SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. _6_ [X]
Post-Effective Amendment No. __ [_]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940 [X]
Amendment No. _6_ [X]
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LABRADOR MUTUAL FUND
(formerly named "Labrador Fund")
(Exact name of registrant as specified in charter)
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2344 Corte De La Jara, Pleasanton, California 94566 (Address of principal
executive offices)
Registrant's Telephone Number: 925-461-1848
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Peter Allen Schuh, 2344 Corte De La Jara, Pleasanton, California 94566
(Name and address of agent for service)
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Approximate date of proposed public offering: As soon as practicable after
the effective date of the Registration Statement.
The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
LABRADOR MUTUAL FUND
FORM N-1A CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
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<TABLE>
<CAPTION>
Item in Part A of Form N-1A Location in Prospectus
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<S> <C>
1. Cover Page Cover Page
2. Synopsis Summary of Fund
Expenses
3. Condensed Financial Information Not Applicable
4. General Description of Cover Page; General
Registrant Information
5. Management of the Fund Management Services
5A. Managers Discussion of Not Applicable
Fund Performance
6. Capital Stock and Other General Information
Securities
7. Purchase of Securities How to Buy Shares;
Being Offered Distribution and
Shareholder Servicing
Plan
8. Redemption or Repurchase How to Redeem Shares
9. Pending Legal Proceedings Not Applicable
Location In Statement
of
Item in Part B of Form N1-A Additional Information
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10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and General Information;
History General Information
(Prospectus)
13. Investment Objectives, Investment Objectives,
Policies and Risks Policies and Risks
14. Management of the Registrant Management
15. Control Persons and Principal Trustees and Officers
Holders of Securities (Prospectus)
16. Investment Advisory and Management
Other Services
17. Brokerage Allocation Portfolio Transactions;
Distribution and
Shareholder Servicing
Plan
18. Capital Stock and Other General Information;
Securities General Information
(Prospectus)
19. Purchase, Redemption and Redemption of Fund
Pricing of Securities Shares;
Being offered How to Buy Shares
(Prospectus); How to
Redeem Shares
(Prospectus) Valuation
20. Tax Status Dividends,
Distributions
and Taxes (Prospectus)
21. Underwriters Underwriters
22. Calculation of Performance Investment Performance
Data
23. Financial Statements Financial Statements
</TABLE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER
TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BY ANY SALE
OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE
WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY SUCH STATE.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION
LABRADOR MUTUAL FUND
c/o Unified Fund Services, Inc.
431 N. Pennsylvania Street
Indianapolis, Indiana 46204
September 22, 1998
Labrador Mutual Fund, (the "Trust") which has a similarly named
portfolio called the Labrador Mutual Fund (the "Fund") is a mutual fund that
invests principally in securities of companies which, in the opinion of the
Fund's management, conduct their business in a socially responsible manner.
Capital growth and current income are the primary and secondary investment
objectives. Investment advisory and management services are provided to the
Fund by Labrador Investment Advisors, Inc., (the "Manager"). For a description
of the Fund's investment objectives and policies, including the risk factors
associated with an investment in the Fund, see "Investment Objectives, Policies
And Risks". There can be no assurance that the Fund's investment objectives
will be achieved.
This Prospectus sets forth concisely the information a
prospective investor should know about the Fund before investing. Please
read it carefully before you invest and keep it for future reference.
Additional information about the Fund, including a Statement of Additional
Information, has been filed with the Securities and Exchange Commission.
The Statement of Additional Information is available upon request and
without charge by calling or writing the Fund at the telephone number or
the address set forth above. The Statement of Additional Information is
dated the same date as this Prospectus and is incorporated herein by
reference in its entirety.
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY, AND ARE SUBJECT TO INVESTMENT RISK, INCLUDING THE LOSS OF
PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
Summary of Fund Expenses...................................
Investment Objectives, Policies and Risks..................
Management Services........................................
How to Buy Shares..........................................
Systematic Investment Plan.................................
How to Redeem Shares.......................................
Distribution and Shareholder Servicing Plan................
Dividends, Distributions and Taxes.........................
Description of Shares, Voting Rights and Liabilities.......
Advertising the Fund's Performance.........................
General Information........................................
SUMMARY OF FUND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of
offering price)........................... None
Redemption Fee (as a percentage of the amount
subject to charge)........................ None***
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
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LABRADOR MUTUAL FUND
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Management Fee 1.50%
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12b-1 Fee** 0.25%
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Other Expenses (after reimbursement)* 0.65%
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Total Fund Operating Expenses (after reimbursement)* 2.40%
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* Above Other Expenses for the Fund are estimated for the current fiscal
year. The Manager will reduce its fees and or reimburse the Fund for
certain expenses to the extent necessary to limit total annual Fund operating
expenses to the amount indicated in the table for the Fund. The
Fund is required to reimburse the Manager for any fee waivers or reimbursements
during the three years following that reduction and only if such reimbursement
can be achieved within the foregoing expense limits. Absent the
waivers/reimbursements, actual total Fund operating expenses are estimated to
be 3.00% (1.25% other expenses). Any possible repayments for fee waivers or
reimbursements will be counted to the oldest waivers/reimbursements first. The
Manager may terminate these voluntary reductions with 60 days written notice to
the Fund, however it intends to maintain the 2.4% expense limit for the current
fiscal year. See "Management Fees."
EXAMPLE
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of each time
period:
1 YEAR............................................... $24
3 YEARS.............................................. $76
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5%
ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN
AN ACTUAL RETURN GREATER OR LESS THAN 5%.
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** Pursuant to the Rules of the National Association of Securities
Dealers, Inc., the aggregate annual distribution fees on shares of the
Fund may not exceed 7.25% of total gross sales, subject to certain
exclusions. The 7.25% limitation is imposed on the Fund rather than on a
per shareholder basis. Therefore, a long-term shareholder of the Fund may
pay more in distribution fees than the economic equivalent of 7.25% of
such shareholder's investment in such shares.
*** In addition to the expenses noted above, the Fund will charge
$15.00 for each wire redemption. See "How to Redeem Shares." For a
further description of the various costs and expenses incurred in the
Fund's operation, as well as expense reimbursement or waiver arrangements,
see "Management Services."
The purpose of the foregoing table is to assist you in understanding the
various costs and expenses that investors will bear, directly or
indirectly, the payment of which will reduce investors' return on an
annual basis. Other Expenses are based on estimated amounts for the
current fiscal year.
INVESTMENT OBJECTIVES, POLICIES AND RISKS
INVESTMENT OBJECTIVES - The Fund's primary and secondary investment
objectives are to provide capital growth and current income. The Fund seeks to
adhere to its objectives through the purchase and retention of shares of common
stock of companies that, in the opinion of the Fund's management conduct their
business in a socially responsible manner. There can be no assurances that the
Fund's investment objectives will be achieved.
SPECIAL CONSIDERATIONS - TYPES OF COMPANIES SOUGHT FOR INVESTMENT - To
assess whether a company conducts its business in a socially responsible
manner, the Fund considers a company's record in the areas of (1) consumer
protection and product safety, (2) protection and improvement of the
environment and the proper use of natural resources, (3) equal employment
opportunity, and (4) occupational health and safety. For example,
consistent with its consumer protection screen, the Fund will not purchase
shares in a company which manufactures tobacco products, hard liquor, or
pornography. The consumer protection and product safety criteria include
a company's record with regard to safety of product, marketing practices,
and commitment to quality goods or services. There are few generally
accepted measures of achievement with regard to these special
considerations. The development of suitable measurement techniques,
therefore, will be largely within the discretion and judgment of the
management of the Fund. Management does not intend at present to evaluate
in depth a company's activities not directly connected with the conduct of
its business (such as participation in community improvement projects) or
the secondary implications of corporate activities (for example, in
examining banks, the business activities of their borrowers will not be
evaluated).
The Fund's special considerations tend to limit the availability
of investment opportunities more than is customary with other investment
companies. Management believes, however, that there are sufficient
investment opportunities among companies that meet the Fund's special
considerations to permit full investment, if management believes it
desirable, in securities that meet the Fund's investment objectives of
capital growth and current income.
The Fund's objectives are fundamental and cannot be changed without
approval by the holders of a majority of the outstanding voting securities of
the Fund. As defined in the Investment Company Act of 1940 (the "Act"), the
"vote of a majority of the outstanding voting securities" means the lesser of
the vote of (a) 67% of the shares of the Fund at a meeting where more than 50%
of the outstanding shares are present in person or by proxy or (b) more than
50% of the outstanding shares of the Fund.
THE INVESTMENT SELECTION PROCESS - Potential investment portfolio
selections, which, in the opinion of the Manager reveal the potential of
capital growth and current income (based on traditional investment
considerations, including an opinion of the fundamental value of the
security and other market factors) are selected by the Manager The
Manager then begins a process of searching publicly available information
about the company to determine its record in the areas of special
consideration to the Fund. The Manager uses commercially available
computer data bases, reviews and evaluations published or made available
by "watchdog" groups whose interests focus on one or more of the special
areas, such as the environment, as applicable. Additional data may be
obtained, where practical, from local, state and federal agencies which
maintain surveillance in certain areas of interest to the Fund and which
provide this data to the public.
If the initial evaluation reveals no negative pattern in the
areas of special consideration to the Fund, a company's securities are
eligible for purchase.
If it is determined at any stage that purchase or retention of a
portfolio security is not consistent with the Fund's special
considerations, the security will not be purchased.
If the security has already been purchased, the security will be
sold as expeditiously as possible, consistent with the best interests of
the Fund. While the Manager will disqualify a company evidencing a
pattern of conduct that is inconsistent with the Fund's special standards
of social responsibility, the Manager need not disqualify a company on the
basis of incidents that, in the Manager's judgment, does not reflect the
company's policies and overall current level of adherence to the areas of
special consideration of the Fund, as seen in SPECIAL CONSIDERATIONS -
TYPES OF COMPANIES SOUGHT FOR INVESTMENT.
MANAGEMENT POLICIES AND RISKS - Depending upon market conditions, the Fund
attempts to be invested fully in common stocks which meet both traditional
investment standards and the Fund's investment criteria described under
"Types of Companies Sought for Investment."
To earn additional income on its portfolio, the Fund may sell
covered call option contracts on securities it owns to the extent of 20%
of the value of its net assets at the time such option contracts are
written. The Fund may also sell cash covered put option contracts.
The Fund may allocate up to 5% of its assets for the purchase of
exchange listed, equity put and call options. Such options must be on
individual securities. A put option gives the Fund, in return for the
payment of a premium, the right to sell the underlying security to another
party at a fixed price. If the market value of the underlying security
declines, the value of the put option would be expected to rise. If the
market value of the underlying security remains the same or rises,
however, the put option could lose all of its value, resulting in a loss
of the cost of the put option premium to the Fund.
A call option gives the Fund, in return for the payment of a
premium, the right to purchase the underlying security from another party
at a fixed price. If the market value of the underlying security rises,
the value of the call option would also be expected to rise. If the
market value of the underlying security remains the same or declines,
however, the call option could lose all of its value, resulting in a loss
of the call option premium to the Fund.
During periods in which management believes adverse trends are
occurring in the financial markets or the economy, the Fund may adopt a
temporary defensive posture to preserve shareholders' capital by investing
in U.S. Government securities, time deposits, bank certificates of deposit
and other short-term bank obligations issued in this country as well as
those issued in dollar denominations by the foreign branches of U.S.
banks, and cash or cash equivalents, without limit as to amount, as long
as such investments are made in securities of eligible companies and
domestic banks. When the Fund has adopted a temporary defensive posture,
the entire portfolio can be so invested. During such periods, the Fund
may not achieve its investment objectives.
The Fund may invest in companies with substantial overseas
activities, but, at present, management will not examine corporate
activities carried on outside the United States.
The Fund does not intend to hold any illiquid securities. In the
event it does hold illiquid securities, at no time will that amount exceed 15%
of net assets.
A more detailed description of the securities in which the Fund
may invest can be found in the Statement of Additional Information.
YEAR 2000 - The Fund's operations depend on the seamless functioning of
computer systems in the financial service industry in general, and specifically
on the systems used by the Advisor and Unified Fund Services. The Year 2000
issue relates to computer programs that use two digits rather than four to
define calendar years. Computer programs may recognize a two-digit reference to
the year 2000 (00), as 1900 rather than 2000. This could result in system
failures or miscalculations, disrupting the processing of date-related
information. If the Fund, the Advisor, Unified Fund Services or their
respective computer services suppliers do not adequately address the Year 2000
issue, this issue could create problems in the handling of security trades,
pricing and account servicing for the Fund.
The Advisor has made compliance with the Year 2000 Issue a high
priority and is taking steps that it believes are reasonably designed to
address the Year 2000 Issue with respect to its computer systems. The Advisor
has also been informed that appropriate steps are being taken by Unified Fund
Services and the Fund's other major service providers. The Advisor believes
that the Year 2000 Issue will not have a material impact on its ability to
continue to fulfill its duties as Advisor to the Fund.
CERTAIN FUNDAMENTAL POLICIES - The Fund may (i) borrow money from banks to the
extent permitted under the Act, which currently limits borrowing to no more
than 33 1/3% of the value of the Fund's total assets; (ii) not invest more than
5% of the value of its total assets in the securities of any one issuer (except
securities of the U.S. Government or any instrumentality thereof); and (iii)
not invest 25% or more of its total assets in any single
industry. This paragraph describes fundamental policies of the Fund which
cannot be changed without approval by the holders of a majority (as defined in
the Act) of the Fund's outstanding voting shares. See "Investment Objectives,
Policies and Risks - Fundamental Investment Policies and Restrictions" in the
Fund's Statement of Additional Information.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES - The Fund may pledge,
hypothecate, mortgage or otherwise encumber its assets, but only to secure
permitted borrowings; See "Investment Objectives, Policies and Risks -
Fundamental Investment Policies and Restrictions" in the Fund's Statement
of Additional Information.
INVESTMENT CONSIDERATIONS - The Fund will not seek to realize profits by
anticipating short-term market movements. When market conditions permit,
the Fund generally intends to retain securities for at least the statutory
long-term capital gain period. The annual portfolio turnover rate
indicates the rate of change in the Fund's portfolio; for instance, a rate
of 100% would result if all the securities in the portfolio at the
beginning of an annual period had been replaced by the end of the period.
While the rate of portfolio turnover will not be a limiting factor when
management deems changes appropriate, it is anticipated that, in view of
the Fund's investment objectives, its annual portfolio turnover rate
generally should not exceed 50%. When extraordinary market conditions
prevail, a higher turnover rate and increased brokerage expenses may be
expected.
CHANGES IN INVESTMENT POLICIES - Unless otherwise noted, the
foregoing investment policies are not fundamental and the Fund's Board of
Trustees may change such policies without the vote of a majority of the
Fund's outstanding voting securities. The Board will not change the
Fund's investment objectives of seeking to produce capital growth and
current income without such a vote. A more detailed description of the
Fund's investment policies, including a list of those restrictions on the
Fund's investment activities which cannot be changed without such a vote,
appears in the Statement of Additional Information.
MANAGEMENT SERVICES
THE MANAGER - The Board of Trustees provides broad supervision over the
affairs of the Fund. Pursuant to a Management Agreement between the Fund
and Labrador Investment Advisors, Inc., (the "Manager") and subject to the
authority of the Board of Trustees, the Manager manages the investments of
the Fund and is responsible for the overall management of the business
affairs of the Fund. The address of the Manager is 2344 Corte De La Jara,
Pleasanton, California 94566. The Manager has no previous experience in
advising a mutual fund.
The Manager was founded in September 1997 by Peter Allen Schuh
and Allen John Schuh. Peter Allen Schuh, the Chairman of the Board,
President, Secretary and Treasurer of the Fund, is the Chairman of the
Board and President of the Manager. Peter Allen Schuh is a co-portfolio
manager of the Fund. Peter Allen Schuh holds a B.S. degree from
California Polytechnic State University, San Luis Obispo. He has co-
authored several articles dealing with decision theory. Peter Allen Schuh
worked at Merrill Lynch before starting Labrador Investment Advisors, Inc.
Allen John Schuh, the Vice-President of the Fund, is also the
Vice-President of the Manager and co-portfolio manager of the Fund. Allen
John Schuh is currently a professor in the Department of Management and
Finance at the California State University at Hayward. Allen John Schuh
holds an A.B. degree from San Diego State University, a M.A. degree from
the University of California, Berkeley, and a Ph.D. from The Ohio State
University. Allen John Schuh has authored several dozen articles and
papers dealing with decision theory, investing and related management
issues. He has a management textbook in its fourth edition. His previous
experience was with the accounting firm Ernst & Ernst, active duty with
the United States Navy, and Lecturer at Old Dominion University. He has
had many consulting assignments in his 30 year professional career.
Professional memberships include; The Academy of Management, The Institute
for Operations Research and The Management Sciences, The American
Psychological Association, and The American Psychological Society.
Peter Allen Schuh, the Chairman and President of the Fund, is also the
President of an Internet company named "Abridging, Inc." Abridging, Inc.,
will be paid by Labrador Investment Advisors, Inc., for Internet related
servicing, including, but not limited to: web site development, web site
maintenance, hosting, and advertising. Advertising may be purchased
through Abridging, Inc., or in connection with Abridging, Inc., and any
outside vendor in which Abridging, Inc., has an advertising contract. No
fees will be charged to the Fund from any such services.
MANAGEMENT FEES - Under the terms of the Management Agreement, the Fund
has agreed to pay the Manager a monthly management fee at the annual rate
of 1.50% of the Fund's average daily net assets.
Based on estimated expenses for the current fiscal year. The
Manager has undertaken, until such time as it gives investors 60 days
notice to the contrary, to waive its investment advisory fee to the extent
Total Fund Operating Expenses (other than interest, taxes, brokerage fees
incurred by purchasing and selling portfolio securities, and extraordinary
items) exceed 2.40%.
EXPENSES - All expenses incurred in the operation of the Fund will be
borne by the Fund, except to the extent specifically assumed by the
Manager. The expenses to be borne by the Fund will include:
organizational costs, taxes, interest, brokerage fees and commissions,
fees of trustees of the Fund, Securities and Exchange Commission fees,
state Blue Sky qualification fees, advisory, administrative and fund
accounting fees, charges of custodians, transfer and dividend disbursing
agents' fees, insurance premiums, industry association fees, outside
auditing and legal expenses, costs of maintaining the Fund's existence,
costs of independent pricing services, costs attributable to investor
services (including, without limitation, telephone and personnel
expenses), costs of shareholders' reports and meetings, costs of preparing
and printing prospectuses and statements of additional information,
amounts payable under the Fund's Distribution and Shareholder Servicing
Plan (the "Plan") and any extraordinary expenses.
PORTFOLIO TRANSACTIONS - The Management Agreement recognizes that in the
purchase and sale of portfolio securities, the Manager will seek the most
favorable price and execution, and, consistent with that policy, may give
consideration to the research, statistical and other services furnished by
brokers or dealers to the Manager. The use of brokers who provide
investment and market research and securities and economic analysis may
result in higher brokerage charges than the use of brokers selected on the
basis of the most favorable brokerage commission rates. Research and
analysis received may be useful to the Manager in connection with its
services to the Fund.
In over-the-counter markets, orders are placed with responsible
primary market makers unless a more favorable execution or price is
believed to be obtainable.
Consistent with these considerations, the Manager may consider
sales of shares of the Fund as a factor in the selection of brokers or
dealers to execute portfolio transactions for the Fund.
CUSTODIAN AND TRANSFER AGENT - Star Bank, N.A., 425 Walnut Street, M.L.
6118, P.O. Box 1118, Cincinnati, Ohio 45201-1118 is the Fund's custodian.
Unified Fund Services, Inc., 431 N. Pennsylvania Street, Indianapolis, IN
46204, IN 46204 is the Fund's transfer agent and dividend disbursing agent
(the "Transfer Agent").
HOW TO INVEST IN THE FUND
Shares of the Fund are sold on a continuous basis, and you may
invest any amount you choose, as often as you wish, subject to a minimum
initial investment of $2,500 ($1,500 for qualified retirement accounts and
Automatic Investment Plan) and minimum subsequent investments of $75.
Management may reduce the minimum account requirement for "special
circumstances". "Special circumstances" will be reviewed by the Manager.
Investors choosing to purchase or redeem their shares through a
broker/dealer or other institution may be charged a fee by that
institution. Investors choosing to purchase or redeem shares directly
from the Fund will not incur charges on purchases or redemption. To the
extent investments of individual investors are aggregated into an omnibus
account established by an investment adviser, broker or other
intermediary, the account minimums apply to the omnibus account, not to
the account of the individual investor.
PURCHASE OF FUND SHARES WITH COMPATABLE SECURITIES. At the discretion of
the Manager, an investor may submit securities in exchange for Labrador
Mutual Fund shares, provided the stocks submitted meet all of the criteria
of the Fund's portfolio at that time. Prior approval of such exchange is
required.
Initial Purchase
By Mail - You may purchase shares of the Fund by completing and
signing the investment application form which accompanies this Prospectus
and mailing it together with a check (subject to the above minimum amounts)
made payable to the Labrador Mutual Fund, and sent to the P.O. Box listed
below. If you prefer overnight delivery, use the overnight address listed
below:
U.S. Mail: Labrador Mutual Fund Overnight: Labrador Mutual Fund
c/o Unified Fund Services, Inc., c/o Unified Fund Services, Inc.,
P.O. Box 6110 431 N. Pennsylvania Street
Indianapolis, Indiana 46204-6110 Indianapolis, Indiana 46204
Your purchase of shares of the Fund will be effected at the next share
price calculated after receipt of your investment.
By Wire - You may also purchase shares of the Fund by wiring
federal funds from your bank, which may charge you a fee for doing so. If
money is to be wired, you must call the Transfer Agent at 800-494-6882 to
set up your account and obtain an account number. You should be prepared
at that time to provide the information on the application by facsimile.
Then, you should provide your bank with the following information for
purposes of wiring your investment:
Star Bank, N.A. Cinti/Trust
ABA # 0420-0001-3
Attn: Labrador Mutual Fund
D.D.A. #488919960
Account Name _________________ (write in shareholder name)
For the Account # ______________ (write in account number)
You are required to mail a signed application to the Custodian at
the above address in order to complete your initial wire purchase. Wire
orders will be accepted only on a day on which the Fund and the Custodian
and Transfer Agent are open for business. A wire purchase will not be
considered made until the wired money is received and the purchase is
accepted by the Fund. Any delays which may occur in wiring money,
including delays which may occur in processing by the banks, are not the
responsibility of the Fund or the Transfer Agent. There is presently no
fee for the receipt of wired funds, but the right to charge shareholders
for this service is reserved by the Fund.
ADDITIONAL INVESTMENTS - You may purchase additional shares of the Fund at
any time (minimum investment $75) by mail, wire, or automatic investment.
Each additional mail purchase request must contain your name, the name of
your account(s), your account number(s), and the name of the Fund. Checks
should be made payable to the Labrador Mutual Fund and should be sent to
the address listed above. A bank wire should be sent as outlined above.
AUTOMATIC INVESTMENT PLAN - You may make regular investments in the Fund
with an Automatic Investment Plan by completing the appropriate section of
the account application and attaching a voided personal check. An initial
investment of $1,500 is required. Subsequent investments will be made
monthly to allow dollar-cost averaging by automatically deducting a
minimum of $75 from your bank checking account. You may change the amount
of your monthly purchase at any time.
PURCHASES THROUGH PROCESSING ORGANIZATIONS - Shares of the Fund may also
be purchased through a "Processing Organization," which is a broker-
dealer, bank or other financial institution that purchases shares for its
customers. When shares are purchased this way, the Processing
Organization, rather than its customer, may be the shareholder of record
of the shares. Such shares may be transferred into the investor's name
following procedures established by the Processing Organization and the
Transfer Agent. The minimum initial and subsequent investments in the
Fund for shareholders who invest through a Processing Organization
generally will be set by the Processing Organization. Processing
Organizations may also impose other charges and restrictions in addition
to or different from those applicable to investors who remain the
shareholder of record of their shares. Certain Processing Organizations
may receive compensation from the Manager pursuant to the Fund's
Distribution and Shareholder Servicing Plan. An investor contemplating
investing with the Fund through a Processing Organization should read
materials provided by the Processing Organization in conjunction with this
Prospectus.
NET ASSET VALUE - Shares of the Fund are sold on a continuous basis. Net
asset value per share is determined as of the close of regular trading on
the floor of the New York Stock Exchange (currently 4:00 p.m., New York
time) on each business day. The Fund's investments are valued based on
market value or, where market quotations are not readily available, based
on fair value as determined in good faith by, or in accordance with
procedures established by, the Fund's Board of Trustees. The net asset
value per share of the Fund is computed by dividing the value of the
Fund's net assets, (minus its liabilities), by the total number of shares
of the Fund outstanding. Purchases of Fund shares will be made in full
and fractional shares of the Fund calculated to three decimal places.
TAX SHELTERED RETIREMENT PLANS - Since the Fund is oriented to longer term
investments, the Fund may be a particularly appropriate investment medium
for tax sheltered retirement plans, including: individual retirement plans
(IRAs); simplified employee pensions (SEPs); 401(k) plans; qualified
corporate pension and profit sharing plans (for employees); tax deferred
investment plans (for employees of public school systems and certain types
of charitable organizations); and other qualified retirement plans. You
should contact the Transfer Agent for the procedure to open an IRA or SEP
plan, as well as more specific information regarding these retirement plan
options. Consultation with an attorney or tax adviser regarding these
plans is advisable. Custodial fees for an IRA will be paid by the
shareholder by redemption of sufficient shares of the Fund from the IRA
unless the fees are paid directly to the IRA custodian. The Manager may
from time to time reimburse the shareholders for the yearly custodial fee.
You can obtain information about the IRA custodial fees from the Transfer
Agent.
OTHER PURCHASE INFORMATION - Dividends begin to accrue after you become a
shareholder. The Fund does not issue share certificates. All shares are
held in non-certificate form registered on the books of the Fund and the
Fund's Transfer Agent for the account of the shareholder. The rights to
limit the amount of purchases and to refuse to sell to any person are
reserved by the Fund. If your check or wire does not clear, you will be
responsible for any loss incurred by the Fund. If you are already a
shareholder, the Fund can redeem shares from any identically registered
account in the Fund as reimbursement for any loss incurred. You may be
prohibited or restricted from making future purchases in the Fund. The Fund
will not be held accountable for any losses resulting from such bad check
writing. The Fund Manager will bear any loss that is not covered by the
responsible shareholder.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined
after the redemption request has been received by the Transfer Agent in
proper order. Shareholders may receive redemption payments in the form of
a check or federal wire transfer. The proceeds of the redemption may be
more or less than the purchase price of your shares, depending on the
market value of the Fund's securities at the time of your redemption.
There is a $15 charge for wire redemptions. Any charges for wire
redemptions will be deducted from the shareholder's Fund account by
redemption of shares. Investors choosing to purchase or redeem their
shares through a broker/dealer or other institution may be charged a fee
by that institution.
By Mail - You may redeem any part of your account in the Fund at
no charge by mail. Your request should be addressed to:
Labrador Mutual Fund
c/o Unified Fund Services, Inc.
431 N. Pennsylvania Street
Indianapolis, Indiana 46204
"Proper order" means your request for a redemption must include
your letter of instruction, including the Fund name, account number,
account name(s), the address and the dollar amount or number of shares you
wish to redeem. This request must be signed by all registered share
owner(s) in the exact name(s) and any special capacity in which they are
registered. For all redemptions, the Fund requires that signatures be
guaranteed by a bank or member firm of a national securities exchange.
Signature guarantees are for the protection of shareholders. At the
discretion of the Fund or the Transfer Agent, a shareholder, prior to
redemption, may be required to furnish additional legal documents to
insure proper authorization.
By Telephone - You may redeem any part of your account in the
Fund by calling the Transfer Agent at 800-494-6882. You must first
complete the Optional Telephone Redemption and Exchange section of the
investment application to institute this option. The Fund, the Transfer
Agent and the Custodian are not liable for following redemption or
exchange instructions communicated by telephone that they reasonably
believe to be genuine. However, if they do not employ reasonable
procedures to confirm that telephone instructions are genuine, they may be
liable for any losses due to unauthorized or fraudulent instructions.
Procedures employed may include recording telephone instructions and
requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be
terminated at any time by the Fund or the Transfer Agent. During periods
of extreme market activity it is possible that shareholders may encounter
some difficulty in telephoning the Fund, although neither the Fund nor the
Transfer Agent has ever experienced difficulties in receiving and in a
timely fashion responding to telephone requests for redemptions or
exchanges. If you are unable to reach the Fund by telephone, you may
request a redemption or exchange by mail.
Additional Information - If you are not certain of the
requirements for a redemption please call the Transfer Agent at 800-494-
6882. Redemptions specifying a certain date or share price cannot be
accepted and will be returned. You will be mailed the proceeds on or
before the fifth business day following the redemption. However, payment
for redemption made against shares purchased by check will be made only
after the check has been collected, which normally may take up to fifteen
days. Also, when the New York Stock Exchange is closed (or when trading
is restricted) for any reason other than its customary weekend or holiday
closing or under any emergency circumstances, as determined by the
Securities and Exchange Commission, the Fund may suspend redemptions or
postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining
shareholder accounts, the Fund reserves the right to require any
shareholder to redeem all of his or her shares in the Fund on 30 days'
written notice if the value of his or her shares in the Fund is less than
$1000 due to redemption, or such other minimum amount as the Fund may
determine from time to time. An involuntary redemption constitutes a
sale. You should consult your tax adviser concerning the tax consequences
of involuntary redemptions. A shareholder may increase the value of his
or her shares in the Fund to the minimum amount within the 30 day period.
Each share of the Fund is subject to redemption at any time if the Board
of Trustees determines in its sole discretion that failure to so redeem
may have materially adverse consequences to all or any of the shareholders
of the Fund.
