Registration Nos. 333 - 82297 and 811 - 09283
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]
Pre-Effective Amendment No. |_|
Post-Effective Amendment No. 1 |X|
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x]
Amendment No. 1 |x|
Name: 10k SmartTrust
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Address of Principal Business Office (No. & Street, City, State, Zip Code)
5952 Royal Lane, Suite 270, Dallas TX 75230
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Telephone Number (including area code): (214) 360-9360
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Name and address of agent for service of process:
J. Paul Hamilton, Monument Investments, Inc., 5952 Royal Lane,
Suite 270, Dallas, TX 75230
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Approximate Date of Proposed Public Offering: As soon as practicable
after this Registration Statement becomes effective.
/ X/ immediately upon filing pursuant to paragraph (b)
/__/ on (date)pursuant to paragraph (b)
/__/ 60 days after filing pursuant to paragraph (a)(1)
/__/ on (date) pursuant to paragraph (a)(1)
/__/ 75 days after filing pursuant to paragraph (a)(2)
/__/ on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
/__/ this post effective amendment designates a new effective date for a
previously filed post effective amendment.
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, as amended, or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
10k SmartTrust Funds
CONTENTS OF REGISTRATION STATMENT ON FORM N-1A
This registration statement consists of the following papers and documents:
Cover Sheet
Contents of Registration Statement on Form N-1A
10k SmartTrust Fund
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Part A - Prospectus
Part B - Statement of Additional Information
Part C - Other Information
Signature Page
Exhibit Index
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PROSPECTUS
10k SmartTrust Fund
5952 ROYAL LANE, SUITE 270
DALLAS, TX 75230
FOR INFORMATION, SHAREHOLDER SERVICES AND REQUESTS:
TOLL FREE: 1-800-733-1183
The 10k SmartTrust Fund seeks long-term capital growth. Monument
Investments, Inc. is the investment manager of The 10k SmartTrust Fund.
The 10k SmartTrust Fund is a special purpose mutual fund designed for investors
who want to make long-term gifts in order to utilize either or both the $10,000
Annual Gift and the $650,000 Life Time Exemption for Estate planning purposes.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
RISK/RETURN SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
FEES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS . . 4
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
HOW TO INVEST IN 10k SmartTrust . . . . . . . . . . . . . . . . . . .. . . . . 7
SHARE PRICE AND DISTRIBUTIONS . . . . . . . . . . . . . . .. . . . . . . . . . 9
TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 10
<PAGE>
RISK/RETURN SUMMARY
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The fund seeks long term capital growth.
WHAT ARE THE PRINCIPAL INVESTMENT STRATEGIES?
The Fund invests primarily in no-load mutual funds specializing in large
capitalization value and growth stocks. We believe that, by carefully selecting
the mutual funds in which the Fund invests ("underlying funds"), we will provide
you with an investment that is flexible in terms of both the investment
techniques used by the underlying funds and the companies represented in the
portfolios of the underlying funds.
The fund advisor, Monument Investments Inc., tries to achieve the greatest
return for the level of risk assumed by each mutual fund. Our investment
strategy stresses three factors: fund performance, investment style, and cost
structure.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?
The value of the fund's shares depends on the value of the mutual funds and
other securities it owns. The value of the mutual funds and the individual
securities that the fund owns will go up and down depending on the performance
of the companies that issued them, general market and economic conditions, and
investor confidence.
There is no guarantee that the Fund will achieve its investment objective and
the beneficiary could lose money as a result of the investment in the Fund.
WHO MAY WANT TO INVEST IN THE FUND?
You may want to invest in the Fund if you are looking for a unique and effective
way to reduce your Estate taxes by making a gift to a child, grandchild or
another individual. The 10k SmartTrust is an excellent way to utilize your
Lifetime Exemption equivalent of $650,000 and/or the Annual Gift Tax Exclusion.
WHO MAY NOT WANT TO INVEST IN THE FUND?
The fund is not a good investment if you or your beneficiary will need to
withdraw the money before maturity or if you do not want to give up control of
the money you invest by making an irrevocable gift.
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FEES AND EXPENSES
The following tables describe the fees and expenses that you will pay during the
life the 10k SmartTrust Account. Each 10k SmartTrust Account will also be
subject to a fee to help offset a portion of the cost of preparing tax returns
for that account and administrative costs that arise upon the maturity of a 10k
SmartTrust Account. (SEE "WHAT ARE THE TAX CONSEQUENCES OF ESTABLISHING A 10K
SMARTTRUST ACCOUNT?" ON PAGE 12)
SHAREHOLDER FEES:
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 2.00%
Maximum deferred sales charge (load) None
ANNUAL OPERATING EXPENSES: (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Fees 1.50%
Distribution Plan (12b-1) and Service Fees 1.00%
Other Expenses* 0.00%
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Total Annual Fund Operating Expenses 2.50%
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*Other expenses, which include the fees and expenses of the Fund's independent
trustee, their legal counsel, interest and extraordinary expenses, are expected
to be less than 0.005%.
EXAMPLE
This example is intended to help you compare the costs 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 of
your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, under these
assumptions, your costs would be:
One Year $ 451
Three Years $ 972
TRUST EXPENSES
Each 10k SmartTrust Account for which the trustee files a tax return will be
charged a $25 fee to help offset a portion of the tax return. See "Taxes" on
page #.
Additionally, as each 10k SmartTrust Account reaches maturity a $100
administrative fee will be charged to help offset any costs incurred by the
trustee associated with the 10k SmartTrust attaining maturity.
FUND EXPENSES
The Fund is responsible for its own operating expenses. These expenses include
the fee that we receive in exchange for our advisory services to the Fund, fees
and expenses of the various organizations that provide necessary services to the
Fund and brokerage commissions.
Investment Management Fee. For our services to the Fund, the Advisor receives an
annual fee, calculated daily and paid monthly, of 1.5% of the average net assets
of the Fund. We may choose to reduce our fees and/or pay expenses of the Fund in
order to reduce the Fund's aggregate annual operating expenses.
12b-1 Distribution Fee. The Fund has also adopted a distribution plan pursuant
to Rule 12b-1 under the Investment Company Act of 1940. This rule allows the
Fund to pay distribution fees for the sale and distribution of its shares and
for services provided to its shareholders. The annual distribution and service
fee is 1.00% of the Fund's average daily net assets. This fee is payable to the
Advisor, as Distribution Coordinator. Because these fees are paid out of the
Fund's assets on an on-going basis, over time these fees will increase the cost
of your investment in Fund shares and may cost you more than paying other types
of sales charges.
WHAT IS THE PURPOSE OF THE FUND?
The purpose of the 10k SmartTrust Fund ("Fund") is to provide a Cost efficient
and Tax effective mean of transferring wealth utilizing the $10,000 Annual Gift
and/or the $650,000 Lifetime Exemption. By investing in the Fund you can make a
long-term gift that may qualify for the $10,000 Annual Gift Tax exclusion.
HOW DOES IT WORK?
If you invest in the Fund, the shares you purchase will be held in an
irrevocable trust -- a "10k SmartTrust Account"-- for the benefit of the
individual you designate (Beneficiary). The duration of the 10k SmartTrust
Account must be at least 10 years or until the beneficiary reaches the age of
maturity, whichever is longer. Neither you nor your designated beneficiary may
withdraw any money from the Fund or change the terms of the 10k SmartTrust
Account in any way.
The 10k SmartTrust Account trustee invests your gift in the fund for the benefit
of the beneficiary you name under the Agreement. The shares in the fund are held
in trust until the maturity date(s) you designate. NOTE: THE 10k SMARTRUST
ACCOUNT IS IRREVOCABLE. ONCE ESTABLISHED, NEITHER YOU (THE GRANTOR) NOR THE
BENEFICIARY CAN CHANGE THE TERMS OF THE TRUST IN ANY WAY. You cannot establish a
10k SmartTrust Account for yourself, your spouse or an entity other than an
individual as a beneficiary.
WHAT IS THE LIFETIME EXEMPTION AND WHAT IS
THE ANNUAL GIFT TAX EXCLUSION?
The Lifetime Exemption is a tax credit wherein the first $650,000 of ones estate
is not taxed (exempt). This exemption amount will increase to $1,000,000 by
2006.
The $10,000 Annual Gift Tax Exclusion allows any individual to gift to anyone
they choose up to $10,000 per year without taxes being owed by either party. The
gift must by definition be a "current interest" gift. This means the gift must
be given irrevocably and the gift must be given at the present time and not
sometime in the future. THE 10k SmartTrust DOES HAVE A PROVISION THAT ALLOWS FOR
THE GIFT TO BE DEEMED A `CURRENT INTEREST GIFT'. (see `Important Note' under
`Tax Consequences' page #
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INVESTMENT OBJECTIVES,PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS
INVESTMENT OBJECTIVES
The fund seeks long term capital growth.
IMPLEMENTATION OF INVESTMENT OBJECTIVES
The Fund invests primarily in no-load mutual funds specializing in large
capitalization value and growth stocks. We believe that, by carefully selecting
the mutual funds in which the Fund invests ("underlying funds"), we will provide
you with an investment that is flexible in terms of both the investment
techniques used by the underlying funds and the companies represented in the
portfolios of the underlying funds.
The fund advisor, Monument Investments Inc., tries to achieve the greatest
return for the level of risk assumed by each mutual fund. Our investment
strategy stresses three factors: fund performance, investment style, and cost
structure.
Performance. The fund advisor continuously monitors the performance of the broad
universe of equity mutual funds selecting those funds which have proven
themselves consistent performers relative to their asset class for the 1, 3, and
5 year time horizons. Though past performance does not guarantee future returns
it does suggest in the opinion of this advisor, that the better performing funds
continue to exhibit investment success over time.
Investment Style. Growth or value or both? The fund advisor realizes that one
style may outperform the other style dramatically over a period of time but not
all the time. Hence, the flexibility to invest in the segment of the market
which is in favor greatly enhances the efforts of the fund advisor to deliver
consistent performance.
Cost Structure. The fund advisor is acutely aware of the effects that the cost
structure of the invested mutual funds can have on performance. To this end,
every effort is made to measure the `cost vs. reward' of each fund in which this
fund invests. Funds which perform well, even those with a higher cost structure
will be maintained, while a poor performing fund, even with a low cost
structure, will be liquidated.
THE FUND IS DESIGNED AS A "FUND OF FUNDS" BUT MAY ALSO INVEST DIRECTLY
IN LARGE, WELL-CAPITALIZED U.S. COMPANIES.
While the Fund intends to invest primarily in equity mutual Funds, the Fund may
also invest up to 25% of the Fund's assets directly in equity securities which
also have large capitalization value and growth characteristics, as viewed by
the Fund's advisor. Large capitalization stocks have a value of approximately
one billion or more and are therefore more liquid in nature, i.e., they usually
have enough shares outstanding to accommodate supply and demand for their shares
on typical trading days. Usually, stocks with greater liquidity are less
volatile.
Value stocks typically are stocks which are out of favor with their particular
industry or the stock market as a whole. Value stocks usually have a lower price
to earnings ratio than growth stocks and as a result are usually less volatile.
Growth stocks are generally companies with higher price to earnings ratios as
investors are more willing to pay a higher price for expected future earnings.
Growth stocks can be more volatile than value stocks in light of their higher
price to earnings ratios.
The Fund will avail itself of both investment styles. Hence the Fund is not
"locked" into just one investment style, but is designed to be more flexible.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?
The value of the fund's shares depends on the value of the mutual funds and
other securities it owns. The value of the mutual funds and the individual
securities that the fund owns will go up and down depending on the performance
of the companies that issued them, general market and economic conditions, and
investor confidence.
There is no guarantee that the Fund will achieve its investment objective and
the beneficiary could lose money as a result of the investment in the Fund.
We will invest only in mutual funds that have an investment objective similar to
the Fund's. The mutual funds we acquire, however, may use certain investment
techniques and strategies that are different from those adopted by the Fund. For
example, an underlying fund might invest a portion of its assets in foreign
securities or concentrate investments in a single industry. These and other
techniques and strategies may involve investment risks in addition to those
normally associated with investments made in accordance with policies adopted by
the Fund. Your investment in the Fund will be subject to such risks to the
extent that the underlying funds make use of such investment techniques and
strategies.
By investing in other mutual funds, the 10k SmartTrust will incur greater
expenses than you would incur if you invested directly in mutual funds. There is
also risk associated with the emphasis placed on our judgment in assembling the
underlying mutual funds. This increased reliance on our judgment exposes you to
the risk that we could be incorrect in our evaluations and assumptions and thus
may make allocation decisions that may not prove profitable.
In summary, 10k SmartTrust is intended for investors who want to give an
irrevocable gift to another individual, but want that gift to have the potential
to grow, outside of the grantors estate, over time (at least 10 years) in a fund
whose objective is long term capital growth through large capitalization value
and growth equity funds. A grantor (the person making the gift) willing to make
such a gift must be willing to give up control over the gift and accept the
risks associated with the fund's investment strategy.
EXPENSES OF THE FUND AND UNDERLYING FUNDS
We will normally invest only in other mutual funds that do not impose sales
charges of any kind or redemption fees. If we do select a mutual fund that
imposes such a charge, however, we will use available waivers and quantity
discounts to [reduce or] eliminate the sales load. We may also invest in mutual
funds that incur fees and expenses for distribution services or shareholder
services under 12b-1 plans or shareholder services plans. The Fund will
indirectly bear its proportionate share of these fees and expenses. Because the
Fund will bear its share of the costs of the underlying funds, you will pay
higher expenses than would be the case if you made a direct investment in the
underlying fund. These costs include items such as the fees paid to the manager
of the underlying fund and fees paid to other organizations that provide
necessary services to the underlying funds, as well as fees, if any, related to
the distribution of shares of the underlying fund.
