio, as effective under the Securities Act of 1933. Each Portfolio will
accrue the Distribution Fee daily, as appropriate, and will pay the Fee monthly
or at such other intervals as the Board, in its sole discretion, determines to
be in the best interests of the Portfolio. Subject to maximum limit set forth
above, the Company, on behalf of a Portfolio, may pay the Distribution Fee for
activities and expenses borne in the past in connection with its shares as to
which no Distribution Fee was paid on account of such limitation.
III. ACTIVITIES AND EXPENSES
The Company, on behalf of each Portfolio, may use some or all of the
Distribution Fee to finance, directly or indirectly, any activity or expense
that is primarily intended to result in the sale of shares of the Class B Shares
of the Portfolio (within the meaning of Rule 12b-1(a)(2) under the Act),
including, for example:
(a) compensation to and expenses, including overhead and telephone
expenses, of employees of Distributor who engage in the distribution
of the Class B Shares of the Portfolio;
(b) printing and mailing of prospectuses, statements of additional
information, and periodic reports to prospective shareholders of
Class B Shares of the Portfolio;
(c) expenses relating to the development, preparation, printing, and
mailing of advertisements, sales literature, and other promotional
materials describing and/or relating to Class B Shares of the
Portfolio;
(d) compensation to financial intermediaries and broker-dealers to pay or
reimburse them for their services or expenses in connection with the
distribution of Class B Shares of the Portfolio;
(e) expenses of holding seminars and sales meetings
designed to promote the distribution of Class B Shares
of the Portfolio;
(f) expenses of obtaining information and providing explanations to
prospective shareholders of Class B Shares of the Portfolio regarding
its investment objectives and policies and other information
pertaining to it, including its performance;
(g) expenses of training sales personnel offering and
selling the Portfolio's Class B Shares; and
(h) expenses of personal services and/or maintenance of shareholder
accounts with respect to Class B Shares of the Portfolio.
IV. TERM AND TERMINATION
A. Term. The Plan shall take effect, with respect to the Class B Shares of
each Portfolio, as of the effective date ("Effective Date") set out next to the
name of the Portfolio on Schedule A. The Plan shall remain in effect, with
respect to the Class B Shares of each Portfolio, for a period of more than one
year after the Effective Date, only for so long as its continuance is
specifically approved, along with any related agreement(s), at least annually by
vote of a majority (or whatever greater or lesser percentage that may, from time
to time, be required by Section 12(b) of the Act and/or the rules thereunder, as
administered by the Securities and Exchange Commission ("SEC")) of both (a) the
Board, and (b) the Independent Directors, cast in person, at a meeting called
for the purpose of voting on the Plan and any related agreement(s).
B. Termination. The Plan may be terminated at any time, with respect to
each Portfolio, by vote of a majority of the Independent Directors or by vote of
a majority of the outstanding Class B voting securities of that Portfolio. If
this Plan is terminated, the obligation of the Company, on behalf of a
Portfolio, to make payments pursuant to this Plan shall also cease and the
Company shall not be required to make any payments beyond the termination date
even with respect to expenses incurred prior to the termination date.
V. REPORTS TO BOARD
Distributor shall provide to the Directors and the Directors shall review,
at least quarterly, a written report of the amounts of the Distribution Fee
expended and the purposes for which such expenditures were made.
VI. AMENDMENT OF PLAN
The Plan may not be amended, with respect to any Portfolio, to materially
increase the amount of the Distribution Fee permitted by Section II. of this
Plan until such amendment has been approved by a vote of at least the majority
of the outstanding voting securities of the Class B Shares of that Portfolio.
All material amendments to the Plan must be approved in the manner described in
Section IV.A above.
VII. SELECTION OF DIRECTORS
To the extent required by Rule 12b-1(c) under the Act, or any successor
provision, as administered by the SEC, while the Plan is in effect, the
selection and nomination of the Independent Directors shall be committed solely
to the discretion of the Independent Directors then in office.
VIII. RECORDS
The Company shall preserve copies of the Plan, any related agreements and
all reports made pursuant to Section V of this Plan, for a period of not less
than six years from the date of the Plan, any such agreement, or any such
report, as the case may be. During the first two years, these records must be
stored in an easily accessible place.
IX. AGREEMENTS RELATED TO PLAN
Any agreement related to the Plan shall be in writing, and shall provide,
with respect to the Class B Shares of each Portfolio, that:
(a) the agreement may be terminated at any time, without the payment of
any penalty, by vote of a majority of the Independent Directors, or
by a majority of the outstanding voting securities of that Portfolio,
on not more than sixty (60) days' written notice;
(b) the agreement shall automatically terminate in the
event of its assignment; and
(c) the agreement shall continue in effect for a period of more than one
year from the date of its execution or adoption only so long as such
continuance is specifically approved at least annually by the Board
and the Independent Directors, in the manner described in Section
IV.A., above.
X. TERMINOLOGY
As used in this Plan, the terms "assignment," "interested person," and "majority
of the outstanding voting securities" shall have the respective meanings
specified in the Act and the rules and regulations thereunder, subject to such
exemptions as may be granted by the SEC. The term "Independent Directors" shall
mean those Directors of the Company who are not "interested persons" of the
Company (as that term is defined by Section 2(a)(19) of the Act) and who have no
direct or indirect financial interest in the operation of the Plan or any
agreements related thereto.
Adopted as of October 1, 1999
<PAGE>
SCHEDULE A
October 1, 1999
This Schedule is an integral part of the Plan Of Distribution Pursuant To
Rule 12b-1 of Monument Series Fund Class B Shares. Capitalized terms used in
this Schedule have the same meaning as given to them in the Agreement, except as
otherwise noted.