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN
Under a plan adopted by the Fund's Board of Trustees pursuant to
Rule 12b-1 under the 1940 Act (the "Plan"), the Fund pays the Manager a
shareholder servicing and distribution fee at the annual rate of .25% of
the average daily net assets of the Fund. Such fee will be used in its
entirety by the Manager to make payments for administration, shareholder
services and distribution assistance, including, but not limited to (i)
compensation to securities dealers and other organizations including the
Underwriter of the Fund, Unified Management Corporation (each, a "Service
Organization" and collectively, the "Service Organizations"), for providing
distribution assistance with respect to assets invested in the Fund, (ii)
compensation to Service Organizations for providing administration, accounting
and other shareholder services with respect to Fund shareholders, and (iii)
otherwise promoting the sale of shares of the Fund, including paying for the
preparation of advertising and sales literature and the printing and
distribution of such promotional materials to prospective investors. The fees
paid to the Manager under the Plan are in addition to the fees payable under
the Management Agreement and are payable without regard to actual expenses
incurred. The Fund understands that third parties also may charge fees to
their clients who are beneficial owners of Fund shares in connection with their
client accounts. These fees would be in addition to any amounts which may be
received by them from the Manager under the Plan.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily pays dividends from its net investment income
and distributes net realized securities gains, if any, once a year, but it
may make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner
consistent with the provisions of the 1940 Act. Dividends are
automatically reinvested in additional Fund shares at net asset value,
unless the shareholder has elected to receive payment in cash. All
expenses are accrued daily and deducted before declaration of dividends to
investors.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains, paid by the
Fund will be taxable to U.S. shareholders as ordinary income for Federal
income tax purposes. Distributions from net realized long-term securities
gains of the Fund will be taxable to U.S. shareholders as long-term
capital gains for Federal income tax purposes. Dividends and
distributions also may be subject to state and local taxes. The Fund's
distributions are taxable in the year paid, regardless of whether they are
received in cash or reinvested in additional shares of the Fund, except
that certain distributions declared in the last three months of the year
and paid in January are taxable as if paid on December 31.
Notice as to the tax status of investors' dividends and
distributions will be mailed to them annually. Investors also will
receive periodic summaries of their accounts which will include
information as to dividends and distributions from securities gains, if
any, paid during the year.
An investor's redemption of Fund shares may result in a taxable
gain or loss, depending upon whether the redemption proceeds payable to
such investor are more or less than his adjusted tax basis for his
redeemed shares.
Federal regulations generally require the Fund to withhold
("backup withholding") and remit to the U.S. Treasury 31% of dividends,
distributions from net realized securities gains and the proceeds of any
redemption, regardless of the extent to which gain or loss may be
realized, paid to a shareholder if such shareholder fails to certify
either that the TIN furnished in connection with opening an account is
correct or that such shareholder has not received notice from the IRS of
being subject to backup withholding as a result of a failure to properly
report taxable dividend or interest income on a Federal income tax return.
Furthermore, the IRS may notify the Fund to institute backup withholding
if the IRS determines a shareholder's TIN is incorrect or if a shareholder
has failed to properly report taxable dividend and interest income on a
Federal income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax
withheld as a result of backup withholding does not constitute an
additional tax imposed on the record owner of the account, and may be
claimed as a credit on the record owner's Federal income tax return.
The Fund intends to qualify as a "regulated investment company"
under the Code so long as such qualification is in the best interests of
its shareholders. Such qualification relieves the Fund of any liability
for Federal income tax to the extent its earnings are distributed in
accordance with applicable provisions of the Code. The Fund intends to
make sufficient distributions prior to the end of each calendar year to
avoid liability for a 4% Federal excise tax on undistributed income.
All investors should consult their tax advisers regarding
specific questions as to Federal, state or local taxes.
DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Fund is a Delaware Business Trust established under a
Declaration of Trust (as amended) dated February 22, 1998. Its authorized
capital consists of an unlimited number of shares of beneficial interest
of $0.0001 par value, issued in separate series. Each share of each
series represents an equal proportionate interest in that series with each
other share of that series.
The assets of the Fund received for the issue or sale of the
shares of each fund and all income, earnings, profits and proceeds
thereof, subject only to the rights of creditors, are specifically
allocated to such series and constitute the underlying assets of such
series. The underlying assets of each series are segregated on the books
of account, and are to be charged with the liabilities in respect to such
series and with such a share of the general liabilities of the Fund. If a
series was unable to meet its obligations, the assets of only that series,
and no other series, will be available to creditors for that purpose.
General liabilities, expenses, costs, charges or reserves which are not
readily identifiable as belonging to any particular series shall be
allocated and charged by the Trustees between or among any one or more of
the series in such manner as the Trustees deem fair and equitable. In the
event of the dissolution or liquidation of the Fund or any series, the
holders of the shares of any series are entitled to ratably receive, as a
class, the value of the underlying assets of such shares available for
distribution to shareholders. However, the payment to the holders may be
reduced by any fees, expenses or charges allocated to that series.
Shares of the Fund entitle their holder to one vote per share;
however, separate votes are taken by each series on matters affecting an
individual series. For example, a change in investment policy for a
series would be voted upon only by shareholders of the series involved.
The Trustees of the Fund have the authority to designate
additional series and to designate the relative rights and preferences
between the different series. There is presently one series so
designated. All shares issued and outstanding will be fully paid and
nonassessable by the Fund, and redeemable as described in this Statement
of Additional Information and in the Prospectus.
The Trust Instrument provides that obligations of the Fund are
not binding upon the Trustees individually but only upon the property of
the Fund, that the Trustees and officers will not be liable for errors of
judgment or mistakes of fact or law, and that the Fund will indemnify its
Trustees and officers against liabilities and expenses incurred in
connection with litigation in which they may be involved because of their
offices with the Fund unless, as to liability to Fund or Fund
shareholders, it is finally adjudicated that they engaged in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in their offices, or unless with respect to any other
matter it is finally adjudicated that they did not act in good faith in
the reasonable belief that their actions were in the best interests of the
Fund. In the case of settlement, such indemnification will be provided
unless it has been determined by a court or other body approving the
settlement or other disposition, or by a reasonable determination, based
upon a review of readily available facts, by vote of a majority of
disinterested Trustees or in a written opinion of independent counsel,
that such officers or Trustees have engaged in willful misfeasance, bad
faith, gross negligence or reckless disregard of their duties.
The Trust Instrument contains an express disclaimer of
shareholder liability for acts or obligations of the Trust and provides
for indemnification and reimbursement of expenses out of Fund property for
any shareholder held personally liable for the obligations of a Fund
solely by reason of his being or having been a shareholder. The Trust
Instrument also provides for the maintenance, by or on behalf of the Trust
and the Fund, of appropriate insurance (for example, fidelity bond and
errors and omissions insurance) for the protection of the Trust and the
Fund, their shareholders, trustees, officers, employees and agents,
covering possible tort and other liabilities. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability
is limited to circumstances in which Delaware law did not apply,
inadequate insurance existed and the Fund itself was unable to meet its
obligations.
GENERAL INFORMATION
In order to provide the initial capital for the Fund, Labrador
Investment Advisors, Inc., has purchased a total of 10,000 shares of the
Fund at $10.00 per share for an aggregate purchase price of $100,000. As
long as Labrador Investment Advisors, Inc., owns more than 25% of the
Fund's shares, it will be deemed to be in "control" of the Fund as that
term is defined in the 1940 Act.
No meetings of shareholders of the Fund will be held for the
purpose of electing Trustees unless and until such time as less than a
majority of the Trustees holding office have been elected by shareholders,
at which time the Trustees then in office will call a shareholders'
meeting for the election of Trustees.
Under the Fund's Declaration of Trust, the Trustees are required
to call a meeting of shareholders for the purpose of voting upon the
question of removal of any such Trustee when required in writing to do so
by the shareholders of record of not less than 10% of the Fund's
outstanding shares.
Shareholder inquiries may be made by writing to the Transfer
Agent at Unified Fund Services, Inc., 431 N. Pennsylvania Street,
Indianapolis, IN 46204, or by calling 800-494-6882.
=======================================================
LABRADOR MUTUAL FUND
INVESTMENT MANAGER
Labrador Investment Advisors, Inc.
2344 Corte De La Jara
Pleasanton, California 94566
TRANSFER AGENT
Unified Fund Services, Inc.
431 N. Pennsylvania Street
Indianapolis, IN 46204
PORTFOLIO SECURITIES CUSTODIAN
Star Bank, N.A.
P.O. Box 1118
Cincinnati, Ohio 45201-1118
DISTRIBUTOR
Unified Management Corporation
431 N. Pennsylvania Street
Indianapolis, IN 46204
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY ANY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION
DOES NOT CONSTITUTE A PROSPECTUS.
PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION SUBJECT TO COMPLETION
LABRADOR MUTUAL FUND
September 22, 1998
This Statement of Additional Information, which is not a prospectus,
expands upon and supplements the information contained in the current
Prospectus of Labrador Mutual Fund (the "Trust") dated September 22, 1998. The
Trust is set up as a series trust under the Laws of the State of Delaware. The
similarly named Labrador Mutual Fund, (the "Fund") which is a series of the
Trust was created on November 13, 1997 as amended February 22, 1998. The
Statement of Additional Information should be read in conjunction with the
Prospectus, which may be obtained without charge by writing or calling the Fund
at the above address or telephone number. This Statement of Additional
Information is incorporated by reference into the Prospectus in its entirety.
Labrador Investment Advisors, Inc. (the "Manager") is the Fund's
investment manager.
TABLE OF CONTENTS
Subject Page
Investment Objectives, Policies and Risks
Certain Portfolio Securities
Trustees and Officers
Management
Distribution and Shareholder Servicing Plan
Redemption of Fund Shares
Valuation
General Information
INVESTMENT OBJECTIVES, POLICIES AND RISKS
The investment objectives, policies and risks of the Fund are
described in the Fund's Prospectus under the heading "Investment
Objective, Policies and Risks". In addition to its investment objectives
of seeking to produce capital growth and current income, the Fund has
adopted the following fundamental investment policies and restrictions.
These policies cannot be changed without approval by the holders of a
majority of the outstanding voting securities of the Fund. As defined in
the Investment Company Act of 1940 (the "Act"), the "vote of a majority of
the outstanding voting securities" means the lesser of the vote of (a) 67%
of the shares of the Fund at a meeting where more than 50% of the
outstanding shares are present in person or by proxy or (b) more than 50%
of the outstanding shares of the Fund.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
The Fund may not:
1. Purchase or retain any securities of an issuer if any of the
officers or Trustees of the Fund or its investment adviser owns
beneficially more than 1/2 of 1% of the securities of such issuer and
together own more than 5% of the securities of such issuer.
2. Invest in commodities.
3. Purchase, hold or deal in real estate, real estate limited
partnership interests, or oil, gas or other mineral leases or exploration
or development programs, but the Fund may purchase and sell securities
that are secured by real estate or issued by companies that invest or deal
in real estate or real estate investment trusts.
4. Borrow money from banks, except to the extent permitted under the
1940 Act. The 1940 Act permits an investment company to borrow an amount up to
33-1/3% of the value of such company's total assets. For purposes of this
Investment Restriction, the entry into options shall not constitute
borrowing.
5. Make loans to others.
6. Act as an underwriter of securities of other issuers, except
to the extent the Fund may be deemed an underwriter under the Securities
Act of 1933, as amended, by virtue of disposing of portfolio securities.
7. Issue any senior security (as such term is defined in Section
18(f) of the 1940 Act).
8. Purchase securities on margin, but the Fund may make margin
deposits in connection with transactions in options.
9. Invest 25% or more of the value of its total assets in any
one industry.
10. Invest in the securities of a company for the purpose of
exercising management or control, but the Fund will vote the securities it
owns in its portfolio as a shareholder in accordance with its views.
11. Pledge, mortgage or hypothecate its assets, except to the
extent necessary to secure permitted borrowings and to the extent related
to the deposit of assets in escrow in connection with writing covered put
and call options, and collateral and initial or variation margin
arrangements with respect to options.
12. Engage in short sales of securities.
13. Invest in securities of foreign issuers (whether directly or
through American Depository Receipts).
14. Purchase securities of other investment companies, except by
purchase in the open market where no commission or profit to a sponsor or
dealer results from the purchase other than the customary broker's
commission or except when the purchase is part of a plan of merger,
consolidation, reorganization or acquisition, and provided that any such
purchase is permitted under the 1940 Act.
If a percentage restriction is adhered to at the time of
investment, a later change in percentage resulting from a change in values
or assets will not constitute a violation of such restriction, except for
the borrowing policies.
The Fund may make commitments more restrictive than the
restrictions listed above so as to permit the sale of the Fund's shares in
certain states. Should the Fund determine that a commitment is no longer
in the best interest of the Fund and its shareholders, the Fund reserves
the right to revoke the commitment by terminating the sale of Fund shares
in the state involved.
CERTAIN PORTFOLIO SECURITIES
MONEY MARKET INSTRUMENTS
The Fund may invest, in the circumstances described under
"Investment Objectives, Policies and Risks," in the following types of
money market instruments.
U.S. GOVERNMENT SECURITIES - The Fund may purchase securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities,
which include U.S. Treasury securities that differ in their interest
rates, maturities and times of issuance. Treasury Bills have initial
maturities of one year or less; Treasury Notes have initial maturities of
one to ten years; and Treasury Bonds generally have initial maturities of
greater than ten years. Some obligations issued or guaranteed by U.S.
Government agencies and instrumentalities, for example, Government
National Mortgage Association pass-through certificates, are supported by
the full faith and credit of the U.S. Treasury; others, such as those of
the Federal Home Loan Banks, by the right of the issuer to borrower from
the U.S. Treasury; others, such as those issued by the Federal National
Mortgage Association, by discretionary authority of the U.S. Government to
purchase certain obligations of the agency or instrumentality; and others,
such as those issued by the Student Loan Marketing Association, only by
the credit of the agency or instrumentality. These securities bear fixed,
floating or variable rates of interest. Principal and interest may
fluctuate based on generally recognized reference rates or the
relationship of rates. While the U.S. Government provides financial
support to such U.S. Government-sponsored agencies or instrumentalities,
no assurance can be given that it will always do so, since it is not so
obligated by law.
BANK OBLIGATIONS - The Fund may invest in bank obligations, including
certificates of deposit, time deposits and other short-term obligations of
banks, savings and loan associations and other banking institutions.
Certificates of deposit are negotiable certificates evidencing
the obligation of a bank to repay funds deposited with it for a specified
period of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate.
Time deposits which may be held by the Fund will not benefit from
insurance from the Bank Insurance Fund or the Savings Association
Insurance Fund administered by the Federal Deposit Insurance Corporation.
TRUSTEES AND OFFICERS
Trustees and officers of the Fund, together with their ages and
information as to their principal business occupations during the past
five years, are shown below. Each Trustee who is an "interested person"
of the Fund, as defined in the 1940 Act, is indicated by an asterisk.
Daniel Thomas Burke (27) Trustee of the Fund; Chairman
834 Vallejo Street of Re-Think Technology, (a San
San Francisco, California 94133 Francisco based ergonomic and
occupational safety design and
manufacturing company). Marketing
Manager at International Micro-
Computer Software Incorporated.
Allen John Schuh* (56) Trustee, Vice-President of the
2344 Corte De La Jara Fund; Vice-President of Labrador
Pleasanton, California 94566 Investment Advisors, Inc.;
Professor in the Department of
Management and Finance at the
California State University at
Hayward.
Peter Allen Schuh* (25) Trustee, Chairman of the Board,
2344 Corte De La Jara President, and Secretary of the
Pleasanton, California 94566 Fund; Chairman, Labrador
Investment Advisors, Inc.;
President of Abridging, Inc.;
Previously at Merrill Lynch,
Pierce, Fenner & Smith.
Leandro Vera (25) Trustee of the Fund; Senior
5117 Glentree Drive Consultant with IBM Global
San Jose, California 95129 Services, previously with both
Coopers and Lybrand, L.L.P,;
and Deloitte and Touche Consulting
Group.
For so long as the Plan described in the section captioned
"Distribution and Shareholder Servicing Plan" remains in effect, the
Fund's Trustees who are not "interested persons" of the Fund, as defined
in the 1940 Act, will be selected and nominated by the Trustees who are
not "interested persons" of the Fund.
COMPENSATION TABLE
Currently the Fund complex only consists of the Fund itself.
Name of Person, Aggregate Total Compensation
Position Compensation From From Registrant and Fund
Registrant Complex Paid to Directors
Daniel T. 375 375*
Burke
Trustee
Allen J. 0 0
Schuh
Trustee,
Vice-
President
Peter A. 0 0
Schuh,
Trustee,
Chairman,
President,
Secretary
Leandro 375 375*
Vera
Trustee
* The Fund typically pays its Trustees an annual retainer fee and
reimburses them for their Board meeting expenses. The estimated aggregate
amount of compensation paid to each Director by the Fund for the fiscal
year ending December 31, 1998.
MANAGEMENT
The following information supplements, and should be read in
conjunction with, the section in the Fund's Prospectus entitled
"Management Services."
Under the Management Agreement dated July 31, 1998, subject to
the control of the Board of Trustees, Labrador Investment Advisors, Inc.,
(the "Manager"), manages the investment of the assets of the Fund,
including making purchases and sales of portfolio securities consistent
with the Fund's investment objectives and policies, and administers its
business and other affairs. The Fund provides the Manager with such
office space, administrative and other services and executive and other
personnel as are necessary for Fund operations.
Pursuant to an undertaking to a state securities administrator,
the Management Fee of the Manager will be reduced in the amount, if any,
by which total expenses, including the management fee, but excluding
interest, taxes, brokerage commissions, redemption fees, distribution fees
and certain extraordinary expenses, exceed 2-1/2% of the first $30,000,000
of average net assets, 2% of the next $70,000,000 and 1-1/2% thereafter.
After the first two years, the Management Agreement is subject to
annual approval by (i) the Fund's Board of Trustees or (ii) majority vote
of the outstanding voting securities (as defined in the 1940 Act): The
majority is the lesser of the vote of (a) 67% of the shares of the Fund at
a meeting where more than 50% of the outstanding shares are present in
person or by proxy or (b) more than 50% of the outstanding shares of the
Fund. In either event the continuance must be approved by a majority of
the Board of Trustees who are not "interested persons" (as defined in the
1940 Act) of the Fund or the Manager, by vote cast in person at a meeting
called for the purpose of voting on such approval. The Board of Trustees,
including a majority of the Trustees who are not "interested persons" of
any party to the Agreement, approved the Agreement at a meeting held on
July 31, 1998. The Agreement is terminable on 60 days' notice, by the
Fund's Board of Trustees or by vote of the holders of a majority of the
Fund's shares, or, on not less than 90 days' notice, by the Manager. As
to the Fund, the Agreement will terminate automatically in the event of
its assignment (as defined in the 1940 Act).
The Manager is a California corporation incorporated in 1997.
Peter Allen Schuh is the Chief Executive Officer of the Manager. Allen
John Schuh is the Vice-President of the Manager.
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Distribution and Shareholder Servicing Plan."
Rule 12b-1 (the "Rule") adopted by the Securities and Exchange
Commission under the 1940 Act provides, among other things, that an
investment company may bear expenses of distributing its shares only
pursuant to a plan adopted in accordance with the Rule. The Fund's
Trustees have adopted such a plan (the "Plan"). The Fund's Trustees
believe that there is a reasonable likelihood that the Plan will benefit
the Fund and its shareholders.
A quarterly report of the amounts expended under the Plan, and
the purposes for which such expenditures were incurred, must be made to
the Trustees for their review. In addition, the Plan provides that it may
not be amended to increase materially the costs which shareholders may
bear pursuant to the Plan without approval of such shareholders and that
other material amendments of the Plan must be approved by the Board of
Trustees, and by the Trustees who are neither "interested persons" (as
defined in the 1940 Act) of the Fund nor have any direct or indirect
financial interest in the operation of the Plan or in the related Plan
agreements, by vote cast in person at a meeting called for the purpose of
considering such amendments. The Plan and related agreements are subject
to annual approval by such vote cast in person at a meeting called for the
purpose of voting on the Plan. The Plan was approved by the Trustees and
by Labrador Investment Advisors, Inc., as sole shareholder of the Fund, on
July 31, 1998. The Plan is terminable at any time by vote of a majority
of the Trustees who are not "interested persons" and who have no direct or
indirect financial interest in the operation of the Plan or in the Plan
agreements or by vote of holders of a majority of the Fund's shares. A
Plan agreement is terminable, without penalty, at any time, by such vote
of the Trustees, upon not more than 60 days' written notice to the parties
to such agreement or by vote of the holders of a majority of the Fund's
shares. A Plan agreement will terminate automatically in the event of its
assignment (as defined in the 1940 Act).
REDEMPTION OF FUND SHARES
The procedures for redemption of Fund shares under ordinary
circumstances are set forth in the Prospectus. In unusual circumstances
payment may be postponed, or the right of redemption postponed for more
than seven days, if the orderly liquidation of portfolio securities is
prevented by the closing of, or restricted trading on the New York Stock
Exchange during periods of emergency, or such other periods as ordered by
the Securities and Exchange Commission. Payment may be made in
securities, subject to the review of some state securities commissions.
If payment is made in securities, a shareholder may incur brokerage
expenses in converting these securities into cash.
VALUATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Shares."
Portfolio securities, including covered call and put options
written by the Fund, and call or put options purchased by the Fund, are
valued at the last sale price on the securities exchange or national
securities market on which such securities primarily are traded. Short-
term investments (i.e., with maturities of 60 days or less) are carried at
amortized cost, which approximates value. Any securities or other assets
for which recent market quotations are not readily available are valued at
fair value as determined in good faith by the Fund's Board of Trustees.
Expenses and fees, including the management fee and distribution and
service fees, are accrued daily and taken into account for the purpose of
determining the net asset value of the Fund's shares.
UNDERWRITERS
Unified Management Corporation, Inc. 431 North Pennsylvania Street,
Indianapolis, Indiana 46204 will serve as the Fund's Underwriter. The offering
will be continuous. Compensation will be paid by the Fund to Unified
Management Corporation in an amount not greater than .25% of Fund assets.
INVESTMENT PERFORMANCE
"Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return (over the one, five and ten year periods) that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates, that the maximum sales load is
deducted from the initial $1,000 and that a complete redemption occurs at the
end of the applicable period. If the Fund has been in existence less than one,
five or ten years, the time period since the date of the initial public
offering of shares will be substituted for the periods stated.
From time to time the Fund advertises its "total return" and
"average annual total return". These figures are based on historical
earnings and are not intended to indicate future performance. The "total
return" shows what an investment in shares of the Fund would have earned
over a specified period of time (for example, one and five year periods or
since inception), and assuming that all distributions and dividends paid
by the Fund were reinvested on their investment dates during the period.
The "average annual total return" is the annual rate required for the
initial payment to grow to the amount which would be received at the end
of the specified period; i.e., the average annual compound rate of return.
From time to time, reference may be made in advertising or
promotional material to performance information, including mutual fund
rankings, prepared by Lipper Analytical Service, Inc. ("Lipper"), an
independent reporting service which monitors the performance of mutual
funds. In calculating the total return of the Fund's shares, the Lipper
analysis assumes investment of all dividends and distributions paid. The
Fund may also refer in advertisements or in other promotional material to
articles, comments, listings and columns in the financial press pertaining
to the Fund's performance.
FINANCIAL STATEMENTS
The following Statement of Assets and Liabilities dated July 29, 1998
was audited by Marie Jones, CPA.
To The Shareholders and Trustees
Labrador Mutual Fund:
I have audited the accompanying statement of assets and liabilities of
Labrador Mutual Fund as of July 29, 1998. This financial statement is
the responsibility of the Company's management. My responsibility is to
express an opinion on this financial statement based upon my audit.
I conducted the audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the statement of assets and
liabilities is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the statement of assets and liabilities. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
presentation of the statement of assets and liabilities. These
procedures included confirmation of cash held by the custodian as of
July 29, 1998, by correspondence with the custodian. I believe that the
audit of the statement of assets and liabilities provides a reasonable
basis for my opinion.
In my opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of
Labrador Mutual Fund as of July 29, 1998, in conformity with generally
accepted accounting principles.
Marie Jones CPA
Saratoga, California
July 29, 1998
STATEMENT OF ASSETS AND LIABILITIES
July 29, 1998
LABRADOR MUTUAL FUND
ASSETS:
Cash in Bank $100,000
Total Assets $100,000
NET ASSETS $100,000
NET ASSETS CONSIST OF:
Capital Paid In $100,000
OUTSTANDING SHARES
Indefinite Number of Shares of
Beneficial Interest Authorized
With Par Value of $.0001 Per Share $10,000
NET ASSET VALUE PER SHARE $10
OFFERING PRICE PER SHARE $10
LABRADOR MUTUAL FUND
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The Labrador Mutual Fund (the "Trust") was organized as a business trust under
the laws of the state of Delaware on November 13, 1997, as amended February 22,
1998. The Trust is authorized to issue an indefinite number of shares of
beneficial interest, par value $.0001 per share. Shares have non-cumulative
voting rights, do not have preemptive or subscription rights and are freely
transferable. The Labrador Mutual Fund is an open-end diversified portfolio of
the Trust.
The Trust uses an independent administrator, transfer agent, and dividend
paying agent. No transactions other than those relating to organizational
matters and the sale of 10,000 shares of Labrador Mutual Fund has taken place
to date.
2. RELATED PARTY TRANSACTIONS
In order to provide the initial capital for the Fund, Labrador Investment
Advisors, Inc. has purchased a total of 10,000 shares of the Fund at $10.00 per
share for an aggregate purchase price of $100,000. As long as Labrador
Investment Advisors, Inc., owns more than 25% of the Fund's shares, it will be
deemed to be in "control" of the Fund as that term is defined in the 1940 Act.
Pursuant to a Management Agreement between the Fund and Labrador Investment
Advisors, Inc., (the "Manager") and subject to the authority of the Board of
Trustees, the Manager manages the investments of the Fund and is responsible
for the overall management of the business affairs of the Fund.
Under the terms of the Management Agreement, the Fund has agreed to pay the
Manager a management fee at the annual rate of 1.50% of the Fund's
average daily net assets
All expenses incurred in the operation of the Fund will be borne by the Fund,
except to the extent specifically assumed by the Manager. The expenses to be
borne by the Fund will include: organizational costs, taxes, interest, brokerage
fees and commissions, fees of board members who are not officers, directors or
employees of the Manager or its affiliates, Securities and Exchange Commission
fees, state Blue Sky qualification fees, advisory, administrative and fund
accounting fees, charges of custodians, transfer and dividend disbursing agents'
fees, insurance premiums, industry association fees, outside auditing and legal
expenses, costs of maintaining the Fund's existence, costs of independent
pricing services, costs attributable to investor services (including, without
limitation, telephone and personnel expenses), cost of shareholders' reports and
meetings, costs of preparing and printing prospectuses and statements of
additional information, amounts payable under the Fund's Distribution and
Shareholder Servicing Plan (the "Plan") and any extraordinary expenses.
The Manager has undertaken, until such time as it gives investors 60 days'
notice to the contrary, to waive its Management Fee in the amount, if any, by
which the total expenses of the Fund for any fiscal year, including amortization
of organizational expenses and amounts paid by the Fund under the Plan, exceed
2.40% of average annual net assets of the Fund, except that the amount of such
fee waiver shall not exceed the amount of fees received by the Manager under the
Management Agreement for such fiscal year. The fee waiver, if any, will be on a
monthly basis, subject to year-end adjustment. Interest expenses, taxes,
brokerage fees and commissions, and extraordinary expenses are not included as
expenses for these purposes.
3. CAPITAL STOCK AND DISTRIBUTION
On July 31, 1998 an indefinite number of shares were authorized and paid-in
capital amounted to $100,000 for Labrador Mutual Fund. Transactions in capital
stock were as follows:
LABRADOR MUTUAL FUND
-------------
Shares sold................................................. 10,000
Shares redeemed..................................... -0-
-------------
Net increase........................................ 10,000
Shares outstanding:
Beginning of period............................... -0-
-------------
End of period..................................... 10,000
-------------
GENERAL INFORMATION
TRANSFER AGENT. Unified Fund Services, Inc., 431 N. Pennsylvania
Street, Indianapolis, IN 46204.
CUSTODIAN. Star Bank, N.A., 425 Walnut Street, M.L.6118, Sixth
Floor, Cincinnati, Ohio 45202 serves as custodian of the Fund.
DISTRIBUTOR. Unified Management Corporation, 431 N. Pennsylvania
Street, Indianapolis, IN 46204.
AUDITOR. Marie Jones, C.P.A., independent auditor, has been
selected as the auditor of the Fund. The business address is 19437
Burgundy Way, Saratoga, California 95070.
LABRADOR MUTUAL FUND
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
(b) Exhibits:
1.a. Agreement and Declaration of Trust
1.b. Certificate of Trust
2. By-Laws
5. Form of Management Contract
6(a). Form of Distribution Agreement
6(b). Form of Distribution Assistance Agreement
8. Custody Agreement With Star Bank
9 Mutual Fund Services Agreement
10. Opinion of Legal Counsel
11. Independent Auditor Report
13. Form of Share Purchase Agreement
14. Retirement Plan Literature
15. Distribution Plan
17(a) Consent of Independent Auditor
17(b) Financial Data Schedule
Item 25. Persons Controlled By or Under Common Control With Registrant
Prior to the effectiveness of this Registration Statement, the
Registrant sold 10,000 shares of the Fund to Labrador Investment Advisors,
Inc., a California Corporation, which is also the manager and investment
adviser to the Fund. Labrador Investment Advisors, Inc., is controlled by
Peter Allen Schuh, and Allen John Schuh.
Item 26. Number of Holders of Securities
Immediately prior to the effective date of this Registration
Statement, it is expected that there will be one record holder of
Registrant's shares of beneficial interest.
Item 27. Indemnification
Except for the Agreement and Declaration of Trust, dated February
22, 1998 (as amended), establishing the Registrant as a trust under
Delaware law, there is no contract, arrangement or statute under which any
director, officer, underwriter or affiliated person of the Registrant is
insured or indemnified. The Declaration of Trust provides that no Trustee
or officer will be indemnified against any liability of which the
Registrant would otherwise be subject by reason of or for willful
misfeasance, bad faith, gross negligence or reckless disregard of such
person's duties.
Insofar as indemnification for liability arising under the
Securities Act of 1933, as amended (the "Act"), may be available to
directors, 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 Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment of 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 or 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
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
Item 28. Business and Other Connections of Investment Adviser
None
Item 29. Principal Underwriter
Unified Management Corporation, 431 N. Pennsylvania Street, Indianapolis,
IN 46204 will serve as principle underwriter for the Fund.
Item 30. Location of Accounts and Records
The accounts and records are maintained at the Registrant's
office at 2344 Corte De La Jara, Pleasanton, California; contact the
Treasurer.
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
(a) Not Applicable.