CERTAIN INVESTMENT TECHNIQUES AND ASSOCIATED RISKS
Investments in foreign securities, and related transaction in foreign
currencies, may be affected by fluctuations in currency exchange rates, unstable
political and economic structures, reduced availability of public information,
and lack of uniform financial reporting and regulatory practices similar to
those that apply to U.S. issuers. An underlying fund that concentrates its
investments in a single industry is likely to be adversely affected by market
and economic conditions that are unfavorable for that industry. The liquidity of
an underlying fund will be affected if that fund invests in restricted or
illiquid issues and this could affect the ability of the Fund to redeem shares
of that fund. An underlying fund that engages in techniques such as selling
short, borrowing money, hedging strategies using futures contracts or options,
may incur transaction costs not associated with direct investments in securities
as well as certain other risks. Investments in fixed income securities by an
underlying fund will subject that fund to the risk that the value of the fixed
income securities held will fluctuate with changes in the prevailing interest
rates.
The underlying funds may actively trade their portfolios, resulting in higher
brokerage commissions and increased realization of taxable capital gains. In
addition, the underlying funds may invest in money market funds and money market
instruments as a temporary defensive strategy; such investments may reduce the
potential for capital appreciation.
The Fund is independent from any of the other mutual funds in which it invests
and has little voice in or control over the investment practices, policies or
decisions of those funds. If the Fund disagrees with those practices, policies
or decisions, it may have no choice other than to liquidate its investment in
the underlying fund, which can entail further losses. In addition, if the Fund
holds more than 1% of the underlying fund's shares, the Fund may encounter
delays in redeeming its holding in that fund.
MANAGEMENT
WHO MANAGES THE FUND?
The Board of Trustees oversees the management of the Fund and meets at least
quarterly to review reports about Fund operations. The Board of Trustees has
hired the Advisor to provide investment management services to the Fund. These
services include day-to-day investment decision for the Fund, placing securities
transactions with brokers selected by the Advisor and coordination of other
services necessary for the Fund to operate.
Monument Investments, Inc. is the Advisor and is located at 5952 Royal
Lane, Suite 270, Dallas, Texas 75230. J. Paul Hamilton, the founder and
president of the advisor, is responsible for day to day investment decisions for
the Fund. Mr. Hamilton has been a portfolio manager for 15 years. Before
founding Monument Investments, Inc. in 1996, Mr. Hamilton was a Vice President,
Trust Officer and Portfolio Manager with Texas Commerce Bank (1986 to 1996) and
prior to that, a Portfolio Manager and Trust Officer with First National Bank,
Abilene, Texas 1984 to 1986). Mr. Hamilton is a graduate of Hardin-Simmons
University, where he also earned an MBA in Finance. Neither the Advisor nor Mr.
Hamilton have previously managed assets organized as a mutual fund. The Fund has
no operating history.
FUNDAMENTAL INVESTMENT POLICIES
Fundamental investment policies contained in the Statement of Additional
Information and the investment objective of the fund may not be changed without
a shareholder vote. The Board of Trustees may change any other policies and
investment strategies.
WHAT ABOUT YEAR 2000?
Many computer systems used today cannot tell the year 2000 from the year 1900
because of the way dates are encoded. This could be a problem when the year 2000
arrives and could affect securities trades, interest and dividend payments,
pricing, and account services.
Although we cannot guarantee, we have received representations that the
investment advisor and the service providers are ready and prepared for Year
2000.
In addition, the issuers of securities the fund owns could have Year 2000
computer problems. These problems could negatively affect the value of the
securities, which, in turn, could impact the funds performance. The advisor has
established a process to gather publicly available information about the Year
2000 readiness of these issuers. However, this process may not uncover all
relevant information, and the information gathered may not be complete and
accurate. Moreover, an issuers Year 2000 readiness is only one of many factors
the fund mangers may consider when making investment decisions, and other
factors may receive greater weight.
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HOW TO INVEST IN 10K SMARTTRUST FUND
HOW DOES A 10K SMARTTRUST ACCOUNT OPERATE?
Establishing a 10k SmartTrust Account. You may establish a 10k SmartTrust
Account by completing an application and forwarding it to the Adviser. As part
of the application process, you will be asked to designate a beneficiary,
maturity date(s) and to approve other terms of your 10k SmartTrust Account.
Please remember that, once your 10k SmartTrust Account is established, you may
make additional investments in your 10k SmartTrust Account until it matures, but
under the terms of the irrevocable trust, you will not be permitted to withdraw
money from the 10k SmartTrust Account or change the terms of the Trust in any
way.
You may send a check or money order payable to the Advisor with your application
or, if you prefer, you may arrange to wire your payment to us. The minimum
investment required to establish your 10k SmartTrust Account is $10,000. Once
your 10k SmartTrust Account is established, you may make additional investments
in the 10k SmartTrust Account, by wire or by mail. You may also establish
telephone services or wire transfer services; please contact us for details.
YOU MAY ESTABLISH YOUR 10K SMARTTRUST ACCOUNT:
BY TELEPHONE
OPEN AN ACCOUNT MAKE ADDITIONAL GIFTS
Additional gift must be Your initial 10k SmartTrust Account must at an
initial gift of at be established in writing with at least
least $10,000. $10,000.
BY MAIL
OPEN AN ACCOUNT MAKE ADDITIONAL GIFTS
Send your check or money Send a signed and completed application
order for at least $5,000. and a check or money order payable to:
Include the account name, Monument Investments, Inc.
address and number to be P. O. Box 670662
credited on your check or Dallas, TX 75367
money order.
BY WIRE
OPEN AN ACCOUNT MAKE AN ADDITIONAL INVESTMENTS
Follow the wire instructions Send a signed and completed application.
provided in the "Open an Give your bank the following information:
account section ABA # 0420-0001-3
Attn: 10k SmartTrust Fund
DDA #821-253549
10k SmartTrust beneficiary's name
ONLINE
Log on to our website and follow the instructions.
IN PERSON
If you prefer to handle your transactions in person, our Investor
Center and a representative can help you open an account and make additional
investments. Our offices are open Monday-Friday 8 a.m. to 5 p.m. Visit us at
Monument Investments, Inc. 5952 Royal Lane, Suite 270, Dallas, TX. 75230.
Managing a Matured 10k SmartTrust Account. Your designated beneficiary will be
notified prior to the date on which the 10k SmartTrust Account reaches maturity.
At that time, shares of the Fund will be transferred to an account ("Matured
Account") established in the sole name and Social Security number of your
designated beneficiary. After the 10k SmartTrust Account matures and is
transferred to your designated beneficiary, neither you nor your designated
beneficiary may make any additional investments to that Matured Account.
Shares of the Fund held in a matured account may be redeemed by the designated
beneficiary, upon written instructions from the beneficiary. Redemption orders
for $100,000 or more must include a signature guarantee. Alternatively, the
beneficiary may establish telephone or wire transfer services; please contact us
for details. A $100 fee will be assessed at final maturity to help offset the
expense of closing the account.
MANAGING A MATURED ACCOUNT:
BY WIRE: SELL SHARES:
If the beneficiary requests a A beneficiary can receive redemption redemption by
wire, $25 will proceeds by wire or electronic be deducted from the amount
transfer. (This service is not wired. Your bank also may available if the
beneficiary charge a fee. Has chosen to do business in writing only.)
IN PERSON:
IF YOU PREFER TO HANDLE YOUR TRANSACTIONS IN PERSON, OUR INVESTOR
CENTER AND A REPRESENTATIVE CAN HELP YOU OPEN AN ACCOUNT AND MAKE ADDITIONAL
INVESTMENTS. OUR OFFICES ARE OPEN MONDAY-FRIDAY 8 A.M. TO 5 P.M. VISIT US AT:
MONUMENT INVESTMENTS, INC.
5952 ROYAL LANE, SUITE 270
DALLAS, TX 75230
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SHARE PRICE AND DISTRIBUTIONS
SHARE PRICE
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (4:00 p.m., Eastern time) on each day that the exchange is open
for business, and on any other day on which there is sufficient trading in the
Fund's securities to materially affect the net asset value. The net asset value
per share of the Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ over-the-counter
market are valued at the last quoted sale price. Lacking a last sale price, a
security is valued at its last bid price except when, in the Advisor's opinion,
the last bid price does not accurately reflect the current value of the
security. All other securities for which over-the-counter market quotations are
readily available are valued at their last bid price. When market quotations are
not readily available or when the Advisor determines the last bid price does not
accurately reflect the current value then such securities are valued pursuant to
methods established by the Board of Trustees.
Fixed income securities generally are valued by using market quotations, but may
be valued on the basis of prices furnished by a pricing service when the Advisor
believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service such securities are valued pursuant to methods established by
the Board of Trustees. Short term investments in fixed income securities with
maturities of less than 60 days when acquired, or which subsequently are within
60 days of maturity, are valued by using the amortized cost method of valuation,
which the Board has determined will represent fair value.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to make distributions of dividends and capital gains; to assure
that the relevant provisions of the tax code relating to irrevocable gift trusts
such as the 10k SmartTrust Account are met, all distributions will be reinvested
in Fund shares. Dividends will nevertheless be taxable to the 10k SmartTrust
Account as ordinary income under federal, state and local tax law. (SEE "TAXES"
ON PAGE 10). The Fund will make distributions of dividends and capital gains, if
any, at least annually, typically after year end. The Fund will make another
distribution of any additional undistributed capital gains earned during the
12-month period ended October 31 on or about December 31.
Dividend or distributions on shares of the Fund held in the 10k SmartTrust
Account will be credited to the 10k SmartTrust, starting on the day after a
purchase is effective. For example, if shares are purchased on a day that a
distribution is declared, the 10k SmartTrust will not receive that distribution.
Redeemed shares will receive any distribution declared on the day of redemption.
When shares held in a Matured Account are redeemed, we will include any
distributions received with the redemption proceeds. Other than to make certain
tax payments, the redemption's from a 10k SmartTrust Account are not permitted
before the account matures.
<PAGE>
TAXES
WHAT ARE THE TAX CONSEQUENCES OF ESTABLISHING A 10K SMARTTRUST ACCOUNT?
The following is only a summary of the tax laws that will affect a 10k
SmartTrust Account. The tax laws applicable to trusts in general are quite
complex. You should consider consulting your tax advisor or attorney before
opening or establishing a 10k SmartTrust Account.
Distribution and dividends earned in a 10k SmartTrust Account may be subject to
federal, state and local taxes and a tax return is generally required to be
filed by the Trustee of the 10k SmartTrust Account. The Trustee for the 10k
SmartTrust Account will file all state and federal tax returns and will pay any
taxes that are due by redeeming Fund shares from your 10k SmartTrust Account. A
$25 fee is charged to the trust for each year a tax return is filed. This also
is done by redeeming shares from the 10k SmartTrust Account.
Taxation of Distributions. Distributions of income are taxable to the 10k
SmartTrust Account as ordinary income. Distributions of capital gains are
classified either as short-term or long-term and are taxed as follows:
Type of Distribution Tax Rate of 15% Bracket Tax Rate of 28% or above Short-term
capital gains Ordinary income rate Ordinary income rate Long-term capital gains
10% 20%
The tax status of any distribution of capital gains is determined by how long
the Fund held the underlying security that was sold, not by how long the 10k
SmartTrust has been in existence. No federal income tax is due from the 10k
SmartTrust Account unless its income exceeds approximately $100 in a year.
Redemption's from Matured Accounts. Redemption's from a Matured Account will be
subject to capital gains tax. Based on current tax law, which is subject to
change, gains or losses will be treated as either short-term capital gains or
losses or long-term capital gains or losses.
Gift Taxes. When you establish a 10k SmartTrust Account, you will be treated,
for Federal gift tax purposes, as the donor of a future interest. Any additional
investments you make in your 10k SmartTrust Account during the term of your 10k
SmartTrust will likewise be considered to be gifts of a future interest. As a
result, neither your initial investment nor any subsequent investment will
qualify for the Annual Gift Tax Exclusion of $10,000 (indexed for inflation).
Accordingly, you will be required to file a United States Gift Tax Return (Form
709) with respect to any year in which you make an investment in your 10k
SmartTrust. No gift tax is payable, however, until your "Lifetime Exemption" or
"Unified Tax Credit" is exceeded. For tax years through 1999, the Unified Tax
Credit is $650,000; this amount will increase to $1,000,000 by 2006. Each gift
is applied against the exemption equivalent that would otherwise be available in
the future.
NOTE: THE ABOVE PARAGRAPH HOLDS TRUE UNLESS THE GRANTOR OFFERS THE
BENEFICIARY THE RIGHT TO WITHDRAWAL THE ANNUAL GIFT TAX EXCLUSION OF
$10,000 (INDEXED FOR INFLATION) WITHIN 30 DAYS OF ESTABLISHING THE 10K
SMARTTRUST. IN MAKING AVAILABLE THE WITHDRAWAL OPTION TO THE
BENEFICIARY, THE GIFT WOULD BE DEEMED A CURRENT INTEREST GIFT AND WOULD
NOW QUALIFY FOR THE ANNUAL GIFT TAX EXCLUSION OF $10,000.
NOTE: Only the annual gift tax exclusion amount would qualify as a
current interest gift. The remaining gift would utilize the
lifetime exemption and a gift tax return would need to be filed.
Example: Suppose a gift of $100,000 was made and the beneficiary chose
to forgo the withdrawal option. $10,000 would qualify for the annual
gift tax exclusion and only $90,000 of the Lifetime Exemption would be
utilized.
<PAGE>
ANNUAL AND SEMIANNUAL REPORTS MORE INFORMATION:
These reports contain more information You can review and copy
about the Fund's investments and the information including the
market conditions and investment Fund's reports and SAI at the
strategies that significantly Public Reference Room of the
affected the Fund's performance Securities and Exchange
during the most recent fiscal period. Commission in Washington, D.C.
These reports about can be obtained Your can obtain information on
free of charge by calling the Fund the operations of the Public
at 1-888-489-0061. Reference Room by calling
1-800-SEC-0330.
STATEMENT OF ADDITIONAL INFORMATION
SAI).