Name Of Portfolio Effective Date
Monument Internet Fund October 1, 1999
Monument Medical Sciences Fund October 1, 1999
Monument Telecommunications Fund October 1, 1999
<PAGE>
Exhibit 23(m)(3)
DISTRIBUTION PLAN PURSUANT TO RULE 12b-1 RELATING TO CLASS C
SHARES
4
PLAN OF DISTRIBUTION
PURSUANT TO RULE 12B-1
Monument Series Fund
Class C Shares
I. INTRODUCTION
This Plan sets out the terms and conditions by which Monument Series Fund,
Inc., a Delaware business trust (the "Trust"), may, in effect, act as
distributor of the shares of which it is the issuer, pursuant to Rule 12b-1
under the Investment Company Act of 1940 (the "Act"), with respect to those
classes of shares designated as Class C Shares.
The Board of Directors ("Board") of the Trust, including all of the
Independent Directors (as defined in this Plan), has approved this Plan on
behalf of the Class C Shares of each series of the Trust listed on Schedule A
hereto (each, a "Portfolio," collectively, "Portfolios"), which may be amended
from time to time in accordance with this Plan ("Schedule A"). The Board
approved this Plan, with respect to the Class C Shares of each Portfolio, at an
in-person meeting, held on March 18, 2000, that was called for the purpose of
voting on this Plan.
In approving this Plan, the Board concluded, in the exercise of reasonable
business judgment, and in light of its fiduciary duties under applicable law,
including state law and Sections 36(a) and (b) of the Act, that there is a
reasonable likelihood that the Plan will benefit the Class C Shares of each
Portfolio and the shareholders those Portfolios.
II. AUTHORIZED PAYMENTS
The Trust, on behalf of the Class C Shares of each Portfolio, shall pay a
fee ("Distribution Fee") to the principal underwriter and distributor of the
shares of the Portfolio ("Distributor"), for the activities and expenses
described in Section III. below. The maximum Distribution Fee payable by the
Trust, on behalf of each Portfolio, is 1.00% on an annualized basis of the
average daily net assets of the Class C Shares of each Portfolio. Of that 1.00%,
the Portfolios may pay a fee for distribution of Class C Shares of 0.75%, and a
service fee of 0.25%.
The average daily net assets of the Class C Shares of each Portfolio will
be computed in the manner described in the then-current prospectus for the
Portfolio, as effective under the Securities Act of 1933. Each Portfolio will
accrue the Distribution Fee daily, as appropriate, and will pay the Fee monthly
or at such other intervals as the Board, in its sole discretion, determines to
be in the best interests of the Portfolio. Subject to maximum limit set forth
above, the Trust, on behalf of a Portfolio, may pay the Distribution Fee for
activities and expenses borne in the past in connection with its shares as to
which no Distribution Fee was paid on account of such limitation.
III. ACTIVITIES AND EXPENSES
The Trust, on behalf of each Portfolio, may use some or all of the
Distribution Fee to finance, directly or indirectly, any activity or expense
that is primarily intended to result in the sale of shares of the Class C Shares
of the Portfolio (within the meaning of Rule 12b-1(a)(2) under the Act),
including, for example:
(a) compensation to and expenses, including overhead and telephone
expenses, of employees of Distributor who engage in the distribution
of the Class C Shares of the Portfolio;
(b) printing and mailing of prospectuses, statements of additional
information, and periodic reports to prospective shareholders of
Class C Shares of the Portfolio;
(c) expenses relating to the development, preparation, printing, and
mailing of advertisements, sales literature, and other promotional
materials describing and/or relating to Class C Shares of the
Portfolio;
(d) compensation to financial intermediaries and broker-dealers to pay or
reimburse them for their services or expenses in connection with the
distribution of Class C Shares of the Portfolio;
(e) expenses of holding seminars and sales meetings
designed to promote the distribution of Class C Shares
of the Portfolio;
(f) expenses of obtaining information and providing explanations to
prospective shareholders of Class C Shares of the Portfolio regarding
its investment objectives and policies and other information
pertaining to it, including its performance;
(g) expenses of training sales personnel offering and
selling the Portfolio's Class C Shares; and
(h) expenses of personal services and/or maintenance of shareholder
accounts with respect to Class C Shares of the Portfolio.
IV. TERM AND TERMINATION
A. Term. The Plan shall take effect, with respect to the Class C Shares of
each Portfolio, as of the effective date ("Effective Date") set out next to the
name of the Portfolio on Schedule A. The Plan shall remain in effect, with
respect to the Class C Shares of each Portfolio, for a period of more than one
year after the Effective Date, only for so long as its continuance is
specifically approved, along with any related agreement(s), at least annually by
vote of a majority (or whatever greater or lesser percentage that may, from time
to time, be required by Section 12(b) of the Act and/or the rules thereunder, as
administered by the Securities and Exchange Commission ("SEC")) of both (a) the
Board, and (b) the Independent Directors, cast in person, at a meeting called
for the purpose of voting on the Plan and any related agreement(s).
B. Termination. The Plan may be terminated at any time, with respect to
each Portfolio, by vote of a majority of the Independent Directors or by vote of
a majority of the outstanding Class C voting securities of that Portfolio. If
this Plan is terminated, the obligation of the Trust, on behalf of a Portfolio,
to make payments pursuant to this Plan shall also cease and the Trust shall not
be required to make any payments beyond the termination date even with respect
to expenses incurred prior to the termination date.
V. REPORTS TO BOARD
Distributor shall provide to the Directors and the Directors shall review,
at least quarterly, a written report of the amounts of the Distribution Fee
expended and the purposes for which such expenditures were made.
VI. AMENDMENT OF PLAN
The Plan may not be amended, with respect to any Portfolio, to materially
increase the amount of the Distribution Fee permitted by Section II. of this
Plan until such amendment has been approved by a vote of at least the majority
of the outstanding voting securities of the Class C Shares of that Portfolio.
All material amendments to the Plan must be approved in the manner described in
Section IV.A above.
VII. SELECTION OF DIRECTORS
To the extent required by Rule 12b-1(c) under the Act, or any successor
provision, as administered by the SEC, while the Plan is in effect, the
selection and nomination of the Independent Directors shall be committed solely
to the discretion of the Independent Directors then in office.