(b) Not Applicable
(c) The Registrant hereby undertakes to deliver or cause
to be delivered with the Prospectus, to each person to whom the Prospectus
is sent or given, a copy of the Registrant's report to shareholders
furnished pursuant to and meeting the requirements of Rule 30d-1 from
which the specified information is incorporated by reference, unless such
person currently holds securities of the Registrant and otherwise has
received a copy of such report, in which case the Registrant shall state
in the Prospectus that it will furnish, without charge, a copy of such
report on request, and the name, address and telephone number of the
person to whom such a request should be directed.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant has duly caused this
Pre-Effective Amendment No. 6 to its Registration Statement on Form N-1A
to be signed on its behalf by the undersigned, thereto duly authorized, in
the City of Pleasanton and The State of California, on the 22nd day of
September, 1998.
LABRADOR MUTUAL FUND
By: /S/ PETER ALLEN SCHUH
---------------------
Peter Allen Schuh
Chairman
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 6 to its Registration Statement has been
signed below by the following persons in the capacities and on the date
indicated:
Signature Title
/S/ PETER ALLEN SCHUH Chairman of the Board
- - ----------------------- and President; Secretary;
Peter Allen Schuh Treasurer; Trustee
Principal Financial
and Accounting Officer
/S/ ALLEN JOHN SCHUH
- - ----------------------- Vice-President;
Allen John Schuh Trustee
Trustees:
/S/ DANIEL THOMAS BURKE
- - -----------------------------
Daniel Thomas Burke
/S/ ALLEN JOHN SCHUH
- - -----------------------------
Allen John Schuh
/S/ PETER ALLEN SCHUH
- - -----------------------------
Peter Allen Schuh
/S/ LEANDRO VERA
- - -----------------------------
Leandro Vera
Exhibit Number Exhibit
1.a. Agreement and Declaration of Trust
1.b. Certificate of Trust
2. By-Laws
5. Form of Management Contract
6(a). Form of Distribution Agreement
6(b). Form of Distribution Assistance Agreement
8. Custody Agreement With Star Bank
9 Mutual Fund Services Agreement
10. Opinion of Legal Counsel
11. Independent Auditor Report
13. Form of Share Purchase Agreement
14. Retirement Plan Literature
15. Distribution Plan
17(a) Consent of Independent Auditor
17(b) Financial Data Schedule
EXHIBIT 1A
AGREEMENT AND DECLARATION OF TRUST
(as Amended February 22, 1998)
of
LABRADOR MUTUAL FUND
(Formerly known as Labrador Fund)
a Delaware Business Trust
Principal Place of Business:
2344 Corte De La Jara
Pleasanton, California 94566
Formed:
November 13, 1997
(As Amended February 22, 1998)
TABLE OF CONTENTS
AGREEMENT AND DECLARATION OF TRUST
LABRADOR MUTUAL FUND
Page
ARTICLE I Name and Definitions
1. Name
2. Definitions
(a) Trust
(b) Trust Property
(c) Trustees
(d) Shares
(e) Shareholder
(f) Person
(g) Investment Company Act
(h) Commission and Principal Underwriter
(i) Declaration of Trust
(j) By-Laws
(k) Interested Person
(l) Investment Adviser
(m) Series
(n) Class
(o) Voting Interest
ARTICLE II Purpose of Trust
ARTICLE III Shares
1. Division of Beneficial Interest
2. Ownership of Shares
3. Investments in the Trust
4. Status of Shares and Limitation of
Personal Liability
5. Power of Board of Trustees to Change
Provisions Relating to Shares
6. Establishment and Designation of Series and Classes
(a) Assets With Respect to a Particular Series
(b) Liabilities Held With Respect to a
Particular Series or Class
(c) Dividends, Distributions, Redemptions and Repurchases
(d) Voting
(e) Equality
(f) Fractions
(g) Exchange Privilege
(h) Combination of Series
(i) Elimination of Series
7. Indemnification of Shareholders
ARTICLE IV The Board of Trustees
1. Number, Election and Tenure
2. Effect of Death, Resignation, etc.of a Trustee
3. Powers
4. Payment of Expenses by the Trust
5. Payment of Expenses by Shareholders
6. Ownership of Assets of the Trust
7. Service Contracts
ARTICLE V Shareholders' Voting Powers and Meetings
1. Voting Powers
2. Voting Power and Meetings
3. Quorum and Required Vote
4. Action by Written Consent
5. Record Dates
6. Additional Provisions
ARTICLE VI Net Asset Value, Distributions,
and Redemptions
1. Determination of Net Asset Value, Net
Income and Distributions
2. Redemptions and Repurchases
3. Redemptions at the Option of the Trust
ARTICLE VII Compensation and Limitation of
Liability of Trustees
1. Compensation
2. Indemnification and Limitation of Liability
3. Trustee's Good Faith Action, Expert
Advice, No Bond or Surety
4. Insurance
ARTICLE VIII Miscellaneous
1. Liability of Third Persons Dealing
with Trustees
2. Termination of Trust, Series or Class
3. Merger and Consolidation
4. Amendments
5. Filing of Copies, References, Headings
6. Applicable Law
7. Provisions in Conflict with Law or Regulations
8. Business Trust Only
9. Use of the Identifying Words "Labrador Mutual"
and Related Phrases
AGREEMENT AND DECLARATION OF TRUST
OF
LABRADOR MUTUAL FUND
WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST is
made and entered into as of the date set forth below by the
Trustees named hereunder for the purpose of forming a Delaware
business trust in accordance with the provisions hereinafter set
forth,
NOW, THEREFORE, the Trustees hereby direct that a
Certificate of Trust be filed with 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 hereafter acquire from time
to time in any manner and manage and dispose of the same upon the
following terms and conditions for the pro rata benefit of the
holders of Shares in this Trust.
ARTICLE I
Name and Definitions
Section 1. Name. This Trust shall be known as
LABRADOR MUTUAL 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.
Section 2. Definitions. Whenever used herein, unless
otherwise required by the context or specifically provided:
(a) The "Trust" refers to the Delaware business trust
established by this Agreement and Declaration of Trust, as
amended from time to time;
(b) The "Trust Property" means any and all property,
real or personal, tangible or intangible, which is owned or held
by or for the account of the Trust, including without limitation
the rights referenced in Article VIII, Section 9 hereof;
(c) "Trustees" refers to the persons who have signed
this Agreement and Declaration of Trust, so long as they continue
in office in accordance with the terms hereof, and all other
persons who may from time to time be duly elected or appointed to
serve on the Board of Trustees in accordance with the provisions
hereof, and reference herein to a Trustee or the Trustees shall
refer to such person or persons in their capacity as trustees
hereunder;
(d) "Shares" means the shares of beneficial interest
into which the beneficial interest in the Trust shall be divided
from time to time and includes fractions of Shares as well as
whole Shares, and if the Shares of any Series shall be divided
into Classes, "Shares" means the Shares belonging to a
particular Class (as the context may require);
(e) "Shareholder" means a record owner of outstanding
Shares;
(f) "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 political subdivisions thereof,
whether domestic or foreign;
(g) The "Investment Company Act" refers to the
Investment Company Act of 1940 and the Rules and Regulations
thereunder, all as amended from time to time;
(h) The terms "Commission" and "Principal Underwriter"
shall have the meanings given them in the Investment Company Act;
(i) "Declaration of Trust" shall mean this Agreement
and Declaration of Trust, as amended or restated from time to
time;
(i) "By-Laws" shall mean the By-Laws of the Trust as
amended from time to time and incorporated herein by reference;
(k) The term "Interested Person" has the meaning given
it in Section 2(a)(19) of the Investment Company Act;
(l) "Investment Adviser" or "Manager" means a party
furnishing services to the Trust pursuant to any contract
described in Article IV, Section 7(a) hereof;
(m) "Series" refers to each Series of Shares
established and designated under or in accordance with the
provisions of Article III;
(n) "Class" means a Class of Shares established and
designated under or in accordance with the provisions of Article
III; and
(o) "Voting Interests" shall mean (i) the number of
Shares outstanding times net asset value per Share where two or
more Series or Classes of Shares of the Trust are voted in the
aggregate or (ii) the number of Shares of each Series or Class
where Shareholders vote by separate Series or Classes.
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 Investment Company Act through one or more
Series investing primarily in securities.
ARTICLE III
Shares
Section 1. Division of Beneficial Interest. The
beneficial interest in the Trust shall at all times be divided
into an unlimited number of Shares, with a par value of $.01 per
Share. The Trustees may authorize the division of Shares into
separate Series and the division of Series into separate Classes
of Shares. The different Series and Classes shall be established
and designated, and the variations in the relative rights and
preferences as between the different Series and Classes shall be
fixed and determined, by the Trustees. If only one or no Series
or Classes shall be established, the Shares shall have the rights
and preferences provided for herein and in Article III, Section 6
hereof to the extent relevant and not otherwise provided for
herein, and all references to Series (and Classes) shall be
construed (as the context may require) to refer to the Trust.
Subject to the provisions of Section 6 of this Article
III, each Share shall have voting rights as provided in Article V
hereof, and holders of the Shares of any Series shall be entitled
to receive dividends when, if and as declared with respect
thereto in the manner provided in Article VI, Section 1 hereof.
No Shares shall have any priority or preference over any other
Share of the same Series and Class with respect to dividends or
distributions upon termination of the Trust or of such Series or
such Class made pursuant to Article VIII, Section 4 hereof. All
dividends and distributions shall be made ratably among all
Shareholders of a particular Class of a particular Series and, if
no Classes, of a particular Series from the assets held with
respect to such Series according to the number of Shares of such
Class of such Series or of such Series held of record by such
Shareholder on the record date for any dividend or distribution
or on the date of termination, as the case may be. Shareholders
shall have no preemptive or other right to subscribe to any
additional Shares or other securities issued by the Trust or any
Series, although the Trustees may provide for the automatic
conversion of one Class of Shares of a Series into another Class
of Shares of the same Series upon the occurrence of certain
specific events. The Trustees may from time to time divide or
combine the Shares of any particular Series or Class into a
greater or lesser number of Shares of that Series or Class
without thereby materially changing the proportionate beneficial
interest of the Shares of that Series or Class in the assets held
with respect to that Series or materially affecting the rights of
Shares of any other Series or Class.
Section 2. Ownership of Shares. The ownership of
Shares shall be recorded on the books of the Trust or a transfer
or similar agent for the Trust, which books shall be maintained
separately for the Shares of each Series or Class of each Series.
No certificates certifying the ownership of Shares shall be
issued except as the Board of Trustees may otherwise determine
from time to time. The Trustees may make such rules as they
consider appropriate for the transfer of Shares of each Series or
Class of each Series 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 each Series and as to the
number of Shares of each Series or Class held from time to time
by each.
Section 3. Investments in the Trust. Investments may
be accepted by the Trust from such Persons, at such times, on
such terms, and for such consideration as the Trustees from time
to time may authorize.
Section 4. Status of Shares and Limitation of Personal
Liability. Shares shall be deemed to be personal property giving
only the rights provided in this instrument. Every Shareholder,
by virtue of having become a Shareholder, shall be held to have
expressly assented and agreed to the terms hereof and to have
become a party hereto. The death of a Shareholder during the
existence of the Trust shall not operate to terminate the Trust,
nor entitle the representative of any deceased Shareholder to an
accounting or to take any action in court or elsewhere against
the Trust or the Trustees, but entitles such representative only
to the rights of said deceased 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 partition or division of the same or for an
accounting, nor shall the ownership of Shares constitute the
Shareholders as partners. Neither the Trust nor the Trustees,
nor any officer, employee or agent of the Trust shall have any
power to bind personally any Shareholder, 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.
Section 5. Power of Board of Trustees to Change
Provisions Relating to Shares. Notwithstanding any other
provision of this Declaration of Trust and without limiting the
power of the Board of Trustees to amend the Declaration of Trust
as provided elsewhere herein, the Board of Trustees shall have
the power to amend this Declaration of Trust, at any time and
from time to time, in such manner as the Board of Trustees may
determine in their sole discretion, without the need for
Shareholder action, so as to add to, delete, replace or otherwise
modify any provisions relating to the Shares contained in this
Declaration of Trust, provided that before adopting any such
amendment without Shareholder approval the Board of Trustees
shall determine that it is consistent with the fair and equitable
treatment of all Shareholders or that Shareholder approval is not
otherwise required by the Investment Company Act or other
applicable law. If Shares have been issued, Shareholder approval
shall be required to adopt any amendments to this Declaration of
Trust that would adversely affect to a material degree the rights
and preferences of the Shares of any Series or Class of any
Series or to increase or decrease the par value of the Shares of
any Series or Class of any Series.
Subject to the foregoing Paragraph, the Board of
Trustees may amend the Declaration of Trust to amend any of the
provisions set forth in paragraphs (a) through (i) of Section 6
of this Article III.
Section 6. Establishment and Designation of Series and
Classes. The establishment and designation of any Series or Class
of Shares shall be effective upon the resolution by a majority of
the then Trustees, adopting a resolution that sets forth such
establishment and designation and the relative rights and
preferences of such Series or Class. Each such resolution shall
be incorporated herein by reference upon adoption.
Shares of each Series or Class established pursuant to
this Section 6, unless otherwise provided in the resolution
establishing such Series, 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 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, shall irrevocably be held with
respect to that Series for all purposes, subject only to the
rights of creditors, 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 herein referred to 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 Asset so allocated to a
particular Series shall be held with respect to that Series.
Each such allocation by the Trustees shall be conclusive and
binding upon the Shareholders of all Series for all purposes.
(b) Liabilities Held With Respect to a Particular
Series or Class. 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.
Specific Classes within each Series shall be charged with the
liabilities, expenses, costs, charges and reserves attributable
to that Class. Any general liabilities of the Trust which are
not readily identifiable as being held with respect to any
particular Series, or within a Series, to any particular 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. The 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. Each
allocation of liabilities, expenses, costs, charges and reserves
by the Trustees shall be conclusive and binding upon the holders
of all Series and Classes for all purposes. All Persons who have
extended credit which has been allocated to a particular Series,
or who have a claim or contract which has been allocated to any
particular Series, shall look, and shall be required by contract
to look exclusively, to the assets of that particular Series for
payment of such credit, claim, or contract. In the absence of an
express contractual agreement so limiting the claims of such
creditors, claimants and contract providers, each creditor,
claimant and contract provider will be deemed nevertheless to
have impliedly agreed to such limitation unless an express
provision to the contrary has been incorporated in the written
contract or other document establishing the claimant
relationship.
(c) Dividends, Distributions, Redemptions and
Repurchases. Notwithstanding any other provisions of this
Declaration of Trust, including, without limitation, Article VI,
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,
except as specifically provided in Section 7 of this Article III,
shall any Shareholder of any particular Series or Class within
such Series 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 Investment
Company 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) Voting. All Shares of the Trust entitled to vote
on a matter shall vote separately by Series (and, if applicable,
by Class): that is, the Shareholders of each Series or Class
shall have the right to approve or disapprove matters affecting
the Trust and each respective Series or Class as if the Series or
Classes were separate companies. There are, however, two
exceptions to voting by separate Series or Classes. First, if
the Investment Company Act requires all Shares of the Trust to be
voted in the aggregate without differentiation between the
separate Series or Classes, then all the Trust's Shares shall be
entitled to vote based on the dollar value of their Shares as
described below in Article V, Section 1. Second, if any matter
affects only the interests of some but not all Series or Classes,
then only the Shareholders of such affected Series or Classes
shall be entitled to vote on the matter.
(e) 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 particular Classes within that
Series and such rights and preferences as may have been
established and designated with respect to Classes of Shares
within such Series), and, except for rights and preference among
Classes, each Share of any particular Series shall be equal to
each other Share of that Series.
(f) Fractions. Any fractional Share of a Series or
Class shall carry proportionately all the rights and obligations
of a whole share of that Series, including rights with respect to
voting, receipt of dividends and distributions, redemption of
Shares and termination of the Trust.
(g) Exchange Privilege. The Trustees shall have the
authority to provide that the holders of Shares of any Series and
Class shall have the right to exchange said Shares for Shares of
one or more other Series of Shares or Classes of the same Series
in accordance with such requirements and procedures as may be
established by the Trustees.
(h) Combination of Series. The Trustees shall have
the authority, without the approval of the Shareholders of any
Series 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.
(i) Elimination of Series. At any time that there are
no Shares outstanding of any particular Series or Class
previously established and designated, the Trustees may by
resolution of a majority of the then Trustees abolish that Series
or Class and rescind the establishment and designation thereof.
Section 7. Indemnification of Shareholders. If any
Shareholder or former Shareholder shall be exposed to liability
by reason of a claim or demand relating to his or her being or
having been a Shareholder, and not because of his or her acts or
omissions, the Shareholder or former Shareholder (or his or her
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 applicable Series
of the Trust against all loss and expense arising from such claim
or demand.
ARTICLE IV
The Board of Trustees
Section 1. Number, Election and Tenure. The number of
Trustees constituting the Board of Trustees shall be fixed from
time to time by a written instrument signed, or by resolution
approved at a duly constituted meeting, by a majority of the
Board of Trustees, provided, however, that the number of Trustees
shall in no event be fewer than one (1) nor more than fifteen
(15). The Board of Trustees, by action of a majority of the then
Trustees at a duly constituted meeting, may fill vacancies in the
Board of Trustees or remove Trustees with or without cause. Each
Trustee shall serve during the continued lifetime of the Trust
until he or she dies, resigns, 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. 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. Such resignation shall be effective upon receipt
unless specified to be effective at some other time. 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. The Shareholders may fix the number of Trustees
and 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 Voting
Interests of the Trust as defined in Article I, Section 2(n). A
meeting of Shareholders for the purpose of electing or removing
one or more Trustees may be called (i) by the Trustees upon their
own vote, or (ii) upon the demand of Shareholders owning 10% or
more of the Voting Interests of the Trust as defined in Article
I, Section 2(n).
Section 2. Effect of Death, Resignation, etc. of a
Trustee. The death, declination, 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 a vacancy in the Board of Trustees shall occur,
until such vacancy is filled as provided in Article IV, Section
l, 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 Board
of 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 fill vacancies, the Trust's Investment
Adviser(s) are empowered to appoint new Trustees subject to the
provisions of Section 16(a) of the Investment Company Act.
Section 3. Powers. Subject to the provisions of this
Declaration of Trust, the business of the Trust shall be managed
by the Board of Trustees, and such Board 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: adopt By-Laws not inconsistent with this
Declaration of Trust providing for the regulation and management
of the affairs of the Trust and may amend and repeal them to the
extent that such By-Laws do not reserve that right to the
Shareholders; fill vacancies in or remove from their number, and
may elect and remove 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 one or more Trustees, which may exercise the powers
and authority of the Board of Trustees to the extent that the
Trustees determine; 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; retain an administrator and a portfolio
adviser for each Series of Shares; 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; set record dates
for the determination of Shareholders with respect to various
matters; 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. 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 or required by law, any
action by the Board of Trustees shall be deemed effective if
approved or taken by a majority of the Trustees then in office.
Without limiting the foregoing, the Trust shall have
power and authority:
(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
paper, 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, any foreign government or any political
subdivision of the U.S. 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 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 of
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;
(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;
(l) To purchase and 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 policies 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 Shares, 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 omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such
Person against liability; and
(m) To adopt, establish and carry out pension, profit-
sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trusts and provisions,
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.
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.
Section 4. Payment of Expenses by the Trust. 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 or manager, 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.
Section 5. Payment of Expenses by Shareholders. 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, for
charges of the Trust's custodian or transfer, Shareholder
servicing or similar agent, an amount fixed from time to time by
the Trustees, by setting off such charges 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
charges due from such Shareholder.
Section 6. Ownership of Assets of the Trust. 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 has been
executed and delivered.
Section 7. Service Contracts.
(a) Subject to such requirements and restrictions as
may be set forth in the By-Laws, 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 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 or administrator
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 in the By-Laws;
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 in the By-Laws or stipulated by resolution of the
Trustees.
(d) 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, manager, 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, shareholder servicing 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
(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, shareholder
servicing or other type of service contract may have
been or may hereafter be made also has an advisory,
management or administration contract, or principal
underwriter's or distributor's contract, or transfer,
shareholder servicing 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 Investment
Company Act.
ARTICLE V
Shareholders' Voting Powers and Meetings
Section 1. Voting Powers. Subject to the provisions
of Article III, Section 6(d), the Shareholders shall have power
to vote only (i) for the election or removal of Trustees as
provided in Article IV, Section 1, and (ii) with respect to such
additional matters relating to the Trust as may be required by
this Declaration of Trust, the By-Laws or any registration of the
Trust with the Commission (or any successor agency) or any state,
or as the Trustees may consider necessary or desirable. As
appropriate, voting may be by Series or Class. A Shareholder of
each Series shall be entitled to one vote for each dollar of net
asset value (number of Shares owned times net asset value per
Share) per Share of such Series, on any matter on which such
Shareholder is entitled to vote and each fractional dollar amount
shall be entitled to a proportionate fractional vote. There
shall be no cumulative voting in the election of Trustees.
Shares may be voted in person or by proxy. A proxy with respect
to Shares held in the name of two or more persons shall be valid
if executed by any one of them unless at or prior to exercise of
the proxy the Trust receives a specific written notice to the
contrary from any one of them. A proxy purporting to be executed
by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden of proving
invalidity shall rest on the challenger.
Section 2. Voting Power and Meetings. Meetings of the
Shareholders may be called by the Trustees for the purpose of
electing Trustees as provided in Article IV, Section l and for
such other purposes as may be prescribed by law, by this
Declaration of Trust or by the By-Laws. Meetings of the
Shareholders may also be called by the Trustees from time to time
for the purpose of taking action upon any other matter deemed by
the Trustees to be necessary or desirable. A meeting of
Shareholders may be held at any place designated by the Trustees.
Written notice of any meeting of Shareholders shall be given or
caused to be given by the Trustees by mailing such notice at
least seven (7) days before such meeting, postage prepaid,
stating the time and place of the meeting, to each Shareholder at
the Shareholder's address as it appears on the records of the
Trust. Whenever notice of a meeting is required to be given to a
Shareholder under this Declaration of Trust or the By-Laws, a
written waiver thereof, executed before or after the meeting by
such Shareholder or his or her attorney thereunto authorized and
filed with the records of the meeting, shall be deemed equivalent
to such notice.
Section 3. Quorum and Required Vote. Except when a
larger quorum is required by applicable law, by the By-Laws or by
this Declaration of Trust, forty percent (40%) of the Voting
Interests, as defined in Article I, Section 2(o), 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, forty percent (40%) of the Shares
of each such Series or Class entitled to vote shall constitute a
quorum at a Shareholder's meeting of that Series. Any meeting of
Shareholders may be adjourned from time to time by a majority of
the Voting Interests, as defined in Article I, Section 2(o),
properly cast upon the question of adjourning a meeting to
another date and time, whether or not a quorum is present, and
the meeting may be held as adjourned within a reasonable time
after the date set for the original meeting without further
notice. Subject to the provisions of Article III, Section 6(d),
when a quorum is present at any meeting, a majority of the Voting
Interests, as defined in Article I, Section 2(o), voted shall
decide any questions and a plurality shall elect a Trustee,
except when a larger vote is required by any provision of this
Declaration of Trust or the By-Laws or by applicable law.
Section 4. Action by Written Consent. Any action
taken by shareholders may be taken without a meeting if
Shareholders holding a majority of the Voting Interests, as
defined in Article I, Section 2(o), entitled to vote on the
matter (or such larger proportion thereof as shall be required by
any express provision of this Declaration of Trust or by the By-
Laws or by applicable law) and holding a majority (or such larger
proportion as aforesaid) of the Shares of any Series or Class
entitled to vote separately on the matter consent to the action
in writing and such written consents are filed with the records
of the meetings of Shareholders. Such consent shall be treated
for all purposes as a vote taken at a meeting of Shareholders.
Section 5. Record Dates. For the purpose of
determining the Shareholders of any Series or Class who are
entitled to vote or act at any meeting or any adjournment
thereof, the Trustees may from time to time fix a time, which
shall be not more than ninety (90) days before the date of any
meeting of Shareholders, as the record date for determining the
Shareholders of such Series or Class having the right to notice
of and to vote at such meeting and any adjournment thereof, and
in such case only Shareholders of record on such record date
shall have such right, notwithstanding any transfer of shares on
the books of the Trust after the record date. 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 voting and/or distribution purposes close the
register or transfer books for one or more Series for all or any
part of the period between a record date and a meeting of
Shareholders or 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.
Section 6. Additional Provisions. The By-Laws may
include further provisions for Shareholders' votes and meetings
and related matters.
ARTICLE VI
Net Asset Value, Distributions and Redemptions
Section 1. Determination of Net Asset Value, Net
Income and Distributions. Subject to Article III, Section 6
hereof, the Trustees, in their absolute discretion, may prescribe
and shall set forth in the By-laws or in a duly adopted vote of
the Trustees such bases and time for determining the per-Share
net asset value of the Shares of any Series and Class or net
income attributable to the Shares of any Series and Class, or the
declaration and payment of dividends and distributions on the
Shares of any Series and Class, as they may deem necessary or
desirable.
Section 2. Redemptions and Repurchases. 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, in accordance with
the By-Laws and applicable law. Payment for said Shares shall be
made by the Trust to the Shareholder within seven days after the
date on which the request is made in proper form. 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 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 obligations may be suspended or
postponed by the Trustees.
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 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 corporation or other Person in
transferring securities selected for delivery as all or part of
any payment in kind.
Section 3. Redemptions at the Option of the Trust.
The Trust shall have the right, at its option and at any time, to
redeem Shares of any Shareholder at the net asset value thereof
as described in Section 1 of this Article VI: (i) if at such time
such Shareholder owns Shares of any Series having an aggregate
net asset value of less than an amount determined from time to
time by the Trustees prior to the acquisition of said Shares; or
(ii) to the extent that such Shareholder owns Shares of a
particular Series equal to or in excess of a percentage of the
outstanding Shares of that Series determined from time to time by
the Trustees; or (iii) to the extent that such Shareholder owns
Shares equal to or in excess of a percentage, determined from
time to time by the Trustees, of the outstanding Shares of the
Trust or of any Series.
ARTICLE VII
Compensation and Limitation of Liability of Trustees
Section 1. Compensation. The Trustees as such shall
be entitled to reasonable compensation from the Trust, and they
may fix the amount of such compensation. Nothing herein shall in
any way prevent the employment of any Trustee for advisory,
management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
Section 2. Indemnification and Limitation of
Liability. The Trustees shall not be responsible or liable in
any event for any neglect or wrong-doing of any officer, agent,
employee, Investment Adviser or principal underwriter of the
Trust, nor shall any Trustee be responsible for the act or
omission of any other Trustee, and the Trust out of its assets
shall indemnify and hold harmless each and every Trustee from and
against any and all claims and demands whatsoever arising out of
or related to each Trustee's performance of his or her duties as
a Trustee of the Trust; provided that nothing herein contained
shall indemnify, hold harmless or protect any Trustee from or
against any liability to the Trust or any Shareholder to which he
or she would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his or her office.
Every note, bond, contract, instrument, certificate or
undertaking and every other act or thing whatsoever issued,
executed or done by or on behalf of the Trust or the Trustees or
any of them in connection with the Trust shall be conclusively
deemed to have been issued, executed or done only in or with
respect to their or his or her capacity as Trustees or Trustee,
and such Trustees or Trustee shall not be personally liable
thereon.
Section 3. Trustee's Good Faith Action, Expert Advice,
No Bond or Surety. The exercise by the Trustees of their powers
and discretion 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.
Section 4. Insurance. 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
or officer in connection with any claim, action, suit or
proceeding in which he or she becomes involved by virtue of his
or her capacity or former capacity with the Trust.
ARTICLE VIII
Miscellaneous
Section 1. Liability of Third Persons Dealing with
Trustees. 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.
Section 2. Termination of Trust, Series or Class.
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 or Class (in the
case of a proposed termination of a Class) may be terminated at
any time by vote of a majority of the Shares of that Series or by
the Trustees by written notice to the Shareholders of that Series
or Class.
Upon termination of the Trust (or any Series or Class,
as the case may be), after paying or otherwise providing for all
charges, taxes, expenses and liabilities held, severally, with
respect to each Series and Class (or the applicable Series or
Class, as the case may be), whether due or accrued or anticipated
as may be determined by the Trustees, the Trust shall, in
accordance with such procedures as the Trustees consider
appropriate, reduce the remaining assets held, severally, with
respect to each Series and Class (or the applicable Series or
Class, as the case may be), to distributable form in cash or
shares or other securities, or any combination thereof, and
distribute the proceeds held with respect to each Series and
Class (or the applicable Series or Class, as the case may be), to
the Shareholders of that Series or Class, as a Series or Class,
ratably according to the number of Shares of that Series or Class
held by the several Shareholders on the date of termination.
Section 3. Merger and Consolidation. The Trustees may
cause (i) the Trust or one or more of its Series or Classes to
the extent consistent with applicable law to be merged into or
consolidated with another trust or company, (ii) the Shares of
the Trust or any Series to be converted into beneficial interests
in another business trust (or series thereof) created pursuant to
this Section 3 of Article VIII, or (iii) the Shares to be
exchanged under or pursuant to any state or federal statute to
the extent permitted by law. Such merger or consolidation, Share
conversion or Share exchange must be authorized by vote of a
majority of the Voting Interests of the Trust, as defined in
Article I, Section 2(o), as a whole, or any affected Series, as
may be applicable; provided that in all respects not governed by
statute or applicable law, the Trustees shall have the power to
prescribe the procedure necessary or appropriate to accomplish a
sale of assets, merger or consolidation including the power to
create one or more separate business trusts to which all or any
part of the assets, liabilities, profits or losses of the Trust
may be transferred and to provide for the conversion of Shares of
the Trust or any Series into beneficial interests in such
separate business trust or trusts (or series thereof).
Section 4. Amendments. This Declaration of Trust may
be restated and/or amended at any time by an instrument in
writing signed by a majority of the then Trustees and, if
required, by approval of such amendment by Shareholders in
accordance with Article V, Section 3 hereof. Any such
restatement and/or amendment hereto shall be effective
immediately upon execution and approval. The Certificate of
Trust of the Trust may be restated and/or amended by a similar
procedure, and any such restatement and/or amendment shall be
effective immediately upon filing with the Office of the
Secretary of State of the State of Delaware or upon such future
date as may be stated therein.
Section 5. Filing of Copies, References, Headings.
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 amendment, references to this instrument, and
all expressions like "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.
Section 6. Applicable Law. This Agreement and
Declaration of Trust is created under and is to be governed by
and construed and administered according to the laws of the State
of Delaware and the Delaware Business Trust Act, as amended from
time to time (the "Act"). The Trust shall be a Delaware business
trust pursuant to such Act, and without limiting the provisions
hereof, the Trust may exercise all powers which are ordinarily
exercised by such a business trust.