The SAI contains a more detailed, You can get text only copies:
legal description of the Fund's For a fee by writing to the
operations, investment restrictions, Public Reference Room of the
policies and practices. The SAI is Commission, Washington, D.C.
incorporated by reference into this 20549-6009, or for a fee, by
Prospectus. This means that it is calling 1-800-SEC-0330, or
legally part of this Prospectus, free of charge Commission's
even if you don't request a copy. Internet website at
This report can be obtained free http:\\www.sec.gov.
of charge by calling the Fund at
1-888-489-0061.
Shareholders may make inquires to the Fund by calling 1-800-733-1183.
Investment Company Act #811-09283
<PAGE>
10k SmartTrust Fund
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of 10k SmartTrust Fund dated
December 28, 1999. A copy of the Prospectus can be obtained by writing the
Transfer Agent at 431 North Pennsylvania Street, Indianapolis, Indiana 46204, or
by calling 1-888-489-0061.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
PAGE
DESCRIPTION OF THE TRUST
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS
INVESTMENT LIMITATIONS
THE INVESTMENT ADVISOR
TRUSTEES AND OFFICERS
PORTFOLIO TRANSACTIONS AND BROKERAGE
DETERMINATION OF SHARE PRICE
INVESTMENT PERFORMANCE
CUSTODIAN
TRANSFER AGENT
ACCOUNTANTS
DISTRIBUTOR
ADMINISTRATOR
<PAGE>
DESCRIPTION OF THE TRUST
The 10k SmartTrust Fund (the "Fund") was organized as a series of 10k SmartTrust
(the "Trust"). The Trust is an open-end investment company
established under the laws of Ohio by an Agreement and Declaration of Trust
dated April 6, 1999 (the "Trust Agreement"). The Trust Agreement permits the
Trustees to issue an unlimited number of shares of beneficial interest of
separate series without par value. The Fund is one of a series of funds
currently authorized by the Trustees.
Each share of a series represents an equal proportionate interest in
the assets and liabilities belonging to that series with each other share of
that series and is entitled to such dividends and distributions out of income
belonging to the series as are declared by the Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any series into a greater or lesser number of shares of that series so long as
the proportionate beneficial interest in the assets belonging to that series and
the rights of shares of any other series are in no way affected. In case of any
liquidation of a series, the holders of shares of the series being liquidated
will been titled to receive as a class a distribution out of the assets, net of
the liabilities, belonging to that series. Expenses attributable to any series
are borne by that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by or under the
direction of the Trustees in such manner as the Trustees determine to be fair
and equitable. No shareholder is liable to further calls or to assessment by the
Trust without his or her express consent.
For information concerning the purchase and redemption of shares of the
Fund, see "How to Invest in the Fund" and "How to Redeem Shares" in the Fund's
Prospectus. For a description of the methods used to determine the share price
and value of the Fund's assets, see "Share Price Calculation" in the Fund's
Prospectus.
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been
adopted by the Trust with respect to the Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. As used in the Prospectus and
this Statement of Additional Information, the term "majority" of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding shares
of the Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other investment
practices which may be changed by the Board of Trustees without the approval of
shareholders to the extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non-Fundamental").
1. Borrowing Money. The Fund will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. Senior Securities. The Fund will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is consistent with or permitted by the Investment
Company Act of 1940, as amended, the rules and regulations promulgated
thereunder or interpretations of the Securities and Exchange Commission or its
staff.
3. Underwriting. The Fund will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent that,
in connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. Real Estate. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5. Commodities. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. Loans. The Fund will not make loans to other persons, except
(a) by loaning portfolio securities,
(b) by engaging in repurchase agreements, or
(c) by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. Concentration. The Fund will not invest 25% or more of its total assets in
a particular industry. This limitation is not applicable to investments in
obligations issued or guaranteed by the U.S. government, its agencies and
instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
Non-Fundamental. The following limitations have been adopted by the
Trust with respect to the Fund and are Non-Fundamental (see "Investment
Restrictions" above).
1. Pledging. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
2. Borrowing. The Fund will not engage in borrowing.
3. Margin Purchases. The Fund will not purchase securities or evidences
of interest thereon on "margin." This limitation is not applicable to short term
credit obtained by the Fund for the clearance of purchases and sales or
redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.
4. Short Sales. The Fund will not effect short sales of securities.
5. Options. The Fund will not purchase or sell puts, calls, options or
straddles.
6. Illiquid Investments. The Fund will not invest in securities for which there
are legal or contractual restrictions on resale and other illiquid securities.
7. Loans of Portfolio Securities. The Fund will not make loans of portfolio
securities.
THE INVESTMENT ADVISOR
The Fund's investment advisor is Monument Investments, Inc. (the "Advisor").
J. Paul Hamilton may be deemed to be a controlling person of the Advisor due to
his ownership of a majority of its shares.
Under the terms of the management agreement (the "Agreement"), the
Advisor manages the Fund's investments subject to approval of the Board of
Trustees and pays all of the expenses of the Fund except brokerage, taxes,
interest, fees and expenses of the non-interested person trustees and
extraordinary expenses (including organizational expenses). As compensation for
its management services and agreement to pay the Fund's expenses, the Fund is
obligated to pay the Advisor a fee computed and accrued daily and paid monthly
at an annual rate of 1.50% of the average daily net assets of the Fund. The
Advisor may waive all or part of its fee, at any time, and at its sole
discretion, but such action shall not obligate the Advisor to waive any fees in
the future.
The Advisor retains the right to use the name 10k SmartTrust in
connection with another investment company or business enterprise with which the
Advisor is or may become associated. The Trust's right to use the name 10k
SmartTrust automatically ceases ninety days after termination of the Agreement
and may be withdrawn by the Advisor on ninety days written notice.
The Advisor may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Fund believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Fund believes that there would be no material impact on the Fund or its
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Fund may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Fund, no preference will be shown for such
securities.
TRUSTEES AND OFFICERS
The names of the Trustees and executive officers of the Trust are shown
below. Each Trustee who is an "interested person" of the Trust, as defined in
the Investment Company Act of 1940, is indicated by an asterisk.
====================== ================== =====================================
NAME, AGE AND ADDRESS POSITION PRINCIPAL OCCUPATIONS DURING
PAST 5 YEARS
J.Paul Hamilton President President of Monument Investments,
Vice President, Inc. since 1996. Trust Officer and
Portfolio Manager at Texas Commerce
Bank from 1984 to 1996.
===================== =================== =====================================
The compensation paid to the Trustees of the Trust for the fiscal year
ended October 31, 1998 is set forth in the following table. Trustee fees are
Trust expenses and each series of the Trust pays a portion of the Trustee fees.
=========================================================================
NAME AGGREGATE TOTAL COMPENSATION
COMPENSATION FROM TRUST
FROM TRUST (THE TRUST IS NOT IN A
FUND COMPLEX)
=========================================================================
J. Paul Hamilton 0 0
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Advisor is responsible for the Fund's portfolio decisions and the placing of
the Fund's portfolio transactions. In placing portfolio transactions, the
Advisor seeks the best qualitative execution for the Fund, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Advisor generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received.
The Advisor is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Fund and/or the other
accounts over which the Advisor exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Advisor determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Advisor's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Fund effects securities
transactions may also be used by the Advisor in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Advisor in connection with its services to the
Fund. Although research services and other information are useful to the Fund
and the Advisor, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Advisor that the review and study of the research and other information will not
reduce the overall cost to the Advisor of performing its duties to the Fund
under the Agreement.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to a market maker may include the spread between the bid and
asked prices.
[To the extent that the Trust and another of the Advisor's clients seek to
acquire the same security at about the same time, the Trust may not be able to
acquire as large a position in such security as it desires or it may have to pay
a higher price for the security. Similarly, the Trust may not be able to obtain
as large an execution of an order to sell or as high a price for any particular
portfolio security if the other client desires to sell the same portfolio
security at the same time. On the other hand, if the same securities are bought
or sold at the same time by more than one client, the resulting participation in
volume transactions could produce better executions for the Trust. In the event
that more than one client wants to purchase or sell the same security on a given
date, the purchases and sales will be prorated in the event full execution of
the trade was not possible.]
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of the Fund is determined as
of 4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day, Martin
Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas. For a description of the methods
used to determine the net asset value (share price), see "Share Price
Calculation" in the Prospectus.
INVESTMENT PERFORMANCE
"Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return for the period indicated that would equate the initial amount invested
to the ending redeemable value, according to the following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical
$1,000 investment made at the beginning of
the applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
In addition to providing average annual total return, the Fund may also
provide non-standardized quotations of total return for differing periods and
may provide the value of a $10,000 investment (made on the date of the initial
public offering of the Fund's shares) as of the end of a specified period.
The Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Fund
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the stock market in general. The Fund may use
the Standard & Poor's 500 Stock Index or the Dow Jones Industrial Average.
In addition, the performance of the Fund may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of the Fund. Performance rankings and ratings
reported periodically in national financial publications such as Barron's and
Fortune also may be used.
CUSTODIAN
Firstar Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is
Custodian of the Fund's investments. The Custodian acts as the Fund's
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Fund's request and
maintains records in connection with its duties.
TRANSFER AGENT
Unified Fund Services, Inc., 431 North Pennsylvania Street,
Indianapolis, Indiana 46204, acts as the Fund's transfer agent and, in such
capacity, maintains the records of each Unified shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution disbursing
agent and performs other accounting and shareholder service functions. In
addition, Unified provides the Fund with certain monthly reports, record-keeping
and other management-related services.
ACCOUNTANTS
The firm of McCurdy & Associates, CPA's, 27955 Clemens Road, Westlake,
Ohio 44145, has been selected as independent public accountants for the Trust
for the fiscal year ending October 31, 1999. McCurdy & Associates performs an
annual audit of the Fund's financial statements and provides financial, tax and
accounting consulting services as requested.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the exclusive agent for distribution of shares of the
Fund. The Distributor is obligated to sell the shares of the Fund on a best
efforts basis only against purchase orders for the shares. Shares of the Fund
are offered to the public on a continuous basis.
ADMINISTRATOR
The Fund retains AmeriPrime Financial Services, Inc., 1793 Kingswood
Drive, Suite 200, Southlake, TX 76092, (the "Administrator") to manage the
Fund's business affairs and provide the Fund with administrative services,
including all regulatory reporting and necessary office equipment, personnel and
facilities.
FINANCIAL STATEMENTS
To The Shareholders and Board of Trustees
10k SmartTrust:
We have audited the accompanying statement of assets and liabilities of The 10k
SmartTrust (comprising, respectively, the 10k SmartTrust Fund) as of November
10, 1999. This financial statement is the responsibility of the Company'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
statement of assets and liabilities presentation. Our procedures included
confirmation of cash held by the custodian as of November 10, 1999, by
correspondence with the custodian. 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 The 10k
SmartTrust constituting 10k SmartTrust Fund as of November 10, 1999, in
conformity with generally accepted accounting principles.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
November 10, 1999
<PAGE>
10K SMARTTRUST
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 10, 1999
The 10k
SmartTrust Fund
ASSETS:
Cash in Bank $100,000
Total Assets $100,000
LIABILITIES: $ 0
------------
Total Liabilities $ 0
------------
NET ASSETS $100,000
NET ASSETS CONSIST OF:
Capital Paid In $100,000
OUTSTANDING SHARES
Unlimited Number of Shares
Authorized Without Par Value 10,000
NET ASSET VALUE PER SHARE $10.00
OFFERING PRICE PER SHARE $10.00
See accompanying notes and accountant=s audit report
<PAGE>
10K SMARTTRUST
NOTES TO FINANCIAL STATEMENTS
November 10, 1999
1. ORGANIZATION
10k SmartTrust (the "Trust") is an open-end management investment
company organized as a business trust under the laws of the State of
Ohio by a declaration of trust dated August 6, 1999. There is currently
only one series within the Trust, The 10k SmartTrust Fund (the AFund@).
It represents a separate non-diversified portfolio of securities.
The Fund uses an independent custodian. No transactions other than those
relating to organizational matters and the sale of 10,000 shares of The
10k SmartTrust Fund have taken place to date.
The Fund=s primary investment objective is long-term capital growth.
2. CONTROL PERSONS
As of November 10, 1999, all of the outstanding shares of the Fund were
owned by 10k SmartTrust FBO Ashley Wells. A shareholder who beneficially
owns, directly or indirectly, more than 25% of the Fund's voting
securities may be deemed a "control person" (as defined in the 1940 Act)
of the Fund.
3. RELATED PARTY TRANSACTIONS
Monument Investors, Inc. is the investment adviser for the Fund. It
manages the Fund=s portfolio and provides administrative services to
the extent not supplied by other service providers. The annual advisory
fee to be paid to Monument Investors, Inc., based on average net assets,
is 1.50%. The Fund is responsible for its own operating expenses.
Certain officers and/or directors of Monument Investors, Inc. are also
officers and/or trustees of the Fund.
The Fund has adopted a plan under Rule 12b-1 that allows the Fund to pay
distribution and other fees for the distribution of its shares and for
services provided to shareholders. The Plan allows for the payment of up
to 1.00% of average annual net assets.
Unified Fund Services, Inc. (AUnified@) acts as the Fund=s transfer agent
and, in that capacity, maintains the records of each shareholder=s
account, answers shareholders= inquiries concerning their accounts,
processes purchases and redemptions of the Fund= shares, acts as dividend
and distribution disbursing agent and performs other shareholder service
functions.
<PAGE>
10K SMARTTRUST
NOTES TO FINANCIAL STATEMENTS (CONT=D)
November 10, 1999
Unified also provides fund accounting services to the Fund including
maintaining the Fund=s accounts, books and records and calculating the
daily net asset value.
Ameriprime Financial Services, Inc. (a subsidiary of Unified) serves as
Fund administrator. In its capacity as fund administrator, it provides
the Fund with certain monthly reports, record-keeping and other
management related services.
Certain officers and /or employees of Ameriprime Financial Services, Inc.
are also officers of the Fund.
4. CAPITAL STOCK AND DISTRIBUTION
At November 10, 1999, the authorized capitalization of the Fund consists
of unlimited shares without par value per share. Each share has equal
dividend, distribution and liquidation rights. There are no conversion,
subscription or preemptive rights applicable to any shares of the Fund.
