<PAGE>
As filed with the Securities and Exchange Commission on September 2, 1998
Securities Act File No. 33-59221
Investment Company Act File No. 811-
8885
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. 1 [X]
Post-Effective Amendment No. [ ]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 1 [X]
(Check appropriate box or boxes.)
HEWITT SERIES TRUST
(Exact Name of Registrant as Specified in Charter)
100 Half Day Road
Lincolnshire, Illinois 60069
(Address of Principal Executive Offices)
(847) 295-5000
(Registrant's Telephone Number, Including Area Code)
Peter E. Ross, Esq.
100 Half Day Road
Lincolnshire, Illinois 60069
copy to:
Kenneth S. Gerstein, Esq.
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
(Name and address of Agent for Service)
As soon as practicable after this registration statement becomes effective.
(Approximate Date of Proposed Public Offering)
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.
<PAGE>
FORM N-1A
HEWITT SERIES TRUST
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
N-1A
Item Number
Part A CAPTION
- - - ----------- -------
<C> <S> <C>
1. Front and Back Cover Pages Front and Back Cover Pages
2. Risk/Return Summary: Investments, About The Fund
Risks and Performance
3. Risk/Return Summary: Fee Table Investor Expenses
4. Investment Objectives, Principal Investment Objective and
Investment Strategies, and Related Risks Policies; Additional Information
5. Management's Discussion of Fund Not Applicable (Registrant is a
Performance newly-formed entity.)
6. Management, Organization, and Capital Management Arrangements
Structure
7. Shareholder Information How To But Shares; How To Redeem
Shares; Net Asset Value;
Dividends and Distributions; Taxes
8. Distribution Arrangements Distribution and Servicing
Arrangements
9. Financial Highlights Information Not Applicable (Registrant is a
newly-formed entity.)
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Part B CAPTION
- - - ----------- -------
<C> <S> <C>
10. Cover Page and Table of Contents Cover Page and Table of Contents
11. Fund History Not Applicable (Registrant is a
newly-formed entity.)
12. Description of the Fund and Its Investments Investment Policies and
Investments and Risks Practices; Investment Restrictions
13. Management of the Fund Management
14. Control Persons and Principal Holders of Additional Information
Securities
15. Investment Advisory and Other Services Management; Distribution
Arrangements; Expenses;
Additional Information
16. Brokerage Allocation and Other Practices Portfolio Transactions
17. Capital Stock and Other Securities Additional Information
18. Purchase, Redemption and Pricing of Shares Purchase and Redemption of
Shares; Determination of Net
Asset Value
19. Taxation of the Fund Taxes
20. Underwriters Distribution Arrangements
21. Calculation of Performance Data Performance Information
22. Financial Statements Report and Audit of Statement of
Assets and Liabilities
</TABLE>
-3-
<PAGE>
PART C
- - - ------
Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration statement.
-4-
<PAGE>
SUBJECT TO COMPLETION DATED: SEPTEMBER 3, 1998
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and is not soliciting an offer to buy these
securities in any state where an offer or sale is not permitted.
HEWITT MONEY MARKET FUND
A SERIES OF HEWITT SERIES TRUST
INSTITUTIONAL SHARES
ADMINISTRATIVE SHARES
Prospectus
[ ], 1998
- - - --------------------------------------------------------------------------------
Hewitt Money Market Fund is a series of Hewitt Series Trust, a diversified,
open-end management investment company. The Fund is a money market fund.
The investment objective of the Fund is to provide a high level of income,
while preserving capital and liquidity, by investing in high quality,
short-term securities.
Unlike most other money market funds, the Fund does not maintain a stable
net asset value of $1.00 per share. Net asset value per share will
fluctuate.
- - - --------------------------------------------------------------------------------
- - - --------------------------------------------------------------------------------
The Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
- - - --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
- - - --------------------------------------------------------------------------------
HEWITT MONEY MARKET FUND
A SERIES OF HEWITT SERIES TRUST
INSTITUTIONAL SHARES
ADMINISTRATIVE SHARES
<TABLE>
<S> <C>
................................................................................
ABOUT THE FUND 3
................................................................................
INVESTOR EXPENSES 3
................................................................................
INVESTMENT OBJECTIVE AND POLICIES 4
................................................................................
MANAGEMENT ARRANGEMENTS 6
................................................................................
HOW TO BUY SHARES 7
................................................................................
HOW TO REDEEM SHARES 8
................................................................................
NET ASSET VALUE 9
................................................................................
DIVIDENDS AND DISTRIBUTIONS 10
................................................................................
TAXES 10
................................................................................
DISTRIBUTION AND SERVICING 11
ARRANGEMENTS
................................................................................
PERFORMANCE INFORMATION 11
................................................................................
ADDITIONAL INFORMATION 12
</TABLE>
________________________________________________________________________________
2
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ABOUT THE FUND
Investment Goals. Hewitt Money Market Fund is a series of Hewitt Series Trust,
a diversified, open-end management investment company. The Fund is a money
market fund. Its investment objective is to provide a high level of income,
while preserving capital and liquidity, by investing in high quality, short-term
securities.
The Fund is designed for use as an investment option by employee benefit plans,
individual retirement accounts and other investors who seek income and stability
of capital. Unlike most other money market funds, the Fund does not maintain a
stable net asset value per share because it declares dividends on a monthly
basis (rather than daily). This will not affect the return on your investment
in the Fund. Net asset value per share will fluctuate.
Principal Investment Strategies. The Fund pursues its investment objective by
investing all of its investable assets in the Money Market Master Portfolio,,
which is a series of Master Investment Portfolio. The Money Market Master
Portfolio has the same investment objective and substantially the same
investment policies as the Fund. Barclays Global Fund Advisors, Inc. serves as
the Portfolio's investment adviser. The Money Market Master Portfolio is a
diversified portfolio that invests in the following types of money market
instruments:
. U.S. Government Obligations
. Bank Obligations
. Commercial Paper and Short-Term Corporate Debt Instruments
. Repurchase Agreements
. Letters of Credit
. Floating- and Variable-Rate Obligations
Principal Risks. Because Money Market Master Portfolio invests in debt
securities, a decline in short-term interest rates will reduce the overall yield
of the Fund and the return on an investment. Strong equity markets or a weak
economy could cause a decline in short-term interest rates. Although Money
Market Master Portfolio invests only in high quality obligations, if an issuer
fails to pay interest or to repay principal, the return on an investment in the
Fund would be adversely affected and the net asset values of the Fund's shares
could decline. Net asset values may also be adversely affected by a substantial
increase in short-term interest rates.
An investment in the Fund is not a deposit account of Barclays Global Fund
Advisors, Inc. or any of its affiliates and is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. It is
possible to lose money by investing in the Fund.
INVESTOR EXPENSES
The following Table summarizes the fees and expenses that you may pay if you buy
and hold shares of the Fund. It is based on estimates of expenses for the
current year.
<TABLE>
<CAPTION>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) Institutional Administrative
Shares Shares
------ ------
<S> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases................................. None None
Maximum Deferred Sales Charge (Load)............................................. None None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends...................... None None
Redemption Fee................................................................... None None
</TABLE>
3
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<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(as a percentage of average net assets)
<S> <C> <C>
Management Fees/1/............................................................... 0.10% 0.10%
Shareholder Servicing Fees....................................................... 0.20% 0.25%
Distribution (12b-1) Fees........................................................ None 0.25%
Other Expenses/2/................................................................ 0.15% 0.15%
Total Annual Fund Operating Expenses............................................. 0.45% 0.75%
</TABLE>
The following Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all your shares at the end of those periods. It also
assumes that your investment has a 5% return each year and that the Fund's
operating expenses are as estimated above and remain the same. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
<TABLE>
<CAPTION>
EXAMPLE 1 Year 3 YEARS
- - - ---------------------------------------------- ------ --------
<S> <C> <C>
Institutional Shares $46.04 $144.64
Administrative Shares $76.64 $239.96
</TABLE>
INVESTMENT OBJECTIVE AND POLICIES
Investment Objective. Hewitt Money Market Fund (the "Fund") seeks to provide a
high level of income, while preserving capital and liquidity, by investing in
high quality, short-term securities.
Investment Policies. The Fund pursues its investment objective by investing all
of its investable assets in the Money Market Master Portfolio (the
"Portfolio"). The Portfolio is a series of Master Investment Portfolio ("MIP"),
which is an investment company, and has the same investment objective and
substantially the same investment policies as the Fund. It invests exclusively
in high quality, short-term debt securities (money market instruments),
including: U.S. Government obligations; certificates of deposit, time deposits
and other obligations issued by domestic banks; commercial paper and other debt
obligations of corporations; and repurchase agreements with respect to these
obligations. The Portfolio maintains a dollar-weighted average maturity of 90
days or less, and invests only in securities having remaining maturities of 397
days or less. All investments must be U.S. dollar denominated.
Securities purchased by the Portfolio, including repurchase agreements, must be
determined by Barclays Global Fund Advisors, Inc. (the "Investment Adviser") to
present minimal credit risks pursuant to procedures adopted by the Board of
Trustees of MIP. Investments purchased by the Portfolio will at the time of
purchase be rated as high quality by at least two nationally recognized
statistical rating organizations ("NRSROs") (or by one NRSRO if the instrument
is rated by only one such organization). However, the Portfolio may purchase an
unrated investment if it is determined by the Investment Adviser to be of
comparable quality to an investment rated as high quality, in accordance with
procedures established by the Board of Trustees of MIP. Subsequent to its
- - - --------------------------------
/1/ Includes investment advisory fee and estimated ordinary operating expenses
of the Portfolio.
/2/ Hewitt Associates LLC, as the Fund's administrator, is obligated to absorb
expenses of the Fund to the extent necessary to assure that total ordinary
operating expenses of Institutional Shares of the Fund do not exceed annually
.45% of the average daily net assets attributable to Institutional Shares and
that total ordinary operating expenses of Administrative Shares do not exceed
annually .75% of the average daily net assets attributable to Administrative
Shares. Without this agreement, it is estimated that Total Annual Fund Operating
Expenses would be 1.02% of average daily net assets for Institutional Shares and
1.16% of average daily net assets for Administrative Shares, assuming average
net assets of $15 million and $35 million in each class, respectively.
4
<PAGE>
purchase by the Portfolio, an issue of securities may cease to be rated or its
rating may be reduced below the minimum required rating. The Investment Adviser
will consider any such event in determining whether the Portfolio should
continue to hold the securities. If the Portfolio continues to hold the
securities, it may be subject to additional risk of default.
Types of Investments. Subject to applicable investment policies and
restrictions, the Investment Adviser purchases and sells securities for the
Portfolio based on its assessment of current market conditions and its
expectations regarding future changes in interest rates and economic conditions.
The Portfolio may invest in the following types of securities:
U.S. GOVERNMENT OBLIGATIONS -- These obligations include debt securities
issued or guaranteed as to principal and interest by the U.S. Government or
one of its agencies or instrumentalities. Payment of principal and
interest on U.S. Government obligations (i) may be backed by the full faith
and credit of the United States (as with U.S. Treasury obligations and GNMA
certificates) or (ii) may be backed solely by the issuing or guaranteeing
agency or instrumentality itself (as with FNMA notes). In the latter case,
the investor must look principally to the agency or instrumentality issuing
or guaranteeing the obligation for ultimate repayment. There can be no
assurance that the U.S. Government would provide financial support to its
agencies or instrumentalities where it is not obligated to do so. Certain
types of U.S. Government obligations are subject to fluctuations in yield
or value due to their structure or contract terms.
BANK OBLIGATIONS -- These obligations include, but are not limited to,
negotiable certificates of deposit ("CDs"), bankers' acceptances and fixed
time deposits of U.S. banks, foreign banks, foreign branches of U.S. banks,
and U.S. branches of foreign banks. The Portfolio may invest 25% or more
of its total assets in obligations of banks, to the extent that the SEC, by
rule or interpretation, permits funds to reserve freedom to concentrate in
such obligations.
Fixed time deposits are bank obligations that are payable at stated
maturity dates and bear fixed rates of interest. They generally may be
withdrawn on demand, but may be subject to early withdrawal penalties which
vary depending upon market conditions and the remaining maturity of the
obligation. Although fixed time deposits do not have an established
market, there are no contractual restrictions on the Portfolio's right to
transfer a beneficial interest in the deposit to a third party. The
Portfolio will not invest in fixed time deposits subject to withdrawal
penalties, other than overnight deposits, if as a result more than 10% of
the value of its net assets would be invested in illiquid securities.
Obligations of foreign banks and foreign branches of U.S. banks involve
somewhat different investment risks from those affecting domestic
obligations. Liquidity could be impaired because of political and economic
developments and the obligations may be less marketable than comparable
obligations of U.S. banks. A foreign jurisdiction might impose withholding
taxes on interest income payable on those obligations and there is a risk
that foreign deposits may be seized or nationalized. Foreign governmental
restrictions (such as foreign exchange controls) may be adopted which might
adversely affect the payment of principal and interest on those obligations
and the selection of those obligations may be more difficult because there
may be less publicly available information concerning foreign banks or the
accounting, auditing and financial reporting standards, practices and
requirements applicable to foreign banks may differ from those applicable
to U.S. banks. Foreign banks are not subject to examination by any U.S.
Government agency.
COMMERCIAL PAPER AND SHORT-TERM CORPORATE DEBT INSTRUMENTS -- Commercial
paper is a short-term, unsecured promissory note issued by a corporation to
finance its short-term credit needs. It is usually sold on a discount
basis and has a maturity at the time of issuance not exceeding nine months.
Variable amount master demand notes are a type of commercial paper. These
notes are demand obligations that permit the investment of fluctuating
amounts at varying market rates of interest pursuant to arrangements
between the issuer and a commercial bank acting as agent for the payee of
the notes. Both parties have the right to vary the amount of the
outstanding indebtedness on the notes.
Corporate debt securities include non-convertible bonds and debentures that
have not more than thirteen months remaining to maturity at the time of
their purchase by the Portfolio.
5
<PAGE>
REPURCHASE AGREEMENTS -- These agreements involve the purchase of a
security by the Portfolio coupled with the agreement of the seller of the
security to repurchase that security on a future date and at a specified
price together with interest. The maturities of repurchase agreements are
typically quite short, often overnight or a few days. The Portfolio may
enter into repurchase agreements with respect to securities that it may
purchase under its investment policies without regard to the maturity of
the securities underlying the agreements. All repurchase transactions are
fully collateralized. However, the Portfolio may incur a loss on a
repurchase transaction if the seller defaults and the value of the
underlying collateral declines or the Portfolio's ability to sell the
collateral is restricted or delayed. The Fund may participate in pooled
repurchase agreement transactions with other funds advised by the
Investment Adviser.
LETTERS OF CREDIT -- Debt obligations which the Portfolio is permitted to
purchase may be backed by an unconditional and irrevocable letter of credit
of a bank, savings and loan association or insurance company which assumes
the obligation for payment of principal and interest in the event of
default by the issuer. Letter of credit-backed investments must, in the
opinion of the Investment Adviser, be of investment quality comparable to
other permitted investments.
FLOATING-RATE AND VARIABLE-RATE OBLIGATIONS -- Debt obligations purchased
by the Portfolio may have interest rates that are periodically adjusted at
specified intervals or whenever a benchmark rate or index changes. These
floating- and variable-rate instruments may include certificates of
participation in such instruments.
Investment Restrictions. The Fund and the Portfolio are subject to various
additional restrictions on their investments in addition to those described in
this Prospectus. Certain of those restrictions, as well as the restrictions on
borrowings and concentration of investments described above and the investment
objective of the Fund and the Portfolio, are deemed fundamental policies. These
fundamental policies cannot be changed without the approval of the holders of a
majority of the Fund's or the Portfolio's outstanding voting securities, as
defined in the Investment Company Act of 1940 (the "Investment Company Act").
MANAGEMENT ARRANGEMENTS
Board of Trustees. The business and affairs of the Fund are managed under the
direction and supervision of the Board of Trustees of Hewitt Series Trust (the
"Trust").
Investment Adviser. Barclays Global Fund Advisors (the "Investment Adviser")
serves as the investment adviser of the Portfolio. The Investment Adviser is an
indirect subsidiary of Barclays Bank PLC and is located at 45 Fremont Street,
San Francisco, California 94105. As of April 30, 1998, the Investment Adviser
and its affiliates provided investment advisory services to accounts with assets
of approximately $575 billion. The Portfolio pays the Investment Adviser a
monthly fee which is computed at the annual rate of 0.10% of the Fund's average
daily net assets. In consideration of this fee, the Investment Adviser provides
investment advice and is obligated to bear all of the ordinary operating
expenses of the Portfolio.
The Investment Adviser manages the assets of the Portfolio in accordance with
the Portfolio's investment objective and policies. The primary responsibility of
the Investment Adviser is to formulate a continuing investment program and to
make all decisions regarding the purchase and sale of securities for the
Portfolio.
Administrator. Hewitt Associates LLC (the "Administrator") provides
administrative services to the Fund. The Administrator is located at 100 Half
Day Road, Lincolnshire IL 60069. Services provided by the Administrator
include, but are not limited to: managing the daily operations and business
affairs of the Fund, subject to the supervision of the Board of Trustees;
overseeing the preparation and maintenance of all documents and records required
to be maintained by the Fund and the Trust; preparing or assisting in the
preparation of regulatory filings, prospectuses and shareholder reports;
providing, at its own expense, the services of its personnel to serve as
officers of the Trust; and preparing and disseminating material for meetings of
the Board of Trustees and shareholders. The Fund pays the Administrator a
monthly fee calculated at an annual rate of 0.10% of the Fund's average daily
net assets.
6
<PAGE>
The Administrator also serves as Shareholder Servicing Agent for Institutional
Shares and is paid compensation by the Fund for furnishing various shareholder
related services. See "Distribution and Servicing Arrangements."
HOW TO BUY SHARES
The Fund offers two classes of its shares to investors: Institutional Shares and
Administrative Shares. No sales commissions or other charges are imposed when
shares are purchased or redeemed.
Institutional Shares. These shares are offered for sale exclusively to employee
benefit plans which are recordkeeping clients of Hewitt Associates LLC. Employee
benefit plans may include 401(k) plans and plans qualified under Sections 401(a)
or 403(b) of the Internal Revenue Code of 1986, as amended (the "Code"), health
and welfare plans and executive deferred compensation plans. Participants in any
employee benefit plan that allows participants to direct the investment of their
plan accounts should contact their plan administrator if they wish to purchase
shares of the Fund for their plan accounts. The plan administrator will provide
information regarding the procedures to be followed to purchase shares.
For employee benefit plans seeking additional information on purchasing
Institutional Shares, please call the Administrator at 1-800-890-3200. The
appropriate plan fiduciary must submit a completed account application before
the plan or its participants may purchase Institutional Shares.
Administrative Shares. These shares are available for purchase by individual
retirement accounts ("IRAs") and other investors, including individuals, trusts
and corporations. They can be purchased through Hewitt Services LLC, which
serves as distributor of the Fund's shares (the "Distributor"). Administrative
Shares bear certain distribution related expenses. See "Distribution and
Servicing Arrangements."
You should contact the Distributor to purchase Administrative Shares. If you do
not have a brokerage account with the Distributor, you will need to submit a
completed Account Application before purchasing Administrative Shares.
For additional information on purchasing Administrative Shares or to request an
Account Application, please call the Distributor at 1-800-890-3200.
Minimum Initial and Subsequent Investment Amounts. Generally, no minimum initial
or subsequent investment requirements apply to the purchase of Institutional
Shares or Administrative Shares. However, if Administrative Shares are not held
in an IRA or other account with a financial intermediary (including the
Distributor) that maintains record ownership of shares on an omnibus basis for
its customers: (i) the initial purchase of Administrative Shares must be in an
amount of $25,000 or more; (ii) subsequent purchases of Administrative Shares
must be $1,000 or more; and (iii) the Fund will have the right to effect a
mandatory redemption of those shares if, as a result of one or more redemptions,
your shares have an aggregate value of less than $5,000. Before the Fund
effects a mandatory redemption of shares, you will be notified and given 60 days
to increase the amount of your investment in the Fund.
Shareholder Accounts. The Fund does not issue share certificates for
Institutional Shares or Administrative Shares. Instead, an account is
maintained for each shareholder by Investors Bank & Trust Company, as the Fund's
transfer agent (the "Transfer Agent"), or by the Distributor as the Shareholder
Servicing Agent for Administrative Shares. Your account will reflect the full
and fractional shares of the Fund that you own. Shareholders will be sent
confirmations of each transaction in shares and monthly statements showing
account balances.
General Information. Shares of the Fund may be purchased on any Business Day.
A Business Day is any day that the New York Stock Exchange (NYSE) is open and
that is not a federal bank holiday. All purchases of shares are effected at the
net asset value per share next determined after (i) an order in proper form is
received by the Administrator (for Institutional Shares) or by the Distributor
(for Administrative Shares) and (ii) federal funds are received by the Fund's
custodian. Purchase orders received prior to the close of regular trading on the
NYSE (normally, 4:00 p.m., Eastern time) are effected at the net asset value per
share determined as of the close of regular trading on the NYSE on that Business
Day. See "Net Asset Value." Orders received after the close of regular trading
on the NYSE are effected at the net asset value per share determined on the next
Business Day.
7
<PAGE>
Purchase by Federal Funds Wire. Shares may be purchased by wiring federal funds
to the Fund's transfer agent. The Fund does not impose any transaction charges;
however, wire charges may be imposed by the bank which transmits the wire.
Purchase payments should be wired to:
Investors Bank & Trust Company
Boston, Massachusetts
attn: Transfer Agent
ABA number: 011001438
DDA number: 000011220
For further credit to: account name, fund and account info
Purchase by Check (Administrative Shares Only). Administrative Shares may be
purchased by sending a check as described below. If you purchase shares by
check, your purchase order will not become effective until federal funds are
credited to the Fund's account, which normally will occur on the Business Day
following receipt of the check. Checks to purchase Administrative Shares should
be sent to:
Hewitt Portfolio
P.O. Box 101167
Atlanta, GA 30392-1167
HOW TO REDEEM SHARES
You may redeem all or a portion of your shares of the Fund on any Business Day
without any charge by the Fund. Shares are redeemed at their net asset value
per share next computed after the receipt of a redemption request in proper
form. Requests to redeem shares may be made as described below.
Institutional Shares. Participants in any employee benefit plan that allows
participants to direct the investment of their plan accounts should contact
their plan administrator for information and instructions on redeeming shares.
Requests by employee benefit plans to redeem Institutional Shares may be
transmitted to the Administrator, as Shareholder Servicing Agent for
Institutional Shares, in accordance with procedures established by the plans
with the Administrator. Redemption proceeds for Institutional Shares will be
paid by federal funds wire to a bank account designated by the plan.
For additional information on redeeming Institutional Shares, please call 1-800-
890-3200.
Administrative Shares. Requests to redeem Administrative Shares may be made in
writing or by telephone as described below. Redemption proceeds for
Administrative Shares will be paid by check or, if you request, by federal funds
wire (minimum wire amount $50,000) to a pre-designated bank account.
If you purchase shares by sending a check (including a certified or cashiers
check), the payment of the proceeds of a redemption of those shares may be
delayed until the check has cleared. This may take up to 15 days. For this
reason, if you need immediate access to your investment, you should purchase
shares by wiring federal funds.
In order to redeem Administrative Shares that are not held through a financial
intermediary (including the Distributor), a completed Account Application must
be on file with the Distributor. See "How to Buy Shares." You may designate a
bank account to receive redemption payments on the Account Application. You may
change this designation at any time, by providing written instructions to the
Distributor. These instructions must be signed by each person shown on the
account registration as an owner of the account, and the signatures must be
guaranteed by an eligible guarantor institution as described under "Written
Redemption Requests" below. Signature guarantees may also be required for you
to change your address on the Fund's records.
For additional information on redeeming Administrative Shares, please call 1-
800-890-3200.
General Information. Redemption requests are effected at the net asset value
per share next computed after receipt by the Administrator (for Institutional
Shares) or the Distributor (for Administrative Shares) of a redemption request
in proper form. Requests received prior to the close of regular trading on the
NYSE (normally, 4:00 p.m., Eastern time) are effected at the net asset value per
share determined as of the close of regular trading on the NYSE on that Business
Day. See "Net Asset Value." Requests received after the close of regular trading
on the NYSE are effected at the net asset value per share determined on the next
Business Day. Redemption proceeds are usually mailed or wired on the Business
Day following the day a redemption is effected. In unusual circumstances, the
Fund may suspend the right of redemption or postpone the payment of redemption
proceeds for more than seven days as permitted under the Investment Company Act.
8
<PAGE>
The Fund may pay redemption proceeds by distributing securities held by the
Portfolio, but only in the unlikely event that the Board of Trustees of the
Trust determines that payment of the proceeds in cash would adversely affect
other shareholders of the Fund. A shareholder who redeems during any 90 day
period shares having a value not exceeding the lesser of (i) $250,000 or (ii) 1%
of the net assets of the Fund, will not be subject to this procedure.
Telephone Redemption Procedures (Administrative Shares Only). You may redeem
Administrative Shares by calling the Distributor at 1-800-890-3200. You will be
asked to provide the account name and number, and the amount of the redemption.
Proceeds of the redemption will be paid by sending you a check, unless you
request payment by federal funds wire to a pre-designated bank account (minimum
wire amount $50,000). A TELEPHONE REDEMPTION REQUEST MAY BE MADE ONLY IF THE
TELEPHONE REDEMPTION PROCEDURE HAS BEEN SELECTED ON THE ACCOUNT APPLICATION OR
IF WRITTEN INSTRUCTIONS AUTHORIZING TELEPHONE REDEMPTION HAVE BEEN FILED WITH
THE DISTRIBUTOR.
The Distributor uses certain reasonable procedures to confirm that telephone
redemption requests are genuine, such as recording telephone calls, providing
written confirmation of transactions, or requiring a form of personal
identification or other information prior to effecting a telephone redemption.
If these procedures are used, the Fund, the Distributor and the Transfer Agent
will not be liable to you for any loss due to fraudulent or unauthorized
telephone instructions.
During periods of severe market or economic conditions, it may be difficult to
contact the Distributor by telephone. In that event, you should follow the
procedures described below for written redemption requests, but send the request
by overnight delivery service to:
Hewitt Portfolio
P.O. Box 101167
Atlanta, GA 30392-1167
Written Redemption Requests (Administrative Shares Only). You may redeem
Administrative Shares by sending a written redemption request. The request must
include the complete account name and address and the amount of the redemption
and must be signed by each person shown on the account registration as an owner
of the account. The signature of each person signing the request must be
guaranteed by an eligible guarantor institution if the redemption is $5,000 or
more. Organizations that may qualify as eligible guarantor institutions include
banks, brokers, dealers, national securities exchanges, clearing agencies,
credit unions, and savings associations. The Fund reserves the right to request
additional information from, and to make reasonable inquiries of, any eligible
guarantor institution. Proceeds of the redemption will be paid by sending you a
check, unless you request payment by federal funds wire to a pre-designated bank
account (minimum wire amount $50,000).
Written redemption requests should be sent to:
Hewitt Portfolio
P.O. Box 101167
Atlanta, GA 30392-1167
NET ASSET VALUE
The net asset values per share of Institutional Shares and Administrative Shares
are computed separately on each Business Day. Institutional Shares and
Administrative Shares will not have the same net asset values because the
expenses of the two share classes differ. Net asset value per share is
determined as of the close of regular trading on the NYSE (normally, 4:00 p.m.
Eastern time). However, on any day the trading markets for both U.S. Government
securities and money market instruments close early, net asset value will be
computed as of the earlier closing time. Unlike most other money market funds,
the Fund does not seek to maintain a stable net asset value per share.
Net asset value per share of each class of the Fund's shares is calculated by
dividing the value of the Fund's total assets attributable to that class, less
the liabilities (including accrued expenses) of the class and its allocable
share of the Fund's liabilities (and accrued expenses), by the number of shares
of the class outstanding. Because the Fund invests in the Portfolio, its assets
will consist primarily
9
<PAGE>
of an interest in the Portfolio. The value of this interest will depend on the
value of the assets of the Portfolio and its liabilities and expenses.
In determining the value of the Portfolio's assets, securities held by the
Portfolio are valued using the "amortized cost" method of valuation. This
method involves valuing each investment at cost and thereafter assuming a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the investment.
Amortized cost valuation provides certainty in valuation, but may result in
periods during which the value of an investment, as determined by amortized
cost, is higher or lower than the price that would be received if the investment
were sold. The Investment Adviser monitors the deviation between the net asset
value of the Portfolio determined by using available market quotations or market
equivalents and its net asset value determined by using amortized cost. If it
is determined that use of amortized cost valuation will result in material
dilution or other unfair results, the assets of the Portfolio may be valued
based upon market quotations.
DIVIDENDS AND DISTRIBUTIONS
Dividends are declared and paid monthly on each class of the Fund's shares from
net investment income (after deduction of expenses) and any realized short-term
capital gains allocable to that class. Distributions of net realized long-term
capital gains, if any, are declared and paid annually at the end of the Fund's
fiscal year. All dividends and other distributions are automatically reinvested
in full and fractional shares of the Fund at the applicable net asset value per
share in effect on the payment date, unless otherwise requested. Plans may
request that dividends and other distributions on Institutional Shares be paid
by check by notifying the Administrator. Shareholders who own Administrative
Shares may request that dividends and other distributions be paid by check by
sending a written request to the Distributor. Any such request must be received
at least five Business Days prior to a payment date in order to be effective on
that date.
Dividends are payable to all shareholders of record as of the time of
declaration. Shares become entitled to any dividend declared beginning on the
day on which they are purchased and are entitled to receive any dividends
declared through the day before they are redeemed.
In order to satisfy certain distribution requirements of the Code, the Fund may
declare special or regular year-end dividend and capital gains distributions
during October, November or December. If received by shareholders by January 31,
these distributions are deemed to have been paid by the Fund and received by
shareholders on December 31 of the prior year.
TAXES
Taxation of the Fund. The Fund has elected and intends to qualify each year as a
"regulated investment company" under Subchapter M of the Code. If so qualified,
the Fund will not be subject to federal income tax to the extent it distributes
its net income to shareholders.
Federal Taxation of Shareholders. Dividend distributions, whether received in
cash or reinvested in additional shares, will be taxable as ordinary income.
Although the Fund does not expect to distribute any long-term capital gains,
investors will also be subject to tax on any capital gains distributions they
receive. Since the Fund does not expect to earn dividend income, the dividends
and other distributions the Fund pays will generally not qualify for the
dividends-received deduction available to corporate investors. In January of
each year, the Fund sends each shareholder a statement showing the tax status of
distributions for the past calendar year.
The redemption of shares of the Fund is a taxable event and will result in a
gain (or loss) for federal income tax purposes, depending on the amount you
receive and the cost of your shares.
The Fund is required to withhold 31% of all taxable distributions and redemption
proceeds paid to shareholders who either have not complied with IRS taxpayer
identification regulations or are otherwise subject to backup withholding.
Investors are asked to certify in
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<PAGE>
their Account Applications that their taxpayer identification numbers are
correct and that they are not subject to backup withholding. Failure to provide
this certification will result in backup withholding.
State and Local Taxes. Dividends and other distributions paid by the Fund and
received by an investor may be subject to state and local taxes. Although
shareholders of the Fund do not directly receive interest on U.S. Government
securities held by the Fund, certain states and localities may allow the
character of the Fund's income to pass through to shareholders. If so, the
portion of dividends paid by the Fund that is derived from interest on certain
U.S. Government securities may be exempt from state and local taxes. Applicable
rules vary from state to state, and interest on certain securities of U.S.
Government agencies may not qualify for the exemption in some states. The United
States Supreme Court has ruled that income from certain types of repurchase
agreements involving U.S. Government securities does not constitute interest on
U.S. Government securities for this purpose. However, it is not clear whether
the Court's holding extends to all types of repurchase agreements involving U.S.
Government securities in which the Fund may invest. Any exemption from state and
local income taxes does not preclude states from assessing other taxes (such as
intangible property taxes) on the ownership of U.S. Government securities.
The discussion set forth above regarding federal and state income taxation is
included for general information only. Prospective investors should consult
their own tax advisors concerning the federal and state tax consequences of an
investment in the Fund.
DISTRIBUTION AND SERVICING ARRANGEMENTS
Distributor. Hewitt Services LLC (the "Distributor"), a broker-dealer
affiliated with the Administrator, serves as the distributor of the Fund's
shares. The Distributor is located at 100 Half Day Road, Lincolnshire IL 60069.
Shareholder Servicing Arrangements. The Fund has retained Hewitt Associates LLC
to serve as Shareholder Servicing Agent for Institutional Shares. As Shareholder
Servicing Agent, Hewitt Associates LLC is responsible for receiving on behalf of
the Transfer Agent orders by employee benefit plans to purchase and redeem
Institutional Shares and for maintaining records showing the number of
Institutional Shares allocable to individual participant accounts in those
plans. In addition, the Shareholder Servicing Agent sends all shareholder
communications relating to the Fund to shareholders and to plan participants or
arranges for these materials to be sent. For these services, the Fund pays the
Hewitt Associates LLC a monthly fee calculated at an annual rate of 0.20% of the
average daily net assets of the Fund attributable to Institutional Shares.
The Fund has retained the Distributor to serve as Shareholder Servicing Agent
for Administrative Shares. As Shareholder Servicing Agent, the Distributor is
responsible for maintaining records showing the number of Administrative Shares
owned by IRAs established through the Distributor and by other investors who
have purchased Administrative Shares through the Distributor. In addition, the
Shareholder Servicing Agent sends all shareholder communications relating to the
Fund to holders of Administrative Shares or arranges for these materials to be
sent. For these services, the Fund pays the Hewitt Services LLC a monthly fee
calculated at an annual rate of 0.25% of the average daily net assets of the
Fund attributable to Administrative Shares. The Fund also reimburses each
Shareholder Servicing Agent for certain out-of-pocket expenses.
Distribution Fee (Administrative Shares only). The Fund has adopted a plan
pursuant to Rule 12b-1 under the Investment Company Act which allows the Fund to
pay expenses relating to the distribution of Administrative Shares. Under the
plan, the Fund pays a fee to the Distributor, calculated at an annual rate of
0.25% of the average daily net assets of Administrative Shares, as compensation
for services rendered in connection with the sale and distribution of
Administrative Shares. This fee is an expense of Administrative Shares only and
is not borne by Institutional Shares. Because the fee is paid out of Fund
assets on an on-going basis, over time the fee will increase the cost of an
investment in Administrative Shares.
PERFORMANCE INFORMATION
The Fund may publish its "current yield" and "effective yield" in
advertisements, sales materials and shareholder reports. Current yield refers to
the income generated by an investment in the Fund over a seven-day period; the
income is then annualized. In
11
<PAGE>
annualizing income, the amount of income generated by the investment during the
period is assumed to be generated each week over a 52-week period and is shown
as a percentage of the investment. The effective yield is calculated in the same
manner, but when annualized, the income earned by an investment in the Fund is
assumed to be reinvested. The effective yield will be slightly higher than the
current yield because of the compounding effect of the assumed reinvestment. All
quotations of investment performance are based upon historical investment
results and are not intended to predict future performance.
In addition, comparative performance information may be used from time to time
in advertisements, sales literature and shareholder reports. This information
may include data, ratings and rankings from Lipper Analytical Services, Inc.,
IBC Financial Data Money Fund Report, The Bank Rate Monitor, Morningstar and
other industry publications, business periodicals and services. Comparisons to
recognized market indices and to the returns on specific money market securities
or types of securities or investments may also be used. The Fund may disseminate
yields for periods longer than seven days, and may report its total return. The
"total return" of the Fund refers to the average annual compounded rate of
return over a specified period (as stated in the advertisement) that would
equate an initial amount invested at the beginning of the period to the end of
period redeemable value of the investment, assuming the reinvestment of all
dividends and distributions.
ADDITIONAL INFORMATION
Organization. The Trust is a Delaware business trust that was organized on July
7, 1998. It is authorized to issue an unlimited number of shares of beneficial
interest, $.001 par value. As of the date of this Prospectus, the Trust has
only one series of its shares outstanding, representing interests in the Fund.
These shares are divided into two classes of shares (Institutional Shares and
Administrative Shares). The Board of Trustees has the power to establish
additional series of shares, representing interests in separate investment
portfolios and, subject to applicable laws and regulations, to issue two or more
classes of shares of each series. Shares are fully paid and non-assessable, and
have no preemptive or conversion rights.
Shareholders of the Fund are entitled to vote, together with the holders of any
other series of the Trust's shares, on the election of Trustees and the
ratification of the Trust's independent auditors when those matters are voted
upon at a meeting of shareholders. Shareholder will also be entitled to vote on
certain other matters as required by the Investment Company Act or the Trust's
Declaration of Trust. On these other matters, shares of the Fund will generally
be voted as a separate class from other series of the Trust's shares.
Institutional Shares and Administrative Shares will also vote as separate
classes on certain matters. Each share (and fractional share) is entitled to
one vote (or fraction thereof). However, if shares of more than one class or
series vote together on a matter, each share will have that number of votes
which equals the net asset value of such share (or fraction thereof). All
shares have non-cumulative voting rights, meaning that shareholders entitled to
cast more than 50% of the votes for the election of Trustees can elect all of
the Trustees standing for election if they choose to do so. As discussed below,
the Fund will pass through to its shareholders the right to vote on Portfolio
matters requiring shareholder approval.
Information Concerning Investment Structure. The Fund does not invest directly
in securities. Instead, it invests all of its investable assets in the
Portfolio, a separate series of MIP. The Portfolio has the same investment
objective and substantially the same investment policies as the Fund. The
Portfolio, in turn, purchases, holds and sells investments in accordance with
that objective and those policies. The Trustees of the Trust believe that the
per share expenses of the Fund (including its share of the Portfolio's expenses)
will be less than or approximately equal to the expenses that the Fund would
incur if its assets were invested directly in securities and other investments.
The Fund may withdraw its assets from the Portfolio at any time, and will do so
if the Trustees believe it to be in the best interest of the Fund's
shareholders. If the Fund withdraws its investment in the Portfolio, it will
either invest directly in securities in accordance with the investment policies
described in this Prospectus or will invest in another pooled investment vehicle
that has the same investment objective and policies as the Fund. In connection
with the withdrawal of its interest in the Portfolio, the Fund could receive
securities and other investments from the Portfolio instead of cash. This could
cause the Fund to incur certain expenses.
A change in the investment objective, policies or restrictions of the Portfolio
may cause the Fund to withdraw its investment in the Portfolio. Alternatively,
the Fund could seek to change its objective, policies or restrictions to conform
to those of the Portfolio. The investment objective and certain of the
investment restrictions of the Portfolio may not be changed without the approval
of investors
12
<PAGE>
in the Portfolio. When the Fund is asked to vote on such a change or on other
matters concerning the Portfolio, the Fund will hold a shareholders meeting and
vote its interest in the Portfolio in the same manner as shares of the Fund are
voted.
Shares of the Portfolio will be held by investors other than the Fund. These
investors may include other series of the Trust, other mutual funds and other
types of pooled investment vehicles. When investors in the Portfolio vote on
matters affecting the Portfolio, the Fund could be outvoted by other investors.
The Fund may also otherwise be adversely affected by other investors in the
Portfolio. These other investors offer shares (or interests) to their investors
which have costs and expenses that differ from those of the Fund. Thus, the
investment returns for investors in other funds that invest in the Portfolio may
differ the investment return of shares of the Fund. These differences in
returns are also present in other fund structures. Information about other
holders of shares of the Portfolio is available from the Shareholder Servicing
Agents.
Custodian. Investors Bank & Trust Company (the "Custodian") is the Fund's
custodian. The Custodian maintains custody of all securities and cash assets of
the Fund and the Portfolio and is authorized to hold these assets in securities
depositories and to use subcustodians.
Transfer Agent. Investors Bank & Trust Company (the "Transfer Agent") is the
Fund's transfer agent and dividend disbursing agent. The Transfer Agent has
entered into arrangements with the Administrator under which the Administrator,
as Shareholder Servicing Agent for Institutional Shares is authorized to receive
and is responsible to transmit to the Transfer Agent orders to purchase and
redeem Institutional Shares that are received from employee benefit plans.
Pursuant to these arrangements, the Institutional Shareholder Servicing Agent
also maintains records showing the number of Institutional Shares allocable to
individual participant accounts in employee benefit plans and the number of
Administrative Shares owned by IRAs established through the Distributor and by
other investors who have purchased Administrative Shares through the
Distributor.
Year 2000. Many computer software systems in use today recognize dates using a
two digit year code. These systems cannot distinguish between years preceding
the year 2000 and years beginning after 1999. This is known as the "Year 2000"
problem. Most of the services provided to the Fund and the Portfolio depend on
the smooth functioning of computer systems. Any failure to adapt these systems
prior to the year 2000 could interfere with the proper operations of the Fund or
the Portfolio. The principal service providers to the Fund and the Portfolio
have advised the Trust and MIP that they are working to implement necessary
changes to their systems and that they expect their systems to be adapted in
time. However, there can be no assurance of success. In addition, because the
Year 2000 problem affects virtually all organizations, companies in which the
Portfolio invests could be adversely impacted by this issue. The extent of the
impact of Year 2000 problems on the Fund and the Portfolio cannot be predicted.
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus. If given or
made, such other information and representations should not be relied upon as
having been authorized by the Trust.
This Prospectus does not constitute an offer in any state in which, or to any
person, to whom , such offer may not lawfully be made.
13
<PAGE>
INVESTMENT ADVISER
Barclays Global Fund Advisors, Inc.
45 Fremont Street
San Francisco, California 94105
DISTRIBUTOR
Hewitt Services LLC
100 Half Day Road
Lincolnshire, Illinois 60069
ADMINISTRATOR
Hewitt Associates LLC
100 Half Day Road
Lincolnshire, Illinois 60069
TRANSFER AGENT
Investors Bank & Trust Company
200 Clarendon Street
16th Floor
Boston, Massachusetts 02116
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street
16th Floor
Boston, Massachusetts 02116
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
Three Embarcadero Center
San Francisco, California 94111
LEGAL COUNSEL
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
The Fund sends annual and semi-annual reports to shareholders. These reports
contain information regarding the investments of the Portfolio and the Fund's
investment performance and are available without charge from the Shareholder
Servicing Agents or your plan administrator. If you have questions regarding
the Fund, shareholder accounts, dividends or share purchase and redemption
procedures, or if you wish to receive the most recent annual or semi-annual
reports, please call 1-800-890-3200. The first annual report will be available
beginning on or about April 28, 1999.
This Prospectus sets forth concisely the information about the Fund and the
Trust that you should know before investing. Additional information about the
Fund and the Trust has been filed with the Securities and Exchange Commission
(SEC) in a Statement of Additional Information (SAI) dated [__________], 1998,
which is incorporated herein by reference and is available without charge by
writing to the Shareholder Servicing Agents or by calling 1-800-890-3200.
Information about the Fund (including the SAI) can be reviewed and copied at the
SEC's Public Reference Room in Washington D.C. (1-800-SEC-0330). Information
about the Fund is also available on the SEC's Internet site at
http://www.sec.gov and copies of this information may be obtained, upon payment
of a duplicating fee, by writing the Public Reference Section of the SEC,
Washington, D.C. 20549-6009.
14
<PAGE>
SUBJECT TO COMPLETION DATED: SEPTEMBER 3, 1998
The information in this Statement of Additional Information is not complete and
may be changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
Statement of Additional Information is not an offer to sell securities and is
not soliciting an offer to buy these securities in any state where an offer or
sale is not permitted.
HEWITT MONEY MARKET FUND
STATEMENT OF ADDITIONAL INFORMATION
[ ], 1998
INSTITUTIONAL SHARES
ADMINISTRATIVE SHARES
____________________________
Hewitt Money Market Fund (the "Fund") is a series of Hewitt Series
Trust (the "Trust"), a diversified, open-end, management investment company.
This Statement of Additional Information ("SAI") contains information about the
Fund which supplements the information contained in the Fund's Prospectus. The
investment objective and policies of the Fund are described in the Prospectus.
This SAI is not a prospectus and should be read in conjunction with
the Fund's current Prospectus, dated [________], 1998. A copy of the Prospectus
may be obtained without charge by writing Hewitt Associates LLC, the Fund's
administrator, at 100 Half Day Road, Lincolnshire, Illinois 60069 or by calling
1-800-890-3200.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
INTRODUCTION................................................................................................... 1
INVESTMENT RESTRICTIONS........................................................................................ 1
INVESTMENT POLICIES AND PRACTICES.............................................................................. 3
MANAGEMENT..................................................................................................... 7
DISTRIBUTION ARRANGEMENTS...................................................................................... 9
EXPENSES....................................................................................................... 11
DETERMINATION OF NET ASSET VALUE............................................................................... 11
PURCHASE AND REDEMPTION OF SHARES.............................................................................. 12
PORTFOLIO TRANSACTIONS......................................................................................... 13
TAXES.......................................................................................................... 14
PERFORMANCE INFORMATION........................................................................................ 15
ADDITIONAL INFORMATION......................................................................................... 16
REPORT AND AUDIT OF STATEMENT OF ASSETS AND LIABILITIES........................................................ 19
SAI APPENDIX................................................................................................... 21
</TABLE>
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INTRODUCTION
The Trust is a registered under the Investment Company Act of 1940
(the "1940 Act") as an open-end, management investment company. The Fund, which
is currently the sole investment portfolio of the Trust, pursues its investment
objective by investing all of its investable assets in the Money Market Master
Portfolio (the "Portfolio"). The Portfolio is a series of Master Investment
Portfolio ("MIP") and has the same investment objective and investment
restrictions as the Fund. MIP, like the Trust, is registered under the 1940 Act
as an open-end management investment company.
INVESTMENT RESTRICTIONS
Fundamental Investment Restrictions. The Fund and the Portfolio are
-----------------------------------
subject to certain investment restrictions which are fundamental policies.
These restrictions may not be changed without the approval of a majority of the
outstanding voting securities of the Fund or the Portfolio, as defined by the
1940 Act. A "majority of the outstanding voting securities" of a Fund or of the
Portfolio means the lesser of (i) 67% of the shares of that Fund or of the
Portfolio represented at a meeting at which holders of more than 50% of the
outstanding shares are present in person or represented by proxy or (ii) more
than 50% of the outstanding shares of the Fund or the Portfolio.
Under these fundamental restrictions, neither the Fund nor the
Portfolio may:
(1) purchase the securities of issuers conducting their principal
business activity in the same industry if, immediately after the purchase and as
a result thereof, the value of the Fund's investments in that industry would be
25% or more of the current value of the Fund's total assets, provided that there
is no limitation with respect to investments in (i) obligations of the U.S.
Government, its agencies or instrumentalities; (ii) obligations of domestic
banks; and provided further, that the Fund may invest all its assets in a
diversified, open-end management investment company, or a series thereof, having
substantially the same investment objective, policies and restrictions as the
Fund;
(2) purchase or sell real estate or real estate limited partnerships
(other than securities secured by real estate or interests therein or securities
issued by companies that invest in real estate or interests therein);
(3) purchase commodities or commodity contracts (including futures
contracts), except that the Fund and the Portfolio may purchase securities of an
issuer which invests or deals in commodities or commodity contracts;
(4) purchase interests, leases, or limited partnership interests in
oil, gas, or other mineral exploration or development programs;
(5) purchase securities on margin (except for short-term credits
necessary for the clearance of transactions and except for margin payments in
connection with options, futures and options on futures) or make short sales of
securities;
(6) underwrite securities of other issuers, except to the extent that
the purchase of permitted investments directly from the issuer thereof or from
an underwriter for an issuer and the later disposition of such securities in
accordance with the Fund's or the Portfolio's investment program may be deemed
to be an underwriting; and provided further, that the purchase by the Fund of
securities issued by a diversified, open-end management investment company, or a
series thereof, having substantially the same investment objective, policies and
restrictions as the Fund shall not constitute an underwriting for this purpose;
<PAGE>
(7) make investments for the purpose of exercising control or
management; provided that the Fund may invest all its assets in a diversified,
open-end management investment company, or a series thereof, having
substantially the same investment objective, policies and restrictions as the
Fund;
(8) borrow money or issue senior securities as defined in the
Investment Company Act of 1940, except that the Fund and the Portfolio may each
borrow from banks up to 10% of the current value of its net assets for temporary
purposes only in order to meet redemptions, and these borrowings may be secured
by the pledge of up to 10% of the current value of its net assets (but
investments may not be purchased while any such outstanding borrowing in excess
of 5% of net assets exists);
(9) write, purchase or sell puts, calls, straddles, spreads,
warrants, options or any combination thereof, except that the Fund and the
Portfolio may purchase securities with put rights in order to maintain
liquidity;
(10) purchase securities of any issuer (except securities issued or
guaranteed by the U.S. Government, its agencies and instrumentalities) if, as a
result, with respect to 75% of total assets, more than 5% of the value of the
Fund's or the Portfolio's total assets would be invested in the securities of
any one issuer or, with respect to 100% of total assets, the Fund's or the
Portfolio's ownership would be more than 10% of the outstanding voting
securities of such issuer, provided that the Fund may invest all its assets in a
diversified, open-end management investment company, or a series thereof, having
substantially the same investment objective, policies and restrictions as the
Fund; or
(11) make loans, except that the Fund and the Portfolio may purchase
or hold debt instruments or lend its portfolio securities in accordance with its
investment policies, and may enter into repurchase agreements (but neither the
Fund nor the Portfolio intend to lend portfolio securities during the coming
year).
Non-Fundamental Investment Restrictions. The Fund and the Portfolio
---------------------------------------
are also subject to the following additional investment restrictions which are
non-fundamental policies. These restricitons may be changed by the Board of
Trustees of the Trust or the Board of Trustees of MIP, as the case may be.
(1) The Fund and the Portfolio may not invest more than 10% of the
current value of its net assets in fixed time deposits that are subject to
withdrawal penalties and that have maturities of more than seven days,
repurchase agreements maturing in more than seven days, or other illiquid
securities.
(2) The Fund and the Portfolio, as provided in Rule 2a-7 under the
1940 Act, may each only purchase "Eligible Securities" (as defined in Rule 2a-7)
and only if, immediately after such purchase: it would have no more than 5% of
its total assets in "First Tier Securities" (as defined in Rule 2a-7) of any one
issuer, excluding government securities and except as otherwise permitted for
temporary purposes and for certain guarantees and unconditional puts; it would
own no more than 10% of the voting securities of any one issuer; it would have
no more than 5% of its total assets in "Second Tier Securities" (as defined in
Rule 2a-7); and it would have no more than the greater of $1 million or 1% of
its total assets in Second Tier Securities of any one issuer.
(3) The Fund and the Portfolio may each invest in shares of other
open-end, management investment companies, subject to the limitations of Section
12(d)(1) of the 1940 Act. Except when shares of other investment companies are
purchased as part of a merger or a similar plan of reorganization, and except to
the extent that the Fund may pursue its investment objective by investing all
its assets in a diversified, open-end management investment company, or a series
thereof, having substantially the same investment objective, policies and
restrictions as the Fund, any purchases of investment company shares will be
limited to temporary investments in shares of unaffiliated investment companies.