Section 7. Provisions in Conflict with Law or
Regulations.
(a) The provisions of the Declaration of Trust
are severable, and if the Trustees shall determine, with the
advice of counsel, that any of such provisions is in conflict
with the Investment Company Act, the regulated investment company
provisions of the Internal Revenue Code or with other applicable
laws and regulations, the conflicting provision shall be deemed
never to have constituted a part of the Declaration of Trust;
provided, however, that such determination shall not affect any
of the remaining provisions of the Declaration of Trust or render
invalid or improper any action taken or omitted prior to such
determination.
(b) If any provision of the 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 the Declaration of Trust in any jurisdiction.
Section 8. Business Trust Only. It is the intention
of the Trustees to create a business trust pursuant to the
Delaware Business Trust Act, as amended from time to time (the
"Act"), and thereby to create only the relationship of trustee
and beneficial owners within the meaning of such Act between the
Trustees and each Shareholder. 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 such
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.
Section 9. Use of the Identifying Words "Labrador
Mutual" and Related Phrases. The identifying words "Labrador
Mutual Fund" and all rights to the use of such identifying words
belong to Labrador Investment Advisors, Inc. Labrador Investment
Advisors, Inc. has licensed the Trust to use the identifying word
"Labrador" in the Trust's name and to use the identifying word
"Labrador" in the name of any series of the Trust. If Labrador
Investment Advisors, Inc. is not appointed or ceases to be the
Investment Adviser for the Trust, the non-exclusive license may
be revoked by Labrador Investment Advisors, Inc., and the Trust
and any series thereof shall respectively cease using the
identifying words "Labrador Mutual" unless otherwise consented to
by Labrador Investment Advisors, Inc. or any successor to
Labrador Investment Advisors, Inc.'s interest.
[REMAINDER OF PAGE LEFT BLANK]
IN WITNESS WHEREOF, the initial Trustee named below does
hereby make and enter into this Declaration of Trust as of the
22nd day of February 1998.
/S/ PETER SCHUH
- ----------------------------
Peter Schuh
2344 Corte De La Jara
Pleasanton, California 94566
THE PRINCIPAL PLACE OF BUSINESS OF THE TRUST IS 2344 CORTE DE LA
JARA, PLEASANTON, CALIFORNIA 94566.
EXHIBIT 1B
State of Delaware
Certificate of Trust
This Certificate of Trust is in accordance with the provisions of the
Delaware Business Trust Act (12 Del.C. Section 3801 et seq.) and sets
forth the following:
First: The name of the trust is Labrador Mutual Fund.
Second: The name and business address of the Registered Agent is (meeting
the requirements of subsection 3807): The Corporation Trust Company, 11209
Orange Street, Wilmington, DE 19801.
Third:
Fourth: The business trust shall be a registered investment company under
the Investment Company Act of 1940.
/S/ PETER ALLEN SCHUH
- --------------------------------
Peter Allen Schuh
Chairman, Trustee
EXHIBIT 2
BY-LAWS
OF
LABRADOR MUTUAL FUND
(FORMERLY NAMED LABRADOR FUND)
A Delaware Business Trust
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The Board of Trustees shall fix and, from
time to time, may change the location of the principal executive office of
the LABRADOR MUTUAL FUND (the "Trust") at any place within or outside the
State of Delaware.
Section 2. DELAWARE OFFICE. The Board of Trustees shall establish a
registered office in the State of Delaware and shall appoint as the
Trust's registered agent for service of process in the State of Delaware
an individual resident of the State of Delaware or a Delaware corporation
or a corporation authorized to transact business in the State of Delaware;
in each case the business office of such registered agent for service of
process shall be identical with the registered Delaware office of the
Trust.
Section 3. OTHER OFFICES. The Board of Trustees may at any time
establish branch or subordinate offices at any place or places where the
Trust intends to do business.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held at
any place designated by the Board of Trustees. In the absence of any such
designation, shareholders' meetings shall be held at the principal
executive office of the Trust.
Section 2. CALL OF MEETING. A meeting of the shareholders may be called
at any time by the Board of Trustees or by the Chairman of the Board or by
the President, or Vice President.
Section 3. NOTICE OF SHAREHOLDERS' MEETING. All notices of meetings of
shareholders shall be sent or otherwise given in accordance with Section 4
of this Article II not less than seven (7) nor more than seventy-five (75)
days before the date of the meeting. The notice shall specify (i) the
place, date and hour of the meeting, and (ii) the general nature of the
business to be transacted. The notice of any meeting at which Trustees
are to be elected also shall include the name of any nominee or nominees
whom at the time of the notice are intended to be presented for election.
If action is proposed to be taken at any meeting for approval of (i) a
contract or transaction in which a Trustee has a direct or indirect
financial interest, (ii) an amendment of the Trust's Agreement and
Declaration of Trust, (iii) a reorganization of the Trust, or (iv) a
voluntary dissolution of the Trust, the notice shall also state the
general nature of that proposal.
Section 4. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice of any
meeting of shareholders shall be given either personally or by first-class
mail or telegraphic or other written communication, charges prepaid,
addressed to the shareholder at the address of that shareholder appearing
on the books of the Trust or its transfer agent or given by the
shareholder to the Trust for the purpose of notice. If no such address
appears on the Trust's books or is given, notice shall be deemed to have
been given if sent to that shareholder by first-class mail or telegraphic
or other written communication to the Trust's principal executive office,
or if published at least once in a newspaper of general circulation in the
county where that office is located. Notice shall be deemed to have been
given at the time when delivered personally or deposited in the mail or
sent by telegram or other means of written communication.
If any notice addressed to a shareholder at the address of that
shareholder appearing on the books of the Trust is returned to the Trust
by the United States Postal Service marked to indicate that the Postal
Service is unable to deliver the notice to the shareholder at that
address, all future notices or reports shall be deemed to have been duly
given without further mailing if these shall be available to the
shareholder on written demand of the shareholder at the principal
executive office of the Trust for a period of one year from the date of
the giving of the notice.
An affidavit of the mailing or other means of giving any notice of any
shareholder's meeting shall be executed by the Secretary, Assistant
Secretary or any transfer agent of the Trust giving the notice and shall
be filed and maintained in the minute book of the Trust.
Section 5. ADJOURNED MEETING; NOTICE. Any shareholder's meeting, whether
or not a quorum is present, may be adjourned from time to time by the vote
of the majority of the Voting Interests, as defined in Article I, Section
2(n) of the Agreement and Declaration of Trust of the Trust, represented
at that meeting, either in person or by proxy.
When any meeting of shareholders is adjourned to another time or place,
notice need not be given of the adjourned meeting at which the adjournment
is taken, unless a new record date of the adjourned meeting is fixed or
unless the adjournment is for more than sixty (60) days from the date set
for the original meeting, in which case the Board of Trustees shall set a
new record date. Notice of any such adjourned meeting shall be given to
each shareholder of record entitled to vote at the adjourned meeting in
accordance with the provisions of Section 3 and 4 of this Article II. At
any adjourned meeting, the Trust may transact any business which might
have been transacted at the original meeting.
Section 6. VOTING. The shareholders entitled to vote at any meeting of
shareholders shall be determined in accordance with the provisions of the
Agreement and Declaration of Trust of the Trust, as in effect at such
time.
The shareholders' vote may be by voice vote or by ballot, provided,
however, that any election for Trustees must be by ballot if demanded by
any shareholder before the voting has begun. On any matter other than
elections of Trustees, any shareholder may vote part of the shares in
favor of the proposal and refrain from voting the remaining shares or vote
them against the proposal, but if the shareholder fails to specify the
number of shares which the shareholder is voting affirmatively, it will be
conclusively presumed that the shareholder's approving vote is with
respect to the total shares that the shareholder is entitled to vote on
such proposal.
Section 7. WAIVER OF NOTICE BY CONSENT OF ABSENT SHAREHOLDERS. The
transactions of the meeting of shareholders, however called and noticed
and wherever held, shall be as valid as though had at a meeting duly held
after regular call and notice if a quorum be present either in person or
by proxy and if either before or after the meeting, each person entitled
to vote who was not present in person or by proxy signs a written waiver
of notice or a consent to a holding of the meeting or an approval of the
minutes. The waiver of notice or consent need not specify either the
business to be transacted or the purpose of any meeting of shareholders.
Attendance by a person at a meeting shall also constitute a waiver of
notice of that meeting, except when the person objects at the beginning of
the meeting to the transaction of any business because the meeting is not
lawfully called or convened and except that attendance at a meeting is not
a waiver of any right to object to the consideration of matters not
included in the notice of the meeting if that objection is expressly made
at the beginning of the meeting.
Section 8. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any
action which may be taken at any meeting of shareholders may be taken
without a meeting and without prior notice if a consent in writing setting
forth the action so taken is signed by the holders of the Voting
Interests, as defined in Article I, Section 2(n) in the Agreement and
Declaration of Trust of the Trust, having not less than the minimum number
of votes that would be necessary to authorize or take that action at a
meeting at which all shares entitled to vote on that action were present
and voted. All such consents shall be filed with the Secretary of the
Trust and shall be maintained in the Trust's records. Any shareholder
giving a written consent or the shareholder's proxy holder or a transferee
of the shares or a personal representative of the shareholder or their
respective proxy holders may revoke the consent by a writing received by
the Secretary of the Trust before written consents of the number of shares
required to authorize the proposed action have been filed with the
Secretary.
If the consents of all shareholders entitled to vote have not been
solicited in writing and if the unanimous written consent of all such
shareholders shall not have been received, the Secretary shall give prompt
notice of the action approved by the shareholders without a meeting. This
notice shall be given in the manner specified in Section 4 of this Article
II. In the case of approval of (i) contracts or transactions in which a
Trustee has a direct or indirect financial interest, (ii) indemnification
of agents of the Trust, and (iii) a reorganization of the Trust, the
notice shall be given at least ten (10) days before the consummation of
any action authorized by that approval.
Section 9. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING AND GIVING
CONSENTS. For purposes of determining the shareholders entitled to notice
of any meeting or to vote or entitled to give consent to action without a
meeting, the Board of Trustees may fix in advance a record date which
shall not be more than ninety (90) days nor less than seven (7) days
before the date of any such meeting as provided in the Agreement and
Declaration of Trust of the Trust.
If the Board of Trustees does not so fix a record date:
(a) The record date for determining shareholders entitled to notice of
or to vote at a meeting of shareholders shall be at the close of business
on the business day next preceding the day on which notice is given or if
notice is waived, at the close of business on the business day next
preceding the day on which the meeting is held.
(b) The record date for determining shareholders entitled to give
consent to action in writing without a meeting, (i) when no prior action
by the Board of Trustees has been taken, shall be the day on which the
first written consent is given, or (ii) when prior action of the Board of
Trustees has been taken, shall be at the close of business on the day on
which the Board of Trustees adopt the resolution relating to that action
or the seventy-fifth day before the date of such other action, whichever
is later.
Section 10. PROXIES. Every person entitled to vote for Trustees or on
any other matter shall have the right to do so either in person or by one
or more agents authorized by a written proxy signed by the person and
filed with the Secretary of the Trust. A proxy shall be deemed signed if
the shareholder's name is placed on the proxy (whether by manual
signature, typewriting, telegraphic transmission or otherwise) by the
shareholder or the shareholder's attorney-in-fact. A validly executed
proxy which does not state that it is irrevocable shall continue in full
force and effect unless (i) revoked by the person executing it before the
vote pursuant to that proxy by a writing delivered to the Trust stating
that the proxy is revoked or by a subsequent proxy executed by or
attendance at the meeting and voting in person by the person executing
that proxy; or (ii) written notice of the death or incapacity of the maker
of that proxy is received by the Trust before the vote pursuant to that
proxy is counted; provided however, that no proxy shall be valid after the
expiration of eleven (11) months from the date of the proxy unless
otherwise provided in the proxy.
Section 11. INSPECTORS OF ELECTION. Before any meeting of shareholders,
the Board of Trustees may appoint any persons other than nominees for
office to act as inspectors of election at the meeting or its adjournment.
If no inspectors of election are so appointed, the chairman of the meeting
may and on the request of any shareholder or a shareholder's proxy shall,
appoint inspectors of election at the meeting. The number of inspectors
shall be either one (1) or three (3). If inspectors are appointed at a
meeting on the request of one or more shareholders or proxies, the holders
of a majority of shares or their proxies present at the meeting shall
determine whether one (1) or three (3) inspectors are to be appointed. If
any person appointed as inspector fails to appear or fails or refuses to
act, the Chairman of the meeting may and on the request of any shareholder
or a shareholder's proxy, shall appoint a person to fill the vacancy.
These inspectors shall:
(a) Determine the number of shares outstanding and the voting power
of each, the shares represented at the meeting, the existence of
a quorum and the authenticity, validity and effect of proxies;
(b) Receive votes, ballots or consents;
(c) Hear and determine all challenges and questions in any way
arising in connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct the election or
vote with fairness to all shareholders.
ARTICLE III
TRUSTEES
Section 1. POWERS. Subject to the applicable provisions of the Agreement
and Declaration of Trust of the Trust and these By-Laws relating to action
required to be approved by the shareholders or by the outstanding shares,
the business and affairs of the Trust shall be managed and all powers
shall be exercised by or under the direction of the Board of Trustees.
Section 2. NUMBER OF TRUSTEES. The exact number of Trustees within the
limits specified in the Agreement and Declaration of Trust of the Trust
shall be fixed from time to time by a written instrument signed or a
resolution approved at a duly constituted meeting by a majority of the
Board of Trustees.
Section 3. VACANCIES. Vacancies in the Board of Trustees may be filled
by a majority of the remaining Trustees, though less than a quorum, or by
a sole remaining Trustee, unless the Board of Trustees calls a meeting of
shareholders for the purposes of electing Trustees. In the event that at
any time less than a majority of the Trustees holding office at that time
were so elected by the holders of the Voting Interests of the Trust as
defined in Article I, Section 2(n) of the Agreement and Declaration of
Trust of the Trust, the Board of Trustees shall forthwith cause to be held
as promptly as possible, and in any event within sixty (60) days, a
meeting of such holders for the purpose of electing Trustees to fill any
existing vacancies in the Board of Trustees, unless such period is
extended by order of the United States Securities and Exchange Commission.
Notwithstanding the above, whenever and for so long as the Trust is a
participant in or otherwise has in effect a Plan under which the Trust may
be deemed to bear expenses of distributing its shares as that practice is
described in Rule 12b-1 under the Investment Company Act of 1940, then the
selection and nomination of the Trustees who are not interested persons of
the Trust (as that term is defined in the Investment Company Act of 1940)
shall be, and is, committed to the discretion of such disinterested
Trustees.
Section 4. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE. All meetings of
the Board of Trustees may be held at any place that has been designated
from time to time by resolution of the Board. In the absence of such a
designation, regular meetings shall be held at the principal executive
office of the Trust. With the exception of meetings at which an Investment
Management Agreement, Portfolio Advisory Agreement or any Distribution
Plan adopted pursuant to Rule 12b-1 is approved by the Board, any meeting,
regular or special, may be held by conference telephone or similar
communication equipment, so long as all Trustees participating in the
meeting can hear one another and all such Trustees shall be deemed to be
present in person at the meeting.
Section 5. REGULAR MEETINGS. Regular meetings of the Board of Trustees
shall be held without call at such time as shall from time to time be
fixed by the Board of Trustees. Such regular meetings may be held without
notice.
Section 6. SPECIAL MEETINGS. Special meetings of the Board of Trustees
for any purpose or purposes may be called at any time by the Chairman of
the Board or the President or any Vice President or the Secretary or any
two (2) Trustees.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each Trustee or sent by first-class mail or
telegram, charges prepaid, addressed to each Trustee at that Trustee's
address as it is shown on the records of the Trust. In case the notice is
mailed, it shall be deposited in the United States mail at least seven (7)
calendar days before the time of the holding of the meeting. In case the
notice is delivered personally or by telephone or to the telegraph company
or by express mail or similar service, it shall be given at least forty-
eight (48) hours before the time of the holding of the meeting. Any oral
notice given personally or by telephone may be communicated either to the
Trustee or to a person at the office of the Trustee whom the person giving
the notice has reason to believe will promptly communicate it to the
Trustee. The notice need not specify the purpose of the meeting or the
place if the meeting is to be held at the principal executive office of
the Trust.
Section 7. QUORUM. A majority of the authorized number of Trustees shall
constitute a quorum for the transaction of business, except to adjourn as
provided in Section 10 of this Article III. Every act or decision done or
made by a majority of the Trustees present at a meeting duly held at which
a quorum is present shall be regarded as the act of the Board of Trustees,
subject to the provisions of the Trust's Agreement and Declaration of
Trust. A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of Trustees if any action
taken is approved by a least a majority of the required quorum for that
meeting.
Section 8. WAIVER OF NOTICE. Notice of any meeting need not be given to
any Trustee who either before or after the meeting signs a written waiver
of notice, a consent to holding the meeting, or an approval of the
minutes. The waiver of notice or consent need not specify the purpose of
the meeting. All such waivers, consents, and approvals shall be filed
with the records of the Trust or made a part of the minutes of the
meeting. Notice of a meeting shall also be deemed given to any Trustee who
attends the meeting without protesting before or at its commencement the
lack of notice to that Trustee.
Section 9. ADJOURNMENT. A majority of the Trustees present, whether or
not constituting a quorum, may adjourn any meeting to another time and
place.
Section 10. NOTICE OF ADJOURNMENT. Notice of the time and place of
holding an adjourned meeting need not be given unless the meeting is
adjourned for more than forty-eight (48) hours, in which case notice of
the time and place shall be given before the time of the adjourned meeting
in the manner specified in Section 7 of this Article III to the Trustees
who were present at the time of the adjournment.
Section 11. ACTION WITHOUT A MEETING. With the exception of the approval
of an investment management agreement, portfolio advisory agreement, or
any distribution plan adopted pursuant to Rule 12b-1, any action required
or permitted to be taken by the Board of Trustees may be taken without a
meeting if a majority of the members of the Board of Trustees shall
individually or collectively consent in writing to that action. Such
action by written consent shall have the same force and effect as a
majority vote of the Board of Trustees. Such written consent or consents
shall be filed with the minutes of the proceedings of the Board of
Trustees.
Section 12. FEES AND COMPENSATION OF TRUSTEES. Trustees and members of
committees may receive such compensation, if any, for their services and
such reimbursement of expenses as may be fixed or determined by resolution
of the Board of Trustees. This Section 12 shall not be construed to
preclude any Trustee from serving the Trust in any other capacity as an
officer, agent, employee or otherwise and receiving compensation for those
services.
Section 13. DELEGATION OF POWER TO OTHER TRUSTEES. Any Trustee may, by
power of attorney, delegate his or her power for a period not exceeding
six (6) months at any one time to any other Trustee or Trustees; provided
that in no case shall fewer than two (2) Trustees personally exercise the
powers granted to the Trustees under the Trust's Agreement and Declaration
of Trust except as otherwise expressly provided herein or by resolution of
the Board of Trustees. Except where applicable law may require a Trustee
to be present in person, a Trustee represented by another Trustee pursuant
to such power of attorney shall be deemed to be present for purposes of
establishing a quorum and satisfying the required majority vote.
ARTICLE IV
COMMITTEES
Section 1. COMMITTEES OF TRUSTEES. The Board of Trustees may by
resolution adopted by a majority of the authorized number of Trustees
designate one or more committees, each consisting of one (1) or more
Trustees, to serve at the pleasure of the Board. The Board may designate
one or more Trustees as alternate members of any committee who may replace
any absent member at any meeting of the committee. Any committee to the
extent provided in the resolution of the Board, shall have the authority
of the Board, except with respect to:
(a) the approval of any action which under applicable law also
requires shareholders' approval or approval of the outstanding shares, or
requires approval by a majority of the entire Board or certain members of
said Board;
(b) the filling of vacancies on the Board of Trustees or in any
committee;
(c) the fixing of compensation of the Trustees for serving on the
Board of Trustees or on any committee;
(d) the amendment or repeal of the Trust's Agreement and Declaration
of Trust or of the By-Laws or the adoption of new By-Laws;
(e) the amendment or repeal of any resolution of the Board of
Trustees which by its express terms is not so amendable or
repealable;
(f) a distribution to the shareholders of the Trust, except at a rate
or in a periodic amount or within a designated range determined
by the Board of Trustees; or
(g) the appointment of any other committees of the Board of Trustees
or the members of these committees.
Section 2. MEETINGS AND ACTION OF COMMITTEES. Meetings and action of
committees shall be governed by and held and taken in accordance with the
provisions of Article III of these By-Laws, with such changes in the
context thereof as are necessary to substitute the committee and its
members for the Board of Trustees and its members, except that the time of
regular meetings of committees may be determined either by resolution of
the Board of Trustees or by resolution of the committee. Special meetings
of committees may also be called by resolution of the Board of Trustees.
Alternate members shall be given notice of meetings of committees and
shall have the right to attend all meetings of committees. The Board of
Trustees may adopt rules for the government of any committee not
inconsistent with the provisions of these By-Laws.
ARTICLE V
OFFICERS
Section 1. OFFICERS. The officers of the Trust shall be a President, a
Vice President, a Secretary and a Treasurer. The Trust may also have, at
the discretion of the Board of Trustees, a Chairman of the Board, one or
more Vice Presidents, one or more Assistant Secretaries, one or more
Assistant Treasurers, and such other officers as may be appointed in
accordance with the provisions of Section 3 of this Article V. Any number
of offices may be held by the same person.
Section 2. ELECTION OF OFFICERS. The officers of the Trust, except such
officers as may appointed in accordance with the provisions of Section 3
or Sections of this Article V, shall be chosen by the Board of Trustees,
and each shall serve at the pleasure of the Board of Trustees, subject to
the rights, if any, of an officer under any contract of employment.
Section 3. SUBORDINATE OFFICERS. The Board of Trustees may appoint and
may empower the President to appoint such other officers as the business
of the Trust may require, each of whom shall hold office for such period,
have such authority and perform such duties as are provided in these By-
Laws or as the Board of Trustees may from time to time determine.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights,
if any, of an officer under any contract of employment, any officer may be
removed, either with or without cause, by the Board of Trustees at any
regular or special meeting of the Board of Trustees or by the principal
executive officer or by such other officer upon whom such power of removal
may be conferred by the Board of Trustees.
Any officer may resign at any time by giving written notice to the Trust.
Any resignation shall take effect at the date of the receipt of that
notice or at any later time specified in that notice; and unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to
the rights, if any, of the Trust under any contract to which the officer
is a party.
Section 5. VACANCIES IN OFFICES. A vacancy in any office because of
death, resignation, removal, disqualification or other cause shall be
filled in the manner prescribed in these By-Laws for regular appointment
to that office. The President may make temporary appointments to a vacant
office pending action by the Board of Trustees.
Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such an
Officer is elected, shall, if present, preside at meetings of the Board of
Trustees, subject to the control of the Board of Trustees, have general
supervision, direction and control of the business and the Officers of the
Trust and exercise and perform such other powers and duties as may be from
time to time assigned to him or her by the Board of Trustees or prescribed
by the By-Laws. The Chairman of the Board shall serve as chief executive
officer in the chief executive officer's absence.
Section 7. PRESIDENT. Subject to such supervisory powers, if any, as may
be given by the Board of Trustees to the Chairman of the Board, if there
be such an officer, the President shall, subject to the control of the
Board of Trustees and the Chairman, have general supervision, direction
and control of the business and the officers of the Trust. He or she
shall preside at all meetings of the shareholders and, in the absence of
the Chairman of the Board or if there be none, at all meetings of the
Board of Trustees. He or she shall have the general powers and duties of
management usually vested in the offices of president, chief executive
officer and chief operating officer of a corporation and shall have such
other powers and duties as may be prescribed by the Board of Trustees or
these By-Laws.
Section 8. VICE PRESIDENTS. In the absence or disability of the
President, the Vice Presidents, if any, in order of their rank as fixed by
the Board of Trustees or if not ranked, the Executive Vice President (who
shall be considered first ranked) and such other Vice Presidents as shall
be designated by the Board of Trustees, shall perform all the duties of
the President and, when so acting, shall have all powers of and be subject
to all the restrictions upon the President. The Vice Presidents shall
have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the Board of Trustees or the
President or the Chairman of the Board or by these By-Laws.
Section 9. SECRETARY. The Secretary shall keep or cause to be kept at
the principal executive office of the Trust or such other place as the
Board of Trustees may direct a book of minutes of all meetings and actions
of Trustees, committees of Trustees and shareholders with the time and
place of holding, whether regular or special, and if special, how
authorized, the notice given, the names of those present at Trustees'
meetings or committee meetings, the number of shares present or
represented at shareholders' meetings, and the proceedings.
The Secretary shall keep or cause to be kept at the principal executive
office of the Trust or at the office of the Trust's transfer agent or
registrar, a share register or a duplicate share register showing the
names of all shareholders and their addresses, the number and classes of
shares held by each, the number and date of certificates issued for the
same and the number and date of cancellation of every certificate
surrendered for cancellation.
The Secretary shall give or cause to be given notice of all meetings of
the shareholders and of the Board of Trustees required to be given by
these By-Laws or by applicable law and shall have such other powers and
perform such other duties as may be prescribed by the Board of Trustees or
by these By-Laws.
Section 10. TREASURER. The Treasurer shall be the chief financial
officer and chief accounting officer of the Trust and shall keep and
maintain or cause to be kept and maintained adequate and correct books and
records of accounts of the properties and business transactions of the
Trust, including accounts of its assets, liabilities, receipts,
disbursements, gains, losses, capital, retained earnings and shares. The
books of account shall at all reasonable times be open to inspection by
any Trustee.
The Treasurer shall deposit all monies and other valuables in the name and
to the credit of the Trust with such depositaries as may be designated by
the Board of Trustees. The Treasurer shall disburse the funds of the
Trust as may be ordered by the Board of Trustees, shall render to the
President and Trustees, whenever they request it, an account of all of his
or her transactions as chief financial officer and of the financial
condition of the Trust and shall have other powers and perform such other
duties as may be prescribed by the Board of Trustees or these By-Laws.
ARTICLE VI
INDEMNIFICATION OF TRUSTEES OFFICERS
EMPLOYEES AND OTHER AGENTS
Section 1. AGENTS, PROCEEDINGS AND EXPENSES. For the purpose of this
Article, "agent" means any person who is or was a Trustee, officer,
employee or other agent of this Trust or is or was serving at the request
of this Trust as a Trustee, director, officer, employee or agent of
another foreign or domestic corporation, partnership, joint venture, trust
or other enterprise or was a Trustee, director, officer, employee or agent
of a foreign or domestic corporation that was a predecessor of another
enterprise at the request of such predecessor entity; "proceeding" means
any threatened, pending or completed action or proceeding, whether civil,
criminal, administrative or investigative; and "expenses" includes,
without limitation, attorney's fees and any expenses of establishing a
right to indemnification under this Article.
Section 2. ACTIONS OTHER THAN BY TRUST. This Trust shall indemnify any
person who was or is a party or is threatened to be made a party to any
proceeding (other than an action by or in the right of this Trust) by
reason of the fact that such person is or was an agent of this Trust,
against expenses, judgments, fines, settlements and other amounts actually
and reasonably incurred in connection with such proceeding, if it is
determined that person acted in good faith and reasonably believed: (a) in
the case of conduct in his or her official capacity as a Trustee of the
Trust, that his or her conduct was in the Trust's best interests and (b),
in all other cases, that his or her conduct was at least not opposed to
the Trust's best interests and (c) in the case of a criminal proceeding,
that he or she had no reasonable cause to believe the conduct of that
person was unlawful. The termination of any proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendere or its
equivalent shall not of itself create a presumption that the person did
not act in good faith and in a manner which the person reasonably believed
to be in the best interests of this Trust or that the person had
reasonable cause to believe that the person's conduct was unlawful.
Section 3. ACTIONS BY THE TRUST. This Trust shall indemnify any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action by or in the right of this Trust
to procure a judgment in its favor by reason of the fact that that person
is or was an agent of this Trust, against expenses actually and reasonably
incurred by that person in connection with the defense or settlement of
that action if that person acted in good faith, in a manner that person
believed to be in the best interests of this Trust and with such care,
including reasonable inquiry, as an ordinarily prudent person in a like
position would use under similar circumstances.
Section 4. EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision
to the contrary contained herein, there shall be no right to
indemnification for any liability arising by reason of willful
misfeasance, bad faith, gross negligence, or the reckless disregard of the
duties involved in the conduct of the agent's office with this Trust.
No indemnification shall be made under Sections 2 or 3 of this Article:
(a) In respect of any claim, issue or matter as to which that person
shall have been adjudged to be liable on the basis that personal benefit
was improperly received by him or her, whether or not the benefit resulted
from an action taken in the person's official capacity; or
(b) In respect of any claim, issue or matter as to which that person
shall have been adjudged to be liable in the performance of that person's
duty to this Trust, unless and only to the extent that the court in which
that action was brought shall determine upon application that in view of
all the circumstances of the case, that person was not liable by reason of
the disabling conduct set forth in the preceding paragraph and is fairly
and reasonably entitled to indemnity for the expenses which the court
shall determine; or
(c) Of amounts paid in settling or otherwise disposing of a
threatened or pending action, with or without court approval, or of
expenses incurred in defending a threatened or pending action that is
settled or otherwise disposed of without court approval, unless the
required approval set forth in Section 6 of this Article is obtained.
Section 5. SUCCESSFUL DEFENSE BY AGENT. To the extent that an agent of
this Trust has been successful on the merits in defense of any proceeding
referred to in Sections 2 or 3 of this Article or in defense of any claim,
issue or matter therein, before the court or other body before whom the
proceeding was brought, the agent shall be indemnified against expenses
actually and reasonably incurred by the agent in connection therewith,
provided that the Board of Trustees, including a majority who are
disinterested, non-party Trustees, also determines that, based upon a
review of the facts, the agent was not liable by reason of the disabling
conduct referred to in Section 4 of this Article.
Section 6. REQUIRED APPROVAL. Except as provided in Section 5 of this
Article, any indemnification under this Article shall be made by this
Trust only if authorized in the specific case on a determination that
indemnification of the agent is proper in the circumstances because the
agent has met the applicable standard of conduct set forth in Sections or
3 of this Article and is not prohibited from indemnification because of
the disabling conduct set forth in Section 4 of this Article, by:
(a) a majority vote of a quorum consisting of Trustees who are not
parties to the proceeding and are not interested persons of the Trust (as
defined in the Investment Company Act of 1940); or
(b) a written opinion by an independent legal counsel.