VIII. RECORDS
The Trust shall preserve copies of the Plan, any related agreements and
all reports made pursuant to Section V of this Plan, for a period of not less
than six years from the date of the Plan, any such agreement, or any such
report, as the case may be. During the first two years, these records must be
stored in an easily accessible place.
IX. AGREEMENTS RELATED TO PLAN
Any agreement related to the Plan shall be in writing, and shall provide,
with respect to the Class C Shares of each Portfolio, that:
(a) the agreement may be terminated at any time, without the payment of
any penalty, by vote of a majority of the Independent Directors, or
by a majority of the outstanding voting securities of that Portfolio,
on not more than sixty (60) days' written notice;
(b) the agreement shall automatically terminate in the event of its
assignment; and
(c) the agreement shall continue in effect for a period of more than one
year from the date of its execution or adoption only so long as such
continuance is specifically approved at least annually by the Board
and the Independent Directors, in the manner described in Section
IV.A., above.
X. TERMINOLOGY
As used in this Plan, the terms "assignment," "interested person," and "majority
of the outstanding voting securities" shall have the respective meanings
specified in the Act and the rules and regulations thereunder, subject to such
exemptions as may be granted by the SEC. The term "Independent Directors" shall
mean those Directors of the Trust who are not "interested persons" of the Trust
(as that term is defined by Section 2(a)(19) of the Act) and who have no direct
or indirect financial interest in the operation of the Plan or any agreements
related thereto.
Adopted effective May 15, 2000
<PAGE>
SCHEDULE A
May 15, 2000
This Schedule is an integral part of the Plan of Distribution Pursuant To
Rule 12b-1 of Monument Series Fund Class C Shares. Capitalized terms used in
this Schedule have the same meaning as given to them in the Agreement, except as
otherwise noted.
Name Of Portfolio Effective Date
Monument Internet Fund May 15, 2000
Monument Medical Sciences Fund May 15, 2000
Monument Telecommunications Fund May 15, 2000
Monument Digital Technology Fund May 15, 2000
Monument New Economy Fund May 15, 2000
<PAGE>
Exhibit 23(n)
RULE 18f-3
MULTIPLE CLASS PLAN
WHEREAS, Monument Series Fund, a Delaware business trust (the "Trust"),
engages in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the Trust is authorized to create separate series, each with its
own separate investment portfolio, and the beneficial interest in each such
series will be represented by a separate series of shares (each series is
hereinafter individually referred to as a "Fund" and collectively, the "Funds");
WHEREAS, the Trust, on behalf of the Funds listed on Schedule A, as such
Schedule A may be amended from time to time, desires to adopt a Multiple Class
Plan pursuant to Rule 18f-3 under the 1940 Act ("Plan");
WHEREAS, the Trust, on behalf of the Funds, employs Monument Advisors, Inc.
("the Advisor") as its investment adviser; Commonwealth Shareholder Services,
Inc. ("the Administrator") as its administrator; and Fund Services, Inc.("the
Transfer Agent") as its transfer agent; and Monument Distributors, Inc. (the
"Distributor") as distributor of the securities of the Funds; and
WHEREAS, the Board of Trustees of the Trust, including a majority of the
Trustees of the Trust who are not "interested persons", as defined in the 1940
Act, of the Trust, the Advisor, or the Distributors ("Independent Trustees")
have found the Plan, as proposed, to be in the best interests of each class of
shares individually, each Fund, and the Trust as a whole;
NOW, THEREFORE, the Trust, on behalf of the Funds, hereby adopts the Plan,
in accordance with Rule 18f-3 under the 1940 Act on the following terms and
conditions:
1. Features of the Classes. Each of the Funds shall offer, at the
discretion of the Board and as indicated on Schedule A, up to four classes of
shares: "Class A Shares", "Class B Shares", "Class C Shares" and "Class Y
Shares." Shares of each class of a Fund shall represent an equal pro rata
interest in such Fund and, generally, shall have identical voting, dividend,
distribution, liquidation, and other rights, preferences, powers, restrictions,
limitations, qualifications, and terms and conditions, except that: (a) each
class shall have a different designation; (b) each class of shares shall bear
any Class Expenses, as defined in Section 3 below; (c) each class shall have
exclusive voting rights on any matter submitted to shareholders that relates
solely to its distribution arrangements; and (d) each class shall have separate
voting rights on any matter submitted to shareholders in which the interests of
one class different from the interests of any other class. In addition, Class A,
Class B, Class C and Class I Y Shares of a Fund shall have the features
described in Sections 2, 3, and 4 below.
2. Distribution Fee Structure.
(a) Class A Shares. Class A Shares of a Fund shall be offered at their then
current net asset value ("NAV") plus an initial sale charge as set
forth in the then-current prospectus. Pursuant to Rule 12b-1 under the
1940 Act, on behalf of the Funds, the Trust has adopted a distribution
plan ("Distribution Plan"), as amended. The Distribution Plan
authorizes a Fund to make payments for distribution services at
an annual rate of up to .50% of the average daily net assets of a
Fund's Class A Shares, which may include a service fee up to 0.25%.
Certain Class A Shares are offered without an initial sales charge.
If shares are purchased without a sales charge and are redeemed
within one year, those shares are subject to a 1% charge upon
redemption.
(b) Class B Shares. Class B Shares of a Fund shall be offered at their then
current NAV without the imposition of an initial sales charge but are
subject to a contingent deferred sales charge ("CDSC") payable upon
certain redemptions as set forth in the Fund's then-current prospectus.