All shares issued are fully paid and non-assessable. Each holder of
common stock has one vote for each share held. There are no restrictions
on the right of shareholders to retain or dispose of their shares.
Voting rights are non-cumulative. Transactions in capital stock were as
follows:
Shares Sold:
10k SmartTrust Fund 10,000
Shares Redeemed:
10k SmartTrust Fund 0
Net Increase:
10k Smart Trust Fund 10,000
Shares Outstanding:
10k SmartTrust Fund 10,000
<PAGE>
PART C OTHER INFORMATION
ITEM 23. EXHIBITS
(a) Articles of Incorporation. Copy of Registrant's Agreement and
Declaration of Trust is filed herewith.
(b) By-laws of the Trust. Copy of the Registrant's By-laws is filed herewith
(c) Not Applicable
(d) Investment Advisor Agreement between Registrant and Monument
Investments, L.L.C. is filed herewith.
(e) Underwriting Contract.
(i) Registrant's Underwriting Agreement with AmeriPrime Financial
Securities, Inc. is filed herewith.
(f) Not Applicable
(g) Custodian Agreement. Registrant's Custodian Agreement with Firstar
Bank, N.A. is filed herewith.
(h) Other Material Contracts. None
(i) Legal Opinion. None.
(j) Other Opinions. Consent of McCurdy & Associates CPA's Inc. is filed
herewith.
(k) Not Applicable
(l) Subscription Agreement for Shares of the 10k SmartTrust Fund.
(m) Rule 12b-1 Distribution Plan.
(n) Financial Data Schedule
(o) Rule 18f-3 Plan. Not Applicable
<PAGE>
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE TRUST
The Trust does not control and is not under common control with any other
person.
ITEM 25. INDEMNIFICATION
All officers, Trustees, employees and agents of the Trust are to be indemnified
as set forth in Trust Instrument. To this end, the Trust intends to obtain an
Officers' and Trustees' Errors and Omissions Insurance Policy.
Insofar as indemnification for liability arising under the Securities Act of
1933, as amended (the "1933 Act") may be permitted for Trustees, officers and
controlling persons of the Trust pursuant to the foregoing provisions, or
otherwise, the Trust has been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Trust of
expenses incurred or paid by a Trustee, officer or controlling person of the
Trust in the successful defense of any action, suit or proceeding) is asserted
by such Trustee, officer or controlling person in connection with the securities
being registered, the Trust 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.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Monument Investments, Inc., 5952 Royal Lane, Suite 270, Dallas, TX 85230
("Monument"), Advisor to the 10k SmartTrust Fund, is a registered investment
advisor. (1) "Monument" has engaged in no other business during the past two
fiscal years. (2) The following list sets forth other substantial business
activities of the directors and officers of "Monument" during the past two
years:
* Gerald R. James, Jr. a director of "Monument", has been a Vice President/Bank
Manager at First State Bank of North Texas in Dallas, Texas since February 1998.
From February 1996 to February 1998, Mr. James served as Vice President of
Fidelity Bank in Dallas, Texas.
* Robert W. Manry, a director of Monument, has been an Account Executive at
Global Dallas (a trucking company) in Irving, Texas since 1987.
ITEM 27. PRINCIPAL UNDERWRITERS
(a) AmeriPrime Financial Securities, Inc., is the Registrant's principal
underwriter. Kenneth D. Trumpfheller, 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the President, Secretary and Treasurer of the
underwriter and the President and a Trustee of the Registrant. It is also the
underwriter for the AmeriPrime Insurance Trust, the Kenwood Funds, the Rockland
Funds Trust, and the TANAKA Funds, Inc.
(b) There are no officers and directors of the Distributor who also serve on
behalf of the Trust.
(c) None.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
The accounts, books or other documents required to be maintained by Section
31(a) of the 1940 Act and the rules promulgated thereunder are maintained on
behalf of the 10k SmartTrust Fund by the Fund Administrator, 175 Westwood Dr,
Suite 500, Southlake, TX 76092.
ITEM 29. MANAGEMENT SERVICES
The Trust has not entered into any management-related service contracts other
than as described in Part A and B of this Registration Statement.
ITEM 30. UNDERTAKINGS
The Registrant undertakes to call a meeting of shareholders for the purpose of
voting upon the question of removal of a Trustee or Trustees if requested to do
so by the holders of at least 10% of Registrant's outstanding voting securities,
and to assist in communications with other shareholders, as required by Section
16(c) of the 1940 Act.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant has duly caused this
Registration Statement on Form 485(B) to be signed on its behalf by the
undersigned, thereunto duly authorized, in Dallas, Texas on the 16th day of
November, 1999.
10k SmartTrust Fund
By:
______ /s/_______________________________
J. Paul Hamilton, President
Pursuant to the requirements of the Securities Act of 1933, as amended, this to
the Registration Statement of the Trust has been signed below by the following
person in the capacity and on the date indicated:
J. Paul Hamilton
President and Trustee
By:
________ /s/__________________________
J. Paul Hamilton
November 16, 1999
________/s/____________________________
Bruce D. Singleton, Trustee
November 16, 1999
__________/s/_________________________
Barry E. Dull, Trustee
November 16, 1999
<PAGE>
EXHIBIT INDEX
1. Declaration of Trust . . . . . . . . . . . . . . . . . . EX-99.23.a.1
2. By-laws of the Trust. . . . . . . . . . . . . . . . . . . EX-99.23.b.1
3. Management Agreement . . . . . . . . . . . . . . . . . . . EX-99.23.d.1
4. Underwriting Agreement . . . . . . . . . . . . . . . . . . EX-99.23.e.1
5. Custody Agreement . . . . . . . . . . . . . . . . . . . . EX-99.23.g.1
6. Consent of Accountant . . . . . . . . . . . . . . . . . . EX-99.23.j.1
7. Letter of Initial Stockholder . . . . . . . . . . . . . . .EX-99.23.l.1
8. Rule 12b-1 Distribution Plan . . . . . . . . . . . . . . . EX-99.23.m.1
9. Financial Data Schedule . . . . . . . . . . . . . . . . . EX-99.23.k.1
--------------------------------------------
10K SMARTTRUST
AGREEMENT AND DECLARATION OF TRUST
MARCH 16, 1999
----------------------
<PAGE>
10K SMARTTRUST
AGREEMENT AND DECLARATION OF TRUST
TABLE OF CONTENTS
ARTICLE I - NAME AND DEFINITIONS...............................................1
Section 1.1 Name and Principal Office.......................1
Section 1.2 Definitions.....................................1
(a) The "Trust".........................................1
(b) "Trustees"..........................................1
(c) "Shares"............................................1
(d) "Series"............................................1
(e) "Class".............................................2
(f) "Shareholder".......................................2
(g) The "1940 Act"......................................2
(h) "Commission"........................................2
(i) "Declaration of Trust"..............................2
(j) "By-Laws"...........................................2
ARTICLE II - PURPOSE OF TRUST..................................................2
ARTICLE III - THE TRUSTEES.....................................................2
Section 3.1 Number, Designation, Election, Term, etc........2
(a) Initial Trustees....................................2
(b) Number..............................................2
(c) Term................................................2
(d) Resignation and Retirement..........................3
(e) Removal.............................................3
(f) Vacancies...........................................3
(g) Effect of Death, Resignation, etc...................3
(h) No Accounting.......................................3
Section 3.2 Powers of Trustees..............................3
(a) Investments.........................................4
(b) Disposition of Assets...............................4
(c) Ownership Powers....................................4
(d) Subscription........................................4
(e) Form of Holding.....................................4
(f) Reorganization, etc.................................4
(g) Voting Trusts, etc..................................5
(h) Compromise..........................................5
(i) Partnerships, etc...................................5
(j) Borrowing and Security..............................5
(k) Guarantees, etc.....................................5
(l) Insurance...........................................5
(m) Pensions, etc.......................................5
Section 3.3 Certain Contracts...............................6
(a) Advisory............................................6
(b) Administration......................................6
(c) Distribution........................................6
(d) Custodian and Depository............................6
(e) Transfer and Dividend Disbursing Agency.............6
(f) Shareholder Servicing...............................6
(g) Accounting..........................................7
Section 3.4 Payment of Trust Expenses and Compensation of
Trustees........................................7
Section 3.5 Ownership of Assets of the Trust................8
ARTICLE IV - SHARES............................................................8
Section 4.1 Description of Shares...........................8
Section 4.2 Establishment and Designation of Series.........9
(a) Assets Belonging to Series..........................9
(b) Liabilities Belonging to Series....................10
(c) Dividends..........................................10
(d) Liquidation........................................11
(e) Voting.............................................11
(f) Redemption by Shareholder..........................11
(g) Redemption by Trust................................12
(h) Net Asset Value....................................12
(i) Transfer...........................................12
(j) Equality...........................................13
(k) Fractions..........................................13
(l) Conversion Rights..................................13
Section 4.3 Ownership of Shares............................13
Section 4.4 Investments in the Trust.......................13
Section 4.5 No Preemptive Rights...........................13
Section 4.6 Status of Shares and Limitation of Personal
Liability......................................13
ARTICLE V - SHAREHOLDERS' VOTING POWERS AND MEETINGS..........................14
Section 5.1 Voting Powers......................................14
Section 5.2 Meetings.......................................14
Section 5.3 Record Dates...................................14
Section 5.4 Quorum and Required Vote.......................15
Section 5.5 Action by Written Consent......................15
Section 5.6 Inspection of Records..........................15
Section 5.7 Additional Provisions..........................15
ARTICLE VI - LIMITATION OF LIABILITY; INDEMNIFICATION.........................15
Section 6.1 Trustees, Shareholders, etc. Not Personally
Liable; Notice.................................15
Section 6.2 Trustee's Good Faith Action; Expert Advice; No
Bond or Surety.................................16
Section 6.3 Indemnification of Shareholders................16
Section 6.4 Indemnification of Trustees, Officers, etc.....17
Section 6.5 Advances of Expenses...........................17
Section 6.6 Indemnification Not Exclusive, etc.............17
Section 6.7 Liability of Third Persons Dealing with
Trustees.......................................17
ARTICLE VII - MISCELLANEOUS...................................................17
Section 7.1 Duration and Termination of Trust..............17
Section 7.2 Reorganization.................................18
Section 7.3 Amendments.....................................18
Section 7.4 Filing of Copies; References; Headings.........19
Section 7.5 Applicable Law.................................19
<PAGE>
10K SMARTTRUST
AGREEMENT AND DECLARATION OF TRUST
AGREEMENT AND DECLARATION OF TRUST made this 16th day of March,
1999, by the Trustees hereunder, and by the holders of Shares of beneficial
interest to be issued hereunder as hereinafter provided.
WITNESSETH:
WHEREAS, this Trust is being formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into
their hands as trustees of an Ohio business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets which they may from time to time acquire in
any manner as Trustees hereunder IN TRUST to manage and dispose of the same upon
the following terms and conditions for the benefit of the holders from time to
time of shares of beneficial interest in this Trust as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1 Name and Principal Office. This Trust shall be known as the
"10K SmartTrust" and the Trustees shall conduct the business of the Trust under
that name or any other name as they may from time to time determine. The
principal office of the Trust shall be located at Dallas, Texas or any other
place as determined from time to time by the Trustees and reported to the
Secretary of the State of Ohio.
Section 1.2 Definitions. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) The "Trust" refers to the Ohio business trust established by
this Agreement and Declaration of Trust, as amended from time
to time;
(b) "Trustees" refers to the Trustees of the Trust named herein or
elected in accordance with Article III;
(c) "Shares" refers to the transferable units of interest into
which the beneficial interest in the Trust, shall be divided
from time to time, including the shares of any and all Series
or Classes which may be established by the Trustees, and
includes fractions of Shares as well as whole Shares;
(d) "Series" refers to Series of Shares established and designated
under or in accordance with the provisions of Article IV;
(e) "Class" refers to a class or sub-series of any Series of
Shares established and designated under and in accordance with
the provisions of Article IV;
(f) "Shareholder" means a record owner of Shares;
(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;
(h) "Commission" shall have the meaning given it in the 1940 Act;
(i) "Declaration of Trust" shall mean this Agreement and
Declaration of Trust as amended or restated from time to time;
and
(j) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of the Trust is to operate as an investment company, to
offer Shareholders one or more investment programs primarily in securities and
debt instruments and to engage in any and all lawful acts or activities for
which business trusts may be formed under Chapter 1746 of the Ohio Revised Code.
ARTICLE III
THE TRUSTEES
Section 3.1 Number, Designation, Election, Term, etc.
(a) Initial Trustees. Upon his execution of this Declaration of Trust or a
counterpart hereof or some other writing in which he accepts such
Trusteeship and agrees to the provisions hereof, J. Paul Hamilton shall
become Trustee hereof.
(b) Number. The Trustees serving as such, whether named above or hereafter
becoming a Trustee, may increase or decrease the number of Trustees to a
number other than the number theretofore determined. No decrease in the
number of Trustees shall have the effect of removing any Trustee from
office prior to the expiration of his term, but the number of Trustees may
be decreased in conjunction with the removal of a Trustee pursuant to
subsection (e) of this Section 3.1.
(c) Term. Each Trustee shall serve as a Trustee during the lifetime of the
Trust and until its termination ---- as hereinafter provided or until such
Trustee sooner dies, resigns, retires or is removed. The Trustees may elect
their own successors and may, pursuant to Section 3.1(f) hereof, appoint
Trustees to fill vacancies; provided that, immediately after filling a
vacancy, at least two-thirds of the Trustees then holding office shall have
been elected to such office by the Shareholders at an annual or special
meeting. If at any time less than a majority of the Trustees then holding
office were so elected, the Trustees shall forthwith cause to be held as
promptly as possible, and in any event within 60 days, a meeting of
Shareholders for the purpose of electing Trustees to fill any existing
vacancies.