Section 7. ADVANCE OF EXPENSES. Expenses incurred in defending any
proceeding may be advanced by this Trust before the final disposition of
the proceeding upon a written undertaking by or on behalf of the agent, to
repay the amount of the advance if it is ultimately determined that he or
she is not entitled to indemnification, together with at least one of the
following as a condition to the advance: (i) security for the undertaking;
or (ii) the existence of insurance protecting the Trust against losses
arising by reason of any lawful advances; or (iii) a determination by a
majority of a quorum of Trustees who are not parties to the proceeding and
are not interested persons of the Trust, or by an independent legal
counsel in a written opinion, based on a review of readily available
facts, that there is reason to believe that the agent ultimately will be
found entitled to indemnification. Determinations and authorizations of
payments under this Section must conform to the standards set forth in
Section 6 of this Article for determining that the indemnification is
permissible.
Section 8. OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article
shall affect any right to indemnification to which persons other than
Trustees and officers of this Trust or any subsidiary hereof may be
entitled by contract or otherwise.
Section 9. LIMITATIONS. No indemnification or advance shall be made
under this Article, except as provided in Sections 5 or 6 in any
circumstances where it appears:
(a) that it would be inconsistent with a provision of the Trust's
Agreement and Declaration of Trust, a resolution of the shareholders of
the Trust, or an agreement in effect at the time of accrual of the alleged
cause of action asserted in the proceeding in which the expenses were
incurred or other amounts were paid which prohibits or otherwise limits
indemnification; or
(b) that it would be inconsistent with any condition expressly
imposed by a court in approving a settlement.
Section 10. INSURANCE. Upon and in the event of a determination by the
Board of Trustees of this Trust to purchase such insurance, this Trust
shall purchase and maintain insurance on behalf of any agent of this Trust
against any liability asserted against or incurred by the agent in such
capacity or arising out of the agent's status as such, but only to the
extent that this Trust would have the power to indemnify the agent against
that liability under the provisions of this Article and the Trust's
Agreement and Declaration of Trust.
Section 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article VI does
not apply to any proceeding against any Trustee, investment manager or
other fiduciary of an employee benefit plan in that person's capacity as
such, even though that person may also be an agent of this Trust as
defined in Section l of this Article VI. Nothing contained in this
Article VI shall limit any right to indemnification to which such a
Trustee, investment manager, or other fiduciary may be entitled by
contractor, otherwise which shall be enforceable to the extent permitted
by applicable law other than this Article VI.
ARTICLE VII
RECORDS AND REPORTS
Section 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER. This Trust shall
keep at its principal executive office or at the office of its transfer
agent or registrar, if either be appointed and as determined by resolution
of the Board of Trustees, a record of its shareholders, giving the names
and addresses of all shareholders and the number, series and, where
applicable, class of shares held by each shareholder.
Section 2. MAINTENANCE AND INSPECTION OF BY-LAWS. The Trust shall keep
at its principal executive office the original or a copy of these By-Laws
as amended from time to time, which shall be open to inspection by the
shareholders at all reasonable times during office hours.
Section 3. MAINTENANCE AND INSPECTION OF OTHER RECORDS. The accounting
books and records and minutes of proceedings of the shareholders and the
Board of Trustees and any committee or committees of the Board of Trustees
shall be kept at such place or places designated by the Board of Trustees
or in the absence of such designation, at the principal executive office
of the Trust. The minutes shall be kept in written form, and the
accounting books and records shall be kept either in written form or in
any other form capable of being converted into written form. The minutes
and accounting books and records shall be open to inspection upon the
written demand of any shareholder or holder of a voting trust certificate
at any reasonable time during usual business hours of the Trust for a
purpose reasonably related to the holder's interests as a shareholder or
as the holder of a voting trust certificate. The inspection may be made in
person or by an agent or attorney and shall include the right to copy and
make extracts.
Section 4. INSPECTION BY TRUSTEES. Every Trustee shall have the absolute
right at any reasonable time to inspect all books, records and documents
of every kind as well as the physical properties of the Trust. This
inspection by a Trustee may be made in person or by an agent or attorney,
and the right of inspection includes the right to copy and make extracts
of documents.
Section 5. FINANCIAL STATEMENTS. A copy of any financial statements and
any income statement of the Trust for each quarterly period of each fiscal
year and accompanying balance sheet of the Trust as of the end of each
such period that has been prepared by the Trust shall be kept on file in
the principal executive office of the Trust for at least twelve (12)
months, and each such statement shall be exhibited at all reasonable times
to any shareholder demanding an examination of any such statement or a
copy shall be mailed to any such shareholder.
The quarterly income statements and balance sheets referred to in this
Section shall be accompanied by the report, if any, of any independent
accountants engaged by the Trust or the certificate of an authorized
officer of the Trust that the financial statements were prepared without
audit from the books and records of the Trust.
ARTICLE VIII
GENERAL MATTERS
Section 1. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS. All checks, drafts
or other orders for payment of money, notes or other evidences of
indebtedness issued in the name of or payable to the Trust shall be signed
or endorsed in such manner and by such person or persons as shall be
designated from time to time in accordance with the resolution of the
Board of Trustees.
Section 2. CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The Board of
Trustees, except as otherwise provided in these By-Laws, may authorize any
officer or officers, agent or agents, to enter into any contract or
execute any instrument in the name of and on behalf of the Trust and this
authority may be general or confined to specific instances; and unless so
authorized or ratified by the Board of Trustees or within the agency power
of an officer, no officer, agent or employee shall have any power or
authority to bind the Trust by any contract or engagement, to pledge its
credit or to render it liable for any purpose or for any amount.
Section 3. CERTIFICATES FOR SHARES. A certificate or certificates for
shares of beneficial interest in any series of the Trust may be issued to
a shareholder upon the shareholder's request when such shares are fully
paid. All certificates shall be signed in the name of the Trust by the
Chairman of the Board or the President or Vice President and by the
Treasurer or an Assistant Treasurer or the Secretary or any Assistant
Secretary, certifying the number of shares and the series of shares owned
by the shareholders. Any or all of the signatures on the certificate may
be facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed on a certificate shall
have ceased to be that officer, transfer agent or registrar before that
certificate is issued, it may be issued by the Trust with the same effect
as if that person were an officer, transfer agent or registrar at the date
of issue. Notwithstanding the foregoing, the Trust may adopt and use a
system of issuance, recordation and transfer of its shares by electronic
or other means.
Section 4. LOST CERTIFICATES. Except as provided in this Section 4, no
new certificate for shares shall be issued to replace an old certificate
unless the latter is surrendered to the Trust and cancelled at the same
time. The Board of Trustees may in case any share certificate or
certificate for any other security is lost, stolen or destroyed, authorize
the issuance of a replacement certificate on such terms and conditions as
the Board of Trustees may require, including a provision for
indemnification of the Trust secured by a bond or other adequate security
sufficient to protect the Trust against any claim that may be made against
it, including any expense or liability on account of the alleged loss,
theft or destruction of the certificate or the issuance of the replacement
certificate.
Section 5. REPRESENTATION OF SHARES OF OTHER ENTITIES HELD BY TRUST. The
Chairman of the Board, the President, any Vice President or any other
person authorized by resolution of the Board of Trustees or by any of the
foregoing designated officers, is authorized to vote or represent on
behalf of the Trust any and all shares of any corporation, partnership,
trusts or other entities, foreign or domestic, standing in the name of the
Trust. The authority granted may be exercised in person or by a proxy
duly executed by such designated person.
Section 6. FISCAL YEAR. The fiscal year of the Trust shall be fixed and
refixed or changed from time to time by resolution of the Trustees. The
fiscal year of the Trust shall be the taxable year of each Series of the
Trust.
ARTICLE IX
AMENDMENTS
Section l. AMENDMENT BY SHAREHOLDERS. These By-Laws may be amended or
repealed by the affirmative vote or written consent of a majority of the
Voting Interests, as defined in Article I, Section 2(n) of the Agreement
and Declaration of Trust of the Trust, entitled to vote, except as
otherwise provided by applicable law or by the Trust's Agreement and
Declaration of Trust or these By-Laws.
Section 2. AMENDMENT BY TRUSTEES. Subject to the right of shareholders
as provided in Section l of this Article IX to adopt, amend or repeal By-
Laws, and except as otherwise provided by applicable law or by the Trust's
Agreement and Declaration of Trust, these By-Laws may be adopted, amended
or repealed by the Board of Trustees.
Section 3. INCORPORATION BY REFERENCE INTO AGREEMENT AND DECLARATION OF
TRUST OF THE TRUST. These By-Laws and any amendments thereto shall be
incorporated by reference to the Trust's Agreement and Declaration of
Trust.
CERTIFICATE
This is to certify that the foregoing is a true and correct copy of the
Bylaws of thecorporation named in the title thereto and that such Bylaws
were duly adopted bythe board of directors of the corporation on the date
set forth below.
Dated: July 31, 1998
/S/ PETER ALLEN SCHUH
__________________________________
Peter Allen Schuh, Secretary
EXHIBIT 5
MANAGEMENT CONTRACT
THIS AGREEMENT dated this 31st day of July, 1998 between Labrador
Mutual Fund, (the "Fund"), a Delaware business trust, and Labrador
Investment Advisors, Inc., a California corporation (the "Manager").
W I T N E S S E T H
WHEREAS, the Fund is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (the "Registration
Statement") for the purpose of registering its shares for public offering
under the Securities Act of 1933, as amended (the "1933 Act"),
WHEREAS, the parties hereto deem it mutually advantageous that the
Manager should be engaged, subject to the supervision of the Fund's Board
of Trustees and officers, to manage the Fund.
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Fund and the Manager do hereby agree as follows:
1. (a) The Manager will regularly provide the Fund with investment
research, advice and supervision, and will furnish continuously an
investment program for the Fund, consistent with the investment objectives
and policies of the Fund. The Manager will determine from time to time
what securities shall be purchased for the Fund, what securities shall be
held or sold by the Fund, and what portion of the Fund's assets shall be
held uninvested as cash, subject always to the provisions of the Fund's
Certificate of Trust, Agreement and Declaration of Trust, By-Laws and its
registration statements under the 1940 Act and under the 1933 Act covering
the Fund's shares, as filed with the Securities and Exchange Commission,
and to the investment objectives, policies and restrictions of the Fund,
as each of the same shall be from time to time in effect, and subject,
further, to such policies and instructions as the Board of Trustees of the
Fund may from time to time establish. To carry out such determinations,
the Manager will exercise full discretion and act for the Fund in the same
manner and with the same force and effect as the Fund itself might or
could do with respect to purchases, sales or other transactions, as well
as with respect to all other things necessary or incidental to the
furtherance or conduct of such purchases, sales or other transactions.
(b) The Manager will, to the extent reasonably required in the
conduct of the business of the Fund and upon the Fund's request, furnish
to the Fund, research, statistical, and advisory reports upon the
industries, businesses, corporations or securities as to which such
requests shall be made, whether or not the Fund shall at the time have any
investment in such industries, businesses, corporations or securities. The
Manager will use its best efforts in the preparation of such reports and
will endeavor to consult the persons and sources believed by it to have
information available with respect to such industries, businesses,
corporations or entities.
(c) The Manager will maintain all books and records with respect
to the Fund's securities transactions required by sub-paragraphs (b)(5),
(6), (9) and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act
(other than those records being maintained by the custodian or transfer
agent appointed by the Fund) and preserve such records for the periods
prescribed therefor by Rule 31a-2 under the 1940 Act. The Manager will
also provide to the Board of Trustees such periodic and special reports as
the Board may reasonably request.
2. (a) The Fund shall assume and shall pay: (i) charges and expenses
for fund accounting, pricing and appraisal services and related overhead,
including to the extent such services are performed by personnel of the
Manager, or its affiliates, office space, facilities and personnel
compensation, training and benefits; (ii) the charges and expenses of
auditors; (iii) the charges and expenses of any custodian, transfer agent,
plan agent, dividend disbursing agent and registrar appointed by the Fund
with respect to the Fund; (iv) issue and transfer taxes chargeable to the
Fund in connection with securities transactions to which the Fund is a
party; (v) insurance premiums, interest charges, dues and fees for
membership in trade associations and all taxes and corporate fees payable
by the Fund to federal, state or other governmental agencies; (vi) fees
and expenses involved in registering and maintaining registrations of the
Fund and/or its shares with the Commission, state or blue sky securities
agencies and foreign countries, including the preparation of Prospectuses
and Statements of Additional Information for filing with the Commission;
(vii) all expenses of shareholders' and Trustees' meetings and of
preparing, printing and distributing prospectuses, notices, proxy
statements and all reports to shareholders and to governmental agencies;
(viii) charges and expenses of legal counsel to the Fund and the Trustees;
(ix) any distribution fees paid by the Fund in accordance with Rule 12b-1
promulgated by the Commission pursuant to the 1940 Act; (x) the cost of
preparing and printing share certificates; and (xi) interest on borrowed
money, if any.
(b) In addition to the expenses described in Section 2(a) above,
the Fund shall pay all brokers' and underwriting commissions chargeable to
the Fund in connection with securities transactions to which the Fund is a
party.
3. (a) The Fund shall pay to the Manager, as compensation for the
Manager's services and expenses assumed hereunder, a fee at the annual
rate of 1.50% of the Fund's average daily net assets. Management fees
payable hereunder shall be computed daily and paid monthly in arrears. In
the event of termination of this Agreement, the fee provided in this
Section shall be re-computed on the basis of the period beginning on the
first day and ending on the last business day on which this Agreement is
in effect subject to a pro rata adjustment based on the number of days
elapsed in the current month as a percentage of the total number of days
in such month.
(b) If the operating expenses of the Fund in any year exceed the
limits set by state securities laws or regulations in states in which
shares of the Fund are sold, the amount payable to the Manager under
subsection (a) above will be reduced (but not below $0), and the Manager
shall make other arrangements concerning expenses but, in each instance,
only as and to the extent required by such laws or regulations. If amounts
have already been advanced to the Manager under this Agreement, the
Manager will return such amounts to the Fund to the extent required by the
preceding sentence, subject to subsection (a) above. If the agreement is
terminated, the Manager will be compensated fully in a re-calculation to
make whole.
(c) In addition to the foregoing, the Manager may from time to
time agree not to impose all or a portion of its fee otherwise payable
hereunder (in advance of the time such fee or a portion thereof would
otherwise accrue) and/or undertake to pay or reimburse the Fund for all or
a portion of its expenses not otherwise required to be borne or reimbursed
by the Manager. Any such fee reduction or undertaking may be discontinued
or modified by the Manager at any time.
4. The Manager will not be liable for any error of judgment or
mistake of law or for any loss sustained by reason of the adoption of any
investment policy or the purchase, sale, or retention of any security on
the recommendation of the Manager, whether or not such recommendation
shall have been based upon its own investigation and research or upon
investigation and research made by any other individual, firm or
corporation, but nothing contained herein will be construed to protect the
Manager against any liability to the Fund or its shareholders by reason of
willful misfeasance, bad faith or gross negligence in the performance of
its duties or by reason of its reckless disregard of its obligations and
duties under this Agreement.
5. (a) Nothing in this Agreement will in any way limit or restrict
the Manager or any of its officers, Trustees, or employees from buying,
selling or trading in any securities for its or their own accounts or
other accounts. The Manager may act as an investment advisor to any other
person, firm or corporation, and may perform management and any other
services for any other person, association, corporation, firm or other
entity pursuant to any contract or otherwise, and take any action or do
any thing in connection therewith or related thereto; and no such
performance of management or other services or taking of any such action
or doing of any such thing shall be in any manner restricted or otherwise
affected by any aspect of any relationship of the Manager to or with the
Fund or deemed to violate or give rise to any duty or obligation of the
Manager to the Fund except as otherwise imposed by law. The Fund
recognizes that the Manager, in effecting transactions for its various
accounts, may not always be able to take or liquidate investment positions
in the same security at the same time and at the same price.
(b) In connection with purchases or sales of securities for the
account of the Fund, neither the Manager nor any of its Trustees, officers
or employees will act as a principal or agent or receive any commission
except as permitted by the 1940 Act. The Manager shall arrange for the
placing of all orders for the purchase and sale of securities for the
Fund's account with brokers or dealers selected by the Manager. In the
selection of such brokers or dealers and the placing of such orders, the
Manager is directed at all times to seek for the Fund the most favorable
execution and net price available except as described herein. It is also
understood that it is desirable for the Fund that the Manager have access
to supplemental investment and market research and security and economic
analyses provided by brokers who may execute brokerage transactions at a
higher cost to the Fund than may result when allocating brokerage to other
brokers on the basis of seeking the most favorable price and efficient
execution. Therefore, the Manager is authorized to place orders for the
purchase and sale of securities for the Fund with such brokers, subject to
review by the Fund's Trustees from time to time with respect to the extent
and continuation of this practice.
6. This Agreement shall become effective on the date hereof and shall
remain in force until two years from the effective date of the Fund, (as
provided to the Fund by the Securities and Exchange Commission), and from
year to year thereafter, but only so long as its continuance is approved
annually by a vote of the Trustees of the Fund voting in person, including
a majority of its Trustees who are not parties to this Agreement or
"interested persons" (as defined in the 1940 Act) of any such parties, at
a meeting of Trustees called for the purpose of voting on such approval or
by a vote of a "majority of the outstanding voting securities" (as defined
in the 1940 Act) of the Fund, subject to the right of the Fund and the
Manager to terminate this contract as provided in Section 7 hereof.
7. Either party hereto may, without penalty, terminate this Agreement
by vote of its Board of Trustees or Directors, as the case may be, or by
vote of a "majority of its outstanding voting securities" (as defined in
the 1940 Act) and the giving of 60 days' written notice to the other
party.
8. This Agreement shall automatically terminate in the event of its
assignment. For purposes of this Agreement, the term "assignment" shall
have the meaning given it by Section 2(a)(4) of the 1940 Act.
9. The Fund agrees that in the event that neither the Manager nor any
of its affiliates acts as an investment adviser to the Fund, the name of
the Fund will be changed to one that does not contain the name "Labrador"
or otherwise suggest an affiliation with the Manager.
10. The Manager is an independent contractor and not an employee of
the Fund for any purpose. If any occasion should arise in which the
Manager gives any advice to its clients concerning the shares of the Fund,
the Manager will act solely as investment counsel for such clients and not
in any way on behalf of the Fund or any series thereof.
11. This Agreement states the entire agreement of the parties hereto,
and is intended to be the complete and exclusive statement of the terms
hereof. It may not be added to or changed orally, and may not be modified
or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.
12. This Agreement and all performance hereunder shall be governed by
and construed in accordance with the laws of The State Of Delaware.
13. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of
this Agreement or affecting the validity or enforceability of any of the
terms or provisions of this Agreement in any other jurisdiction.
14. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers as of the day and year first
above written.
ATTEST: LABRADOR MUTUAL FUND
By:
/S/ PETER ALLEN SCHUH /S/ PETER ALLEN SCHUH
- ----------------------- ---------------------------
Peter Allen Schuh Peter Allen Schuh
Secretary Chairman and President
/S/ ALLEN JOHN SCHUH
---------------------------
Allen John Schuh
Vice-President
ATTEST: LABRADOR INVESTMENT ADVISORS, INC.
By:
/S/ PETER ALLEN SCHUH /S/ PETER ALLEN SCHUH
- ----------------------- ---------------------------
Peter Allen Schuh Peter Allen Schuh
Secretary President
/S/ ALLEN JOHN SCHUH
---------------------------
Allen John Schuh
Vice-President
EXHIBIT 6A
LABRADOR MUTUAL FUND
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, dated as of August 1, 1998 between Labrador Mutual
Fund, a Delaware business trust (the "Trust"), and Unified Management
Corporation, an Indiana corporation (the "Distributor").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Trust desires to retain the Distributor as the principal
underwriter of the Trust's shares of beneficial interest (the "Shares"); and
WHEREAS, the Distributor is willing to render such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties hereto agree as follows:
Section 1. Delivery of Documents. The Trust has delivered to the
Distributor copies of the following documents and will deliver to the
Distributor all future amendments and supplements thereto, if any:
(a) The Trust's Declaration of Trust and all amendments thereto (as
currently in effect and as from time to time amended, hereinafter referred to
as the "Declaration");
(b) The Trust's By-Laws (as currently in effect and as from time to
time amended, hereinafter referred to as the "By-Laws");
(c) Resolutions of the Board of Trustees authorizing the execution and
delivery of this Agreement;
(d) The Trust's Registration Statement under the Securities Act of
1933, as amended (the "1933 Act"), and the 1940 Act on Form N-IA most
recently filed with the Securities and Exchange Commission (the "Commission")
and all subsequent amendments or supplements thereto (the "Registration
Statement");
(e) The Trust's Notification of Registration under the 1940 Act on
Form N-8A as filed with the Commission; and
The Trust's current Prospectus and Statement of Additional Information
(as currently in effect and as from time to time amended and
supplemented, hereinafter collectively referred to as the
"Prospectus").
Section 2. Distribution.
2.1 Appointment of Distributor. The Trust hereby appoints the Distributor as
principal underwriter of the Shares of each portfolio of the Trust that is
set forth on Exhibit A to this Agreement (each a "Fund") and the Distributor
hereby accepts such appointment and agrees to render the services and duties
set forth in this Agreement.
2.2 Services and Duties.
(a) The Trust agrees to sell through the Distributor, as agent, from time
to time during the term of this Agreement, Shares of each Fund upon the terms
and at the current offering prices as described in the Prospectus. The
Distributor will act only in its own behalf as principal in making agreements
with selected dealers or others for the sale and redemption of Shares, and
shall sell Shares only at the offering prices as set forth in the Prospectus.
The Distributor shall devote its best efforts to effect the sale of shares,
but shall not be obligated to sell any certain number of Shares.
(b) In all matters relating to the sale and redemption of Shares, the
Distributor and its designed agent(s) will act in conformity with the Trust's
Declaration, By-laws and Prospectus and with the instructions and directions
of the Board of Trustees and will conform and comply with the requirements of
the Securities Exchange Act of 1934, as amended, the 1933 Act, the 1940 Act,
the regulations of the National Association of Securities Dealers, Inc. and
all other applicable federal or state laws or regulations. In connection
with the sale of Shares, the Distributor acknowledges and agrees that it is
not authorized to provide any information or make any representation other
than as contained in the Trust's Registration Statement or Prospectus and any
sales literature approved by the Trust.
(c) The Trust will bear the costs and expenses incurred for (i) printing
and mailing to prospective investors copies of the Prospectus (including
supplements thereto) and annual and interim reports of the Trust which are
used in connection with the offering of Trust's Shares; (ii) preparing,
printing and mailing any other literature used by the Distributor in
connection with the sale of the Shares and (iii) NASD advertising compliance
expenses borne by the Distributor. See Exhibit B attached.
(d) All Trust Shares offered for sale by the Distributor shall be offered
for sale to the public at a price per Share (the "offering price") equal to
their net asset value (determined in the manner set forth in the Trust's
then-current Prospectus).
2.3 Sales and Redemptions.
(a) The Trust shall pay all costs and expenses in connection with the
registration of the Shares under the 1933 Act, and all expenses in connection
with maintaining facilities for the issue and transfer of the Shares and for
supplying information, prices and other data to be furnished by the Trust
hereunder, and all expenses in connection with preparing, printing and
distributing any Prospectus, except as set forth in Section 2.2(c) hereof.
(b) The Trust shall execute all documents, furnish all information and
otherwise take all actions which may be reasonably necessary in the
discretion of the Trust's officers in connection with the qualification of
the Shares for sale in such states as the Distributor may designate to the
Trust and the Trust may approve, and the Trust shall pay all fees which may
be incurred in connection with such qualification. The Distributor shall pay
all expenses connected with its qualification as a dealer under state or
federal laws and, except as otherwise specifically provided in this
Agreement, all other expenses incurred by the Distributor in connection with
the sale of the Shares as contemplated in this Agreement. It is understood
that certain advertising, marketing, shareholder servicing, administration
and/or distribution expenses to be incurred in connection with the Shares may
be paid as provided in any plan which may be adopted by the Trust in
accordance with Rule 12b-1 under the 1940 Act.
(c) The Trust shall have the right to suspend the sale of Shares at
any time in response to conditions in the securities markets or otherwise,
and to suspend the redemption of Shares at any time permitted by the 1940 Act
or the rules of the Commission
(d) The Trust reserves the right to reject any order for Shares.
(e) No Shares shall be offered by either the Trust or the Distributor
under any provisions of this Agreement and no orders for the purchase or sale
of Shares hereunder shall be accepted by the Trust if and so long as the
effectiveness of the Registration Statement shall be suspended under any of
the provisions of the 1933 Act, or if and so long as a Prospectus as required
by Section 10 of the 1933 Act is not on file with the Commission; provided,
however, that nothing contained in this subsection shall in any way restrict
or have any application to or bearing upon the Trust's obligation to
repurchase any Shares from any shareholder in accordance with the provisions
of the Prospectus.
Section 3. Limitation of Liability. The Distributor shall not be
liable for any error of judgment or mistake of law or for any loss suffered
by the Trust in connection with the matters to which this Agreement relates,
except a loss resulting from willful misfeasance, bad faith or gross
negligence on the Distributor's part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.
Any person, even though also an officer, director, partner, employee or agent
of the Distributor, who may be or become an officer, trustee, employee or
agent of the Trust, shall be deemed, when rendering services to the Trust, or
acting on any business of the Trust (other than services or business in
connection with the Distributors duties as distributor hereunder), to be
rendering such services to or acting solely for the Trust and not as an
officer, director, partner, employee or agent of, or one under the control or
direction of, the Distributor even though paid by the Distributor.
Section 4. Indemnification.
4.1. Trust Representations. The Trust represents and warrants to the
Distributor that at all times the Registration Statement and Prospectus will
in all material respects conform to the applicable requirements of the 1933
Act and the rules and regulations thereunder and will not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that no
representation or warranty is made herein with respect to any statements in
the Registration Statement or Prospectus made in reliance upon and in
conformity with written information furnished to the Trust by, or on behalf
of' and with respect to, the Distributor specifically for use in the
Registration Statement or Prospectus.
4.2. Distributor's Representations. The Distributor represents and
warrants to the Trust that it is duly organized and validly existing as an
Indiana corporation and is and at all times will remain duly authorized and
licensed to carry out its services as contemplated herein.
4.3. Trust Indemnification. The Trust will indemnify, defend and hold
harmless the Distributor, its several officers and directors, and any person
who controls the Distributor within the meaning of Section 15 of the 1933
Act, from and against any losses, claims, damages or liabilities, joint or
several, to which any of them may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon, any
untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement, the Prospectus or in any application or other
document executed by or on behalf of the Trust, or arise out of, or are based
upon, information furnished by or on behalf of the Trust filed in any state
in order to qualify the Shares under the securities or blue sky laws thereof
("Blue Sky Application"), or arise out of, or are based upon, the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Distributor, its several officers and directors, and any person
who controls the Distributor within the meaning of Section 15 of the 1933
Act, for any legal or other expenses reasonably incurred by any of them in
investigating, defending or preparing to defend any such action, proceeding
or claim; provided, however, that the Trust shall not be liable in any case
to the extent that such loss, claim, damage or liability arises out of, or is
based upon, any untrue statement, alleged untrue statement, or omission or
alleged omission made in the Registration Statement, the Prospectus, any Blue
Sky Application or any application or other document executed by or on behalf
of the Trust in reliance upon and in conformity with written information
furnished to the Trust by, or on behalf of, and with respect to, the
Distributor specifically for inclusion therein.
The Trust shall not indemnify any person pursuant to this Section 4.3
unless the court or other body before which the proceeding was brought has
rendered a final decision on the merits that such person was not liable by
reason of his willful misfeasance, bad faith or gross negligence in the
performance of his duties, or his reckless disregard of obligations and
duties, under this Agreement ("disabling conduct") or, in the absence of such
a decision, a reasonable determination (based upon a review of the facts)
that such person was not liable by reason of disabling conduct has been made
by the vote of a majority of Trustees who are neither "interested persons" of
the Trust (as defined in the 1940 Act) nor parties to the proceeding, or by
an independent legal counsel in a written opinion.
The Trust shall advance attorneys' fees and other expenses incurred by
any person in defending any claim, demand, action or suit which is the
subject of a claim for indemnification pursuant to this Section 4.3, so long
as such person shall: (i) undertake to repay all such advances unless it is
ultimately determined that he is entitled to indemnification hereunder; and
(ii) provide security for such undertaking, or the Trust shall be insured
against losses arising by reason of any lawful advances, or a majority of a
quorum of disinterested non-party Trustees of the Trust (or an independent
legal counsel in a written opinion) shall determine based on a review of
readily available facts (as opposed to a full trial-type inquiry) that there
is reason to believe that such person ultimately will be found entitled to
indemnification hereunder.
4.4. Distributor's Indemnification. The Distributor will indemnify,
defend and hold harmless the Trust, the Trust's several officers and Trustees
and any person who controls the Trust within the meaning of Section 15 of the
1933 Act, from and against any losses, claims, damages or liabilities, joint
or several, to which any of them may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages, liabilities (or actions
or proceedings in respect hereof) arise out of, or are based upon, any breach
of its representations and warranties in Section 4.2 hereof, or which arise
out of, or are based upon, any true statement or alleged untrue statement of
a material fact contained in the Registration Statement, the Prospectus, any
Blue Sky Application or any application or other document executed by or on
behalf of the Trust, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, which statement or omission was made in
reliance upon and in conformity with written information furnished to the
Trust or any of its several officers and Trustees by, or on behalf of, and
with respect to, the Distributor specifically for inclusion therein, and will
reimburse the Trust, the Trust's several officers and Trustees, and any
person who controls the Trust within the meaning of Section 15 of the 1933
Act, for any legal or other expenses reasonably incurred by any of them in
investigating, defending or preparing to defend any such action, proceeding
or claim.
4.5. General Indemnity Provisions. No indemnifying party shall be
liable under its indemnity agreement contained in Section 4.3 or 4.4 hereof
with respect to any claim made against such indemnifying party unless the
indemnified party shall have notified the indemnifying party 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
indemnified party (or after the indemnified party shall have received notice
of such service on any designated agent), but failure to notify the
indemnifying party of any such claim shall not relieve it from any liability
which it may otherwise have to the indemnified party. The indemnifying party
will 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, and if the indemnifying party elects to assume the defense, such
defense shall be conducted by counsel chosen by it and reasonably
satisfactory to the indemnified party. In the event the indemnifying party
elects to assume the defense of any such suit and retain such counsel, the
indemnified party shall bear the fees and expenses of any additional counsel
retained by the indemnified party.