Class B Shares may be exchanged for Class B Shares of another Fund of
the company. Class B Shares of a Fund will automatically convert to
Class A Shares of the Fund on the first business day of the month in
which the eighth anniversary of the issuance of the Class B Shares
occurs. The conversions will be effected at the relative net assets
values per share of the two classes. Class B Shares pay a Rule
12b-1 fee of up to 0.75% (annualized) of the average daily net assets
of a Fund's Class B Shares, as described in the Distribution Plan,
as amended. Brokers, dealers and other institutions may maintain
Class B shareholder accounts and provide personal services to Class
B shareholders, and the Funds may pay up to 0.25% as a fee for such
services. Services related to the sale of Class B Shares may include,
but are not limited to, preparation, printing and distribution of
prospectuses, sales literature and advertising materials by the
Company's distributor, or, as applicable, brokers, dealers or other
institutions; commissions, incentive compensation to, and expenses
of, account executives or other employees of the Company's distributor
or brokers, dealers and other institutions; overhead and other office
expenses of the Company's distributor attributable to distribution
or sales support activities; opportunity costs related to the
foregoing (which may be calculated as a carrying charge on the
Company's distributor unreimbursed expenses) incurred in connection
with distribution or sales support activities. The overhead and other
office expenses referenced above may include, without limitation,
(a) the expenses of operating the Company's distributor's offices in
connection with the sale of the Class B Shares of the Funds,
including lease costs, the salaries and employee benefit costs of
administrative, operations and support activities, (b) the costs of
client sales seminars and travel related to distribution and sales
support activities, and (c) other expenses relating to distribution
and sales support activities.
(c) Class C Shares. Class C Shares of a Fund shall be offered at net asset
value ("NAV") plus an initial sale charge as set forth in the
then-current prospectus. Pursuant to Rule 12b-1 under the 1940 Act, a
Fund may make payments for distribution services at an annual rate of
up to 0.75% of the average daily net assets of a Fund's Class C Shares,
plus a service fee of up to 0.25%. Shares redeemed within one year
of purchase may be subject to a 1% charge upon redemption.
(d) Class Y Shares. Class I Shares of a Fund shall be offered at their
then-current NAV without the imposition of an initial sales
charge, CDSC, asset-based sales or service fee under the Distribution
Plan (discussed above). Class I Shares are only offered to certain
investors meeting the minimum investment as described in the then-
current prospectus offered to Class I Share investors.
3. Allocation of Income and Expenses.
(a) The net asset value of all outstanding shares representing interests in
a Fund shall be computed on the same days and at the same time. For
purposes of computing net asset value, the gross investment income
of each Fund shall be allocated to each class on the basis of the
relative net assets of each class at the beginning of the day adjusted
for capital share activity for each class as of the prior day as
reported by the Fund's transfer agent. Realized and unrealized
gains and losses for each class will be allocated based on relative
net assets at the beginning of the day, adjusted for capital share
activity for each class of the prior day, as reported by the Fund's
transfer agent. To the extent practicable, certain expenses,
(other than Class Expenses as defined below, which shall be allocated
more specifically), shall be allocated to each class based on the
relative net assets of each class at the beginning of the day,
adjusted for capital share activity for each class as of the prior day,
as reported by the Fund's transfer agent. Allocated expenses to each
class shall be subtracted from allocated gross income. These expenses
include:
(1) Expenses incurred by the Trust (for example, fees of Trustees,
auditors, insurance costs, and legal counsel) that are not
attributable to a particular Fund or class of shares of such
Fund ("Trust Level Expenses"); and
(2) Expenses incurred by each Fund that are not attributable to
any particular class of the Fund's shares (for example,
advisory fees, custodial fees, banking charges, organizational
costs, federal and Blue Sky registration fees, or other
expenses relating to the management of the Fund's assets)
("Fund Expenses").
(b) Class Expenses. Expenses attributable to a particular class ("Class
Expenses") shall be limited to: (i) payments made pursuant to the
Distribution Plan; (ii)transfer agent fees attributable to a specific
class; (iii) printing and postage expenses related to preparing and
distributing materials such as shareholder reports, prospectuses
and proxies to current shareholders of a specific class; (iv)the
expense of administrative personnel and services to support the
shareholders of a specific class, including, but not limited to,
fees and expenses under an administrative service agreement; (v)
litigation or other legal expenses relating solely to one class;
and (vi) Trustees' fees incurred as a result of issues relating to
one class. Expenses in category (i) above must be allocated to the
class for which such expenses are incurred. All other "Class
Expenses" listed in categories (ii)-(vi) above may be allocated to
a class but only if an officer of the Trust has determined, subject
to Board approval or ratification, which of such categories of
expenses will be treated as Class Expenses consistent with applicable
legal principles under the 1940 Act and the Internal Revenue Code of
1986 ("Code").
(c) Therefore, expenses of the Fund shall be apportioned to each class of
shares depending on the nature of the expense item. Trust Level
Expenses and Fund Expenses shall be allocated among the classes of
shares based on their relative net asset values. Approved Class
Expenses shall be allocated to the particular class to which they are
attributable. In addition, certain expenses may be allocated
differently if their method of imposition changes. Thus, if a
Class Expense can no longer be attributed to a class, it shall be
charged to the Fund for allocation among the classes, as determined
by the Board of Trustees. Any additional Class Expenses not
specifically identified above that are subsequently identified and
determined to be properly allocated to one class of shares shall not be
so allocated until approved by the Board of Trustees of the Trust in
light of the requirements of the 1940 Act and the Code.
4. Exchange Privileges. The Class A, Class B, Class C and Class I Y Shares of
a Fund may be exchanged at their relative NAVs for: (i) Class A, Class B,
Class C or Class I Y Shares within the same Class of another Monument
Series Fund or (ii) if the Monument Series Fund does not have multiple
classes of shares, the existing shares of another Monument Series Fund.
Purchases of Fund shares by exchange are subject to the same minimum
investment requirements and other criteria imposed for purchases made in
any other manner.
5. Conversion Features. Class B shares of the Fund will automatically convert
to Class A shares of the respective Fund, based on the relative net asset
values per share of the two classes, no later than the month following the
eighth anniversary of the initial issuance of such Class B shares of the
Fund. Class A, Class B and Class Y Shares do not have conversion features.
6. Quarterly and Annual Report. The Trustees shall receive quarterly and
annual written reports concerning all allocated Class Expenses and
expenditures under the Distribution Plan complying with paragraph
(b)(3)(ii) of Rule 12b-1. The reports, including the allocations upon which
they are based, shall be subject to the review and approval of the
Independent Trustees in the exercise of their fiduciary duties.