(d) Resignation and Retirement. Any Trustee may resign his trust or retire as a
Trustee, by written instrument signed by him and delivered to the other
Trustees or to any officer of the Trust, and such resignation or retirement
shall take effect upon such delivery or upon such later date as is
specified in such instrument.
(e) Removal. Any Trustee may be removed with or without cause at any time:
(i) by written instrument, signed by at least two-thirds of the number of
Trustees prior to such removal, specifying the date upon which such
removal shall become effective,
(ii) by vote of the Shareholders holding not less than two-thirds of the
Shares then outstanding, cast in person or by proxy at any meeting
called for the purpose, or
(iii) by a declaration in writing signed by Shareholders holding not less
than two-thirds of the Shares then outstanding and filed with the
Trust's Custodian.
(f) Vacancies. Any vacancy or anticipated vacancy resulting from any reason,
including without limitation --------- the death, resignation, retirement,
removal or incapacity of any of the Trustees, or resulting from an increase
in the number of Trustees by the Trustees may (but so long as there are at
least three remaining Trustees, need not unless required by the 1940 Act)
be filled either by a majority of the remaining Trustees through the
appointment in writing of such other person as such remaining Trustees in
their discretion shall determine (unless a shareholder election is required
by the 1940 Act) or by the election by the Shareholders, at a meeting
called for the purpose, of a person to fill such vacancy, and such
appointment or election shall be effective upon the written acceptance of
the person named therein to serve as a Trustee and agreement by such person
to be bound by the provisions of this Declaration of Trust, except that any
such appointment or election in anticipation of a vacancy to occur by
reason of retirement, resignation, or increase in number of Trustees to be
effective at a later date shall become effective only at or after the
effective date of said retirement, resignation, or increase in number of
Trustees. As soon as any Trustee so appointed or elected shall have
accepted such appointment or election and shall have agreed in writing to
be bound by this Declaration of Trust and the appointment or election is
effective, the Trust estate shall vest in the new Trustee, together with
the continuing Trustees, without any further act or conveyance.
(g) Effect of Death, Resignation, etc. The death, resignation, retirement,
removal, or incapacity of the Trustees, or any one of them, shall not
operate to annul or terminate the Trust or to revoke or terminate any
existing agency or contract created or entered into pursuant to the terms
of this Declaration of Trust.
(h) No Accounting. Except to the extent required by the 1940 Act or under
circumstances which would justify his removal for cause, no person ceasing
to be a Trustee as a result of his death, resignation, retirement, removal
or incapacity (nor the estate of any such person) shall be required to make
an accounting to the Shareholders or remaining Trustees upon such
cessation.
Section 3.2 Powers of Trustees. Subject to the provisions of this
Declaration of Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient to carry out
that responsibility and the purpose of the Trust. Without limiting the
foregoing, the Trustees may adopt By-Laws not inconsistent with this Declaration
of Trust providing for the conduct of the business and affairs of the Trust and
may amend and repeal them to the extent that such By-Laws do not reserve that
right to the Shareholders; they may as they consider appropriate elect and
remove officers and appoint and terminate agents and consultants and hire and
terminate employees, any one or more of the foregoing of whom may be a Trustee,
and may provide for the compensation of all of the foregoing; they may appoint
from their own number, and terminate, any one or more committees consisting of
two or more Trustees, including without implied limitation an executive
committee, which may, when the Trustees are not in session and subject to the
1940 Act, exercise some or all of the power and authority of the Trustees as the
Trustees may determine; in accordance with Section 3.3 they may employ one or
more Advisers, Administrators, Depositories and Custodians and may authorize any
Depository or Custodian to employ subcustodians or agents and to deposit all or
any part of such assets in a system or systems for the central handling of
securities and debt instruments, retain transfer, dividend, accounting or
Shareholder servicing agents or any of the foregoing, provide for the
distribution of Shares by the Trust through one or more distributors, principal
underwriters or otherwise, set record dates or times for the determination of
Shareholders or certain of them with respect to various matters; they may
compensate or provide for the compensation of the Trustees, officers, advisers,
administrators, custodians, other agents, consultants and employees of the Trust
or the Trustees on such terms as they deem appropriate; and in general they may
delegate to any officer of the Trust, to any committee of the Trustees and to
any employee, adviser, administrator, distributor, principal underwriter,
depository, custodian, transfer and dividend disbursing agent, or any other
agent or consultant of the Trust such authority, powers, functions and duties as
they consider desirable or appropriate for the conduct of the business and
affairs of the Trust, including without implied limitation the power and
authority to act in the name of the Trust and of the Trustees, to sign documents
and to act as attorney-in-fact for the Trustees.
Without limiting the foregoing and to the extent not inconsistent with
the 1940 Act or other applicable law, the Trustees shall have power and
authority:
(a) Investments. To invest and reinvest cash and other property, and to
hold cash or other property uninvested without in any event being
bound or limited by any present or future law or custom in regard to
investments by trustees;
(b) Disposition of Assets. To sell, exchange, lend, pledge, mortgage,
hypothecate, write options on and lease any or all of the assets of
the Trust;
(c) Ownership Powers. To vote or give assent, or exercise any rights
of ownership, with respect to stock or other securities, debt
instruments 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, debt instruments or
property as the Trustees shall deem proper;
(d) Subscription. To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of
securities or debt instruments;
(e) Form of Holding. To hold any security, debt instrument or
property in a form not indicating any trust, whether in bearer,
unregistered or other negotiable form, or in the name of the
Trustees or of the Trust or in the name of a custodian,
subcustodian or other depository or a nominee or nominees or
otherwise;
(f) Reorganization, etc. To consent to or participate in any plan for
the reorganization, consolidation or merger of any corporation or
issuer, any security or debt instrument of which is or was held
in the Trust; to consent to any contract, lease, mortgage,
purchase or sale of property by such corporation or issuer, and
to pay calls or subscriptions with respect to any security or
debt instrument held in the Trust;
(g) Voting Trusts, etc. To join with other holders of any securities
or debt instruments in acting through a committee, depository,
voting trustee or otherwise, and in that connection to deposit
any security or debt instrument with, or transfer any security or
debt instrument to, any such committee, depository or trustee,
and to delegate to them such power and authority with relation to
any security or debt instrument (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, depository or trustee as the Trustees shall deem
proper;
(h) Compromise. To compromise, arbitrate or otherwise adjust claims
in favor of or against the Trust or any matter in controversy,
including but not limited to claims for taxes;
(i) Partnerships, etc. To enter into joint ventures, general or
limited partnerships and any other combinations or associations;
(j) Borrowing and Security. To borrow funds and to mortgage and
pledge the assets of the Trust or any part thereof to secure
obligations arising in connection with such borrowing;
(k) Guarantees, etc. To endorse or guarantee the payment of any notes
or other obligations of any person; to make contracts of guaranty
or suretyship, or otherwise assume liability for payment thereof;
and to mortgage and pledge the Trust property or any part thereof
to secure any of or all such obligations;
(l) Insurance. To purchase and pay for entirely out of Trust property
such insurance as they may deem --------- necessary or
appropriate for the conduct of the business, including, without
limitation, insurance policies insuring the assets of the Trust
and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, consultants, investment
advisers, managers, administrators, distributors, principal
underwriters, or independent contractors, or any thereof (or any
person connected therewith), of the Trust individually against
all claims and liabilities of every nature arising by reason of
holding, being or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by any
such person in any such capacity, including any action taken or
omitted that may be determined to constitute negligence;
provided, however, that insurance which protects the Trustees and
officers against liabilities rising from action involving willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of their offices may not be
purchased; and
(m) Pensions, etc. To pay pensions for faithful service, as deemed
appropriate by the Trustees, and 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.
Except as otherwise provided by the 1940 Act or other applicable law,
this Declaration of Trust or the By-Laws, any action to be taken by the Trustees
may be taken by a majority of the Trustees present at a meeting of Trustees (a
quorum, consisting of at least a majority of the Trustees then in office, being
present), within or without Ohio, including any meeting held by means of a
conference telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting, or
by written consents of a majority of the Trustees then in office (or such larger
or different number as may be required by the 1940 Act or other applicable law).
Section 3.3 Certain Contracts. Subject to compliance with the
provisions of the 1940 Act, but notwithstanding any limitations of present and
future law or custom in regard to delegation of powers by trustees generally,
the Trustees may, at any time and from time to time and without limiting the
generality of their powers and authority otherwise set forth herein, enter into
one or more contracts with any one or more corporations, trusts, associations,
partnerships, limited partnerships, other type of organizations, or individuals
("Contracting Party") to provide for the performance and assumption of some or
all of the following services, duties and responsibilities to, for or of the
Trust and/or the Trustees, and to provide for the performance and assumption of
such other services, duties and responsibilities in addition to those set forth
below as the Trustees may determine appropriate:
(a) Advisory. Subject to the general supervision of the Trustees
and in conformity with the stated policy of the Trustees with
respect to the investments of the Trust or of the assets
belonging to any Series of Shares of the Trust (as that phrase
is defined in subsection (a) of Section 4.2), to manage such
investments and assets, make investment decisions with respect
thereto, and to place purchase and sale orders for portfolio
transactions relating to such investments and assets;
(b) Administration. Subject to the general supervision of the
Trustees and in conformity with any policies of the Trustees
with respect to the operations of the Trust, to supervise all
or any part of the operations of the Trust, and to provide all
or any part of the administrative and clerical personnel,
office space and office equipment and services appropriate for
the efficient administration and operations of the Trust;
(c) Distribution. To distribute the Shares of the Trust, to be
principal underwriter of such Shares, and/or to act as agent
of the Trust in the sale of Shares and the acceptance or
rejection of orders for the purchase of Shares;
(d) Custodian and Depository. To act as depository for and to
maintain custody of the property of the Trust and accounting
records in connection therewith;
(e) Transfer and Dividend Disbursing Agency. To maintain records
of the ownership of outstanding Shares, the issuance and
redemption and the transfer thereof, and to disburse any
dividends declared by the Trustees and in accordance with the
policies of the Trustees and/or the instructions of any
particular Shareholder to reinvest any such dividends;
(f) Shareholder Servicing. To provide service with respect to the
relationship of the Trust and its Shareholders, records with
respect to Shareholders and their Shares, and similar matters;
and
(g) Accounting. To handle all or any part of the accounting
responsibilities, whether with respect to the Trust's
properties, Shareholders or otherwise.
The same person may be the Contracting Party for some or all of the services,
duties and responsibilities to, for and of the Trust and/or the Trustees, and
the contracts with respect thereto may contain such terms interpretive of or in
addition to the delineation of the services, duties and responsibilities
provided for, including provisions that are not inconsistent with the 1940 Act
relating to the standard of duty of and the rights to indemnification of the
Contracting Party and others, as the Trustees may determine. Nothing herein
shall preclude, prevent or limit the Trust or a Contracting Party from entering
into subcontractual arrangements relative to any of the matters referred to in
Sections 3.3(a) through (g) hereof.
Subject to the provisions of the 1940 Act, the fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee,
manager, adviser, principal underwriter or distributor or agent
of or for any Contracting Party, or of or for any parent or
affiliate of any Contracting Party or that the Contracting Party
or any parent or affiliate thereof is a Shareholder or has an
interest in the Trust, or that
(ii) any Contracting Party may have a contract providing for the
rendering of any similar services to one or more other
corporations, trusts, associations, partnerships, limited
partnerships or other organizations, or has other business or
interests, shall not affect the validity of any contract for the
performance and assumption of services, duties and
responsibilities to, for or of the Trust and/or the Trustees 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 that in
the case of any relationship or interest referred to in the
preceding clause (i) on the part of any Trustee or officer of the
Trust either (l) the material facts as to such relationship or
interest have been disclosed to or are known by the Trustees not
having any such relationship or interest and the contract
involved is approved in good faith reasonably justified by such
facts by a majority of such Trustees not having any such
relationship or interest (even though such unrelated or
disinterested Trustees are less than a quorum of all of the
Trustees), (2) the material facts as to such relationship or
interest and as to the contract have been disclosed to or are
known by the Shareholders not having such relationship or
interest and who are entitled to vote thereon and the contract
involved is specifically approved in good faith by majority vote
of such Shareholders, or (3) the specific contract involved is
fair to the Trust as of the time it is authorized, approved or
ratified by the Trustees or by such Shareholders.
Section 3.4 Payment of Trust Expenses and Compensation of Trustees. The
Trustees are authorized to pay or to cause to be paid out of the principal or
income of the Trust, or partly out of principal and partly out of income, and to
charge or allocate the same to, between or among such one or more of the Series
and Classes that may be established and designated pursuant to Article IV, as
the Trustees deem fair, all expenses, fees, charges, taxes and liabilities
incurred or arising in connection with the Trust, or in connection with the
management thereof, including, but not limited to, the Trustees' compensation
and such expenses and charges for the services of the Trust's officers,
employees, investment adviser, administrator, distributor, principal
underwriter, auditor, counsel, depository, custodian, transfer agent, dividend
disbursing agent, accounting agent, Shareholder servicing agent, and such other
agents, consultants, and independent contractors and such other expenses and
charges as the Trustees may deem necessary or proper to incur. Without limiting
the generality of any other provision hereof, the Trustees shall be entitled to
reasonable compensation from the Trust for their services as Trustees and may
fix the amount of such compensation.
Section 3.5 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 Trustees.
ARTICLE IV
SHARES
Section 4.1 Description of Shares. The beneficial interest in the Trust
shall be divided into Shares, all without par value. The Trustees shall have the
authority from time to time to issue or reissue Shares in one or more Series of
Shares (including without limitation the Series specifically established and
designated in Section 4.2), as they deem necessary or desirable, to establish
and designate such Series, and to fix and determine the relative rights and
preferences as between the different Series of Shares as to right of redemption
and the price, terms and manner of redemption, special and relative rights as to
dividends and other distributions and on liquidation, sinking or purchase fund
provisions, conversion rights, and conditions under which the several Series
shall have separate voting rights or no voting rights.