If such an investment is made, any investment advisory fees otherwise payable by
the Fund or the Portfolio will be waived with respect to that portion of the
Fund's or the Portfolio's assets so invested. Neither the Fund nor the
Portfolio intends to invest more than 5% of its net assets in shares of other
investment companies during the coming year.
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<PAGE>
General. Unless otherwise specified, all percentage and other
-------
restrictions, requirements and limitations on investments set forth in this
Statement of Additional Information, as well as those set forth in the
Prospectus, apply immediately after the purchase of an investment, and
subsequent changes and events do not constitute a violation or require the sale
of any investment by the Portfolio or the Fund.
INVESTMENT POLICIES AND PRACTICES
General. The following information supplements the description of the
-------
investment policies and practices of the Portfolio as described in the
Prospectus.
Currently, the Fund pursues its investment objective by investing all
of its investable assets in the Portfolio. The Fund may withdraw its investment
from the Portfolio at any time if the Board of Trustees of the Trust (the "Board
of Trustees") determines that it is in the best interest of the Fund to do so.
Upon any such withdrawal, the Fund's assets would be invested in accordance with
the investment policies described below with respect to the Portfolio.
The assets of the Portfolio consist only of obligations maturing
within thirteen months from the date of acquisition, as determined in accordance
with applicable rules of the the regulations of the Securities and Exchange
Commission (the "SEC"), and the dollar-weighted average maturity of the
investments of the Portfolio may not exceed 90 days. The securities in which
the Portfolio may invest will not yield as high a level of current income as
could be achieved by investing in securities having longer maturities, less
liquidity and less safety. There can be no assurance that the investment
objective of the Portfolio or the Fund, as described in the Prospectus, will be
achieved.
Treasury, Government and Agency Securities. The Portfolio invests in
-------------------------------------------
short-term debt securities that are issued or guaranteed by the U.S. government
or an agency or instrumentality of the U.S. government ("Government
Securities"). These securities include obligations issued by the U.S. Treasury
("Treasury Securities"), including Treasury bills, notes and bonds. These are
direct obligations of the U.S. government and differ primarily in their rates of
interest and the length of their original maturities. Treasury Securities are
backed by the full faith and credit of the U.S. government. Government
Securities include Treasury Securities as well as securities issued or
guaranteed by the U.S. government or its agencies and instrumentalities ("Agency
Securities"). Agency Securities are in some cases backed by the full faith and
credit of the U.S. government. In other cases, Agency Securities are backed
solely by the credit of the governmental issuer. Certain issuers of Agency
Securities have the right to borrow from the U.S. Treasury, subject to certain
conditions. Government Securities purchased by the Portfolio may include
variable and floating rate securities.
Bank Obligations. Domestic commercial banks organized under federal
----------------
law are supervised and examined by the Comptroller of the Currency and are
required to be members of the Federal Reserve System. Domestic banks organized
under state law are supervised and examined by state banking authorities but are
members of the Federal Reserve System only if they elect to join. As a result
of federal or state laws and regulations, domestic banks, among other things,
generally are required to maintain specified levels of reserves, limited in the
amounts which they can loan to a single borrower and subject to other
regulations designed to promote financial soundness.
Investments in obligations of foreign banks involve various risks that
are not generally associated with investments in the obligations of domestic
banks.
Unrated Investments and Changes in Ratings. The Portfolio may
------------------------------------------
purchase securities that are not rated if, in the opinion of Barclays Global
Advisors, Inc. (the "Investment Adviser"), the investment adviser of the
Portfolio, such obligations are of a quality comparable to that of the rated
investments in which the Portfolio may invest, if they are purchased in
accordance with procedures adopted by MIP's Board of Trustees in accordance with
Rule 2a-7 under the 1940 Act. These procedures require approval or ratification
by the MIP Trustees of the purchase of unrated securities. The Portfolio will
not invest in an unrated security if as a result the Portfolio's investment in
such securities would exceed 5% of its net assets.
-3-
<PAGE>
After purchase by the Portfolio, a security may cease to be rated or
its rating may be reduced below the minimum required for purchase by the Fund
and the Portfolio. Neither event will require an immediate sale of such
security by the Portfolio provided that, when a security ceases to be rated, the
MIP Board of Trustees determines that such security presents minimal credit
risks and, provided further that, when a security rating is downgraded below the
eligible quality for investment or no longer presents minimal credit risks, the
MIP Board finds that the sale of such security would not be in the Portfolio's
shareholder's best interest. To the extent the ratings given by Moody's
Investor Service, Inc. ("Moody's") or Standard & Poors Corporation ("S&P") may
change as a result of changes in such organizations or their rating systems, the
Fund will attempt to use comparable ratings as standards for investments in
accordance with the investment policies contained in the Prospectus and in this
SAI.
The ratings categories used by Moody's and S&P are more fully
described in the Appendix.
Pass-Through Obligations. Certain of the debt obligations in which
------------------------
the Portfolio may invest may be pass-through obligations that represent an
ownership interest in a pool of mortgages and the resultant cash flow from those
mortgages. Payments by homeowners on the loans in the pool flow through to
certificate holders in amounts sufficient to repay principal and to pay interest
at the pass-through rate. The stated maturities of pass-through obligations may
be shortened by unscheduled prepayments of principal on the underlying
mortgages. Therefore, it is not possible to predict accurately the average
maturity of a particular pass-through obligation. Variations in the maturities
of pass-through obligations will affect the yield of any fund investing in such
obligations. Furthermore, as with any debt obligation, fluctuations in interest
rates will inversely affect the market value of pass-through obligations.
Loans of Portfolio Securities. The Portfolio may lend its securities
-----------------------------
to brokers, dealers and financial institutions, provided the loan is secured
continuously by collateral consisting of cash, Government Securities or a letter
of credit. This collateral is marked to market daily to ensure that the loan is
fully collateralized at all times. Under procedures adhered to by the
Portfolio, the loan must be callable by the Portfolio at any time and the
Portfolio must have the right to obtain the return of the securities loaned.
The Portfolio also has the right to receive any interest paid on the securities
loaned. The Portfolio will not lend securities having an aggregate market value
exceeding one-third of its total assets.
Loans of securities will only be made to firms deemed by the Board of
Trustees of MIP to be creditworthy (such creditworthiness will be monitored on
an ongoing basis by the Investment Adviser) and when the income expected to be
earned from such loans justifies the attendant risks. There may be delays in
the recovery of the loaned securities or a loss of rights in the collateral
supplied should the borrower fail financially, in which case the Portfolio could
suffer a loss. In addition, securities lending involves a form of leverage, and
the Portfolio may incur a loss if securities purchased with the collateral from
securities loans decline in value or if the income earned does not cover
transaction costs. The Portfolio may pay reasonable finder's, administrative
and custodial fees in connection with loans of securities.
Loans of securities provides a way for the Portfolio to earn either
through the reinvestment of the cash collateral or the payment of fees by the
borrower of the securities. The Portfolio does not intend to lend securities
during the coming year.
Repurchase Agreements. The Portfolio may enter into repurchase
---------------------
agreements with respect to any security in which they are authorized to invest,
although the underlying security may mature in more than thirteen months. In a
repurchase agreement the Portfolio purchases a security and the seller of the
security to the Portfolio agrees to repurchase that security from the Portfolio
at a mutually agreed-upon time and price. The maturity of repurchase agreements
are generally not more than seven days. Any repurchase agreements having longer
maturities are deemed to be illiquid and are subject to the limitation on the
purchase of illiquid securities by the Portfolio.
The custodian of the Portfolio's assets or a subcustodian approved by
MIP maintains custody of securities acquired through repurchase agreements.
These securities serve as collateral to secure the obligation of the seller to
repurchase the underlying security and the seller is required to post additional
collateral if the value of
-4-
<PAGE>
the securities should decrease below the resale price including accrued interest
under the repurchase agreement. Repurchase agreements are considered by the
staff of the SEC to be loans by the Portfolio. The Investment Adviser monitors
on an ongoing basis the value of the collateral. Certain costs may be incurred
by the Portfolio in connection with the sale of the underlying securities if the
seller does not repurchase them in accordance with the terms of the repurchase
agreement. In addition, if bankruptcy proceedings are commenced with respect to
the seller of the securities, disposition of the securities by the Portfolio may
be delayed or limited. This could cause the Portfolio to suffer a loss if the
value of the securities declines in value.
Although it is not possible to eliminate all risks from these
transactions (particularly the possibility of a decline in the market value of
the underlying securities, as well as delay and costs to the Fund in connection
with insolvency proceedings), it is the policy of the Portfolio to effect
repurchase agreements only with securities dealers, domestic banks or other
financial institutions determined by the Investment Adviser to meet certain
requirements as to creditworthiness.
Municipal Obligations. The Portfolio may invest in municipal
---------------------
obligations. Municipal bonds generally have a maturity at the time of issuance
of up to 40 years. Medium-term municipal notes are generally issued in
anticipation of the receipt of tax funds, of the proceeds of bond placements, or
of other revenues. The ability of an issuer to make payments on notes is
therefore especially dependent on such tax receipts, proceeds from bond sales or
other revenues, as the case may be. Municipal commercial paper is a debt
obligation with a stated maturity of 270 days or less that is issued to finance
seasonal working capital needs or as short-term financing in anticipation of
longer-term debt.
The Portfolio may invest in the following municipal obligations with
remaining maturities not exceeding 13 months: (i) long-term municipal bonds
rated at the date of purchase "Aa" or better by Moody's or "AA" or better by
S&P; (ii) municipal notes rated at the date of purchase "MIG1" or "MIG2" (or
"VMIG1" or "VMIG2" in the case of an issuer having a variable rate with a demand
feature) by Moody's or "SP-1+", "SP-1" or "SP-2" by S&P; and (iii) short-term
municipal commercial paper rated at the date of purchase "P-1" by Moody's or "A-
1+", "A-1" or "A-2" by S&P.
Floating- and Variable-Rate Obligations. The the Portfolio may
---------------------------------------
purchase floating- and variable-rate obligations as described in the Prospectus.
These obligations may include floating- and variable-rate demand notes and
bonds, which are obligations ordinarily having stated maturities in excess of
thirteen months, but which permit the holder to demand payment of principal at
any time, or at specified intervals not exceeding thirteen months. Variable
rate demand notes include master demand notes that are obligations that permit
the Portfolio to invest fluctuating amounts, which may change daily without
penalty, pursuant to direct arrangements between the Portfolio, as lender, and
the borrower. The interest rates on these notes fluctuate from time to time.
The issuer of these obligations ordinarily has a corresponding right, after a
given period, to prepay in its discretion the outstanding principal amount of
the obligations plus accrued interest upon a specified number of days' notice to
the holders of the obligations. The interest rate on a floating-rate demand
obligation is based on a specified lending rate, such as a bank's prime rate,
and is adjusted automatically each time that rate is adjusted. The interest
rate on a variable-rate demand obligation is adjusted automatically at specified
intervals. Frequently, these obligations are secured by letters of credit or
other credit support arrangements provided by banks. Because these obligations
are direct lending arrangements between the lender and borrower, it is not
contemplated that the obligations generally will be traded, and there generally
is no established secondary market for these obligations, although they are
redeemable at face value. Where these obligations are not secured by letters of
credit or other credit support arrangements, the Portfolio's right to redeem is
dependent on the ability of the borrower to pay principal and interest on
demand. Such obligations frequently are not rated by credit rating agencies and
the Portfolio may invest in obligations which are not so rated only if the
Investment Adviser determines that at the time of investment the obligations are
of comparable quality to the other obligations in which the Portfolio may
invest. The Investment Adviser considers on an ongoing basis the
creditworthiness of the issuers of the floating- and variable-rate demand
obligations in which the Portfolio invests. The Fund will not invest more than
10% of the value of its total net assets in floating or variable-rate demand
obligations whose demand feature is not exercisable within seven days. Such
obligations may be treated as liquid if an active secondary market exists.
-5-
<PAGE>
Forward Commitments, When-Issued Purchases and Delayed-Delivery
---------------------------------------------------------------
Transactions. The Portfolio may purchase securities on a when-issued or forward
- - - ------------
commitment (sometimes called a delayed-delivery) basis, which means that the
price is fixed at the time of commitment, but delivery and payment ordinarily
take place a number of days after the date of the commitment to purchase. The
Portfolio will make commitments to purchase such securities only with the
intention of actually acquiring the securities, but the Portfolio may sell these
securities before the settlement date if it is deemed advisable. The Portfolio
will not accrue income in respect of a security purchased on a forward
commitment basis prior to its stated delivery date.
Securities purchased on a when-issued or forward commitment basis are
subject to changes in value and the Portfolio is subject to the risk that such
fluctuations may occur prior to the actual delivery of the securities.
Purchasing securities on a when-issued or forward commitment basis also involves
the risk that the yield available in the market when the delivery takes place
may be higher than that obtained by the Portfolio. When the Portfolio purchases
a security on a when-issued or forward commitment basis, it will establish a
segregated account with its custodian, consisting of cash or high quality liquid
debt securities at least equal at all times to the amount of the when-issued or
forward commitment.
Purchasing securities on a forward commitment basis when the Portfolio
is fully or almost fully invested may result in greater potential fluctuation in
the value of the Portfolio's net assets. In addition, because the Portfolio
will set aside cash and other high quality liquid debt securities as described
above, the liquidity of the Portfolio's investment portfolio may decrease as the
proportion of securities purchased on a when-issued or forward commitment basis
increases.
The value of the securities underlying a when-issued purchase or a
forward commitment to purchase securities, and any subsequent fluctuations in
their value, is taken into account when determining the Portfolio's net asset
value starting on the day the Portfolio agrees to purchase the securities. The
Fund does not earn interest on the securities it has committed to purchase until
the securities are paid for and delivered on the settlement date. When the
Portfolio makes a forward commitment to sell securities it owns, the proceeds to
be received upon settlement are included in the Portfolio's assets, and
fluctuations in the value of the underlying securities are not reflected in the
Portfolio's net asset value as long as the commitment remains in effect.
Illiquid Securities. The Portfolio may invest up to 10% of the
-------------------
current value of its net assets in illiquid securities. Illiquid securities are
those securities which the Portfolio cannot sell or dispose of in the ordinary
course of business within seven days at approximately the value at which the
Fund carries the securities. These securities may include restricted
securities, fixed time deposits that are subject to withdrawal penalties and
that have maturities of more than seven days, and repurchase agreements maturing
in more than seven days. Restricted securities are securities that may not be
sold to the public without an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and thus, may be sold only
in privately negotiated transactions or pursuant to an exemption from
registration. Certain restricted securities that may be sold to institutional
investors pursuant to Rule 144A under the 1933 Act and non-exempt commercial
paper may be determined to be liquid by the Investment Adviser under procedures
adopted by the Board of Trustees of MIP. The purchase of these securities could
have the effect of decreasing the Portfolio's liquidity if qualified
institutional buyers become uninterested in purchasing those securities.
Illiquid securities involve the risk that the securities will not be able to be
sold at the time desired by the Investment Adviser or at prices approximating
the value at which the Portfolio is carrying the securities.
Foreign Obligations. Investments in foreign obligations involve
-------------------
certain considerations that are not typically associated with investing in
domestic obligations. There may be less publicly available information about a
foreign issuer than about a domestic issuer. Foreign issuers also are not
generally subject to uniform accounting, auditing and financial reporting
standards or governmental supervision comparable to those applicable to domestic
issuers. In addition, with respect to certain foreign countries, taxes may be
withheld at the source under foreign income tax laws, and there is a possibility
of expropriation or confiscatory taxation, political or social instability or
diplomatic developments that could adversely affect investments in, the
liquidity of, and the ability to enforce contractual obligations with respect
to, securities of issuers located in those countries. The Portfolio may invest
up to 25% of its assets in foreign obligations.
-6-
<PAGE>
Obligations of foreign banks and foreign branches of U.S. banks
involve somewhat different investment risks from those affecting obligations of
U.S. banks, including the possibilities that liquidity could be impaired because
of future political and economic developments; the obligations may be less
marketable than comparable obligations of U.S. banks; a foreign jurisdiction
might impose withholding taxes on interest income payable on those obligations;
foreign deposits may be seized or nationalized; foreign governmental
restrictions (such as foreign exchange controls) may be adopted which might
adversely affect the payment of principal and interest on those obligations; and
the selection of those obligations may be more difficult because there may be
less publicly available information concerning foreign banks. In addition, the
accounting, auditing and financial reporting standards, practices and
requirements applicable to foreign banks may differ from those applicable to
U.S. banks. In that connection, foreign banks are not subject to examination by
any U.S. Government agency or instrumentality.
MANAGEMENT
Directors and Officers. The Board of Trustees of the Trust has the
----------------------
overall responsibility for monitoring the operations of the Trust and the Fund
and for supervising its operations. The officers of the Trust are responsible
for managing the day-to-day operations of the Trust and the Fund. MIPs Board of
Trustees has similar responsibilities with respect to the operations of the
Portfolio.
Set forth below is information with respect to each of the Trustees
and officers of the Trust, including their principal occupations during the past
five years.
<TABLE>
<CAPTION>
NAME, POSITION WITH TRUST, AGE PRINCIPAL OCCUPATIONS
AND ADDRESS DURING LAST FIVE YEARS
---------------------------------- ----------------------------------------
<S> <C>
*E. Scott Peterson, 45 Consultant, Hewitt Associates LLC
Trustee
Donald S. Hunt, 60 Director and President, ADA Financial
Trustee Services; Director ADA Holding Co.;
860 N. Lakeshore Drive Director, Vision III; Director and Chief
Chicago, IL 60611 Excutive Officer, Global Training Inc.;
Director and President, Harris Bank Corp. and
Harris Trust & Savings Bank
John D. Oliverio, 45 Executive Vice President and Chief Operating
Trustee Officer, Wheaton Franciscan Services, Inc.;
26 West 171 Roosevelt Road Director, AHA Investment Funds, Inc.
Wheaton, IL 60189
Stacy L. Schaus, 38 Consultant, Hewitt Associates LLC
President
Peter E. Ross, 38 Consultant, Hewitt Associates LLC
Secretary
James B. Lee, 36 Consultant, Hewitt Associates LLC
Treasurer, Chief Financial Officer
</TABLE>
- - - --------------------
* Trustee who is an "interested person" of the Trust, as defined in the 1940
Act, because of his affiliation with Hewitt Associates LLC, an affilaite of the
distributor of the Fund's shares.
Except as otherwise indicated above, the address of each Trustee and
officer of the Trust is 100 Half Day Road, Lincolnshire, Illinois 60069.
Trustees who are not employed by Hewitt Associates LLC or one of its
affiliates are paid an attendance fee of $1000 for each meeting of the Board of
Trustees they attend. Officers of the Trust receive no compensation from the
Trust. Trustees who are not employees of Hewitt Associates LLC or one of its
affiliates are reimbursed for reasonable out-of-pocket expenses incurred in
connection with the performance of their
-7-
<PAGE>
responsibilities related expenses. As of the date of this Statement of
Additional Information, the Trustees and officers of the Trust, as a group,
owned less than 1% of the outstanding shares of the Trust and the Fund.
Trustee compensation for the coming year is estimated as follows:
COMPENSATION TABLE*
<TABLE>
<CAPTION>
Name of Person Aggregate
Compensation Pension or Retirement Total Compensation
from Trust Benefits Accrued from Trust Paid
as Part of Fund Expenses to Trustees
<S> <C> <C> <C>
E. Scott Peterson $ 0 $0 $ 0
Donald S. Hunt $4000 $0 $4000
John D. Oliverio $4000 $0 $4000
</TABLE>
Investment Adviser. The Investment Adviser, Barclays Global Fund
------------------
Advisors, located at 45 Fremont Street, San Francisco, California 94105, is a
subsidiary of Barclays Global Investors, N.A., which in turn is an indirect
subsidiary of Barclays Bank PLC. It provides investment advisory services to the
Portfolio pursuant to an investment advisory agreement with MIP dated January 1,
1996 (the "Advisory Agreement"). Pursuant to the Advisory Agreement, the
Investment Adviser is responsible for the management of the investments of the
Portfolio and makes all decisions regarding, and places all orders for, the
purchase and sale of securities.
As compensation for services rendered and expenses assumed by the
Investment Adviser, the Portfolio pays the Investment Adviser a monthly fee
which is computed at the annual rate of 0.10% of the net assets of the
Portfolio. Because the Fund is an investor in the Portfolio, shareholders of the
Fund indirectly bear this fee. Under the Advisory Agreement, the Investment
Adviser is obligated to bear all of the ordinary operating expenses of the
Portfolio.
The Advisory Agreement was approved by the Board of Trustees of MIP,
including a majority of the Trustees of MIP who are not "interested persons," as
defined by the 1940 Act of MIP or the Investment Adviser. Its current term
expires January 1, 1999 and may be continued in effect from year to year
thereafter if approved annually by either (i) MIP's Board of Trustees or (ii)
vote of a majority of the outstanding voting securities of the Fund (as defined
in the 1940 Act); or by MIP's Board of Trustees, and provided that the
continuance also is approved by a majority of MIP's Board of Trustees who are
not "interested persons" (as defined in the 1940 Act) of the MIP or the
Investment Adviser, by vote cast in person at a meeting called for the purpose
of voting on such approval. The Advisory Agreement is terminable without
penalty, on 60 days' written notice by the Board of Trustees of MIP or by vote
of the holders of a majority of the outstanding voting securities of the
Portfolio. As required by the 1940 Act, the Advisory Agreement provides for its
automatic termination in the event of its assignment (as defined by the 1940
Act).
Administrator. Hewitt Associates LLC (the "Administrator") provides
-------------
administrative services to the Fund pursuant to the terms of an administration
agreement dated September 1, 1998, entered into by the Trust and the
Administrator. Services provided by the Administrator include, but are not
limited to: managing the daily operations and business affairs of the Fund,
subject to the supervision of the Board of Trustees; overseeing the preparation
and maintenance of all documents and records required to be maintained by the
Fund and the Trust; preparing or assisting in the preparation of regulatory
filings, prospectuses and shareholder reports; providing, at its own expense,
the services of its personnel to serve as officers of the Trust; and preparing
and disseminating material for meetings of the Board of Trustees and
shareholders. The Fund pays the Administrator a monthly fee calculated at an
annual rate of 0.10% of the Fund's average daily net assets.
-8-
<PAGE>
The Administration Agreement was approved by the Board of Trustees of
the Trust, including a majority of the Trustees who are not "interested persons"
of the Trust or of Investment Adviser or the Distributor, as defined by the 1940
Act (the "Independent Trustees"), at a meeting held in person on August 18,
1998. It has an initial term expiring August 31, 2000, and may be continued in
effect from year to year thereafter if such continuance is approved annually by
the Board of Trustees, including the vote of a majority of the Independent
Trustees. The Administration Agreement terminates automatically in the event of
its "assignment" (as defined by the 1940 Act), and may be terminated by either
party without penalty on not less than 60 days' written notice.
Pursuant to the Administration Agreement, the Trust has acknowledged
that the name "Hewitt" is a property right of the Administrator and its
affiliates and has agreed that the Administrator and its affiliated companies
may use and permit others to use that name. If the Administration Agreement is
terminated, the Trust may be required to cease using the name Hewitt as part of
its name or the name of the Fund, unless otherwise permitted by the
Administrator or any successor to its interest in such name.
The Administrator also serves as the Shareholder Servicing Agent for
Institutional Shares and is paid compensation by the Fund for furnishing various
shareholder related services. See "Shareholder Servicing Arrangements," below.
Shareholder Servicing Arrangements. The Fund has retained Hewitt
----------------------------------
Associates LLC to serve as the Shareholder Servicing Agent for Institutional
Shares pursuant to the terms of a shareholder servicing agreement dated
September 1, 1998 (the "Institutional Shares Servicing Agreement"). Pursuant to
the Institutional Shares Servicing Agreement, the Fund pays Hewitt Associates
LLC a monthly fee calculated at an annual rate of 0.20% of the Fund's average
daily net assets attributable to the Institutional Shares.
The Fund has retained Hewitt Services LLC to serve as the Shareholder
Servicing Agent for Administrative Shares pursuant to the terms of a shareholder
servicing agreement dated September 1, 1998 (the "Administrative Shares
Servicing Agreement"). Pursuant to the Administrative Shares Servicing
Agreement, the Fund pays Hewitt Services LLC a monthly fee calculated at an
annual rate of 0.25% of the Fund's average daily net assets attributable to the
Administrative Shares. The responsibilities of each Shareholder Servicing Agent
are described in the Prospectus. The Fund reimburses each Shareholder Servicing
Agent for certain out-of-pocket expenses.
The Institutional Shares Servicing Agreement and the Administrative
Shares Servicing Agreement were approved by the Board of Trustees of the Trust,
including a majority of the Independent Trustees, at a meeting held in person on
August 18, 1998. Each has an initial term expiring August 31, 2000, and may be
continued in effect from year to year thereafter if such continuance is approved
annually by the Board of Trustees of the Trust, including the vote of a majority
of the Independent Trustees. Each servicing agreement terminates automatically
in the event of its "assignment" (as defined by the 1940 Act), and may be
terminated by either party to the agreement without penalty on not less than 60
days' written notice.
DISTRIBUTION ARRANGEMENTS
Hewitt Services LLC, an affiliate of the Administrator, serves as the
distributor of shares of the Fund (the "Distributor"). The Distributor also
serves as the Shareholder Servicing Agent for the Administrative Shares and is
paid compensation by the Fund for furnishing various shareholder related
services. See "Shareholder Servicing Arrangements," above. he Distributor also
receives payments from the Fund in connection with the distribution of
Administrative Shares, as described below.
Distribution Agreement. The Distributor serves as the exclusive
----------------------
distributor of shares of the Fund pursuant to a distribution agreement with the
Trust, dated as of September 1, 1998 (the "Distribution Agreement"). Pursuant to
the Distribution Agreement, the Distributor is authorized to enter into selling
agreements with securities dealers and other financial institutions for the
distribution of shares. Shares of the Fund are available for purchase on a
continuous basis from the Distributor, as agent, although the Distributor is not
obligated to sell any particular amount of shares. The Fund has appointed the
Shareholder Servicing Agent as its agent for purposes of accepting
-9-
<PAGE>
orders to purchase and redeem Institutional Shares on behalf of the Distributor
and transmitting those orders to the Fund's transfer agent.
The Distribution Agreement was approved by the Board of Trustees of
the Trust, including a majority of the Independent Trustees, at a meeting held
in person on August 18, 1998. It has an initial term expiring August 31, 2000,
and may be continued in effect from year to year thereafter if such continuance
is approved annually by the Board of Trustees, including the vote of a majority
of the Independent Trustees. The Distribution Agreement may be terminated at any
time, without penalty, by either party upon 60 days written notice and
terminates automatically in the event of an "assignment" as defined by the 1940
Act.
Under the Distribution Agreement, the Distributor is required to bear
all of the costs associated with distribution of shares of the Fund, including
the incremental cost of printing prospectuses, annual reports and other periodic
reports for distribution to prospective investors and the costs of preparing,
distributing and publishing sales literature and advertising materials. As
described below, Administrative Shares of the Fund pay a fee to the Distributor
for services it renders in connection with the distribution of Administrative
Shares.
Distribution Plan (Administrative Shares Only) . The Trust has
-----------------------------------------------
adopted a plan and agreement of distribution pursuant to Rule 12b-1 under the
Investment Company Act which allows the Fund to pay expenses relating to the
distribution of Administrative Shares (the "Distribution Plan"). Under the
Distribution Plan, the Fund pays a fee to the Distributor, calculated at an
annual rate of 0.25% of the average daily net assets of Administrative Shares,
as compensation for the services the Distributor renders and the expenses it
bears in connection with the sale and distribution of Administrative Shares.
This fee is an expense of Administrative Shares only and is not borne by
Institutional Shares.
The Distribution Plan was approved by the Board of Trustees of the
Trust, including a majority of the Trustees who are not "interested persons" (as
defined by the 1940 Act) of the Trust and who have no direct or indirect
financial interest in the operation of the Distribution Plan or in any agreement
related to the Plan ("Qualified Trustees"), at a meeting held in person on
August 18, 1998. It provides that it will continue in effect for a period of one
year from the date of its execution, and may be continued in effect from year to
year thereafter, provided that each such continuance is approved annually by a
vote of both a majority of the Trustees and a majority of the Qualified
Trustees. The Distribution Plan requires that the Trust provide the Board of
Trustees of the Trust, and that the Board review, at least quarterly, a written
report of the amounts expended (and the purposes therefor) under the
Distribution Plan. In addition, the Distribution Plan provides that the
selection and nomination of Qualified Trustees shall be committed to the
discretion of those Trustees, who are not "interested persons" (as defined by
the 1940 Act) of the Distributor, then in office. The Distribution Plan may be
terminated at any time by a vote of a majority of the Qualified Trustees or by
vote of a majority of the outstanding voting shares of the Fund (as defined by
the 1940 Act). It may not be amended to increase materially the amount of
permitted expenses thereunder without the approval of the holders of
Administrative Shares and may not be materially amended in any other respect
without a vote of the majority of both the Trustees and the Qualified Trustees.
Since payments made pursuant to the Distribution Plan are not directly
tied to actual expenses, the amount of payments by Administrative Shares to the
Distributor during any year may be more or less than actual expenses incurred by
the Distributor in providing services. For this reason, this type of
distribution fee arrangement is characterized by the staff of the Securities and
Exchange Commission as being of the "compensation variety" (in contrast to
"reimbursement" arrangements under which payments by a fund are made only to
reimburse specific expenses). However, Administrative Shares are not liable to
pay any distribution related expenses incurred by the Distributor in excess of
the amounts paid pursuant the Distribution Plan.
The Distribution Plan was adopted by the Board of Trustees of the
Trust to foster the distribution of Administrative Shares. The Trustees believe
that the Distribution Plan will provide an incentive for the Distributor to make
Administrative Shares available to its customers and that, without the
Distribution Plan, the Distributor would not offer shares of the Fund to its
customers. In addition, the Trustees believe that the Distribution Plan will
help assure that assets of the Fund attributable to Administrative Shares reach
a level that will enable the per share expenses of Administrative Shares to be
competitive with the per share expenses of other
-10-
<PAGE>
money market funds. For these reasons, the Board of Trustees determined that
adoption of the Distribution Plan will benefit the Fund and shareholder who own
Administrative Shares.
The Trustee and officers of the Trust who are members or employees of
the Distributor, or of any company affiliated with or controlling the
Distributor, may be deemed to have a direct or indirect interest in the
operation of the Distribution Plan.
EXPENSES
All expenses of the Trust and the Fund not expressly assumed by the
Administrator or the Distributor are paid by the Fund. In addition, as an
investor in the Portfolio, the Fund bears a pro rata portion of the expenses of
the Portfolio. Expenses borne by the Fund and the Portfolio include, but are not
limited to: fees for investment advisory and administration services; fees paid
to the Shareholder Servicing Agents; the distribution fee payable by
Administrative Shares; the fees and expenses of any registrar, custodian,
accounting agent, transfer agent or dividend disbursing agent; brokerage
commissions; taxes; registration costs; the cost and expense of printing,
including typesetting, and distributing prospectuses and supplements thereto to
shareholders; all expenses of shareholders' and Trustees' meetings and of
preparing, printing and mailing of proxy statements and reports to shareholders;
fees and travel expenses of Trustees or members of any advisory board or
committee who are not employees of the Administrator, the Distributor or the
Investment Adviser; all expenses incident to any dividend, withdrawal or
redemption options; charges and expenses of any outside service used for pricing
shares of the Trust; fees and expenses of legal counsel; fees and expenses of
independent auditors; membership dues of industry associations; interest on
borrowings; postage; insurance premiums on property or personnel (including
officers and Trustees) of the Trust and MIP which inure to its benefit; and
extraordinary expenses (including, but not limited to, legal claims and
liabilities and litigation costs and any indemnification relating thereto).
DETERMINATION OF NET ASSET VALUE
Days and Times Net Asset Value Per Share is Computed. The Prospectus
----------------------------------------------------
describes the days on which the net asset values per share of the Fund are
computed for purposes of purchases and redemptions of shares by investors, and
also sets forth the times as of which such computations are made.
Shares of the Fund may be purchased on any that the New York Stock
Exchange (NYSE) is open and that is not a federal bank holiday. The following
days are either days on which the NYSE is closed or which are federal bank
holidays: New Year's Day; Martin Luther King's Birthday (third Monday in
January); Presidents' Day (third Monday in February); Good Friday (Friday before
Easter); Memorial Day (last Monday in May); Independence Day; Labor Day (first
Monday in September); Columbus Day (second Monday in October); Veterans Day;
Thanksgiving Day (fourth Thursday in November); and Christmas Day.
Net asset value is computed as of the closing time of the U.S.
government securities markets on days when the Public Securities Association
recommends an early closing of such markets. Early closings may occur the
Fridays preceding the following holidays: Martin Luther King's Birthday;
Presidents' Day; Memorial Day; Labor Day; and Columbus Day. Early closings may
also occur on the business days preceding the following holidays: Independence
Day; Veterans Day; Thanksgiving Day; Christmas Day; New Year's Day, and the
Friday following Thanksgiving Day.
The net asset values per share of Institutional Shares and
Administrative Shares are computed separately. Net asset value per share of each
class of the Fund's shares is calculated by dividing the value of the Fund's
total assets attributable to that class, less the liabilities (including accrued
expenses) of the class and its allocable share of the Fund's liabilities (and
accrued expenses), by the number of shares of the class outstanding. The value
of the Portfolio's net assets (its securities and other assets, less its
liabilities, including expenses payable or accrued) is determined at the same
time and on the same days as the net asset values per share of the Fund are
determined. Unlike most other money market funds, the Fund does not seek to
maintain a stable net asset value per share.
-11-
<PAGE>
Amortized Cost Valuation. The Fund and the Portfolio use the
------------------------
amortized cost method of valuation to determine the value of their portfolio
securities in accordance with the provisions of Rule 2a-7 under the 1940 Act.
The amortized cost method involves valuing a security at its cost and amortizing
any discount or premium over the period until maturity, regardless of the impact
of fluctuating interest rates on the market value of the security. This method
of valuation does not take into account unrealized capital gains and losses
resulting from changes in the market values of the securities due to changes in
prevailing interest rate levels or other factors. While this method provides
certainty in valuation, it may result in periods during which the value, as
determined by amortized cost, is higher or lower than the price that the Fund
would receive if the security were sold. During these periods the yield to a
shareholder may differ somewhat from that which could be obtained from a similar
fund that uses a method of valuation based upon market prices. Thus, during
periods of declining interest rates, if the use of the amortized cost method
resulted in a lower net asset value of the Fund's portfolio on a particular day,
a prospective investor in the Fund would be able to obtain a somewhat higher
yield than would result from investment in a fund using solely market values,
and existing Fund shareholders would receive correspondingly less income. The
converse would apply during periods of rising interest rates.
Rule 2a-7 provides that in order to value its portfolio using the
amortized cost method, the Fund (or to the extent the Fund invests in the
Portfolio, the Portfolio) must maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase securities having remaining maturities (as
defined in Rule 2a-7) of thirteen months or less and invest only in those high-
quality securities that are determined by the Board of Trustees of the Trust (or
MIP) to present minimal credit risks. The maturity of an instrument is generally
deemed to be the period remaining until the date when the principal amount
thereof is due or the date on which the instrument is to be redeemed. However,
Rule 2a-7 provides that the maturity of an instrument may be deemed shorter in
the case of certain instruments, including certain variable- and floating-rate
instruments subject to demand features. In addition, Rule 2a-7 requires that the
Portfolio invest only in securities which have been determined by the Investment
Adviser, under procedures adopted by the Board of Trustees of MIP, to present
minimal credit risks and to be of eligible credit quality under applicable
regulations.
PURCHASE AND REDEMPTION OF SHARES
The procedures to be used in purchasing and redeeming Institutional
Shares and Administrative Shares are set forth in the Prospectus under "How To
Buy Shares" and "How To Redeem Shares". The Company reserves the right to reject
any purchase order and to change the amount of the minimum investment and
subsequent purchases in the Funds.
Purchases by Check (Administrative Shares Only). Administrative
-----------------------------------------------
Shares may be purchased by check as described in the Prospectus. If a check to
purchase Administrative Shares does not clear, the shares purchased may be
redeemed by the Distributor and the investor will be responsible for any loss or
expenses incurred by the Fund or the Distributor as a result of the redemption
or non-clearance.
Mandatory Redemption of Shares. Under the Declaration of Trust, the
------------------------------
Trust has the right to redeem all shares of the Fund held by a shareholder if as
a result of one or more redemptions the aggregate value of shares held in the
shareholder's account is less than such dollar amount of $1 million or such
lesser amount as may be specified by the Trustees, which amount may be no
greater than the then applicable minimum initial investment amount. There is
currently no minimum required investment for Institutional Shares. There is also
currently no minimum required initial investment for Administrative Shares, if
those shares are held in an account with a financial intermediary (including the
Distributor) that holds shares for its customers on an omnibus basis. Thus,
Institutional Shares and Administrative Shares held as described above are not
subject to the mandatory redemption procedure described above. As described in
the Prospectus, Administrative Shares not held on an omnibus basis may be
subject to mandatory redemption if the value of Administrative Shares held by a
shareholder is less than $5,000. The Trust is under no obligation to compel the
redemption of any account.
Suspension of Redemptions. Redemption proceeds are normally paid as
-------------------------
described in the Prospectuses. The payment of redemption proceeds by the Fund
may be postponed for more than seven days or the right of redemption suspended
at times (a) when the New York Stock Exchange is closed for other than customary
-12-
<PAGE>
weekends and holidays, (b) when trading on the New York Stock Exchange is
restricted, (c) when an emergency exists as a result of which disposal by the
Fund of securities owned by it is not reasonably practicable or it is not
reasonably practicable for the Fund to determine fairly the value of its net
assets, or (d) during any other period when the Securities and Exchange
Commission (the "SEC"), by order, so permits for the protection of shareholders.
Applicable rules and regulations of the SEC will govern as to whether the
conditions described in (b) or (c) exist.
Redemption in Kind. In the event that the Board of Trustees
------------------
determines that it would be detrimental to the best interests of remaining
shareholders of the Fund to pay any redemption or redemptions in cash, a
redemption payment by a Fund may be made in whole or in part by a distribution
in kind of portfolio securities, subject to applicable rules of the SEC. Any
securities distributed in kind will be readily marketable and will be valued,
for purposes of the redemption, in the same manner as such securities are
normally valued in computing net asset value per share. In the unlikely event
that shares are redeemed in kind, the redeeming shareholder would incur
transaction costs in converting the distributed securities to cash. The Trust
has elected to be governed by Rule 18f-1 under the 1940 Act and is therefore
obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of
the net asset value of a Fund during any 90 day period for any one shareholder.
PORTFOLIO TRANSACTIONS
Purchases and sales of debt securities generally are principal
transactions. Debt securities acquired for the Portfolio normally are purchased
or sold from or to dealers serving as market makers for the securities at a net
price. Debt securities also may be purchased in underwritten offerings and may
be purchased directly from the issuer. Generally, Government Securities and
other money market securities are traded on a net basis and do not involve
brokerage commissions. The cost of executing transactions in debt securities
consists primarily of dealer spreads and underwriting commissions. Under the
1940 Act, persons affiliated with the Trust are prohibited from dealing with the
Trust as a principal in the purchase and sale of securities unless an exemptive
order allowing such transactions is obtained from the SEC or an exemption is
otherwise available. However, the Portfolio may purchase securities from
underwriting syndicates in which the Investment Adviser or an affiliate of the
Investment Adviser is a member under certain conditions in accordance with the
provisions of a rule adopted under the 1940 Act and in compliance with
procedures adopted by the MIP Board of Trustees.
MIP has no obligation to deal with any dealer or group of dealers in
the execution of transactions in portfolio securities. Subject to policies
established by the MIP Board of Trustees, the Investment Adviser is responsible
for the Portfolio's investment decisions and the placing of orders to purchase
and sell securities. In placing orders, it is the policy of the Portfolio to
obtain the best overall terms taking into account the dealer's general execution
and operational facilities, the type of transaction involved and other factors
such as the dealer's risk in positioning the securities involved. While the
Investment Adviser generally seeks reasonably competitive spreads or
commissions, the Portfolio will not necessarily be paying the lowest spread or
commission available.
In assessing the best overall terms available for any transaction, the
Investment Adviser considers factors deemed relevant, including the breadth of
the market in the security, the price of the security, the financial condition
and execution capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing basis.
The Investment Adviser may cause the Portfolio to pay a broker which furnishes
brokerage and research services a higher commission than that which might be
charged by another broker for effecting the same transaction, provided that the
Investment Adviser determines in good faith that such commission is reasonable
in relation to the value of the brokerage and research services provided by that
broker, viewed in terms of either the particular transaction or the overall
responsibilities of the Investment Adviser. Such brokerage and research services
might consist of reports and statistics relating to specific companies or
industries, general summaries of groups of stocks or bonds and their comparative
earnings and yields, or broad overviews of the stock, bond, and government
securities markets and the economy.
Supplementary research information so received is in addition to, and
not in lieu of, services required to be performed by the Investment Adviser and
does not reduce the advisory fees payable by the Portfolio. The MIP Board of
Trustees will periodically review the commissions paid by the Portfolio to
consider whether commissions paid over representative periods of time appear to
be reasonable in relation to the benefits inuring to
-13-
<PAGE>
the Portfolio. It is possible that certain of the supplementary research or
other services received will primarily benefit one or more other investment
companies or other accounts for which the Investment Adviser exercises
investment discretion. Conversely, the Portfolio may be the primary beneficiary
of the research or services received as a result of portfolio transactions
effected for such other accounts or investment companies.
Under Section 28(e) of the Securities Exchange Act of 1934, an adviser
shall not be "deemed to have acted unlawfully or to have breached its fiduciary
duty" solely because under certain circumstances it has caused the account to
pay a higher commission than the lowest available. To obtain the benefit of
Section 28(e), an adviser must make a good faith determination that the
commissions paid are "reasonable in relation to the value of the brokerage and
research services provided...viewed in terms of either that particular
transaction or its overall responsibilities with respect to the accounts as to
which it exercises investment discretion and that the services provided by a
broker provide an adviser with lawful and appropriate assistance in the
performance of its investment decision-making responsibilities." Accordingly,
the price to the Portfolio in any brokerage transaction may be less favorable
than that available from another broker if the difference is reasonably
justified by other aspects of the portfolio execution services offered.
Broker-dealers utilized by the Investment Adviser may furnish
statistical, research and other information or services which are deemed by the
Investment adviser to be beneficial to the Portfolio's investment program.
Research services received from brokers supplement the Investment Adviser's own
research and may include the following types of information: statistical and
background information on industry groups and individual companies; forecasts
and interpretations with respect to U.S. and foreign economics, securities,
markets, specific industry groups and individual companies; information on
political developments; portfolio management strategies; performance information
on securities and information concerning prices of securities; and information
supplied by specialized services to the Investment Adviser and to the Portfolio
with respect to the performance, investment activities and fees and expenses of
other mutual funds. Such information may be communicated electronically, orally
or in written form. Research services may also include the providing of
equipment used to communicate research information, the arranging of meetings
with management of companies and the providing of access to consultants who
supply research information.
The outside research assistance is useful to the Investment Adviser
since the brokers utilized by the Investment Adviser as a group tend to follow a
broader universe of securities and other matters than the staff of the
Investment Adviser can follow. In addition, this research provides the
Investment Adviser with a diverse perspective on financial markets. Research
services which are provided to the Investment Adviser by brokers are available
for the benefit of all accounts managed or advised by the Investment Adviser. It
is the opinion of the Investment Adviser that this material is beneficial in
supplementing their research and analysis; and, therefore, it may benefit the
Portfolio by improving the quality of the Investment Adviser's investment
advice.
TAXES
It is the policy of the Trust to distribute each fiscal year
substantially all of the Fund's net investment income and net realized capital
gains, if any, to shareholders. The Trust intends that the Fund will qualify as
a regulated investment company under the provisions of the Internal Revenue Code
of 1986, as amended (the "Code"). If so qualified, the Fund will not be subject
to federal income tax on that part of its net investment income and net realized
capital gains which it distributes to its shareholders. To qualify for such tax
treatment, the Fund must generally, among other things: (a) derive at least 90%
of its gross income from dividends, interest, payments received with respect to
loans of stock and securities, and gains from the sale or other disposition of
stock or securities and certain related income; and (b) diversify its holdings
so that at the end of each fiscal quarter (i) 50% of the market value of the
Fund's assets is represented by cash, Government Securities, securities of other
regulated investment companies, and other securities limited, in respect of any
one issuer, to an amount not greater than 5% of the Fund's assets or 10% of the
voting securities of any issuer, and (ii) not more than 25% of the value of its
assets is invested in the securities of any one issuer (other than Government
Securities).
The Portfolio has elected to be treated as a partnership for federal
income tax purposes and therefore believes that it will not be required to pay
any federal or state income or excise taxes. Any interest,
-14-
<PAGE>
dividends, gains and losses of the Portfolio will be deemed to pass through to
the Fund in proportion to the Fund's ownership interest in the Portfolio. Thus,
to the extent that the Portfolio accrues but does not distribute income or
gains, the Fund will be deemed to have realized and recognized its proportionate
share of interest, dividends and gains, regardless of whether there has been a
distribution of such items to the Fund. The Portfolio will seek to minimize
recognition by its investors, including the Fund, of interest, dividends and
gains without a distribution.0
The Code requires regulated investment companies to pay a
nondeductible 4% excise tax to the extent they do not distribute 98% of their
ordinary income, determined on a calendar year basis, and 98% of their capital
gains, determined on an October 31 year end. The Trust intends to distribute
the income and capital gains of the Funds in the manner necessary to avoid
imposition of the 4% excise tax by the end of each calendar year.
Dividends of the Funds declared in October, November or December and
paid the following January will be taxable to shareholders as if received on
December 31 of the year in which they are declared.
PERFORMANCE INFORMATION
Calculation of Yield. Quotations of the "current yield" and
--------------------
"effective yield" of Institutional Shares and Administrative Shares may be used
in advertisements, sales materials and shareholder reports. Current yield is
the simple annualized yield for an identified seven calendar day period. This
yield calculation is based on a hypothetical account having a balance of exactly
one share of the Fund at the beginning of the seven-day period. The base period
return is the net change in the value of the hypothetical account during the
seven-day period, including dividends declared on any shares purchased with
dividends on the shares but excluding any capital changes. Yield will vary as
interest rates and other conditions change. Yields also depend on the quality,
length of maturity and type of instruments held and operating expenses of the
Fund. Because the expenses of Institutional Shares and Administrative Shares
differ, the yield of each class of the Fund's shares will differ.
Effective yield is computed by compounding the unannualized seven-day
period return as follows: by adding 1 to the unannualized seven-day base period
return, raising the sum to a power equal to 365 divided by 7, and subtracting 1
from the result.
365/7
Effective yield = [(base period return + 1) ]-1
Calculation of Total Return. Quotations of average annual total
---------------------------
return and other total return data relating to Institutional Shares and
Administrative Shares may also be used in advertisements, sales materials and
shareholder reports. Average annual total return quotations for the specified
periods are computed by finding the average annual compounded rates of return
(based on net investment income and any realized and unrealized capital gains or
losses on investments over such periods) that would equate the initial amount
invested to the redeemable value of such investment at the end of each period.
In making these computations, all dividends and distributions are assumed to be
reinvested and all applicable recurring and non-recurring expenses are taken
into account. The Fund also may quote annual, average annual and annualized
total return and aggregate total return performance data, both as a percentage
and as a dollar amount based on a hypothetical investment amount, for various
periods. The total return of Institutional Shares and Administrative Shares
will differ because their expenses differ.
Total return quotations will be computed in accordance with the
following formula, except that as required by the periods of the quotations,
actual annual, annualized or aggregate data, rather than average annual data,
may be quoted:
n
P (1+T) = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
-15-
<PAGE>
n = number of years
ERV = ending redeemable value of the
hypothetical $1,000 payment made at the beginning of the period.
Actual annual or annualized total return data generally will be lower
than average annual total return data because the average rates of return
reflect compounding of return. Aggregate total return data, which is calculated
according to the following formula, generally will be higher than average annual
total return data because the aggregate rates of return reflect compounding over
longer periods of time:
ERV - P
-------
P
Where: P = a hypothetical initial payment of $1,000.
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period.
Yield and total return quotations are based upon historical investment
performance and is not intended to indicate future performance. Yield and total
return will fluctuate and will depend upon not only changes in prevailing
interest rates, but also upon any realized gains and losses and changes in
expenses.
Performance Comparisons. From time to time and only to the extent the
-----------------------
comparison is appropriate, the performance of Institutional Shares and
Administrative Shares may be compared to the performance of various indices and
investments for which reliable performance data is available. Performance of
Institutional Shares and Administrative Shares may also be compared to averages,
performance rankings and other information prepared by recognized mutual fund
statistical services.
Quotations of performance used in advertising and other types of
literature may be compared to the 91-Day Treasury Bill Average (Federal
Reserve), Lipper Money Market Fund Average, Donoghue Taxable Money Market Fund
Average, Salomon Three-Month Treasury Bill Index, or Bank Averages, which are
calculated from figures supplied by the U.S. League of Savings Institutions
based on effective annual rates of interest on both passbook and certificate
accounts. Savings accounts offer a guaranteed return of principal and a fixed
rate of interest. The performance of Institutional Shares and Administrative
Shares also may be compared to the Consumer Price Index, as published by the
U.S. Bureau of Labor Statistics, which is an established measure of change over
time in the prices of goods and services in major expenditure groups.
Performance comparisons to other mutual funds having investment
objectives similar to those of the Fund may also be used. This comparative
performance could be expressed as a ranking prepared by Lipper Analytical
Services, Inc., Donoghue's Money Fund Report, including Donoghue's Taxable Money
Market Fund Average or Morningstar, Inc., independent services which monitor the
performance of mutual funds.
Of course, past performance is no guarantee of future investment
results.
ADDITIONAL INFORMATION
Description of the Trust and its Shares. The Trust was organized on
---------------------------------------
July 7, 1998, as a business trust under the laws of the State of Delaware.
Interests in the Fund are represented by shares of beneficial
interest, $.001 par value. The Trust is authorized to issue an unlimited number
of shares, and may issue shares in series, with each series representing
interests in a separate portfolio of investments (a "series"). As of the date
of this Statement of Additional
-16-
<PAGE>
Information, shares representing interests in the Fund constitute the sole
series of the Trust's shares outstanding. Two classes of the Fund's shares
(Institutional Shares and Administrative Shares) have been authorized.
Each share of each class represents an equal proportionate interest in
that Fund with each other share of that class, without any priority or
preference over other shares. All consideration received for the sales of the
Fund, all assets in which such consideration is invested, and all income,
earnings and profits derived therefrom are allocated to and belong to that Fund.