7. Waiver or Reimbursement of Expenses. Expenses may be waived or reimbursed
by the Advisor or any other provider of services to the Funds without the
prior approval of the Trust's Board of Trustees.
8. Effectiveness of Plan. The Plan shall not take effect until it has been
approved by votes of a majority of both (a) the Trustees of the Trust and
(b) those Trustees of the Trust who are not "interested persons" of the
Trust, the Advisor, or the Distributor (as defined in the 1940 Act) and who
have no direct or indirect financial interest in the operation of this
Plan, cast in person at a meeting (or meetings) called for the purpose of
voting on this Plan.
9. Material Modifications. This Plan may not be amended to materially modify
its terms unless such amendment is approved in the manner provided for
initial approval in Paragraph 8 hereof.
10. Limitation of Liability. The Trustees and the shareholders of the Funds
shall not be liable for any obligations of the Funds under this Plan, and
any person in asserting any rights or claims under this Plan shall look
only to the assets and property of the Funds in settlement of such right or
claim and not to such Trustees or shareholders.
IN WITNESS WHEREOF, the Trust, on behalf of the Funds, has adopted this
Multiple Class Plan effective as of the 7th day of August, 1999.
Monument Series Fund
By: David A. Kugler
President
SCHEDULE A
The Funds of the Trust currently subject to this Multiple
Class Plan are as follows:
Date of Addition
Fund/Class to this Multiple Class Plan
Monument Internet Fund
* Class A August 7, 1999
* Class B August 7, 1999
* Class C June xx, 2000
* Class Y August 7, 1999
Monument Medical Sciences Fund
* Class A August 7, 1999
* Class B August 7, 1999
* Class C June xx, 2000
* Class Y August 7, 1999
Monument Telecommunications Fund
* Class A August 7, 1999
* Class B August 7, 1999
* Class C June xx, 2000
* Class Y August 7, 1999
Monument Digital Technology Fund
* Class A June xx, 2000
* Class B June xx, 2000
* Class C June xx, 2000
* Class Y June xx, 2000
Monument New Economy Fund
* Class A June xx, 2000
* Class B June xx, 2000
* Class C June xx, 2000
* Class Y June xx, 2000
Exhibit 23(p)
CODE OF ETHICS
14
Monument Series Fund, Inc.
Monument Advisors, Ltd.
and
Monument Distributors, Inc.
Code of Ethics
1. Introduction
Monument Series Fund, Inc. ("Monument Funds"), Monument
Advisors, Ltd. ("Advisors") and Monument Distributors, Inc.
("Distributors") recognize that they have fiduciary duties to
their shareholders and clients, and recognize the importance of
maintaining high ethical standards in the conduct of business.
2. Purpose
The purpose of this Code of Ethics is to make it clear what ethical standards
you, as an officer, director, or employee of Monument Funds, Advisors, or
Distributors, are expected to follow.
In addition, this Code of Ethics sets forth implementing procedures designed
to prevent Access Persons (defined below) of the Funds from engaging in any
conduct prohibited by this code.
3. Legal Background
Rule 17j-1 under the Investment Company Act of 1940 ("Act") makes it unlawful
for any affiliated person of or principal underwriter for an investment
company, or any affiliated person of an investment adviser of or principal
underwriter for an investment company, in connection with the purchase or
sale, directly or indirectly, by the person, relating to a security held or
to be acquired by an investment company:
a. To employ any device, scheme or artifice to defraud the investment
company;
b. To make any untrue statement of a material fact to the investment company,
or omit to state a material fact necessary in order to make the statements
made to the investment company, in light of the circumstances under which
they are made, not misleading; c. To engage in any act, practice or course
of business that operates or would operate as a fraud or deceit on the
investment company; or d. To engage in any manipulative practice with
respect to an investment company.
4. Duties of Officer, Directors and Employees
a. General Fiduciary Duty. You, being in a position of trust, have a fiduciary
duty to the shareholders of the Monument Funds and to the clients of
Advisors and Distributors to maintain a standard of professional conduct
higher than that expected of the ordinary man or woman on the street.
The standards of such conduct are spelled out in a body of law, but they
may be expressed in one simple principal: a fiduciary must place his first
duty to another. In your case, your first duty is to the Monument
Fund's shareholders and the clients of Advisors and Distributors.
b. Conflicts of Interest. When there is a conflict of interest or a potential
conflict of interest between your own interests and the interests of the
Monument Funds' shareholders or the clients of Advisors or Distributors,
you must put their interests first. You have a fiduciary duty timely to
disclose to your supervisor and Monument Funds' compliance officer any
financial interest or other conflict of interest, direct or indirect, that
you may have. You may not make any arrangement with any third party, formal
or informal, directly or indirectly, in which you receive any financial
benefit as a result of your position with Monument Funds, Advisors, or
Distributors. You may not share in any profits, make any guarantees, or
promise any profits to any other person, based on your position as an
officer, director or employee of the Monument Funds, Advisors, or
Distributors.
c. Gifts, Gratuities and the Like. You may not accept any payment, fee,
commission, gift, or services in lieu of payment, from any person or entity
who does or may do business with Monument Funds, Advisors, or Distributors.
An exception may be made in the case of a gift of nominal value (under
$100) under circumstances in which it would be awkward and inappropriate to
decline.
d. Outside Employment. You may not accept any outside employment or accept any
outside remuneration without prior written clearance from Monument Funds'
compliance officer. You may not engage in any securities business, attempt
to sell any securities, limited offerings, insurance product, or otherwise,
that is not supervised by Advisors or Distributors. You may not be
registered with or employed by any broker-dealer other than Distributors,
without the written approval of Monument Funds' compliance officer.
e. Service as a Board Member. You may not serve on the board of a publicly
traded company unless prior authorization is obtained from the Monument
Funds' compliance officer, based on a determination that (i) the business
of such company does not conflict with the interests of the Monument Funds,
(ii) service would be consistent with the best interests of the Monument
Funds and their shareholders, and (iii) service is not prohibited by law.