The Shares of each Series may be issued or reissued from time to time
in one or more Classes, as determined by the Board of Trustees pursuant to
resolution. Each Class shall be appropriately designated, prior to the issuance
of any shares thereof, by some distinguishing letter, number or title. All
Shares within a Class shall be alike in every particular. All Shares of each
Series shall be of equal rank and have the same powers, preferences and rights,
and shall be subject to the same qualifications, limitations and restrictions
without distinction between the shares of different Classes thereof, except with
respect to such differences among such Classes, as the Board of Trustees shall
from time to time determine to be necessary or desirable, including without
limitation differences in expenses, in voting rights and in the rate or rates of
dividends or distributions. The Board of Trustees may from time to time increase
the number of Shares allocated to any Class already created by providing that
any unissued Shares of the applicable Series shall constitute part of such
Class, or may decrease the number of Shares allocated to any Class already
created by providing that any unissued Shares previously assigned to such Class
shall no longer constitute part thereof. The Board of Trustees is hereby
empowered to classify or reclassify from time to time any unissued Shares of
each Series by fixing or altering the terms thereof and by assigning such
unissued shares to an existing or newly created Class. Notwithstanding anything
to the contrary in this paragraph the Board of Trustees is hereby empowered (i)
to redesignate any issued Shares of any Series by assigning a distinguishing
letter, number or title to such shares and (ii) to reclassify all or any part of
the issued Shares of any Series to make them part of an existing or newly
created Class.
The number of authorized Shares and the number of Shares of each Series
and Class that may be issued is unlimited, and the Trustees may issue Shares of
any Series or Class for such consideration and on such terms as they may
determine (or for no consideration if pursuant to a Share dividend or split-up),
all without action or approval of the Shareholders. All Shares when so issued on
the terms determined by the Trustees shall be fully paid and non-assessable (but
may be subject to mandatory contribution back to the Trust as provided in
subsection (h) of Section 4.2). The Trustees may classify or reclassify any
unissued Shares or any Shares previously issued and reacquired of any Series or
Class into one or more Series or Classes that may be established and designated
from time to time. The Trustees may hold as treasury Shares (of the same or some
other Series), 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.
The Trustees may from time to time close the transfer books or
establish record dates and times for the purposes of determining the holders of
Shares entitled to be treated as such, to the extent provided or referred to in
Section 5.3.
The establishment and designation of any Series or Class of Shares in
addition to those established and designated in Section 4.2 shall be effective
upon the execution by a majority of the then Trustees of an instrument setting
forth such establishment and designation and the relative rights and preferences
of such Series or Class, or as otherwise provided in such instrument. At any
time that there are no Shares outstanding of any particular Series or Class
previously established and designated the Trustees may by an instrument executed
by a majority of their number abolish that Series or Class and the establishment
and designation thereof. Each instrument referred to in this paragraph shall
have the status of an amendment to this Declaration of Trust.
Any Trustee, officer or other agent of the Trust, and any organization
in which any such person is interested may acquire, own, hold and dispose of
Shares to the same extent as if such person were not a Trustee, officer or other
agent of the Trust; and the Trust may issue and sell or cause to be issued and
sold and may purchase Shares from any such person or any such organization
subject only to the general limitations, restrictions or other provisions
applicable to the sale or purchase of Shares generally.
Section 4.2 Establishment and Designation of Series or Classes. Without
limiting the authority of the Trustees set forth in Section 4.1 to establish and
designate any further Series, the Trustees hereby establish and designate one
Series of Shares: the "10K SmartTrust Fund". The Shares of these Series and any
Shares of any further Series or Class that may from time to time be established
and designated by the Trustees shall (unless the Trustees otherwise determine
with respect to some further Series or Class at the time of establishing and
designating the same) have the following relative rights and preferences:
(a) Assets Belonging to Series. 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, profits, and
proceeds thereof, including 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 belong to that Series or Class
for all purposes, subject only to the rights of creditors, and
shall be so recorded upon the books of account of the Trust. Such
consideration, assets, income, earnings, profits and proceeds
thereof, including 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, together with any General Items allocated to that Series
or Class as provided in the following sentence, are herein
referred to as "assets belonging 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 belonging to any particular Series or Class
(collectively "General Items"), the Trustees shall allocate such
General Items to and among any one or more of the Series or
Classes established and designated from time to time in such
manner and on such basis as they, in their sole discretion, deem
fair and equitable; and any General Items so allocated to a
particular Series or Class shall belong 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.
The Trustees shall have full discretion, to the extent not
inconsistent with the 1940 Act, to determine which items shall be
treated as income and which items as capital; and each such
determination and allocation shall be conclusive and binding upon
the Shareholders.
(b) Liabilities Belonging to Series. The assets belonging to each
particular Series and Class thereof shall be charged with the
liabilities of the Trust in respect of that Series or Class and
all expenses, costs, charges and reserves attributable to that
Series or Class, and any general liabilities, expenses, costs,
charges or reserves of the Trust which are not readily
identifiable as belonging to any particular Series or Class shall
be allocated and charged by the Trustees to and among any one or
more of the Series and Classes established and designated from
time to time in such manner and on such basis as the Trustees in
their sole discretion deem fair and equitable. The liabilities,
expenses, costs, charges and reserves allocated and so charged to
a Series or Class are herein referred to as "liabilities
belonging to" that Series or Class. Each allocation of
liabilities, expenses, costs, charges and reserves by the
Trustees shall be conclusive and binding upon the Shareholders of
all Series for all purposes.
(c) Dividends. Dividends and distributions on Shares of a particular
Series may be paid with such frequency as the Trustees may
determine, which may be daily or otherwise pursuant to a standing
resolution or resolutions adopted only once or with such
frequency as the Trustees may determine, to the holders of Shares
of that Series, from such of the estimated income and capital
gains, accrued or realized, from the assets belonging to that
Series, as the Trustees may determine, after providing for actual
and accrued liabilities belonging to that Series. All dividends
and distributions on Shares of a particular Series shall be
distributed pro rata to the holders of that Series in proportion
to the number of Shares of that Series held by such holders at
the date and time of record established for the payment of such
dividends or distributions, except that in connection with any
dividend or distribution program or procedure the Trustees may
determine that no dividend or distribution shall be payable on
Shares as to which the Shareholder's purchase order and/or
payment have not been received by the time or times established
by the Trustees under such program or procedure, and except that
if Classes have been established for any Series, the rate of
dividends or distributions may vary among such Class pursuant to
resolution, which may be a standing resolution, of the Board of
Trustees. Such dividends and distributions may be made in cash or
Shares or a combination thereof as determined by the Trustees or
pursuant to any program that the Trustees may have in effect at
the time for the election by each Shareholder of the mode of the
making of such dividend or distribution to that Shareholder. Any
such dividend or distribution paid in Shares will be paid at the
net asset value thereof as determined in accordance with
subsection (h) of Section 4.2.
The Trust intends to qualify each Series as a "regulated investment
company" under the Internal Revenue Code of 1954, as amended, or
any successor or comparable statute thereto, and regulations
promulgated thereunder. Inasmuch as the computation of net income
and gains for federal income tax purposes may vary from the
computation thereof on the books of the Trust, the Board of
Trustees shall have the power, in its sole discretion, to
distribute in any fiscal year as dividends, including dividends
designated in whole or in part as capital gains distributions,
amounts sufficient, in the opinion of the Board of Trustees, to
enable each Series to qualify as a regulated investment company
and to avoid liability of the Series for federal income tax in
respect of that year. However, nothing in the foregoing shall
limit the authority of the Board of Trustees to make
distributions greater than or less than the amount necessary to
qualify as a regulated investment company and to avoid liability
of each Series for such tax.
(d) Liquidation. In event of the liquidation or dissolution of the
Trust, the Shareholders of each Series or Class that has been
established and designated shall be entitled to receive, as a
Series or Class, when and as declared by the Trustees, the excess
of the assets belonging to that Series or Class over the
liabilities belonging to that Series or Class. The assets so
distributable to the Shareholders of any particular Series or
Class shall be distributed among such Shareholders in proportion
to the number of Shares of that Series or Class held by them and
recorded on the books of the Trust. The liquidation of any
particular Series or Class may be authorized by vote of a
majority of the Trustees then in office subject to the approval
of a majority of the outstanding voting Shares of that Series or
Class, as defined in the 1940 Act.
(e) Voting. All Shares shall have "equal voting rights" as such term
is defined in the Investment Company Act of 1940 and except as
otherwise provided by that Act or rules, regulations or orders
promulgated thereunder. On each matter submitted to a vote of the
Shareholders, each Series shall vote as a separate series except
(i) as to any matter with respect to which a vote of all Series
voting as a single series is required by the 1940 Act or rules
and regulations promulgated thereunder, or would be required
under the Ohio General Corporation Law if the Trust were an Ohio
corporation; and (ii) as to any matter which the Trustees have
determined affects only the interests of one or more Series or
Classes, only the holders of Shares of the one or more affected
Series or Classes shall be entitled to vote thereon.
(f) Redemption by Shareholder. Each holder of Shares of a particular
Series or Class shall have the right at such times as may be
permitted by the Trust, but no less frequently than once each
week, to require the Trust to redeem all or any part of his
Shares of that Series or Class at a redemption price equal to the
net asset value per Share of that Series or Class next determined
in accordance with subsection (h) of this Section 4.2 after the
Shares are properly tendered for redemption. Payment of the
redemption price shall be in cash; provided, however, that if the
Trustees determine, which determination shall be conclusive, that
conditions exist which make payment wholly in cash unwise or
undesirable, the Trust may make payment wholly or partly in
securities or other assets belonging to the Series or Class of
which the Shares being redeemed are part at the value of such
securities or assets used in such determination of net asset
value.
Notwithstanding the foregoing, the Trust may postpone payment
of the redemption price and may suspend the right of the
holders of Shares of any Series to require the Trust to redeem
Shares of that Series during any period or at any time when
and to the extent permissible under the 1940 Act, and such
redemption is conditioned upon the Trust having funds or
property legally available therefor.
(g) Redemption by Trust. Each Share of each Series or Class that has
been established and designated is subject to redemption by the
Trust at the redemption price which would be applicable if such
Share was then being redeemed by the Shareholder pursuant to
subsection (f) of this Section 4.2:(a) at any time, if the
Trustees determine in their sole discretion that failure to so
redeem may have materially adverse consequences to all or any of
the holders of the Shares, or any Series or Class thereof, of the
Trust, or (b) upon such other conditions as may from time to time
be determined by the Trustees and set forth in the then current
Prospectus of the Trust with respect to maintenance of
Shareholder accounts of a minimum amount. Upon such redemption
the holders of the Shares so redeemed shall have no further right
with respect thereto other than to receive payment of such
redemption price.
(h) Net Asset Value. The net asset value per Share of any Series or
Class shall be the quotient obtained by dividing the value of the
net assets of that Series or Class (being the value of the assets
belonging to that Series or Class less the liabilities belonging
to that Series or Class) by the total number of Shares of that
Series or Class outstanding, all determined in accordance with
the methods and procedures, including without limitation those
with respect to rounding, established by the Trustees from time
to time. Net asset value shall be determined separately for each
Class of a Series.
The Trustees may determine to maintain the net asset value per
Share of any Series or Class at a designated constant dollar
amount and in connection therewith may adopt procedures not
inconsistent with the 1940 Act for the continuing declarations
of income attributable to that Series or Class as dividends
payable in additional Shares of that Series or Class at the
designated constant dollar amount and for the handling of any
losses attributable to that Series or Class . Such procedures
may provide that in the event of any loss each Shareholder
shall be deemed to have contributed to the capital of the
Trust attributable to that Series or Class his pro rata
portion of the total number of Shares required to be canceled
in order to permit the net asset value per Share of that
Series or Class to be maintained, after reflecting such loss,
at the designated constant dollar amount. Each Shareholder of
the Trust shall be deemed to have agreed, by his investment in
any Series with respect to which the Trustees shall have
adopted any such procedure, to make the contribution referred
to in the preceding sentence in the event of any such loss.
(i) Transfer. All Shares of each particular Series or Class shall be
transferable, but transfers of Shares of a particular Series or
Class will be recorded on the Share transfer records of the Trust
applicable to that Series or Class only at such times as
Shareholders shall have the right to require the Trust to redeem
Shares of that Series or Class and at such other times as may be
permitted by the Trustees.
(j) Equality. All Shares of each particular Series shall represent an
equal proportionate interest in the assets belonging to that
Series (subject to the liabilities belonging to that Series), and
each Share of any particular Series shall be equal to each other
Share of that Series; but the provisions of this sentence shall
not restrict any distinctions permissible under this Section 4.2
that may exist with respect to a Class of the same Series. The
Trustees may from time to time divide or combine the Shares of
any particular Series or Class into a greater or lesser number of
Shares of that Series or Class without thereby changing the
proportionate beneficial interest in the assets belonging to that
Series or Class or in any way affecting the rights of Shares of
any other Series or Class.
(k) Fractions. Any fractional Share of any Series or Class, if any
such fractional Share is outstanding, shall carry proportionately
all the rights and obligations of a whole Share of that Series or
Class, including with respect to voting, receipt of dividends and
distributions, redemption of Shares, and liquidation of the
Trust.
(l) Conversion Rights. Subject to compliance with the requirements of
the 1940 Act, the Trustees shall have the authority to provide
that holders of Shares of any Series or Class shall have the
right to convert said Shares into Shares of one or more other
Series or Classes in accordance with such requirements and
procedures as may be established by the Trustees.
Section 4.3 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
and Class that has been established and designated. No certificates certifying
the ownership of Shares need be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the use of facsimile
signatures, the transfer of Shares 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 and as to the number of
Shares of each Series and Class held from time to time by each such Shareholder.
Section 4.4 Investments in the Trust. The Trustees may accept
investments in the Trust from such persons and on such terms and for such
consideration, not inconsistent with the provisions of the 1940 Act, as they
from time to time authorize. The Trustees may authorize any distributor,
principal underwriter, custodian, transfer agent or other person to accept
orders for the purchase of Shares that conform to such authorized terms and to
reject any purchase orders for Shares whether or not conforming to such
authorized terms.