As such, the interest of shareholders in the Fund will be separate and distinct
from the interest of shareholders of any other funds which may be represented by
other series of shares of the Trust, and shares of the Fund will be entitled to
dividends and distributions only out of the net income and gains, if any, of the
Fund as declared by the Board of Trustees of the Trust. The assets of the Fund
and those of each other series of the Trust that may be authorized will be
segregated on the Trust's books and will be charged with the expenses and
liabilities of that series and a pro rata share of the general expenses and
liabilities of the Trust not attributable solely to any particular series. The
Board of Trustees determines those expenses and liabilities deemed to be general
expenses and liabilities of the Trust, and these items will be allocated among
Fund and other series of the Trust in a manner deemed fair and equitable by the
Board of Trustees in its sole discretion.
The Board of Trustees may create additional classes of shares of the
Funds. Except for the different distribution related and other specific costs
borne by each class of the Fund's shares, shares of each class have the same
voting and other rights. These varying costs will result in different dividends
for each class.
Annual meetings of shareholders of the Trust will not be held except
as required by the 1940 Act or other applicable law. A meeting will be held on
the removal of a Trustee or Trustees of the Trust if requested in writing by
shareholders representing not less than 10% of the outstanding shares of the
Trust. The Trust will assist in communications among shareholders as required
by Section 16(c) of the 1940 Act.
The Portfolio and MIP. The Fund pursues its investment objective by
---------------------
investing all of its investable assets in the Portfolio. The Portfolio is a
newly formed series of MIP, an open-end management investment company that is
organized as a Delaware business trust. MIP was formed on October 21, 1993. In
accordance with Delaware law and in connection with the tax treatment sought by
MIP, the Declaration of Trust of MIP provides that investors in MIP are
personally responsible for Trust liabilities and obligations, but only to the
extent that MIP's property is insufficient to satisfy such liabilities and
obligations. The MIP Declaration of Trust also provides that MIP shall maintain
appropriate insurance (for example, fidelity bonding and errors and omissions
insurance) for the protection of the MIP, its investors, Trustees of MIP,
officers, employees and agents covering possible tort and other liabilities, and
that investors will be indemnified to the extent that they are held liable for a
disproportionate share of MIP's obligations.
Interests in the Portfolio have substantially identical voting and
other rights as those right discussed above with respect to the Trust. Whenever
the Fund has the right to vote on any matter relating to MIP or the Portfolio by
virtue of its investment in the Portfolio, the Fund will hold a meeting of its
shareholders and will cast its vote as an investor in the Portfolio in the same
proportion as shares of the Fund are voted.
Trustee and Officer Liability. Under the Trust's Declaration of Trust
-----------------------------
and its By-Laws, and under Delaware law, the Trustees, officers, employees and
agents of the Trust are entitled to indemnification under certain circumstances
against liabilities, claims and expenses arising from any threatened, pending or
completed action, suit or proceeding to which they are made parties by reason of
the fact that they are or were such Trustees, officers, employees or agents of
the Trust, subject to the limitations of the 1940 Act which prohibit
indemnification which would protect such persons against liabilities to the
Trust or its shareholders to which they would otherwise be subject by reason of
their own bad faith, willful misfeasance, gross negligence or reckless disregard
of duties. Similar provisions are contained in the Declaration of Trust of MIP.
Control Persons. As of the date of this Statement of Additional
---------------
Information, Hewitt Associates LLC was the sole owner of shares of the Fund. So
long as such ownership of shares continues to exceed 25% of the outstanding
shares of the Fund, Hewitt Associates LLC will be deemed to control the Fund by
virtue of such
-17-
<PAGE>
ownership. Through the exercise of voting rights with respect to shares of the
Fund, Hewitt Associates LLC may be able to determine the outcome of shareholder
voting on matters as to which approval of shareholders is required.
Independent Auditors. KPMG Peat Marwick LLP, Three Embarcardero
--------------------
Center, San Francisco, California, 94111, are the independent auditors of the
Trust. The independent auditors are responsible for auditing the financial
statements annually and prepare the tax returns of the Fund. KPMG Peat Marwick
LLP also serve as the independent auditors of MIP and audit the financial
statements of the Porfolio. The selection of the independent auditors for the
Trust and MIP is approved annually by their respective Boards of Trustees.
Custodian. Investors Bank & Trust Company, 200 Clarendon Street, 16th
---------
Floor, Boston, Massachusetts, 02116, serves as custodian of the Fund and the
Portfolio and maintains custody of the securities and similar assets of the Fund
and the Portfolio. Cash held by the custodian, which may at times be
substantial, is insured by the Federal Deposit Insurance Corporation up to the
amount of available insurance coverage limits (presently, $100,000). Investors
Bank & Trust Company also maintains the accounting books and records of the Fund
and provides sub-administrative services.
Transfer Agent. Investors Bank & Trust Company, 200 Clarendon Street,
--------------
16th Floor, Boston, Massachusetts, 02116,(the "Transfer Agent") serves as the
Fund's transfer agent and dividend disbursing agent.
Shareholder Reports. Shareholders of the Fund are kept fully informed
-------------------
through annual and semi-annual reports showing diversification of investments,
securities owned and other information regarding the activities of the Fund.
Legal Counsel. Schulte Roth & Zabel LLP, New York, New York, serves
-------------
as counsel to the Trust.
Registration Statement. This Statement of Additional Information and
----------------------
the Prospectus do not contain all of the information set forth in the
Registration Statement the Trust has filed with the SEC. The complete
Registration Statement may be obtained from the SEC upon payment of the fee
prescribed by the rules and regulations of the SEC.
Financial Statements. The statement of assets and liabilities of the
--------------------
Fund as of August 31, 1998, included in this Statement of Additional Information
has been audited by KPMG Peat Marwick LLP, independent public accountants, as
indicated by their report thereon. The financial statements are included herein
in reliance upon the authority of said firm as experts in accounting and
auditing in giving said report.
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<PAGE>
AUDIT OF STATEMENT OF ASSETS AND LIABILITIES AS OF AUGUST 31, 1998
Hewitt Money Market Fund
Statement of Assets and Liabilities
August 31, 1998
<TABLE>
<S> <C>
ASSETS:
Cash............................................... $100,000
--------
Total Assets....................................... 100,000
LIABILITIES:
Total Liabilities.................................... 0
NET ASSETS:............................................. $100,000
========
Net assets consist of:
Paid-in Capital.................................... $100,000
NET ASSETS:............................................. $100,000
========
Administrative Shares.............................. 70,000
Institutional Shares............................... $ 30,000
Shares outstanding:
Administrative Shares.............................. 7,000
Institutional Shares............................... 3,000
NET ASSET VALUE:
Administrative Shares.............................. $ 10.00
Institutional Shares............................... $ 10.00
</TABLE>
See Notes to Statement of Assets and Liabilities
HEWITT MONEY MARKET FUND
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
August 31, 1998
Note 1 - Organization and Summary of Significant Accounting Policies:
(A) General: The Hewitt Money Market Fund (the "Fund"), a series
of Hewitt Series Trust (the "Trust"), is a diversified open-end management
investment company registered under the Investment Company Act of 1940, as
amended. The Company was established as a Delaware business trust organized
pursuant to a Declaration of Trust dated July 7, 1998. The objective of the Fund
is to provide a high level of income while preserving capital and liquidity by
investing in high quality, short-term securities. The Fund presently offers two
classes of shares, Administrative Shares and Institutional Shares. Shares of
each class have identical interests in the portfolio of the Fund and have the
same rights. As of August 31, 1998, the Fund had no operations other than
organizational matters and the issuance and sale of initial shares to Hewitt
Associates LLC on August 31, 1998.
(B) Federal Taxes: The Fund has elected and intends to qualify
each year as a "regulated investment company" under Subchapter M of the Internal
Revenue Code. If so qualified, the Fund will not be subject to federal income
tax to the extent it distributes its net income to shareholders.
Note 2 - Investment Adviser
The Fund pursues its investment objective by investing all of its
investable assets in the Money Market Master Portfolio (the "Portfolio"), which
is a series of Master Investment Portfolio ("MIP"). The Portfolio has the same
investment objective and substantially the same investment policies as the Fund.
Barclays Global Fund Advisors, Inc. (the "Investment Adviser") serves as the
Portfolio's investment adviser. For their services, the Adviser is paid by the
Portfolio a fee at an annual rate of 0.10% of the Fund's average daily net
assets.
Note 3 - Administrative, Distribution and Shareholder Servicing Fees
Hewitt Associates LLC (the "Administrator") provides
administrative services to the Fund. Services provided by the Administrator
include, but are not limited to: managing the daily operations and business
affairs of the Fund, subject to the supervision of the Board of Trustees;
overseeing the preparation and maintenance of all documents and records required
to be maintained by the Fund and the Trust; preparing or assisting in the
preparation of regulatory filings, prospectuses and shareholder reports;
providing, at its own expense, the services of its personnel to serve as
officers of the Trust; and preparing and disseminating material for meetings of
the Board of Trustees and shareholders. The Fund pays the Administrator a
monthly fee calculated at an annual rate of 0.10% of the Fund's average daily
net assets. The administrator has agreed to waive its fees or absorb expenses of
the Fund to the extent necessary to assure that total ordinary operating
expenses of Institutional and Administrative Shares on an annual basis do not
exceed 0.45% and 0.75% of the average daily net assets of the Fund attributable
to Institutional and Administrative Shares, respectively. The Administrator may
not modify or terminate these waiver agreements without the approval of the
Board of Trustees of the Trust.
Hewitt Services LLC (the "Distributor") serves as the Distributor
of the Fund's shares. The Fund has adopted a plan pursuant to Rule 12b-1 under
the Investment Company Act which allows the Fund to pay expenses relating to the
distribution of Administrative Shares. Under the plan, the Fund pays a fee to
the Distributor, calculated at an annual rate of 0.25% of the average daily net
assets of Administrative Shares, as compensation for services rendered in
connection with the sale and distribution of Administrative Shares. This fee is
an expense of Administrative Shares only and is not borne by Institutional
Shares.
Hewitt Associates LLC also serves as the shareholder servicing
agent (the "Shareholder Servicing Agent") for Institutional Shares. The
Shareholder Servicing Agent is responsible for receiving on behalf of the
Transfer Agent orders by employee benefit plans to purchase and redeem
Institutional Shares. The Shareholder Servicing Agent is also responsible for
maintaining records showing the number of Institutional Shares allocable to
individual participant accounts in those plans. In addition, the Shareholder
Servicing Agent sends all shareholder communications relating to the Fund to
shareholders and to plan participants or arranges for these materials to be
sent. For these services, the Fund pays Hewitt Associates LLC a monthly fee
calculated at an annual rate of 0.20% of the average daily net assets of the
Fund attributable to Institutional Shares.
The Fund has retained the Distributor to serve as Shareholder
Servicing Agent for Administrative Shares. As Shareholder Servicing Agent, the
Distributor is responsible for maintaining records showing the number of
Administrative Shares owned by IRAs established through the Distributor and by
other investors who have purchased Administrative Shares through the
Distributor. In addition, the Distributor sends all shareholder communications
relating to the Fund to holders of Administrative Shares or arranges for all
these materials to be sent. For these services, the Fund pays the Distributor a
monthly fee calculated at an annual rate of 0.25% of the average daily net
assets of the Fund attributable to Administrative Shares. The Fund also
reimburses each Shareholder Servicing Agent for certain out-of-pocket expenses.
-19-
<PAGE>
REPORT ON AUDIT OF STATEMENT OF ASSETS AND LIABILITIES AS OF AUGUST 31, 1998
The Board of Trustees
Hewitt Money Market Fund:
We have audited the accompanying statement of assets and liabilities of Hewitt
Money Market Fund (the "Fund") as of August 31, 1998. This financial statement
is the responsibility of the Fund's management. Our responsibility is to express
an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we 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
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of Hewitt
Money Market Fund as of August 31, 1998, in conformity with generally accepted
accounting principles.
San Francisco, California
August 31, 1998
-20-
<PAGE>
SAI APPENDIX
The following is a description of the ratings given by Moody's and S&P
to corporate bonds and commercial paper.
CORPORATE BONDS
Moody's: The four highest ratings for corporate bonds are "Aaa,"
-------
"Aa," "A" and "Baa." Bonds rated "Aaa" are judged to be of the "best quality"
and carry the smallest amount of investment risk. Interest payments are
protected by a large or by an exceptionally stable margin and principal is
secure. Bonds rated "Aa" are of "high quality by all standards," but margins of
protection or other elements make long-term risks appear somewhat greater than
"Aaa" rated bonds. Bonds rated "A" possess many favorable investment attributes
and are considered to be upper medium grade obligations. Bonds rated "Baa" are
considered to be medium grade obligations; interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds have speculative characteristics as well. Moody's applies numerical
modifiers "1," "2" and "3" in each rating category from "Aa" through "Baa" in
its rating system. The modifier "1" indicates that the security ranks in the
higher end of its category; the modifier "2" indicates a mid-range ranking; and
the modifier "3" indicates that the issue ranks in the lower end.
S&P: The four highest ratings for corporate bonds are "AAA," "AA,"
---
"A" and "BBB." Bonds rated "AAA" have the highest ratings assigned by S&P and
have an extremely strong capacity to pay interest and repay principal. Bonds
rated "AA" have a "very strong capacity to pay interest and repay principal" and
differ "from the highest rated issued only in small degree." Bonds rated "A"
have a "strong capacity" to pay interest and repay principal, but are "somewhat
more susceptible" to adverse effects of changes in economic conditions or other
circumstances than bonds in higher rated categories. Bonds rated "BBB" are
regarded as having an "adequate capacity" to pay interest and repay principal,
but changes in economic conditions or other circumstances are more likely to
lead to a "weakened capacity" to make such repayments. The ratings from "AA" to
"BBB" may be modified by the addition of a plus or minus sign to show relative
standing within the category.
CORPORATE COMMERCIAL PAPER
Moody's: Moody's employs the designations of "Prime-1," "Prime-2" and
-------
"Prime-3" to indicate the relative capacity of the rated issuers or borrowers to
repay punctually. The highest rating for corporate commercial paper is "Prime-
1." Issuers rated "Prime-1" have a "superior capacity for repayment of short-
term promissory obligations," and will normally be evidenced by leading market
positions in well established industries, high rates of return on funds
employed, conservative capitalization structures with moderate reliance on debt
and ample asset protection, broad margins in earnings coverage of fixed
financial charges and highinternal cash generation, and well established access
to a range of financial markets and assured sources of alternate liquidity.
Issuers rated "Prime-2" "have a strong capacity for repayment of short-term
promissory obligations," but earnings trends, while sound, will be subject to
more variation.
S&P: The "A-1" rating for corporate commercial paper indicates that
---
the "degree of safety regarding timely payment is either overwhelming or very
strong." Commercial paper with "overwhelming safety characteristics" will be
rated "A-1+." Commercial paper with a strong capacity for timely payments on
issues will be rated "A-2."
-21-
<PAGE>
PART C
OTHER INFORMATION
Item 23. Exhibits.
Exhibit
Number Description
------ -----------
(a) Declaration of Trust, dated July 6, 1998.
(b) By-Laws of Registrant.
(c) Certificate of Trust, dated July 6, 1998.
(d) Not Applicable.
(e) Distribution Agreement, dated September 1, 1998.
(f) Not Applicable.
(g) Custodian Agreement, dated September 1, 1998.
(h)(1) Administration Agreement, dated September 1, 1998.
(h)(2) Transfer Agency and Service Agreement, dated
September 1, 1998.
(h)(3) Sub-Administration Agreement, dated September 1,
1998.
(h)(4) Shareholder Services Agreement (Institutional),
dated September 1, 1998.
(h)(5) Shareholder Services Agreement (Administrative),
dated September 1, 1998.
(h)(6) Third Party Feeder Fund Agreement, dated September
1, 1998.
(i) Legal Opinion.
(j) Consent of Independent Auditors.
(k) Not Applicable.
(l) Agreement Regarding Initial Capital.
(m) Rule 12b-1 Plan.
(n) Financial Data Schedule.
(o) Rule 18f-3 Plan.
<PAGE>
Item 24. Persons Controlled by or Under Common Control with Registrant.
Hewitt Associates LLC, which serves as the Administrator of
Registrant, supplied the initial seed capital and is the sole initial owner of
shares of Registrant as of the date of this filing. Therefore, Registrant may be
deemed to be controlled by Hewitt Associates LLC and its parent, Hewitt Holdings
LLC, and may also be deemed to be under common control with Hewitt Services LLC,
which will serve as the Distributor of shares of Registrant.
Item 25. Indemnification.
As permitted by Section 17(h) and (i) of the Investment Company Act of
1940, as amended (the "Investment Company Act"), and pursuant to Article VI of
Registrant's By-Laws, officers, trustees, employees and agents of Registrant may
be indemnified against certain liabilities in connection with Registrant, and
pursuant to Section 9 of the Distribution Agreement, Hewitt Services LLC as
principal underwriter of Registrant, may be indemnified against certain
liabilities which it may incur. Such Article VI of the By-Laws and Section 9 of
the Distribution Agreement are hereby incorporated by reference in their
entirety.
Registrant intends to maintain an insurance policy insuring its
officers and trustees against certain liabilities, and certain costs of
defending claims against such officers and trustees, and to bear the costs of
such policy except for such costs as is determined to be attributable to
coverage protecting such persons against liabilities to which they may become
subject as a consequence of their own willful misfeasance, bad faith, gross
negligence or reckless disregard in the performance of their duties. The
insurance policy will also insure Registrant against the cost of indemnification
payments to officers and trustees under certain circumstances.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "1933 Act"), may be permitted to
trustees, officers and controlling persons of Registrant and the principal
underwriter pursuant to the foregoing provisions or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses incurred or
paid by a trustee, officer, or controlling person of Registrant and the
principal underwriter in connection with the successful defense of any action,
C-2
<PAGE>
suit or proceeding) is asserted against Registrant by such trustee, officer or
controlling person or the principal underwriter in connection with the shares
being registered, 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 1933 Act and will be governed by the
final adjudication of such issue.
Registrant hereby undertakes that it will apply the indemnification
provisions of its By-Laws in a manner consistent with Release No. 11330 of the
Securities and Exchange Commission under the Investment Company Act so long as
the interpretations of Sections 17(h) and 17(i) of the Investment Company Act
remain in effect and are consistently applied.
Item 26. Business and Other Connections of Investment Adviser.
Registrant does not have an investment adviser because it pursues its
investment objective by investing its assets in the Money Market Master
Portfolio, a series of Master Investment Portfolio, a registered open-end
management company. The Investment Adviser of Money Market Master Portfolio is
Barclays Global Fund Advisors. The information required by this Item 26 with
respect to Barclays Global Fund Advisors is incorporated by reference to Form N-
1A of Masterworks Fund Inc., filed July 2, 1998, accession number 0000929624-98-
00127.
Item 27. Principal Underwriters.
(a) None.
(b)
<TABLE>
<CAPTION>
Positions and Positions and
Offices with Offices with
Name Distributor Fund
- - - --------------------------- ------------------------- -----------------
<S> <C> <C>
John M. Ryan Chief Executive Oficer
James B. Lee Chief Financial Officer Treasurer/ Chief
Financial Officer
Peter E. Ross Chief Compliance Officer/ Secreatry
Assistant Secretary
C. Lawrence Connolly, III General Counsel/
Secretary
Stacy L. Schaus Marketing Director/ President
Chief Operating Officer
</TABLE>
C-3
<PAGE>
The principal business address of each of the above persons is 100 Half Day
Road, Lincolnshire, Illinois 60069.
(c) The Distributor does not receive compensation for its services
as principal underwriter, except that it will be paid a fee for services
rendered in connection with the distribution of Administrative Shares of
Registrant. See "Distribution and Servicing Arrangements" in Part A and
"Distribution Arrangements" in Part B.
Item 28. Location of Accounts and Records.
All accounts books and other documents required to be maintained by
Registrant by Section 31(a) of the Investment Company Act of 1940 and the rules
thereunder are maintained by Investors Bank & Trust Company, 200 Clarendon
Street, 16th Floor, Boston Massachusetts, 02116, which serves as Registrant's
custodian and transfer agent, except for records required by paragraph (b)(4) of
Rule 31a-1 which will be maintained at the offices of Hewitt Associates LLC, 100
Half Day Road, Lincolnshire, Illinois 60069.
Item 29. Management Services.
Not Applicable.
Item 30. Undertakings.
Not Applicable.
C-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, Hewitt Series Trust, has duly
caused this Amended Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the city of Lincolnshire and State of
Illinois, on the 31st day of August, 1998.
Hewitt Series Trust
By: /s/ Stacy L. Schaus
--------------------
Stacy L. Schaus
President
Pursuant to the requirements of the Securities Act of 1933, this Pre-
Effective Amendment No. 1 to the Registration Statement of Registrant has been
signed below by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
- - - --------- ----- ----
<S> <C> <C>
/s/ E. Scott Peterson Trustee August 31, 1998
- - - -----------------------
E. Scott Peterson
/s/ Stacy L. Schaus President August 31, 1998
- - - ----------------------- (Principal Executive Officer)
Stacy L. Schaus
/s/ James B. Lee Treasurer and August 31, 1998
- - - ----------------------- Chief Financial Officer
James B. Lee (Principal Financial Officer)
</TABLE>
C-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amended
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized, in the city of Little Rock, State of Arkansas, on the 31st day
of August, 1998.
Master Investment Portfolio
By: /s/ Richard H. Blank, Jr.
-------------------------------
Richard H. Blank, Jr.
Secretary and Treasurer
(Principal Financial Officer)
Pursuant to the requirements of the Securities Act of 1933, this Pre-
Effective Amendment No. 1 to the Registration Statement of Registrant has been
signed below by the following persons in the capacities and on the dates
indicated.
Signature Title
- - - --------- -----
* Chairman, President (Principal
- - - ---------------------------- Executive Officer) and Trustee
R. Greg Feltus
/s/ Richard H. Blank, Jr. Secretary and Treasurer
- - - ---------------------------- (Principal Financial Officer)
Richard H. Blank, Jr.
* Trustee
- - - ----------------------------
Jack S. Euphrat
* Trustee
- - - ----------------------------
Thomas S. Goho
* Trustee
- - - ----------------------------
W. Rodney Hughes
* Trustee
- - - ----------------------------
J. Tucker Morse
August 31, 1998
* By: /s/ Richard H. Blank, Jr.
--------------------------
Richard H. Blank, Jr.
as Attorney-in-Fact
C-6
<PAGE>
INDEX TO EXHIBITS
Ex-27.1 Financial Data Schedule.
Ex-27.2 Financial Data Schedule.
Ex-99.A Declaration of Trust, dated July 6, 1998.
Ex-99.B By-Laws of Registrant.
Ex-99.C Certificate of Trust, dated July 6, 1998.
Ex-99.E Distribution Agreement, dated September 1, 1998.
Ex-99.G Custodian Agreement, dated September 1, 1998.
Ex-99.H1 Administration Agreement, dated September 1, 1998.
Ex-99.H2 Transfer Agency and Service Agreement, dated September 1, 1998.
Ex-99.H3 Sub-Administration Agreement, dated September 1, 1998.
Ex-99.H4 Shareholder Services Agreement (Institutional), dated September 1,
1998.
Ex-99.H5 Shareholder Services Agreement (Administrative), dated September 1,
1998.
Ex-99.H6 Third Party Feeder Fund Agreement, dated September 1, 1998.
Ex-99.I Opinion and Consent of Counsel.
Ex-99.J Consent of Independent Auditors.
Ex-99.L Agreement Regarding Initial Capital.
Ex-99.M Rule 12b-1 Plan.
Ex-99.O Rule 18f-3 Plan.
Ex-99.P Power of Attorney.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE HEWITT
MONEY MARKET FUND FORM N-SAR FOR THE PERIOD ENDED AUGUST 31, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 01
<NAME> HEWITT MONEY MARKET FUND ADMINISTRATIVE SHARES
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-28-1999
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 100,000
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 100,000
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 100,000
<SHARES-COMMON-STOCK> 7,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 70,000
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 70,000
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.00
<EXPENSE-RATIO> 0.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE HEWITT
MONEY MARKET FUND FORM N-SAR FOR THE PERIOD ENDED AUGUST 31, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 02
<NAME> HEWITT MONEY MARKET FUND INSTITUTIONAL SHARES
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-28-1999
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 100,000
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 100,000
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 100,000
<SHARES-COMMON-STOCK> 3,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 30,000
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 30,000
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.00
<EXPENSE-RATIO> 0.45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<PAGE>
EX-99.A
DECLARATION OF TRUST
OF
HEWITT SERIES TRUST
A DELAWARE BUSINESS TRUST
PRINCIPAL PLACE OF BUSINESS:
100 Half Day Road
Lincolnshire, IL 60069
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
ARTICLE I NAME AND DEFINITIONS................................................ 1
Section 1. Name ............................................................ 1
Section 2. Definitions...................................................... 1
ARTICLE II PURPOSE OF TRUST.................................................. 3
ARTICLE III SHARES OF BENEFICIAL INTEREST..................................... 3
Section 1. Description of Shares............................................ 3
Section 2. Ownership of Shares.............................................. 4
Section 3. Investments in the Trust; Consideration.......................... 4
Section 4. Status of Shares and Limitation of Personal Liability............ 4
Section 5. Power of Board of Trustees to Change Provisions
Relating to Shares............................................... 5
Section 6. Establishment and Designation of Series and Classes.............. 5
Section 7. Indemnification of Shareholders.................................. 7
ARTICLE IV THE BOARD OF TRUSTEES............................................. 8
Section 1. Number, Election and Tenure...................................... 8
Section 2. Effect of Death, Resignation, etc. of a Trustee.................. 8
Section 3. Powers........................................................... 9
Section 4. Payment of Expenses by the Trust.................................12
Section 5. Payment of Expenses by Shareholders..............................12
Section 6. Ownership of Assets of the Trust.................................12
Section 7. Service Contracts................................................13
ARTICLE V SHAREHOLDERS' VOTING POWERS........................................14
ARTICLE VI NET ASSET VALUE, DISTRIBUTIONS AND REDEMPTIONS....................14
Section 1. Determination of Net Asset Value, Net Income, Dividends and
Distributions....................................................14
Section 2. Redemptions and Repurchases......................................15
Section 3. Redemptions at the Option of the Trust...........................15
ARTICLE VII COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES.............15
Section 1. Compensation.....................................................15
Section 2. Indemnification and Limitation of Liability......................15
Section 3. Trustee's Good Faith Action; Expert Advice; No Bond or Surety....16
Section 4. Insurance........................................................16
ARTICLE VIII MISCELLANEOUS...................................................16
Section 1. Liability of Third Persons Dealing with Trustees.................16
Section 2 Termination of Trust or Series...................................17
Section 3. Merger and Consolidation.........................................17
Section 4. Amendments.......................................................18
Section 5. Filing of Copies; References; Headings...........................18
Section 6. Applicable Law...................................................18
Section 7. Provisions in Conflict with Law or Regulations...................18
Section 8. Business Trust Only..............................................19
Section 9. Use of the Name "Hewitt".........................................19
</TABLE>
<PAGE>
DECLARATION OF TRUST
OF
HEWITT SERIES TRUST
WHEREAS, THIS DECLARATION OF TRUST (the "Declaration") is made
and entered into as of the date set forth below by the Trustee hereunder (the
"Initial Trustee") for the purpose of forming a Delaware business trust in
accordance with the provisions hereinafter set forth,
NOW, THEREFORE, the Initial Trustee is filing a Certificate of
Trust with the Office of the Secretary of State of the State of Delaware and
hereby declares that all money and property contributed to the trust established
hereby shall be held and managed in trust for the benefit of the persons who may
from time to time hold beneficial interests issued hereunder and subject to the
provisions hereof, to wit:
ARTICLE I
NAME AND DEFINITIONS
Section 1. Name.
The name of the trust established hereby (the "Trust") is HEWITT
SERIES TRUST and, insofar as may be practicable, the Trustees shall conduct the
Trust's activities, execute all documents and sue or be sued under that name,
which name (and the word "Trust" wherever herein used) shall refer to the
Trustees as trustees, and not as individuals, or personally, and shall not refer
to the officers, agents, employees or Shareholders of the Trust. If the
Trustees determine that the Trust's use of such name is not advisable or if the
Trust is required to discontinue the use of such name pursuant to Article VIII,
Section 9 hereof, then, subject to that section, the Trustees may adopt such
other name for the Trust as they deem proper and the Trust may hold its property
and conduct its activities under such other name.
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 hereby, by whatever name it be known, inclusive of each and every
Series established hereunde r;
(b) The "Trust Property" means any and all assets and
property, real or personal, tangible or intangible, which are owned or held by
or for the account of the Trust or the Trustees, including without limitation
the rights referenced in Article VIII, Section 9 hereof;
-1-
<PAGE>
(c) "Trustee" refers to the individual Initial Trustee who has
signed this Declaration, so long as such persons continue in office in
accordance with the terms hereof, and all other individuals who may from time to
time be duly elected or appointed to serve as Trustees hereunder in accordance
with the provisions hereof, so long as such persons continue in office in
accordance with the terms hereof, and all references herein to a Trustee or the
Trustees shall refer to such person or persons in their capacity as trustees
hereunder;
(d) "Shares" means the units 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;
(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 "1940 Act" refers to the Investment Company Act of 1940
and the rules and regulations thereunder, all as amended from time to time and
any orders thereunder which may from time to time be applicable to the Trust;
(h) The terms "Commission" and "Principal Underwriter" shall have
the meanings given them in the 1940 Act;
(i) "Declaration" shall mean this Declaration of Trust, as
amended and in effect from time to time. Reference in this Declaration of Trust
to "Declaration," "hereof," "herein," "hereby," and "hereunder" shall be deemed
----------- ------ ------ ------ ---------
to refer to this Declaration rather than the article or section in which such
words appear;
(j) "By-Laws" shall mean the By-Laws of the Trust referred to in
Article IV, Section 3 hereof, as amended from time to time and incorporated
herein by reference;
(k) The term "Interested Person" has the meaning given it in the
1940 Act;
(l) "Investment 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 the Trust established and
designated under or in accordance with the provisions of Article III hereof;
(n) "Class" means a separately designated class of shares of a
Series established in accordance with the provisions of Article III of this
Declaration with such varying rights from each other Class of such Series as may
be established in accordance with the provisions of Article III of this
Declaration; and
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(o) "Board of Trustees" means such individuals who at any given
time constitute the Trustees.
ARTICLE II
PURPOSE OF TRUST
The purpose of the Trust is to conduct, operate and carry on the
business of a management investment company registered under the 1940 Act
through one or more Series investing primarily in securities.
ARTICLE III
SHARES OF BENEFICIAL INTEREST
Section 1. Description of Shares.
The beneficial interest in the Trust shall at all times be divided
into transferable units to be called Shares of Beneficial Interest, each with a
par value of one tenth of one cent ($.001). The Trustees may, from time to
time, authorize the division of Shares into separate Series and the division of
any Series into two or more separate Classes of Shares, as they deem necessary
and desirable. The different Series shall be established and designated, and
the variations in the relative rights and preferences as between the different
Series shall be fixed and determined, by the Trustees, without the requirement
of Shareholder approval. The sole initial Series of 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 in the By-
Laws, and holders of the Shares of any Series shall be entitled to receive
dividends, if and when 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 or Class with respect to dividends or
distributions upon termination of the Trust or of such Series or Class made
pursuant to Article VIII, Section 2 hereof. All dividends and distributions
shall be made ratably among all Shareholders of a particular Series or Class
thereof from the assets held with respect to such Series according to the number
of Shares of such Series or Class thereof from the assets held with respect to
such Series according to the number of Shares of such Series or Class 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 or Class. The Trustees may from
time to time divide or combine the Shares of any particular 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.
The number of authorized Shares and the number of Shares of each
Series and Class that may be issued is unlimited. The Trustees may classify or
reclassify any unissued
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Shares or any Shares previously issued and reacquired of any Series or Class
into one or more Series or Classes that are now or hereafter established and
designated from time to time. The Trustees may hold as treasury Shares, reissue
for such consideration and on such terms as they may determine, or cancel, at
their discretion from time to time, any Shares of any Series or Class reacquired
by the Trust.
Section 2. Ownership of Shares.
The ownership of Shares shall be recorded on the books of the Trust
or of a transfer or similar agent for the Trust, which books shall be maintained
separately for the Shares of each Series or Class. 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 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 who are
the Shareholders of each Series or Class and as to the number of Shares of each
Series or Class held by each Shareholder.
Section 3. Investments in the Trust; Consideration.
Shares of the Trust shall be offered for sale and sold in such
manner and at such times, and subject to such requirements and for such
consideration, as may be determined from time to time by the Trustees, subject
to applicable requirements of law, including the 1940 Act. To the extent
permitted by applicable law, Shares may be sold subject to imposition of such
sales charges, deferred sales charges, asset-based sales charges and redemption
fees as may be determined by the Trustees. All Shares when issued on the terms
determined by the Trustees shall be fully paid and nonassessable.
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 shall not
operate to terminate the Trust, and shall not 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 to any 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 Shareholders, nor, except as specifically provided herein, to call upon any
Shareholder for the payment of any sum of money or assessment whatsoever other
than such as the Shareholder may at any time personally agree to pay.
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Section 5. Power of Board of Trustees to Change Provisions Relating to Shares.
Notwithstanding any other provisions of this Declaration and
without limiting the power of the Board of Trustees to amend the Declaration as
provided elsewhere herein, the Board of Trustees shall have the power to amend
this Declaration, at any time and from time to time, in such manner as the Board
of Trustees may determine in its 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, 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 1940 Act or other applicable law. If Shares have been issued,
Shareholder approval shall be required to adopt any amendments to this
Declaration which would adversely affect to a material degree the rights and
preferences of the Shares of any Series or Class or to increase or decrease the
par value of the Shares of any Series or Class.
Subject to this Section 5, the Board of Trustees may amend the
Declaration of Trust to amend any of the provisions set forth in paragraphs (a)
through (g) of Section 6 of this Article III.
Section 6. Establishment and Designation of Series and Classes.
The sole initial Series of Shares of the Trust (the "Initial
Series"), which Series is hereby established and designated, is HEWITT MONEY
MARKET FUND. Until such time as may otherwise be determined by the Trustees in
accordance with this Declaration, there shall be two Classes of Shares of such
initial Series: INSTITUTIONAL SHARES and ADMINISTRATIVE SHARES. The relative
rights and preferences of each Class of Hewitt Money Market Fund shall be as set
forth herein; however, the varying obligations of such Classes with respect to
certain of the expenses of Hewitt Money Market Fund shall be as set forth in a
written plan meeting the requirements of and adopted by the Trustees in
accordance with Rule 18f-3 under the 1940 Act, which plan shall be adopted prior
to commencement of the operations of Hewitt Money Market Fund.
The establishment and designation of any additional Series or Class
shall be effective upon the execution by a majority of the Trustees of an
instrument setting forth such establishment and designation and the relative
rights and preferences of the Shares of such Series or Class, or as otherwise
provided in such instrument. Each instrument referred to in this paragraph
shall have the status of an amendment to this Declaration.
Shares of the Initial Series, and Shares of each additional Series
hereafter established pursuant to this Section 6, unless otherwise provided
herein or in the instrument establishing such Series, shall have the following
relative rights and preferences:
(a) Assets Held With Respect to a Particular Series or
--------------------------------------------------
Class. All consideration received by the Trust for the issuance or sale of
- - - -----
Shares of a particular Series or Class, together with all assets in which such
consideration is invested or reinvested, all income, earnings and profits
thereon, and the proceeds thereof, from whatever source derived, including,
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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 or Class for all purposes, subject only to the rights of
creditors of such Series, and shall be so recorded upon the books of account of
the Trust. All such consideration, assets, income, earnings, profits and
proceeds thereof of a Series or Class, are herein referred to as "assets held
with respect to" that Series or Class. 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 or
Class (collectively "General Assets"), the Trustees shall allocate such General
Assets to, between or 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, and any General Assets so allocated to a particular Series or
Class shall be assets held with respect to that Series or Class. Each such
allocation by the Trustees shall be conclusive and binding upon the Shareholders
of all Series and Classes for all purposes.
(b) Liabilities Attributable to a Particular Series or Class.
--------------------------------------------------------
The assets of the Trust held with respect to each particular Series and Class
thereof shall be charged with all liabilities, expenses, costs, charges and
reserves attributable to that Series or Class. All such liabilities, expenses,
costs, charges, and reserves so charged to a Series or Class are herein referred
to as "liabilities attributable to" that Series or Class. Any liabilities of the
Trust which are not readily identifiable as being attributable to any particular
Series or Class thereof ("General Liabilities") shall be allocated and charged
by the Trustees to, between or 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, and any General Liabilities so allocated to a particular
Series or Class shall be liabilities attributable to that Series or Class. Each
such 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, including, without
limitation, Article VI: (i) 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 or Class, and (ii) except as specifically provided
in Section 7 of this Article III, no Shareholder of any particular Series or
Class shall otherwise have any right or claim against the assets held with
respect to any other Series or Class except to the extent that such Shareholder
has such a right or claim hereunder as a Shareholder of such other Series or
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Class. The Trustees shall have full discretion, to the extent not inconsistent
with the 1940 Act, to determine which items shall be treated as income or
capital gains and which items shall be treated 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 by Class: that is, the Shareholders of each
Series and Class shall have the right to approve or disapprove matters affecting
the Trust and that Series and Class as if the Series or Class were separate
companies. There are, however, two exceptions to voting by separate Series and
Classes. First, if as to any matter the 1940 Act requires or permits all Shares
entitled to vote with respect to such matter to be voted in the aggregate
without differentiation between the separate Series or Classes, then all Shares
entitled to vote on such matter shall vote as a single class. 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 or Class
--------
shall represent an equal proportionate interest in the assets held with respect
to that Series or Class (subject to the liabilities attributable to that Series
or Class and such rights and preferences as may have been established and
designated with respect to such Series or Class), and each Share of any
particular Series or Class shall be equal to each other Share of that Series or
Class.
(f) Fractional Shares. Any fractional Share of a Series or Class
-----------------
shall carry proportionately all the rights and obligations of a whole share of
that Series or Class, including rights with respect to voting, receipt of
dividends and distributions, redemption of Shares and termination of the Trust.
(g) Exchange Privilege. The Trustees shall have the authority to
------------------
provide that the holders of Shares of any Series or Class shall have the right
to exchange said Shares for Shares of one or more other Series or Classes of
Shares in accordance with such requirements, limitations and procedures as may
be established by the Trustees.
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 Trust against all
loss and expense arising from such claim or demand.
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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 less than
one (1) nor more than fifteen (15). Except as required by the 1940 Act, Trustees
need not be elected by Shareholders. 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; except that a
vacancy shall be filled only by a person elected by Shareholders if required by
the 1940 Act.
Each Trustee shall serve during the continued lifetime of the Trust
until he 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 successor. Any Trustee may resign at any time
by written instrument signed by him 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 resignation or removal, or any right to damages on account of such
removal. The Shareholders may elect Trustees at any meeting of Shareholders
called by the Trustees for that purpose. Any Trustee may be removed at any
meeting of Shareholders by a vote of two-thirds of the outstanding Shares of the
Trust. A meeting of Shareholders for the purpose of electing or removing one or
more Trustees shall be called (i) by the Trustees upon their own vote, or (ii)
upon the demand of a Shareholder or Shareholders owning Shares representing 10%
or more of all votes entitled to be cast by outstanding Shares.
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. Whenever a vacancy in the Board of Trustees shall occur, until such
vacancy is filled as provided in Article IV, Section 1, 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. 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 Manager is hereby empowered to appoint new Trustees, subject
to the provisions of Section 16(a) of the 1940 Act.
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Section 3. Powers.
Subject to the provisions of this Declaration, 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.
Without limiting the foregoing, the Trustees may: (i) adopt By-Laws
not inconsistent with this Declaration providing for the regulation and
management of the affairs of the Trust and may amend and repeal the By-Laws to
the extent that such By-Laws do not reserve that right to the Shareholders; (ii)
elect persons to serve as Trustees and fill vacancies in the Board of Trustees,
and remove Trustees from such Board in accordance with the provisions of this
Declaration, and may elect and remove such officers and appoint and terminate
such agents as they consider appropriate; (iii) 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; (iv) employ one or more custodians of
the assets of the Trust and may authorize such custodians to employ sub-
custodians 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 a
transfer agent or a shareholder servicing agent, or both, and employ such other
Persons as the Trustees may deem desirable for the transaction of business of
the Trust or any Series; (v) provide for the issuance, sale and distribution of
Shares by the Trust directly or through one or more Principal Underwriters or
otherwise; (vi) redeem, repurchase, retire, cancel, acquire, hold, resell,
reissue, classify, reclassify, and transfer and otherwise deal in Shares
pursuant to applicable law; (vii) set record dates for the determination of
Shareholders with respect to various matters; (viii) declare and pay dividends
and distributions to Shareholders of each Series or Class from the assets of
such Series or Class; (ix) collect all property due to the Trust, pay all
claims, including taxes, against the Trust Property, prosecute, defend,
compromise or abandon any claims relating to the Trust Property, foreclose any
security interest securing any obligations by virtue of which any property is
owed to the Trust, and enter into releases, agreements and other instruments;
(x) incur and pay any expenses which, in the opinion of the Trustees, are
necessary or incidental to carry out the purposes of the Trust, and pay
reasonable compensation from the funds of the Trust to themselves as Trustees;
(xi) engage in and prosecute, defend, compromise, abandon, or adjust, by
arbitration or otherwise, any actions, suits, proceedings, disputes, claims and
demands relating to the Trust expenses incurred in connection therewith,
including those of litigation; (xii) indemnify any Person with whom the Trust
has dealings, including the Shareholders, Trustees, officers, employees, agents,
Investment Managers, or Principal Underwriters of the Trust, to the extent
permitted by law and not inconsistent with any applicable provisions of the By-
Laws as the Trustees shall determine; (xiii) determine and change the fiscal
year of the Trust or any Series and the method by which its accounts shall be
kept; (xiv) adopt a seal for the Trust or any Series; and (xv) 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, Investment Manager
or Principal Underwriter. Any determination made by the Trustees in good faith
as to what is in the interests of the Trust shall be conclusive. In construing
the provisions of this Declaration, the presumption shall be in favor of a grant
of power to the Trustees. Unless otherwise specified or required by law, any
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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 securities of every nature and kind, including, without limitation, all types
of stocks, bonds, bills, notes, debentures, options, 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 political
subdivision of the U.S. Government or any foreign government, or any
international instrumentality, or by any bank or saving 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" or "delayed
delivery" 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 rights to 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 sub-custodian 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
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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 a claim 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 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 Managers, Principal Underwriters, or
independent contractors of the Trust, individually against all claims and
liabilities of every nature arising by reason of holding Shares, holding 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 Manager, 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, subject to such limitations as may be imposed by law;
(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;
(n) To enter into futures contracts (including, but not limited
to, interest rate and stock index futures contracts) and options thereon; and
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(o) To conduct, operate and carry on any other lawful business
and engage in any other lawful business activity which the Trustees, in their
sole and absolute discretion, consider to be (i) incidental to the business of
the Trust as an investment company, (ii) conducive to or expedient for the
benefit or protection of the Trust or any Series or the Shareholders, or (iii)
calculated in any other manner to promote the interests of the Trust or any
Series or the Shareholders.
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 Managers, Principal Underwriters, 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 shall automatically cease to have any right, title or
interest in any of the Trust Property, and the right, title and interest of such
Trustee in the Trust Property shall vest automatically in the remaining
Trustees. Such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered.
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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 investment advisory, management and
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 one or more Investment Managers 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.
(c) The Trustees are also empowered, at any time and from time
to time, to contract with any corporation, trust, association or other
organization, appointing it the administrator, custodian, transfer agent or
shareholder servicing agent for the Trust or one or more of its Series.
(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 any Series or Class, as the Trustees determine to be in the best
interests of the Trust or the Series or Class.
(e) The fact that:
(i) any of the Shareholders, Trustees, or officers of the
Trust is a shareholder, director, officer, partner, trustee, employee,
Investment 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 that
(ii) any corporation, trust, association or other
organization with which an advisory, management or administration
contract or Principal Underwriter's or distributor's contract, or
transfer, 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 other organizations, or has other business or interests,
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shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same, or create any liability or accountability to the Trust or its
Shareholders, provided approval of each such contract is made pursuant to the
requirements of the 1940 Act.
ARTICLE V
SHAREHOLDERS' 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,
the By-Laws, the 1940 Act 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. Each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote, except that (i) Shares held in the
Treasury as of the record date, as determined in accordance with the By-Laws,
shall not be voted, and (ii) when Shares of more than one Series or Class vote
together on a matter as a single class, each Share (or fraction thereof) shall
be entitled to that number of votes which is equal to the net asset value of
such Share (or fractional Share) determined as of the applicable record date.
There shall be no cumulative voting in the election of Trustees.
Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action that the law, this Declaration or the By-
Laws require to be taken by Shareholders.
ARTICLE VI
NET ASSET VALUE, DISTRIBUTIONS AND REDEMPTIONS
Section 1. Determination of Net Asset Value, Net Income, Dividends and
Distributions.
Subject to Article III, Section 6 hereof, the Trustees, in their
absolute discretion, may prescribe such bases and times for valuing the net
assets of the Trust and determining the net asset value of Shares, which net
asset value shall be separately determined for each Series and Class, for
determining the net income attributable to the Shares of any Series or Class, or
for declaring and paying dividends and other distributions on Shares of any
Series or Class, as they may deem necessary or desirable.
The Trustees shall, in their sole discretion, consistent with
applicable law, determine whether any cash or property of the Trust or any stock
dividends received by the Shareholders shall be treated as income or as
principal and whether any item of expense shall be charged to the income or the
principal amount, and any such determination made in good faith shall be
conclusive and binding upon the Shareholders.
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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 by wire or check, in
accordance with applicable law, less the amount of any deferred sales charge or
redemption fee that is applicable. 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, except as may otherwise be permitted by the 1940 Act.
The redemption price may in any case or cases be paid wholly or
partly in kind if the Trustees determine that it would be detrimental to the
best interests of remaining Shareholders of the Series for which the Shares are
being redeemed to pay any redemption or redemptions in cash. 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 from any Shareholder at the net asset value thereof as described
in Section 1 of this Article VI if at such time, and as a result of one or more
redemptions of one or more Shares by such Shareholder, the aggregate net asset
value of the Shares in such Shareholder's account with the Trust or any Series
or Class is, as a result (in whole or part) of a redemption of Shares, less than
the minimum initial investment amount then applicable for investments in the
Trust or the applicable Series or Class, or such lesser amount, as the Trustees
may from time to time determine.
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 wrongdoing of any officer, agent, employee, Investment Manager or
Principal Underwriter of the
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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 duties as a
Trustee of the Trust to the fullest extent permitted by law; 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 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
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 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 discretions
hereunder shall be binding upon everyone interested. A Trustee shall be liable
to the Trust and to any Shareholder solely for his 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, 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
becomes involved by virtue of his 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.
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Section 2. Termination of Trust or 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
the holders of a majority of the outstanding 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 may be terminated at any time by vote of the
holders of a majority of the outstanding Shares of that Series or Class
respectively 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 (or the applicable
Series or Class), 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 (or the applicable Series or Class) to distributable form
in cash or shares or other securities, or any combination thereof, and
distribute the proceeds held with respect to each Series (or the applicable
Series or Class) 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 to
the extent consistent with applicable law to be merged into or consolidated with
another trust or company, (ii) 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, (iii) the sale of substantially all
of the assets of the Trust or one or more of its Series to another trust or
company in exchange for the assumption of the liabilities of the Trust or the
Series and the issuance of beneficial interests in such trust or company, or
(iv) 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,
sale of assets or Share exchange must be authorized by vote of the holders of a
majority of the outstanding Shares of the affected Series; provided that in all
respects not governed by applicable law, the Trustees shall have the power to
prescribe the procedures necessary or appropriate to accomplish the transaction
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). The Trustees may also cause substantially all of the assets of
any Series (the "Acquired Series") to be sold to another Series if authorized by
vote of the holders of a majority of the outstanding Shares of the Acquired
Series, and to the extent not governed by applicable law, the Trustees shall
have the power to prescribe the procedures necessary or appropriate to
accomplish the transaction. Upon consummation of any transaction contemplated by
this Section 3, the Trust or applicable Series, as the case may be, shall
distribute its remaining assets to Shareholders and terminate as provided by
Section 2 of this Article VIII.
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Section 4. Amendments.
(a) This Declaration may be restated or amended at any time by
an instrument in writing signed by a majority of the Trustees and, if required
by applicable law or this Declaration or the By-Laws, by approval of such
amendment by Shareholders in accordance with Article V hereof and the By-Laws.
Any such restatement or amendment hereto shall be effective immediately upon
execution and approval. The Certificate of Trust of the Trust may be restated or
amended by a similar procedure, and any such restatement 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.
(b) Nothing contained in this Declaration shall permit the
amendment of this Declaration to impair the exemption from personal liability of
the Shareholders, Trustees, officers, employees and agents of the Trust or to
permit assessments on Shareholders.
Section 5. Filing of Copies; References; Headings.
The original or a copy of this Declaration and of each restatement
and 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 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
Declaration or of any such restatement or amendment. 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 Declaration.
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 Declaration may be simultaneously executed in any number of
counterparts each of which shall be deemed an original, and such counterparts
together shall constitute one and the same instrument, which shall be
sufficiently evidenced by any such original counterpart.
Section 6. Applicable Law.
This Declaration 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 "Delaware
Act"). The Trust shall be a Delaware business trust pursuant to the Delaware
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 this Declaration are severable, and if the
Trustees shall determine, with the advice of counsel, that any of such
provisions is in conflict with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code of 1986, as amended, 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
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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 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 in any jurisdiction.
Section 8. Business Trust Only.
It is the intention of the Trustees to create a business trust
pursuant to the Delaware Act and thereby to create only the relationship of
trustee and beneficial owners within the meaning of the Delaware 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 the Delaware Act. Nothing in this Declaration 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 Name "Hewitt".
The Trust acknowledges that the name "Hewitt" and all rights to the
use of the name "Hewitt" in the name of the Trust and in connection with its
operations belongs to Hewitt Associates LLC. Hewitt Associates LLC has consented
to the use by the Trust of the identifying word "Hewitt" and has granted to the
Trust a non-exclusive license to use such words as part of the name of the Trust
and the name of any Series of Shares. In the event Hewitt Associates LLC or an
affiliate of Hewitt Associates LLC is not appointed as administrator or
distributor of the Trust or ceases to be the administrator or distributor of the
Trust or of any Series, the non-exclusive license granted herein may be revoked
in whole or in part by Hewitt Associates LLC and the Trust shall cease using the
name Hewitt as part of its name or the name of any Series of Shares, unless
otherwise consented to by Hewitt Associates LLC or any successor to its interest
in such name.
IN WITNESS WHEREOF, the Trustee named below hereby makes and enters
into this Declaration of Trust as of the 6th day of July, 1998.