Section 5. Duration and Termination. The term of this Agreement shall
begin on the date of this Agreement for each Fund that has executed an
Exhibit hereto on the date of this Agreement and shall continue in effect
with respect to each such Fund (and any subsequent Funds added pursuant to an
Exhibit executed during the initial term of this Agreement) for two years
thereafter, and shall continue in effect from year to year thereafter,
subject to termination as hereinafter provided, if such continuance is
approved at least annually by (a) a majority of the outstanding voting
securities (as defined in the 1940 Act) of such Fund or by vote of the
Trust's Board of Trustees, cast in person at a meeting called for the purpose
of voting on such approval, and (b) by vote of a majority of the Trustees of
the Trust who are not parties to this Agreement or "interested persons" (as
defined in the 1940 Act) of any party to this Agreement, cast in person at a
meeting called for the purpose of voting on such approval. If a Fund is added
pursuant to an Exhibit executed after the date of this Agreement as described
above, this Agreement shall become effective with respect to that Fund upon
execution of the applicable Exhibit and shall continue in effect until the
next annual continuance of this Agreement and from year to year thereafter,
subject to approval as described above. This Agreement may be terminated by
the Trust with respect to any Fund at any time, without the payment of any
penalty, by the Board of Trustees or by vote of a majority of the outstanding
voting securities (as defined in the 1940 Act) of such Fund, on 60 days'
written notice to the Distributor, or by the Distributor at any time, without
the payment of any penalty, on 90 days' written notice to the Trust. This
Agreement will automatically and immediately terminate in the event of its
assignment (as defined in the 1940 Act).
Section 6. Miscellaneous.
6.1. Amendments. No provision of this Agreement may be changed,
waived, discharged or terminated except by an instrument in writing signed by
the party against which an enforcement of the change, waiver, discharge or
termination is sought.
6.2. Construction. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. 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. Subject to the provisions of Section 5 hereof, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors.
6.3. Notices. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Trust shall be sufficiently
given if addressed to the Trust and mailed or delivered to it at its
principal office set forth in the Registration Statement, or at such other
place as the Trust may from time to time designate in writing. Any notice or
other instrument in writing, authorized or required by this Agreement to be
given to the Distributor shall be sufficiently given if addressed to the
Distributor and mailed or delivered to it at 431 North Pennsylvania Street,
Indianapolis, Indiana 46204, Attention: President, or at such other place as
the Distributor may from time to time designate in writing.
6.4. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Indiana.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date and year first
above written.
LABRADOR MUTUAL FUND
By /S/ PETER ALLEN SCHUH
---------------------------
UNIFIED MANAGEMENT CORPORATION
By DAVID A BOGAERT
-----------------------------
Title: Executive Vice President
Date: August 12, 1998
By /S/ STEPHEN D. HIGHSMITH
-------------------------------
Title: SR. Vice President/ COO
Date: August 12, 1998
EXHIBIT A
to
Distribution Agreement
List of Portfolios
The Labrador Mutual Fund
EXHIBIT B
to
Distribution Agreement
Fee Schedule
Review of Sales Literature: $50 per hour, plus applicable
NASD advertising review fees
Maintenance of Fund officer NASD licenses $150 per individual, plus
applicable license including
compliance review. fees.
IN WITNESS WHEREOF, the parties hereto have caused this Exhibit to be
executed by their officers designated below as of the date and year first
above written.
LABRADOR MUTUAL FUND
By /S/ PETER ALLEN SCHUH
---------------------------
UNIFIED MANAGEMENT CORPORATION
By DAVID A BOGAERT
-----------------------------
Title: Executive Vice President
Date: August 12, 1998
By /S/ STEPHEN D. HIGHSMITH
-------------------------------
Title: SR. Vice President/ COO
Date: August 12, 1998
EXHIBIT 6B
UNIFIED MANAGEMENT CORPORATION
431 NORTH PENNSYLVANIA STREET
INDIANAPOLIS, INDIANA 46204
317-917-7002
DISTRIBUTION ASSISTANCE AGREEMENT
This Agreement is made between the broker/dealer or other financial
institution executing this Agreement ("Provider") and Unified Management
Corporation ("Unified") on behalf of the Labrador Mutual Fund (the "Fund"),
for which Unified administers a Distribution Plan (the "Plan") and which
have approved this form of Agreement.
Provider understands that The Labrador Mutual Fund (the "Fund") have
adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended (the "Act"), with respect to one
or more series (each, a "Fund") of its shares of beneficial ownership
(collectively, the "Shares") for making payments to selected brokers for
distribution assistance.
Provider further understands that Unified is the principal underwriter
as defined in the Investment Company Act of 1940 and from which Provider
has the right to purchase shares.
In consideration of the mutual covenants hereinafter contained, Provider
desires to enter into an agreement with Unified for distribution assistance
of the Shares, and it is hereby agreed by and between the parties hereto as
follows:
1. Provider certifies that it is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD") and agrees to
maintain membership in the NASD, or, in the alternative, that Provider is a
foreign broker not eligible for membership in the NASD. In either case,
Provider agrees to abide by all of the rules and regulations of the NASD
which are binding upon underwriters and brokers in the distribution of the
shares of open-end investment companies, including without limitation:
Section 24 of Article III of the Rules of Fair Practice; Rule 26 of its
Rules of Fair Practice; all of which are incorporated herein as if set
forth in full. Provider further agrees to comply with all applicable state
and federal laws and the rules and regulations of authorized regulatory
agencies. Provider agrees that it will not sell, or offer for sale, Shares
in any state or jurisdiction where they are not exempt from registration or
have not been qualified for sale.
By our acceptance of this Agreement, Provider represents and certifies
that Provider is a broker-dealer registered with the Securities and
Exchange Commission. Provider's acceptance also constitutes a
representation that Provider has been duly authorized by the proper
corporate action(s) to enter into this Agreement and to perform its
obligations hereunder.
2. Provider will offer and sell Shares only in accordance with the
terms and conditions of the Trust's then current Prospectus with respect
thereto, and Provider will make no representations not included in said
Prospectus or in any authorized supplemental material supplied by the
Trust. Provider will use its best efforts in the development and promotion
of sales of the Shares and agrees to be responsible for the proper
instruction and training of all sales personnel employed by it, in order
that the Shares will be offered in accordance with the terms and conditions
of this Agreement and all applicable laws, rules and regulations. Provider
agrees to hold the Trust and Unified harmless and indemnify the Trust and
Unified in the event that Provider, or any of its sales representatives,
should violate any law, rule or regulation, or any provisions of this
Agreement, which may result in liability to the Trust or Unified; and in
the event the Trust or Unified determines to refund any amount paid by any
investor by reason of any such violation on Provider's part, Provider shall
return to the Trust or Unified any distribution assistance payments
previously paid or allowed by the Trust or Unified to Provider with respect
to the transaction for which the refund is made. All expenses which
Provider incurs in connection with its activities under this Agreement
shall be borne by the Provider.
3. For purposes of this Agreement "Qualified Accounts" shall mean:
accounts of customers of Provider who have purchased Shares and who use
Provider's facilities to communicate with the Trust or Unified or to effect
redemptions or additional purchases of Shares and with respect to which
Provider provides shareholder and administration services, which services
may include, without limitation: answering inquiries regarding the Trust;
assistance to customers in changing dividend options, account designations
and addresses; establishment and maintenance of shareholder accounts and
records; processing purchase and redemption transactions; exchanging shares
between Funds of the Trust; automatic investment in Shares of customer
account cash balance; providing periodic statements showing a customer's
account balance and the integration of such statements with those of other
transactions and balances in the customer's other accounts serviced by
Provider; arranging for bank wires; and such other information and services
as the Trust or Unified reasonably may request with respect to the Shares,
to the extent Provider is permitted by applicable statute, rule or
regulation.
4. In consideration of the services and facilities described herein,
Provider shall be entitled to receive from Unified fees based on the
average daily net assets of each Fund of the Trust for which a Plan is in
effect and representing Shares for which Provider is the broker of record,
as set forth in the Schedule hereto, provided that such fees shall not
exceed those set forth in such Plan. Provider understands that the payment
of such fees has been authorized pursuant to the related Plan approved by
the Board of Trustees and shareholders of the Trust and shall be paid only
so long as the related Plan and this Agreement are in effect.
5. The frequency of payment, the terms of any right to sell in a
territory, and any other supplemental terms, conditions or qualifications
for Provider to receive such payments are subject to change by the Trust or
Unified from time to time upon written notice. Any orders placed after the
effective date of such change shall be subject to the fee rates in effect
at the time of receipt of the payment by the Trust or Unified.
6. Provider understands and agrees that in performing its services
covered by this Agreement Provider is acting as principal, and the Trust
and Unified are in no way responsible for the manner of Provider's
performance or for any of its acts or omissions in connection therewith.
Nothing in this Agreement or in any Plan shall be construed to constitute
Provider or any of its agents, employees or representatives as the Trust's
or Unified's agent, partner or employee.
7. In all sales of shares of the Fund to the public, Provider shall act
as dealer for its own account, and in no transaction shall Provider have
authority to act as agent for the Fund or for Unified Management
Corporation.
8. Orders that Unified receives from Provider will be accepted only at
the net asset value applicable to each order. The minimum dollar purchase
of shares of the Fund by any person shall be the applicable minimum amount
described in the current Fund Prospectus, and no order for less than such
amount will be accepted hereunder. The procedures relating to the handling
of orders shall be subject to instructions which Unified shall communicate
from time to time to Provider. All orders are subject to acceptance or
rejection by Unified in Unified's sole discretion.
9. This Agreement shall terminate automatically (i) in the event of its
"assignment" (as defined in Section 2(a)(4) of the Act) or (ii) with
respect to a Plan, in the event such Plan is terminated.
10. This Agreement may be terminated at any time with respect to a Plan
(without payment of any penalty) by a majority of the "Qualified Trustees"
(as defined in such Plan) or by a vote of a majority of the outstanding
voting securities of the related Fund, or by Unified on 60 days' written
notice to Provider at its principal place of business. Provider may
terminate this Agreement on 60 days' written notice addressed to the Trust
and Unified at Unified's principal place of business. Without limiting the
generality of the foregoing, any provision hereof to the contrary
notwithstanding, Provider's expulsion from the NASD will automatically
terminate this Agreement without notice; and Provider's suspension from the
NASD, or violation of applicable state or federal laws or rules and
regulations of authorized regulatory agencies, will terminate this
Agreement effective upon the date of mailing notice to Provider of such
termination.
11. Provider agrees to pay for Fund shares by or before the settlement
date by check or Federal wire payable to the order of the Fund, which
reserves the right to delay issuance or transfer of shares until such check
has cleared. If such payment is not received by Unified, Unified reserves
the right, without notice, forthwith either to cancel the sale, or at
Unified's option, to sell the shares ordered back to the Fund, and in
either case, Provider shall be responsible for any loss suffered by the
Fund.
12. Provider agrees to purchase shares only from Unified or from
Provider's customers. If Provider purchases shares from Unified, Provider
agrees that all such purchases shall be made only: (a) to cover orders
already received by Provider from its customer, or (b) for Provider's own
bona fide investment. Provider, in turn, agrees that Provider will not
purchase any securities from the Fund except for the purpose of covering
purchase orders which Provider has already received.
13. Provider shall sell shares only: (a) to customers at the
applicable net asset value. In such a sale to Unified, Provider may act
either as agent or principal for its customer. If Provider acts as
principal for its own account in purchasing shares for resale to Unified,
Provider agrees to pay its customer not less than the price which Provider
receives from Unified. If Provider acts as agent for its customer in
selling shares to Unified, Provider agrees not to charge its customer more
than a fair commission for handling the transaction.
14. Settlement shall be made promptly, but in no case later than three
(3) business days after Unified's acceptance of the order. If payment is
not so received or made, the right is reserved forthwith to cancel the sale
or, at Unified's option, to resell the shares to the respective Fund, at
the then prevailing net asset value in which latter case Provider will
agree to be responsible for any loss, resulting to such Fund or to Unified
from our failure to make payment as aforesaid.
15. The Fund reserves the right in its discretion and Unified reserves
the right in Unified's discretion, without notice, to suspend sales or
withdraw the offering of shares entirely. Unified reserves the right,
without notice, to amend, modify, or cancel this Agreement. This Agreement
may not be assigned by either party without prior written consent of the
other party.
16. Provider will not offer shares of the Fund for sale in any state
where they are not qualified for sale under the Blue Sky Laws and
regulations of such state or where Provider is not qualified to act as a
dealer, except for states in which they are exempt from qualification.
17. No person is authorized to make any representations concerning
shares of the Fund except those contained in the then current Fund
Prospectus. In purchasing shares from Unified, Provider shall rely solely
on the representations contained in such Prospectus. Unified will furnish
additional copies of the current Prospectus and sales literature issued by
Unified in reasonable quantities upon request.
18. Neither this Agreement nor the performance of the services
hereunder shall be considered to create a joint venture or partnership
between Provider and Unified.
19. All communications to the Trust or Unified shall be sent to Unified
at Unified's address set forth above. Any notice to Provider shall be duly
given if mailed or telegraphed to Provider at the address set forth below.
20. This Agreement shall become effective on the later of (i) the date
the Plan is adopted and becomes effective, or (ii) the date this Agreement
is accepted by Unified as indicated below. This Agreement and all the
rights and obligations of the parties hereunder shall be governed by and
construed under the laws of the State of Indiana.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their duly authorized signatories designated below as of the
date set forth below.
Provider:
Broker Dealer Tax I.D. #:
Address:
City:
State: Zip Code:
Dated:
By:
Authorized Signatory
Name:
Printed
Title:
UNIFIED MANAGEMENT CORPORATION
431 North Pennsylvania Street
Indianapolis, Indiana 46204
By:
Name:
Title:
By:
Name:
Title:
EXHIBIT A
to
Distribution Assistance Agreement
Funds covered by this Agreement:
The Labrador Fund
Distribution Assistance Fees:
1. During the term of this Agreement, the Funds will pay Provider a
monthly fee. This fee will be computed at the annual rate of 0.25% of the
average net asset value of shares of the Funds held during the month in
accounts for which the Provider provides Services under this Agreement, so
long as the average net asset value of shares in the Funds during the month
equals or exceeds such minimum amount as the Funds shall from time to time
determine and communicate in writing to the Provider.
2. For the monthly period in which the Distribution Assistance
Agreement becomes effective or terminates, there shall be an appropriate
proration of any fee payable on the basis of the number of days that the
Agreement is in effect during the month.
EXHIBIT 8
CUSTODY AGREEMENT
This agreement (the "Agreement") is entered into as of the 06 day
of March, 1998 by and between Labrador Mutual Fund, (the "Fund"), an open-
end diversified investment business trust organized under the laws of
Delaware and having its office at 2344 Corte De La Jara, Pleasanton,
California 94566 and Star Bank, National Association, (the "Custodian"),
a national banking association having its principal office at 425 Walnut
Street, Cincinnati, Ohio, 45202.
WHEREAS, the Fund and the Custodian desire to enter into this
Agreement to provide for the custody and safekeeping of the assets of the
Fund as required by the Investment Company Act of 1940, as amended (the
"Act").
WHEREAS, the Fund hereby appoints the Custodian as custodian of all
the Fund's Securities and moneys at any time owned by the Fund during the
term of this Agreement (the "Fund Assets").
WHEREAS, the Custodian hereby accepts such appointment as Custodian
and agrees to perform the duties thereof as hereinafter set forth.
THEREFORE, in consideration of the mutual promises hereinafter set
forth, the Fund and the Custodian agree as follows:
ARTICLE I
Definitions
The following words and phrases, when used in this Agreement,
unless the context otherwise requires, shall have the following meanings:
Authorized Person - the Chairman, President, Secretary, Treasurer,
Controller, or Senior Vice President of the Fund, or any other person,
whether or not any such person is an officer or employee of the Fund, duly
authorized by the Board of Trustees of the Fund to give Oral Instructions
and Written Instructions on behalf of the Fund, and listed in the
Certificate annexed hereto as Appendix A, or such other Certificate as may
be received by the Custodian from time to time.
Book-Entry System - the Federal Reserve Bank book-entry system for
United States Treasury securities and federal agency securities.
Depository - The Depository Trust Company ("DTC"), a limited purpose trust
company its successor(s) and its nominee(s) or any other person or
clearing agent
Dividend and Transfer Agent - the dividend and transfer agent
appointed, from time to time, pursuant to a written agreement between the
dividend and transfer agent and the Fund
Foreign Securities - a) securities issued and sold primarily
outside of the United States by a foreign government, a national of any
foreign country, or a trust or other organization incorporated or
organized under the laws of any foreign country or; b) securities issued
or guaranteed by the government of the United States, by any state, by any
political subdivision or agency thereof, or by any entity organized under
the laws of the United States or of any state thereof, which have been
issued and sold primarily outside of the United States.
Money Market Security - debt obligations issued or guaranteed as to
principal and/or interest by the government of the United States or
agencies or instrumentalities thereof, commercial paper, obligations
(including certificates of deposit, bankers' acceptances, repurchase
agreements and reverse repurchase agreements with respect to the same),
and time deposits of domestic banks and thrift institutions whose deposits
are insured by the Federal Deposit Insurance Corporation, and short-term
corporate obligations where the purchase and sale of such securities
normally require settlement in federal funds or their equivalent on the
same day as such purchase and sale, all of which mature in not more than
thirteen (13) months.
Officers - the Chairman, President, Secretary, Treasurer,
Controller, and Senior Vice President of the Fund listed in the
Certificate annexed hereto as Appendix A, or such other Certificate as may
be received by the Custodian from time to time.
Oral Instructions - verbal instructions received by the Custodian
from an Authorized Person (or from a person that the Custodian reasonably
believes in good faith to be an Authorized Person) and confirmed by
Written Instructions in such a manner that such Written Instructions are
received by the Custodian on the business day immediately following
receipt of such Oral Instructions.
Prospectus - the Fund's then currently effective prospectus and
Statement of Additional Information, as filed with and declared effective
from time to time by the Securities and Exchange Commission.
Security or Securities - Money Market Securities, common stock,
preferred stock, options, financial futures, bonds, notes, debentures,
corporate debt securities, mortgages, and any certificates, receipts,
warrants, or other instruments representing rights to receive, purchase,
or subscribe for the same or evidencing or representing any other rights
or interest therein, or any property or assets.
Written Instructions - communication received in writing by the
Custodian from an Authorized Person.
ARTICLE II
Documents and Notices to be Furnished by the Fund
A The following documents, including any amendments thereto,
will be provided contemporaneously with the execution of the Agreement, to
the Custodian by the Fund:
1. A copy of the Articles of Incorporation of the Fund
certified by the Secretary.
2. A copy of the By-Laws of the Fund certified by the
Secretary
3. A copy of the resolution of the Board of Trustees of the
Fund appointing the Custodian, certified by the
Secretary.
4. A copy of the then current Prospectus.
5. A Certificate of the President and Secretary of the Fund
setting forth the names and signatures of the Officers
of the Fund.
B. The Fund agrees to notify the Custodian in writing of the
appointment of any Dividend and Transfer Agent.
ARTICLE III
Receipt of Fund Assets
A. During the term of this Agreement, the Fund will deliver
or cause to be delivered to the Custodian all moneys constituting Fund
Assets. The Custodian shall be entitled to reverse any deposits made on
the Fund's behalf where such deposits have been entered and moneys are not
finally collected within 30 days of the making of such entry.
B. During the term of this Agreement, the Fund will deliver
or cause to be delivered to the Custodian all Securities constituting Fund
Assets. The Custodian will not have any duties or responsibilities with
respect to such Securities until actually received by the Custodian.
C. As and when received, the Custodian shall deposit to the
account(s) of the Fund any and all payments for shares of the Fund issued
or sold from time to time as they are received from the Fund's distributor
or Dividend and Transfer Agent or from the Fund itself.
ARTICLE IV
Disbursement of Fund Assets
A. The Fund shall furnish to the Custodian a copy of the
resolution of the Board of Trustees of the Fund, certified by the Fund's
Secretary, either (i) setting forth the date of the declaration of any
dividend or distribution in respect of shares of the Fund, the date of
payment thereof, the record date as of which Fund shareholders entitled to
payment shall be determined, the amount payable per share to Fund
shareholders of record as of that date, and the total amount to be paid by
the Dividend and Transfer Agent on the payment date, or (ii) authorizing
the declaration of dividends and distributions in respect of shares of the
Fund on a daily basis and authorizing the Custodian to rely on a
Certificate setting forth the date of the declaration of any such dividend
or distribution, the date of payment thereof, the record date as of which
Fund shareholders entitled to payment shall be determined, the amount
payable per share to Fund shareholders of record as of that date, and the
total amount to be paid by the Dividend and Transfer Agent on the payment
date.
On the payment date specified in such resolution or
Certificate described above, the Custodian shall segregate such amounts
from moneys held for the account of the Fund so that they are available
for such payment.
B. Upon receipt of Written Instructions so directing it, the
Custodian shall segregate amounts necessary for the payment of redemption
proceeds to be made by the Dividend and Transfer Agent from moneys held
for the account of the Fund so that they are available for such payment.
C. Upon receipt of a Certificate directing payment and
setting forth the name and address of the person to whom such payment is
to be made, the amount of such payment, and the purpose for which payment
is to be made, the Custodian shall disburse amounts as and when directed
from the Fund Assets. The Custodian is authorized to rely on such
directions and shall be under no obligation to inquire as to the propriety
of such directions.
D. Upon receipt of a Certificate directing payment, the
Custodian shall disburse moneys from the Fund Assets in payment of the
Custodian's fees and expenses as provided in Article VIII hereof.
ARTICLE V
Custody of Fund Assets
A. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of the Fund, subject
only to draft or order by the Custodian acting pursuant to the terms of
this Agreement, and shall hold all cash received by it from or for the
account of the Fund, other than cash maintained by the Fund in a bank
account established and used by the Fund in accordance with Rule 17f-3
under the Act. Moneys held by the Custodian on behalf of the Fund may be
deposited by the Custodian to its credit as Custodian in the banking
department of the Custodian. Such moneys shall be deposited by the
Custodian in its capacity as such, and shall be withdrawable by the
Custodian only in such capacity.
B. The Custodian shall hold all Securities delivered to it
in safekeeping in a separate account or accounts maintained at Star Bank,
N.A. for the benefit of the Fund.
C. All Securities held which are issued or issuable only
in bearer form, shall be held by the Custodian in that form; all other
Securities held for the Fund shall be registered in the name of the
Custodian or its nominee. The Fund agrees to furnish to the Custodian
appropriate instruments to enable the Custodian to hold, or deliver in
proper form for transfer, any Securities that it may hold for the account
of the Fund and which may, from time to time, be registered in the name of
the Fund.
D. With respect to all Securities held for the Fund , the
Custodian shall on a timely basis (concerning items 1 and 2 below, as
defined in the Custodian's Standards of Service Guide, as amended from
time to time, annexed hereto as Appendix C):
1.) Collect all income due and payable with respect to
such Securities;
2.) Present for payment and collect amounts payable
upon all Securities which may mature or be called,
redeemed, or retired, or otherwise become payable;
3.) Surrender Securities in temporary form for
definitive Securities; and
4.) Execute, as agent, any necessary declarations or
certificates of ownership under the Federal income
tax laws or the laws or regulations of any other
taxing authority, including any foreign taxing
authority, now or hereafter in effect.
E. Upon receipt of a Certificate and not otherwise, the
Custodian shall:
1.) Execute and deliver to such persons as may be
designated in such Certificate proxies, consents,
authorizations, and any other instruments whereby
the authority of the Fund as beneficial owner of
any Securities may be exercised;
2.) Deliver any Securities in exchange for other
Securities or cash issued or paid in connection
with the liquidation, reorganization, refinancing,
merger, consolidation, or recapitalization of any
trust, or the exercise of any conversion
privilege;
3.) Deliver any Securities to any protective
committee, reorganization committee, or other
person in connection with the reorganization,
refinancing, merger, consolidation,
recapitalization, or sale of assets of any trust,
and receive and hold under the terms of this
Agreement such certificates of deposit, interim
receipts or other instruments or documents as may
be issued to it to evidence such delivery;
4.) Make such transfers or exchanges of the assets of
the Fund and take such other steps as shall be
stated in said Certificate to be for the purpose
of effectuating any duly authorized plan of
liquidation, reorganization, merger, consolidation
or recapitalization of the Fund; and
5.) Deliver any Securities held for the Fund to the
depository agent for tender or other similar
offers.
F. The Custodian shall promptly deliver to the Fund all
notices, proxy material and executed but unvoted proxies pertaining to
shareholder meetings of Securities held by the Fund. The Custodian shall
not vote or authorize the voting of any Securities or give any consent,
waiver or approval with respect thereto unless so directed by a
Certificate or Written Instruction.
G. The Custodian shall promptly deliver to the Fund all
information received by the Custodian and pertaining to Securities held by
the Fund with respect to tender or exchange offers, calls for redemption
or purchase, or expiration of rights.
ARTICLE VI
Purchase and Sale of Securities
A. Promptly after each purchase of Securities by the Fund,
the Fund shall deliver to the Custodian (i) with respect to each purchase
of Securities which are not Money Market Securities, Written Instructions,
and (ii) with respect to each purchase of Money Market Securities, Written
Instructions or Oral Instructions, specifying with respect to each such
purchase the;
1.) name of the issuer and the title of the Securities,
2.) principal amount purchased and accrued interest, if any,
3.) date of purchase and settlement,
4.) purchase price per unit,
5.) total amount payable, and
6.) name of the person from whom, or the broker through
which, the purchase was made.
The Custodian shall, against receipt of Securities purchased by or for the
Fund, pay out of the Fund Assets, the total amount payable to the person
from whom or the broker through which the purchase was made, provided that
the same conforms to the total amount payable as set forth in such Written
Instructions or Oral Instructions, as the case may be.
B. Promptly after each sale of Securities by the Fund, the
Fund shall deliver to the Custodian (i) with respect to each sale of
Securities which are not Money Market Securities, Written Instructions,
and (ii) with respect to each sale of Money Market Securities, Written
Instructions or Oral Instructions, specifying with respect to each such
sale the;
1.) name of the issuer and the title of the Securities,
2.) principal amount sold and accrued interest, if any,
3.) date of sale and settlement,
4.) sale price per unit,
5.) total amount receivable, and
6.) name of the person to whom, or the broker through
which, the sale was made.
The Custodian shall deliver the Securities against receipt of the total
amount receivable, provided that the same conforms to the total amount
receivable as set forth in such Written Instructions or Oral Instructions,
as the case may be.
C. On contractual settlement date, the account of the Fund
will be charged for all purchased Securities settling on that day,
regardless of whether or not delivery is made. Likewise, on contractual
settlement date, proceeds from the sale of Securities settling that day
will be credited to the account of the Fund, irrespective of delivery.
D. Purchases and sales of Securities effected by the
Custodian will be made on a delivery versus payment basis. The Custodian
may, in its sole discretion, upon receipt of a Certificate, elect to
settle a purchase or sale transaction in some other manner, but only upon
receipt of acceptable indemnification from the Fund.
E. The Custodian shall, upon receipt of a Written
Instructions so directing it, establish and maintain a segregated account
or accounts for and on behalf of the Fund. Cash and/or Securities may be
transferred into such account or accounts for specific purposes, to-wit:
1.) in accordance with the provision of any agreement
among the Fund, the Custodian, and a broker-
dealer registered under the Securities and
Exchange Act of 1934, as amended, and also a
member of the National Association of Securities
Dealers (NASD) (or any futures commission
merchant registered under the Commodity Exchange
Act), relating to compliance with the rules of
the Options Clearing Corporation and of any
registered national securities exchange, the
Commodity Futures Trading Commission, any
registered contract market, or any similar
organization or organizations requiring escrow or
other similar arrangements in connection with
transactions by the Fund;
2.) for purposes of segregating cash or government
securities in connection with options purchased,
sold, or written by the Fund or commodity futures
contracts or options thereon purchased or sold by
the Fund;
3.) for the purpose of compliance by the fund with the
procedures required for reverse repurchase
agreements, firm commitment agreements, standby
commitment agreements, and short sales by Act
Release No. 10666, or any subsequent release or
releases or rule of the Securities and Exchange
Commission relating to the maintenance of
segregated accounts by registered investment
companies; and
4.) for other corporate purposes, only in the case of
this clause 4 upon receipt of a copy of a
resolution of the Board of Trustees of the Fund,
certified by the Secretary of the Fund, setting
forth the purposes of such segregated account.
F. Except as otherwise may be agreed upon by the parties
hereto, the Custodian shall not be required to comply with any Written
Instructions to settle the purchase of any Securities on behalf of the
Fund unless there is sufficient cash in the account(s) at the time or to
settle the sale of any Securities from an account(s) unless such
Securities are in deliverable form. Notwithstanding the foregoing, if the
purchase price of such Securities exceeds the amount of cash in the
account(s) at the time of such purchase, the Custodian may, in its sole
discretion, advance the amount of the difference in order to settle the
purchase of such Securities. The amount of any such advance shall be
deemed a loan from the Custodian to the Fund payable on demand and bearing
interest accruing from the date such loan is made up to but not including
the date such loan is repaid at a rate per annum customarily charged by
the Custodian on similar loans.
ARTICLE VII
Fund Indebtedness
In connection with any borrowings by the Fund, the Fund will cause
to be delivered to the Custodian by a bank or broker requiring Securities
as collateral for such borrowings (including the Custodian if the
borrowing is from the Custodian), a notice or undertaking in the form
currently employed by such bank or broker setting forth the amount of
collateral. The Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to each such borrowing: (a) the name
of the bank or broker, (b) the amount and terms of the borrowing, which
may be set forth by incorporating by reference an attached promissory note
duly endorsed by the Fund, or a loan agreement, (c) the date, and time if
known, on which the loan is to be entered into, (d) the date on which the
loan becomes due and payable, (e) the total amount payable to the Fund on
the borrowing date, and (f) the description of the Securities securing the
loan, including the name of the issuer, the title and the number of shares
or the principal amount. The Custodian shall deliver on the borrowing
date specified in the Certificate the required collateral against the
lender's delivery of the total loan amount then payable, provided that
the same conforms to that which is described in the Certificate. The
Custodian shall deliver, in the manner directed by the Fund, such
Securities as additional collateral, as may be specified in a Certificate,
to secure further any transaction described in this Article VII. The Fund
shall cause all Securities released from collateral status to be returned
directly to the Custodian and the Custodian shall receive from time to
time such return of collateral as may be tendered to it.