Section 4.5 No Preemptive Rights. Shareholders shall have no
preemptive or other right to subscribe to any additional Shares or other
securities issued by the Trust.
Section 4.6 Status of Shares and Limitation of Personal Liability.
Shares shall be deemed to be personal property giving only the rights provided
in this instrument. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the terms hereof and to
have become a party hereto. The death of a Shareholder during the continuance of
the Trust shall not operate to terminate the Trust nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to the
rights of said decedent under this Trust. Ownership of Shares shall not entitle
the Shareholder to any title in or to the whole or any part of the Trust
property or right to call for a partition or division of the same or for an
accounting, nor shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees, nor any officer, employee or agent
of the Trust shall have any power to bind personally any Shareholder, nor except
as specifically provided herein to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the Shareholder may
at any time personally agree to pay.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 5.1 Voting Powers. The Shareholders shall have power to vote
only (i) for the election or removal of Trustees as provided in Section 3.1,
(ii) with respect to any contract with a Contracting Party as provided in
Section 3.3 as to which Shareholder approval is required by the 1940 Act, (iii)
with respect to any termination or reorganization of the Trust or any Series to
the extent and as provided in Sections 7.1 and 7.2, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as provided in Section
7.3, (v) to the same extent as the stockholders of an Ohio business corporation
as to whether or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, and (vi) with respect to such additional matters relating
to the Trust as may be required by the 1940 Act, this Declaration of Trust, the
By-Laws or any registration of the Trust with the Commission (or any successor
agency) or any state, or as the Trustees may consider necessary or desirable.
There shall be no cumulative voting in the election of any Trustee or Trustees.
Shares may be voted in person or by proxy. A proxy with respect to Shares held
in the name of two or more persons shall be valid if executed by any one of them
unless at or prior to exercise of the proxy the Trust receives a specific
written notice to the contrary from any one of them. A proxy purporting to be
executed by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden of proving invalidity
shall rest on the challenger. Until Shares are then issued and outstanding, the
Trustees may exercise all rights of Shareholders and may take any action
required by law, this Declaration of Trust or the By-Laws to be taken by
Shareholders.
Section 5.2 Meetings. Meetings (including meetings involving only the
holders of Shares of one or more but less than all Series or Classes) of
Shareholders may be called by the Trustees from time to time for the purpose of
taking action upon any matter requiring the vote or authority of the
Shareholders as herein provided or upon any other matter deemed by the Trustees
to be necessary or desirable. Written notice of any meeting of Shareholders
shall be given or caused to be given by the Trustees by mailing such notice at
least seven days before such meeting, postage prepaid, stating the time, place
and purpose of the meeting, to each Shareholder at the Shareholder's address as
it appears on the records of the Trust. If the Trustees shall fail to call or
give notice of any meeting of Shareholders (including a meeting involving only
the holders of Shares of one or more but less than all Series or Classes) for a
period of 30 days after written application by Shareholders holding at least 25%
of the Shares then outstanding requesting a meeting be called for any other
purpose requiring action by the Shareholders as provided herein or in the
By-Laws, then Shareholders holding at least 25% of the Shares then outstanding
may call and give notice of such meeting, and thereupon the meeting shall be
held in the manner provided for herein in case of call thereof by the Trustees.
Section 5.3 Record Dates. For the purpose of determining the
Shareholders who are entitled to vote or act at any meeting or any adjournment
thereof, or who are entitled to participate in any dividend or distribution, or
for the purpose of any other action, the Trustees may from time to time close
the transfer books for such period, not exceeding 30 days (except at or in
connection with the termination of the Trust), as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date and time not more
than 60 days prior to the date of any meeting of Shareholders or other action as
the date and time of record for the determination of Shareholders entitled to
vote at such meeting or any adjournment thereof or to be treated as Shareholders
of record for purposes of such other action, and any Shareholder who was a
Shareholder at the date and time so fixed shall be entitled to vote at such
meeting or any adjournment thereof or (subject to any provisions permissible
under subsection (c) of Section 4.2 with respect to dividends or distributions
on Shares that have not been ordered and/or paid for by the time or times
established by the Trustees under the applicable dividend or distribution
program or procedure then in effect) to be treated as a Shareholder of record
for purposes of such other action, even though he has since that date and time
disposed of his Shares, and no Shareholder becoming such after that date and
time shall be so entitled to vote at such meeting or any adjournment thereof or
to be treated as a Shareholder of record for purposes of such other action.
Section 5.4 Quorum and Required Vote. A majority of Shares entitled to
vote shall be a quorum for the transaction of business at a Shareholders'
meeting, except that where any provision of law or of this Declaration of Trust
permits or requires that holders of any Series or Class thereof shall vote as a
Series or Class, then a majority of the aggregate number of Shares of that
Series or Class thereof entitled to vote shall be necessary to constitute a
quorum for the transaction of business by that Series or Class. Any lesser
number shall be sufficient for adjournments. Any adjourned session or sessions
may be held, within a reasonable time after the date set for the original
meeting, without the necessity of further notice. Except when a larger vote is
required by any provision of this Declaration of Trust or the By-Laws, a
majority of the Shares voted, at a meeting at which a quorum is present, shall
decide any questions and a plurality shall elect a Trustee, provided that where
any provision of law or of this Declaration of Trust permits or requires that
the holders of any Series or Class shall vote as a Series or Class, then a
majority of the Shares of that Series or Class voted on the matter shall decide
that matter insofar as that Series or Class is concerned.
Section 5.5 Action by Written Consent. Subject to the provisions of the
1940 Act and other applicable law, any action taken by Shareholders may be taken
without a meeting if a majority of Shareholders entitled to vote on the matter
(or such other proportion thereof as shall be required by the 1940 Act or by any
express provision of this Declaration of Trust or the By-Laws) consent to the
action in writing and such written consents are filed with the records of the
meetings of Shareholders. Such consent shall be treated for all purposes as a
vote taken at a meeting of Shareholders.
Section 5.6 Inspection of Records. The records of the Trust shall be
open to inspection by Shareholders to the same extent as is permitted
stockholders of an Ohio corporation under the Ohio General Corporation Law.
Section 5.7 Additional Provisions. The By-Laws may include
further provisions for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
ARTICLE VI
LIMITATION OF LIABILITY; INDEMNIFICATION
Section 6.1 Trustees, Shareholders, etc. Not Personally Liable; Notice.
All persons extending credit to, contracting with or having any claim against
any Series of the Trust (or the Trust on behalf of any Series) shall look only
to the assets of that Series for payment under such credit, contract or claim;
and neither the Shareholders nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, shall be personally liable
therefor. Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only by or for the Trust or
the Trustees and not personally. Nothing in this Declaration of Trust shall
protect any Trustee or officer against any liability to the Trust or the
Shareholders to which such Trustee or officer would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of the office of Trustee or of such
officer.
Every note, bond, contract, instrument, certificate or undertaking made
or issued by the Trustees or by any officers or officer shall give notice that
this Declaration of Trust is on file with the Secretary of the State of Ohio and
shall recite to the effect that the same was executed or made by or on behalf of
the Trust or by them as Trustees or Trustee or as officers or officer and not
individually and that the obligations of such instrument are not binding upon
any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, but the omission thereof shall not operate to
bind any Trustees or Trustee or officers or officer or Shareholders or
Shareholder individually.
Section 6.2 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 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 for nothing else,
and shall not be liable for errors of judgment or mistakes of fact or law.
Subject to the foregoing, (a) the Trustees shall not be responsible or liable in
any event for any neglect or wrongdoing of any officer, agent, employee,
consultant, adviser, administrator, distributor or principal underwriter,
custodian or transfer, dividend disbursing, Shareholder servicing or accounting
agent of the Trust, nor shall any Trustee be responsible for the act or omission
of any other Trustee; (b) the Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Declaration of Trust
and their duties as Trustees, and shall be under no liability for any act or
omission in accordance with such advice or for failing to follow such advice;
and (c) in discharging their duties, the Trustees, when acting in good faith,
shall be entitled to rely upon the books of account of the Trust and upon
written reports made to the Trustees by any officer appointed by them, any
independent public accountant, and (with respect to the subject matter of the
contract involved) any officer, partner or responsible employee of a Contracting
Party appointed by the Trustees pursuant to Section 3.3. The Trustees as such
shall not be required to give any bond or surety or any other security for the
performance of their duties. Nothing stated herein is intended to detract from
the protection accorded to Trustees by Ohio Revised Code Sections 1746.08 and
1701.59, as amended from time to time.
Section 6.3 Indemnification of Shareholders. In case any Shareholder or
former Shareholder shall be charged or held to be personally liable for any
obligation or liability of the Trust solely by reason of being or having been a
Shareholder and not because of such Shareholder's acts or omissions or for some
other reason, the Trust (upon proper and timely request by the Shareholder)
shall assume the defense against such charge and satisfy any judgment thereon,
and the Shareholder or former Shareholder (or his 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 out of
the assets of the Trust estate to be held harmless from and indemnified against
all loss and expense arising from such liability; provided that, in the event
the Trust shall consist of more than one Series, Shareholders of a particular
Series who are faced with claims or liabilities solely by reason of their status
as Shareholders of that Series shall be limited to the assets of that Series for
recovery of such loss and related expenses. The rights accruing to a Shareholder
under this Section 6.3 shall not exclude any other right to which such
Shareholder may be lawfully entitled, nor shall anything herein contained
restrict the right of the Trust to indemnify or reimburse a Shareholder in any
appropriate situation even though not specifically provided herein.
Section 6.4 Indemnification of Trustees, Officers, etc. Subject to and
except as otherwise provided in the Securities Act of 1933, as amended, and the
1940 Act, the Trust shall indemnify each of its Trustees and officers (including
persons who serve at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a shareholder,
creditor or otherwise (hereinafter referred to as a "Covered Person") against
all liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or officer, director or trustee, and except that no Covered
Person shall be indemnified against any liability to the Trust or its
Shareholders to which such Covered Person would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.
Section 6.5 Advances of Expenses. The Trust shall advance attorneys'
fees or other expenses incurred by a Covered Person in defending a proceeding to
the full extent permitted by the Securities Act of 1933, as amended, the 1940
Act, and Ohio Revised Code Chapter 1707, as amended. In the event any of these
laws conflict with Ohio Revised Code Section 1701.13(E), as amended, these laws,
and not Ohio Revised Code Section 1701.13(E), shall govern.
Section 6.6 Indemnification Not Exclusive, etc. The right of
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators. Nothing contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.
Section 6.7 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.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Duration and Termination of Trust. Unless terminated as
provided herein, the Trust shall continue without limitation of time. The Trust
may be terminated at any time by a majority of the Trustees then in office
subject to a favorable vote of a majority of the outstanding voting Shares, as
defined in the 1940 Act, of each Series voting separately by Series.
Upon termination, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, 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 to
distributable form in cash, securities or other property, or any combination
thereof, and distribute the proceeds to the Shareholders, in conformity with the
provisions of subsection (d) of Section 4.2.
Section 7.2 Reorganization. The Trustees may sell, convey and transfer
the assets of the Trust, or the assets belonging to any one or more Series, to
another trust, partnership, association or corporation organized under the laws
of any state of the United States, or to the Trust to be held as assets
belonging to another Series of the Trust, in exchange for cash, shares or other
securities (including, in the case of a transfer to another Series of the Trust,
Shares of such other Series) with such transfer being made subject to, or with
the assumption by the transferee of, the liabilities belonging to each Series
the assets of which are so transferred; provided, however, that if shareholder
approval is required by the 1940 Act, no assets belonging to any particular
Series shall be so transferred unless the terms of such transfer shall have
first been approved at a meeting called for the purpose by the affirmative vote
of the holders of a majority of the outstanding voting Shares, as defined in the
1940 Act, of that Series. Following such transfer, the Trustees shall distribute
such cash, shares or other securities (giving due effect to the assets and
liabilities belonging to and any other differences among the various Series the
assets belonging to which have so been transferred) among the Shareholders of
the Series the assets belonging to which have been so transferred; and if all of
the assets of the Trust have been so transferred, the Trust shall be terminated.
Section 7.3 Amendments. All rights granted to the Shareholders under
this Declaration of Trust are granted subject to the reservation of the right to
amend this Declaration of Trust as herein provided, except that no amendment
shall repeal the limitations on personal liability of any Shareholder or Trustee
or repeal the prohibition of assessment upon the Shareholders without the
express consent of each Shareholder or Trustee involved. Subject to the
foregoing, the provisions of this Declaration of Trust (whether or not related
to the rights of Shareholders) may be amended at any time so long as such
amendment does not adversely affect the rights of any Shareholder with respect
to which such amendment is or purports to be applicable and so long as such
amendment is not in contravention of applicable law, including the 1940 Act, by
an instrument in writing signed by a majority of the then Trustees (or by an
officer of the Trust pursuant to the vote of a majority of such Trustees).
Except as provided in the first sentence of this Section 7, any amendment to
this Declaration of Trust that adversely affects the rights of Shareholders may
be adopted at any time by an instrument signed in writing by a majority of the
then Trustees (or by an officer of the Trust pursuant to the vote of a majority
of such Trustees) when authorized to do so by the vote in accordance with
subsection (e) of Section 4.2 of Shareholders holding a majority of the Shares
entitled to vote; (a "Majority Shareholder Vote"); provided, however, than an
amendment that shall affect the Shareholders of one or more Series (or of one or
more Classes), but not the Shareholders of all outstanding Series (or Classes),
shall be authorized by a Majority Shareholder Vote of each Series (or Class, as
the case may be) affected, and no vote of a Series (or Class) not affected shall
be required. Subject to the foregoing, any such amendment shall be effective as
provided in the instrument containing the terms of such amendment or, if there
is no provision therein with respect to effectiveness, upon the execution of
such instrument and of a certificate (which may be a part of such instrument)
executed by a Trustee or officer to the effect that such amendment has been duly
adopted. Copies of the amendment to this Declaration of Trust shall be filed as
specified in Section 7.4. A restated Declaration of Trust, integrating into a
single instrument all of the provisions of the Declaration of Trust which are
then in effect and operative, may be executed from time to time by a majority of
the then Trustees (or by an officer of the Trust pursuant to the vote of a
majority of such Trustees) and shall be effective upon filing as specified in
Section 7.4.