/s/ E. Scott Peterson
-------------------------
E. Scott Peterson
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EX-99.B
BY-LAWS
OF
HEWITT SERIES TRUST
A DELAWARE BUSINESS TRUST
AS ADOPTED JULY 6, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I OFFICES.................................................... 5
SECTION 1. PRINCIPAL OFFICE......................................... 5
SECTION 2. DELAWARE OFFICE.......................................... 5
SECTION 3. OTHER OFFICES............................................ 5
ARTICLE II MEETINGS OF SHAREHOLDERS.................................. 6
SECTION 1. TIME AND PLACE OF MEETINGS............................... 6
SECTION 2. MEETINGS................................................. 6
SECTION 3. NOTICE OF MEETINGS....................................... 6
SECTION 4. QUORUM; ADJOURNMENTS..................................... 6
SECTION 5. VOTE REQUIRED............................................ 7
SECTION 6. VOTING................................................... 7
SECTION 7. PROXIES.................................................. 7
SECTION 8. PROCEDURES AT MEETINGS................................... 8
SECTION 9. INFORMAL ACTION BY SHAREHOLDERS.......................... 8
ARTICLE III TRUSTEES................................................. 8
SECTION 1. POWERS................................................... 8
SECTION 2. NUMBER OF TRUSTEES....................................... 8
SECTION 3. VACANCIES................................................ 8
SECTION 4. ANNUAL MEETINGS OF THE TRUSTEES.......................... 8
SECTION 5. REGULAR AND SPECIAL MEETINGS OF THE TRUSTEES............. 9
SECTION 6. NOTICE OF SPECIAL MEETING................................ 9
SECTION 7. QUORUM; ADJOURNMENT...................................... 9
SECTION 8. VOTING................................................... 9
SECTION 9. EXECUTIVE AND OTHER COMMITTEES........................... 9
SECTION 10. PARTICIPATION IN MEETINGS BY TELEPHONE..................10
SECTION 11. INFORMAL ACTION BY TRUSTEES.............................10
SECTION 12. COMPENSATION............................................10
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE IV WAIVER OF NOTICE........................................... 11
ARTICLE V OFFICERS.................................................... 11
SECTION 1. EXECUTIVE OFFICERS........................................ 11
SECTION 2. OTHER OFFICERS AND AGENTS................................. 11
SECTION 3. TENURE, RESIGNATION AND REMOVAL........................... 12
SECTION 4. VACANCIES................................................. 12
SECTION 5. COMPENSATION.............................................. 12
SECTION 6. AUTHORITY AND DUTIES...................................... 12
SECTION 7. CHAIRMAN.................................................. 12
SECTION 8. PRESIDENT................................................. 13
SECTION 9. VICE-PRESIDENTS........................................... 13
SECTION 10. ASSISTANT VICE-PRESIDENT................................. 13
SECTION 11. SECRETARY................................................ 13
SECTION 12. ASSISTANT SECRETARIES.................................... 14
SECTION 13. TREASURER................................................ 14
SECTION 14. ASSISTANT TREASURERS..................................... 14
ARTICLE VI INDEMNIFICATION OF TRUSTEES, OFFICERS, EMPLOYEES AND
OTHER AGENTS.......................................................... 14
SECTION 1. AGENTS, PROCEEDINGS AND EXPENSES.......................... 14
SECTION 2. ACTIONS OTHER THAN BY TRUST............................... 15
SECTION 3. ACTIONS BY THE TRUST...................................... 15
SECTION 4. EXCLUSION OF INDEMNIFICATION.............................. 15
SECTION 5. SUCCESSFUL DEFENSE BY AGENT............................... 16
SECTION 6. REQUIRED APPROVAL......................................... 16
SECTION 7. ADVANCE OF EXPENSES....................................... 16
SECTION 8. OTHER CONTRACTUAL RIGHTS.................................. 17
SECTION 9. LIMITATIONS............................................... 17
SECTION 10. INSURANCE................................................ 17
SECTION 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN..................... 17
</TABLE>
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<TABLE>
<S> <C>
ARTICLE VII RECORDS AND REPORTS....................................... 18
SECTION 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER.............. 18
SECTION 2. MAINTENANCE AND INSPECTION OF BY-LAWS..................... 18
SECTION 3. MAINTENANCE AND INSPECTION OF OTHER RECORDS............... 18
SECTION 4. INSPECTION BY TRUSTEES.................................... 18
SECTION 5. FINANCIAL STATEMENTS...................................... 18
ARTICLE VIII CONTRACTS, CHECKS AND DRAFTS............................. 19
SECTION 1. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS.................. 19
SECTION 2. CONTRACTS AND INSTRUMENTS; HOW EXECUTED................... 19
ARTICLE IX SHARES OF BENEFICIAL INTEREST.............................. 19
SECTION 1. CERTIFICATES OF SHARES.................................... 19
SECTION 2. TRANSFERS OF SHARES....................................... 19
SECTION 3. LOST CERTIFICATE.......................................... 20
SECTION 4. FIXING OF RECORD DATE..................................... 20
ARTICLE X FISCAL YEAR................................................. 21
ARTICLE XI SEAL....................................................... 21
ARTICLE XII FEDERAL SUPREMACY......................................... 21
ARTICLE XIII DECLARATION OF TRUST..................................... 21
ARTICLE XIV AMENDMENTS................................................ 21
</TABLE>
<PAGE>
BY-LAWS
OF
HEWITT SERIES TRUST
A DELAWARE BUSINESS TRUST
These By-Laws are made and adopted pursuant to Article IV, Section 3, of
the Declaration of Trust establishing Hewitt Series Trust (the "Trust"), dated
July 6, 1998, as from time to time amended (the "Declaration"). All words
capitalized in these By-Laws that are not otherwise defined herein shall have
the meaning or meanings set forth for such words or terms in the Declaration.
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 Trust at any place within or
without 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 in the State of Delaware
or a Delaware corporation or a foreign corporation authorized to transact
business in the State of Delaware; provided that, 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 an office or offices in
Linconshire, Illinois and at such other places within or without the State of
Delaware as the Trustees may from time to time designate or the business of the
Trust may require.
<PAGE>
ARTICLE II
MEETINGS OF SHAREHOLDERS
SECTION 1. TIME AND PLACE OF MEETINGS.
All meetings of Shareholders shall be held at such time and place, whether
within or without the State of Delaware, as shall be stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
SECTION 2. MEETINGS.
Meetings of Shareholders of the Trust or any Series (or Class) shall be
held whenever a vote of such Shareholders is required by the Declaration and at
such other times as the Trustees may determine to be necessary, appropriate or
advisable. Meetings of Shareholders to consider any matter as to which a vote
of Shareholders is required by the 1940 Act or is permitted to be requested by
Shareholders pursuant to the 1940 Act and as to which the Trustees have not
called a meeting of Shareholders shall be called by the secretary upon the
written request of the holders of Shares entitled to cast not less than ten
percent (10%) of all the votes then entitled to be cast on such matter at a
meeting of Shareholders. Such request shall state the purpose or purposes of
such meeting and the matters proposed to be acted on thereat. The secretary
shall inform such Shareholders of the estimated reasonable cost of preparing and
mailing such notice of the meeting. Upon payment to the Trust of such costs,
the secretary shall give notice stating the purpose or purposes of the meeting
to each Shareholder entitled to vote at such meeting. Unless requested by
Shareholders entitled to cast a majority of all votes entitled to be cast on
such matter, a meeting need not be called to consider any matter which is
substantially the same as a matter voted on at any meeting of Shareholders held
during the preceding twelve (12) months.
SECTION 3. NOTICE OF MEETINGS.
Written notice of each meeting of Shareholders stating the place, date and
hour thereof, and in the case of a special meeting, specifying the purpose or
purposes thereof, shall be given, to each Shareholder entitled to vote thereat,
not less than ten (10) nor more than ninety (90) days prior to the meeting
either by mail or by presenting it to such Shareholder personally or by leaving
it at his residence or usual place of business. If mailed, such notice shall be
deemed to be given when deposited in the United States mail, postage prepaid,
addressed to the Shareholder at his post office address as it appears on the
records of the Trust.
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 Declaration, (iii) a reorganization of the
Trust, or (iv) a voluntary dissolution of the Trust, the notice shall state the
general nature of that proposal.
SECTION 4. QUORUM; ADJOURNMENTS.
Except as otherwise provided by law, by the Declaration or by these By-
Laws, at all meetings of Shareholders the holders of Shares representing forty
percent (40%) of the Shares
<PAGE>
entitled to vote on a matter, present in person or represented by proxy, shall
be requisite and shall constitute a quorum for the transaction of business as to
such matter. This section shall not affect any applicable requirement of law or
the Declaration for the vote necessary for the adoption of any measure. In the
absence of a quorum, the Shareholders present in person or represented by proxy
and entitled to vote on a matter shall have power to adjourn the meeting with
respect to such matter from time to time without notice other than announcement
at the meeting until such quorum shall be present. The holders of Shares
entitled to cast not less than a majority of all the votes entitled to be cast
at such meeting on a matter shall also have the power to adjourn the meeting.
Written notice shall be given as required by this Article II, Section 3, if a
meeting is adjourned to a date more than one hundred twenty (120) days after the
record date originally scheduled with respect to the meeting. At any such
adjourned meeting at which a quorum shall be present, any business may be
transacted which might have been transacted had a quorum been present at the
time originally fixed for the meeting.
SECTION 5. VOTE REQUIRED.
Except as otherwise provided by applicable law, by the Declaration or by
these By-Laws and subject to the provisions of Article III, Section 6(d) of the
Declaration, when a quorum is present at any meeting, a majority of the Shares
voted shall decide all questions and a plurality shall elect a Trustee.
SECTION 6. VOTING.
At any meeting of Shareholders, each Shareholder having the right to vote
shall be entitled to vote in person or by proxy, and each Shareholder of record
shall be entitled to cast such number of votes as specified by Article V of the
Declaration for each Share (and fractional share) entitled to vote so registered
in his name on the records of the Trust on the date fixed as the record date for
the determination of Shareholders entitled to vote at such meeting. Shares held
by two or more persons (whether as joint tenants, co-fiduciaries or otherwise)
will be voted as follows, unless written instrument or court order providing to
the contrary has been filed with the secretary of the Trust: (1) if only one
votes, his vote will bind all; (2) if more than one votes, the vote of the
majority will bind all; and (3) if more than one votes and the vote is evenly
divided, the Shares will be voted in accordance with the determination of a
majority of such persons and any person appointed to act by a court of competent
jurisdiction, or, in the absence of such appointment, the vote will be cast
proportionately.
SECTION 7. PROXIES.
Each proxy shall be in writing executed by the Shareholder giving the proxy
or by his duly authorized attorney. Notwithstanding the foregoing, a
Shareholder may authorize another person or persons to act for him as proxy by
transmitting or authorizing the transmission of a telegram, cablegram or other
means of electronic transmission to the person who will be the holder of the
proxy or to a proxy solicitation firm, proxy support service organization or
like agent duly authorized by the person who will be the holder of the proxy to
receive such transmission, provided that any such telegram, cablegram or other
means of electronic transmission must either set forth or be submitted with
information from which it can be
<PAGE>
determined that the telegram, cablegram or other electronic transmission was
authorized by the Shareholder. No proxy shall be valid after the expiration of
eleven (11) months from its date, unless a longer period is provided for in the
proxy.
SECTION 8. PROCEDURES AT MEETINGS.
At all meetings of Shareholders, all questions relating to the
qualification of voters, the validity of proxies, the acceptance or rejection of
votes, the order and manner in which matters are submitted to a vote, and all
other matters relating to questions of procedure shall be decided by the
chairman, or co-chairmen, of the meeting, in a manner consistent with these By-
Laws.
SECTION 9. INFORMAL ACTION BY SHAREHOLDERS.
Any action required or permitted to be taken at a meeting of Shareholders
may be taken without a meeting if (i) a consent in writing, setting forth such
action, is signed by the holders of outstanding Shares having not less than the
minimum number of votes that would be necessary to authorize such action at a
meeting of Shareholders at which all Shares issued and outstanding and entitled
to vote thereat were present in person or by proxy, and (ii) such consents are
filed with the records of the Trust.
ARTICLE III
TRUSTEES
SECTION 1. POWERS.
Subject to the applicable provisions of the Declaration 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 Declaration
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.
SECTION 3. VACANCIES.
Vacancies in the Board of Trustees may be filled by a majority of the then
remaining Trustees at a duly constituted meeting; except that a vacancy shall be
filled only by a person elected by Shareholders if required by the 1940 Act.
SECTION 4. ANNUAL MEETINGS OF THE TRUSTEES.
The Trustees shall hold an annual meeting for the election of officers and
the transaction of other business which may come before the meeting.
<PAGE>
SECTION 5. REGULAR AND SPECIAL MEETINGS OF THE TRUSTEES.
The Trustees may in their discretion provide for regular or special
meetings of the Trustees. Regular meetings of the Trustees may be held without
further notice, except as otherwise required by the 1940 Act in which case
notice shall be given as prescribed in Section 6 of this Article III, and may be
held at such time and place as shall be fixed in advance by the Trustees.
Special meetings of the Trustees may be called at any time by the chairman, or
co-chairmen, and shall be called by the chairman, or co-chairmen, vice-president
or the secretary upon the request of any two (2) Trustees or, if there shall be
only one (1) Trustee, upon the request of such sole Trustee.
SECTION 6. NOTICE OF SPECIAL MEETING.
Notice of any special meeting of the Trustees shall be given by oral or
written notice delivered personally, telephoned, telegraphed, mailed or
electronically transmitted to each Trustee at his business or residence address.
Personally delivered, telegram or electronically transmitted notice shall be
given at least twenty-four (24) hours prior to the meeting. Notice by mail
shall be given at least five (5) days prior to the meeting. If mailed, such
notice will be deemed to be given when deposited in the United States mail
properly addressed, with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed given when the telegram is delivered to
the telegraph company. Neither the business to be transacted at, nor the
purpose of, any special meeting of the Trustees need be stated in the notice,
unless specifically required by the 1940 Act.
SECTION 7. QUORUM; ADJOURNMENT.
A majority of the authorized number of Trustees shall constitute a quorum
for the transaction of business; provided, that if less than a majority of such
number of Trustees is present at any such meeting, a majority of the Trustees
present or the sole Trustee present may adjourn the meeting from time to time
without further notice until a quorum is present.
SECTION 8. VOTING.
The action of a majority of the Trustees present at a meeting at which a
quorum is present shall be the action of the Trustees, unless the concurrence of
a greater proportion or of any specified group of Trustees is required for such
action by law, the Declaration or these By-Laws.
SECTION 9. EXECUTIVE AND OTHER COMMITTEES.
The Trustees may designate one or more committees, each committee to
consist of one (1) or more Trustees and to have such title as the Trustees may
consider to be properly descriptive of its function, except that not more than
one committee shall be designated as the Executive Committee and that the
Executive Committee shall consist of two (2) or more Trustees. Each such
committee shall serve at the pleasure of the Trustees.
<PAGE>
In the absence of any member of such committee, the members thereof present
at any meeting, whether or not they constitute a quorum, may appoint a Trustee
to act in the place of such absent member.
The Trustees may delegate to any of the committees appointed under this
Article III, Section 9, any of the powers of the Trustees, except the power to:
(1) amend the Declaration; (2) authorize the merger or consolidation of the
Trust or the sale, lease or exchange of all or substantially all of the Trust
Property belonging to the Trust or any Series (or Class); (3) approve the
incorporation of the Trust; (4) approve the termination of the Trust; (5)
declare dividends or distributions on Shares; (6) issue Shares except pursuant
to a general formula or method specified by the Trustees by resolution; (7)
amend these By-Laws; or (8) elect, appoint or remove Trustees.
Each committee, as and when requested by the Trustees, shall keep minutes
or other appropriate written evidence of its meetings or proceedings and shall
report the same to the Trustees and shall observe such other procedures with
respect to its meetings as may be prescribed by the Trustees in the resolution
appointing such committee, or, if and to the extent not so prescribed, as are
prescribed in these By-Laws with respect to meetings of the Trustees.
SECTION 10. PARTICIPATION IN MEETINGS BY TELEPHONE.
Any Trustee may participate in a meeting of the Trustees or of any
committee of the Trustees by means of conference telephone or similar
communications equipment if all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by these means shall
constitute presence in person at the meeting except where the 1940 Act requires
Trustee action at a meeting held in person.
SECTION 11. INFORMAL ACTION BY TRUSTEES.
Unless an in person meeting is required by the 1940 Act, any action
required or permitted to be taken at any meeting of the Trustees or of any
committee of the Trustees may be taken without a meeting, if a consent in
writing to such action is signed by each Trustee in the case of a meeting of
Trustees, or each Trustee who is a member of the committee, in the case of a
meeting of a committee, and such written consent is filed with the minutes of
proceedings of the Trustees or of the committee. Any such consent may be
executed in counterparts.
SECTION 12. COMPENSATION.
The Trustees shall determine and from time to time fix by resolution the
compensation payable to Trustees for their services to the Trust in that
capacity. Such compensation may, but need not, consist of an annual fee or a
fee for attendance at meetings of the Trustees or of any committee of the
Trustees of which the Trustees receiving such fees are members, or a combination
of an annual fee and a fee for attendance. The chairman, or co-chairmen, of the
Board of Trustees and the chairman, if any, of each committee of Trustees, may
be paid additional amounts for services rendered in such capacities. In
addition, the Trustees may authorize the reimbursement of Trustees for their
expenses for attendance at meetings of the
<PAGE>
Trustees and at meetings of any committee of the Trustees of which they are
members. Nothing herein contained shall be construed to preclude any Trustee
from serving the Trust in any other capacity and receiving compensation
therefor.
ARTICLE IV
WAIVER OF NOTICE
Whenever any notice is required to be given pursuant to law, the
Declaration or these By-Laws, a waiver thereof in writing, signed by the person
or persons entitled to such notice, or, in the case of any waiver of notice of
any meeting of Shareholders, signed by the proxy for a person entitled to notice
thereof, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Neither the business to be transacted
at nor the purpose of any meeting need be set forth in the waiver of notice,
unless specifically required by law, the Declaration or these By-Laws. The
attendance by any person at any meeting in person, or in the case of a meeting
of Shareholders, by proxy, shall constitute a waiver of notice of such meeting,
except where such person attends a meeting for the express purpose of objecting
to the transaction of any business on the ground that the meeting is not
lawfully called or convened.
ARTICLE V
OFFICERS
SECTION 1. EXECUTIVE OFFICERS.
The executive officers of the Trust shall be a President, a Secretary and a
Treasurer. If the Trustees shall elect a Chairman pursuant to Section 7 of this
Article V, then the Chairman shall also be an executive officer of the Trust.
If the Trustees shall elect one or more Vice-Presidents, each such Vice-
President shall be an executive officer. The Chairman, if there be one, shall
be elected from among the Trustees, but no other executive officer need be a
Trustee. Any two or more executive offices, except those of President and Vice-
President, may be held by the same person. A person holding more than one
office may not act in more than one capacity to execute, acknowledge or verify
on behalf of the Trust an instrument required by law to be executed,
acknowledged and verified by more than one officer. The executive officers of
the Trust shall be elected annually at a meeting of Trustees.
SECTION 2. OTHER OFFICERS AND AGENTS.
The Trustees may also elect or may delegate to the President, authority to
appoint, remove, or fix the duties, compensation or terms of office of one or
more Assistant Vice-Presidents, Assistant Secretaries and Assistant Treasurers,
and such other officers and agents as the Trustees shall at any time and from
time to time deem to be advisable.
<PAGE>
SECTION 3. TENURE, RESIGNATION AND REMOVAL.
Each officer of the Trust shall hold office until his successor is elected
or appointed or until his earlier displacement from office by resignation,
removal or otherwise; provided, that if the term of office of any officer
elected or appointed pursuant to Section 2 of this Article V shall have been
fixed by the Trustees or by the President acting under authority delegated by
the Trustees, such officer shall cease to hold such office no later than the
date of expiration of such term, regardless of whether any other person shall
have been elected or appointed to succeed him. Any officer of the Trust may
resign at any time by written notice to the Trust. Any officer or agent of the
Trust may be removed at any time by the Trustees or by the President acting
under authority delegated by the Trustees pursuant to Section 2 of this Article
V if in their or his judgment the best interest of the Trust would be served
thereby, but such removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment of an officer or agent
shall not of itself create contract rights between the Trust and such officer or
agent.
SECTION 4. VACANCIES.
If the office of any officer becomes vacant for any reason, the vacancy may
be filled by the Trustees or by the President acting under authority delegated
by the Trustees pursuant to Section 2 of this Article V. Each officer elected
or appointed to fill a vacancy shall hold office for the balance of the term for
which his predecessor was elected or appointed.
SECTION 5. COMPENSATION.
The compensation, if any, of all officers of the Trust shall be fixed by
the Trustees or by the President acting under authority delegated by the
Trustees pursuant to Section 2 of this Article V.
SECTION 6. AUTHORITY AND DUTIES.
All officers as between themselves and the Trust shall have such powers,
perform such duties and be subject to such restrictions, if any, in the
management of the Trust as may be provided in these By-Laws, or, to the extent
not so provided, as may be prescribed by the Trustees or by the President acting
under authority delegated by the Trustees pursuant to Section 2 of this Article
V.
SECTION 7. CHAIRMAN.
When and if the Trustees deem such action to be necessary or appropriate,
they may elect a Chairman from among the Trustees. The Chairman shall preside
at meetings of the Shareholders and of the Trustees; and he shall have such
other powers and duties as may be prescribed by the Trustees. The Chairman
shall in the absence or disability of the President exercise the powers and
perform the duties of the President.
<PAGE>
SECTION 8. PRESIDENT.
The President shall be the chief executive officer of the Trust. He shall
have responsibility for the general and active management of the business of the
Trust, shall see to it that all orders, policies and resolutions of the Trustees
are carried into effect, and, in connection therewith, shall be authorized to
delegate to any Vice-President of the Trust such of his powers and duties as
President and at such times and in such manner as he shall deem advisable. In
the absence or disability of the Chairman, or if there is no Chairman, the
President shall preside at all meetings of the Shareholders and of the Trustees
and he shall have such other powers and perform such other duties as are
incident to the office of a corporate president and as the Trustees may from
time to time prescribe.
SECTION 9. VICE-PRESIDENTS.
The Vice-President, if any, or, if there is more than one, the Vice-
Presidents, shall assist the President in the management of the business of the
Trust and the implementation of orders, policies and resolutions of the Trustees
at such times and in such manner as the President may deem to be advisable. If
there is more than one Vice-President, the Trustees may designate one as the
executive Vice-President, in which case he shall be first in order of seniority,
and the Trustees may also grant to other Vice-Presidents such titles as shall be
descriptive of their respective functions or indicative of their relative
seniority. In the absence or disability of both the President and the Chairman,
or in the absence or disability of the President if there is no Chairman, the
Vice-President, or, if there is more than one, the Vice-Presidents in the order
of their relative seniority, shall exercise the powers and perform the duties of
those officers; and the Vice-President or Vice-Presidents shall have such other
powers and perform such other duties as from time to time may be prescribed by
the President or the Trustees.
SECTION 10. ASSISTANT VICE-PRESIDENT.
The Assistant Vice-President, if any, or if there is more than one, the
Assistant Vice-Presidents, shall perform such duties as the Trustees or the
President acting under authority delegated by the Trustees pursuant to Section 2
of this Article V may from time to time prescribe.
SECTION 11. SECRETARY.
The Secretary shall (a) keep the minutes of the meetings and proceedings
and any written consents evidencing actions of the Shareholders, the Trustees
and any committees of the Trustees in one or more books provided for that
purpose; (b) see that all notices are duly given in accordance with the
provisions of these By-Laws or as required by law; (c) be custodian of the
corporate records and the seal of the Trust, and, when authorized by the
Trustees, cause the seal of the Trust to be affixed to any document requiring
it, and when so affixed, attested by his signature as Secretary or by the
signature of an Assistant Secretary; and (d) in general, perform such other
duties as the President and Trustees may assign to him from time to time.
<PAGE>
SECTION 12. ASSISTANT SECRETARIES.
The Assistant Secretary, if any, or, if there is more than one, the
Assistant Secretaries in the order determined by the Trustees or by the
President, shall in the absence or disability of the Secretary exercise the
powers and perform the duties of the Secretary, and he or they shall perform
such other duties as the Trustees, the President or the Secretary may from time
to time prescribe.
SECTION 13. TREASURER.
The Treasurer shall be the chief financial officer of the Trust. The
Treasurer shall keep full and accurate accounts of receipts and disbursements in
books belonging to the Trust, shall deposit all moneys and other valuable
effects in the name and to the credit of the Trust in such depositories as may
be designated by the Trustees, and shall render to the Trustees and the
President, at regular meetings of the Trustees or whenever they or the President
may require it, an account of all his transactions as Treasurer and of the
financial condition of the Trust.
If required by the Trustees, the Treasurer shall give the Trust a bond in
such sum and with such surety or sureties as shall be satisfactory to the
Trustees for the faithful performance of the duties of his office and for the
restoration to the Trust, in case of his death, resignation, retirement or
removal from office, all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the Trust.
SECTION 14. ASSISTANT TREASURERS.
The Assistant Treasurer, if any, or, if there is more than one, the
Assistant Treasurers in the order determined by the Trustees or by the
President, shall in the absence or disability of the Treasurer exercise the
powers and perform the duties of the Treasurer, and he or they shall perform
such other duties as the Trustees, the President or the Treasurer may from time
to time prescribe.
ARTICLE VI
INDEMNIFICATION OF TRUSTEES, OFFICERS,
EMPLOYEES AND OTHER AGENTS
SECTION 1. AGENTS, PROCEEDINGS AND EXPENSES.
For purposes of this Article VI, "agent" means any individual who is or was
a Trustee, officer or employee of the Trust or is or was serving at the request
of the Trust as a trustee, director, partner, officer or employee of another
trust, partnership, corporation or association whose securities are or were
owned by the Trust or of which the Trust is or was a creditor, and the heirs,
executors, administrators, successors and assigns of any of the foregoing
individuals; "proceeding" means any threatened, pending or completed action or
proceeding, whether civil,
<PAGE>
criminal, administrative or investigative; and "expenses" includes without
limitation attorney's fees and any expenses of establishing a right to
indemnification under this Article VI.
SECTION 2. ACTIONS OTHER THAN BY TRUST.
The 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
the Trust) by reason of the fact that such person is or was an agent of the
Trust, against expenses, judgments, fines, settlements and other amounts
actually and reasonably incurred in connection with such proceedings, if it is
determined that such person acted in good faith and reasonably believed: (a) in
the case of conduct in his official capacity as a Trustee of the Trust, that his
conduct was in the Trust's best interests and (b) in all other cases, that his
conduct was at least not opposed to the Trust's best interests and (c) in the
case of a criminal proceeding, that he had no reasonable cause to believe the
conduct 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
the Trust or that the person had reasonable cause to believe that the person's
conduct was unlawful.
SECTION 3. ACTIONS BY THE TRUST.
The 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 the Trust to procure a judgment in its favor by reason of the fact that
such person is or was an agent of the 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 such person
believed to be in the best interests of the 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 the Trust.
No indemnification shall be made under Sections 2 or 3 of this
Article VI:
(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, 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 the Trust, unless and only to the extent that the
court in which that action was
<PAGE>
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 which is settled
or otherwise disposed of with or without court approval, unless the
required approval set forth in Section 6 of this Article VI is
obtained.
SECTION 5. SUCCESSFUL DEFENSE BY AGENT.
To the extent that an agent of the Trust has been successful on the merits
in defense of any proceeding referred to in Sections 2 or 3 of this Article VI
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 VI.
SECTION 6. REQUIRED APPROVAL.
Except as provided in Section 5 of this Article VI, any indemnification
under this Article VI shall be made by the 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 2 or 3 of this Article VI and is not prohibited from
indemnification because of the disabling conduct set forth in Section 4 of this
Article VI, 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 1940 Act); 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 the 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 (as
<PAGE>
defined in the 1940 Act), 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 be made in
the manner specified in Section 6 of this Article VI for determining that the
indemnification is permissible.
SECTION 8. OTHER CONTRACTUAL RIGHTS.
Nothing contained in this Article VI shall affect any right to
indemnification to which persons other than Trustees and officers of the 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 VI, 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 Declaration, a
resolution of the Shareholders, or an agreement in effect at the time
of accrual or 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 the approval of the Board of Trustees, the Trust may purchase and
maintain insurance protecting any agent of the 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 the portion of the cost of such insurance protecting
the agent against liabilities as to which the Trust would not have the power to
indemnify the agent under the provisions of this Article VI and the Declaration
shall not be borne by the 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 the
Trust as defined in Section 1 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 contract or otherwise
which shall be enforceable to the extent permitted by applicable law other than
this Article VI.
<PAGE>
ARTICLE VII
RECORDS AND REPORTS
SECTION 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER.
The Trust shall keep at its principal executive office or at the office of
its transfer agent, a record of its Shareholders, giving the names and addresses
of all Shareholders and the number and Series (and 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 to date, 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 of the Trust 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 at any reasonable time during usual business hours for a
purpose reasonably related to the holder's interests as a Shareholder. The
inspection may be made in person or by an agent or attorney and shall include
the right to copy and make extracts. Inspection by any Shareholder of the
Shareholder list and books and records of the Trust shall be at the discretion
of the Trustees.
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 and 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.
The Trustees shall submit to the Shareholders such written financial
reports as are required by the 1940 Act.
<PAGE>
ARTICLE VIII
CONTRACTS, CHECKS AND DRAFTS
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 or to pledge its credit or to
render it liable for any purpose or for any amount.
ARTICLE IX
SHARES OF BENEFICIAL INTEREST
SECTION 1. CERTIFICATES OF SHARES.
The Trust shall not be obligated to issue certificates representing Shares
of the Trust or any Series (or Class), except that the Trustees may determine to
authorize the issuance of certificates for Shares of any Series (or Class), and
in such case, certificates shall be issued in accordance with such procedures as
the Trustees may establish. If certificates for Shares are issued, each such
certificate shall be signed by the chairman, or co-chairmen, or, in the absence
of a chairman or co-chairmen, by a vice-president and countersigned by the
secretary or the treasurer. Certificates may be sealed with the seal of the
Trust. The signatures and seal, if any, on a certificate may be either manual
or facsimile. A certificate is valid and may be issued whether or not an
officer who signed it is still an officer when it is issued. A full record of
the issuance of each certificate and the identifying number assigned thereto
shall be made on the books and records of the Trust usually kept for the purpose
or required by statute.
SECTION 2. TRANSFERS OF SHARES.
Upon surrender to the Trust or its transfer agent of a certificate duly
endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, the Trust shall issue a new certificate to the person
entitled thereto, cancel the old certificate and record the transaction upon its
books. Shares of the Trust or any Series (or Class) not represented by
certificates shall be transferred by recording the transaction on the books of
the Trust upon presentation of proper evidence of succession, assignment or
authority to transfer.
<PAGE>
The Trust shall be entitled to treat the holder of record of any Share or
Shares as the holder in fact thereof and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such Shares on the part
of any other person, whether or not it shall have express or other notice
thereof, except as otherwise provided by applicable law.
SECTION 3. LOST CERTIFICATE.
The Trustees may by resolution establish procedures pursuant to which a new
certificate or certificates may be issued in place of any certificate or
certificates theretofore issued by the Trust which have been mutilated or which
are alleged to have been lost, stolen or destroyed, upon presentation of each
such mutilated certificate, or the making of an affidavit by the person claiming
any such certificate to have been lost, stolen or destroyed as to the fact and
circumstances of the loss, theft or destruction thereof. The Trustees, in their
discretion and as a condition precedent to the issuance of any new certificate,
may include among such procedures a requirement that the owner of any
certificate alleged to have been lost, stolen or destroyed, or the owner's legal
representative, furnish the Trust with a bond, in such sum and with such surety
or sureties as the Trustees may direct, as indemnity against any claim that may
be made against the Trust in respect of such lost, stolen or destroyed
certificate.
SECTION 4. FIXING OF RECORD DATE.
For purposes of determining the Shareholders entitled to notice of, or to
vote at, any meeting of Shareholders or at any adjournment thereof in respect of
which a new record date is not fixed, or entitled to express written consent to
or dissent from the taking of action by Shareholders without a meeting, or for
the purpose of determining the Shareholders entitled to receive payment of any
dividend or other distribution or allotment of any rights, or to exercise any
rights in respect of any change, conversion or exchange of Shares, or for the
purpose of any other lawful action, the Trustees may fix, in advance, a date as
the record date for any such determination of Shareholders. Such date shall not
be more than ninety (90) days, and in case of a meeting of Shareholders not less
than ten (10) days, before the date on which the meeting or particular action
requiring such determination of Shareholders is to be held or taken. If no
record date is fixed, (a) the record date for the determination of Shareholders
entitled to notice of or to vote at a meeting of Shareholders shall be the later
of: (i) the close of business on the day on which the notice of meeting is first
mailed to any Shareholder; or (ii) the thirtieth (30th) day before the meeting;
(b) the record date for determining the Shareholders entitled to express written
consent to the taking of any action without a meeting, when no prior action by
the Trustees is necessary, shall be the day on which the first written consent
is expressed; and (c) the record date for the determination of Shareholders
entitled to receive payment of a dividend or other distribution or an allotment
of any other rights shall be at the close of business on the day on which the
resolution of the Trustees, declaring the dividend, distribution or allotment of
rights, is adopted.
<PAGE>
EX-99.C
CERTIFICATE OF TRUST
OF
HEWITT SERIES TRUST
This Certificate of Trust of HEWITT SERIES TRUST, a business trust
which proposes to register under the Investment Company Act of 1940, as amended
(the "Business Trust"), filed in accordance with the provisions of the Delaware
Business Trust Act (12 Del. Code (S)(S) 3801 et seq.), sets forth the following:
-- ---
FIRST: The name of the Business Trust is HEWITT SERIES TRUST.
SECOND: As required by 12 Del. Code (S)(S) 3807(b) and 3810(a)(1)(b),
the name and business address of the Business Trust's Registered Agent for
Service of Process and the address of the Business Trust's Registered Office
are:
Address of Business Trust's
Registered Office and Business
Resident Agent Address of Registered Agent
-------------- ------------------------------
National Corporate Research, Ltd. 9 East Loockerman Street
Suite 214
Dover, DE 19901
The names and business addresses of the initial trustee of the
Business Trust is as follows:
Name Business Address
---- ----------------
E. Scott Peterson 100 Half Day Road
Lincolnshire, IL 60069
THIRD: The nature of the business or purpose or purposes of the
Business Trust as set forth in its governing instrument is to conduct, operate
and carry on the business of a management investment company registered under
the Investment Company Act of 1940, as amended, through one or more series of
shares of beneficial interest, investing primarily in securities.
FOURTH: Notice is given, pursuant to 12 Del. Code (S) 3804, that the
governing instrument of the Trust provides for the creation of one or more
series as provided in 12 Del. Code (S) 3806(b)(2), and separate and distinct
records are maintained for such series and the assets associated with each such
series are held and accounted for separately from the other
<PAGE>
assets of the Trust, or any other series thereof, and that the debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular series shall be enforceable against the
assets of such series only, and not against the assets of the Trust generally.
FIFTH: The trustees of the business trust, as set forth in its
governing instrument, reserve the right to amend, alter, change or repeal any
provision contained in this Certificate of Trust, in any manner now or hereafter
prescribed by statute.
SIXTH: This Certificate of Trust shall become effective immediately
upon its filing with the Office of the Secretary of State of the State of
Delaware.
IN WITNESS WHEREOF, the undersigned, being the initial trustee of
HEWITT SERIES TRUST, has duly executed this Certificate of Trust as of this 6th
day of July, 1998.
/s/ E. Scott Peterson
--------------------------------------
E. Scott Peterson, as Trustee and not
individually
<PAGE>
EX-99.E
DISTRIBUTION AGREEMENT
Agreement made this 1st day of September, 1998, by and between Hewitt
Series Trust (the "Trust"), on behalf of its portfolio known as Hewitt Money
Market Fund (the "Fund"), and Hewitt Services LLC (the "Distributor").
W I T N E S S E T H:
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end, management investment company
and the Trust has determined to offer shares of the Fund for sale to the public
in a continuous offering; and
WHEREAS, the Trust and the Distributor wish to enter into an agreement
with each other with respect to the continuous offering of each class of shares
of the Trust representing interests in the Fund, par value $0.001 per share (the
"Shares"), to commence after the effective date of the Trust's registration
statement (the "Registration Statement") filed with the Securities and Exchange
Commission (the "SEC") pursuant to the Securities Act of 1933, as amended (the
"1933 Act"); and
WHEREAS, Shares shall initially be of two classes: Institutional
Shares and Administrative Shares;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Appointment of the Distributor.
------------------------------
(a) The Trust hereby appoints the Distributor to serve as a
distributor of Shares of each class and to arrange for the sale of Shares of
each class to investors on the terms set forth in this Agreement and the
Distributor hereby accepts such appointment and agrees to act in such capacity
hereunder.
(b) The Distributor shall act as agent of and as a distributor for
the Trust in connection with the sale of Shares to investors and dealers, upon
the terms described herein and in the Trust's prospectus (the "Prospectus") and
statement of additional information (the "Statement of Additional Information"
or "SAI") included in the Trust's Registration Statement filed with the SEC, as
said Prospectus and Statement of Additional Information and Registration
Statement may be amended and supplemented from time to time. No sales of Shares
shall be made by the Distributor pursuant to this Agreement unless the
Registration Statement under the 1933 Act is effective at the time of such
sales.
SECTION 2. Exclusive Nature of Duties.
--------------------------
The Distributor shall be the exclusive distributor of Shares of the
Trust, except that:
<PAGE>
(a) The Trust may, upon written notice to the Distributor, from time
to time designate other distributors of Shares with respect to areas other than
the United States as to which the Distributor may have expressly waived in
writing its right to act as such. If such designation is deemed exclusive, the
right of the Distributor under this Agreement to serve as distributor in the
areas so designated shall terminate, but this Agreement shall remain otherwise
in full effect until terminated in accordance with the other provisions hereof.
(b) The rights granted to the Distributor to act as agent in
connection with the sale of Shares shall not apply to Shares issued by the
Trust: (i) in connection with the merger or consolidation of any other
investment company or personal holding company with the Trust or the acquisition
by purchase or otherwise of all (or substantially all) the assets or the
outstanding shares of any such company by the Trust; or (ii) pursuant to
reinvestment of dividends, capital gains or other distributions; or (iii)
pursuant to any reinstatement privilege afforded redeeming shareholders.
SECTION 3. Purchase of Shares from the Trust and Compensation of
-----------------------------------------------------
Distributor.
------------
(a) Upon the initial effective date of the Registration Statement,
the Trust will commence a continuous offering of Institutional Shares and
Administrative Shares. The Trust may establish additional classes of Shares in
the future and make continuous offerings of Shares of such classes. During the
continuous offering of Shares of a class, the Distributor shall offer and
solicit offers to subscribe to the purchase of such Shares from investors.
(b) The Distributor shall not be paid any compensation by the Trust
pursuant to this Agreement, however, the Trust may, on behalf of one or more
classes of Shares, pay such compensation and make other payments to the
Distributor as may be permitted by a separate Plan of Distribution and Related
Agreement adopted by the Trust pursuant to Rule 12b-1 under the 1940 Act. The
Distributor may pay such concessions or reallowances to dealers as the
Distributor, in its discretion, may from time to time determine. The Trust and
the Distributor agree, however, that no concessions or reallowances shall be
paid except in compliance with applicable laws and regulations, including the
rules of the National Association of Securities Dealers, Inc. (the "NASD").
(c) The public offering price of each class of Shares, i.e., the
---
price per share at which the Distributor or Dealers (as hereinafter defined) may
sell such Shares to the public, shall be the net asset value per share of such
class of Shares. If the public offering price does not equal an even cent, the
public offering price may be adjusted to the nearest cent.
(d) The net asset value per share of each class of Shares shall be
determined by the Trust or an agent appointed by the Trust, on such days, and at
such times and in such manner, as is set forth in the Prospectus and the SAI and
in guidelines that may be established by the Board of Trustees of the Trust.
(e) The Trust shall have the right to suspend the sale of Shares of
any or all classes at times when redemption is suspended pursuant to the
conditions set forth in Section
-2-
<PAGE>
4(b) hereof. The Trust shall also have the right to suspend the sale of Shares
if trading on the New York Stock Exchange shall have been suspended, if a
banking moratorium shall have been declared by Federal or New York authorities,
or if there shall have been some other extraordinary event or if conditions
exist, which, in the sole judgment of the Trust, makes it impracticable or
inadvisable to sell Shares.
(f) The Trust, or any agent of the Trust designated in writing by the
Trust, shall be promptly advised of all purchase orders for Shares received by
the Distributor. Any order may be rejected by the Trust; provided, however,
that the Trust will not arbitrarily or without reasonable cause refuse to accept
orders for the purchase of Shares. The Distributor will confirm orders upon
their receipt, and the Trust (or its agent), upon receipt of payment therefor
and instructions, will deliver a statement confirming the issuance of such
Shares. The Distributor agrees to cause such instructions and any payments that
it may receive to be delivered promptly to the Trust (or its agent).
(g) Nothing contained herein shall require the Trust to offer Shares
of any class, and the Trust may terminate or suspend the continuous offering of
Shares of any class at any time in its sole discretion.
SECTION 4. Redemption of Shares.
--------------------
(a) Any of the outstanding Shares may be tendered for redemption at
any time, and the Trust agrees to redeem Shares so tendered in accordance with
their terms and the procedures and requirements set forth in the Prospectus and
the SAI. The price to be paid upon the redemption of Shares of each class shall
be equal to the net asset value per share of such class calculated in accordance
with the provisions of Section 3(d) hereof. All payments by the Trust hereunder
shall be made in the manner set forth below.
Subject to Section 4(b) hereof, the Trust shall pay the total amount
of the redemption price in accordance with applicable provisions of the
Prospectus and the SAI on or before the seventh day subsequent to receipt by the
Trust (or its agent) of a request for the redemption in proper form.
(b) Redemptions of Shares may be suspended or payment by the Trust
upon the redemption of Shares may be postponed for more than seven days at
times: (i) when the New York Stock Exchange is closed for other than customary
weekend or holiday closings; (ii) when trading on said Exchange is restricted,
or when an emergency exists as a result of which disposal by the Trust of
securities owned by it is not reasonably practicable or it is not reasonably
practicable for the Trust fairly to determine the value of its net assets, as
provided by SEC rules; or (iii) during any other period when the SEC by order so
permits.
SECTION 5. Duties of the Trust.
-------------------
(a) The Trust shall furnish to the Distributor copies of all
information, financial statements and other papers which the Distributor may
reasonably request for use in connection with the distribution of the Shares,
including one certified copy, upon request by the
-3-
<PAGE>
Distributor, of all financial statements prepared by the Trust, in respect of
the Fund, and examined by independent accountants. The Trust shall, at the
expense of the Distributor, make available to the Distributor such number of
copies of the Prospectus and the SAI as the Distributor shall reasonably
request.
(b) The Trust shall take, from time to time, but subject to the
necessary approval of its shareholders, all necessary action to register Shares
under the 1933 Act, to the end that there will be available for sale such number
of the Shares as investors may reasonably be expected to purchase.
(c) The Trust shall use its best efforts to qualify and maintain the
qualification of an appropriate number of Shares for sale under the securities
laws of such states as the Distributor and the Trust may approve. Any such
qualification may be withheld, terminated or withdrawn by the Trust at any time
in its discretion. As provided in Section 8(b) hereof, the expense of
qualification and maintenance of qualification shall be borne by the Trust. The
Distributor shall furnish such information and other material relating to its
affairs and activities as may be required by the Trust in connection with such
qualification.
(d) The Trust shall, at the expense of the Distributor, furnish, in
reasonable quantities upon request by the Distributor, copies of annual and
interim reports of the Trust.
(e) The Trust shall promptly notify the Distributor if the
effectiveness of the Registration Statement is suspended or lapses and shall
promptly notify of the termination or withdrawal of qualification under the laws
of any state.
SECTION 6. Duties of the Distributor.
-------------------------
(a) The Distributor shall devote reasonable time and effort to effect
sales of the Shares, but shall not be obligated to sell any specific number of
Shares. The services of the Distributor hereunder are not to be deemed
exclusive and nothing herein contained shall prevent the Distributor from
entering into distribution or dealer arrangements with other investment
companies so long as the performance of its obligations hereunder is not
impaired thereby.
(b) Neither the Distributor nor any Dealer nor any other person is
authorized by the Trust to give any information or to make any representations,
other than those contained in the Registration Statement or the Prospectus and
SAI. Any advertising or sales literature relating to the Trust shall be
approved by the Distributor and the contents and use thereof shall comply with
all applicable laws and regulations, including rules and interpretations of the
NASD.
(c) The Distributor shall perform its responsibilities hereunder in
accordance with applicable laws and regulations, including rules and
interpretations of the NASD.
-4-
<PAGE>
SECTION 7. Selected Dealer and Agency Agreements.
-------------------------------------
(a) The Distributor shall have the right to enter into selected
dealer agreements with securities dealers (and with such other financial
institutions as may be authorized under applicable laws and regulations to act
as agent in the sale of Shares) of its choice ("Dealers") for the offering and
sale of Shares by such Dealers and agents. The Distributor may pay such
compensation and concessions to Dealers as it determines, consistent with
applicable law and the rules of the NASD. Shares offered for sale by Dealers
shall be offered on the same terms as would apply to the Distributor as set
forth herein.
(b) Within the United States, the Distributor shall enter into
selected dealer agreements only with organizations that are either members in
good standing of the NASD or financial institutions that are not required to be
NASD members.
(c) The Distributor shall adopt and follow procedures for the
confirmation of sales of Shares to investors and Dealers, the collection of
amounts payable by investors and Dealers on such sales, and the cancellation of
unsettled transactions, as may be necessary to comply with applicable laws and
regulations and the requirements of the NASD, as they may from time to time
exist.
SECTION 8. Payment of Expenses.
-------------------
(a) The Trust shall bear all of its costs and expenses, including
fees and disbursements of its counsel and auditors, in connection with: (i) the
preparation and filing of the Registration Statement, the Prospectus and the
SAI, and supplements to the foregoing, and annual and interim reports and proxy
materials; and (ii) the expense of printing, mailing and otherwise distributing
Prospectuses and SAIs (including supplements), annual and interim reports and
proxy materials for use by shareholders. The expense of printing, mailing and
otherwise distributing such materials to persons who are not shareholders shall
be bourne by the Distributor.
(b) The Trust shall bear the cost and expenses of qualification of
Shares for sale, and, if necessary or advisable in connection therewith, of
qualifying the Trust as a broker or dealer, in such states of the United States
or other jurisdictions as shall be selected by the Trust and the Distributor
pursuant to Section 5(c) hereof, and the cost and expenses payable to each such
state for continuing qualification therein until the Trust decides to
discontinue such qualification pursuant to Section 5(c) hereof.
SECTION 9. Indemnification.
---------------
(a) The Trust shall indemnify and hold harmless the Distributor and
each person, if any, who controls the Distributor against any loss, liability,
claim, damage or expense (including the reasonable cost of investigating or
defending any alleged loss, liability, claim, damage or expense and reasonable
counsel fees incurred in connection therewith) arising by reason of any person
acquiring any Shares, which may be based upon the 1933 Act, or on any
-5-
<PAGE>
other statute or at common law, on the ground that the Registration Statement,
the Prospectus or the SAI, or any annual or interim report to shareholders,
includes an untrue statement of material fact or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, unless such statement or omission was made in reliance
upon, and in conformity with, information furnished to the Trust in connection
therewith by or on behalf of the Distributor; provided, however, that in no case
(i) is the indemnity of the Trust in favor of the Distributor and any such
controlling persons to be deemed to protect such Distributor or any such
controlling persons thereof against any liability to the Trust or its
shareholders to which the Distributor or any such controlling persons would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of reckless disregard
of its obligations and duties under this Agreement; or (ii) is the Trust to be
liable under its indemnity agreement contained in this paragraph with respect to
any claim made against the Distributor or any such controlling persons, unless
the Distributor or such controlling persons as the case may be, shall have
notified the Trust 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 Distributor or such controlling persons (or after the
Distributor or such controlling persons shall have received notice of such
service on any designated agent), but failure to notify the Trust of any such
claim shall not relieve it from any liability which it may have to the person
against whom such action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. The Trust 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, but if the Trust elects to
assume the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Distributor or such controlling person or persons, defendant
or defendants in the suit. In the event the Trust elects to assume the defense
of any such suit and retain such counsel, the Distributor or such controlling
person or persons, defendant or defendants in the suit, shall bear the fees and
the expenses of any additional counsel retained by them, but, in case the Trust
does not elect to assume the defense of any such suit, it will reimburse the
Distributor or such controlling person or persons, defendant or defendants in
the suit, for the reasonable fees and expenses of any counsel retained by them.
The Trust shall promptly notify the Distributor of the commencement of any
litigation or proceedings against it or any of its officers or directors in
connection with the issuance or sale of the Shares.
(b) The Distributor shall indemnify and hold harmless the Trust and
each of its trustees and officers and each person, if any, who controls the
Trust against any loss, liability, claim, damage, or expense described in the
foregoing indemnity contained in subsection (a) of this Section, but only with
respect to statements or omissions made in reliance upon, and in conformity
with, information furnished to the Trust in writing by or on behalf of the
Distributor for use in connection with the Registration Statement, the
Prospectus or the SAI, or the annual or interim reports to shareholders. In
case any action shall be brought against the Trust or any person so indemnified,
in respect of which indemnity may be sought against the Distributor, the
Distributor shall have the rights and duties given to the Trust, and the Trust
and each person so indemnified shall have the rights and duties given to the
Distributor by the provisions of subsection (a) of this Section 9.
-6-
<PAGE>
SECTION 10. Duration and Termination of This Agreement
------------------------------------------
This Agreement shall remain in effect for an initial term of two years
from the date hereof and shall continue in effect from year to year thereafter
provided such continuance is approved at least annually by the vote of a
majority of the outstanding voting securities of the Fund (as defined by the
1940 Act and the rules thereunder) or by the Board of Trustees of the Trust;
provided, that in either event such continuance is also approved annually by the
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 such
party, which vote must be cast in person at a meeting called for the purpose of
voting on such approval; and provided, however, that: (a) the Trust may, at any
time and without the payment of any penalty, terminate this Agreement upon sixty
days' written notice to the Distributor; (b) this Agreement shall immediately
terminate in the event of its assignment (to the extent required by the 1940 Act
and the rules thereunder) unless such automatic termination shall be prevented
by an exemptive order of the SEC; and (c) the Distributor may terminate this
Agreement without payment of any penalty on sixty days' written notice to the
Trust.
SECTION 11. Amendments of this Agreement.
----------------------------
This Agreement may be amended only by the written agreement of the
parties; provided that any amendment hereof must be approved by the Board of
Trustees of the Trust, including a majority of the directors of the Trust who
are not parties to this Agreement or "interested persons" (as defined by the
1940 Act) of any such party, by vote cast in person at a meeting called for the
purpose of voting on such approval.
SECTION 12. Governing Law.
-------------
This Agreement shall be construed in accordance with the laws of the
State of [Illinois] and the applicable provisions of the 1940 Act. To the
extent the applicable laws of the State of [Illinois], or any of the provisions
herein, conflict with the applicable provisions of the 1940 Act, the latter
shall control.