If such service is authorized, procedures shall be put in place to isolate
you from those making investment decisions on behalf of Monument Funds and
Advisors' clients.
f. Pre-clearance of Personal Securities Transactions. You must obtain prior
written approval from the Monument Funds' compliance officer or a principal
of Advisors or Distributors before purchasing or selling, directly or
indirectly, any Restricted Security (defined below) in any account over
which you exercise beneficial ownership (defined below).
Approval will not be granted for purchase or sale of any Restricted
Security (or any related option or security convertible into any
Restricted Security) for which the Monument Funds or Advisors' clients
have a pending purchase or sale order, or have had a purchase or sale
transaction within the previous three business days.
A written record of any pre-clearance approval shall be
maintained by Monument Funds' compliance officer.
g. Pre-clearance of Personal Securities Transactions of Independent Directors.
A special provision applies to an Access Person who is also an independent
director (defined below) of the Monument Funds. Such independent director
must obtain prior written approval from Monument Funds' compliance officer
to effect a transaction in a Covered Security (defined below) in any
account over which he or she knew or, in the ordinary course of fulfilling
his or her official duties as a director of Monument Funds, should have
known, that during the 15-day period immediately preceding or after the
date of such transaction by the independent director, such security is or
was purchased or sold by a Monument Fund, or such purchase or sale is or
was being considered by a Monument Fund.
h. Initial Public Offerings. You may not participate in any initial public
offering (defined below) of any security in any account over which you
exercise beneficial ownership.
i. Limited Offerings. You may not engage in any transaction as a result of
which you acquire beneficial ownership in a limited offering (defined
below), without obtaining the prior written approval of Monument Funds'
compliance officer or of a principal of Advisors or Distributors.
If you have obtained prior approval and made an investment in a private
placement, you must disclose that investment to Advisors' officers and
portfolio managers when they consider an investment in the private
placement issuer on behalf of the Monument Funds or Advisors' or
Distributors' clients.
j. Brokerage Accounts. You may open a personal brokerage account at one or
more broker-dealers. You are required to disclose to the broker-dealer that
you are an officer, director or employee of the Monument Funds, Advisors,
or Distributors. You are required to instruct the broker-dealer to send
duplicate confirmations and duplicate statements to your employer, in care
of the Monument Funds' compliance officer.
5. Definitions
a. "Access Person" means any director, officer, or Advisory
Person (defined below) of the Monument Funds, Advisors, or
Distributors.
b. "Advisory Person" means any employee of the Monument Funds
or Advisors who, in connection with his or her regular
functions or duties, makes, participates in, or obtains
information regarding the purchase or sale of Covered
Securities (defined below) by a Fund, or whose functions
relate to the making of any recommendations with respect to
the purchases or sales; and any natural person in a control
relationship to the Monument Funds or Advisors who obtains
information concerning recommendations made to the Monument
Funds with regard to the purchase or sale of Covered
Securities by the Monument Funds.
c. "Beneficial Ownership" means ownership of securities or securities accounts
by or for the benefit of a person, or such person's family member (defined
below) including any account in which the employee or family member of that
person holds a direct or indirect beneficial interest, retains
discretionary investment authority or exercise a power of attorney.
"Beneficial Ownership" is interpreted in the same manner as it would be
under Rule 16a-1(a)(2) under the Securities Exchange Act of 1934 ("Exchange
Act") in determining whether a person is the beneficial owner of a security
for purposes of section 16 of the Exchange Act and the rules thereunder.
Any report required by this Code of Ethics may contain a statement that the
report will not be construed as an admission that the person making the
report has any direct or indirect beneficial ownership in the Covered
Security to which the report relates.
d. "Compliance Officer" means the person appointed by the
directors of the Monument Funds to administer the Code of
Ethics.
e. "Control" means the power to exercise a controlling influence over the
management of policies of a company, as defined in Section 2(a)(9) of the
Act.
f. "Covered Security" means a security as defined in section 2(a)(36) of the
Act, except that it does not include: (i) direct obligations of the
Government of the United States; (ii) bankers' acceptances, bank
certificates of deposit, commercial paper and high quality short-term debt
instruments, including repurchase agreements; and (iii) shares issued by
open-end investment companies.
g. "Family member" means any person's spouse, child or other relative, whether
related by blood, marriage or otherwise, who either resides with, is
financially dependent upon, or whose investments are controlled by that
person. The term "family member" also includes any unrelated individual
whose investments are controlled and whose financial support is materially
contributed to by that person.
h. "Independent Director" means a director of the Monument Funds who is not
an "interested person" of Monument Funds within the meaning of Section
2(a)(19) of the Act.
i. "Initial Public Offering" means an offering of securities registered under
the Securities Act of 1933, the issuer of which, immediately before the
registration, was not subject to the reporting requirements of Sections 13
or 15(d) of the Securities Exchange Act of 1934.
j. "Investment Adviser" means any entity listed in the Monument Funds'
current prospectus that provides investment advice and investment
management services to Monument Funds.
k. "Investment Personnel" means any person who, in connection with his or her
regular duties makes, participates in, or recommends the purchase or sale
of a security for any of the Funds.
l. "Limited Offering" means an offering that is exempt from registration
under the Securities Act of 1933 pursuant to Section 4(2) or Section 4(6)
or pursuant to Rule 504, Rule 505, or Rule 506 under the Securities Act of
1933.
m. "Portfolio Manager" means any person entrusted with the
direct responsibility and authority to make investment
decisions affecting any of Monument Funds.
n. "Purchase or sale of a security" includes, among other things, the writing
of an option to purchase or sell a security and the exercise of a stock
option.
o. "Restricted Security" means any security for which Monument Funds or
Advisors' clients have a pending purchase or sale order. Advisors shall
maintain a daily list of restricted securities.
p. "Security held or to be acquired" means any security which, within the
most recent 15 days, (i) is or has been held by a Monument Fund or
Advisors' client, or (ii) is being or has been considered by a Monument
Fund or Advisors for purchase on behalf of a client.
q. "Security is being considered for purchase or sale" when a recommendation
to purchase or sell a security has been made and communicated or, with
respect to the person making the recommendation, when such person
considers making such a recommendation or when there is an outstanding
order to purchase or sell the security.