The Custodian may, at the option of the lender, keep such
collateral in its possession, subject to all rights therein given to the
lender because of the loan. The Custodian may require such reasonable
conditions regarding such collateral and its dealings with third-party
lenders as it may deem appropriate.
ARTICLE VIII
Concerning the Custodian
A. Except as otherwise provided herein, the Custodian
shall not be liable for any loss or damage resulting from its action or
omission to act or otherwise, except for any such loss or damage arising
out of its own gross negligence or willful misconduct. The Fund shall
defend, indemnify and hold harmless the Custodian and its directors,
officers, employees and agents with respect to any loss, claim, liability
or cost (including reasonable attorneys' fees) arising or alleged to arise
from or relating to the Fund's duties hereunder or any other action or
inaction of the Fund or its Trustees, officers, employees or agents,
except such as may arise from the negligent action, omission, willful
misconduct or breach of this Agreement by the Custodian. The Custodian
may, with respect to questions of law, apply for and obtain the advice and
opinion of counsel, at the expense of the Fund, and shall be fully
protected with respect to anything done or omitted by it in good faith in
conformity with the advice or opinion of counsel. The provisions under
this paragraph shall survive the termination of this Agreement.
B. Without limiting the generality of the foregoing, the
Custodian, acting in the capacity of Custodian hereunder, shall be under
no obligation to inquire into, and shall not be liable for:
1.) The validity of the issue of any Securities
purchased by or for the account of the Fund, the
legality of the purchase thereof, or the
propriety of the amount paid therefor;
2.) The legality of the sale of any Securities by or
for the account of the Fund, or the propriety of
the amount for which the same are sold;
3.) The legality of the issue or sale of any shares
of the Fund, or the sufficiency of the amount to
be received therefor;
4.) The legality of the redemption of any shares of
the Fund, or the propriety of the amount to be
paid therefor;
5.) The legality of the declaration or payment of
any dividend by the Fund in respect of shares of
the Fund;
6.) The legality of any borrowing by the Fund on
behalf of the Fund, using Securities as
collateral;
C. The Custodian shall not be under any duty or obligation
to take action to effect collection of any amount due to the Fund from any
Dividend and Transfer Agent of the Fund nor to take any action to effect
payment or distribution by any Dividend and Transfer Agent of the Fund of
any amount paid by the Custodian to any Dividend and Transfer Agent of the
Fund in accordance with this Agreement.
D. Notwithstanding Section D of Article V, the Custodian
shall not be under any duty or obligation to take action to effect
collection of any amount, if the Securities upon which such amount is
payable are in default, or if payment is refused after due demand or
presentation, unless and until (i) it shall be directed to take such
action by a Certificate and (ii) it shall be assured to its satisfaction
(including prepayment thereof) of reimbursement of its costs and expenses
in connection with any such action.
E. The Fund acknowledges and hereby authorizes the
Custodian to hold Securities through its various agents described in
Appendix B annexed hereto. The Fund hereby represents that such
authorization has been duly approved by the Board of Trustees of the Fund
as required by the Act. The Custodian acknowledges that although certain
Fund Assets are held by its agents, the Custodian remains primarily liable
for the safekeeping of the Fund Assets.
In addition, the Fund acknowledges that the Custodian may appoint
one or more financial institutions, as agent or agents or as sub-custodian
or sub-custodians, including, but not limited to, banking institutions
located in foreign countries, for the purpose of holding Securities and
moneys at any time owned by the Fund. The Custodian shall not be relieved
of any obligation or liability under this Agreement in connection with the
appointment or activities of such agents or sub-custodians. Any such
agent or sub-custodian shall be qualified to serve as such for assets of
investment companies registered under the Act. Upon request, the
Custodian shall promptly forward to the Fund any documents it receives
from any agent or sub-custodian appointed hereunder which may assist
trustees of registered investment companies fulfill their responsibilities
under Rule 17f-5 of the Act.
F. The Custodian shall not be under any duty or obligation
to ascertain whether any Securities at any time delivered to or held by it
for the account of the Fund are such as properly may be held by the Fund
under the provisions of the Articles of Incorporation and the Fund's By-
Laws.
G. The Custodian shall treat all records and other
information relating to the Fund and the Fund Assets as confidential and
shall not disclose any such records or information to any other person
unless (i) the Fund shall have consented thereto in writing or (ii) such
disclosure is required by law.
H. The Custodian shall be entitled to receive and the Fund
agrees to pay to the Custodian such compensation as shall be determined
pursuant to Appendix D attached hereto, or as shall be determined pursuant
to amendments to such Appendix D. The Custodian shall be entitled to
charge against any money held by it for the account of the Fund, the
amount of any of its fees, any loss, damage, liability or expense,
including counsel fees. The expenses which the Custodian may charge
against the account of the Fund include, but are not limited to, the
expenses of agents or sub-custodians incurred in settling transactions
involving the purchase and sale of Securities of the Fund.
I. The Custodian shall be entitled to rely upon any Oral
Instructions and any Written Instructions. The Fund agrees to forward to
the Custodian Written Instructions confirming Oral Instructions in such a
manner so that such Written Instructions are received by the Custodian,
whether by hand delivery, facsimile or otherwise, on the same business day
on which such Oral Instructions were given. The Fund agrees that the
failure of the Custodian to receive such confirming instructions shall in
no way affect the validity of the transactions or enforceability of the
transactions hereby authorized by the Fund. The Fund agrees that the
Custodian shall incur no liability to the Fund for acting upon Oral
Instructions given to the Custodian hereunder concerning such
transactions.
J. The Custodian will (i) set up and maintain proper books
of account and complete records of all transactions in the accounts
maintained by the Custodian hereunder in such manner as will meet the
obligations of the Fund under the Act, with particular attention to
Section 31 thereof and Rules 31a-1 and 31a-2 thereunder and those records
are the property of the Fund, and (ii) preserve for the periods prescribed
by applicable Federal statute or regulation all records required to be so
preserved. All such books and records shall be the property of the Fund,
and shall be open to inspection and audit at reasonable times and with
prior notice by Officers and auditors employed by the Fund.
K. The Custodian shall send to the Fund any report received
on the systems of internal accounting control of the Custodian, or its
agents or sub-custodians, as the Fund may reasonably request from time to
time.
L. The Custodian performs only the services of a custodian
and shall have no responsibility for the management, investment or
reinvestment of the Securities from time to time owned by the Fund. The
Custodian is not a selling agent for shares of the Fund and performance of
its duties as custodian shall not be deemed to be a recommendation to the
Fund's depositors or others of shares of the Fund as an investment.
M. The Custodian shall take all reasonable action, that the
Fund may from time to time request, to assist the Fund in obtaining
favorable opinions from the Fund's independent accountants, with respect
to the Custodian's activities hereunder, in connection with the
preparation of the Fund's Form N-1A, Form N-SAR, or other annual reports
to the Securities and Exchange Commission.
N. The Fund hereby pledges to and grants the Custodian a
security interest in any Fund Assets to secure the payment of any
liabilities of the Fund to the Custodian, whether acting in its capacity
as Custodian or otherwise, or on account of money borrowed from the
Custodian. This pledge is in addition to any other pledge of collateral
by the Fund to the Custodian.
ARTICLE IX
Force Majeure
Neither the Custodian nor the Corporation shall be liable for any
failure or delay in performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond
its reasonable control, including, without limitation, acts of God;
earthquakes; fires; floods; wars; civil or military disturbances;
sabotage; strikes; epidemics; riots; labor disputes; acts of civil or
military authority; governmental actions; or inability to obtain labor,
material, equipment or transportation; provided, however, that the
Custodian, in the event of a failure or delay, shall use its best efforts
to ameliorate the effects of such failure or delay.
ARTICLE X
Termination
A. Either of the parties hereto may terminate this Agreement
for any reason by giving to the other party a notice in writing specifying
the date of such termination, which shall be not less than ninety (90)
days after the date of giving of such notice. If such notice is given by
the Fund, it shall be accompanied by a copy of a resolution of the Board
of Trustees of the Fund, certified by the Secretary of the Fund, electing
to terminate this Agreement and designating a successor custodian or
custodians. In the event such notice is given by the Custodian, the Fund
shall, on or before the termination date, deliver to the Custodian a copy
of a resolution of the Board of Trustees of the Fund, certified by the
Secretary, designating a successor custodian or custodians to act on
behalf of the Fund. In the absence of such designation by the Fund, the
Custodian may designate a successor custodian which shall be a bank or
trust company having not less than $100,000,000 aggregate capital,
surplus, and undivided profits. Upon the date set forth in such notice
this Agreement shall terminate, and the Custodian, provided that it has
received a notice of acceptance by the successor custodian, shall deliver,
on that date, directly to the successor custodian all Securities and
moneys then owned by the Fund and held by it as Custodian. Upon
termination of this Agreement, the Fund shall pay to the Custodian on
behalf of the Fund such compensation as may be due as of the date of such
termination. The Fund agrees on behalf of the Fund that the Custodian
shall be reimbursed for its reasonable costs in connection with the
termination of this Agreement.
B. If a successor custodian is not designated by the Fund,
or by the Custodian in accordance with the preceding paragraph, or the
designated successor cannot or will not serve, the Fund shall, upon the
delivery by the Custodian to the Fund of all Securities (other than
Securities held in the Book-Entry System which cannot be delivered to the
Fund) and moneys then owned by the Fund, be deemed to be the custodian
for the Fund, and the Custodian shall thereby be relieved of all duties
and responsibilities pursuant to this Agreement, other than the duty with
respect to Securities held in the Book-Entry System, which cannot be
delivered to the Fund, which shall be held by the Custodian in accordance
with this Agreement.
ARTICLE XI
MISCELLANEOUS
A. Appendix A sets forth the names and the signatures of all
Authorized Persons, as certified by the Secretary of the Fund. The Fund
agrees to furnish to the Custodian a new Appendix A in form similar to the
attached Appendix A, if any present Authorized Person ceases to be an
Authorized Person or if any other or additional Authorized Persons are
elected or appointed. Until such new Appendix A shall be received, the
Custodian shall be fully protected in acting under the provisions of this
Agreement upon Oral Instructions or signatures of the then current
Authorized Persons as set forth in the last delivered Appendix A.
B. No recourse under any obligation of this Agreement or
for any claim based thereon shall be had against any organizer,
shareholder, Officer, Director, past, present or future as such, of the
Fund or of any predecessor or successor, either directly or through the
Fund or any such predecessor or successor, whether by virtue of any
constitution, statute or rule of law or equity, or be the enforcement of
any assessment or penalty or otherwise; it being expressly agreed and
understood that this Agreement and the obligations thereunder are
enforceable solely against the Fund, and that no such personal liability
whatever shall attach to, or is or shall be incurred by, the organizers,
shareholders, Officers, Trustees of the Fund or of any predecessor or
successor, or any of them as such. To the extent that any such liability
exists, it is hereby expressly waived and released by the Custodian as a
condition of, and as a consideration for, the execution of this Agreement.
C. The obligations set forth in this Agreement as having been
made by the Fund have been made by the Board of Trustees, acting as such
Trustees for and on behalf of the Fund, pursuant to the authority vested
in them under the laws of the State of Delaware, the Articles of
Incorporation and the By-Laws of the Fund. This Agreement has been
executed by Officers of the Fund as officers, and not individually, and
the obligations contained herein are not binding upon any of the Trustees,
Officers, agents or holders of shares, personally, but bind only the Fund.
D. Provisions of the Prospectus and any other documents
(including advertising material) specifically mentioning the Custodian
(other than merely by name and address) shall be reviewed with the
Custodian by the Fund prior to publication and/or dissemination or
distribution, and shall be subject to the consent of the Custodian.
E. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Custodian, shall be
sufficiently given if addressed to the Custodian and mailed or delivered
to it at its offices at Star Bank Center, 425 Walnut Street, M. L. 6118,
Cincinnati, Ohio 45202, attention Mutual Fund Custody Department, or at
such other place as the Custodian may from time to time designate in
writing.
F. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Fund shall be sufficiently
given when delivered to the Fund or on the second business day following
the time such notice is deposited in the U.S. mail postage prepaid and
addressed to the Fund at its office at 2344 Corte De La Jara, Pleasanton,
California 94566 or at such other place as the Fund may from time to time
designate in writing.
G. This Agreement, with the exception of the Appendices, may
not be amended or modified in any manner except by a written agreement
executed by both parties with the same formality as this Agreement, and
authorized and approved by a resolution of the Board of Trustees of the
Fund.
H. This Agreement shall extend to and shall be binding upon
the parties hereto, and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Fund or by the
Custodian, and no attempted assignment by the Fund or the Custodian shall
be effective without the written consent of the other party hereto.
I. This Agreement shall be construed in accordance with the
laws of the State of Ohio.
J. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective Officers, thereunto duly authorized as
of the day and year first above written.
ATTEST: Labrador Mutual Fund
/S/ PETER ALLEN SCHUH
By:----------------------------------------
Title: Chairman
ATTEST: Star Bank, N.A.
/S/ MARSHA A CROXTON
By:----------------------------------------
Title: Senior Vice President
APPENDIX A
Authorized Persons Specimen Signatures
Chairman: --------------------
President: --------------------
Secretary: --------------------
Treasurer: --------------------
Controller: ---------------------
Vice-President: ---------------------
Adviser Employees: ---------------------
Transfer Agent/Fund Accountant
Employees:
--------------------- -------------------------
--------------------- -------------------------
--------------------- -------------------------
--------------------- -------------------------
APPENDIX B
The following agents are employed currently by Star Bank, N.A. for
securities processing and control . . .
The Depository Trust Company (New York)
7 Hanover Square
New York, NY 10004
The Federal Reserve Bank
Cincinnati and Cleveland Branches
Bankers Trust Company
16 Wall Street
New York, NY 10005
(For Foreign Securities and certain non-DTC eligible Securities
APPENDIX C
Standards of Service Guide
APPENDIX D
Schedule of Compensation
EXHIBIT 9
MUTUAL FUND SERVICES AGREEMENT
Fund Accounting Services
and
Transfer Agency Services
between
LABRADOR MUTUAL FUND
and
UNIFIED FUND SERVICES, INC.
April 27, 1998
Exhibit A - Portfolio Listing
Exhibit B - Fund Accounting Services Description
Exhibit C - Transfer Agency Services Description
Exhibit D - Fees and Expenses
MUTUAL FUND SERVICES AGREEMENT
AGREEMENT (this "Agreement"), dated as of April 27, 1998, between the
Labrador Mutual Fund, a Delaware business trust (the "Fund"), and Unified Fund
Services, Inc., an Indiana corporation ("Unified").
WITNESSTH:
WHEREAS, the Fund is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain Unified to provide certain transfer
agent, fund accounting and administration services with respect to the Fund,
and Unified is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:
Section 1. Appointment. The Fund hereby appoints Unified to provide
transfer agent, fund accounting and fund administration services for the Fund,
subject to the supervision of the Board of Trustees of the Fund (the "Board"),
for the period and on the terms set forth in this Agreement. Unified accepts
such appointment and agrees to furnish the services herein set forth in return
for the compensation as provided in Section 6 and Exhibit D to this Agreement.
The Fund will initially consist of the portfolios, funds and/or classes of
shares (each a "Portfolio"; collectively the "Portfolios") listed on Exhibit A.
The Fund shall notify Unified in writing of each additional Portfolio
established by the Fund. Each new Portfolio shall be subject to the provisions
of this Agreement, except to the extent that the provisions (including those
relating to the compensation and expenses payable by the Fund and its
Portfolios) may be modified with respect to each new Portfolio in writing by
the Fund and Unified at the time of the addition of the new Portfolio.
Section 2. Representations and Warranties of Unified. Unified represents and
warrants to the Fund that:
(a) Unified is a corporation duly organized and existing under the laws
of the State of Indiana;
(b) Unified is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement, and all
requisite corporate proceedings have been taken by Unified to authorize Unified
to enter into and perform this Agreement;
(c) Unified has, and will continue to have, access to the facilities,
personnel and equipment required to fully perform its duties and obligations
hereunder;
(d) no legal or administrative proceedings have been instituted or
threatened against Unified that would impair its ability to perform its duties
and obligations under this Agreement; and
(e) Unified's entrance into this Agreement will not cause a material
breach or be in material conflict with any other agreement or obligation of
Unified or any law or regulation applicable to Unified.
Section 3. Representations and Warranties of the Fund. The Fund
represents and warrants to Unified that:
(a) the Fund is a business trust duly organized and existing under the
laws of the State of Delaware;
(b) the Fund is empowered under applicable laws and by its Declaration
of Trust and By-Laws to enter into and perform this Agreement, and the Fund has
taken all requisite proceedings to authorize the Fund to enter into and perform
this Agreement;
(c) the Fund is an investment company properly registered under the 1940
Act; a registration statement under the Securities Act of 1933, as amended
("1933 Act") and the 1940 Act on Form N-lA has been filed and will be effective
and will remain effective during the term of this Agreement, and all necessary
filings under the laws of the states will have been made and will be current
during the term of this Agreement;
(d) no legal or administrative proceedings have been instituted or
threatened against the Fund that would impair its ability to perform its duties
and obligations under this Agreement; and
(e) the Fund's entrance into this Agreement will not cause a material
breach or be in material conflict with any other agreement or obligation of the
Fund or any law or regulation applicable to it.
Section 4. Delivery of Documents. The Fund will promptly furnish to
Unified such copies, properly certified or authenticated, of contracts,
documents and other related information that Unified may request or requires to
properly discharge its duties. Such documents may include but are not limited
to the following:
(a) Resolutions of the Board authorizing the appointment of Unified to
provide certain transfer agency, fund accounting and administration services to
the Fund and approving this Agreement;
(b) The Fund's Declaration of Trust;
(c) The Fund's By-Laws;
(d) The Fund's Notification of Registration on Form N-8A under the 1940
Act as filed with the Securities and Exchange Commission ("SEC");
(e) The Fund's registration statement including exhibits, as amended, on
Form N-1A (the "Registration Statement") under the 1933 Act and the 1940 Act,
as filed with the SEC;
(f) Copies of the Management Agreement between the Fund and its
investment adviser (the "Advisory Agreement");
(g) Opinions of counsel and auditors reports;
(h) The Fund's Prospectus and Statement of Additional Information
relating to all Portfolios and all amendments and supplements thereto (such
Prospectus and Statement of Additional Information and supplements thereto, as
presently in effect and as from time to time hereafter amended and
supplemented, herein called the "Prospectuses"); and
(i) Such other agreements as the Fund may enter into from time to time
including securities lending agreements, futures and commodities account
agreements, brokerage agreements, and options agreements.
Section 5. Services Provided by Unified.
(a) Unified will provide the following services subject to the control,
direction and supervision of the Board and in compliance with the objectives,
policies and limitations set forth in the Fund's Registration Statement,
Declaration of Trust and By-Laws; applicable laws and regulations; and all
resolutions and policies implemented by the Board:
(i) Fund Accounting, as described on Exhibit B to this Agreement.
(ii) Transfer Agency, as described on Exhibit C to this Agreement.
(iii) Dividend Disbursing. Unified will serve as the Fund's
dividend disbursing agent. Unified will prepare and mail checks, place wire
transfers of credit income and capital gain payments to shareholders. The Fund
will advise Unified in advance of the declaration of any dividend or
distribution and the record and payable date thereof. Unified will, on or
before the payment date of any such dividend or distribution, notify the Fund's
Custodian of the estimated amount required to pay any portion of such dividend
or distribution payable in cash, and on or before the payment date of such
distribution, the Fund will instruct its Custodian to make available to Unified
sufficient funds for the cash amount to be paid out. If a shareholder is
entitled to receive additional shares by virtue of any such distribution or
dividend, appropriate credits will be made to each shareholder's account and/or
certificates delivered where requested. A shareholder not receiving
certificates will receive a confirmation from Unified indicating the number of
shares credited to his/her account.
(b) Unified will also:
(i) provide office facilities with respect to the provision of the
services contemplated herein (which may be in the offices of Unified or a
corporate affiliate of Unified);
(ii) provide or otherwise obtain personnel sufficient, in Unified's sole
discretion, for provision of the services contemplated herein;
(iii) furnish equipment and other materials, which Unified, in its
sole discretion, believes are necessary or desirable for provision of the
services contemplated herein; and
(iv) keep records relating to the services provided hereunder in such
form and manner as set forth on Exhibits B and C and as Unified may otherwise
deem appropriate or advisable, all in accordance with the 1940 Act. To the
extent required by Section 31 of the 1940 Act and the rules thereunder, Unified
agrees that all such records prepared or maintained by Unified relating to the
services provided hereunder are the property of the Fund and will be preserved
for the periods prescribed under Rule 31a-2 under the 1940 Act, maintained at
the Fund's expense, and made available in accordance with such Section and
rules. Unified further agrees to surrender promptly to the Fund upon its
request and cease to retain in its records and files those records and
documents created and maintained by Unified pursuant to this Agreement.
Section 6. Fees: Expenses: Expense Reimbursement.
(a) As compensation for the services rendered to the Fund
pursuant to this Agreement the Fund shall pay Unified monthly fees determined
as set forth on Exhibit D to this Agreement. Such fees are to be billed monthly
and shall be due and payable upon receipt of the invoice. Upon any termination
of this Agreement and before the end of any month, the fee for the part of the
month before such termination shall be equal to the fee normally due for the
full monthly period and shall be payable upon the date of termination of this
Agreement.
(b) For the purpose of determining fees calculated as a function of a
Portfolio's net assets, the value of the Portfolio's net assets shall be
computed as required by the Prospectus, generally accepted accounting
principles, and resolutions of the Board.
(c) Unified will from time to time employ or associate with such person
or persons as may be appropriate to assist Unified in the performance of this
Agreement. Such person or persons may be officers and employees who are
employed or designated as officers by both Unified and the Fund. The
compensation of such person or persons for such employment shall be paid by
Unified and no obligation will be incurred by or on behalf of the Fund in such
respect.
(d) Unified will bear all of its own expenses in connection with
the performance of the services under this Agreement except as otherwise
expressly provided herein. The Fund agrees to promptly reimburse Unified for
any equipment and supplies specially ordered by or for the Fund through Unified
and for any other expenses not contemplated by this Agreement that Unified may
incur on the Fund's behalf at the Fund's request or as consented to by the
Fund. Such other expenses to be incurred in the operation of the Fund and to be
borne by the Fund, include, but are not limited to: taxes; interest; brokerage
fees and commissions; salaries and fees of officers and directors who are not
officers, directors, shareholders or employees of Unified, or the Fund's
investment adviser or distributor; SEC and state Blue Sky registration and
qualification fees, levies, fines and other charges; advisory fees; charges and
expenses of custodians; insurance premiums including fidelity bond premiums;
auditing and legal expenses; costs of maintenance of corporate existence;
expenses of typesetting and printing of prospectuses and for distribution to
current shareholders of the Fund; expenses of printing and production cost of
shareholders' reports and proxy statements and materials; costs and expense of
Fund stationery and forms; costs and expenses of special telephone and data
lines and devices; costs associated with corporate, shareholder, and Board
meetings; and any extraordinary expenses and other customary Fund expenses. In
addition, Unified may utilize one or more independent pricing services,
approved from time to time by the Board, to obtain securities prices and to act
as backup to the primary pricing services, in connection with determining the
net asset values of the Fund, and the Fund will reimburse Unified for the
Fund's share of the cost of such services based upon the actual usage, or a
pro-rata estimate of the use, of the services for the benefit of the Fund.
(e) The Fund may request additional services, additional processing, or
special reports. Such requests may be provided by Unified at additional
charges. In this event, the Fund shall submit such requests in writing together
with such specifications as may be reasonably required by Unified, and Unified
shall respond to such requests in the form of a price quotation. The Fund's
written acceptance of the quotation must be received prior to implementation of
such request. Additional services will be charged at Unified's standard rates.
(f) All fees, out-of-pocket expenses, or additional charges of Unified
shall be billed on a monthly basis and shall be due and payable upon receipt of
the invoice.
Unified will render, after the close of each month in which services have
been furnished, a statement reflecting all of the charges for such month.
Charges remaining unpaid after thirty (30) days shall bear interest in finance
charges equivalent to, in the aggregate, the Prime Rate (as publicly announced
by Star Bank, N.A., from time to time) plus 2.00% per year and all costs and
expenses of effecting collection of any such sums, including reasonable
attorney's fees, shall be paid by the Fund to Unified.
In the event that the Fund is more than sixty (60) days delinquent in its
payments of monthly billings in connection with this Agreement (with the
exception of specific amounts which may be contested in good faith by the
Fund), this Agreement may be terminated upon thirty (30) days' written notice
to the Fund by Unified. The Fund must notify Unified in writing of any
contested amounts within thirty (30) days of receipt of a billing for such
amounts. Disputed amounts are not due and payable while they are being
investigated.
Section 7. Proprietary and Confidential Information. Unified agrees on
behalf of itself and its employees to treat confidentially and as proprietary
information of the Fund, all records and other information relative to the
Fund's prior, present or potential shareholders, and to not use such records
and information for any purpose other than performance of Unified's
responsibilities and duties hereunder. Unified may seek a waiver of such
confidentiality provisions by furnishing reasonable prior notice to the Fund
and obtaining approval in writing from the Fund, which approval shall not be
unreasonably withheld and may not be withheld where the service agent may be
exposed to civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities. Waivers
of confidentiality are automatically effective without further action by
Unified with respect to Internal Revenue Service levies, subpoenas and similar
actions, or with respect to any request by the Fund.
Section 8. Duties, Responsibilities and Limitations of Liability.
(a) In the event performance of its duties hereunder, Unified shall be
obligated to exercise due care and diligence, and to act in good faith in
performing the services provided for under this Agreement. In performing its
services hereunder, Unified shall be entitled to rely on any oral or written
instructions, notices or other communications from the Fund and its Custodian,
officers and Trustees, investors, agents and other service providers which
Unified reasonably believes to be genuine, valid and authorized. Unified shall
also be entitled to consult with and rely on the advice and opinions of outside
legal counsel retained by the Fund, as necessary or appropriate.
(b) Unified shall not be liable for any error of judgment or mistake of
law or for any loss or expense suffered by the Fund, in connection with the
matters to which this Agreement relates, except for a loss or expense solely
caused by or resulting from willful misfeasance, bad faith or negligence on
Unified's part in the performance of its duties or from reckless disregard by
Unified of its obligations and duties under this Agreement. Any person, even
though also an officer, director, partner, employee or agent of Unified, who
may be or become an officer, director, partner, employee or agent of the Fund,
shall be deemed when rendering services to the Fund or acting on any business
of the Fund (other than services or business in connection with Unified's
duties hereunder) to be rendering such services to or acting solely for the
Fund and not as an officer, director, partner, employee or agent or person
under the control or direction of Unified even though paid by Unified.
(c) Except for a loss or expense solely caused by or resulting from
willful misfeasance, bad faith or negligence on Unified's part in the
performance of its duties or from reckless disregard by Unified of its
obligations and duties under this Agreement, Unified shall not be responsible
for, and the Fund shall indemnify and hold Unified harmless from and against,
any and all losses, damages, costs, reasonable attorneys' fees and expenses,
payments, expenses and liabilities arising out of or attributable to:
(i) all actions of Unified or its officers or agents required to be
taken pursuant to this Agreement;
(ii) the reliance on or use by Unified or its officers or agents
of information, records, or documents which are received by Unified or its
officers or agents and furnished to it or them by or on behalf of the Fund, and
which have been prepared or maintained by the Fund or any third party on behalf
of the Fund;
(iii) the Fund's refusal or failure to comply with the terms of this
Agreement or the Fund's lack of good faith, or its actions, or lack thereof
involving negligence or willful misfeasance;
(iv) the breach of any representation or warranty of the Fund hereunder;
(v) the taping or other form of recording of telephone conversations or
other forms of electronic communications with investors and shareholders, or
reliance by Unified on telephone or other electronic instructions of any person
acting on behalf of a shareholder or shareholder account for which telephone or
other electronic services have been authorized;
(vi) the reliance on or the carrying out by Unified or its
officers or agents of any proper instructions reasonably believed to be duly
authorized, or requests of the Fund or recognition by Unified of any share
certificates which are reasonably believed to bear the proper signatures of the
officers of the Fund and the proper countersignature of any transfer agent or
registrar of the Fund;
(vii) any delays, inaccuracies, errors in or omissions from data
provided to Unified by data and pricing services;
(viii) the offer or sale of shares by the Fund in violation of any
requirement under the federal securities laws or regulations or the securities
laws or regulations of any state, or in violation of any stop order or other
determination or ruling by any federal agency or any state agency with respect
to the offer or sale of such shares in such state (1) resulting from
activities, actions, or omissions by the Fund or its other service providers
and agents, or (2) existing or arising out of activities, actions or omissions
by or on behalf of the Fund prior to the effective date of this Agreement; and
(ix) the compliance by the Fund, its investment adviser, and its
distributor with applicable securities, tax, commodities and other laws, rules
and regulations.
Section 9. Terms. This Agreement shall become effective on the date
first herein above written. This Agreement may be modified or amended from time
to time by mutual agreement between the parties hereto. This Agreement shall
continue in effect unless terminated by either party on at least ninety (90)
days' prior written notice. Upon termination of this Agreement, the Fund shall
pay to Unified such compensation and any reimbursable expenses as may be due
under the terms hereof as of the date of termination or the date that the
provision of services ceases, whichever is sooner.
Should the Fund exercise its right to terminate this Agreement, the Fund
agrees to pay a termination/conversion fee, simultaneous with the transfer of
all Fund records to the successor mutual fund service provider(s), in an amount
equal to the total compensation under this agreement for the 90 day period
immediately preceding the termination notice date. In addition, the Fund
agrees to pay for all conversion tape set-up fees, test conversion preparation
and processing fees and final conversion fees.
Such compensation to Unified shall be for the expenses incurred in
connection with the retrieval, compilation and movement of books, records and
materials relative to the deconversion or conversion of Fund records to the
successor mutual fund service provider as directed by the Fund.
Notwithstanding the foregoing, any amount owed by the Fund to Unified prior to
the termination/conversion shall still be due and payable under the terms of
this Agreement. No such compensation shall be due to Unified if Unified
terminates this Agreement for reasons other than a default by the Fund.
Upon the termination of the Agreement for any reason, Unified agrees to
provide the Fund with complete and accurate tranfer agency, fund accounting and
administration records and to assist the Fund in the orderly transfer of
accounts and records. Without limiting the generality of the foregoing,
Unified agrees upon termination of this Agreement:
(a) to deliver to the successor mutual fund service provider(s),
computer tapes containing the Fund's accounts and records together with such
record layouts and additional information as may be necessary to enable the
successor mutual fund service provider(s) to utilize the information therein;
(b) to cooperate with the successor mutual fund service provider(s) in
the interpretation of the Fund's account and records;
(c) to forward all shareholder calls, mail and correspondence to the new
mutual fund service provider(s) upon de-conversion; and
(d) to act in good faith, to make the conversion as smooth as possible
for the successor mutual fund service provider(s) and the Fund.