SECTION 13. Liability of the Trust
----------------------
The Declaration of Trust states and notice is hereby given that this
Agreement is not executed on behalf of the Trustees of the Trust as individuals,
and that the obligations of this Agreement are not binding upon any of the
Trustees, officers or shareholders or partners of the Trust individually, but
are binding only upon the assets and property of the Trust.
-7-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement on the day and year first above written.
HEWITT SERIES TRUST
By: /s/ Stacy L. Schaus
--------------------------
Name: Stacy L. Schaus
---------------------
Title: President
--------------------
HEWITT SERVICES LLC
By: /s/ C. L. Connolly, III
--------------------------
Name: C. L. Connolly, III
---------------------
Title: Secretary
--------------------
-8-
<PAGE>
EX-99.G
CUSTODIAN AGREEMENT
AGREEMENT made as of this 1st day of September, 1998, between Hewitt
Series Trust, a business trust organized under the laws of the state of delaware
(the "Fund"), and INVESTORS Bank & TRUST COMPANY, a Massachusetts trust company
(the "Bank").
The Fund, an open-end management investment company, on behalf of the
Portfolios/series listed on Appendix a hereto (as such Appendix a may be amended
---------- ----------
from time to time) (each a "Portfolio" and collectively, the "Portfolios"),
desires to place and maintain all of its Portfolio Securities and cash in the
custody of the Bank. The Bank has at least the minimum qualifications required
by Section 17(f)(1) of the Investment Company Act of 1940 (the "1940 Act") To
Act as custodian of the Portfolio Securities and cash of the Fund, and has
indicated its willingness to so Act, subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
Agreements contained herein, the parties hereto agree as follows:
1. Bank Appointed Custodian. The Fund hereby appoints the Bank as
------------------------
custodian of its Portfolio Securities and cash delivered to the Bank as
hereinafter described and the Bank agrees to Act as such upon the terms and
conditions hereinafter set forth. For the services rendered pursuant to this
Agreement the Fund agrees to pay to the Bank the fees set forth on Appendix B
----------
hereto.
2. Definitions. Whenever used herein, the terms listed below will
-----------
have the following meaning:
2.1 Authorized Person. Authorized Person will mean any of the
-----------------
Persons duly Authorized to give proper instructions or otherwise Act on behalf
of the Fund by appropriate resolution of its Board, and set forth in a
Certificate as required by Section 4 hereof.
2.2 Board. Board will mean the Board of trustees of the Fund.
-----
2.3 Security. The term Security as used herein will have the
--------
same meaning assigned to such term in the Securities Act of 1933, as amended,
including, without limitation, any note, stock, treasury stock, bond, debenture,
evidence of indebtedness, Certificate of interest or participation in any profit
sharing Agreement, collateral-trust Certificate, preorganization Certificate or
subscription, transferable share, investment contrAct, voting-trust Certificate,
Certificate of deposit for a Security, frActional undivided interest in oil,
gas, or other mineral rights, any put, call, straddle, option, or privilege on
any Security, Certificate of deposit, or group or index of Securities (including
any interest therein or based on the value thereof), or any put, call, straddle,
option, or privilege entered into on a national Securities Exchange relating to
a foreign currency, or, in general, any interest or instrument commonly known as
a "Security", or any Certificate of interest or participation in, temporary or
interim Certificate for, receipt for,
<PAGE>
guarantee of, or warrant or right to subscribe to, or option contrAct to
purchase or sell any of the foregoing, and Futures, forward contrActs and
options thereon.
2.4 Portfolio Security. Portfolio Security will mean any
------------------
Security owned by the Fund.
2.5 Officers' Certificate. Officers' Certificate will mean,
---------------------
unless otherwise indicated, any request, direction, instruction, or
certification in writing signed by any two Authorized Persons of the Fund.
2.6 Book-Entry System. Book-Entry System shall mean the Federal
-----------------
Reserve-Treasury Department Book Entry System for United States government,
instrumentality and agency Securities operated by the Federal Reserve Bank, its
successor or successors and its nominee or nominees.
2.7 Depository. Depository shall mean the Depository Trust
----------
Company ("DTC"), a clearing agency registered with the Securities and Exchange
Commission under Section 17a of the Securities Exchange Act of 1934 ("Exchange
Act"), its successor or successors and its nominee or nominees. The term
"Depository" shall further mean and include any other Person Authorized to Act
as a Depository under the 1940 Act, its successor or successors and its nominee
or nominees, specifically identified in a certified copy of a resolution of the
Board.
2.8 Proper Instructions. Proper Instructions shall mean (i)
-------------------
instructions regarding the purchase or sale of Portfolio Securities, and
payments and deliveries in connection therewith, given by an Authorized Person,
such instructions to be given in such form and manner as the Bank and the Fund
shall agree upon from time to time, and (ii) instructions (which may be
continuing instructions) regarding other matters signed or initialed by an
Authorized Person. Oral instructions will be considered Proper Instructions if
the Bank reasonably believes them to have been given by an Authorized Person.
The Fund shall cause all oral instructions to be promptly confirmed in writing.
the Bank shall Act upon and comply with any subsequent Proper instruction which
modifies a prior instruction and the sole obligation of the Bank with respect to
any follow-up or confirmatory instruction shall be to make reasonable efforts to
detect any discrepancy between the original instruction and such confirmation
and to report such discrepancy to the Fund. The Fund shall be responsible, at
the Fund's expense, for taking any Action, including any reprocessing, necessary
to correct any such discrepancy or error, and to the extent such Action requires
the Bank to Act, the Fund shall give the Bank specific Proper Instructions as to
the Action required. Upon receipt by the Bank of an Officers' Certificate as to
the authorization by the Board accompanied by a detailed description of
procedures approved by the Fund, Proper Instructions may include communication
effected directly between electro-mechanical or electronic devices provided that
the Board and the Bank agree in writing that such procedures afford adequate
safeguards for the Fund's assets.
3. Separate Accounts. If the Fund has more than one series or
-----------------
Portfolio, the Bank will segregate the assets of each series or Portfolio to
which this Agreement relates into a separate Account for each such series or
Portfolio containing the assets of such series or Portfolio
<PAGE>
(and all investment earnings thereon). Unless the context otherwise requires,
any reference in this Agreement to any Actions to be taken by the Fund shall be
deemed to refer to the Fund Acting on behalf of one or more of its series, any
reference in this Agreement to any assets of the Fund, including, without
limitation, any Portfolio Securities and cash and earnings thereon, shall be
deemed to refer only to assets of the applicable series, any duty or obligation
of the Bank hereunder to the Fund shall be deemed to refer to duties and
obligations with respect to such individual series and any obligation or
liability of the Fund hereunder shall be binding only with respect to such
individual series, and shall be discharged only out of the assets of such
series.
4. Certification as to Authorized Persons. The Secretary or
--------------------------------------
Assistant Secretary of the Fund will at all times maintain on file with the Bank
his or her certification to the Bank, in such form as may be acceptable to the
Bank, of (i) The names and signatures of the Authorized Persons and (ii) The
names of the members of the Board, it being understood that upon the occurrence
of any change in the information set forth in the most recent certification on
file (including without limitation any Person named in the most recent
certification who is no longer an Authorized Person as designated therein), the
Secretary or Assistant Secretary of the Fund will sign a new or amended
certification setting forth the change and the new, additional or omitted names
or signatures. The Bank will be entitled to rely and Act upon any Officers'
Certificate given to it by the Fund which has been signed by Authorized Persons
named in the most recent certification received by the Bank.
5. Custody of Cash. As custodian for the Fund, the Bank will open
---------------
and maintain a separate Account or Accounts in the name of the Fund or in the
name of the Bank, as Custodian of the Fund, and will deposit to the Account of
the Fund all of the cash of the Fund, except for cash held by a subcustodian
appointed pursuant to Sections 14.2 or 14.3 hereof, including borrowed Funds,
delivered to the Bank, subject only to draft or order by the Bank Acting
pursuant to the terms of this Agreement. Pursuant to the Bank's internal
policies regarding the management of cash Accounts, the Bank may segregate
certain portions of the cash of the Fund into a separate savings deposit Account
upon which the Bank Reserves the right to require seven (7) days notice prior to
withdrawal of cash from such an Account. Upon receipt by the Bank of Proper
Instructions (which may be continuing instructions) or in the case of payments
for redemptions and repurchases of outstanding shares of common stock of the
Fund, notification from the Fund's transfer agent as provided in Section 7,
requesting such payment, designating the payee or the Account or Accounts to
which the Bank will release Funds for deposit, and stating that it is for a
purpose permitted under the terms of this Section 5, specifying the applicable
subSection, the Bank will make payments of cash held for the Accounts of the
Fund, insofar as Funds are available for that purpose, only as permitted in
subSections 5.1-5.9 below.
5.1 Purchase of Securities. Upon the purchase of Securities for the
----------------------
Fund, against contemporaneous receipt of such Securities by the Bank or against
delivery of such Securities to the Bank in accordance with generally accepted
settlement prActices and customs in the jurisdiction or market in which the
transaction occurs registered in the name of the Fund or in the name of, or
properly endorsed and in form for transfer to, the Bank, or a nominee of the
Bank, or receipt for the Account of the Bank pursuant to the provisions of
Section 6 below, each such payment to be made at the purchase price shown on a
broker's confirmation (or transaction
<PAGE>
report in the case of book entry paper (as that term is defined in Section 6.6
hereof)) of purchase of the Securities received by the Bank before such payment
is made, as confirmed in the Proper Instructions received by the Bank before
such payment is made.
5.2 Redemptions. In such amount as may be necessary for the
-----------
repurchase or redemption of shares of the Fund offered for repurchase or
redemption in accordance with Section 7 of this Agreement.
5.3 Distributions and Expenses of Fund. For the payment on the
-------------------------------------
Account of the Fund of dividends or other distributions to shareholders as may
from time to time be declared by the Board, interest, taxes, management or
supervisory fees, distribution fees, fees of the Bank for its services hereunder
and reimbursement of the expenses and liabilities of the Bank as provided
hereunder, fees of any transfer agent, fees for legal, Accounting, and auditing
services, or other operating expenses of the Fund.
5.4 Payment in Respect of Securities. For payments in connection
--------------------------------
with the conversion, Exchange or surrender of Portfolio Securities or Securities
subscribed to by the Fund held by or to be delivered to the Bank.
5.5 Repayment of Loans. To repay loans of money made to the Fund,
------------------
but, in the case of final payment, only upon redelivery to the Bank of any
Portfolio Securities pledged or hypothecated therefor and upon surrender of
documents evidencing the loan;
5.6 Repayment of Cash. To repay the cash delivered to the Fund for
-----------------
the purpose of collateralizing the obligation to return to the Fund Certificates
borrowed from the Fund representing Portfolio Securities, but only upon
redelivery to the Bank of such borrowed Certificates.
5.7 Foreign Exchange TransActions.
-----------------------------
(a) For payments in connection with foreign Exchange contrActs or
options to purchase and sell foreign currencies for spot and future delivery
(collectively, "Foreign Exchange Agreements") which may be entered into by the
Bank on behalf of the Fund upon the receipt of Proper Instructions, such Proper
Instructions to specify the currency broker or Banking institution (which may be
the Bank, or any other subcustodian or agent hereunder, Acting as principal)
with which the contrAct or option is made, and the Bank shall have no duty with
respect to the selection of such currency brokers or Banking institutions with
which the Fund deals or for their failure to comply with the terms of any
contrAct or option.
(b) In order to secure any payments in connection with Foreign
Exchange Agreements which may be entered into by the Bank pursuant to Proper
Instructions, the Fund agrees that the Bank shall have a continuing lien and
Security interest, to the extent of any payment due under any Foreign Exchange
Agreement, in and to any property at any time held by the Bank for the Fund's
benefit or in which the Fund has an interest and which is then in the Bank's
possession or control (or in the possession or control of any third party Acting
on the Bank's behalf). The Fund authorizes the Bank, in the Bank's sole
discretion, at any time to
<PAGE>
charge any such payment due under any foreign Exchange Agreement against any
balance of Account standing to the credit of the Fund on the Bank's books.
5.8 Other Authorized Payments. For other authorized transactions of
-------------------------
the Fund, or other obligations of the Fund incurred for proper Fund purposes;
provided that before making any such payment the Bank will also receive a
certified copy of a resolution of the Board signed by an Authorized Person
(other than the Person certifying such resolution) and certified by its
Secretary or Assistant Secretary, naming the Person or Persons to whom such
payment is to be made, and either describing the transaction for which payment
is to be made and declaring it to be an Authorized transaction of the Fund, or
specifying the amount of the obligation for which payment is to be made, setting
forth the purpose for which such obligation was incurred and declaring such
purpose to be a proper Corporate purpose.
5.9 Termination: Upon the termination of this Agreement as
-----------
hereinafter set forth pursuant to Section 8 and Section 16 of this Agreement.
6. Securities.
----------
6.1 Segregation and Registration. Except as otherwise provided
----------------------------
herein, and except for Securities to be delivered to any subcustodian appointed
pursuant to Sections 14.2 or 14.3 hereof, the Bank as custodian will receive and
hold pursuant to the provisions hereof, in a separate Account or Accounts and
physically Segregated at all times from those of other Persons, any and all
Portfolio Securities which may now or hereafter be delivered to it by or for the
Account of the Fund. all such Portfolio Securities will be held or disposed of
by the Bank for, and subject at all times to, the instructions of the Fund
pursuant to the terms of this Agreement. subject to the specific provisions
herein relating to Portfolio Securities that are not physically held by the
Bank, the Bank will register all Portfolio Securities (unless otherwise directed
by proper instructions or an officers' Certificate), in the name of a registered
nominee of the Bank as defined in the internal revenue code and any regulations
of the treasury department issued thereunder, and will execute and deliver all
such Certificates in connection therewith as may be required by such laws or
regulations or under the laws of any state.
The Fund will from time to time furnish to the Bank appropriate
instruments to enable it to hold or deliver in proper form for transfer, or to
register in the name of its registered nominee, any Portfolio Securities which
may from time to time be registered in the name of the Fund.
6.2 Voting and Proxies. Neither the Bank nor any nominee of the Bank
------------------
will vote any of the Portfolio Securities held hereunder, except in accordance
with proper instructions or an Officers' Certificate. The Bank will execute and
deliver, or cause to be executed and delivered, to the Fund all notices, proxies
and proxy soliciting materials delivered to the Bank with respect to such
Securities, such proxies to be executed by the registered holder of such
Securities (if registered otherwise than in the name of the Fund), but without
indicating the manner in which such proxies are to be voted.
<PAGE>
6.3 Corporate Action. If at any time the Bank is notified that an
----------------
Issuer of any Portfolio Security has taken or intends to take a Corporate Action
(a "Corporate Action") That affects the rights, privileges, powers, preferences,
qualifications or ownership of a Portfolio Security, including without
limitation, liquidation, consolidation, merger, recapitalization,
reorganization, reclassification, subdivision, combination, stock split or stock
dividend, which Corporate Action requires an affirmative response or Action on
the part of the holder of such Portfolio Security (a "response"), the Bank shall
notify the Fund promptly of the Corporate Action, the response required in
connection with the Corporate Action and the Bank's deadline for receipt from
the Fund of proper instructions regarding the response (the "response
deadline"). The Bank shall forward to the Fund via telecopier and/or overnight
courier all notices, information statements or other materials relating to the
Corporate Action promptly after receipt of such materials by the Bank.
(a) The Bank shall Act upon a required response only after receipt by
the Bank of proper instructions from the Fund no later than 5:00 p.m. on the
date specified as the Response Deadline and only if the Bank (or its agent or
subcustodian hereunder) has Actual possession of all necessary Securities,
consents and other materials no later than 5:00 p.m. on the date specified as
the response deadline.
(b) The Bank shall have no duty to Act upon a required response if
proper instructions relating to such response and all necessary Securities,
consents and other materials are not received by and in the possession of the
Bank no later than 5:00 p.m. on the date specified as the response deadline.
notwithstanding, the Bank may, in its sole discretion, use its best efforts to
Act upon a response for which proper instructions and/or necessary Securities,
consents or other materials are received by the Bank after 5:00 p.m. on the
date specified as the response deadline, it being acknowledged and agreed by the
parties that any undertaking by the Bank to use its best efforts in such
circumstances shall in no way create any duty upon the Bank to complete such
response prior to its expiration.
(c) In the event that the Fund notifies the Bank of a Corporate Action
requiring a Response and the Bank has received no other notice of such Corporate
Action, the response deadline shall be 48 hours prior to the response expiration
time set by the Depository processing such Corporate Action.
(d) Section 14.3(e) of this Agreement shall govern any Corporate
Action involving foreign Portfolio Securities held by a Selected Foreign Sub-
custodian. It is understood by the parties that the Board of Trustees of the
Fund has not authorized the use of Foreign Sub-Custodians. Prior to the use of
Foreign Sub-Custodians as provided under this Agreement, the Board of Trustees
shall have approved the use of such Foreign Sub-Custodians.
6.4 Book-Entry System. Provided (i) The Bank has received a
-----------------
certified copy of a resolution of the Board specifically approving deposits of
Fund assets in the Book-Entry System, and (ii) for any subsequent changes to
such arrangements following such
<PAGE>
approval, the Board has reviewed and approved the arrangement and has not
delivered an officer's Certificate to the Bank indicating that the Board has
withdrawn its approval:
(a) The Bank may keep Portfolio Securities in the Book-Entry System
provided that such Portfolio Securities are represented in an Account
("Account") of the Bank (or its agent) in such System which shall not include
any assets of the Bank (or such agent) other than assets held as a fiduciary,
custodian, or otherwise for customers;
(b) The records of the Bank (and any such agent) with respect to the
Fund's participation in the Book-Entry System through the Bank (or any such
agent) will identify by book entry the Portfolio Securities which are included
with other Securities deposited in the Account and shall at all times during
the regular business hours of the Bank (or such agent) be open for inspection by
duly Authorized officers, employees or agents of the Fund. Where Securities are
transferred to the Fund's Account, the Bank shall also, by book entry or
otherwise, identify as belonging to the Fund a quantity of Securities in a
fungible bulk of Securities (i) registered in the name of the Bank or its
nominee, or (ii) shown on the Bank's Account on the books of the Federal
Reserve Bank;
(c) The Bank (or its agent) shall pay for Securities purchased for the
Account of the Fund or shall pay cash collateral against the return of
Portfolio Securities loaned by the Fund upon (i) receipt of advice from the
Book-Entry System that such Securities have been transferred to the Account,
and (ii) The making of an entry on the records of the Bank (or its agent) To
reflect such payment and transfer for the Account of the Fund. The Bank (or its
agent) shall transfer Securities sold or loaned for the Account of the Fund
upon
(i) receipt of advice from the Book-Entry System that payment for
Securities sold or payment of the initial cash collateral against the
delivery of Securities loaned by the Fund has been transferred to the
Account; and
(ii) The making of an entry on the records of the Bank (or its
agent) To reflect such transfer and payment for the Account of the Fund.
copies of all advices from the Book-Entry System of transfers of Securities
for the Account of the Fund shall identify the Fund, be maintained for the
Fund by the Bank and shall be provided to the Fund at its request. The
Bank shall send the Fund a confirmation, as defined by Rule 17f-4 of the
1940 Act, of any transfers to or from the Account of the Fund;
(d) The Bank will promptly provide the Fund with any report obtained
by the Bank or its agent on the Book-Entry System's Accounting System, internal
Accounting control and procedures for safeguarding Securities deposited in the
Book-Entry System;
6.5 Use of a Depository. Provided (i) The Bank has received a
-------------------
certified copy of a resolution of the Board specifically approving deposits in
dtc or other such Depository and (ii) for any subsequent changes to such
arrangements following such approval,
<PAGE>
the Board has reviewed and approved the arrangement and has not delivered an
Officer's Certificate to the Bank indicating that the Board has withdrawn its
approval:
(a) The Bank may use a Depository to hold, receive, Exchange, release,
lend, deliver and otherwise deal with Portfolio Securities including stock
dividends, rights and other items of like nature, and to receive and remit to
the Bank on behalf of the Fund all income and other payments thereon and to take
all steps necessary and proper in connection with the collection thereof;
(b) Registration of Portfolio Securities may be made in the
name of any nominee or nominees used by such Depository;
(c) Payment for Securities purchased and sold may be made through the
clearing medium employed by such Depository for transactions of participants
Acting through it. Upon any purchase of Portfolio Securities, payment will be
made only upon delivery of the Securities to or for the Account of the Fund and
the Fund shall pay cash collateral against the return of Portfolio Securities
loaned by the Fund only upon delivery of the Securities to or for the Account
of the Fund; and upon any sale of Portfolio Securities, delivery of the
Securities will be made only against payment therefor or, in the event Portfolio
Securities are loaned, delivery of Securities will be made only against receipt
of the initial cash collateral to or for the Account of the Fund; and
(d) The Bank shall use its best efforts to provide that:
(i) The Depository obtains replacement of any Certificated
Portfolio Security deposited with it in the event such Security is lost,
destroyed, wrongfully taken or otherwise not available to be returned to
the Bank upon its request;
(ii) Proxy materials received by a Depository with respect to
Portfolio Securities deposited with such Depository are forwarded
immediately to the Bank for prompt transmittal to the Fund;
(iii) Such Depository promptly forwards to the Bank confirmation
of any purchase or sale of Portfolio Securities and of the appropriate book
entry made by such Depository to the Fund's Account;
(iv) Such Depository prepares and delivers to the Bank such
records with respect to the performance of the Bank's obligations and
duties hereunder as may be necessary for the Fund to comply with the
recordkeeping requirements of Section 31(a) of the 1940 Act and Rule 31(a)
thereunder; and
(v) Such Depository delivers to the Bank all internal Accounting
control reports, whether or not audited by an independent public
Accountant, as well as such other reports as the Fund may reasonably
request in order to verify the Portfolio Securities held by such
Depository.
<PAGE>
6.6 Use of Book-Entry System for Commercial Paper. Provided (i) the
---------------------------------------------
Bank has received a certified copy of a resolution of the Board specifically
approving participation in a System maintained by the Bank for the holding of
commercial paper in Book-Entry form ("Book-Entry paper") and (ii) for each year
following such approval the Board has received and approved the arrangements,
upon receipt of proper instructions and upon receipt of confirmation from an
Issuer (as defined below) That the Fund has purchased such Issuer's Book-Entry
paper, the Bank shall issue and hold in Book-Entry form, on behalf of the Fund,
commercial paper issued by Issuers with whom the Bank has entered into a book-
entry Agreement (the "Issuers"). in maintaining procedures for Book-Entry
paper, the Bank agrees that:
(a) The Bank will maintain all Book-Entry paper held by the Fund in an
Account of the Bank that includes only assets held by it for customers;
(b) The records of the Bank with respect to the Fund's purchase of
Book-Entry paper through the Bank will identify, by Book-Entry, commercial paper
belonging to the Fund which is included in the Book-Entry System and shall at
all times during the regular business hours of the Bank be open for inspection
by duly Authorized officers, employees or agents of the Fund;
(c) The Bank shall pay for Book-Entry paper purchased for the Account
of the Fund upon contemporaneous (i) receipt of advice from the Issuer that such
sale of Book-Entry paper has been effected, and (ii) The making of an entry on
the records of the Bank to reflect such payment and transfer for the Account of
the Fund;
(d) The Bank shall cancel such Book-Entry paper obligation upon the
maturity thereof upon contemporaneous (i) receipt of advice that payment for
such Book-Entry paper has been transferred to the Fund, and (ii) The making of
an entry on the records of the Bank to reflect such payment for the Account of
the Fund; and
(e) The Bank will send to the Fund such reports on its System of
internal Accounting control with respect to the Book-Entry paper as the Fund may
reasonably request from time to time.
6.7 Use of Immobilization Programs. Provided (i) the Bank has
------------------------------
received a certified copy of a resolution of the Board specifically approving
the maintenance of Portfolio Securities in an immobilization program operated by
a Bank which meets the requirements of Section 26(a)(1) of the 1940 Act, and
(ii) for each year following such approval the Board has reviewed and approved
the arrangement and has not delivered an officer's Certificate to the Bank
indicating that the Board has withdrawn its approval, the Bank shall enter into
such immobilization program with such Bank Acting as a subcustodian hereunder.
6.8 Eurodollar CDs. any Portfolio Securities which are eurodollar
--------------
CDs may be physically held by the European branch of the u.s. Banking
institution that is the Issuer of such eurodollar CD (a "European Branch"),
provided that such Portfolio Securities are identified on the books of the Bank
as belonging to the Fund and that the books of the Bank
<PAGE>
identify the European branch holding such Portfolio Securities. Notwithstanding
any other provision of this Agreement to the contrary, except as stated in the
first sentence of this subSection 6.8, the Bank shall be under no other duty
with respect to such Eurodollar CDs belonging to the Fund.
6.9 Options and Futures Transactions.
--------------------------------
(a) Puts and Calls Traded on Securities Exchanges, NASDAQ or
Over-the-Counter.
(i) The Bank shall take Action as to put options ("puts") and
call options ("calls") purchased or sold (written) by the Fund regarding
escrow or other arrangements (i) in accordance with the provisions of any
Agreement entered into upon receipt of proper instructions among the Bank,
any broker-dealer registered with the national association of Securities
Dealers, Inc. (the "NASD"), and, if necessary, the Fund, relating to the
compliance with the Rules of the Options Clearing Corporation and of any
registered national Securities Exchange, or of any similar organization or
organizations.
(ii) Unless another Agreement requires it to do so, the Bank
shall be under no duty or obligation to see that the Fund has deposited or
is maintaining adequate margin, if required, with any broker in connection
with any option, nor shall the Bank be under duty or obligation to present
such option to the broker for exercise unless it receives proper
instructions from the Fund. The Bank shall have no responsibility for the
legality of any put or call purchased or sold on behalf of the Fund, the
propriety of any such purchase or sale, or the adequacy of any collateral
delivered to a broker in connection with an option or deposited to or
withdrawn from a Segregated Account (as defined in subSection 6.10 below).
the Bank specifically, but not by way of limitation, shall not be under any
duty or obligation to: (i) periodically check or notify the Fund that the
amount of such collateral held by a broker or held in a Segregated Account
is sufficient to protect such broker or the Fund against any loss; (ii)
effect the return of any collateral delivered to a broker; or (iii) advise
the Fund that any option it holds, has or is about to expire. Such duties
or obligations shall be the sole responsibility of the Fund.
(b) Puts, Calls and Futures Traded on Commodities Exchanges
(i) The Bank shall take action as to puts, calls and Futures
contrActs ("Futures") purchased or sold by the Fund in accordance with the
provisions of any Agreement entered into upon the receipt of proper
instructions among the Fund, the Bank and a Futures Commission Merchant
registered under the Commodity Exchange Act, relating to compliance with
the Rules of the Commodity Futures trading commission and/or any contrAct
market, or any similar organization or organizations, regarding Account
deposits in connection with transactions by the Fund.
<PAGE>
(ii) The responsibilities of the Bank as to Futures, puts and
calls traded on commodities Exchanges, any Futures commission merchant
Account and the Segregated Account shall be limited as set forth in
subparagraph (a)(ii) of this Section 6.9 as if such subparagraph referred
to Futures Commission Merchants rather than brokers, and Futures and puts
and calls thereon instead of options.
6.10 Segregated Account. The Bank shall upon receipt of Proper
------------------
Instructions establish and maintain a Segregated Account or Accounts for and on
behalf of the Fund.
(a) Cash and/or Portfolio Securities may be transferred into
a Segregated Account upon receipt of proper instructions in the following
circumstances:
(i) in accordance with the provisions of any Agreement among the
Fund, the Bank and a broker-dealer registered under the Exchange Act and a
member of the 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 or the Commodity Futures Trading Commission or any registered
Contract Market, or of any similar organizations regarding escrow or other
arrangements in connection with transactions by the Fund;
(ii) for the purpose of segregating cash or Securities in
connection with options purchased or written by the Fund or Commodity
Futures purchased or written by the Fund;
(iii) for the deposit of liquid assets, such as cash, u.s.
government Securities or other high grade debt obligations, having a market
value (marked to market on a daily basis) at all times equal to not less
than the aggregate purchase price due on the settlement dates of all the
Fund's then outstanding forward commitment or "when-issued" Agreements
relating to the purchase of Portfolio Securities and all the Fund's then
outstanding commitments under reverse repurchase Agreements entered into
with broker-dealer firms;
(iv) for the purposes of compliance by the Fund with the
procedures required by investment company Act release no. 10666, or any
subsequent release or releases of the Securities and Exchange Commission
relating to the maintenance of Segregated Accounts by registered investment
companies;
(v) for other proper Corporate purposes, but only, in the case of
this clause (v), upon receipt of, in addition to proper instructions, a
certified copy of a resolution of the Board, or of the executive committee
of the Board signed by an officer of the Fund and certified by the
Secretary or an Assistant Secretary, setting forth the purpose or purposes
of such Segregated Account and declaring such purposes to be proper
Corporate purposes.
<PAGE>
(b) Cash and/or Portfolio Securities may be withdrawn from a
Segregated Account pursuant to Proper Instructions in the following
circumstances:
(i) with respect to assets deposited in accordance with the
provisions of any Agreements referenced in (a)(i) or (a)(ii) above, in
accordance with the provisions of such Agreements;
(ii) with respect to assets deposited pursuant to (a)(iii) or
(a)(iv) above, for sale or delivery to meet the Fund's obligations under
outstanding forward commitment or when-issued Agreements for the purchase
of Portfolio Securities and under reverse repurchase Agreements;
(iii) for Exchange for other liquid assets of equal or greater
value deposited in the Segregated Account;
(iv) To the extent that the Fund's outstanding forward commitment
or when-issued Agreements for the purchase of Portfolio Securities or
reverse repurchase Agreements are sold to other parties or the Fund's
obligations thereunder are met from assets of the Fund other than those in
the Segregated Account;
(v) for delivery upon settlement of a forward commitment or when-
issued Agreement for the sale of Portfolio Securities; or
(vi) with respect to assets deposited pursuant to (a)(v) above,
in accordance with the purposes of such Account as set forth in Proper
Instructions.
6.11 Interest Bearing Call or Time Deposits. The Bank shall, upon
--------------------------------------
receipt of Proper Instructions relating to the purchase by the Fund of interest-
bearing fixed-term and call deposits, transfer cash, by wire or otherwise, in
such amounts and to such Bank or Banks as shall be indicated in such Proper
Instructions. The Bank shall include in its records with respect to the assets
of the Fund appropriate notation as to the amount of each such deposit, the
Banking institution with which such deposit is made (the "Deposit Bank"), and
shall retain such forms of advice or receipt evidencing the deposit, if any, as
may be forwarded to the Bank by the Deposit Bank. such deposits shall be deemed
Portfolio Securities of the Fund and the responsibility of the Bank therefore
shall be the same as and no greater than the Bank's responsibility in respect of
other Portfolio Securities of the Fund.
6.12 Transfer of Securities. The Bank will transfer, Exchange,
----------------------
deliver or release Portfolio Securities held by it hereunder, insofar as such
Securities are available for such purpose, provided that before making any
transfer, Exchange, delivery or release under this Section only upon receipt of
Proper Instructions. The Proper Instructions shall state that such transfer,
Exchange or delivery is for a purpose permitted under the terms of this Section
6.12, and shall specify the applicable subSection, or describe the purpose of
the transaction with sufficient particularity to permit the Bank to ascertain
the applicable subSection. after receipt of such Proper Instructions, the Bank
will transfer, Exchange, deliver or release Portfolio Securities only in the
following circumstances:
<PAGE>
(a) Upon sales of Portfolio Securities for the Account of the Fund,
against contemporaneous receipt by the Bank of payment therefor in full, or
against payment to the Bank in accordance with generally accepted settlement
practices and customs in the jurisdiction or market in which the transaction
occurs, each such payment to be in the amount of the sale price shown in a
broker's confirmation of sale received by the Bank before such payment is made,
as confirmed in the Proper Instructions received by the Bank before such payment
is made;
(b) In exchange for or upon conversion into other Securities alone or
other Securities and cash pursuant to any plan of merger, consolidation,
reorganization, share split-up, change in par value, recapitalization or
readjustment or otherwise, upon exercise of subscription, purchase or sale or
other similar rights represented by such Portfolio Securities, or for the
purpose of tendering shares in the event of a tender offer therefor, provided,
however, that in the event of an offer of Exchange, tender offer, or other
exercise of rights requiring the physical tender or delivery of Portfolio
Securities, the Bank shall have no liability for failure to so tender in a
timely manner unless such Proper Instructions are received by the Bank at least
two business days prior to the date required for tender, and unless the Bank (or
its agent or subcustodian hereunder) has Actual possession of such Security at
least two business days prior to the date of tender;
(c) upon conversion of Portfolio Securities pursuant to
their terms into other Securities;
(d) for the purpose of redeeming in-kind shares of the Fund
upon authorization from the Fund;
(e) in the case of option contracts owned by the Fund, for
presentation to the endorsing broker;
(f) When such Portfolio Securities are called, redeemed or
retired or otherwise become payable;
(g) For the purpose of effectuating the pledge of Portfolio Securities
held by the Bank in order to collateralize loans made to the Fund by any Bank,
including the Bank; provided, however, that such Portfolio Securities will be
released only upon payment to the Bank for the Account of the Fund of the moneys
borrowed, provided further, however, that in cases where additional collateral
is required to secure a borrowing already made, and such fAct is made to appear
in the Proper Instructions, Portfolio Securities may be released for that
purpose without any such payment. in the event that any pledged Portfolio
Securities are held by the Bank, they will be so held for the Account of the
lender, and after notice to the Fund from the lender in accordance with the
normal procedures of the lender and any loan Agreement between the Fund and the
lender that an event of deficiency or default on the loan has occurred, the Bank
may deliver such pledged Portfolio Securities to or for the Account of the
lender;
(h) for the purpose of releasing Certificates representing Portfolio
Securities, against contemporaneous receipt by the Bank of the fair market value
of such Security, as set forth in the Proper Instructions received by the Bank
before such payment is made;
<PAGE>
(i) for the purpose of delivering securities lent by the Fund to a
bank or broker dealer, but only against receipt in accordance with street
delivery custom except as otherwise provided herein, of adequate collateral as
agreed upon from time to time by the Fund and the Bank, and upon receipt of
payment in connection with any repurchase Agreement relating to such Securities
entered into by the Fund;
(j) for other authorized transactions of the Fund or for other proper
Corporate purposes; provided that before making such transfer, the Bank will
also receive a certified copy of resolutions of the Board, signed by an
Authorized officer of the Fund (other than the officer certifying such
resolution) and certified by its Secretary or Assistant Secretary, specifying
the Portfolio Securities to be delivered, setting forth the transaction in or
purpose for which such delivery is to be made, declaring such transaction to be
an Authorized transaction of the Fund or such purpose to be a proper Corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made; and
(k) upon termination of this Agreement as hereinafter set
forth pursuant to Section 8 and Section 16 of this Agreement.
As to any deliveries made by the Bank pursuant to this Section 6.12,
Securities or cash receivable in Exchange therefor shall be delivered to the
Bank.
7. Redemptions. In the case of payment of assets of the Fund held by
-----------
the Bank in connection with redemptions and repurchases by the Fund of its
outstanding shares, the Bank will rely on notification by the Fund's transfer
agent of receipt of a request for redemption and Certificates, if issued, in
proper form for redemption before such payment is made. Payment shall be made
in accordance with the Articles of Incorporation or Declaration of Trust and By-
laws of the Fund (the "Articles"), from assets available for said purpose.
8. Merger, Dissolution, etc. of Fund. in the case of the following
----------------------------------
transactions, not in the ordinary course of business, namely, the merger of the
Fund into or the consolidation of the Fund with another investment company, the
sale by the Fund of all, or substantially all, of its assets to another
investment company, or the liquidation or dissolution of the Fund and
distribution of its assets, the Bank will deliver the Portfolio Securities held
by it under this Agreement and disburse cash only upon the order of the Fund set
forth in an officers' Certificate, accompanied by a certified copy of a
resolution of the Board authorizing any of the foregoing transactions. Upon
completion of such delivery and disbursement and the payment of the fees,
disbursements and expenses of the Bank, this Agreement will terminate and the
Bank shall be released from any and all obligations hereunder.
9. Actions of Bank Without Prior Authorization. Notwithstanding
-------------------------------------------
anything herein to the contrary, unless and until the Bank receives an Officers'
Certificate to the contrary, the Bank will take the following Actions without
prior authorization or instruction of the Fund or the transfer agent:
<PAGE>
9.1 Endorse for collection and collect on behalf of and in the name
of the Fund all checks, drafts, or other negotiable or transferable instruments
or other orders for the payment of money received by it for the Account of the
Fund and hold for the Account of the Fund all income, dividends, interest and
other payments or distributions of cash with respect to the Portfolio Securities
held thereunder;
9.2 Present for payment all coupons and other income items held by it
for the Account of the Fund which call for payment upon presentation and hold
the cash received by it upon such payment for the Account of the Fund;
9.3 Receive and hold for the Account of the Fund all Securities
received as a distribution on Portfolio Securities as a result of a stock
dividend, share split-up, reorganization, recapitalization, merger,
consolidation, readjustment, distribution of rights and similar Securities
issued with respect to any Portfolio Securities held by it hereunder.
9.4 Execute as agent on behalf of the Fund all necessary ownership
and other Certificates and affidavits required by the internal revenue code or
the regulations of the Treasury Department issued thereunder, or by the laws of
any state, now or hereafter in effect, inserting the Fund's name on such
Certificates as the owner of the securities covered thereby, to the extent it
may lawfully do so and as may be required to obtain payment in respect thereof.
the Bank will execute and deliver such Certificates in connection with Portfolio
Securities delivered to it or by it under this Agreement as may be required
under the provisions of the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, or under the laws of any State;
9.5 Present for payment all Portfolio Securities which are called,
redeemed, retired or otherwise become payable, and hold cash received by it upon
payment for the Account of the Fund; and
9.6 Exchange interim receipts or temporary Securities for
definitive Securities.
10. Collections and Defaults. The Bank will use reasonable efforts
------------------------
to collect any Funds which may to its knowledge become collectible arising from
Portfolio Securities, including dividends, interest and other income, and to
transmit to the Fund notice Actually received by it of any call for redemption,
offer of Exchange, right of subscription, reorganization or other proceedings
affecting such Securities. if Portfolio Securities upon which such income is
payable are in default or payment is refused after due demand or presentation,
the Bank will notify the Fund in writing of any default or refusal to pay within
two business days from the day on which it receives knowledge of such default or
refusal.
11. Maintenance of Records and Accounting Services. The Bank will
----------------------------------------------
maintain records with respect to transactions for which the Bank is responsible
pursuant to the terms and conditions of this Agreement, and in compliance with
the applicable Rules and regulations of the 1940 Act. The books and records of
the Bank pertaining to its Actions under this Agreement and reports by the Bank
or its independent Accountants concerning its accounting
<PAGE>
system, procedures for safeguarding Securities and internal Accounting controls
will be open to inspection and audit at reasonable times by officers of or
auditors employed by the Fund or such Persons Authorized by the Fund, and will
be preserved by the Bank in the manner and in accordance with the applicable
Rules and regulations under the 1940 Act.
The Bank shall perform fund accounting and shall keep the books of
Account and render statements or copies from time to time as reasonably
requested by the Treasurer or any executive officer of the Fund. Such books
shall be maintained and preserved in compliance with applicable Rules and
regulations under the 1940 Act.
The Bank shall assist generally in the preparation of reports to
shareholders and others, audits of Accounts, and other ministerial matters of
like nature.
12. Fund Evaluation and Yield Calculation.
-------------------------------------
12.1 Fund Evaluation. The Bank shall compute and, unless otherwise
---------------
directed by the Board, determine as of the close of regular trading on the New
York Stock Exchange on each day on which said Exchange is open for unrestricted
trading and as of such other days, or hours, if any, as may be authorized by the
Board, the net asset value and the public offering price of a share of capital
stock of the Fund, such determination to be made in accordance with the
provisions of the Declaration and By-laws of the Fund and the Prospectus and
Statement of Additional Information relating to the Fund, as they may from time
to time be amended, and any applicable resolutions of the Board at the time in
force and applicable; and promptly to notify the Fund, the proper Exchange and
the NASD or such other Persons as the Fund may request of the results of such
computation and determination. In computing the net asset value hereunder, the
Bank may rely in good faith upon information furnished to it by any Authorized
Person in respect of (i) The manner of accrual of the liabilities of the Fund
and in respect of liabilities of the Fund not appearing on its books of Account
kept by the Bank, (ii) Reserves, if any, Authorized by the Board or that no such
Reserves have been Authorized, (iii) The source of the quotations to be used in
computing the net asset value, (iv) The value to be assigned to any Security for
which no price quotations are available, and (v) The method of computation of
the public offering price on the basis of the net asset value of the shares, and
the Bank shall not be responsible for any loss occasioned by such reliance or
for any good faith reliance on any quotations received from a source pursuant to
(iii) above.
12.2. Yield Calculation. The Bank will compute the performance
-----------------
results of the Fund (the "Yield Calculation") in accordance with the provisions
of Release No. 33-6753 and Release No. IC-16245 (February 2, 1988) (the
"Releases") promulgated by the Securities and Exchange Commission, and any
subsequent amendments to, published interpretations of or general conventions
accepted by the staff of the Securities and Exchange commission with respect to
such releases or the subject matter thereof ("Subsequent Staff Positions"),
subject to the terms set forth below:
(a) The Bank shall compute the yield calculation for the Fund for the
stated periods of time as shall be mutually agreed upon, and communicate in a
timely manner the result of such computation to the Fund.
<PAGE>
(b) in performing the Yield Calculation, the Bank will derive the
items of data necessary for the computation from the records it generates and
maintains for the Fund pursuant Section 11 hereof. The Bank shall have no
responsibility to review, confirm, or otherwise assume any duty or liability
with respect to the accuracy or correctness of any such data supplied to it by
the Fund, any of the Fund's designated agents or any of the Fund's designated
third party providers.
(c) at the request of the Bank, the Fund shall provide, and the Bank
shall be entitled to rely on, written standards and guidelines to be followed by
the Bank in interpreting and applying the computation methods set forth in the
releases or any subsequent staff positions as they specifically apply to the
Fund. in the event that the computation methods in the releases or the
subsequent staff positions or the application to the Fund of a standard or
guideline is not free from doubt or in the event there is any question of
interpretation as to the characterization of a particular Security or any aspect
of a Security or a payment with respect thereto (e.g., original issue discount,
participating debt Security, income or return of capital, etc.) or otherwise or
as to any other element of the computation which is pertinent to the Fund, the
Fund or its designated agent shall have the full responsibility for making the
determination of how the Security or payment is to be treated for purposes of
the computation and how the computation is to be made and shall inform the Bank
thereof on a timely basis. The Bank shall have no responsibility to make
independent determinations with respect to any item which is covered by this
Section, and shall not be responsible for its computations made in accordance
with such determinations so long as such computations are mathematically
correct.
(d) The Fund shall keep the Bank informed of all publicly available
information and of any non-public advice, or information obtained by the Fund
from its independent auditors or by its Personnel or the Personnel of its
investment adviser, or subsequent staff positions related to the computations to
be undertaken by the Bank pursuant to this Agreement and the Bank shall not be
deemed to have knowledge of such information (except as contained in the
Releases) unless it has been furnished to the Bank in writing.
13. Additional Services. The Bank shall perform the additional
-------------------
services for the Fund as are set forth on Appendix C hereto. Appendix C may be
---------- ----------
amended from time to time upon Agreement of the parties to include further
additional services to be provided by the Bank to the Fund, at which time the
fees set forth in Appendix B shall be appropriately amended.
----------
14. Duties of the Bank.
------------------
14.1 Performance of Duties and Standard of Care. In performing its
------------------------------------------
duties hereunder and any other duties listed on any schedule hereto, if any, the
Bank will be entitled to receive and Act upon the advice of independent counsel
of its own selection, which may be counsel for the Fund, and will be without
liability for any Action taken or thing done or omitted to be done in accordance
with this Agreement in good faith in conformity with such advice.
The Bank will be under no duty or obligation to inquire into and will
not be liable for:
<PAGE>
(a) The validity of the issue of any Portfolio Securities purchased by
or for the Fund, the legality of the purchases thereof or the propriety of the
price incurred therefor;
(b) The legality of any sale of any Portfolio Securities by or for the
Fund or the propriety of the amount for which the same are sold;
(c) The legality of an issue or sale of any shares of the Fund or the
sufficiency of the amount to be received therefor;
(d) The legality of the repurchase of any shares of the Fund or the
propriety of the amount to be paid therefor;
(e) The legality of the declaration of any dividend by the Fund or the
legality of the distribution of any Portfolio Securities as payment in kind of
such dividend; and
(f) any property or moneys of the Fund unless and until received by
it, and any such property or moneys delivered or paid by it pursuant to the
terms hereof.
Moreover, the Bank will not be under any duty or obligation to
ascertain whether any Portfolio Securities at any time delivered to or held by
it for the Account of the Fund are such as may properly be held by the Fund
under the provisions of its Declaration, By-laws, any Federal or state statutes
or any Rule or regulation of any governmental agency.
14.2 Agents and Subcustodians with Respect to Property of the Fund
-------------------------------------------------------------
held in the United States. The Bank may employ agents of its own selection in
- - - -------------------------
the performance of its duties hereunder and shall be responsible for the Acts
and omissions of such agents as if performed by the Bank hereunder. Without
limiting the foregoing, certain duties of the Bank hereunder may be performed by
one or more affiliates of the Bank.
Upon receipt of Proper Instructions, the Bank may employ subcustodians
selected by or at the direction of the Fund, provided that any such subcustodian
meets at least the minimum qualifications required by Section 17(f)(1) of the
1940 Act to act as a custodian of the Fund's assets with respect to property of
the Fund held in the United States. The Bank shall have no liability to the
Fund or any other Person by reason of any Act or omission of any such
subcustodian and the Fund shall indemnify the Bank and hold it harmless from and
against any and all Actions, suits and claims, arising directly or indirectly
out of the performance of any subcustodian. Upon request of the Bank, the Fund
shall assume the entire defense of any Action, suit, or claim subject to the
foregoing indemnity. The Fund shall pay all fees and expenses of any
subcustodian.
<PAGE>
14.3 Duties of the Bank with Respect to Property of the Fund
-------------------------------------------------------
Held Outside of the United States.
- - - ---------------------------------
(a) Appointment of Foreign Custody Manager.
--------------------------------------
(i) If the Fund has appointed the Bank Foreign Custody Manager
(as that term is defined in Rule 17f-5 under the 1940 Act), the Bank's
duties and obligations with respect to the Fund's Portfolio Securities and
other assets maintained outside the United States shall be, to the extent
not set forth herein, as set forth in the delegation Agreement between the
Fund and the Bank (the "Delegation Agreement").
(ii) If the Fund has appointed any other Person or entity Foreign
Custody Manager, the Bank shall Act only upon Proper Instructions from the
Fund with regard to any of the Fund's Portfolio Securities or other assets
held or to be held outside of the United States, and the Bank shall be
without liability for any claim (as that term is defined in Section 15
hereof) arising out of maintenance of the Fund's Portfolio Securities or
other assets outside of the United States. The Fund also agrees that it
shall enter into a written Agreement with such Foreign Custody Manager that
shall obligate such foreign custody manager to provide to the Bank in a
timely manner all information required by the Bank in order to complete its
obligations hereunder. The Bank shall not be liable for any claim arising
out of the failure of such Foreign Custody Manager to provide such
information to the Bank.
(b) Segregation of Securities. The Bank shall identify on its books
-------------------------
as belonging to the Fund the foreign Portfolio Securities held by each foreign
sub-custodian (each an "Eligible Foreign Custodian") selected by the Foreign
Custody Manager, subject to receipt by the Bank of the necessary information
from such Eligible Foreign Custodian if the Foreign Custody Manager is not the
Bank.
(c) Access of Independent Accountants of the Fund. If the Bank is the
---------------------------------------------
Fund's Foreign Custody Manager, upon request of the Fund, the Bank will use its
best efforts to arrange for the independent accountants of the Fund to be
afforded access to the books and records of any foreign Banking institution
employed as an Eligible Foreign Custodian insofar as such books and records
relate to the performance of such foreign Banking institution with regard to the
Fund's Portfolio Securities and other assets.
(d) Reports by Bank. If the Bank is the Fund's Foreign Custody
---------------
Manager, the Bank will supply to the Fund the reports required under the
Delegation Agreement.
(e) Transactions in Foreign Custody Account. Transactions with
---------------------------------------
respect to the assets of the Fund held by an Eligible Foreign Custodian shall be
effected pursuant to Proper Instructions from the Fund to the Bank and shall be
effected in accordance with the applicable Agreement between the Foreign Custody
Manager and such Eligible Foreign Custodian. if at any time any Foreign
Portfolio Securities shall be registered in the name of the
<PAGE>
nominee of the eligible foreign custodian, the Fund agrees to hold any such
nominee harmless from any liability by reason of the registration of such
Securities in the name of such nominee.
Notwithstanding any provision of this Agreement to the contrary,
settlement and payment for Foreign Portfolio Securities received for the Account
of the Fund and delivery of Foreign Portfolio Securities maintained for the
Account of the Fund may be effected in accordance with the customary established
Securities trading or Securities processing prActices and procedures in the
jurisdiction or market in which the transaction occurs, including, without
limitation, delivering Securities to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such Securities from such purchaser
or dealer.
In connection with any Action to be taken with respect to the Foreign
Portfolio Securities held hereunder, including, without limitation, the exercise
of any voting rights, subscription rights, redemption rights, Exchange rights,
conversion rights or tender rights, or any other Action in connection with any
other right, interest or privilege with respect to such Securities
(collectively, the "Rights"), the Bank shall promptly transmit to the Fund such
information in connection therewith as is made available to the Bank by the
Eligible Foreign Custodian, and shall promptly forward to the applicable
Eligible Foreign Custodian any instructions, forms or certifications with
respect to such Rights, and any instructions relating to the Actions to be taken
in connection therewith, as the Bank shall receive from the Fund pursuant to
Proper Instructions. Notwithstanding the foregoing, the Bank shall have no
further duty or obligation with respect to such Rights, including, without
limitation, the determination of whether the Fund is entitled to participate in
such Rights under applicable U.S. and foreign laws, or the determination of
whether any Action proposed to be taken with respect to such Rights by the Fund
or by the applicable Eligible Foreign Custodian will comply with all applicable
terms and conditions of any such Rights or any applicable laws or regulations,
or market practices within the market in which such Action is to be taken or
omitted.
(f) Tax Law. The Bank shall have no responsibility or liability for
-------
any obligations now or hereafter imposed on the Fund or the Bank as custodian of
the Fund by the tax laws of any jurisdiction, and it shall be the responsibility
of the Fund to notify the Bank of the obligations imposed on the Fund or the
Bank as the custodian of the Fund by the tax law of any non-U.S. jurisdiction,
including responsibility for withholding and other taxes, assessments or other
governmental charges, certifications and governmental reporting. The sole
responsibility of the Eligible Foreign Custodian with regard to such tax law
shall be to use reasonable efforts to assist the Fund with respect to any claim
for exemption or refund under the tax law of jurisdictions for which the Fund
has provided such information.