6. Reports by Access Persons
Monument Funds' Code of Ethics requires Access Persons to file four reports:
initial holding reports, quarterly transaction reports, annual holding
reports, and annual certificates of compliance.
a. Initial Holding Reports
No later than 30 days after you have been informed that you are an
Access Person, you are required to submit a report to the Monument
Fund's compliance officer showing: (1) the name, (2) the number of
shares (if an equity security), and (3) the principal amount (if a bond
or similar instrument denominated in dollars) of each Covered Security
(defined above) in which you had any direct or indirect beneficial
ownership when you became named an Access Person. Negative reports are
required. A truthful negative report is satisfactory if you sign, date
and submit a report marked "No Securities Holdings."
b. Quarterly Transactions Reports
No later than ten calendar days after the end of each calendar quarter,
you are required to submit a two-part report to the Monument Fund's
compliance officer showing:
(1) Part One. Transactions. With respect to any transaction during the previous
quarter in a Covered Security in which you had any direct or indirect
beneficial ownership: (a) the date of the transaction; (b) the title (name)
of the security; (c) the principal amount, interest rate and maturity date
(if applicable, for a non-equity, bond or similar security); (d) the number
of shares (if an equity security); (b) the nature of the transaction (i.e.
purchase, sale or any other type of acquisition or disposition); (c) the
price of the Covered Security at which the transaction was effected; (d)
the name of the broker, dealer or bank with or through which the
transaction was effected; and (e) the date you signed the report and
transmitted it to the Monument Fund's compliance officer. Negative reports
are required. A truthful negative report is satisfactory if you sign, date
and submit a report marked "No Securities Transactions."
(2) Part Two. Account Established. With respect to any account you established
in which any securities (note: not just Covered Securities) were held
during the previous quarter for your direct or indirect benefit: (a) the
name of the broker, dealer or bank with whom you established the account;
(b) the date the account was established; and (c) the date you signed the
report and transmitted it to the Monument Fund's compliance officer. A
truthful negative report is satisfactory if you sign, date and submit a
report marked "No Accounts Established."
Access Persons are not required to file quarterly reports for
quarters ending prior to December 31, 1999, for the purchase and sale
of any Restricted Security, provided that the Access Person caused
the broker-dealer effecting any such transaction to mail duplicate
confirmations and brokerage statements to the Monument Funds'
compliance officer.
c. Annual Holdings Reports Holding Reports. Annually, no later than January
10th, you are required to submit a report, with information current no
older than 30 days before the report is submitted, showing for any Covered
Security in which you had any direct or indirect beneficial interest: (1)
the title or name of each security; (2) the name of any broker, dealer or
bank with whom you maintain such an account; and (3) the date you signed
the report and transmitted it to the Monument Fund's compliance officer. A
truthful negative report is satisfactory if you sign, date and submit a
report marked "No Covered Securities."
d. Annual Certificate of Compliance. Annually, no later than January 10, you
are required to submit a report certifying that you have a copy of the
Monument Funds' Code of Ethics a copy of the Monument Funds' Written
Supervisory Procedures that you understand them, and that you are in
compliance with their provisions.
6. Exceptions to Reports by Access Persons
a. A person need not make a report required under the immediately preceding
section of this Code of Ethics with respect to transactions effect for,
and Covered Securities held in, an account over which the person has no
direct or indirect influence or control.
b. A director of Monument Funds who is an independent director
(defined above) need not (1) file an initial holdings
report; (2) need not file quarterly transaction reports; and
(3) need not direct his or her broker to provide duplicate
confirmations of personal securities transactions to
Monument Funds' compliance officer, unless the director
knew, or, in the ordinary course of fulfilling his or her
official duties as a Monument Funds director, should have
known that during the 15 day period immediately before or
after the director's transaction in a Covered Security, a
Monument Fund purchased or sold the Covered Security, or the
Monument Fund or Advisors considered purchasing or selling
the Covered Security.
However, each independent is required to file annual holdings reports and
annual certification of compliance, called for by this Code of Ethics.
7. Sanctions
Your employer wishes you success in your personal life and does not wish to
impose any unreasonable sanction. When in doubt about contemplated conduct,
or past conduct, it makes sense to discuss it frankly with your supervisor
and/or Monument Funds' compliance officer. They have a duty to treat you
fairly. That being said, violations of this Code of Ethics expose you to
appropriate sanctions, including, but not limited to, a letter of censure,
suspension with or without pay, or termination of employment. In addition,
you shall be require to disgorge any profits realized on personal securities
transactions found to be in violation of this Code of Ethics.
8. Notification of Reporting Obligation.
Monument Funds' compliance officer shall identify all Access Persons and any
other persons who may not meet the definition of Access Person but who,
nevertheless, are required to make the reports required by this Code of
Ethics. The Monument Funds' compliance officer shall inform those persons
of their reporting obligation.
9. Review of Reports
Monument Funds' compliance officer shall establish procedures to insure that
required reports are submitted timely; to notify persons whose reports are
late or otherwise do not meet the requirements of this Code of Ethics; and to
notify Monument Funds' management of any significant violation of this Code
of Ethics, together with recommendations of remedial actions and sanctions,
if appropriate.
10. Reports to Board of Directors
The Monument Funds' compliance officer shall prepare an annual report for the
Board for Directors which, at a minimum, summarizes the existing procedures
concerning personal investing any changes in the procedures made during that
year; identifies any violations requiring significant remedial action during
the past year; and identifies any recommended changes in existing
restrictions or procedures.