Section 10. Notices. Any notice required or permitted hereunder
shall be in writing and shall be deemed to have been given when delivered in
person or by certified mail, return receipt requested, to the parties at the
following address (or such other address as a party may specify by notice to
the other):
(a) If to the Fund, to:
Labrador Mutual Fund
2344 Corte De La Jara
Pleasanton, California 94566
Attention: President
(b) If to Unified, to:
Unified Fund Services, Inc.
431 North Pennsylvania Street
Indianapolis, Indiana 46204
Attention: President
Notice shall be effective upon receipt if by mail, on the date of
personal delivery (by private messenger, courier service or otherwise) or upon
confirmed receipt of telex or facsimile, whichever occurs first.
Section 11. Assignability. This Agreement shall not be assigned by
either party hereto without the prior written consent of the other party.
Section 12. Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver nor shall it deprive such party of the right thereafter to insist upon
strict adherence to that term or any term of this Agreement. Any waiver must be
in writing signed by the waiving party.
Section 13. Force Majeure. Unified shall not be responsible or
liable for any failure or delay in performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by circumstances
beyond its control, including without limitations, acts of God, earthquake,
fires, floods, wars, acts of civil or military authorities, or governmental
actions, nor shall any such failure or delay give the Fund the right to
terminate this Agreement.
Section 14. Use or Name. The Fund and Unified agree not to use the
other's name nor the names of such other's affiliates, designees, or assignees
in any prospectus, sales literature, or other printed material written in a
manner not previously, expressly approved in writing by the other or such
other's affiliates, designees, or assignees except where required by the SEC or
any state agency responsible for securities regulation.
Section 15. Amendments. This Agreement may be modified or amended
from time to time by mutual written agreement between the parties. No provision
of this Agreement may be changed, discharged, or terminated orally, but only by
an instrument in writing signed by the party against which enforcement of the
change, discharge or termination is sought
Section 16. Severability. If any provision of this Agreement is
invalid or unenforceable, the balance of the Agreement shall remain in effect,
and if any provision is inapplicable to any person or circumstance it shall
nevertheless remain applicable to all other persons and circumstances.
Section 17. Governing Law. This Agreement shall be governed by the
laws of the State of Indiana.
IN WITNESS WHEREOF, the parties hereto have caused this Mutual Fund
Services Agreement to be signed by their respective duly authorized officers as
of the day and year first above written.
LABRADOR MUTUAL FUND
By /S/ PETER ALLEN SCHUH Date: August 1, 1998
Print Name: Peter Allen Schuh
Title: President
Attest: /S/ ALLEN JOHN SCHUH
UNIFIED FUND SERVICES, INC.
By /S/ DAVID A BOGAERT Date: August 11, 1998
Print Name: David A. Bogaert
Title President
By: /S/ LINDA A LAWSON Date: August 12, 1998
Print Name: Linda A. Lawson
Title: Sr. Vice President, C.O.O.
Attest /S/ CAROL J HIGHSMITH
EXHIBIT A
to
Mutual Fund Services Agreement
List of Portfolios
The Labrador Mutual Fund
EXHIBIT B
to
Mutual Fund Services Agreement
Description of Fund Accounting Services
I. General Description
Unified shall provide the following accounting services to the Fund:
A. Calculate dividend and capital gain distributions in accordance with
distribution policies detailed in the Fund's Prospectus. Assist Fund
management in making final determinations of distribution amounts.
B. Estimate and recommend year-end dividend and capital gain distributions
necessary to establish Fund's status as a regulated investment company
("RIC") under Section 4982 of the Internal revenue Code of 1986, as
amended (the "Code") regarding minimum distribution requirements.
C. Working with the Fund's public accountants or other professionals,
prepare and file Fund's Federal tax return on Form 1120-RIC along with
all state and local tax returns where applicable. Prepare and file
Federal Excise Tax Return (Form 8613).
D. Maintain the books and records and accounting controls for the Fund's
assets, including records of all securities transactions.
E. Calculate each Portfolio's net asset value in accordance with the
Prospectus and (once the Portfolio meets eligibility requirements)
transmit to NASDAQ and to such other entities as directed by the Fund.
F. Account for dividends and interest received and distributions made by the
Fund.
G. Prepare Fund or Portfolio expense projections, establish accruals and
review on a periodic basis, including expenses based on a percentage of
Fund's average daily net assets (advisory and administrative fees) and
expenses based on actual charges annualized and accrued daily (audit
fees, registration fees, directors' fees, etc.).
H. Produce transaction data, financial reports and such other periodic and
special reports as the Board may reasonably request.
I. Liaison with the Fund's independent auditors.
J. Monitor and administer arrangements with the Fund's Custodian and
depository banks.
K. A listing of reports that will be available to the Fund is included
below.
II. Daily Reports
A. General Ledger Reports
1. Trial Balance Report
2. General Ledger Activity Report
B. Portfolio Reports
1. Portfolio Report
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
5. Amortization/Accretion Report
6. Maturity Projection Report
C. Pricing Reports
1. Pricing Report
2. Pricing Report by Market Value
3. Pricing Variance by % Change
4. NAV Report
5. NAV Proof Report
6. Money Market Pricing Report
D. Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Report
2. Accounts Payable for Investments Report
3. Interest Accrual Report
4. Dividend Accrual Report
E. Other Reports
1. Dividend Computation Report
2. Cash Availability Report
3. Settlement Journal
IV. Monthly Reports
Standard Reports
1. Cost Proof Report
2. Transaction History Report
3. Realized Gain/Loss Report
4. Interest Record Report
5. Dividend Record Report
6. Broker Commission Totals
7. Broker Principal Trades
8. Shareholder Activity Report
9. Fund Performance Report
10. SEC Yield Calculation Work Sheet (fixed-income funds only)
EXHIBIT C
to
Mutual Fund Services Agreement
Description of Transfer Agency Services
The following is a general description of the transfer agency services
Unified shall provide to the Fund.
A. Shareholder Recordkeeping. Maintain records showing for each Fund
shareholder the following: (i) name, address and tax identifying number;
(ii) number of shares of each Portfolio; (iii) historical information
including, but not limited to, dividends paid and date and price of all
transactions including individual purchases and redemptions; and (iv) any
dividend reinvestment order, application, dividend address and
correspondence relating to the current maintenance of the account.
B. Shareholder Issuance. Record the issuance of shares of each Portfolio.
Except as specifically agreed in writing between Unified and the Fund,
Unified shall have no obligation when countersigning and issuing and/or
crediting shares to take cognizance of any other laws relating to the
issue and sale of such shares except insofar as policies and procedures
of the Stock Transfer Association recognize such laws.
C. Purchase Orders. Process all orders for the purchase of shares of the
Fund in accordance with the Fund's current registration statement. Upon
receipt of any check or other payment for purchase of shares of the Fund
from an investor, Unified will (i) stamp the envelope with the date of
receipt, (ii) forthwith process the same for collection, (iii) determine
the amounts thereof due the Fund, and notify the Fund of such
determination and deposit, such notification to be given on a daily basis
of the total amounts determined and deposited to the Fund's custodian
bank account during such day. Unified shall then credit the share account
of the investor with the number of Portfolio shares to be purchased made
on the date such payment is received by Unified, as set forth in the
Fund's current prospectus and shall promptly mail a confirmation of said
purchase to the investor, all subject to any instructions which the Fund
may give to Unified with respect to the timing or manner of acceptance of
orders for shares relating to payments so received by it.
D. Redemption Orders. Receive and stamp with the date of receipt all
requests for redemptions or repurchase of shares held in certificate or
non-certificate form, and process redemptions and repurchase requests as
follows: (i) if such certificate or redemption request complies with the
applicable standards approved by the Fund, Unified shall on each business
day notify the Fund of the total number of shares presented and covered
by such requests received by Unified on such day; (ii) on or prior to the
seventh calendar day succeeding any such requests received by Unified,
Unified shall notify the Custodian, subject to instructions from the
Fund, to transfer monies to such account as designated by Unified for
such payment to the redeeming shareholder of the applicable redemption or
repurchase price; (iii) if any such certificate or request for redemption
or repurchase does not comply with applicable standards, Unified shall
promptly notify the investor of such fact, together with the reason
therefor, and shall effect such redemption at the Fund's price next
determined after receipt of documents complying with said standards, or,
at such other time as the Fund shall so direct.
E. Telephone Orders. Process redemptions, exchanges and transfers of Fund
shares upon telephone instructions from qualified shareholders in
accordance with the procedures set forth in the Fund's current
Prospectus. Unified shall be permitted to redeem, exchange and/or
transfer Fund shares from any account for which such services have been
authorized.
F. Transfer of Shares. Upon receipt by Unified of documentation in proper
form to effect a transfer of shares, including in the case of shares for
which certificates have been issued the share certificates in proper form
for transfer, Unified will register such transfer on the Fund's
shareholder records maintained by Unified pursuant to instructions
received from the transferor, cancel the certificates representing such
shares, if any, and if so requested, countersign, register, issue and
mail by first class mail new certificates for the same or a smaller whole
number of shares.
G. Shareholder Communications and Meetings. Address and mail all
communications by the Fund to its shareholders promptly following the
delivery by the Fund of the material to be mailed. Prepare shareholder
lists, mail and certify as to the mailing of proxy materials, receive the
tabulated proxy cards, render periodic reports to the Fund on the
progress of such tabulation, and provide the Fund with inspectors of
election at any meeting of shareholders.
H. Share Certificates. If the Fund issues certificates, and if a shareholder
of the Fund requests a certificate representing his shares, Unified as
Transfer Agent, will countersign and mail by first class mail with
receipt confirmed, a share certificate to the investor at his/her address
as it appears on the Fund's transfer hooks. Unified shall supply, at the
expense of the Fund, a supply of blank share certificates. The
certificates shall be properly signed, manually or by facsimile, as
authorized by the Fund, and shall bear the Fund's seal or facsimile; and
notwithstanding the death, resignation or removal of any officers of the
Fund authorized to sign certificates, Unified may, until otherwise
directed by the Fund, continue to countersign certificates which bear the
manual or facsimile signature of such officer.
I. Returned checks. In the event that any check or other order for the
payment of money is returned unpaid for any reason, Unified will take
such steps, including redepositing the check for collection or returning
the check to the investor, as Unified may, at its discretion, deem
appropriate and notify the Fund of such action, or as the Fund may
instruct.
J. Shareholder Correspondence. Acknowledge all correspondence from
shareholders relating to their share accounts and undertake such other
shareholder correspondence as may from time to time be mutually agreed
upon.
EXHIBIT D
to
MUTUAL FUND SERVICES AGREEMENT
TRANSFER AGENCY FEE SCHEDULE
I Standard Base Fee for Standard Base Services
The Base Fee* is $1.50 for money market funds and $1.25 for equity/bond
funds per active Shareholder Account per active Shareholder Account per
month with a minimum fee of $1,250 per portfolio per month. An Active
Shareholder Account is any Shareholder Account existing on Transfer Agent's
computerized files with a non-zero Share balance. There is a $.25 per
account charge for any account with a zero share balance for the current
calendar year, as determined on the last day of each month.
*The Base Fee does not include: forms design and printing, statement
production, envelope design and printing, postage and handling, shipping,
statement microfiche copies and 800 number access to Unified's shareholder
services group.
Unified supports for an additional monthly fee of $0.05 per account per
service: receivables accounting, 12b-1 fund reporting, back-end sales load
recapture accounting, and/or detailed dealer and representative load
commission accounting and reporting. Funds paying dividends more frequently
than once per quarter (generally, money market funds) are charged an
additional $0.30 per month per account.
Unified will provide lost account search services in connection of SEC
Rules 17Ad-17 and 17a-24 at a cost of $2.50 per account per account searched.
These "Electronic Data Search Services" will be performed on a semi-annual
basis. This service will apply to only Active Shareholder Accounts
maintained on the transfer agency system coded as RPO accounts.
In addition to the above fees, there will be a $500.00 minimum fee/rerun
charge when the nightly processing has be repeated due to incorrect NAV or
dividend information received from the Fund Accountant/Portfolio Pricing
Agent.
II Standard Base Transaction Fees
Fund/Serv processing charges are $0.25 per transaction in addition to
direct Fund/Serv charges that are passed through (See Section VI herein).
Minimum charge: $500.00 per month
Networking processing charges are $0.24 per account for Matrix levels 1, 2
& 4 and $0.06 for Matrix level 3 in
addition to direct Networking charges that are passed through (See Section
VI herein). Minimum charge: $500.00 per month.
III Standard Services Provided
- -Opening new accounts
- -Maintaining Shareholder accounts
Includes:
-Maintaining certificate records
-Changing addresses
-Daily reports on number of Shares, accounts
-Preparation of Shareholder federal tax information
-Withhold taxes on U.S. resident and non-resident alien accounts
-Reply to Shareholder calls and correspondence other than that for Fund
information and related inquiries
- -Processing purchase of Shares
- -Issuing /Canceling of certificates (Excessive use may be subject to additional
charges)
- -Processing partial and complete redemptions
- -Regular and legal transfer of accounts
- -Mail processing of semi-annual and annual reports
- -Processing dividends and distributions
- -Prepare Shareholder meeting lists
- -One proxy processing per year per fund. Tabulation is limited to three.
- -Receiving and tabulating of proxies
- -Confirmation of all transactions as provided by the terms of each
Shareholder's
account
- -Provide a system which will enable Fund to monitor the total number of Shares
sold in each state. System has capability to halt sales and warn of potential
oversell. (Blue Sky Reports)
- -Determination/Identification of lost Shareholder accounts
- -1099 reporting
IV Standard Reports Available
- -Daily Input Transaction Journal
- -Company Maintenance Register
- -Disbursement Register
- -Tax Reporting Proof
- -Aged Suspense Detail Report
- -Transaction Journal
- -Cash Receipts & Disbursements Proof
- -Share Proof Report
- -Daily Blue Sky Warning
V Additional Fees for Services Outside the Standard Base
- -Archiving of old records/storage of aged records negotiable
- -Off-line Shareholder research $25/hour (Billed to
customer account)
- -Check copies $3/each (Billed to
customer
account)
- -Statement copies $5/each (Billed to
customer
account)
- -Maintenance of account history more than 13 mos. old $.18/acct/6 months
- -Mutual Fund fulfillment/prospect file maintenance $1.00/item
- -Shareholder communications charges (Faxes) pass through
- -Leased line/equipment on TA's computer system pass through
- -Dial-up access to TA's computer system pass through
- -Labels .05 ea/$100 minimum
- -Electronic filings of approved forms $75/transmission
- -Monthly Director's Reports $25/mo/portfolio
-Direct Fund/Serv expenses Pass through
-Direct Networking expenses Pass through
- -AD-HOC REPORTWRITER Report Generation $50.00 per report
-Bank Reconciliation Service $50.00 monthly maintenance
fee per bank account
$1.50 per bank item
- -Systems Programming Labor Charges:
System Support Representatives $100.00/hour
Programmers, Consultants or
Department Heads $125.00/hour
Officers $150.00/hour
-Additional Proxy Processing:
Each processing $225.00 fixed charge per
processing
Preparation and Tabulation $0.145/proxy issued
(includes 3 tabulations, sixteen
propositions)
Each Extra Tabulation $23.00 fixed charge per
processing
$0.02 per proxy tabulated
FUND ACCOUNTING FEE SCHEDULE
Standard Fee
0.07% for the first $150 million in total fund assets;
0.06% from $150 million to $250 million in total fund assets;
0.05% over $250 million in total fund assets.
Out of Pocket Fees: Fees charged for outside
pricing
services and all accompanying
administrative expenditures.
Subject to a annual minimum of $18,000 per year.
Optional Services Available - Initial (for desired services)
- -Additional portfolio sub-adviser fee $10,000/portfolio
- -Multiple custodian fee $5,000/fund group
- -GNMA securities fee $2,500/portfolio
- -Monthly dividend estimation fee $2,500/portfolio
- -Quarterly financial statement preparation fee $5,000/portfolio
- -Creation of semi-annual and annual reports $3,000/fund group
- -Statistical reporting fee (ICI, Lipper, Donoghue, etc.) $100/report
- -Quarterly tax and compliance $4,000/portfolio
- -Accrual calculations $2,500/fund group
- -S.E.C. yield calculations $1,000/portfolio
- -S.E.C. audit requirements pass through
- -Processing of backup withholding $1,500/portfolio
Special Report Generation Fees
AD-HOC Report Generation $75.00 per report
Reruns $75.00 per run
Extract Tapes $110.00 plus
Systems Programming Labor Charges
System Support Representatives $100.00/hour
Programmers, Consultants or Department Heads $125.00/hour
Officers $150.00/hour
De-Conversion Fees
De-Conversion fees will be subject to additional charges commensurate
with particular circumstances and dependent upon scope of problems.
EXHIBIT 10
Opinion of Legal Counsel
August 17, 1998
Labrador Mutual Fund
2344 Corte De La Jara
Pleasanton, California 94566
Gentlemen:
We have acted as counsel to Labrador Mutual Fund (the "Fund"), a
business trust organized under the laws of the State of Delaware, and based
in Pleasanton, California, in connection with the filing of a registration
statement on Form N-1A covering the offer and sale of an indefinite number
of shares of beneficial interest of the Fund.
We have examined copies of the Fund's Agreement and Declaration of
Trust, the Fund's By-Laws, and the Fund's Registration Statement, as
amended, on Form N-1A, Securities Act File No. 333-45579 (the "Registration
Statement"). We have also examined the certificate of the Secretary of
State of Delaware as to the existence of the Trust; a copy, as filed with
the Secretary of State of Delaware on November 13, 1997, of the Agreement
and Declaration of Trust and the Amendment thereto filed on February 22,
1998; and a certificate executed by an appropriate officer of the Trust
certifying as to, and attaching copies of, the Agreement and Declaration of
Trust and By-Laws and certain votes of the Trustees authorizing the
issuance of an indefinite number of shares of beneficial interest in the
Trust.
In our examination of materials, we have assumed the genuineness
of all signatures and the conformity to original documents of all copies
submitted to us. As to various questions of fact material to our opinion,
we have relied upon statements and certificates of officers and
representatives of the Fund and others. This opinion is based entirely on
our review of the documents described above. We have made no other review
or investigation of any kind whatsoever, and we have assumed, without
independent inquiry, the accuracy of the information set forth in such
documents.
Subject to the foregoing assumptions, qualifications and
limitations,
Please be advised that it is our opinion that:
The Trust is duly organized and existing under the Declaration of
Trust as a voluntary association with transferable shares of beneficial
interest commonly referred to as a Delaware Business Trust.
The shares of beneficial interest of such Trust, when issued and
sold in accordance with the Declaration of Trust, will be legally issued,
fully paid and non-accessible. Shareholders of the Trust may under certain
circumstances may be held personally liable for the Trust obligations.
We understand that the Fund will rely upon this opinion in filing
its Form N-1A Registration Statement with the Securities and Exchange
Commission. We hereby consent to such use in filing of this opinion.
Very truly yours,
MITCHELL LAW OFFICES
A Professional Corporation
By: /S/ ROBERT D MITCHELL
------------------------
Robert D. Mitchell
EXHIBIT 11
CONSENT OF INDEPENDENT AUDITOR
I consent to the inclusion in this registration statement of Form N-1A (File
No.333-45579) of my report dated July 29, 1998, on my audit of the statement of
assets and liabilities of Labrador Mutual Fund.
Marie Jones CPA
Saratoga, California
August 20, 1998
EXHIBIT 13
SHARE PURCHASE AGREEMENT
This Agreement is made as of the 31 st day of July, 1998 between
Labrador Investment Advisors, Inc., a California corporation ("LIA") and
Labrador Mutual Fund, a Delaware business trust (the "Fund") a diversified
open-end management investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
WHEREAS, the Fund wishes to sell to LIA, and LIA wishes to
purchase from the Fund, $100,000 of shares of beneficial interest of the
Fund (10,000 shares) at a purchase price of $10.00 per share
(collectively, the "Shares"); and
WHEREAS, LIA is purchasing the Shares for the purpose of
providing the initial capitalization of the Fund as required by the 1940
Act;
NOW, THEREFORE, the parties hereto agree as follows:
1. Simultaneously with the execution of this Agreement, LIA is
delivering to Labrador Mutual Fund a wire in the amount of $100,000 in
full payment for the Shares.
2. LIA agrees that it is purchasing the Shares through Labrador
Mutual Fund for investment purposes and has no present intention of
redeeming or reselling the Shares or terminating its account.
3. LIA further agrees that it may not withdraw the Shares from
Labrador Mutual Fund at a rate, which at any time during the Fund's first
two years of operations, exceeds in the aggregate $4,166.67 per month.
Executed as of the date first set forth above.
LABRADOR INVESTMENT ADVISORS, INC.
/s/ Peter Allen Schuh
- ---------------------
Peter Allen Schuh,
Chairman, President
LABRADOR MUTUAL FUND
/s/ Peter Allen Schuh
- ---------------------------
Peter Allen Schuh
Chairman
EXHIBIT 14
TAX SHELTERED RETIREMENT PLANS - Since the Fund is oriented to long term
investments, shares of the Fund may be an appropriate investment medium
for tax sheltered retirement plans, including: individual retirement plans
(IRAs); simplified employee pensions (SEPs); 401(k), 403(b) plans; Keogh
(HR-10) Plans, qualified corporate pension and profit sharing plans (for
employees); tax deferred investment plans (for employees of public school
systems and certain types of charitable organizations); and other
qualified retirement plans. You should contact the Transfer Agent for the
procedure to open such plans, as well as more specific information
regarding these retirement plan choices. Consultation with an attorney or
tax adviser regarding these plans is advisable. Custodial fees and other
processing fees for an IRA will be paid by the shareholder, by redemption
of sufficient shares of the Fund, from the IRA unless the fees are paid
directly to the IRA custodian. You can obtain information about IRA fees
by calling the Transfer Agent at 1.800.494.6882.
EXHIBIT 15
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN
WHEREAS, Labrador Mutual Fund (the "Fund") engages in business as
an open-end management investment company and is registered as such under
the Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, the Fund is comprised of a series that is revised from
time to time (each, a "Portfolio"); and
WHEREAS, the Fund desires to adopt this Plan pursuant to Rule 12b-1
under the Act, and the Fund's Board has determined that there is a
reasonable likelihood that adoption of this Plan will benefit the
Portfolios and their shareholders; and
WHEREAS, the Fund employs Labrador Investment Advisors, Inc., (the
"Manager") as investment manager for the Portfolios' shares (the "Shares")
pursuant to a Management Agreement dated July 31, 1998.
NOW, THEREFORE, the Fund hereby adopts, and the Manager hereby
agrees to the terms of, this Plan in accordance with Rule 12b-1 under the
Act on the following terms and conditions:
1. (a) Each Portfolio shall pay the Manager a shareholder
servicing and distribution fee at the annual rate of .25%
of its average daily net assets.
(b) Such fee will be used in its entirety by the Manager to
make payments for administration, shareholder services and
distribution assistance, including, but not limited to (i)
compensation to securities dealers and other organizations
(each a "Service Organization" and collectively, the
"Service Organizations"), for providing distribution
assistance with respect to assets invested in the
Portfolio, (ii) compensation to Service Organizations for
providing administration, accounting and other shareholder
services with respect to Portfolio shareholders, and (iii)
otherwise promoting the sale of shares to the Portfolio,
including paying for the preparation of advertising and
sales literature and distribution of such promotional
materials to prospective investors. The Manager shall
determine the amounts to be paid to third parties and the
basis on which such payments will be made. Payments to a
third party are subject to compliance by the third party
with the terms of any related Plan agreement between the
third party and the Manager.
(c) For the purposes of determining the fees payable under this
Plan, the value of each Portfolio's net assets shall be
computed in the manner specified in the Fund's charter
documents as then in effect for the computation of the
value of such Portfolio's net assets.
2. As respects each Portfolio, this Plan shall not take effect
until it has been approved by a vote of at least a majority (as
defined in the Act) of the outstanding voting securities of the
relevant Portfolio.
3. As respects each Portfolio, this Plan shall not take effect
until it, together with any related agreement, has been
approved by vote of a majority of both (a) the Fund's Board and
(b) those Trustees who are not "interested persons" of the Fund
(as defined by the Act) and who have no direct or indirect
financial interest in the operation of this Plan or any
agreements related to it (the "Rule 12b-1 Trustees") cast in
person at a meeting (or meetings) called for the purpose of
voting on this Plan and such related Agreements.
4. As respects each Portfolio, this Plan shall remain in effect
until July 31, 2000 and shall continue in effect
thereafter so long as such continuance is specifically approved
at least annually in the manner provided for approval of this
Plan in paragraph 3.
5. The Manager shall provide to the Fund's Board and the Board
shall review, at least quarterly, a written report of amounts
paid hereunder and the purposes for which they were made.
6. As respects each Portfolio, this Plan may be terminated at any
time by vote of a majority of the Rule 12b-1 Trustees or by a
vote of a majority of its outstanding voting securities.
7. This Plan may not be amended to increase materially the amount
of compensation payable pursuant to paragraph 1 hereof unless
such amendment is approved in the manner provided for initial
approval in paragraph 2 hereof. No material amendment to the
Plan shall be made unless approved in the manner provided in
paragraph 3 hereof.
8. While this Plan is in effect, the selection and nomination of
the Trustees who are not interested persons (as defined in the
Act) of the Fund shall be committed to the discretion of the
Trustees who are not such interested persons.
9. The Fund shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 5 hereof,
for a period of not less than six years from the date of this
Plan, any such agreement or any such report, as the case may
be, the first two years in an easily accessible place.
10. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument. The name "Labrador Mutual Fund" is the designation
of the Trustees for the time being under a Declaration of Trust
dated November 13, 1997, as amended February 22, 1998, All
persons dealing with the Fund must look solely to the property
of the Fund for enforcement of any claims against the Fund as
neither the Trustees, officers, agents or shareholders assume
any personal liability for obligations entered into on behalf
of the Fund.
IN WITNESS WHEREOF, the Fund, on behalf of the Portfolios, and the
Manager have executed this Plan as of the date set forth below.
Dated: July 31, 1998
LABRADOR MUTUAL FUND
/S/ DANIEL THOMAS BURKE
By: ------------------------------------
LABRADOR INVESTMENT ADVISORS, INC.
/S/ PETER ALLEN SCHUH
By: ------------------------------------
EXHIBIT 17
STATEMENT OF ASSETS AND LIABILITIES
July 29, 1998
LABRADOR MUTUAL FUND
ASSETS:
Cash in Bank $100,000
Total Assets $100,000
NET ASSETS $100,000
NET ASSETS CONSIST OF:
Capital Paid In $100,000
OUTSTANDING SHARES
Indefinite Number of Shares of
Beneficial Interest Authorized
With Par Value of $.0001 Per Share $10,000
NET ASSET VALUE PER SHARE $10
OFFERING PRICE PER SHARE $10
LABRADOR MUTUAL FUND
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The Labrador Mutual Fund (the "Trust") was organized as a business trust under
the laws of the state of Delaware on November 13, 1997, as amended February 22,
1998. The Trust is authorized to issue an indefinite number of shares of
beneficial interest, par value $.0001 per share. Shares have non-cumulative
voting rights, do not have preemptive or subscription rights and are freely
transferable. The Labrador Mutual Fund is an open-end diversified portfolio of
the Trust.
The Trust uses an independent administrator, transfer agent, and dividend
paying agent. No transactions other than those relating to organizational
matters and the sale of 10,000 shares of Labrador Mutual Fund has taken place
to date.
2. RELATED PARTY TRANSACTIONS
In order to provide the initial capital for the Fund, Labrador Investment
Advisors, Inc. has purchased a total of 10,000 shares of the Fund at $10.00 per
share for an aggregate purchase price of $100,000. As long as Labrador
Investment Advisors, Inc., owns more than 25% of the Fund's shares, it will be
deemed to be in "control" of the Fund as that term is defined in the 1940 Act.
Pursuant to a Management Agreement between the Fund and Labrador Investment
Advisors, Inc., (the "Manager") and subject to the authority of the Board of
Trustees, the Manager manages the investments of the Fund and is responsible
for the overall management of the business affairs of the Fund.
Under the terms of the Management Agreement, the Fund has agreed to pay the
Manager a management fee at the annual rate of 1.50% of the Fund's
average daily net assets
All expenses incurred in the operation of the Fund will be borne by the Fund,
except to the extent specifically assumed by the Manager. The expenses to be
borne by the Fund will include: organizational costs, taxes, interest, brokerage
fees and commissions, fees of board members who are not officers, directors or
employees of the Manager or its affiliates, Securities and Exchange Commission
fees, state Blue Sky qualification fees, advisory, administrative and fund
accounting fees, charges of custodians, transfer and dividend disbursing agents'
fees, insurance premiums, industry association fees, outside auditing and legal
expenses, costs of maintaining the Fund's existence, costs of independent
pricing services, costs attributable to investor services (including, without
limitation, telephone and personnel expenses), cost of shareholders' reports and
meetings, costs of preparing and printing prospectuses and statements of
additional information, amounts payable under the Fund's Distribution and
Shareholder Servicing Plan (the "Plan") and any extraordinary expenses.
The Manager has undertaken, until such time as it gives investors 60 days'
notice to the contrary, to waive its Management Fee in the amount, if any, by
which the total expenses of the Fund for any fiscal year, including amortization
of organizational expenses and amounts paid by the Fund under the Plan, exceed
2.40% of average annual net assets of the Fund, except that the amount of such
fee waiver shall not exceed the amount of fees received by the Manager under the
Management Agreement for such fiscal year. The fee waiver, if any, will be on a
monthly basis, subject to year-end adjustment. Interest expenses, taxes,
brokerage fees and commissions, and extraordinary expenses are not included as
expenses for these purposes.
3. CAPITAL STOCK AND DISTRIBUTION
On July 31, 1998 an indefinite number of shares were authorized and paid-in
capital amounted to $100,000 for Labrador Mutual Fund. Transactions in capital
stock were as follows:
LABRADOR MUTUAL FUND
-------------
Shares sold................................................. 10,000
Shares redeemed..................................... -0-
-------------
Net increase........................................ 10,000
Shares outstanding:
Beginning of period............................... -0-
-------------
End of period..................................... 10,000
-------------