14.4 Insurance. The Bank shall use the same care with respect to the
---------
safekeeping of Portfolio Securities and cash of the Fund held by it as it uses
in respect of its own similar property but it need not maintain any special
insurance for the benefit of the Fund.
14.5 Fees and Expenses of the Bank. The Fund will pay or reimburse
-----------------------------
the Bank from time to time for any transfer taxes payable upon transfer of
Portfolio Securities
<PAGE>
made hereunder, and for all necessary proper disbursements, expenses and charges
made or incurred by the Bank in the performance of this Agreement (including any
duties listed on any schedule hereto, if any) including any indemnities for any
loss, liabilities or expense to the Bank as provided above. for the services
rendered by the Bank hereunder, the Fund will pay to the Bank such compensation
or fees at such rate and at such times as set forth in appendix b hereto. The
Bank will also be entitled to reimbursement by the Fund for all reasonable
expenses incurred in conjunction with termination of this Agreement.
14.6 Advances by the Bank. The Bank may, in its sole discretion,
--------------------
advance Funds on behalf of the Fund to make any payment permitted by this
Agreement upon receipt of any proper authorization required by this Agreement
for such payments by the Fund. should such a payment or payments, with advanced
Funds, result in an overdraft (due to insufficiencies of the Fund's Account with
the Bank, or for any other reason) This Agreement deems any such overdraft or
related indebtedness a loan made by the Bank to the Fund payable on demand.
Such overdraft shall bear interest at the current rate charged by the Bank for
such loans unless the Fund shall provide the Bank with agreed upon compensating
balances. The Fund agrees that the Bank shall have a continuing lien and
Security interest to the extent of any overdraft or indebtedness or to the
extent required by law, whichever is greater, in and to any property at any time
held by it for the Fund's benefit or in which the Fund has an interest and which
is then in the Bank's possession or control (or in the possession or control of
any third party Acting on the Bank's behalf). The Fund authorizes the Bank, in
the Bank's sole discretion, at any time to charge any overdraft or indebtedness,
together with interest due thereon, against any balance of Account standing to
the credit of the Fund on the Bank's books.
15. Limitation of Liability.
-----------------------
15.1 Notwithstanding anything in this Agreement to the contrary, in
no event shall the Bank or any of its officers, directors, employees or agents
(collectively, the "Indemnified Parties") be liable to the Fund or any third
party, and the Fund shall indemnify and hold the Bank and the Indemnified
Parties harmless from and against any and all loss, damage, liability, actions,
suits, claims, costs and expenses, including legal fees, (a "claim") arising as
a result of any Act or omission of the Bank or any Indemnified Party under this
Agreement, except for any claim resulting from the negligence, willful
misfeasance or bad faith of the Bank or any Indemnified Party. Without limiting
the foregoing, neither the Bank nor the Indemnified Parties shall be liable for,
and the Bank and the Indemnified Parties shall be indemnified against, any Claim
arising as a result of:
(a) Any Act or omission by the Bank or any Indemnified Party in good
faith reliance upon the terms of this Agreement, any Officer's Certificate,
Proper Instructions, resolution of the Board, telegram, telecopier, notice,
request, Certificate or other instrument reasonably believed by the Bank to
genuine;
(b) Any Act or omission of any subcustodian selected by or at the
direction of the Fund;
<PAGE>
(c) Any Act or omission of any Foreign Custody Manager other than the
Bank or any Act or omission of any Eligible Foreign Custodian if the Bank is not
the Foreign Custody Manager;
(d) Any Corporate Action, distribution or other event related to
Portfolio Securities which, at the direction of the Fund, have not been
registered in the name of the Bank or its nominee;
(e) Any Corporate Action requiring a Response for which the Bank has
not received Proper Instructions or obtained Actual possession of all necessary
Securities, consents or other materials by 5:00 p.m. on the date specified as
the response deadline;
(f) Any Act or omission of any European branch of a U.S. Banking
institution that is the Issuer of eurodollar CDs in connection with any
eurodollar CDs held by such European branch;
(g) information relied on in good faith by the Bank and supplied by
any Authorized Person in connection with the calculation of (i) The net asset
value and public offering price of the shares of the Fund or (ii) The Yield
Calculation; or
(h) Any acts of God, earthquakes, fires, floods, storms or other
disturbances of nature, epidemics, strikes, riots, nationalization,
expropriation, currency restrictions, Acts of war, civil war or terrorism,
insurrection, nuclear fusion, fission or radiation, the interruption, loss or
malfunction of utilities, transportation or computers (hardware or software) and
computer facilities, the unavailability of energy sources and other similar
happenings or events, provided that the Bank has taken reasonable steps to
protect against potential disruption caused by the foregoing.
15.2 Notwithstanding anything to the contrary in this Agreement, in
no event shall the Bank or the indemnified Parties be liable to the Fund or any
third party for lost profits or lost revenues or any special, consequential,
punitive or incidental damages of any kind whatsoever in connection with this
Agreement or any Activities hereunder.
16. Termination.
-----------
16.1 The term of this Agreement shall be one year commencing upon the
date hereof (the "Initial Term"), unless earlier terminated as provided herein.
after the expiration of the Initial Term, the term of this Agreement shall
automatically renew for successive one-year terms (each a "Renewal Term") unless
notice of non-renewal is delivered by the non-renewing party to the other party
no later than sixty days prior to the expiration of the Initial Term or any
Renewal Term, as the case may be.
(a) Either party hereto may terminate this Agreement prior to the
expiration of the Initial Term in the event the other party violates any
material provision of this Agreement, provided that the non-violating party
gives written notice of such violation to the violating party and the violating
party does not cure such violation within 60 days of receipt of such notice.
<PAGE>
(b) Either party may terminate this Agreement during any renewal term
upon sixty days written notice to the other party. any termination pursuant to
this paragraph 16.1(b) shall be effective upon expiration of such sixty days,
provided, however, that the effective date of such termination may be postponed
to a date not more than one hundred twenty days after delivery of the written
notice: (i) at the request of the Bank, in order to prepare for the transfer by
the Bank of all of the assets of the Fund held hereunder; or (ii) at the request
of the Fund, in order to give the Fund an opportunity to make suitable
arrangements for a successor custodian.
16.2 In the event of the termination of this Agreement, the Bank will
immediately upon receipt or transmittal, as the case may be, of notice of
termination, commence and prosecute diligently to completion the transfer of all
cash and the delivery of all Portfolio Securities duly endorsed and all records
maintained under Section 11 to the successor custodian when appointed by the
Fund. The obligation of the Bank to deliver and transfer over the assets of the
Fund held by it directly to such successor custodian will commence as soon as
such successor is appointed and will continue until completed as aforesaid. if
the Fund does not select a successor custodian within sixty (60) days from the
date of delivery of notice of termination the Bank may, subject to the
provisions of subSection 16.3, deliver the Portfolio Securities and cash of the
Fund held by the Bank to a Bank or trust company of the Bank's own selection
which meets the requirements of Section 17(f)(1) of the 1940 Act and has a
reported capital, surplus and undivided profits aggregating not less than
$2,000,000, to be held as the property of the Fund under terms similar to those
on which they were held by the Bank, whereupon such Bank or trust company so
selected by the Bank will become the successor custodian of such assets of the
Fund with the same effect as though selected by the Board. Thereafter, the Bank
shall be released from any and all obligations under this Agreement.
16.3 Prior to the expiration of sixty (60) days after notice of
termination has been given, the Fund may furnish the Bank with an order of the
Fund advising that a successor custodian cannot be found willing and able to Act
upon reasonable and customary terms and that there has been submitted to the
shareholders of the Fund the question of whether the Fund will be liquidated or
will function without a custodian for the assets of the Fund held by the Bank.
in that event the Bank will deliver the Portfolio Securities and cash of the
Fund held by it, subject as aforesaid, in accordance with one of such
alternatives which may be approved by the requisite vote of shareholders, upon
receipt by the Bank of a copy of the minutes of the meeting of shareholders at
which Action was taken, certified by the Fund's Secretary and an opinion of
counsel to the Fund in form and content satisfActory to the Bank. Thereafter,
the Bank shall be released from any and all obligations under this Agreement.
16.4 The Fund shall reimburse the Bank for any reasonable expenses
incurred by the Bank in connection with the termination of this Agreement.
<PAGE>
16.5 At any time after the termination of this Agreement, the Fund
may, upon written request, have reasonable access to the records of the Bank
relating to its performance of its duties as custodian.
17. Confidentiality. Both parties hereto agree than any non-public
---------------
information obtained hereunder concerning the other party is confidential and
may not be disclosed without the consent of the other party, except as may be
required by applicable law or at the request of a governmental agency. The
parties further agree that a breach of this provision would irreparably damage
the other party and accordingly agree that each of them is entitled, in addition
to all other remedies at law or in equity to an injunction or injunctions
without bond or other Security to prevent breaches of this provision.
18. Notices. Any notice or other instrument in writing Authorized or
-------
required by this Agreement to be given to either party hereto will be
sufficiently given if addressed to such party and delivered via (i) United
States Postal Service registered mail, (ii) Telecopier with written
confirmation, (iii) hand delivery with signature to such party at its office at
the address set forth below, namely:
(a) In the case of notices sent to the Fund to:
Hewitt Series Trust
100 Half Day Road
Lincolnshire, IL 60069
Attn: James B. Lee
With a copy to: Peter Ross
(b) in the case of notices sent to the Bank to:
Investors Bank & Trust Company
200 clarendon street, P.O. Box 9130
Boston, Massachusetts 02117-9130
Attention: Andrew Nesvet, Director - Client Management
With a copy to: John E. Henry, General Counsel
or at such other place as such party may from time to time designate
in writing.
19. Amendments. This Agreement may not be altered or amended, except
----------
by an instrument in writing, executed by both parties.
20. Parties. This Agreement will be binding upon and shall inure to
-------
the benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement will not be assignable by the Fund
without the written consent of the Bank or by the Bank without the written
consent of the Fund, Authorized and approved by its Board; and provided further
that termination proceedings pursuant to Section 16 hereof will not be deemed to
be an assignment within the meaning of this provision.
<PAGE>
21. Governing Law. This Agreement and all performance hereunder will
-------------
be governed by the laws of the Commonwealth of Massachusetts, without regard to
conflict of laws provisions.
22. Counterparts. 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.
23. Entire Agreement. This Agreement, together with its Appendices,
----------------
constitutes the sole and entire Agreement between the parties relating to the
subject matter herein and does not operate as an acceptance of any conflicting
terms or provisions of any other instrument and terminates and supersedes any
and all prior Agreements and undertakings between the parties relating to the
subject matter herein.
24. Limitation of Liability. The Bank agrees that the obligations
-----------------------
assumed by the Fund hereunder shall be limited in all cases to the assets of the
Fund and that the Bank shall not seek satisfAction of any such obligation from
the officers, agents, employees, trustees, or shareholders of the Fund.
25. Several Obligations of the Portfolios. This Agreement is an
-------------------------------------
Agreement entered into between the Bank and the Fund with respect to each
Portfolio. With respect to any obligation of the Fund on behalf of any
Portfolio arising out of this Agreement, the Bank shall look for payment or
satisfaction of such obligation solely to the assets of the Portfolio to which
such obligation relates as though the Bank had separately contrActed with the
Fund by separate written instrument with respect to each Portfolio.
[Remainder of Page Intentionally Left Blank]
<PAGE>
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 written above.
HEWITT SERIES TRUST
By: /s/ Stacy L. Schaus
--------------------------
Name: Stacy L. Schaus
Title: President
INVESTORS BANK & TRUST COMPANY
By: /s/ Andrew Nesvet
--------------------------
Name: Andrew Nesvet
Title: Director, Client Management
<PAGE>
Appendices
----------
Appendix A.............................................. Series or Portfolios
Appendix B.............................................. Fee Schedule
Appendix C.............................................. Additional Services
<PAGE>
Appendix A
----------
Hewitt Money Market Fund
<PAGE>
Appendix B
----------
Hewitt Series Trust
Annual Fee Schedule
For One Money Market Fund - 2 Classes
September 1, 1998
================================================================================
Fund Accounting, Custody and Calculation of N.A.V., Transfer Agency, Fund
Administration, Financial Statement Preparation and Blue Sky
================================================================================
A. FUND ACCOUNTING, CUSTODY AND CALCULATION OF N.A.V., TRANSFER AGENCY, FUND
-------------------------------------------------------------------------
ADMINISTRATION, FINANCIAL STATEMENT PREPARATION AND BLUE SKY
------------------------------------------------------------
The Annual Fee for Fund Accounting, Custody and Calculation of N.A.V.,
Transfer Agency, Fund Administration, Financial Statement Preparation and
Blue Sky for the one (1) Hewitt Money Market Fund (including two classes)
will be charged according to the following schedule. The following schedule
is exclusive of transaction costs and out-of-pocket expenses.
ANNUAL FEE
----------
Annual Fee per Fund $70,000
For each additional class added beyond the first two classes there will be
an annual fee of $28,000 for the above services.
Blue Sky services, which are to be billed separately from the above, will
be billed at an annual rate of $100.00 per permit filed.
B. TRANSACTION COSTS PER TRANSACTION
----------------- ---------------------
incoming wires 5.00
outgoing wires 7.00
================================================================================
MISCELLANEOUS
================================================================================
A. OUT-OF-POCKET
-------------
- These charges consist of:
- Telephone
- Ad Hoc reporting
- TA - Non-current Day Inquiry ($1.00 per inquiry)
- Third Party Review
- Forms and Supplies
- Printing/Postage/Delivery
<PAGE>
- Systems Development/Reports/Transmissions
- Equipment Rental
- Legal costs associated with substantial alterations of IBT's standard
Agreements
B. BALANCE CREDITS
---------------
We allow use of balance credit against fees (excluding out-of-pocket
charges) for collected Fund balances arising out of the custody
relationship. The monthly earnings allowance is equal to 75% of the 90-day
T-bill rate.
C. SYSTEMS
-------
The details of any Systems work required to service this Fund will be
determined after a thorough business analysis. all Systems work, including
creating customized reports and establishing Systems/communications
interfaces with Hewitt, other providers, etc., will be billed on a time and
materials basis.
D. OTHER ASSUMPTIONS
-----------------
The fee schedule assumes that there will be two (2) classes of shares.
Also, this schedule reflects the fAct that the Fund will not declare a
daily distribution, but will distribute monthly or annually only. increases
in the number of classes or any change in the frequency of distributions
will result in an increase in the fees noted above.
This fee schedule does not reflect the impAct, if any, on ibt's processing
transactions using Fundserve or other nscc applications. the fees
associated with such applications and any related Systems development costs
will be determined at a later date prior to implementation.
The above fees will be charged against the Funds' custodian checking
Account five business days after the invoice is mailed to the Fund.
This annual fee schedule is valid for 30 days and assumes the execution of
IBT's standard contrActual Agreements for a minimum term of one (1) year.
All charges will be billed monthly. The fee schedule will be effective upon
start-up of the Fund.
<PAGE>
Appendix C
----------
<PAGE>
EX-99.H1
ADMINISTRATION AGREEMENT
This Administration Agreement is made as of September 1, 1998 by and
between Hewitt Associates LLC ("HA"), and Hewitt Series Trust, a Delaware
business trust (the "Trust").
WITNESSETH:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust desires to retain HA to render certain administrative
services to Hewitt Money Market Fund (the "Fund"), the sole series of the Trust,
and HA is willing to render such services;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints HA to act as administrator of
the Trust on the terms set forth in this Agreement. HA accepts such appointment
and agrees to render the services herein set forth for the compensation provided
for in Schedule A, annexed hereto and incorporated herein.
2. Delivery of Documents. The Trust has furnished HA with copies properly
certified or authenticated of each of the following:
(a) Resolutions of the Trust's Board of Trustees authorizing the
appointment of HA to provide certain administrative services to the Fund and
approving this Agreement;
(b) The Trust's Certificate of Trust filed with the Secretary of the
State of Delaware on July 7, 1998, the Trust's Declaration of Trust and all
amendments thereto (the "Declaration of Trust");
(c) The Trust's By-Laws and all amendments thereto (the "By-Laws");
(d) The Third Party Feeder Fund Agreement between Master Investment
Portfolio and the Trust dated as of September 1, 1998;
(e) The Custody Agreement between Investors Bank & Trust Company (the
"IBTC") and the Trust dated September 1, 1998;
<PAGE>
(f) The Transfer Agency and Service Agreement between IBTC and the
Trust dated as of September 1, 1998;
(g) The Sub-Administration Agreement between IBTC and the Trust dated
as of September 1, 1998;
(h) The Distribution Agreement between Hewitt Services LLC and the
Trust dated September 1, 1998; and
(i) The Trust's Registration Statement on Form N-1A (the
"Registration Statement") under the Securities Act of 1933 and under the 1940
Act (as filed with the Securities and Exchange Commission ("SEC") on July 16,
1998, relating to the Trust's shares of beneficial ownership, $.001 par value
per share, representing interests in the Fund and all amendments thereto.
The Trust will furnish HA from time to time with copies, properly certified
or authenticated, of all amendments of or supplements to the foregoing, as well
as copies of all prospecuses and statements of additional information of the
Fund and all amendments and supplements thereto (together, the "Prospectus").
Furthermore, the Trust will provide HA with any other documents that HA may
reasonably request and will notify HA as soon as possible of any matter
materially affecting the performance by HA of its services under this Agreement.
3. Duties as Administrator. Subject to the supervision and direction of
the Board of Trustees of the Trust, HA, as administrator, will assist in
supervising various aspects of the Trust's administrative operations and
undertakes to perform the following specific services:
(a) Maintaining such office facilities as necessary to provide the
services hereafter set forth (which may be in the offices of HA or a corporate
affiliate);
(b) Furnishing non-investment related statistical and research data,
data processing services, clerical services, executive and administrative
services, and stationery and office supplies in connection with its services
hereunder;
(c) Furnishing corporate secretarial services including preparation
and distribution of materials for Board of Trustees meetings;
(d) Assisting in the preparation of the Trust's Registration
Statement and any Pre-Effective and Post-Effective Amendments to the Trust's
Registration statement, Notices of Annual or Special Meetings of Shareholders
and Proxy materials relating to such Meetings;
(e) Assisting in the preparation of periodic reports to shareholders
and regulatory filings;
<PAGE>
(f) Assisting in the determination of the jurisdictions in which the
Trust's shares will be registered or qualified for sale;
(g) Providing the services of persons employed by HA or its
affiliates who may be appointed as officers of the Trust by the Trust's Board of
Trustees;
(h) Assisting the Trust in routine regulatory examinations of the
Trust, and working closely with outside counsel to the Trust in response to any
litigation, investigations or regulatory matters; and
(i) Assisting in the preparation of the financial statements of the
Fund and in coordinating the annual audit of such financial statements by the
independent auditors of the Trust.
In performing its duties as administrator of the Trust, HA will act in
accordance with the Declaration of Trust, By-Laws, Prospectus of the Fund and
with the instructions and directions of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act and the rules
thereunder and all other applicable federal or state laws and regulations.
4. Allocation of Expenses and Fees. HA shall bear all expenses in
connection with the performance of its services under this Agreement, except as
noted below.
(a) HA will from time to time employ or associate with itself such
person or persons as HA may believe to be particularly suited to assist it in
performing services under this Agreement. Such person or persons may be officers
and employees who are employed by both HA and the Trust. The compensation of
such person or persons shall be paid by HA and no obligation shall be incurred
on behalf of the Trust in such respect.
(b) HA shall not be required to pay any of the following expenses
incurred by the Trust: membership dues in the Investment Company Institute or
any similar organization; investment advisory expenses; costs of stock
certificates; the costs of printing and mailing prospectuses, reports and
notices for use by shareholders of the Fund; interest on borrowed money;
brokerage commissions; taxes and fees payable to Federal, state and other
governmental agencies; fees of Trustees of the Trust who are not affiliated with
HA or with any affiliated company of HA; outside auditing expenses; outside
legal expenses; or other expenses not specified in this Section 4 which may be
properly payable by the Trust.
(c) For the services to be rendered, the facilities to be furnished
and the payments to be made to HA, as provided for in this Agreement, the Trust
shall compensate HA for its services rendered pursuant to this Agreement in
accordance with
<PAGE>
the fee schedule set forth in Schedule A, annexed hereto and incorporated
herein; provided however, that HA shall absorb expenses of the Fund
(other than interest, brokerage commissions and extraordinary expenses) to the
extent necessary to assure that total ordinary operating expenses of
Institutional Shares of the Fund do not exceed annually 0.45% of the average
daily net assets attributable to Institutional Shares and that total ordinary
operating expenses of Administrative Shares of the Fund do not exceed annually
0.75% of the average daily net assets attributable to Administrative Shares.
(d) HA will bill the Trust as soon as practicable after the end of
each calendar month. The Trust will promptly pay to HA the amount of such
billing.
5. Limitation of Liability.
(a) HA shall not be liable to the Trust for any error of judgment or
mistake of law or for any loss suffered by the Trust in connection with the
performance of its obligations and duties under this Agreement, except a loss
resulting from HA's willful misfeasance, bad faith or gross negligence in the
performance of such obligations and duties, or by reason of its reckless
disregard thereof. The Trust will indemnify HA against and hold it harmless from
any and all losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses) resulting from any claim, demand, action
or suit not resulting from the willful misfeasance, bad faith or gross
negligence of HA in the performance of such obligations and duties or by reason
of its reckless disregard thereof. The Trust and HA agree that the obligations
of the Trust under this Agreement shall not be binding upon any of the members
of the Trust's Board of Trustees, shareholders, nominees, officers, employees or
agents, whether past, present or future, of the Trust, individually, but are
binding only upon the assets and property of the Trust, as provided in the
Declaration of Trust. The execution and delivery of this Agreement have been
authorized by the Board of Trustees and signed by an authorized officer of the
Trust, acting as such, and neither such authorization by such members of the
Board of Trustees nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose any liability
on any of them personally, but shall bind only the assets and property of the
Trust as provided in the Declaration of Trust.
(b) In no event and under no circumstances shall either party to this
Agreement be liable to the other party for consequential or indirect loss of
profits, reputation or business or any other special damages under any provision
of this Agreement or for any act or failure to act hereunder.
6. Term and Termination.
(a) This Agreement shall become effective on the date hereof and
shall continue for a period of two (2) years from the date of its effectiveness
(the "Initial Term") unless earlier terminated pursuant to the terms of this
Agreement. Thereafter this Agreement may be renewed for successive terms of one
(1) year ("Renewal Term") each, provided, that each such Renewal Term is
approved by the Board of Trustees of the Trust, including the vote of a majority
of the Trustees who are not "Interested Persons," as defined by the 1940 Act and
the rules thereunder, of the Trust.
<PAGE>
(b) Either party may terminate this Agreement, without penalty, at
any time upon not than less than sixty (60) days' prior written notice to the
other party.
(c) In the event a termination notice is given by the Trust, all
reasonable out of pocket expenses associated with movement of records and
materials and conversion thereof will be borne by the Trust.
(d) This Agreement shall terminate automatically in the event of its
"assignment," as such term is defined by the 1940 Act and the rules thereunder.
7. Amendment to this Agreement. 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 bought.
8. Miscellaneous.
(a) This Agreement shall be construed in accordance with the
laws of the State of Illinois.
(b) This Agreement may be executed in any number of counterparts each
of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
(c) The captions of 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.
(d) This Agreement and the schedule hereto constitute the entire
agreement between the parties hereto with respect to the matters described
herein.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed and delivered by their duly authorized officers as of the date
first written above.
HEWITT ASSOCIATES LLC
By: /s/ C. L. Connolley, III
--------------------------
Name: C. L. Connolley, III
Title: Principal
HEWITT SERIES TRUST
By: /s/ Stacy L. Schaus
---------------------
Name: Stacy L. Schaus
Title: President
<PAGE>
SCHEDULE A
FEE SCHEDULE FOR ADMINISTRATION SERVICES
The fee shall be computed at the annual rate of 0.10% of the average daily net
assets of the Fund, and shall be paid monthly in arrears.
<PAGE>
EX-99.H2
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 1st day of September, 1998 by and between
Hewitt Series Trust, a business trust organized under the laws of Delaware (the
"Company"), and INVESTORS BANK & TRUST Company, a Massachusetts trust Company
(the "Bank").
WHEREAS, the Company desires to appoint the Bank as its transfer
agent, dividend disbursing agent and agent in connection with certain other
activities, and the Bank desires to accept such appointment;
WHEREAS, the Bank is duly registered as a transfer agent as provided
in Section 17A(c) of the Securities Exchange Act of 1934, as amended, (the "1934
Act");
WHEREAS, the Company is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets;
WHEREAS, the Company intends to initially offer shares in the series
listed on Appendix A hereto (such series, together with all other series
----------
subsequently established by the Company and made subject to this Agreement in
accordance with Section 17, being herein referred to as the "Fund(s)");
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, the Company and the Bank agree as follows:
1. Terms of Appointment; Duties of the Bank
1.1 Subject to the terms and conditions set forth in this
Agreement, the Company on behalf of the Funds hereby employs and appoints the
Bank to act, and the Bank agrees to act, as transfer agent for each of the
Fund(s)' authorized and issued shares of beneficial interest ("Shares"),
dividend disbursing agent and agent in connection with any accumulation, open-
account or similar plans provided to the shareholders of the Company
("Shareholders") and set out in the currently effective prospectus and statement
of additional information, as each may be amended from time to time, (the
"Prospectus") of the Company, including without limitation any periodic
investment plan or periodic withdrawal program.
1.2 The Bank agrees that it will perform the following services:
(a) In connection with procedures established from time to
time by agreement between the Company and the Bank, the Bank shall:
(i) Receive for acceptance orders for the purchase of Shares
and promptly deliver payment and appropriate documentation therefor to the
custodian of the Company appointed by the Board of Directors of the Company (the
"Custodian");
(ii) Pursuant to purchase orders, issue the appropriate number
of Shares and hold such Shares in the appropriate Shareholder account;
<PAGE>
(iii) Receive for acceptance redemption requests and
redemption directions and deliver the appropriate documentation therefor to the
Custodian;
(iv) At the appropriate time as and when it receives monies
paid to it by the Custodian with respect to any redemption, pay over or cause to
be paid over in the appropriate manner such monies as instructed by the
redeeming Shareholders;
(v) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
(vi) Prepare and transmit payments for dividends and
distributions declared by the Company on behalf of a Fund;
(vii) Create and maintain all necessary records including
those specified in Article 10 hereof, in accordance with all applicable laws,
rules and regulations, including but not limited to records required by Section
31(a) of the Investment Company Act of 1940, as amended (the "1940 Act"), and
those records pertaining to the various functions performed by it hereunder. All
records shall be available for inspection and use by the Company. Where
applicable, such records shall be maintained by the Bank for the periods and in
the places required by Rule 31a-2 under the 1940 Act;
(viii) Make available during regular business hours all
records and other data created and maintained pursuant to this Agreement for
reasonable audit and inspection by the Company, or any person retained by the
Company. Upon reasonable notice by the Company, the Bank shall make available
during regular business hours its facilities and premises employed in connection
with its performance of this Agreement for reasonable visitation by the Company,
or any person retained by the Company;
(ix) At the expense of and at the request of the Company,
maintain an adequate supply of blank share certificates for each Fund providing
for the issuance of certificates to meet the Bank's requirements therefor, in
the event the Company determines to issue certificates for Shares. Such share
certificates shall be properly signed by facsimile. The Company agrees that,
notwithstanding the death, resignation, or removal of any officer of the Company
whose signature appears on such certificates, the Bank may continue to
countersign certificates which bear such signatures until otherwise directed by
the Company. Share certificates may be issued and accounted for entirely by the
Bank and do not require any third party registrar or other endorsing party;
(x) Issue replacement share certificates in lieu of
certificates which have been lost, stolen, mutilated or destroyed, without any
further action by the Board of Directors or any officer of the Company, upon
receipt by the Bank of properly executed affidavits and lost certificate bonds,
in form satisfactory to the Bank with the Company and the Bank as obligees under
the bond. At the discretion of the Bank, and at its sole risk, the Bank may
issue replacement certificates without requiring the affidavits and lost
certificate bonds described above and the Company agrees to indemnify the Bank
against any and all losses or
-2-
<PAGE>
claims which may arise by reason of the issuance of such new certificates in the
place of the ones allegedly lost, stolen or destroyed; and
(xi) Record the issuance of Shares of the Company and
maintain, pursuant to Rule 17Ad-10(e) under the 1934 Act, a record of the total
number of Shares of the Company which are issued and outstanding, based upon
data provided to it by the Company. The Bank shall also provide the Company on a
regular basis with the total number of Shares which are issued and outstanding
and shall have no obligation, when recording the issuance of Shares, to monitor
the issuance of such Shares or to take cognizance of any laws relating to the
issue or sale of such Shares, which functions shall be the sole responsibility
of the Company.
(b) In addition to and not in lieu of the services set forth
in the above paragraph (a) or in any Schedule hereto, the Bank shall:
(i) perform all of the customary services of a transfer agent, dividend
disbursing agent and, as relevant, agent in connection with accumulation, open-
account or similar plans (including without limitation any periodic investment
plan or periodic withdrawal program); including but not limited to maintaining
all Shareholder accounts, preparing Shareholder meeting lists, mailing proxies,
receiving and tabulating proxies, mailing Shareholder reports and prospectuses
to current Shareholders, withholding taxes on all accounts, including
nonresident alien accounts, preparing and filing U.S. Treasury Department Forms
1099 and other appropriate forms required with respect to dividends and
distributions by federal authorities for all Shareholders, preparing and mailing
confirmation forms and statements of account to Shareholders for all purchases
and redemptions of Shares and other confirmable transactions in Shareholder
accounts, responding to Shareholder telephone calls and Shareholder
correspondence, preparing and mailing activity statements for Shareholders, and
providing Shareholder account information; and (ii) provide a system which will
enable the Company to monitor the total number of shares sold in each State. The
Company shall (i) identify to the Bank in writing those transactions and assets
to be treated as exempt from blue sky reporting for each State and (ii) verify
the establishment of transactions for each State on the system prior to
activation and thereafter monitor the daily activity for each State. The
responsibility of the Bank for a Fund's blue sky state registration status is
solely limited to the initial establishment of transactions subject to blue sky
compliance by such Fund(s) and the reporting of such transactions to the Fund(s)
as provided above.
(c) Additionally, the Bank shall utilize a system to identify
all share transactions which involve purchase and redemption orders that are
processed at a time other than the time of the computation of net asset value
per share next computed after receipt of such orders, and shall compute the net
effect upon the Fund(s) of such transactions so identified on a daily and
cumulative basis.
2. Sale of Company Shares
----------------------
2.1 Whenever the Company shall sell or cause to be sold any Shares
of a Fund, the Company shall deliver or cause to be delivered to the Bank a
document duly specifying: (i) the name of the Fund whose Shares were sold; (ii)
the number of Shares sold,
-3-
<PAGE>
trade date, and price; (iii) the amount of money to be delivered to the
Custodian for the sale of such Shares and specifically allocated to such Fund;
and (iv) in the case of a new account, a new account application or sufficient
information to establish an account.
2.2 The Bank will, upon receipt by it of a check or other payment
identified by it as an investment in Shares of one of the Funds and drawn or
endorsed to the Bank as agent for, or identified as being for the account of,
one of the Funds, promptly deposit such check or other payment to the
appropriate account postings necessary to reflect the investment. The Bank will
notify the Company, or its designee, and the Custodian of all purchases and
related account adjustments.
2.3 Under procedures as established by mutual agreement between
the Company and the Bank, the Bank shall issue to the purchaser or its
authorized agent such Shares, computed to the nearest three decimal points, as
he is entitled to receive, based on the appropriate net asset value of the
Funds' Shares, determined in accordance with the prospectus and any applicable
federal law or regulation. In issuing Shares to a purchaser or its authorized
agent, the Bank shall be entitled to rely upon the latest directions, if any,
previously received by the Bank from the purchaser or its authorized agent
concerning the delivery of such Shares.
2.4 The Bank shall not be required to issue any Shares of the
Company where it has received a written instruction from the Company or written
notification from any appropriate federal or state authority that the sale of
the Shares of the Fund(s) in question has been suspended or discontinued, and
the Bank shall be entitled to rely upon such written instructions or written
notification.
2.5 Upon the issuance of any Shares of any Fund(s) in accordance
with foregoing provisions of this Section, the Bank shall not be responsible for
the payment of any original issue or other taxes, if any, required to be paid by
the Company in connection with such issuance.
2.6 The Bank may establish such additional rules and regulations
governing the transfer or registration of Shares as it may deem advisable and
consistent with such rules and regulations generally adopted by transfer agents,
or with the written consent of the Company, any other rules and regulations.
3. Returned Checks. In the event that any check or other order for
---------------
the transfer of money is returned unpaid for any reason, the Bank will take such
steps as the Bank may, in its discretion, deem appropriate to protect the
Company from financial loss or as the Company or its designee may instruct.
Provided that the standard procedures, as agreed upon from time to time, between
the Company and the Bank, regarding purchases and redemptions of Shares, are
adhered to by the Bank, the Bank shall not be liable for any loss suffered by a
Fund as a result of returned or unpaid purchase or redemption transactions.
Legal or other expenses incurred to collect amounts owed to a Fund as a
consequence of returned or unpaid purchase or redemption transactions shall be
an expense of that Fund.
-4-
<PAGE>
4. Redemptions. Shares of any Fund may be redeemed in accordance
-----------
with the procedures set forth in the Prospectus of the Company and the Bank will
duly process all redemption requests.
5. Transfers and Exchanges. The Bank is authorized to review and
-----------------------
process transfers of Shares of each Fund, exchanges between Funds on the records
of the Funds maintained by the Bank, and exchanges between the Company and any
other entity as may be permitted by the Prospectus of the Company. If Shares to
be transferred are represented by outstanding certificates, the Bank will, upon
surrender to it of the certificates in proper form for transfer, and upon
cancellation thereof, countersign and issue new certificates for a like number
of Shares and deliver the same. If the Shares to be transferred are not
represented by outstanding certificates, the Bank will, upon an order therefor
by or on behalf of the registered holder thereof in proper form, credit the same
to the transferee on its books. If Shares are to be exchanged for Shares of
another Fund, the Bank will process such exchange in the same manner as a
redemption and sale of Shares, except that it may in its discretion waive
requirements for information and documentation.
6. Right to Seek Assurances. The Bank reserves the right to refuse
------------------------
to transfer or redeem Shares until it is satisfied that the requested transfer
or redemption is legally authorized, and it shall incur no liability for the
refusal, in good faith, to make transfers or redemptions which the Bank, in its
judgment, deems improper or unauthorized, or until it is satisfied that there is
no basis for any claims adverse to such transfer or redemption. The Bank may,
in effecting transfers, rely upon the provisions of the Uniform Act for the
simplification of Fiduciary Security Transfers or the Uniform Commercial Code,
as the same may be amended from time to time, which in the opinion of legal
counsel for the Company or the Bank's own legal counsel, do not require certain
documents in connection with the transfer or redemption of Shares of any Fund,
and the Company shall indemnify the Bank for any act done or omitted by it in
reliance upon such laws or opinions of counsel of the Company or of the Bank.
7. Distributions.
-------------
7.1 The Company will promptly notify the Bank of the declaration of
any dividend or distribution. The Company shall furnish to the Bank a
resolution of the Board of Directors of the Company certified by the Secretary
(a "Certificate"): (i) authorizing the declaration of dividends on a specified
periodic basis and authorizing the Bank to rely on oral instructions or a
Certificate specifying the date of the declaration of such dividend or
distribution, the date of payment thereof, the record date as of which
Shareholders entitled to payment shall be determined and the amount payable per
share to Shareholders of record as of such record date and the total amount
payable to the Bank on the payment date; or (ii) setting forth the date of the
declaration of any dividend or distribution by a Fund, the date of payment
thereof, the record date as of which Shareholders entitled to payment shall be
determined, and the amount payable per share to the Shareholders of record as
of that date and the total amount payable to the Bank on the payment date.
-5-
<PAGE>
7.2 The Bank, on behalf of the Company, shall instruct the Custodian
to place in a dividend disbursing account funds equal to the cash amount of any
dividend or distribution to be paid out. The Bank will calculate, prepare and
mail checks to (at the address as it appears on the records of the Bank), or
(where appropriate) credit such dividend or distribution to the account of, Fund
Shareholders, and maintain and safeguard all underlying records.
7.3 The Bank will replace lost checks at its discretion and in
conformity with regular business practices.
7.4 The Bank will maintain all records necessary to reflect the
crediting of dividends which are reinvested in Shares of the Company, including
without limitation daily dividends.
7.5 The Bank shall not be liable for any improper payments made in
accordance with a resolution of the Board of Directors of the Company.
7.6 If the Bank shall not receive from the Custodian sufficient cash
to make payment to all Shareholders of the Company as of the record date, the
Bank shall, upon notifying the Company, withhold payment to all Shareholders of
record as of the record date until such sufficient cash is provided to the Bank
and shall not be liable for any claim arising out of such withholding.
8. Other Duties. In addition to the duties expressly provided for
------------
herein, the Bank shall perform such other duties and functions and shall be paid
such amounts therefor as may from time to time be agreed to in writing.
9. Taxes. It is understood that the Bank shall file such appropriate
-----
information returns concerning the payment of dividends and capital gain
distributions and tax withholding with the proper Federal, State and Local
authorities as are required by law to be filed by the Company and shall withhold
such sums as are required to be withheld by applicable law.
10. Books and Records.
-----------------
10.1 The Bank shall maintain confidential records showing for each
Shareholder's account the following: (i) names, addresses and tax
identification numbers; (ii) numbers of Shares held; (iii) historical
information (as available from prior transfer agents) regarding the account of
each Shareholder, including dividends paid and date and price of all
transactions on a Shareholder's account; (iv) any stop or restraining order
placed against a Shareholder's account; (v) information with respect to
withholdings; (vi) any capital gain or dividend reinvestment order, plan
application, dividend address and correspondence relating to the current
maintenance of a Shareholder's account; (vii) certificate numbers and
denominations for any Shareholders holding certificates; (viii) any information
required in order for the Bank to perform the calculations contemplated or
required by this Agreement; and (ix) such other information and data as may be
required by applicable law.
-6-
<PAGE>
10.2 Any records required to be maintained by Rule 31a-1 under the
1940 Act will be preserved for the periods prescribed in Rule 31a-2 under the
1940 Act. Such records may be inspected by the Company during regular business
hours upon reasonable notice. The Bank may, at its option at any time, and
shall forthwith upon the Company's demand, turn over to the Company and cease to
retain in the Bank's files, records and documents created and maintained by the
Bank in performance of its service or for its protection. At the end of the
six-year retention period, such documents will either be turned over to the
Company, or destroyed in accordance with the Company's authorization.
10.3 Procedures applicable to the services to be performed hereunder
may be established from time to time by agreement between the Fund(s) and the
Bank. The Bank shall have the right to utilize any shareholder accounting and
recordkeeping systems which, in its opinion, qualifies to perform any services
to be performed hereunder. The Bank shall keep records relating to the services
performed hereunder, in the form and manner as it may deem advisable.
11. Fees and Expenses.
-----------------
11.1 For performance by the Bank pursuant to this Agreement, the
Fund(s) agree to pay the Bank an annual maintenance fee for each Shareholder
account as set out in the initial fee schedule attached as Appendix B hereto.
----------
Such fees and out-of-pocket expenses and advances identified under Section 11.2
below may be changed from time to time subject to mutual written agreement
between the Company and the Bank.
11.2 In addition to the fee paid under Section 11.1 above, the
Fund(s) agree to reimburse the Bank for out-of-pocket expenses or advances
incurred by the Bank for the items set out in the fee schedule attached hereto.
In addition, any other expenses incurred by the Bank at the request or with the
consent of the Company including, without limitation, any equipment or supplies
which the Company specifically orders or requires the Bank to purchase, will be
reimbursed by the Fund(s).
11.3 The Fund(s) agree to pay all fees and reimbursable expenses
within thirty days following the mailing of the respective billing notice.
Postage for mailing of dividends, proxies, Fund reports and other mailings to
all shareholder accounts shall be advanced to the Bank by the Fund(s) at least
seven (7) days prior to the mailing date of such materials. Any waiver or
extension by the Bank of the thirty and seven day time periods enumerated in
this section 11.3 shall not constitute a dismissal of any monies due under this
Agreement nor shall such waiver or extension apply to any future monies due to
the Bank hereunder.
12. Representations and Warranties of the Bank.
------------------------------------------
The Bank represents and warrants to the Company that:
12.1 It is a trust company duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts.
-7-
<PAGE>
12.2 It is empowered under applicable laws and by its charter and by-
laws to enter into and perform this Agreement.
12.3 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
12.4 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
13. Representations and Warranties of the Company.
---------------------------------------------
The Company represents and warrants to the Bank that:
13.1 It is a business trust duly organized and existing and in good
standing under the laws of the State of its incorporation as set forth in the
preamble hereto.
13.2 It is empowered under applicable laws and by its declaration of
trust and by-laws to enter into and perform this Agreement.
13.3 All proceedings required by said declaration and by-laws have
been taken to authorize it to enter into and perform this Agreement.
13.4 It is a open-end investment Company registered under the 1940
Act.
13.5 On or prior to the commencement of the public offering of
shares, a registration statement on Form N-1A (including a prospectus and
statement of additional information) under the Securities Act of 1933 and the
1940 Act shall be effective and will remain effective, and appropriate state
securities law filings will have been made and will continue to be made, with
respect to all Shares of the Company being offered for sale.
13.6 When Shares are hereafter issued in accordance with the terms of
the Prospectus, such Shares shall be validly issued, fully paid and
nonassessable by the Fund(s).
14. Indemnification.
---------------
14.1 Notwithstanding anything in this Agreement to the contrary, in
no event shall the Bank or any of its officers, directors, employees or agents
(collectively, the "Indemnified Parties") be liable to the Company, any Fund or
any third party, and the Company and each Fund shall indemnify and hold the Bank
and the Indemnified Parties harmless from and against any and all loss, damage,
liability, actions, suits, claims, costs and expenses, including legal fees, (a
"Claim") arising as a result of any act or omission of the Bank or any
Indemnified Party under this Agreement, except for any Claim resulting from the
negligence, willful misfeasance or bad faith of the Bank or any Indemnified
Party. Without limiting the foregoing, neither the Bank nor the Indemnified
Parties shall be liable for, and the Bank and the Indemnified Parties shall be
indemnified against, any Claim arising as a result of:
-8-
<PAGE>
(a) Any actions taken or omitted to be taken by the Bank or its
agents or subcontractors in good faith in reliance on, or use by the Bank or its
agents or subcontractors of, information, records and documents which (i) are
received by the Bank or its agents or subcontractors and furnished to such party
by or on behalf of the Fund(s), (ii) have been prepared and/or maintained by the
Fund(s) or any other person or firm on behalf of the fund(s), or (iii) were
received by the Bank or its agents or subcontractors from a prior transfer
agent.
(b) Any action taken or omitted to be taken by the Bank in good
faith reliance upon any law, act, regulation (a "Regulation") or interpretation
of a Regulation even though such Regulation may thereafter have been altered,
changed, amended or repealed.
(c) the Fund(s)' refusal or failure to comply with the terms of
this Agreement, or which arise out of the Funds' bad faith, negligence or
willful misfeasance or which arise out of the breach of any representation or
warranty of the Fund(s) hereunder.
(d) The reliance on, or the carrying out by the Bank or its agents
or subcontractors of any instructions or requests, whether written or oral, of
the Fund(s), which are reasonably believed by the Bank to be authorized and
genuine.
(e) The offer or sale of Shares by the Company in violation of
(i) any requirement under the federal securities laws or regulations; (ii) any
requirement under the securities laws or regulations of any state; or (iii) any
stop order or other determination or ruling by any federal or state agency with
respect to the offer or sale of such Shares.
14.2 The Bank shall indemnify and hold the Fund(s) harmless from and
against any and all losses, damages, costs, charges, legal fees, payments,
expenses and liability arising out of or attributed to any action or failure or
omission to act by the Bank as a result of the Bank's lack of good faith,
negligence, willful misconduct, knowing violation of law or fraud.
14.3 At any time the Bank may consult with legal counsel of the Bank
or the Company with respect to any matter arising in connection with the
services to be performed by the Bank under this Agreement, and the Bank and its
agents or subcontractors shall not be liable and shall be indemnified by the
Company for any action taken or omitted by it in reliance upon the opinion of
such counsel except for a knowing violation of law. The Bank, its agents and
subcontractors shall be protected and indemnified in acting upon any paper or
document furnished by or on behalf of the Fund(s), reasonably believed to be
genuine and to have been signed by an authorized person or persons, or upon any
instruction, information, data, records or documents provided to the Bank or its
agents or subcontractors by machine readable input, telex, crt data entry or
other similar means authorized by the fund(s). The Company shall provide the
Bank with a list of persons authorized to give instructions, and the Bank, its
agents and subcontractors shall not be held to have notice of any change of
authority of any person, until receipt of written notice thereof from the
Fund(s). The Bank, its agents and subcontractors shall also be protected and
indemnified in recognizing stock certificates which are reasonably believed to
be genuine and to bear the proper manual or facsimile signatures of an officer
of the Company, and one proper countersignature of any former transfer agent or
registrar, or of a co-transfer agent or co-registrar.
-9-
<PAGE>
14.4 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, interruption
of electrical power or other utilities, equipment or transmission failure or
damage reasonably beyond its control, or other causes reasonably beyond its
control, such party shall not be liable to the other for any damages resulting
from such failure to perform or otherwise from such causes; provided that such
party has in place reasonable backup facilities and procedures.
14.5 Neither party to this Agreement shall be liable to the other
party for special, incidental or consequential damages, even if the other party
has been advised of the possibility of such damages, under any provision of this
Agreement or for any act or failure to act hereunder as contemplated by this
Agreement.
14.6 In order that the indemnification provisions contained in this
Article 14 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking the indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
seeking indemnification shall give the indemnifying party full and complete
authority, information and assistance to defend such claim or proceeding, and
the indemnifying party shall have, at its option, sole control of the defense of
such claim or proceeding and all negotiations for its compromise or settlement.
The party seeking indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to indemnify it
except with the other party's prior written consent, which consent shall not be
unreasonably withheld.
15. Covenants of the Company and the Bank.
-------------------------------------
15.1 The Company shall promptly furnish to the Bank the
following:
(a) A certified copy of the resolution of the Trustees of
the Company authorizing the appointment of the Bank and the execution and
delivery of this Agreement.
(b) A copy of the declaration of trust and by-laws of the
Company and all amendments thereto.
(c) Copies of each vote of the Trustees designating
authorized persons to give instructions to the Bank, and a Certificate providing
specimen signatures for such authorized persons.
(d) Certificates as to any change in any Officer or Trustee
of the Company.
-10-
<PAGE>
(e) If applicable a specimen of the certificate of Shares in
each Fund of the Company in the form approved by the Trustees, with a
Certificate as to such approval.
(f) Specimens of all new certificates for Shares,
accompanied by the Trustees' resolutions approving such forms.
(g) All account application forms and other documents
relating to shareholder accounts or relating to any plan, program or service
offered by the Company.
(h) A list of all Shareholders of the Fund(s) with the name,
address and tax identification number of each Shareholder, and the number of
Shares of the Fund(s) held by each, certificate numbers and denominations ( if
any certificates have been issued), lists of any account against which stops
have been placed, together with the reasons for said stops, and the number of
Shares redeemed by the Fund(s).
(i) An opinion of counsel for the Company with respect to
the validity of the Shares and the status of such Shares under the Securities
Act of 1933.
(j) Copies of the Trust's registration statement on
Form N-1a (if applicable)as amended and declared effective by the Securities and
Exchange Commission and all post-effective amendments thereto.
(k) Such other certificates, documents or opinions as the
Bank may deem necessary or appropriate for the Bank in the proper performance of
its duties hereunder.
15.2 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Company for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
15.3 The Bank shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable. To the
extent required by Section 31 of the 1940 Act and the Rules thereunder, the Bank
agrees that all such records prepared or maintained by the Bank relating to the
services to be performed by the Bank hereunder are the confidential property of
the Company and will be preserved, maintained and made available in accordance
with such Section and Rules, and will be surrendered to the Company on and in
accordance with its request.
15.4 The Bank and the Company agree that all books, records,
information and data pertaining to the business of the other party which are
exchanged or received pursuant to the negotiation or the carrying out of this
Agreement shall remain confidential, and shall not be voluntarily disclosed to
any other person, except as may be required by law.
-11-
<PAGE>
15.5 In case of any requests or demands for the inspection of the
Shareholder records of the Company, the Bank will endeavor to notify the Company
and to secure instructions from an authorized officer of the Company as to such
request or demand. The Bank reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised by its counsel that it
may be subject to enforcement or other action by any court or regulatory body
for the failure to exhibit the Shareholder records to such person.
16. Term of Agreement.
-----------------
16.1 Termination of Agreement. The term of this Agreement shall be a
------------------------
period of one year commencing upon the date hereof (the "Initial Term"), unless
earlier terminated as provided herein. After the expiration of the Initial
Term, the term of this Agreement shall automatically renew for successive one-
year terms (each a "Renewal Term") unless notice of non-renewal is delivered by
the non-renewing party to the other party no later than sixty days prior to the
expiration of the Initial Term or any Renewal Term, as the case may be.
(a) Either party hereto may terminate this Agreement prior to the
expiration of the Initial Term in the event the other party violates any
material provision of this agreement, provided that the non-violating party
gives written notice of such violation to the violating party and the violating
party does not cure such violation within sixty days of receipt of such notice.
(b) Either party may terminate this Agreement during any Renewal Term
upon sixty days written notice to the other party. Any termination pursuant to
this paragraph 16.1(b) shall be effective upon expiration of such sixty days,
provided, however, that the effective date of such termination may be postponed
to a date not more than one hundred twenty days after delivery of the written
notice: (i) at the request of the Bank, in order to prepare for the transfer by
the Bank of its duties hereunder; or (ii) at the request of the Fund, in order
to give the Fund an opportunity to make suitable arrangements for a successor
transfer agent.
16.2 Should the Company exercise its right to terminate, all out-of-
pocket expenses associated with the movement of records and material will be
borne by the Company. Additionally, the Bank reserves the right to recover from
the Company any other reasonable expenses associated with such termination.
17. Additional Funds. In the event that the Company establishes one
----------------
or more series of Shares in addition to the series listed on Appendix A hereto
----------
with respect to which it desires to have the Bank render services as transfer
agent under the terms hereof, it shall so notify the Bank in writing, and if the
Bank agrees in writing to provide such services, such series of Shares shall
become a Fund hereunder and Appendix A shall be appropriately amended.
----------
-12-
<PAGE>
18. Assignment.
----------
18.1 Except as provided in Section 18.3 below, neither this Agreement
nor any rights or obligations hereunder may be assigned by either party without
the written consent of the other party.