11. Recordkeeping
Monument Funds shall maintain the following records:
a. Code of Ethics. A copy of each Code of Ethics that is in
effect, or at any time within the past five years was in
effect, shall be maintained in an easily accessible place.
b. Record of Violations. A record of any violation of the Code of Ethics,
and of any action taken as a result of the violation, shall be
maintained in an easily accessible place for at least five years after
the end of the fiscal year in which the violation occurs.
c. Reports by Access Persons. A copy of each report made by an Access
Person, including any information provided in lieu of reports, shall be
maintained for at least five years after the end of the fiscal year in
which the report is made, the first two years in an easily accessible
place.
d. Records of Persons. A record of all persons, currently or within the
past five years, who are or were required to make reports, or who are or
were responsible for reviewing these reports, shall be maintained in an
easily accessible place for at least five years.
e. Reports to Funds' Board of Directors. A copy of each report to Funds'
Board of Directors shall be maintained for at least five years after the
end of the fiscal year in which it is made, the first two years in an
easily accessible place.
f. Records of Decisions. A record of any decision, and the reasons
supporting the decision, to approve the acquisition by investment
personnel of investments in IPOs and Limited Offerings shall be
maintained for at least five years after the end of the fiscal year in
which the approval is granted, the first two years in an easily
accessible place.
Attachments:
Initial Holding Report
Quarterly Transaction Report
Annual Holding Report
Annual Certification of Compliance
Securities Transaction Pre-clearance Form
Monument Series Fund, Inc.
Access Person Initial Holding Report
I certify that as of ____________ (date) the list below is a complete list of
Covered Securities in which I had any direct or indirect beneficial ownership
and includes each broker, dealer or bank at which I maintain an account in which
any securities (not just Covered Securities) were held for my direct or indirect
beneficial ownership when I became an Access Person:
- ----------------------------------------------------
Title or Name No. of Principal Broker,
of Security Shares Amount Dealer
(Bonds) or Bank
- ----------------------------------------------------
- -------------------------
Signature
- -------------------------
(Name printed legibly)
Date
Monument Series Fund, Inc.
Quarterly Transaction Report
Calendar quarter ended______________.
I certify that the transactions listed below are all of the securities
transactions in Covered Securities effected in all accounts in which I had any
direct or indirect beneficial ownership during the quarter.
- --------------------------------------------------------------
Trade Type of Name of No. of Princ. Price Broker/
Date of Trans-actSecurity Shares Amt/Rate/Mat Dealer
Trans-actiB/S (Bonds)
Other
P= Purchase
S= Sale
E= Exercise of option
O=Other
- -------------------------
Signature
- -------------------------
(Name printed legibly)
Date
Monument Series Fund, Inc.
Annual Securities Holding Report for the year ended December 31,
- --------
I certify that the securities listed below are all of the Securities of which I
had Beneficial Ownership:
- ----------------------------------------------------------
Title/Type of No. of shares Principal Amount
Security----------------------------------------------------------
- -------------------------
Signature
- -------------------------
(Name printed legibly)
Date
Monument Series Fund, Inc.
Annual Certification of Compliance with Written Supervisory
Procedures and Code of Ethics
I certify that I have received a copy of Monument Funds' Written Supervisory
Procedures ("Procedures") and Code of Ethics ("Code") and that I have read and
understood the Procedures and the Code to the best of my ability. I acknowledge
that I am subject to the Procedures and the Code and have complied with each of
the provisions to which I am subject.
I understand that I am obligated to ask Monument Funds' compliance officer
questions to clarify any matters set forth in the Procedures or Code that are
unclear to me. I understand that I am obligated to inform Monument Funds'
compliance officer in writing of any violation of the Procedures or Code for
which I am responsible.
- ---------------------
Signature
- ---------------------
(Name printed legibly)
- ---------------------
Date
Monument Series Fund, Inc.
Preclearance of Securities Transaction
I request preclearance of the following proposed securities transaction:
- --------- ------------ --------------- -----------------------
Buy/Sell No. Shares/ Security Name Name of Broker-dealer
or Princ Amt through whom to be(for
bonds, effected etc.)
Name ____________________________________
Name of Account in which Proposed Transaction
to be effected
Your name printed: _________________
Your signature: _________________
Date of request: ______________
Approved by:
Disapproved by: ________________
(Signature)
Printed name of
Approving Principal: _______________
Date of Approval: _______________
Notes of Approving ________________________
Principal As To Transactions ________________________
Of Affiliated Parties: ________________________
<PAGE>
Exhibit 27(q)
POWER OF ATTORNEY: DAVID GREGG
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints David A. Kugler, Peter L. Smith and
Beth-ann Roth his true and lawful attorneys-in-fact and agents, each with full
power of substitution and resubstitution for him in his name, place, and stead,
in any and all capacities, to sign the Registration Statement applicable to
Monument Series Fund, Inc. and any amendments or supplements thereto, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto each said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorney-in-fact and agent, or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Dated: March 18, 2000
- -----------------------------------------------
David Gregg, Director
<PAGE>
Beth-ann Roth, P.C.
9204 Saint Marks Place
Fairfax, Virginia 22031-3046
(703) 352-0095
(703) 352-2329 (fax)
(admitted in Florida and the District of Columbia)
March 24, 2000
Filing Desk
Securities & Exchange Commission
450 Fifth St., N.W.
Washington, D.C. 20549
Re: Monument Series Fund (the "Fund")
File Nos. 33-26223 and 811-8199
Dear Commissioners:
Electronically transmitted for filing, under the Securities Act of 1933 ("1933
Act") and the Investment Company Act of 1940 ("1940 Act") pursuant to Rule
485(a) under the 1933 Act, is Post-Effective Amendment No. 8 under the 1933 Act
and Amendment No. 10 under the 1940 Act to the Fund's Registration Statement.
The primary purpose of this filing is to add two new series to the Monument
Family of Funds: Monument Digital Technology Fund, and Monument New Economy
Fund. In addition, a new advisory fee schedule and breakpoints are being
proposed to shareholders, and the Fund is proposing to change its form of
organization from a Maryland corporation to a Delaware business trust. Various
dditional changes have also been proposed to shareholders to help streamline
operations.
If you have any questions, please call me at (703) 352-0095.
Sincerely,
Beth-ann Roth
cc: David A. Kugler
Mary Cole (SEC)