18.2 This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
18.3 The Bank, may without further consent on the part of the
Company, subcontract for the performance of any of the services to be provided
hereunder to third parties, including any affiliate of the Bank, provided that
the Bank shall remain liable hereunder for any acts or omissions of any
subcontractor as if performed by the Bank.
19. Amendment. This Agreement may be amended or modified only by a
---------
written agreement executed by both parties.
20. Governing Law. This agreement shall be construed and the
-------------
provisions thereof interpreted under and in accordance with the laws of the
Commonwealth of Massachusetts, without regard to its conflict of laws
provisions.
21. Merger of Agreement and Severability.
------------------------------------
21.1 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written.
21.2 In the event any provision of this Agreement shall be held
unenforceable or invalid for any reason, the remainder of the Agreement shall
remain in full force and effect.
21.3 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.
22. Limitation of Liability. The Bank is hereby expressly put on
------------------------
notice of the limitation of liability set forth in the Declaration of Trust of
the Company and agrees that the obligations assumed by the Company hereunder
shall be limited in all cases to the assets of the Company and that the Bank
shall not seek satisfaction of any such obligation from the officers, agents,
employees, trustees, or shareholders of the Company.
23. Several Obligations of the Portfolios. This Agreement is an
--------------------------------------
agreement entered into between the Bank and the Company with respect to each
Portfolio. With respect to any obligation of the Company on behalf of any
portfolio arising out of this Agreement, the Bank shall look for payment or
satisfaction of such obligation solely to the assets of the Portfolio
-13-
<PAGE>
to which such obligation relates as though the Bank had separately contracted
with the Company by separate written instrument with respect to each Portfolio.
24. Notices. Any notice or other instrument in writing authorized or
-------
required by this agreement to be given to either party hereto will be
sufficiently given if addressed to such party and mailed or delivered to it at
its office at the address set forth below:
For the Fund(s):
Hewitt Series Trust
100 Half Day Road
Lincolnshire, IL 60069
Attn: James B. Lee
With a copy to: Peter Ross
For the Bank:
Investors Bank & Trust Company
200 Clarendon Street, P.O. Box 9130
Boston, Massachusetts 02117-9130
Attention: Andrew Nesvet, Director, Client Management
With a copy to: John E. Henry, General Counsel
[Remainder of Page Intentionally Left Blank]
-14-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and the year first above written.
HEWITT SERIES TRUST
By: /s/ Stacy L. Schaus
---------------------------------
Name: Stacy L. Schaus
Title: President
INVESTORS BANK & TRUST COMPANY
By: /s/ Andrew Nesuet
---------------------------------
Name: Andrew Nesuet
Title: Director, Client Management
-15-
<PAGE>
Appendices
----------
Appendix A ........................ Series or Portfolios
Appendix B ........................ Fee Schedule
<PAGE>
Appendix A
----------
Hewitt Money Market Fund
<PAGE>
Appendix B
----------
Hewitt Series Trust
Annual Fee Schedule
For One Money Market Fund - 2 Classes
September 1, 1998
================================================================================
FUND ACCOUNTING, CUSTODY AND CALCULATION OF N.A.V., TRANSFER AGENCY, FUND
ADMINISTRATION, FINANCIAL STATEMENT PREPARATION AND BLUE SKY
================================================================================
A. FUND ACCOUNTING, CUSTODY AND CALCULATION OF N.A.V., TRANSFER AGENCY, FUND
-------------------------------------------------------------------------
ADMINISTRATION, FINANCIAL STATEMENT PREPARATION AND BLUE SKY
------------------------------------------------------------
The Annual Fee for Fund Accounting, Custody and Calculation of N.A.V.,
Transfer Agency, Fund Administration, Financial Statement Preparation and
Blue Sky for the one (1) Hewitt Money Market Fund (including two classes)
will be charged according to the following schedule. The following schedule
is exclusive of transaction costs and out-of-pocket expenses.
ANNUAL FEE
----------
Annual Fee per fund $70,000
For each additional class added beyond the first two classes there will be
an annual fee of $28,000 for the above services.
Blue Sky services, which are to be billed separately from the above, will
be billed at an annual rate of $100.00 per permit filed.
B. TRANSACTION COSTS PER TRANSACTION
---------------------------------
Incoming Wires 5.00
Outgoing Wires 7.00
================================================================================
MISCELLANEOUS
================================================================================
A. OUT-OF-POCKET
-------------
- These charges consist of:
- Telephone
- Ad Hoc Reporting
- TA - Non-current Day Inquiry ($1.00 per inquiry)
- Third Party Review
- Forms and Supplies
<PAGE>
- Printing/Postage/Delivery
- Systems Development/Reports/Transmissions
- Equipment Rental
- Legal costs associated with substantial alterations of IBT's standard
agreements
B. BALANCE CREDITS
---------------
We allow use of balance credit against fees (excluding out-of-pocket
charges) for collected fund balances arising out of the custody
relationship. The monthly earnings allowance is equal to 75% of the 90-day
T-bill rate.
C. SYSTEMS
-------
The details of any systems work required to service this fund will be
determined after a thorough business analysis. All systems work, including
creating customized reports and establishing systems/communications
interfaces with Hewitt, other providers, etc., will be billed on a time and
materials basis.
D. OTHER ASSUMPTIONS
-----------------
The fee schedule assumes that there will be two (2) classes of shares.
Also, this schedule reflects the fact that the fund will not declare a
daily distribution, but will distribute monthly or annually only. Increases
in the number of classes or any change in the frequency of distributions
will result in an increase in the fees noted above.
This fee schedule does not reflect the impact, if any, on IBT's processing
transactions using FundServe or other NSCC applications. The fees
associated with such applications and any related systems development costs
will be determined at a later date prior to implementation.
The above fees will be charged against the funds' custodian checking
account five business days after the invoice is mailed to the fund.
This annual fee schedule is valid for 30 days and assumes the execution of
IBT's standard contractual agreements for a minimum term of one (1) year.
All charges will be billed monthly. The fee schedule will be effective upon
start-up of the fund.
<PAGE>
EX-99.H3
SUB-ADMINISTRATION AGREEMENT
AGREEMENT made as of September 1, 1998 by and between Hewitt Series
Trust , a business trust organized under the laws of Delaware (the "Fund"), and
INVESTORS BANK & TRUST COMPANY, a Massachusetts trust company (the "Bank").
WHEREAS, the Fund, a registered investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"), consisting of the
separate portfolios listed on Appendix A (each, a "Portfolio") hereto; and
----------
WHEREAS, the Fund desires to retain the Bank to render certain
administrative services to the Fund and the Bank is willing to render such
services.
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints the Bank to provide certain
-----------
administrative services to the Fund on the terms set forth in this Agreement.
The Bank agrees to render the services herein set forth for the compensation
herein provided.
2. Delivery of Documents. The Fund has furnished the Bank with
---------------------
copies properly certified or authenticated of each of the following:
(a) Resolutions of the Fund's Board of Trustees approving this
Agreement;
(b) The Fund's declaration of trust (the "Declaration") and all
amendments thereto (the "Articles");
(c) The Fund's by-laws and all amendments thereto (the "By-
Laws");
(d) The Fund's agreements with all service providers which
include any investment advisory agreements, sub-investment advisory agreements,
custody agreements, distribution agreements and transfer agency agreements
(collectively, the "Agreements");
(e) The Fund's most recent Registration Statement on Form N-1A
(the "Registration Statement") under the Securities Act of 1933 and under the
1940 Act and all amendments thereto; and
(f) The Fund's most recent prospectus and statement of
additional information (the "Prospectus"); and
(g) Such other certificates, documents or opinions as may
mutually be deemed necessary or appropriate for the Bank in the proper
performance of its duties hereunder.
<PAGE>
The Fund will immediately furnish the Bank with copies of all
amendments of or supplements to the foregoing. Furthermore, the Fund will
notify the Bank as soon as possible of any matter which may materially affect
the performance by the Bank of its services under this Agreement.
3. Duties of Bank. Subject to the supervision and direction of the
--------------
Board of Trustees of the Fund, the Bank will assist in conducting various
aspects of the Fund's administrative operations and undertakes to perform the
services described in Appendix C hereto. The Bank may, from time to time,
----------
perform additional duties and functions which shall be set forth in an amendment
to such Appendix C executed by both parties. At such time, the fee schedule
----------
included in Appendix B hereto shall be appropriately amended.
----------
In performing all services under this Agreement, the Bank shall act in
conformity with the Fund's Declaration and By-Laws and the 1940 Act, as the same
may be amended from time to time, and the investment objectives, investment
policies and other practices and policies set forth in the Fund's Registration
Statement, as the same may be amended from time to time. Notwithstanding any
item discussed herein, the Bank has no discretion over the Fund's assets or
choice of investments and cannot be held liable for any problem relating to such
investments.
4. Duties of the Fund.
------------------
(a) The Fund is solely responsible (through its transfer
agent or otherwise) for (i) providing timely and accurate reports ("Daily Sales
Reports") which will enable the Bank to monitor the total number of shares sold
in each state on a daily basis and (ii) identifying any exempt transactions
("Exempt Transactions") which are to be excluded from the Daily Sales Reports.
(b) The Fund agrees to make its legal counsel available to the
Bank for instruction with respect to any matter of law arising in connection
with the Bank's duties hereunder, and the Fund further agrees that the Bank
shall be entitled to rely on such instruction without further investigation on
the part of the Bank.
5. Fees and Expenses.
-----------------
(a) For the services to be rendered and the facilities to be
furnished by the Bank, as provided for in this Agreement, the Fund will
compensate the Bank in accordance with the fee schedule attached as Appendix B
----------
hereto. Such fees do not include out-of-pocket disbursements (as delineated on
the fee schedule or other expenses with the prior approval of the Fund's
management) of the Bank for which the Bank shall be entitled to bill the Fund
separately and for which the Fund shall reimburse the Bank.
(b) The Bank shall not be required to pay any expenses incurred
by the Fund.
<PAGE>
6. Limitation of Liability.
-----------------------
(a) The Bank, its directors, officers, employees and agents
shall not be liable for any error of judgment or mistake of law or for any loss
suffered by the Fund in connection with the performance of its obligations and
duties under this Agreement, except a loss resulting from willful misfeasance,
bad faith or negligence in the performance of such obligations and duties, or by
reason of its reckless disregard thereof. The Fund will indemnify the Bank, its
directors, officers, employees and agents against and hold it and them harmless
from any and all losses, claims, damages, liabilities or expenses (including
legal fees and expenses) resulting from any claim, demand, action or suit (i)
arising out of the actions or omissions of the Fund, including, but not limited
to, inaccurate Daily Sales Reports and misidentification of Exempt Transactions;
(ii) arising out of the offer or sale of any securities of the Fund in violation
of (x) any requirement under the federal securities laws or regulations, (y) any
requirement under the securities laws or regulations of any state, or (z) any
stop order or other determination or ruling by any federal or state agency with
respect to the offer or sale of such securities, which violation was not caused
by the Bank's acts or omissions or willful misfeasance, bad faith, or
negligence; or (iii) not resulting from the willful misfeasance, bad faith or
negligence of the Bank in the performance of such obligations and duties or by
reason of its reckless disregard thereof.
(b) The Bank may apply to the Fund at any time for instructions
and may consult counsel for the Fund, or its own counsel, and with accountants
and other experts with respect to any matter arising in connection with its
duties hereunder, and the Bank shall not be liable or accountable for any action
taken or omitted by it in good faith in accordance with such instruction, or
with the opinion of such counsel, accountants, or other experts. The Bank shall
not be liable for any act or omission taken or not taken in reliance upon any
document, certificate or instrument which it reasonably believes to be genuine
and to be signed or presented by the proper person or persons. The Bank shall
not be held to have notice of any change of authority of any officers,
employees, or agents of the Fund until receipt of written notice thereof has
been received by the Bank from the Fund.
(c) In the event the Bank is unable to perform, or is delayed
in performing, its obligations under the terms of this Agreement because of acts
of God, strikes, legal constraint, government actions, war, emergency
conditions, interruption of electrical power or other utilities, equipment or
transmission failure or damage reasonably beyond its control or other causes
reasonably beyond its control, the Bank shall not be liable to the Fund for any
damages resulting from such failure to perform, delay in performance, or
otherwise from such causes; provided that the Bank has taken reasonable steps to
protect against potential disruption caused by the foregoing.
(d) Notwithstanding anything to the contrary in this Agreement,
in no event shall the Bank be liable for special, incidental or consequential
damages, even if advised of the possibility of such damages.
<PAGE>
7. Termination of Agreement.
------------------------
(a) The term of this Agreement shall be one year commencing
upon the date hereof (the "Initial Term"), unless earlier terminated as provided
herein. After the expiration of the Initial Term, the term of this Agreement
shall automatically renew for successive one-year terms (each a "Renewal Term")
unless notice of non-renewal is delivered by the non-renewing party to the other
party no later than sixty days prior to the expiration of the Initial Term or
any Renewal Term, as the case may be.
(i) Either party hereto may terminate this Agreement
prior to the expiration of the Initial Term in the event the other party
violates any material provision of this Agreement, provided that the
violating party does not cure such violation within sixty days of receipt
of written notice from the non-violating party of such violation.
(ii) Either party may terminate this Agreement during any
Renewal Term upon sixty days written notice to the other party. Any
termination pursuant to this paragraph 7(a)(ii) shall be effective upon
expiration of such sixty days, provided, however, that the effective date
of such termination may be postponed, at the request of the Fund, to a date
not more than one hundred twenty days after delivery of the written notice
in order to give the Fund an opportunity to make suitable arrangements for
a successor administrator.
(b) At any time after the termination of this Agreement, the
Fund may, upon written request, have reasonable access to the records of the
Bank relating to its performance of its duties hereunder.
8. Miscellaneous.
-------------
(a) Any notice or other instrument authorized or required by
this Agreement to be given in writing to the Fund or the Bank shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
To the Fund:
Hewitt Series Trust
100 Half Day Road
Lincolnshire, IL. 60069
Attn: James B. Lee
With a copy to: Peter Ross
<PAGE>
To the Bank:
Investors Bank & Trust Company
200 Clarendon Street, P.O. Box 9130
Boston, MA 02117-9130
Attention: Andrew Nesvet, Director, Client Management
With a copy to: John E. Henry, General Counsel
(b) 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 either party without the
written consent of the other party.
(c) This Agreement shall be construed in accordance with the
laws of the Commonwealth of Massachusetts, without regard to its conflict of
laws provisions.
(d) This Agreement may be executed in any number of
counterparts each of which shall be deemed to be an original and which
collectively shall be deemed to constitute only one instrument.
(e) The captions of 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.
9. Confidentiality. All books, records, information and data
---------------
pertaining to the business of the other party which are exchanged or received
pursuant to the negotiation or the carrying out of this Agreement shall remain
confidential, and shall not be voluntarily disclosed to any other person, except
as may be required in the performance of duties hereunder or as otherwise
required by law.
10. Use of Name. The Fund shall not use the name of the Bank or any
-----------
of its affiliates in any prospectus, sales literature or other material relating
to the Fund in a manner not approved by the Bank prior thereto in writing;
provided however, that the approval of the Bank shall not be required for any
use of its name which merely refers in accurate and factual terms to its
appointment hereunder or which is required by the Securities and Exchange
Commission or any state securities authority or any other appropriate
regulatory, governmental or judicial authority; provided further, that in no
----------------
event shall such approval be unreasonably withheld or delayed.
11. Limitation of Liability. IBT is hereby expressly put on notice
-----------------------
of the limitation of liability set forth in the Declaration of Trust of the Fund
and agrees that the obligations assumed by the Fund hereunder shall be limited
in all cases to the assets of the Fund and that IBT shall not seek satisfaction
of any such obligation from the officers, agents, employees, trustees, or
shareholders of the Fund.
12. Several Obligations of the Portfolios. This Agreement is an
-------------------------------------
agreement entered into between IBT and the Fund with respect to each Portfolio.
With respect to any
<PAGE>
obligation of the Fund on behalf of any Portfolio arising out of this Agreement,
IBT shall look for payment or satisfaction of such obligation solely to the
assets of the Portfolio to which such obligation relates as though IBT had
separately contracted with the Fund by separate written instrument with respect
to each Portfolio.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed and delivered by their duly authorized officers as of the date
first written above.
HEWITT SERIES TRUST
By: /s/ Stacy L. Schaus
-------------------------
Name: Stacy L. Schaus
Title: President
INVESTORS BANK & TRUST COMPANY
By: /s/ Andrew Nesvet
-------------------------
Name: Andrew Nesvet
Title: Director, Client Management
<PAGE>
Appendices
----------
Appendix A......................Series or Portfolios
Appendix B......................Fee Schedule
Appendix C......................Services
<PAGE>
Appendix A
----------
Hewitt Money Market Fund
<PAGE>
Appendix B
----------
Hewitt Series Trust
Annual Fee Schedule
For One Money Market Fund - 2 Classes
September 1, 1998
================================================================================
FUND ACCOUNTING, CUSTODY AND CALCULATION OF N.A.V., TRANSFER AGENCY, FUND
ADMINISTRATION, FINANCIAL STATEMENT PREPARATION AND BLUE SKY
================================================================================
A. FUND ACCOUNTING, CUSTODY AND CALCULATION OF N.A.V., TRANSFER AGENCY, FUND
-------------------------------------------------------------------------
ADMINISTRATION, FINANCIAL STATEMENT PREPARATION AND BLUE SKY
------------------------------------------------------------
The Annual Fee for Fund Accounting, Custody and Calculation of N.A.V.,
Transfer Agency, Fund Administration, Financial Statement Preparation and
Blue Sky for the one (1) Hewitt Money Market Fund (including two classes)
will be charged according to the following schedule. The following schedule
is exclusive of transaction costs and out-of-pocket expenses.
ANNUAL FEE
----------
Annual Fee per fund $70,000
For each additional class added beyond the first two classes there will be
an annual fee of $28,000 for the above services.
Blue Sky services, which are to be billed separately from the above, will
be billed at an annual rate of $100.00 per permit filed.
B. TRANSACTION COSTS PER TRANSACTION
----------- ---------------------
Incoming Wires 5.00
Outgoing Wires 7.00
================================================================================
MISCELLANEOUS
================================================================================
A. OUT-OF-POCKET
-------------
- These charges consist of:
- Telephone
- Ad Hoc Reporting
- TA - Non-current Day Inquiry ($1.00 per inquiry)
- Third Party Review
- Forms and Supplies
- Printing/Postage/Delivery
- Systems Development/Reports/Transmissions
- Equipment Rental
- Legal costs associated with substantial alterations
of IBT's standard agreements
<PAGE>
B. BALANCE CREDITS
---------------
We allow use of balance credit against fees (excluding out-of-pocket
charges) for collected fund balances arising out of the custody
relationship. The monthly earnings allowance is equal to 75% of the
90-day T-bill rate.
C. SYSTEMS
-------
The details of any systems work required to service this fund will be
determined after a thorough business analysis. All systems work, including
creating customized reports and establishing systems/communications
interfaces with Hewitt, other providers, etc., will be billed on a time and
materials basis.
D. OTHER
-----
Assumptions:
------------
The fee schedule assumes that there will be two (2) classes of shares. Also,
this schedule reflects the fact that the fund will not declare a daily
distribution, but will distribute monthly or annually only. Increases in the
number of classes or any change in the frequency of distributions will
result in an increase in the fees noted above.
This fee schedule does not reflect the impact, if any, on IBT's processing
transactions using FundServe or other NSCC applications. The fees associated
with such applications and any related systems development costs will be
determined at a later date prior to implementation.
The above fees will be charged against the funds' custodian checking account
five business days after the invoice is mailed to the fund.
This annual fee schedule is valid for 30 days and assumes the execution of
IBT's standard contractual agreements for a minimum term of one (1) year.
All charges will be billed monthly. The fee schedule will be effective upon
start-up of the fund.
<PAGE>
Appendix C
----------
INVESTORS BANK & TRUST SUMMARY OF SUB-ADMINISTRATION FUNCTIONS
9/1/98
HEWITT ASSOCIATES
<TABLE>
<CAPTION>
FUNCTION INVESTORS BANK & TRUST HEWITT
- - - ------------------------------------------------------------------------------------------------------------------------------------
MANAGEMENT REPORTING
& TREASURY ADMINISTRATION
- - - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Prepare agenda and board materials for Prepare agenda and resolutions
quarterly board meetings. and assemble board materials
for quarterly board meetings.
Prepare supporting information
and materials when necessary.
Attend board and committee
meetings and prepare minutes.
FREQUENCY: QUARTERLY
Monitor portfolio compliance in Perform tests of certain specific Continuously monitor portfolio
accordance with the current Prospectus portfolio activity designed from activity and Fund operations in
and SAI. provisions of the Fund's Prospectus conjunction with 1940 Act,
and SAI at the Master level only. Prospectus, SAI and any other
Follow-up on potential violations. applicable laws and
regulations. Monitor testing
results and approve resolution
FREQUENCY: DAILY of compliance issues.
Provide compliance summary package. Provide a report of compliance Review report.
testing results.
Frequency: Monthly
</TABLE>
<TABLE>
FUNCTION SUGGESTED FUND AUDITOR OR
COUNSEL
- - - ------------------------------------------------------------------------------------------------------------------------------------
MANAGEMENT REPORTING
& TREASURY ADMINISTRATION
- - - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Prepare agenda and board materials for C - Review agenda, board
quarterly board meetings. material and board and
committee meeting minutes.
Ensure BOD material contains
all required information
that the BOD must review
and/or approve to perform
their duties as directors.
FREQUENCY: QUARTERLY
Monitor portfolio compliance in A/C - Provide consultation
accordance with the current Prospectus as needed on compliance
and SAI. issues.
FREQUENCY: DAILY
Provide compliance summary package. A/C - Provide consultation
as needed.
FREQUENCY: MONTHLY
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- - - ----------------------------------------------------------------------------------------------------------------------
MANAGEMENT REPORTING
& TREASURY ADMINISTRATION (CONT.)
- - - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Perform asset diversification tests Continuously monitor portfolio
Perform asset diversification testing at each tax quarter end at the activity in conjunction with
to establish qualification as a RIC. Master level. Follow-up on issues. IRS requirements. Review test
results and take any necessary
action. Approve tax positions
taken.
FREQUENCY: QUARTERLY
Perform qualifying income testing to Perform qualifying income testing Continuously monitor portfolio
establish qualification as a RIC. (on book basis income, unless activity in conjunction with
material differences are IRS requirements. Review test
anticipated) on quarterly basis and results and take any necessary
as may otherwise be necessary. action. Approve tax positions
FREQUENCY: QUARTERLY Follow-up on issues. taken.
Prepare the Fund's annual expense Prepare preliminary expense budget. Provide asset level
budget. Establish daily accruals. Notify fund accounting of new projections. Approve expense
accrual rates. budget.
FREQUENCY: ANNUALLY
</TABLE>
<TABLE>
- - - ----------------------------------------------------------------------------------------------------------------------
MANAGEMENT REPORTING
& TREASURY ADMINISTRATION (CONT.)
- - - ----------------------------------------------------------------------------------------------------------------------
<S> <C>
Perform asset diversification testing A - Provide consultation as
to establish qualification as a RIC. needed in establishing
positions to be taken in tax
treatment of particular
issues. Review quarter end
tests on a current basis.
FREQUENCY: QUARTERLY
Perform qualifying income testing to A- Consult as needed on tax
establish qualification as a RIC. accounting positions to be
taken. Review in
conjunction with year-end
audit.
FREQUENCY: QUARTERLY
Prepare the Fund's annual expense
budget. Establish daily accruals.
FREQUENCY: ANNUALLY
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- - - -----------------------------------------------------------------------------------------------------------------------------------
MANAGEMENT REPORTING
& TREASURY ADMINISTRATION (CONT.)
- - - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Monitor the Fund's expense Monitor actual expenses updating Provide asset level projections C/A - Provide consultation
budget. budgets/ expense accruals. Review quarterly. Provide vendor as requested.
Review the Fund's multi-class expense differentials among classes information as necessary.
expense differentials. to ensure consistency with Rule Review expense analysis and
18f-3 or the Fund's exemptive approve budget revisions.
application and the Fund's private
letter ruling or published ruling.
FREQUENCY: QUARTERLY
Receive and coordinate Propose allocations of invoice among Approve invoices and
payment of fund expenses. Funds and obtain authorized approval allocations of payments. Send
to process payment. invoices to IBT in a timely
FREQUENCY: AS OFTEN manner.
AS NECESSARY
Calculate periodic dividend Calculate amounts available for Establish and maintain dividend C - Review dividend
rates to be declared in distribution. Coordinate review by and distribution policies. resolutions in conjunction
accordance with management management and/or auditors. Notify Approve distribution rates per with Board approval.
guidelines. custody and transfer agent of share and aggregate amounts.
authorized dividend rates in Obtain Board approval when A - Review and concur with
accordance with Board approved required. proposed distributions
policy. Report dividends to Board
as required.
FREQUENCY: ANNUALLY
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- - - ----------------------------------------------------------------------------------------------------------------------------------
MANAGEMENT REPORTING
& TREASURY ADMINISTRATION (CONT.)
- - - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Calculate total return information on Provide total return calculations. Review total return information.
Funds as defined in the current
Prospectus and SAI.
FREQUENCY: MONTHLY
Prepare responses to major industry Prepare, coordinate as necessary, Identify the services to which
questionnaires. and submit responses to the the Funds report. Provide
appropriate agency. information as requested.
FREQUENCY: AS OFTEN AS NECESSARY
Prepare disinterested director/trustee Summarize amounts paid to Provide social security numbers
Form 1099-Misc. directors/trustees during the and current mailing address for
calendar year. Prepare and mail trustees. Review and approve
Form 1099-Misc. information provided for Form
1099-Misc.
FREQUENCY: ANNUALLY
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- - - -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL REPORTING
- - - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Prepare financial information for Prepare selected portfolio and
presentation to Fund Management and financial information for
Board of Directors. inclusion in board material.
FREQUENCY: QUARTERLY
Coordinate the annual audit and Coordinate the creation of templates Provide past F/S and other
semi-annual preparation and printing of reflecting client-selected information required to create
financial statements and notes with standardized appearance and text of templates, including report
management, fund accounting and the financial statements and footnotes. style and graphics. Approve
fund auditors. Draft and manage production cycle. format and text as standard.
Coordinate with IBT fund accounting Approve production cycle and
the electronic receipt of portfolio assist in managing to the
and general ledger information. cycle. Coordinate review and
Assist in resolution of accounting approval by portfolio managers
issues. Using templates, draft of portfolio listings to be
financial statements, coordinate included in financial
auditor and management review, and statements. Prepare
clear comments. Coordinate printing appropriate management letter
of reports and EDGAR conversion with and coordinate production of
outside printer and filing with the Management Discussion and
SEC via EDGAR. Analysis. Review and approve
entire report. Make
FREQUENCY: ANNUALLY/SEMI-ANNUALLY appropriate representations in
conjunction with audit.
</TABLE>
<TABLE>
- - - -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL REPORTING
- - - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Prepare financial information for
presentation to Fund Management and
Board of Directors.
FREQUENCY: QUARTERLY
Coordinate the annual audit and A - Perform audit and issue
semi-annual preparation and printing of opinion on annual financial
financial statements and notes with statements.
management, fund accounting and the
fund auditors. A/C - Review reports.
FREQUENCY: ANNUALLY/SEMI-ANNUALLY
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- - - ------------------------------------------------------------------------------------------------------------------------------------
LEGAL
- - - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Prepare and file Form N-SAR. Prepare form for filing. Obtain any Provide appropriate responses.
necessary supporting documents. Review and authorize filing.
File with SEC via EDGAR.
FREQUENCY: SEMI-ANNUALLY
Prepare amendments to Registration Coordinate the preparation and
Statement. filing of post-effective
amendments. Coordinate with
FREQUENCY: ANNUAL UPDATE (INCLUDES outside printers the Edgar
UPDATING FINANCIAL HIGHLIGHTS, EXPENSE conversion, filing with the SEC
TABLES, RATIOS) PLUS ONE ADDITIONAL and printing of prospectus.
FILING PER FISCAL YEAR
Prepare Prospectus/SAI supplements. Coordinate the preparation of
Prospectus and SAI supplements.
File with the SEC via Edgar.
Coordinate printing of
supplements.
FREQUENCY: AS OFTEN AS REQUIRED
</TABLE>
<TABLE>
- - - ------------------------------------------------------------------------------------------------------------------------------------
LEGAL
- - - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Prepare and file Form N-SAR. C - Review initial filing.
A - Provide annual audit
internal control letter to
accompany the annual filing.
Provide annual multi-class
FREQUENCY: SEMI-ANNUALLY report when applicable.
Prepare amendments to Registration C - Review and approve
Statement. filings.
A/C - Provide consents as
FREQUENCY: ANNUAL UPDATE (INCLUDES appropriate.
UPDATING FINANCIAL HIGHLIGHTS, EXPENSE
TABLES, RATIOS) PLUS ONE ADDITIONAL
FILING PER FISCAL YEAR
Prepare Prospectus/SAI supplements. C - Review and approve
filings.
A/C - Provide consents as
appropriate.
FREQUENCY: AS OFTEN AS REQUIRED
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- - - ----------------------------------------------------------------------------------------------------------------------------------
LEGAL (CONT.)
- - - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Coordinate the preparation and filing of Accumulate capital stock Review and approve filing. C - Approve 24f-2 Notice.
Form 24f-2 Notice. information and draft
Form 24f-2 Notice. A - Review informally when
Coordinate filing of requested
approved Form with
SEC via Edgar.
FREQUENCY: ANNUALLY
Proxy Material/Shareholder Meetings Prepare drafts of proxy C - Review and approve proxy.
material for review, file
materials with SEC and
coordinate printing. Assist
proxy solicitation firm and
prepare scripts. Attend
FREQUENCY: AS NEEDED meeting and prepare minutes.
Assist in updating of fidelity bond Obtain required fidelity bond
insurance coverage. insurance coverage. Monitor
level of fidelity bond
insurance maintained in
accordance with required
coverage. Make annual filing of
fidelity bond insurance
FREQUENCY: ANNUALLY MATERIAL WITH THE SEC.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- - - ----------------------------------------------------------------------------------------------------------------------------------
LEGAL (CONT.)
- - - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Respond to regulatory audits. Compile and provide documentation Coordinate with regulatory C - Provide consultation as
pursuant to audit requests. Assist auditors to provide requested needed.
client in resolution of audit documentation and resolutions
inquiries. to inquiries.
FREQUENCY: AS NEEDED
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- - - -----------------------------------------------------------------------------------------------------------------------------------
BLUE SKY
- - - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Maintain effective Blue Sky notification Maintain records of fund sales for Identify states in which
filings for states in which Fund client designated states via PW filings are to be made.
Management intends to solicit sales of Blue2 compliance system. File
fund shares. annual notification renewal Identify exempt transactions to
documents and annual sales reports. transfer agent for appropriate
File amendments to increase dollar exclusion from blue sky
amounts authorized for sales by reporting.
funds, based upon client instruction.
File notifications to states for new
funds and/or classes, mergers and
liquidations. Provide periodic
reports on state authorization
amounts and sales amounts.
Determine state filing requirements
by using CCH Blue Sky Law Reporter,
ICI memoranda and state securities
commission directives (both written
FREQUENCY: ON-GOING and oral).
File amendments to registration File updated registration Inform IBT of filings prior to
statement with the applicable state statements, prospectuses, SAIs, SEC filing.
securities commissions in coordination supplements thereto, and annual
with SEC filing. reports to shareholders upon
approval/authorization by client.
FREQUENCY: ANNUAL UPDATES (INCLUDES
REGISTRATION STATEMENT, PROSPECTUS,
SAI) PLUS ONE ADDITIONAL FILING PER
FISCAL YEAR
- - - -----------------------------------------------------------------------------------------------------------------------------------
BLUE SKY
- - - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Maintain effective Blue Sky notification C - Provide consultation as
filings for states in which Fund needed on Blue Sky issues.
Management intends to solicit sales of
fund shares. C - Provide consultation on
product and institutional
exemptions.
FREQUENCY: ON-GOING
File amendments to registration C - Provide consultation as
statement with the applicable state needed on Blue Sky filing
securities commissions in coordination issues.
with SEC filing.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- - - -----------------------------------------------------------------------------------------------------------------------------------
TAX
- - - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Prepare income tax provisions. Calculate investment company taxable Provide transaction information
income, net tax exempt interest, net as requested. Identify Passive
capital gain and spillback dividend Foreign Investment Companies
requirements. Identify book-tax (PFICs). Approve tax
accounting differences. Track accounting positions to be
required information relating to taken. Approve provisions.
accounting differences.
FREQUENCY: ANNUALLY
- - - ---------------------------------------------------------------------------------------
TAX
- - - ---------------------------------------------------------------------------------------
<S> <C>
Prepare income tax provisions. A - Provide consultation as needed in
establishing positions to be taken in
tax treatment of particular issues.
Perform review in conujunction with
the year-end audit.
FREQUENCY: ANNUALLY
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- - - ----------------------------------------------------------------------------------------------------------------------------------
TAX (CONT.)
- - - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Calculate excise tax Calculate required distributions to Provide transaction information A - Provide consultation as
distributions avoid imposition of excise tax. as requested. Identify Passive needed in establishing
- Calculate capital gain net Foreign Investment Companies positions to be taken in tax
income and foreign currency (PFICs). Approve tax treatment of particular
gain/loss through October 31. accounting positions to be issues. Review and concur
- Calculate ordinary income and taken. Review and approve all with proposed distributions
distributions through a specified income and distribution per share.
cut off date . calculations, including
- Project ordinary income from projected income and dividend
cut off date to December 31. shares. Approve distribution
- Ascertain dividend shares. rates per share and aggregate
Identify book-tax accounting amounts. Obtain Board approval
differences. Track required when required.
information relating to accounting
differences. Coordinate review by
management and fund auditors.
Notify custody and transfer agent of
authorized dividend rates in
accordance with Board approved
policy. Report dividends to Board
as required.
FREQUENCY: ANNUALLY
Prepare tax returns Prepare excise and RIC tax returns Review and sign tax return. A - Review and sign tax
for Feeder. return as preparer.
FREQUENCY: ANNUALLY
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- - - ----------------------------------------------------------------------------------------------------------------------------------
TAX (CONT.)
- - - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Prepare Form 1099 Obtain yearly distribution Review and approve information
information. Calculate 1099 provided for Form 1099.
reclasses and coordinate with
transfer agent.
FREQUENCY: ANNUALLY
Prepare other year-end tax-related Obtain yearly income distribution Review and approve information
disclosures information. Calculate disclosures provided.
(i.e., dividend received deductions,
foreign tax credits, tax-exempt
income, income by jurisdiction) and
coordinate with transfer agent.
FREQUENCY: ANNUALLY
</TABLE>
<PAGE>
EX-99.H4
SHAREHOLDER SERVICING AGREEMENT
(Institutional Shares)
Agreement made this 1st day of Sepember, 1998, by and between Hewitt
Series Trust (the "Trust"), on behalf of its portfolio known as Hewitt Money
Market Fund (the "Fund"), and Hewitt Associates LLC ("HA").
W I T N E S S E T H:
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end, management investment
company;
WHEREAS, the Trust and HA wish to enter into an agreement with each
other with respect to the furnishing of account related services to certain
shareholders of the Fund ("Shareholder Services"); and
WHEREAS, shares of the Fund ("Shares") shall initially be of two
classes: Institutional Shares and Administrative Shares:
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints HA to serve as shareholder
servicing agent of the Fund with respect to the Institutional Shares on the
terms set forth in this Agreement, and HA accepts such appointment and agrees to
render the services herein.
2. Duties as Shareholder Servicing Agent. Subject to the supervision and
direction of the Board of Trustees of the Trust, HA, as a shareholder servicing
agent, undertakes to perform the following services:
(a) Receive and accept orders placed by employee benefit plans to
purchase and redeem Institutional Shares that are transmitted to HA in
accordance with procedures established by the plans with HA;
(b) Maintain records showing the number of Institutional Shares
allocable to individual participant accounts in the plans; and
(c) Send, or arrange to be sent, all shareholder communications of
the Fund relating to the Institutional Shares to the plans and plan
participants.
In performing its duties as shareholder servicing agent of the Fund with
respect to Institutional Shares, HA will act in accordance with the instructions
and directions of the Board
<PAGE>
of Trustees of the Trust and will comply with the requirements of the 1940 Act
and the rules thereunder and all other applicable federal or state laws and
regulations.
3. Allocation of Expenses. HA shall bear all expenses in connection with
the performance of its services under this Agreement, except that the Trust
shall reimburse HA for out-of-pocket costs incurred in transmitting shareholder
communications to shareholders of the Fund and plan participants.
4. Fees.
(a) For the services rendered pursuant to this Agreement, the Trust
shall pay HA the fees set forth in Schedule A, annexed hereto.
(b) HA will bill the Trust as soon as practicable after the end of
each calendar month. The Trust will promptly pay to HA the amount of such
billing.
5. Limitation of Liability.
(a) HA shall not be liable to the Trust for any error of judgment or
mistake of law or for any loss suffered by the Trust in connection with the
performance of its obligations and duties under this Agreement, except a loss
resulting from HA's willful misfeasance, bad faith or gross negligence in the
performance of such obligations and duties, or by reason of its reckless
disregard thereof. The Trust will indemnify HA against and hold it harmless from
any and all losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses) resulting from any claim, demand, action
or suit not resulting from the willful misfeasance, bad faith or gross
negligence of HA in the performance of such obligations and duties or by reason
of its reckless disregard thereof.
(b) The Trust and HA agree that the obligations of the Trust under
this Agreement shall not be binding upon any of the members of the Board of
Trustees, shareholders, nominees, officers, employees or agents, whether past,
present or future, of the Trust, individually, but are binding only upon the
assets and property of the Fund, as provided in the Declaration of Trust.
(b) In no event and under no circumstances shall either party to this
Agreement be liable to the other party for consequential or indirect loss of
profits, reputation or business or any other special damages under any provision
of this Agreement or for any act or failure to act hereunder.
6. Term and Termination.
(a) This Agreement shall become effective on the date hereof and
shall continue for a period of two (2) years (the "Initial Term") unless earlier
terminated pursuant to the terms of this Agreement. Thereafter this Agreement
may be renewed for successive terms of
-2-
<PAGE>
one (1) year ("Renewal Term") each, provided, that each such Renewal Term is
approved by the Board of Trustees of the Trust, including the vote of a majority
of the Trustees who are not "interested persons," as defined by the 1940 Act and
the rules thereunder, of the Trust.
(b) Either party may terminate this Agreement, without penalty, at
any time upon not than less than sixty (60) days' prior written notice to the
other party.
(c) This Agreement shall terminate automatically in the event of its
"assignment," as such term is defined by the 1940 Act and the rules thereunder.
7. Amendment to this Agreement. 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 bought.
8. Miscellaneous.
(a) This Agreement shall be construed in accordance with the laws of
the State of Illinois.
(b) This Agreement may be executed in any number of counterparts each
of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
(c) The captions of 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.
(d) This Agreement constitutes the entire agreement between the
parties hereto with respect to the matters described herein.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed and delivered by their duly authorized officers as of the date
first written above.
HEWITT ASSOCIATES LLC
By: /s/ C.L.Connolly, III
----------------------
Name: C.L.Connolly, III
Title: Principal
HEWITT SERIES TRUST
By: /s/ Stacy L. Schaus
--------------------
Name: Stacy L. Schaus
Title: President
-4-
<PAGE>
SCHEDULE A
FEE SCHEDULE
The fee payable to HA under this Agreement shall be computed at the annual rate
of 0.20% of the average daily net assets of the Fund attributable to
Institutional Shares, and shall be paid monthly.
-5-
<PAGE>
EX-99.H5
SHAREHOLDER SERVICING AGREEMENT
(Administrative Shares)
Agreement made this 1st day of September, 1998, by and between Hewitt
Series Trust (the "Trust"), on behalf of its portfolio known as Hewitt Money
Market Fund (the "Fund"), and Hewitt Services LLC ("HS").
WITNESSETH:
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end, management investment
company;
WHEREAS, the Trust and HS wish to enter into an agreement with each
other with respect to the furnishing of account related services to certain
shareholders of the Fund ("Shareholder Services"); and
WHEREAS, shares of the Fund ("Shares") shall initially be of two
classes: Institutional Shares and Administrative Shares:
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints HS to serve as shareholder
servicing agent of the Fund with respect to the Administrative Shares on the
terms set forth in this Agreement, and HS accepts such appointment and agrees to
render the services herein.
2. Duties as Shareholder Servicing Agent. Subject to the supervision and
direction of the Board of Trustees of the Trust, HS, as a shareholder servicing
agent, undertakes to perform the following specific services:
(a) Maintain records showing the number of Administrative Shares
owned by individual retirement accounts established through HS and by other
holders of Administrative Shares; and
(b) Send, or arrange to be sent, all shareholder communications of
the Fund relating to the Administrative Shares to shareholders.
In performing its duties as shareholder servicing agent of the Fund with
respect to Administrative Shares, HS will act in accordance with the
instructions and directions of the Board of Trustees of the Trust and will
comply with the requirements of the 1940 Act and the rules thereunder and all
other applicable federal or state laws and regulations.
3. Allocation of Expenses. HS shall bear all expenses in connection with
the performance of its services under this Agreement, except that the Trust
shall reimburse HS for
<PAGE>
out-of-pocket costs incurred in transmitting shareholder communications to
shareholders of the Fund.
4. Fees.
(a) For the services rendered pursuant to this Agreement, the Trust
shall pay HS the fees set forth in Schedule A, annexed hereto.
(b) HS will bill the Trust as soon as practicable after the end of
each calendar month. The Trust will promptly pay to HS the amount of such
billing.
5. Limitation of Liability.
(a) HS shall not be liable to the Trust for any error of judgment or
mistake of law or for any loss suffered by the Trust in connection with the
performance of its obligations and duties under this Agreement, except a loss
resulting from HS's willfull misfeasance, bad faith or gross negligence in the
performance of such obligations and duties, or by reason of its reckless
disregard thereof. The Trust will indemnify HS against and hold it harmless from
any and all losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses) resulting from any claim, demand, action
or suit not resulting from the willfull misfeasance, bad faith or gross
negligence of HS in the performance of such obligations and duties or by reason
of its reckless disregard thereof.
(b) The Trust and HS agree that the obligations of the Trust under
this Agreement shall not be binding upon any of the members of the Board of
Trustees, shareholders, nominees, officers, employees or agents, whether past,
present or future, of the Trust, individually, but are binding only upon the
assets and property of the Fund, as provided in the Declaration of Trust.
(c) In no event and under no circumstances shall either party to this
agreement be liable to the other party for consequential or indirect loss of
profits, reputation or business or any other special damages under any provision
of this Agreement or for any act or failure or act hereunder.
6. Term and Termination.
(a) This Agreement shall become effective on the date hereof and
shall continue for a period of two (2) years (the "Initial Term") unless earlier
terminated pursuant to the terms of this Agreement. Thereafter this Agreement
may be renewed for successive terms of one (1) year ("Renewal Term") each,
provided, that each such Renewal Term is approved by the Board of Trustees of
the Trust, including the vote of a majority of the Trustees who are not
"Interested Persons," as defined by the 1940 Act and the rules thereunder, of
the Trust.
(b) Either party may terminate this Agreement, without penalty, at
any time upon not than less than sixty (60) days' prior written notice to the
other party.
-2-
<PAGE>
(c) This Agreement shall terminate automatically in the event of its
"assignment," as such term is defined by the 1940 Act and the rules thereunder.
7. Amendment to this Agreement. 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 bought.
8. Miscellaneous.
(a) This Agreement shall be construed in accordance with the laws of
the State of Illinois.
(b) This Agreement may be executed in any number of counterparts each
of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
(c) The captions of 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.
(d) This Agreement constitutes the entire agreement between the
parties hereto with respect to the matters described herein.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed and delivered by their duly authorized officers as of the date
first written above.
HEWITT SERVICES LLC
By: /s/ C. L. Connolly
------------------
Name: C. L. Connolly
Title: Secretary
HEWITT SERIES TRUST
By: /s/ Stacy L. Schaus
-------------------
Name: Stacy L. Schaus
Title: President
-3-
<PAGE>
SCHEDULE A
FEE SCHEDULE
The fee payable to HS under this Agreement shall be computed at the annual rate
of 0.25% of the average daily net assets of the Fund attributable to
Administrative Shares, and shall be paid monthly.
-4-
<PAGE>
EX.H6
THIRD PARTY FEEDER FUND
AGREEMENT
AMONG
HEWITT SERIES TRUST
HEWITT SERVICES LLC
AND
MASTER INVESTMcENT PORTFOLIO
dated as of
September 1, 1998
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
ARTICLE I. REPRESENTATIONS AND WARRANTIES................... 1
1.1 Trust............................................ 1
1.2 MIP.............................................. 2
1.3 Distributor...................................... 3
ARTICLE II. COVENANTS........................................ 3
2.1 Trust............................................ 3
2.2 MIP.............................................. 5
2.3 Reasonable Actions............................... 7
ARTICLE III. INDEMNIFICATION.................................. 7
3.1 Trust and Distributor............................ 7
3.2 MIP.............................................. 9
ARTICLE IV. ADDITIONAL AGREEMENTS............................ 10
4.1 Access to Information............................ 10
4.2 Confidentiality.................................. 10
4.3 Obligations of Trust and MIP..................... 11
ARTICLE V. TERMINATION, AMENDMENT........................... 11
5.1 Termination...................................... 11
5.2 Amendment........................................ 11
ARTICLE VI. GENERAL PROVISIONS............................... 11
6.1 Expenses......................................... 11
6.2 Headings......................................... 11
6.3 Entire Agreement................................. 11
6.4 Successors....................................... 11
6.5 Governing Law.................................... 12
6.6 Counterparts..................................... 12
6.7 Third Parties.................................... 12
6.8 Notices.......................................... 12
6.9 Interpretation................................... 13
6.10 Operation of Fund................................ 13
6.11 Relationship of Parties; No Joint Venture, Etc... 13
6.12 Use of Name...................................... 13
Signatures..................................................... 14
</TABLE>
i
<PAGE>
AGREEMENT
---------
THIS AGREEMENT (the "Agreement") is made and entered into as of the
1st day of September, 1998, by and among Hewitt Series Trust, a Delaware
business ("Trust"), for itself and on behalf of its series, Hewitt Money Market
Fund ("Fund"), Hewitt Services LLC ("Distributor"), an Illinois limited
liability company, and Master Investment Portfolio ("MIP"), a Delaware business
trust, for itself and on behalf of its series, the Money Market Master Portfolio
("Portfolio").
WITNESSETH
----------
WHEREAS, Trust and MIP are each registered under the Investment
Company Act of 1940 (the "1940 Act") as open-end management investment
companies;
WHEREAS, Fund and Portfolio have the same investment objective and
substantially the same investment policies;
WHEREAS, Fund desires to pursue its investment objective by investing
on an ongoing basis all of its investable assets (the "Assets") in Portfolio
(the "Investments") on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
made herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES
------------------------------
1.1 Trust. Trust represents and warrants to MIP that:
-----
(a) Organization. Trust is a trust duly organized, validly
------------
existing and in good standing under the laws of the State of Delaware and Fund
is a duly and validly designated series of Trust. Each of Trust and Fund has the
requisite power and authority to own its property and conduct its business as
proposed to be conducted pursuant to this Agreement..
(b) Authorization of Agreement. The execution and delivery of
--------------------------
this Agreement by Trust on behalf of Fund and the conduct of business
contemplated hereby have been duly authorized by all necessary action on the
part of Trust's Board of Trustees and no other action or proceeding is necessary
for the execution and delivery of this Agreement by Fund, or the performance by
Fund of its obligations hereunder. This Agreement when executed and delivered by
Trust on behalf of Fund shall constitute a legal, valid and binding obligation
of Trust, enforceable against Fund in accordance with its terms. No meeting of,
or consent by, shareholders of Fund is necessary to approve or implement the
Investments.
<PAGE>
(c) 1940 Act Registration. Trust is duly registered under the
---------------------
1940 Act as an open-end management investment company, and such registration is
in full force and effect.
(d) SEC Filings. Trust has duly filed all forms, reports,
-----------
proxy statements and other documents (collectively, the "SEC Filings") required
to be filed with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933 (the "1933 Act"), the Securities Exchange Act of 1934
(the "1934 Act") and the 1940 Act, and the rules and regulations thereunder
(collectively, the "Securities Laws"), in connection with the registration of
Fund's shares, any meetings of its shareholders and its registration as an
investment company. All SEC Filings relating to Fund comply in all material
respects with the requirements of the applicable Securities Laws and do not, as
of the date of this Agreement, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(e) Fund Assets. Fund currently intends on an ongoing
-----------
basis to invest its Assets solely in Portfolio.
(f) Registration Statement. Trust has reviewed MIP's and
----------------------
Portfolio's registration statement on Form N-lA, as filed with the SEC on August
31, 1998, and agrees that Fund's Investments will be subject to the terms
thereof. Fund understands and acknowledges that Portfolio has the right, in its
sole discretion, at any time, to limit or reject additional Investments from
Fund, provided that MIP shall provide Trust at least thirty (30) days' advance
written notice, or such lesser time as may be agreed to by the parties, of any
such limit or rejection.
(g) Insurance. As of the date of commencement of its
---------
operations, Fund has in force reasonable insurance coverage against any and all
liabilities that may arise as a result of Fund's business as a registered
investment company.
1.2 MIP. MIP represents and warrants to Trust that:
---
(a) Organization. MIP is a trust duly organized, validly
------------
existing and in good standing under the laws of the State of Delaware and
Portfolio is a duly and validly designated series of MIP. Each of MIP and
Portfolio has the requisite power and authority to own its property and conduct
its business as now being conducted.
(b) Authorization of Agreement. The execution and delivery
--------------------------
of this Agreement by MIP on behalf of Portfolio and the conduct of business
contemplated hereby have been duly authorized by all necessary action on the
part of MIP's Board of Trustees and no other action or proceeding is necessary
for the execution and delivery of this Agreement by Portfolio, or the
performance by Portfolio of its obligations hereunder. This Agreement when
executed and delivered by MIP on behalf of Portfolio shall constitute a legal,
valid and binding obligation of MIP and Portfolio, enforceable against MIP and
Portfolio in accordance with its terms. No meeting of, or consent by,
interestholders of Portfolio is necessary to approve the issuance of the
Interests (as defined below) to Fund.
2
<PAGE>
(c) Authorization of Issuance of Beneficial Interest. The
------------------------------------------------
issuance by MIP of beneficial interests in the Portfolio ("Interests") in
exchange for the Investments by Fund of its assets has been duly authorized by
all necessary action on the part of the Board of Trustees of MIP.
(d) 1940 Act Registration. MIP is duly registered as an
---------------------
open-end management investment company under the 1940 Act and such registration
is in full force and effect.
(e) SEC Filings; Securities Exemptions. MIP has duly filed
----------------------------------
all SEC Filings, as defined herein, relating to Portfolio required to be filed
with the SEC pursuant to the Securities Laws. Interests in Portfolio are not
required to be registered under the 1933 Act, because such Interests are offered
solely in private placement transactions which do not involve any "public
offering" within the meaning of Section 4(2) of the 1933 Act. In addition,
Interests in Portfolio are either noticed for sale or exempt from notice
requirements under applicable securities laws in those states or jurisdictions
in which Interests are offered and sold. All SEC Filings relating to Portfolio
comply in all material respects with the requirements of the applicable
Securities Laws, and do not, as of the date of this Agreement, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(f) Tax Status. Based upon applicable IRS interpretations
----------
and rulings, Portfolio is treated as a partnership for federal income tax
purposes under the Internal Revenue Code of 1986, as amended (the "Code") for
its current taxable year.
1.3 Distributor. Distributor represents and warrants to MIP that the
-----------
execution and delivery of this Agreement by Distributor have been duly
authorized by all necessary action on the part of Distributor and no other
action or proceeding is necessary for the execution and delivery of this
Agreement by Distributor, or the performance by Distributor of its obligations
hereunder. This Agreement when executed and delivered by Distributor shall
constitute a legal, valid and binding obligation of Distributor, enforceable
against Distributor in accordance with its terms.
ARTICLE II
COVENANTS
---------
2.1 Trust. Trust covenants that:
-----
(a) Advance Review of Certain Documents. Trust will furnish
-----------------------------------
MIP at least ten (10) business days prior to the earlier of filing or first use,
with drafts of Fund's registration statement on Form N-lA and any amendments
thereto, and also will furnish MIP at least five (5) business days' prior to the
earlier of filing or first use, with drafts of any prospectus or statement of
additional information supplements. In addition, Trust will furnish or will
cause to be furnished to MIP at least five (5) business days prior to the
earlier of filing or first use, as the case may be, any proposed advertising or
sales literature that contains language that describes
3
<PAGE>
or refers to MIP or Portfolio and that was not previously approved by MIP. Trust
agrees that it will include in all such Fund documents any disclosures that may
be required by law, and that it will incorporate in all such Fund documents any
material and reasonable comments made by MIP. MIP will not, however, in any way
be liable to the Trust for any errors or omissions in such documents, whether or
not MIP makes any objection thereto, except to the extent such errors or
omissions result from errors in or omissions in information provided in MIP's
1940 Act registration statement or otherwise provided by MIP for inclusion
therein, or result from the failure of MIP to provide information requested by
the Trust or information otherwise required to be provided to them under this
Agreement. In addition, neither Fund nor Distributor will make any other written
or oral representations about MIP or Portfolio other than those contained in
such documents without MIP's prior written consent.
(b) SEC and Blue Sky Filings. Trust will file all SEC Filings
------------------------
required to be filed with the SEC under the Securities Laws in connection with
the registration of Fund's shares, any meetings of its shareholders, and its
registration as an investment company. Trust will file such similar or other
documents as may be required to be filed with any securities commission or
similar authority by the laws or regulations of any state, territory or
possession of the United States, including the District of Columbia, in which
shares of Fund are or will be noticed for sale ("State Filings"). Fund's SEC
Filings will comply in all material respects with the requirements of the
applicable Securities Laws, and, insofar as they relate to information other
than that supplied or required to be supplied by MIP, will not, at the time they
are filed or used to offer Fund shares, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Fund's State Filings
will be prepared in accordance with the requirements of applicable state and
federal law and the rules and regulations thereunder.
(c) 1940 Act Registration. Trust will be duly registered as
---------------------
an open-end management investment company under the 1940 Act.
(d) Tax Status. Fund will qualify for treatment as a
----------
regulated investment company under Subchapter M of the Code for any taxable year
during which this Agreement continues in effect, unless such lack of
qualification is solely as a result of Portfolio's failure to meet (i) the
income test imposed on regulated investment companies under Section 851(b)(2) of
the Code and (ii) the asset test imposed on regulated investment companies under
Section 851(b)(3) of the Code, as if such Sections applied to it.
(e) Fiscal Year. Fund shall take appropriate action to adopt
-----------
and maintain the same fiscal year end as Portfolio (currently the last day of
February).
(f) Proxy Voting. If requested to vote on matters pertaining
------------
to MIP or Portfolio, Fund will vote such shares in accordance with applicable
law.
(g) Compliance with Laws. Trust shall comply, in all material
--------------------
respects, with all applicable laws, rules and regulations in connection with
conducting its operations as a registered investment company.
4
<PAGE>
(h) Insurance. Trust will maintain in full force and effect
---------
for so long as this Agreement is in effect insurance coverage against
liabilities that may arise as a result of Fund's business as a registered
investment company, in such amount and covering such liabilities as the Board of
Trustees of Trust deems reasonable.
2.2 MIP. MIP covenants that:
---
(a) Signature Pages. MIP shall promptly provide all required
---------------
signature pages to Trust for inclusion in any SEC Filings of Trust, provided
Trust is in material compliance with its covenants and other obligations under
this Agreement at the time such signature pages are provided and included in the
SEC Filing. Trust and Distributor acknowledge and agree that the provision of
such signature pages does not constitute a representation by MIP, its Trustees
or Officers, that such SEC Filing complies with the requirements of the
applicable Securities Laws, or that such SEC Filing does not contain any untrue
statement of a material fact or does not omit to the state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except with respect to information provided by MIP for inclusion in
such SEC Filing or for use by Trust in preparing such filing, which shall in any
event include any written information obtained from MIP's current registration
statement on Form N-1A.
(b) Redemption. Except as otherwise provided in this Section
----------
2.2(b), redemptions of Interests owned by Fund will be effected pursuant to
Section 2.2(c). In the event Fund desires to withdraw its entire Investment from
Portfolio, either by submitting a redemption request or by terminating this
Agreement in accordance with Section 5.1 hereof, Portfolio, unless otherwise
agreed to by the parties, and in all cases subject to Sections 17 and 18 of the
1940 Act and the rules and regulations thereunder, will effect such redemption
"in kind" and in such a manner that the securities delivered to Fund or its
custodian for the account of Fund mirror, as closely as practicable, the
composition of Portfolio immediately prior to such redemption. Portfolio further
agrees that, to the extent legally possible, it will not take or cause to be
taken any action without Trust's prior approval that would cause the withdrawal
of Fund's Investments to be treated as a taxable event to Fund. Portfolio
further agrees to conduct its activities in accordance with all applicable
requirements of Regulation 1.731-2(e) under the Code or any successor
regulation.
(c) Ordinary Course Redemptions. Portfolio will effect
---------------------------
redemptions of Interests in accordance with the provisions of the 1940 Act and
the rules and regulations thereunder, including, without limitation, Section 17
thereof. All redemption requests other than a withdrawal of Fund's entire
Investment in Portfolio under Section 2.2(b) or, at the sole discretion of MIP,
a withdrawal (or series of withdrawals over any three (3) consecutive business
days) of an amount that exceeds 10% of Portfolio's net asset value, will be
effected in cash at the next determined net asset value after the redemption
request is received. Portfolio will use its best efforts to settle redemptions
on the business day following the receipt of a redemption request by Fund and if
such next business day settlement is not practicable, will immediately notify
Fund regarding the anticipated settlement date, which shall in all events be a
date permitted under the 1940 Act.
5
<PAGE>
(d) SEC Filings. MIP will file all SEC Filings required to
-----------
be filed with the SEC under the Securities Laws in connection with any meetings
of Portfolio's investors and its registration as an investment company and will
provide copies of all such definitive filings to Trust. Portfolio's SEC Filings
will comply in all material respects with the requirements of the applicable
Securities Laws, and will not, at the time they are filed or used, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(e) 1940 Act Registration. MIP will remain duly registered
---------------------
as an open-end management investment company under the 1940 Act.
(f) Tax Status. Based upon applicable IRS interpretations and
----------
rulings, Portfolio will conduct its business and activities so as to be treated
as a partnership for federal income tax purposes under the Code. Portfolio will
continue to satisfy (i) the income test imposed on regulated investment
companies under Section 851(b)(2) of the Code and (ii) the asset test imposed on
regulated investment companies under Section 851(b)(3) of the Code as if such
Sections applied to it for so long as this Agreement continues in effect. MIP
agrees to forward to Fund prior to Fund's initial Investment a copy of its
opinion of counsel or private letter ruling relating to the tax status of
Portfolio and agrees that Fund may rely upon such opinion or ruling during the
term of this Agreement.
(g) Securities Exemptions. Interests in Portfolio have been
---------------------
and will continue to be offered and sold solely in private placement
transactions which do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act or require registration under any state law. MIP
will file such documents and take such other actions as may be necessary to
qualify the offer and sale of Interests for exemption from qualification under
any state law.
(h) Advance Notice of Certain Changes. MIP shall provide
---------------------------------
Trust with at least one hundred twenty (120) days' advance notice, or such
lesser time as may be agreed to by the parties, of any change in Portfolio's
investment objective, and at least sixty (60) days' advance notice, or if MIP
has knowledge that one of the following changes is likely to occur more than
sixty (60) days in advance of such event, notice shall be provided as soon as
reasonably possible after MIP obtains such knowledge, of any material change in
Portfolio's investment policies or activities, any material increase in
Portfolio's fees or expenses, or any change in Portfolio's fiscal year or time
for calculating net asset value for purposes of Rule 22c-1.
(i) Compliance with Laws. MIP shall comply, in all material
--------------------
respects, with all applicable laws, rules and regulations in connection with
conducting its operations as a registered investment company.
(j) Delivery of Information. MIP shall provide Trust with
-----------------------
such information regarding MIP and Portfolio as may be necessary for Trust and
Fund to comply with the Securities Laws and for Fund to comply with the
requirements for qualification as a regulated investment company under the Code
and to make distributions in the amounts necessary to avoid income and excise
taxes. MIP shall also provide Trust with such information as may be
6
<PAGE>
necessary for Fund to file federal and state tax returns. MIP shall provide the
information described in this paragraph a reasonable period of time prior to the
date by which Trust or Fund is required to make any filing or send any report or
other document the contents of which includes or is based upon such information,
provided Trust gives MIP adequate advance notice of the dates by which such
information is required, giving due consideration to the actions that Trust and
Fund will be required to take after the information is received to enable such
filing to be made or such report or other document to be sent.
(k) Insurance. MIP will maintain in full force and effect for
---------
so long as this Agreement is in effect insurance coverage against liabilities
that may arise as a result of Portfolio's business, in such amounts, and
covering such liabilities as the Board of Trustees of MIP deems reasonable.
2.3 Reasonable Actions. Each party covenants that it will, subject
------------------
to the provisions of this Agreement, from time to time, as and when requested by
another party or in its own discretion, as the case may be, execute and deliver
or cause to be executed and delivered all such documents, assignments and other
instruments, take or cause to be taken such actions, and do or cause to be done
all things reasonably necessary, proper or advisable in order to conduct the
business contemplated by this Agreement and to carry out its intent and purpose.
ARTICLE III
INDEMNIFICATION
---------------
3.1 Trust and Distributor
(a) Trust and Distributor agree, jointly and severally, to
indemnify and hold harmless MIP, Portfolio and Portfolio's investment adviser,
and any director/trustee, officer, employee or agent of MIP, Portfolio or
Portfolio's investment adviser (in this Section, each, a "Covered Person" and
collectively, "Covered Persons"), against any and all losses, claims, demands,
damages, liabilities or expenses (including, with respect to each Covered
Person, the reasonable cost of investigating and defending against any claims
therefor and any counsel fees incurred in connection therewith, except as
provided in subparagraph (b)), that:
(i) arise out of or are based upon any violation or alleged
violation of any of the Securities Laws, or any other applicable
statute, rule, regulation or common law, or are incurred in connection
with or as a result of any formal or informal administrative
proceeding or investigation by a regulatory agency, insofar as such
violation or alleged violation, proceeding or investigation arises out
of or is based upon any direct or indirect omission or commission (or
alleged omission or commission) by Trust or by Distributor or by any
of its or their trustees/directors, officers, employees or agents, but
only insofar as such omissions or commissions relate to Fund and were
not, directly or indirectly, the result of or caused by, in whole or
in part, the act or omission of any Covered Person; or
7
<PAGE>
(ii) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in any
advertising or sales literature, prospectus, registration statement,
or any other SEC Filing relating to Fund, or any amendments or
supplements to the foregoing (in this Section, collectively "Offering
Documents"), 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 in light of the
circumstances under which they were made, not misleading, in each case
to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was not made
in the Offering Documents in reliance upon and in conformity with
MIP's registration statement on Form N-1A and other written
information furnished by MIP to Fund or by any service provider of MIP
for use therein or for use by Fund in preparing such documents,
including but not limited to any written information contained in
MIP's current registration statement on Form N-1A.
provided, however, that in no case shall Trust or Distributor be
-------- -------
liable for indemnification hereunder with respect to any claims made against any
Covered Person unless a Covered Person shall have notified Trust or Distributor
in writing within a reasonable time after the summons, other first legal
process, notice of a federal, state or local tax deficiency, or formal
initiation of a regulatory investigation or proceeding giving information of the
nature of the claim shall have properly been served upon or provided to a
Covered Person seeking indemnification. Failure to notify Trust or Distributor
of such claim shall not relieve Trust or Distributor from any liability that it
may have to any Covered Person otherwise than on account of the indemnification
contained in this Section.
(b) Trust and Distributor each 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, but if Trust and/or Distributor
elect(s) to assume the defense, such defense shall be conducted by counsel
chosen by Trust and/or Distributor, as applicable. In the event Trust and/or
Distributor elect(s) to assume the defense of any such suit and retain such
counsel, each Covered Person in the suit may retain additional counsel but shall
bear the fees and expenses of such counsel unless (A) Trust and Distributor
shall have specifically authorized the retaining of and payment of fees and
expenses of such counsel or (B) the parties to such suit include any Covered
Person and Trust and/or Distributor, and any such Covered Person has been
advised in a written opinion by counsel reasonably acceptable to Trust and
Distributor that one or more legal defenses may be available to it that may not
be available to Trust and/or Distributor, in which case Trust and/or Distributor
shall not be entitled to assume the defense of such suit notwithstanding their
obligation to bear the fees and expenses of one counsel to such persons. Trust
shall not be required to indemnify any Covered Person for any settlement of any
such claim effected without its written consent and Distributor shall not be
required to indemnify any Covered Person for any settlement of any such claim
effected without its written consent, which consent, in each case, shall not be
unreasonably withheld or delayed. The indemnities set forth in paragraph (a)
will be in addition to any liability that Trust and/or Distributor might
otherwise have to Covered Persons.
8
<PAGE>
3.2 MIP.
---
(a) MIP agrees to indemnify and hold harmless Trust, Fund,
Distributor, and any affiliate providing services to Trust and/or Fund, and any
trustee/director, officer, employee or agent of any of them (in this Section,
each, a "Covered Person" and collectively, "Covered Persons"), against any and
all losses, claims, demands, damages, liabilities or expenses (including, with
respect to each Covered Person, the reasonable cost of investigating and
defending against any claims therefor and any counsel fees incurred in
connection therewith, except as provided in subparagraph (b)), that:
(i) arise out of or are based upon any violation or alleged
violation of any of the Securities Laws, or any other applicable
statute, rule, regulation or common law or are incurred in connection
with or as a result of any formal or informal administrative
proceeding or investigation by a regulatory agency, insofar as such
violation or alleged violation, proceeding or investigation arises out
of or is based upon any direct or indirect omission or commission (or
alleged omission or commission) by MIP, or any of its trustees,
officers, employees or agents, but only insofar as such omissions or
commissions relate to Portfolio and were not, directly or indirectly,
the result of or caused by, in whole or in part, the act or omission
of any Covered Person; or
(ii) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in any
advertising or sales literature, or any SEC Filing relating to
Portfolio, or any amendments to the foregoing (in this Section,
collectively, the "Offering Documents") relating to Portfolio, 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 in light of the circumstances
under which they were made, not misleading; or
(iii) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in any
Offering Documents relating to Trust or Fund, 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 in light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in
conformity with written information furnished to Fund by MIP for use
therein or for use by Fund in preparing such documents, including but
not limited to any written information contained in MIP's current
registration statement on Form N-1A, or was made as a result of the
failure of MIP to provide information requested by Trust, Fund or
Distributor or otherwise required to be provided to them under this
Agreement.
provided, however, that in no case shall MIP be liable for
-------- -------
indemnification hereunder with respect to any claims made against any Covered
Person unless a Covered Person shall have notified MIP in writing within a
reasonable time after the summons, other first legal
9
<PAGE>
process, notice of a federal, state or local tax deficiency, or formal
initiation of a regulatory investigation or proceeding giving information of the
nature of the claim shall have properly been served upon or provided to a
Covered Person seeking indemnification. Without limiting the generality of the
foregoing, Portfolio's indemnity to Covered Persons shall include all relevant
liabilities of Covered Persons under the Securities Laws, as if the Offering
Documents constitute a "prospectus" within the meaning of the 1933 Act, and MIP
had registered its interests under the 1933 Act pursuant to a registration
statement meeting the requirements of the 1933 Act. Failure to notify MIP of
such claim shall not relieve MIP from any liability that it may have to any
Covered Person otherwise than on account of the indemnification contained in
this Section .
(b) MIP 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, but, if MIP elects to assume the defense, such
defense shall be conducted by counsel chosen by MIP. In the event MIP elects to
assume the defense of any such suit and retain such counsel, each Covered Person
in the suit may retain additional counsel but shall bear the fees and expenses
of such counsel unless (A) MIP shall have specifically authorized the retaining
of and payment of fees and expenses of such counsel or (B) the parties to such
suit include any Covered Person and MIP, and any such Covered Person has been
advised in a written opinion by counsel reasonably acceptable to MIP that one or
more legal defenses may be available to it that may not be available to MIP, in
which case MIP shall not be entitled to assume the defense of such suit
notwithstanding its obligation to bear the fees and expenses of one counsel to
such persons. MIP shall not be required to indemnify any Covered Person for any
settlement of any such claim effected without its written consent, which consent
shall not be unreasonably withheld or delayed. The indemnities set forth in
paragraph (a) will be in addition to any liability that MIP might otherwise have
to Covered Persons.
ARTICLE IV
ADDITIONAL AGREEMENTS
---------------------
4.1 Access to Information. Throughout the life of this Agreement,
---------------------
Trust and MIP shall afford each other reasonable access at all reasonable times
to such party's officers, employees, agents and offices and to all relevant
books and records and shall furnish each other party with all relevant financial
and other data and information as such other party may reasonably request.
4.2 Confidentiality. Each party agrees that it shall hold in strict
---------------
confidence all data and information obtained from another party (unless such
information is or becomes readily ascertainable from public or published
information or trade sources or public disclosure of such information is
required by law) and shall ensure that its officers, employees and authorized
representatives do not disclose such information to others without the prior
written consent of the party from whom it was obtained, except if disclosure is
required by the SEC, any other regulatory body, Fund's or Portfolio's respective
auditors, or in the opinion of counsel to the disclosing party such disclosure
is required by law, and then only with as much prior written notice to the other
parties as is practical under the circumstances. Each party hereto acknowledges
that the provisions of this Section 4.2 shall not prevent Trust or MIP from
filing a copy of this Agreement as an exhibit to a registration statement on
Form N-1A as it relates to
10
<PAGE>
Fund or Portfolio, respectively, and that such disclosure by Trust or MIP shall
not require any additional consent from the other parties.
4.3 Obligations of Trust and MIP. MIP agrees that the financial
----------------------------
obligations of Trust under this Agreement shall be binding only upon the assets
of Fund, and that except to the extent liability may be imposed under relevant
Securities Laws, MIP shall not seek satisfaction of any such obligation from the
officers, agents, employees, trustees or shareholders of Trust or other classes
or series of Trust. Trust agrees that the financial obligations of MIP under
this Agreement shall be binding only upon the assets of Portfolio and that,
except to the extent liability may be imposed under relevant Securities Laws,
Trust shall not seek satisfaction of any such obligation from the officers,
agents, employees, trustees or shareholders of MIP or other classes or series
of MIP.
ARTICLE V
TERMINATION, AMENDMENT
----------------------
5.1 Termination. The provisions of Article III and Sections 2.2(j),
-----------
4.2 and 4.3 shall survive any termination of this Agreement.
5.2 Amendment. This Agreement may be amended, modified or
---------
supplemented at any time in such manner as may be mutually agreed upon in
writing by the parties.
ARTICLE VI
GENERAL PROVISIONS
------------------
6.1 Expenses. All costs and expenses incurred in connection with
--------
this Agreement and the conduct of business contemplated hereby shall be paid by
the party incurring such costs and expenses.
6.2 Headings. The headings and captions contained in this Agreement
--------
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
6.3 Entire Agreement. Except as set forth below, this Agreement sets
----------------
forth the entire understanding between the parties concerning the subject matter
of this Agreement and incorporates or supersedes all prior negotiations and
understandings. There are no covenants, promises, agreements, conditions or
understandings, either oral or written, between the parties relating to the
subject matter of this Agreement other than those set forth herein and the
terms, conditions and descriptions set forth in MIP's Registration Statement, as
in effect from time to time.
6.4 Successors. Each and all of the provisions of this Agreement
----------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and
11
<PAGE>
assigns; provided, however, that neither this Agreement, nor any rights
-------- -------
herein granted may be assigned to, transferred to or encumbered by any party,
without the prior written consent of the other parties hereto.
6.5 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of California; provided, however, that
-------- -------
in the event of any conflict between the 1940 Act and the laws of California,
the 1940 Act shall govern.
6.6 Counterparts. This Agreement may be executed in any number of
------------
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing one or more counterparts.
6.7 Third Parties. Nothing herein expressed or implied is intended
-------------
or shall be construed to confer upon or give any person, other than the parties
hereto and their successors or assigns, any rights or remedies under or by
reason of this Agreement.
6.8 Notices. All notices and other communications given or made
-------
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made when delivered in person or three days after being sent by certified or
registered United States mail, return receipt requested, postage prepaid,
addressed:
If to Fund: Hewitt Money Market Fund
100 Half Day Road
Lincolnshire, IL 60069
Attn: James B. Lee
copy to: Peter Ross, Esq.
Hewitt Associates LLC
100 Half Day Road
Lincolnshire, IL 60069
If to Distributor: Hewitt Services LLC
100 Half Day Road
Lincolnshire, IL 60069
Attn: Stacy L. Schaus
copy to: Peter Ross, Esq.
Hewitt Associates LLC
100 Half Day Road
Lincolnshire, IL 60069
12
<PAGE>
If to MIP: Chief Operating Officer
Master Investment Portfolio
c/o Stephens Inc.
111 Center Street
Little Rock, AR 72201
6.9 Interpretation. Any uncertainty or ambiguity existing herein
--------------
shall not be interpreted against any party, but shall be interpreted according
to the application of the rules of interpretation for arms' length agreements.
6.10 Operation of Fund. Except as otherwise provided herein, this
-----------------
Agreement shall not limit the authority of Fund, Trust or Distributor to take
such action as it may deem appropriate or advisable in connection with all
matters relating to the operation of Fund and the sale of its shares.
6.11 Relationship of Parties; No Joint Venture, Etc. It is understood
-----------------------------------------------
and agreed that neither Trust nor Distributor shall hold itself out as an agent
of MIP with the authority to bind such party, nor shall MIP hold itself out as
an agent of Trust or Distributor with the authority to bind such party.
6.12 Use of Name. Except as otherwise provided herein or required by
-----------
law (e.g., in Trust's Registration Statement on Form N-1A), neither Trust, Fund
nor Distributor shall describe or refer to the name of MIP, Portfolio or any
derivation thereof, or any affiliate thereof, or to the relationship
contemplated by this Agreement in any advertising or promotional materials
without the prior written consent of MIP, nor shall MIP describe or refer to the
name of Trust, Fund or Distributor or any derivation thereof, or any affiliate
thereof, or to the relationship contemplated by this Agreement in any
advertising or promotional materials without the prior written consent of Trust,
Fund or Distributor, as the case may be. In addition, the party required to
give its consent shall have at least three (3) business days prior to the
earlier of filing or first use, as the case may be, to review the proposed
advertising or promotional materials.
13
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers, thereunto duly authorized, as of the date
first written above.
HEWITT SERIES TRUST
on behalf of itself and HEWITT MONEY MARKET FUND
By: /s/ Stacy L. Schaus
---------------------
Name: Stacy L. Schaus
Title: President
HEWITT SERVICES LLC
By: /s/ C. L. Connolly, III
-----------------------------
Name: C. L. Connolly, III
Title: Secretary
MASTER INVESTMENT PORTFOLIO, on behalf of its
series, the MONEY MARKET MASTER PORTFOLIO
By: /s/ Richard H. Blank, Jr.
-----------------------------
Name: Richard H. Blank, Jr.
Title: Chief Operating Officer
14
<PAGE>
EX-99.I
MORRIS, NICHOLS, ARNST & TUNNEL
1201 NORTH MARKET STREET
P.O. BOX 1347
WILMINGTON, DELAWARE 19899-1347
Telephone (302) 658-9200
Telecopy (302) 658-3989
August 31, 1998
Hewitt Series Trust
100 Half Day Road
Lincolnshire, Illinois 60069
Re: Hewitt Series Trust
-------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel to Hewitt Series Trust, a
Delaware business trust (the "Trust"), in connection with certain matters
relating to the issuance of Shares of beneficial interest in the Trust.
Capitalized terms used herein and not otherwise herein defined are used as
defined in the Declaration of Trust of the Trust dated July 6, 1998 (the
"Governing Instrument").
In rendering this opinion, we have examined copies of the following
documents, each in the form provided to us: the Certificate of Trust of the
Trust as filed in the Office of the Secretary of State of the State of Delaware
(the "Recording Office") on July 7, 1998 (the "Certificate"); the Governing
Instrument; the By-laws of the Trust; the Unanimous Written Consent in Lieu of a
Meeting of the Board of Trustees of the Trust dated July 6, 1998 (the
"Consent"); the resolutions prepared for adoption at the initial meeting of the
Board of Trustees to be held on August 18, 1998 (the "Initial Meeting
Resolutions" and together with the Consent, the "Resolutions"); the Trust's
Notification of Registration Filed Pursuant to Section 8(a) of the Investment
Company Act of 1940 (the "1940 Act") on Form N-8A as filed with the Securities
and Exchange Commission on July 16, 1998; the Trust's Registration Statement on
Form N-1A as filed with the Securities and Exchange Commission on July 16, 1998
(the "Registration Statement"); and a certification of good standing of the
Trust obtained as of a recent date from the Recording Office. In such
examinations, we have assumed the genuineness of all signatures, the conformity
to original documents of all documents submitted to us as copies or drafts of
documents to be executed, and the legal capacity of natural persons to complete
the execution of documents. We have further assumed for the purpose of this
opinion: (i) the due authorization,
<PAGE>
execution and delivery by, or on behalf of, each of the parties thereto of the
above-referenced instruments, certificates and other documents, and of all
documents contemplated by the Governing Instrument, the By-laws and applicable
resolutions of the Trustees to be executed by investors desiring to become
Shareholders; (ii) that the Resolutions were duly adopted by the Trustees; (iii)
the payment of consideration for Shares, and the application of such
consideration, as provided in the Governing Instrument, and compliance with the
other terms, conditions and restrictions set forth in the Governing Instrument
and all applicable resolutions of the Trustees of the Trust in connection with
the issuance of Shares (including, without limitation, the taking of all
appropriate action by the Trustees to designate Series of Shares and the rights
and preferences attributable thereto as contemplated by the Governing
Instrument); (iv) that appropriate notation of the names and addresses of, the
number of Shares held by, and the consideration paid by, Shareholders will be
maintained in the appropriate registers and other books and records of the Trust
in connection with the issuance, redemption or transfer of Shares; (v) that no
event has occurred subsequent to the filing of the Certificate that would cause
a termination or a merger, consolidation, conversion or other reorganization of
the Trust under Section 2 or Section 3 of Article VIII of the Governing
Instrument; (vi) that a written plan meeting the requirements of and duly
adopted by the Trustees in accordance with Rule 18f-3 under the 1940 Act, and
setting forth the varying obligations of the Institutional Shares and
Administrative Shares Classes of Shares (the "Fund Shares") in the Series
designated as the Hewitt Money Market Fund (the "Fund") with respect to certain
expenses of the Fund, was duly adopted by the Trustees, or will be duly adopted,
prior to commencement of the operations of the Fund; (vii) that the activities
of the Trust have been and will be conducted in accordance with the terms of the
Governing Instrument and the Delaware Business Trust Act, 12 Del. C. (S)(S) 3801
--- -
et seq. (the "Delaware Act") and (viii) that of the documents examined by us
- - - -- ----
is in full force and effect and has not been amended, supplemented or otherwise
modified and is in full force and effect. No opinion is expressed herein with
respect to the requirements of, or compliance with, federal or state securities
or blue sky laws. Further, we express no opinion on the sufficiency or accuracy
of any registration or offering documentation relating to the Trust or the
Shares. As to any facts material to our opinion, other than those assumed, we
have relied without independent investigation on the above-referenced documents
and on the accuracy, as of the date hereof, of the matters therein contained.
Based on and subject to the foregoing, and limited in all respects to
matters of Delaware law, it is our opinion that:
1. The Trust is a duly created and validly existing business trust in
good standing under the laws of the State of Delaware.
2. The Fund Shares, when issued to Shareholders in accordance with
the terms, conditions, requirements and procedures set forth in the Governing
Instrument, will constitute legally issued, fully paid and non-assessable Shares
of beneficial interest in the Trust.
3. Under the Delaware Act and the terms of the Governing Instrument,
each Shareholder of the Trust, in such capacity, will be entitled to the same
limitation of personal liability as that extended to stockholders of private
corporations for profit organized under the
<PAGE>
general corporation law of the State of Delaware; provided, however, that we
express no opinion with respect to the liability of any Shareholder who is, was
or may become a named Trustee of the Trust. Neither the existence nor exercise
of the voting rights granted to Shareholders under the Governing Instrument
will, of itself, cause a Shareholder to be deemed a Trustee of the Trust under
the Delaware Act. Notwithstanding the foregoing or the opinion expressed in
paragraph 2 above, we note that, pursuant to Section 5 of Article IV of the
Governing Instrument, the Trustees have the power to cause Shareholders, or
Shareholders of a particular Series, to pay certain custodian, transfer,
servicing or similar agent charges by setting off the same against declared but
unpaid dividends or by reducing Share ownership (or by both means) and that,
pursuant to Section 3 of Article III of the Governing Instrument, Shares may be
sold subject to imposition of sales charges, deferred sales charges, asset-based
sales charges and redemption fees.
We understand that the Trust is currently in the process of
registering or qualifying Shares in various states, and we hereby consent to the
filing of a copy of this opinion with the securities administrators of such
states and with the Securities and Exchange Commission as an exhibit to a Pre-
Effective Amendment to the Registration Statement. In giving this consent, we
do not thereby admit that we come within the category of persons whose consent
is required under Section 7 of the Securities Act of 1933, as amended, or the
rules and regulations of the Securities and Exchange Commission thereunder. The
opinion set forth above is expressed solely for the benefit of the addressee
hereof in connection with the matters contemplated hereby and may not be relied
upon for any other purpose or by any other person or entity without our prior
written consent.
Sincerely,
/s/ Morris, Nichols, Arsht & Tunnell
----------------------------------------
MORRIS, NICHOLS, ARSHT & TUNNELL
<PAGE>
EX-99.J
Consent of Independent Auditors
The Board of Trustees
Hewitt Money Market Fund:
We consent to the use of our report dated August 31, 1998 included herein and to
the reference to our firm under the captions "Independent Auditors" and
"Financial Statements" in the Statement of Additional Information.
San Francisco, California
August 31, 1998
<PAGE>
EX-99.L
August 18, 1998
The Board of Trustees
Hewitt Series Trust
100 Half Day Road
Lincolnshire, Illinois 60069
Ladies and Gentlemen:
In order to provide Hewitt Series Trust (the "Trust") with its initial
capital, Hewitt Associates LLC (the "Purchaser") is hereby purchasing from the
Trust 3,000 Institutional Shares and 7,000 Administrative Shares, the two
initial classes of shares of beneficial interest, $.001 par value, of the Trust,
representing interests in Hewitt Money Market Fund (the "Shares"), at a purchase
price of $10.00 per Share.
The Purchaser represents and warrants to the Trust that the Shares are
being acquired for investment purposes and not with a view to the distribution
thereof and that the Purchaser has no present intention to dispose of the
Shares.
The Purchaser hereby agrees that if any of the Shares purchased by
Purchaser herewith are redeemed by the Purchaser (or any subsequent holder of
such Shares) prior to the reimbursement to Hewitt Associates LLC, of the
organization and start up expenses of the Trust by the Trust, the Purchaser will
reimburse the Trust for any unreimbursed organization and start-up expenses in
the same proportion as the value of Shares being redeemed bears to the value of
all Shares of the Trust outstanding at the time of redemption.
Very truly yours,
HEWITT ASSOCIATES LLC
By: /s/ C.L. Connolly
-------------------------------
Name: C.L. Connolly
-------------------------
Title: Principal
------------------------
<PAGE>
EX-99.M
HEWITT SERIES TRUST
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
AND RELATED AGREEMENT
THIS PLAN AND RELATED AGREEMENTS between Hewitt Series Trust, a
Delaware Business Trust (the "Trust") and Hewitt Services LLC ("HS") made as of
this 1st day of September, 1998.
WHEREAS, the Trust proposes to engage in business as an open-end, non-
diversified management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust has retained HS to serve as a distributor of shares
of beneficial interest of the Trust representing interests in the Hewitt Money
Market Fund (the "Fund"), the sole series of the Trust, pursuant to a separate
Distribution Agreement with HS; and
WHEREAS, two classes of Shares of the Fund have been authorized:
Institutional Shares and Administrative Shares; and
WHEREAS, the Trust wishes to adopt a plan (the "12b-1 Plan") to
authorize the use of Fund assets to finance certain activities in connection
with the distribution of Administrative Shares of the Fund in accordance with
Rule 12b-1 under the 1940 Act and to enter into an agreement with HS to
facilitate the distribution of the Fund's Shares; and
WHEREAS, HS (the "Distributor") desires to enter into such an
agreement pursuant to the 12b-1 Plan (the "Agreement") on the terms and
conditions set forth below; and
WHEREAS, the 12b-1 Plan and the Agreement have been approved by the
Board of Trustees of the Trust, including a majority of the trustees who are not
"interested persons" (as defined by the 1940 Act) of the Trust and who have no
direct or indirect financial interest in the operation of the 12b-1 Plan or the
Agreement or any other agreement in respect of the 12b-1 Plan (the
"Disinterested Trustees"), by vote cast in person at a meeting called for the
purpose of voting on the 12b-1 Plan and the Agreement;
NOW, THEREFORE, the Trust hereby adopts this 12b-1 Plan, and the
Trust, on behalf of the Fund, and the Distributor hereby enter into the
Agreement pursuant to the 12b-1 Plan, in accordance with the requirements of
Rule 12b-1 under the 1940 Act, and provide and agree as follows:
1. The Trust is hereby authorized to utilize the assets of the Fund
to finance certain activities in connection with distribution of the Fund's
Administrative Shares, as specified below.
2. The Trust is hereby authorized to finance the following
activities in connection with the sale of Administrative Shares of the Fund to
investors ("Distribution Services"): (a) the payment of compensation (including
performance-based compensation) to the
<PAGE>
Distributor and to other securities dealers and financial institutions which
engage in efforts to promote the sale of Administrative Shares of the Fund and
which sell such Administrative Shares; (b) the preparation, printing and
distribution of reports and prospectuses, statements of additional information
and profiles for distribution to and use by potential investors in
Administrative Shares of the Fund; (c) the preparation, printing and
distribution of sales literature and advertising relating to Administrative
Shares of the Fund, including but not limited to direct mail solicitation and
television, radio, newspaper and other media advertisements; and (d) the payment
of other expenses and the costs of other activities related to the promotion and
sale of Administrative Shares of the Fund as may from time to time be
specifically authorized by the Board of Trustees and approved by a majority of
the Disinterested Trustees.
3. Under the 12b-1 Plan, the Fund is authorized to expend its assets
in an amount which shall not exceed 0.25% annually of the average daily net
assets of the Fund attributable to Administrative Shares for Distribution
Services. All such expenditures shall be allocated as a class expense of
Administrative Shares of the Fund.
4. The Distributor hereby undertakes to use its best efforts to
promote sales of Administrative Shares of the Fund by engaging in those
activities, which may include but are not limited to those specified in
paragraph 2 above, as it from time to time believes will further sales of
Administrative Shares. In furtherance thereof, the Distributor agrees: (a) to
promote the sale of Administrative Shares of the Fund to its customers and to
other investors and (b) to pay and bear all other expenses relating to its
distribution related activities.
5. In consideration of the services provided by the Distributor, the
Trust agrees on behalf of the Fund to pay a monthly fee to the Distributor for
Distribution Services, which fee shall be computed at the annual rate of 0.25%
of the average daily net assets of the Fund attributable to Administrative
Shares held by persons who have purchased Administrative Shares through the
Distributor or through broker-dealers that have entered into selling agreements
with such Distributor.
6. The Distributor agrees to provide quarterly written reports to
the Treasurer of the Trust describing the particular Distribution Services that
have been provided during the relevant quarter by it and by any broker-dealers
with which it has entered into agreements with respect to the Trust and setting
forth the costs and expenses incurred by the Distributor in connection
therewith, and further agrees to provide such additional information regarding
the services provided and the amounts expended as may reasonably be requested by
the Board of Trustees or officers of the Trust for purposes of reviewing the
continued appropriateness of the 12b-1 Plan and the Agreement.
7. The Treasurer of the Trust shall provide, and the Board of
Trustees of the Trust shall review, at least quarterly, a written report of all
amounts expended pursuant to the 12b-1 Plan and the Agreement. Each such report
shall: (a) set forth the amounts expended during the period by the Trust
pursuant to the 12b-1 Plan and the nature of such expenditures; and (b) identify
the types of Distribution Services provided during the quarter by the
Distributor
2
<PAGE>
and others and the costs and expenses incurred by the Distributor with respect
to each type of service.
8. The 12b-1 Plan and the Agreement shall each continue in effect
for a period of one year from the date hereof unless terminated as provided
below. Thereafter, the 12b-1 Plan and the Agreement shall each continue in
effect from year to year, provided that the continuance of each is approved at
least annually by the Board of Trustees of the Trust, including a majority of
the Disinterested Trustees, by vote cast in person at a meeting called for the
purpose of voting on such continuance, and provided that the Disinterested
Trustees have concluded, in the exercise of their reasonable business judgment
and in light of their fiduciary duties under state law and under Sections 36(a)
and 36(b) of the 1940 Act, that there is a reasonable likelihood that the 12b-1
Plan or the Agreement, as the case may be, will benefit the Fund and the holders
of Administrative Shares.
9. The 12b-1 Plan may be terminated at any time, without penalty, by
the vote of a majority of the Disinterested Trustees or by the vote of a
majority of the outstanding Administrative Shares of the Fund. The Agreement
may be terminated by the Distributor, or by the vote of a majority of the
Disinterested Trustees or by the vote of a majority of the outstanding
Administrative Shares of the Fund, without penalty, at any time upon 30 days'
written notice.
10. So long as the 12b-1 Plan remains in effect, the selection and
nomination of persons to serve as Trustees of the Trust who are not "interested
persons" (as defined by the 1940 Act) of the Trust shall be committed to the
discretion of the Disinterested Trustees then in office. However, nothing
contained herein shall prevent the participation of other persons in the
selection and nomination process; provided that a final decision on any such
selection or nomination shall remain within the sole discretion of, and be
approved by, the Disinterested Trustees.
11. The 12b-1 Plan may not be amended to increase materially the
amount to be spent for distribution by the Fund hereunder without the approval
of a majority of the outstanding Administrative Shares of the Fund. All
material amendments to the 12b-1 Plan or to the Agreement must be approved by
the Board of Trustees of the Trust, including a majority of the Disinterested
Trustees, by vote cast in person at a meeting called for the purpose of voting
on such amendment.
12. The 12b-1 Plan shall remain in effect as such, so as to authorize
the use of the Fund's assets in the amounts and for the purposes set forth
herein, notwithstanding the termination of the Agreement or the occurrence of an
"assignment," as defined by the 1940 Act and the rules thereunder, of the
Agreement. However, the Agreement shall terminate automatically in the event of
such an "assignment." Upon a termination of the Agreement, the Fund may
continue to make payments pursuant to the 12b-1 Plan to the Distributor only
upon the approval of a new agreement. However, in lieu of such an agreement
with the Distributor, the Trust may adopt other arrangements regarding the use
of the amounts authorized to be paid by the Fund hereunder. Any new agreement
or other arrangements shall be subject to approval by the Board of Trustees of
the Trust, including a majority of the Disinterested Trustees, by vote
3
<PAGE>
cast in person at a meeting called for such purpose, and subject to compliance
with the other provisions of Rule 12b-1 under the 1940 Act that may be
applicable.
13. The Trust shall preserve copies of this 12b-1 Plan and the
Agreement and all other agreements relating to the 12b-1 Plan and all reports
made pursuant to paragraphs 6 and 7 hereof, together with minutes of all
meetings of its Board of Trustees at which the adoption, amendment or
continuance of the 12b-1 Plan or any such agreement related to the 12b-1 Plan
(including the Agreement) were considered (describing the factors considered and
the basis for decision), in the manner and for the periods specified by Rule
12b-1 and other applicable rules adopted under the 1940 Act.
14. The Declaration of Trust states and notice is hereby given that
this Agreement is not executed on behalf of the Trustees of the Trust as
individuals, and the obligations of the Trust under the Agreement are not
binding upon any of the Trustees, officers or shareholders of the Trust
individually, but are binding only upon the assets and property of the Trust.
15. The 12b-1 Plan and the Agreement shall be construed in accordance
with the laws of the State of Illinois and applicable provisions of the 1940
Act. To the extent the applicable law of the State of Illinois conflict with
the applicable provisions of the 1940 Act, the latter shall control.
16. The Agreement between HS and the Trust shall become effective
upon the commencement of the public offering of Shares of the Fund.
IN WITNESS WHEREOF, the Trust has adopted the 12b-1 Plan, and the
Trust and the Distributor have entered into, executed and delivered the
Agreement, as of the day and year first above written.
HEWITT SERIES TRUST
on behalf of
HEWITT MONEY MARKET FUND
By: /s/ Stacy L. Schaus
------------------------------
Name: Stacy L. Schaus
------------------------
Title: President
-----------------------
HEWITT SERVICES LLC
By: /s/ C. L. Connolly, III
------------------------------
Name: C. L. Connolly, III
------------------------
Title: Secretary
-----------------------
4
<PAGE>
EX-99.0
MULTIPLE CLASS (RULE 18f-3) PLAN FOR HEWITT SERIES TRUST
Hewitt Money Market Fund (the "Fund"), the sole series of Hewitt Series Trust
(the "Trust"), offers two classes of shares with the following provisions and
offering characteristics. Additional classes of shares (such classes being
shares having characteristics referred to in Rule 18f-3 under the Investment
Company Act of 1940, as amended (the "1940 Act")), when created, may have
characteristics that differ from those described.
I. CLASSES
A. Administrative Shares
1. Administrative Shares are offered for sale to individual
investors, individual retirement accounts and to other investors.
The Trust has adopted a plan pursuant to Rule 12b-1 under the
1940 Act (the "Plan") to finance the distribution of
Administrative Shares. Under the Plan, the Fund is authorized to
bear distribution expenses at an annual rate of up to 0.25% of
the average daily net assets of the Fund attributable to
Administrative Shares, for services rendered in connection with
the sale and distribution of Administrative Shares, as described
in the Fund's prospectus.
B. Institutional Shares
1. Institutional Shares are offered for sale to employee benefit
plans. The Trust has not adopted any plan pursuant to Rule 12b-1
with respect to Institutional Shares.
II. CLASS EXPENSES
A. 12b-1 Distribution Plan
1. Each class bears the expenses incurred in connection with any
plan pursuant to Rule 12b-1 adopted with respect to such class.
B. Other Class Specific Expenses
1. Each class bears different shareholder servicing fees pursuant to
separate Shareholder Servicing Agreements. The fee borne by
Administrative Shares is paid monthly to Hewitt Services LLC and
calculated at an annual rate of 0.25% of the average daily net
assets of Administrative Shares. This fee is paid for services
rendered by Hewitt Services LLC in connection with maintaining
records showing the number of Administrative Shares owned by IRAs
and other investors, and for sending shareholder communications
relating to the Fund to the holders of such Administrative
Shares. The fee borne by Institutional Shares is paid monthly to
Hewitt Associates LLC and calculated at an annual rate of 0.20%
of the average daily net assets of Institutional Shares. This fee
is paid for services
<PAGE>
rendered by Hewitt Associates LLC in connection with receiving on
behalf of the transfer agent orders by employee benefit plans to
purchase and redeem Institutional Shares, for maintaining records
showing the number of Institutional Shares allocable to
individual participants in those plans, and for sending
shareholder communications relating to the Fund to plan
participants.
2. There currently are no other class specific expenses.
III. EXPENSE ALLOCATED METHOD
All income, realized and unrealized capital gains and losses and
expenses not assigned to a class will be allocated to each class based
on the relative net assets of each class.
IV. VOTING RIGHTS
A. Each class will have exclusive voting rights on any matter submitted
to its shareholders that relates solely to its class arrangement.
B. Each class will have separate voting rights on any matter submitted to
shareholders where the interests of one class differ from the
interests of any other class.
C. In all other respects, each class has the same rights and obligations
as each other class.
V. EXPENSE WAIVERS OR REIMBURSEMENTS
Any expense waivers or reimbursements will be in compliance with Rule
18f-3 under the 1940 Act.
<PAGE>
EX-99.P
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Marco E. Adelfio, Richard H. Blank, Jr., R. Greg Feltus and Robert M.
Kurucza and each of them, his true and lawful attorney-in-fact and agent (each,
an "Attorney-in-Fact") with full power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, (i) to execute
the Registration Statement of each of MasterWorks Funds, Inc., Managed Series
Investment Trust and Master Investment Portfolio, (each, a "Company") and any or
all amendments (including post-effective amendments) thereto and to file the
same, with any and all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission and any state securities
commissions or authorities, and (ii) to execute any and all federal or state
regulatory filings, including all applications with regulatory authorities,
state charter or organizational documents and any amendments or supplements
thereto, to be executed by, on behalf of, or for the benefit of, a Company. The
undersigned hereby grants to each Attorney-in-Fact full power and authority to
do and perform each and every act and thing contemplated above, as fully and to
all intents and purposes as he might or could do in person, and hereby ratifies
and confirms all that said Attorney-in-Fact may lawfully do or cause to be done
by virtue hereof.
Dated: October 24, 1996 /s/ Jack S. Euphrat
---------------------
Jack S. Euphrat
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Marco E. Adelfio, Richard H. Blank, Jr. and Robert M. Kurucza and each
of them, his true and lawful attorney-in-fact and agent (each, an "Attorney-in-
Fact") with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, (i) to execute the
Registration Statement of each of MasterWorks Funds, Inc., Managed Series
Investment Trust and Master Investment Portfolio, (each, a "Company") and any or
all amendments (including post-effective amendments) thereto and to file the
same, with any and all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission and any state securities
commissions or authorities, and (ii) to execute any and all federal or state
regulatory filings, including all applications with regulatory authorities,
state charter or organizational documents and any amendments or supplements
thereto, to be executed by, on behalf of, or for the benefit of, a Company. The
undersigned hereby grants to each Attorney-in-Fact full power and authority to
do and perform each and every act and thing contemplated above, as fully and to
all intents and purposes as he might or could do in person, and hereby ratifies
and confirms all that said Attorney-in-Fact may lawfully do or cause to be done
by virtue hereof.
Dated: October 24, 1996 /s/ R. Greg Feltus
---------------------
R. Greg Feltus
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Marco E. Adelfio, Richard H. Blank, Jr., R. Greg Feltus and Robert M.
Kurucza and each of them, his true and lawful attorney-in-fact and agent (each,
an "Attorney-in-Fact") with full power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, (i) to execute
the Registration Statement of each of MasterWorks Funds, Inc., Managed Series
Investment Trust and Master Investment Portfolio, (each, a "Company") and any or
all amendments (including post-effective amendments) thereto and to file the
same, with any and all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission and any state securities
commissions or authorities, and (ii) to execute any and all federal or state
regulatory filings, including all applications with regulatory authorities,
state charter or organizational documents and any amendments or supplements
thereto, to be executed by, on behalf of, or for the benefit of, a Company. The
undersigned hereby grants to each Attorney-in-Fact full power and authority to
do and perform each and every act and thing contemplated above, as fully and to
all intents and purposes as he might or could do in person, and hereby ratifies
and confirms all that said Attorney-in-Fact may lawfully do or cause to be done
by virtue hereof.
Dated: October 24, 1996 /s/ Thomas S. Goho
----------------------
Thomas S. Goho
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Marco E. Adelfio, Richard H. Blank, Jr., R. Greg Feltus and Robert M.
Kurucza and each of them, his true and lawful attorney-in-fact and agent (each,
an "Attorney-in-Fact") with full power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, (i) to execute
the Registration Statement of each of MasterWorks Funds, Inc., Managed Series
Investment Trust and Master Investment Portfolio, (each, a "Company") and any or
all amendments (including post-effective amendments) thereto and to file the
same, with any and all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission and any state securities
commissions or authorities, and (ii) to execute any and all federal or state
regulatory filings, including all applications with regulatory authorities,
state charter or organizational documents and any amendments or supplements
thereto, to be executed by, on behalf of, or for the benefit of, a Company. The
undersigned hereby grants to each Attorney-in-Fact full power and authority to
do and perform each and every act and thing contemplated above, as fully and to
all intents and purposes as he might or could do in person, and hereby ratifies
and confirms all that said Attorney-in-Fact may lawfully do or cause to be done
by virtue hereof.
Dated: October 24, 1996 /s/ W. Rodney Hughes
-----------------------
W. Rodney Hughes
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Marco E. Adelfio, Richard H. Blank, Jr., R. Greg Feltus and Robert M.
Kurucza and each of them, his true and lawful attorney-in-fact and agent (each,
an "Attorney-in-Fact") with full power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, (i) to execute
the Registration Statement of each of MasterWorks Funds, Inc., Managed Series
Investment Trust and Master Investment Portfolio, (each, a "Company") and any or
all amendments (including post-effective amendments) thereto and to file the
same, with any and all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission and any state securities
commissions or authorities, and (ii) to execute any and all federal or state
regulatory filings, including all applications with regulatory authorities,
state charter or organizational documents and any amendments or supplements
thereto, to be executed by, on behalf of, or for the benefit of, a Company. The
undersigned hereby grants to each Attorney-in-Fact full power and authority to
do and perform each and every act and thing contemplated above, as fully and to
all intents and purposes as he might or could do in person, and hereby ratifies
and confirms all that said Attorney-in-Fact may lawfully do or cause to be done
by virtue hereof.
Dated: October 24, 1996 /s/ J. Tucker Morse
-----------------------
J. Tucker Morse