Section 7.4 Filing of Copies; References; Headings. The original or a
copy of this instrument and of each amendment hereto shall be kept at the office
of the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment hereto shall be filed by the Trust with the
Secretary of the State of Ohio, as well as any other governmental office where
such filing may from time to time be required, but the failure to make any such
filing shall not impair the effectiveness of this instrument or any such
amendment. Anyone dealing with the Trust may rely on a certificate by an officer
of the Trust as to whether or not any such amendments have been made, as to the
identities of the Trustees and officers, and as to any matters in connection
with the Trust hereunder; and, with the same effect as if it were the original,
may rely on a copy certified by an officer of the Trust to be a copy of this
instrument or of any such amendments. In this instrument and in any such
amendment, references to this instrument, and all expressions like "herein",
"hereof" and "hereunder" shall be deemed to refer to this instrument as a whole
as the same may be amended or affected by any such amendments. The masculine
gender shall include the feminine and neuter genders. Headings are placed herein
for convenience of reference only and shall not be taken as a part hereof or
control or affect the meaning, construction or effect of this instrument. This
instrument may be executed in any number of counterparts each of which shall be
deemed an original.
Section 7.5 Applicable Law. This Trust is an Ohio business trust, and
it is created under and is to be governed by and construed and administered
according to the laws of said State, including the Ohio General Corporation Law
as the same may be amended from time to time, but the reference to said
Corporation Law is not intended to give the Trust, the Trustees, the
Shareholders or any other person any right, power, authority or responsibility
available only to or in connection with an entity organized in corporate form.
The Trust shall be of the type referred to in Section 1746.01 of the Ohio
Revised Code, and without limiting the provisions hereof, the Trust may exercise
all powers which are ordinarily exercised by such a trust.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand for
himself and his assigns, as of the day and year first above written.
......... __/s/___________________________
......... J. PAUL HAMILTON
STATE OF TEXAS ......... )
......... ) ss:
COUNTY OF DALLAS ......... )
Before me, a Notary Public in and for said county and state, personally
appeared the above named J. PAUL HAMILTON, who acknowledged that he did sign the
foregoing instrument and that the same is his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal on this 16th day of March, 1999.
......... Carole B. Kerby
......... Notary Public
.........
My Commission Expires: 6-12-2000
<PAGE>
ACCEPTANCE OF TRUST
As contemplated in Section 3.1 of the Agreement and Declaration of
Trust of the 10K SmartTrust, the undersigned accepts his designation as a
Trustee of said Trust and agrees to the provisions of said Agreement and
Declaration of Trust.
IN WITNESS WHEREOF, the undersigned has set his hand on the date set
opposite his signature.
Date: November 16, 1999 ......... __/s/__________________________
......... J. PAUL HAMILTON
.........
STATE OF TEXAS ......... )
......... ) ss:
COUNTY OF DALLAS ......... )
Before me, a Notary Public in and for said county and state, personally
appeared the above named J. PAUL HAMILTON, who acknowledged that he did sign the
foregoing instrument and that the same is his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal on this 16th day of November, 1999.
......... Carole B. Kerby
......... Notary Public
My Commission Expires: 6-12-2000
<PAGE>
ACCEPTANCE OF TRUST
As contemplated in Section 3.1 of the Agreement and Declaration of
Trust of 10k SmartTrust, the undersigned accepts his designation as a Trustee of
said Trust and agrees to the provisions of said Agreement and Declaration of
Trust.
IN WITNESS WHEREOF, the undersigned has set his hand on the date set
opposite his signature.
Date: November 16, 1999 ......... __/s/___________________
......... J. Paul Hamilton
STATE OF Texas )
) ss:
COUNTY OF Dallas)
Before me, a Notary Public in and for said county and state, personally
appeared the above named J. PAUL HAMILTON, who acknowledged that he did sign the
foregoing instrument and that the same is his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal on this 16th day of November, 1999.
......... Carole B. Kerby
......... Notary Public
My Commission Expires:6-12-2000
<PAGE>
ACCEPTANCE OF TRUST
As contemplated in Section 3.1 of the Agreement and Declaration of
Trust of 10k SmartTrust, the undersigned accepts his designation as a Trustee of
said Trust and agrees to the provisions of said Agreement and Declaration of
Trust.
IN WITNESS WHEREOF, the undersigned has set his hand on the date set
opposite his signature.
Date: November 16, 1999 ......... _____/s/______________________
Barry Dull
.........
STATE OF Texas .........)
.........) ss:
COUNTY OF Dallas .........)
Before me, a Notary Public in and for said county and state, personally
appeared the above named BARRY DULL, who acknowledged that he did sign the
foregoing instrument and that the same is his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal on this 16th day of November, 1999.
......... Carole B. Kerby
......... Notary Public
My Commission Expires:6-12-2000
<PAGE>
ACCEPTANCE OF TRUST
As contemplated in Section 3.1 of the Agreement and Declaration of
Trust of 10k SmartTrust, the undersigned accepts his designation as a Trustee of
said Trust and agrees to the provisions of said Agreement and Declaration of
Trust.
IN WITNESS WHEREOF, the undersigned has set his hand on the date set
opposite his signature.
Date: November 16, 1999 __/s/____________________________
......... Bruce Singleton
STATE OF Texas .........)
.........) ss:
COUNTY OF Dallas.........)
Before me, a Notary Public in and for said county and state, personally
appeared the above named BRUCE SINGLETON, who acknowledged that he did sign the
foregoing instrument and that the same is his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal on this 16th day of November, 1999.
......... Carole B. Kerby
......... Notary Public
My Commission Expires:6-12-2000
BY-LAWS
OF
10K SMARTTRUST
ARTICLE 1
Agreement and Declaration of Trust and Offices
1.1 Agreement and Declaration of Trust. These By-Laws shall be subject
to the Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of the 10K Smart Trust, the Ohio business trust
established by the Declaration of Trust (the "Trust").
1.2 Offices. The Trust may maintain one or more other offices,
including its principal office, in or outside of Ohio, in such cities as the
Trustees may determine from time to time. Unless the Trustees otherwise
determine, the principal office of the Trust shall be located in Dallas, Texas.
ARTICLE 2
Meetings of Trustees
2.1 Regular Meetings. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees. A regular
meeting of the Trustees may be held without call or notice immediately after and
at the same place as any meeting of the shareholders.
2.2 Special Meetings. Special meetings of the Trustees may be held at
any time and at any place designated in the call of the meeting when called by
the President or the Treasurer or by two or more Trustees, sufficient notice
thereof being given to each Trustee by the Secretary or an Assistant Secretary
or by the officer or the Trustees calling the meeting.
2.3 Notice. It shall be sufficient notice to a Trustee of a special
meeting to send notice by mail at least forty-eight hours or by telegram at
least twenty-four hours before the meeting addressed to the Trustee at his or
her usual or last known business or residence address or to give notice to him
or her in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any Trustee if a written waiver of
notice, executed by him or her before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the meeting without
protesting prior thereto or at its commencement the lack of notice to him or
her. Neither notice of a meeting nor a waiver of a notice need specify the
purposes of the meeting.
2.4 Quorum. At any meeting of the Trustees a majority of the
Trustees then in office
shall constitute a quorum. Any meeting may be adjourned from time to time by a
majority of the votes cast upon the question, whether or not a quorum is
present, and the meeting may be held as adjourned without further notice.
8240 3/16/99 9:06 AM
2.5 Participation by Telephone. One or more of the Trustees or of any
committee of the Trustees may participate in a meeting thereof by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting except as
otherwise provided by the Investment Company Act of 1940.
2.6 Action by Consent. Any action required or permitted to be taken at
any meeting of the Trustees or any committee thereof may be taken without a
meeting, if a written consent of such action is signed by a majority of the
Trustees then in office or a majority of the members of such committee, as the
case may be, and such written consent is filed with the minutes of the
proceedings of the Trustees or such committee.
ARTICLE 3
Officers
3.1 Enumeration and Qualification. The officers of the Trust shall be a
President, a Treasurer, a Secretary and such other officers, including Vice
Presidents, if any, as the Trustees from time to time may in their discretion
elect. The Trust may also have such agents as the Trustees from time to time may
in their discretion appoint. Any officer may be but none need be a Trustee or
shareholder. Any two or more offices may be held by the same person.
3.2 Election. The President, the Treasurer and the Secretary shall be
elected annually by the Trustees. Other officers, if any, may be elected or
appointed by the Trustees at any time. Vacancies in any office may be filled at
any time.
3.3 Tenure. The President, the Treasurer and the Secretary shall hold
office for one year and until their respective successors are chosen and
qualified, or in each case until he or she sooner dies, resigns, is removed or
becomes disqualified. Each other officer shall hold office and each agent shall
retain authority at the pleasure of the Trustees.
3.4 Powers. Subject to the other provisions of these By-Laws, each
officer shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as are commonly incident
to the office occupied by him or her as if the Trust were organized as an Ohio
business corporation and such other duties and powers as the Trustees may from
time to time designate.
3.5 President. Unless the Trustees otherwise provide, the
President, or in the absence of the President, any Trustee chosen by the
Trustees, shall preside at all meetings of the shareholders and of the
Trustees. The President shall be the chief executive officer.
3.6 Treasurer. The Treasurer shall be the chief financial and
accounting officer of the Trust, and shall, subject to the provisions of the
Declaration of Trust and to any arrangement made by the Trustees with a
custodian, investment adviser or manager, or transfer, shareholder servicing or
similar agent, be in charge of the valuable papers, books of account and
accounting records of the Trust, and shall have such other duties and powers as
may be designated from time to time by the Trustees or by the President.
3.7 Secretary. The Secretary shall record all proceedings of the
shareholders and the Trustees in books to be kept therefor, which books or a
copy thereof shall be kept at the principal office of the Trust. In the absence
of the Secretary from any meeting of the shareholders or Trustees, an assistant
secretary, or if there be none or if he or she is absent, a temporary secretary
chosen at such meeting shall record the proceedings thereof in the aforesaid
books.
3.8 Resignations and Removals. Any Trustee or officer may resign at any
time by written instrument signed by him or her and delivered to the President
or the Secretary or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some other time. The
Trustees may remove any officer elected by them with or without cause. Except to
the extent expressly provided in a written agreement with the Trust, no Trustee
or officer resigning and no officer removed shall have any right to any
compensation for any period following his or her resignation or removal, or any
right to damages on account of such removal.
ARTICLE 4
Committees
4.1 General. The Trustees, by vote of a majority of the Trustees then
in office, may elect from their number an Executive Committee or other
committees and may delegate thereto some or all of their powers except those
which by law, by the Declaration of Trust, or by these By-Laws may not be
delegated. Except as the Trustees may otherwise determine, any such committee
may make rules for the conduct of its business, but unless otherwise provided by
the Trustees or in such rules, its business shall be conducted so far as
possible in the same manner as is provided by these By-Laws for the Trustees
themselves. All members of such committees shall hold such offices at the
pleasure of the Trustees. The Trustees may abolish any such committee at any
time. Any committee to which the Trustees delegate any of their powers or duties
shall keep records of its meetings and shall report its action to the Trustees.
The Trustees shall have power to rescind any action of any committee, but no
such rescission shall have retroactive effect.
ARTICLE 5
Reports
5.1 General. The Trustees and officers shall render reports at the time
and in the manner required by the Declaration of Trust or any applicable law.
Officers and Committees shall render such additional reports as they may deem
desirable or as may from time to time be required by the Trustees.
ARTICLE 6
Fiscal Year
6.1 General. The fiscal year of the Trust shall be fixed by, and shall
be subject to change by, the Trustees.
ARTICLE 7
Seal
7.1 General. If required by applicable law, the seal of the Trust shall
consist of a flat-faced die with the word "Ohio", together with the name of the
Trust and the year of its organization cut or engraved thereon, but, unless
otherwise required by the Trustees, the seal shall not be necessary to be placed
on, and its absence shall not impair the validity of, any document, instrument
or other paper executed and delivered by or on behalf of the Trust.
ARTICLE 8
Execution of Papers
8.1 General. Except as the Trustees may generally or in particular
cases authorize the execution thereof in some other manner, all deeds, leases,
contracts, notes and other obligations made by the Trustees shall be signed by
the President, any Vice President, or by the Treasurer and need not bear the
seal of the Trust, but shall state the substance of or make reference to the
provisions of Section 7.1 of the Declaration of Trust.
ARTICLE 9
Issuance of Share Certificates
9.1 Share Certificates. In lieu of issuing certificates for shares, the
Trustees or the transfer agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
The Trustees may at any time authorize the issuance of share
certificates. In that event, each shareholder shall be entitled to a certificate
stating the number of shares owned by him, in such form as shall be prescribed
from time to time by the Trustees. Such certificate shall be signed by the
President or a Vice-President and by the Treasurer or Assistant Treasurer. Such
signatures may be facsimiles if the certificate is signed by a transfer agent,
or by a registrar, other than a Trustee, officer or employee of the Trust. In
case any officer who has signed or whose facsimile signature has been placed on
such certificate shall cease to be such officer before such certificate is
issued, it may be issued by the Trust with the same effect as if he were such
officer at the time of its issue.
9.2 Loss of Certificates. In case of the alleged loss or destruction or
the mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees shall prescribe.
9.3 Issuance of New Certificate to Pledgee. In the event certificates
have been issued, a pledgee of shares transferred as collateral security shall
be entitled to a new certificate if the instrument of transfer substantially
describes the debt or duty that is intended to be secured thereby. Such new
certificate shall express on its face that it is held as collateral security,
and the name of the pledgor shall be stated thereon, who alone shall be liable
as a shareholder, and entitled to vote thereon.
9.4 Discontinuance of Issuance of Certificates. The Trustees may at any
time discontinue the issuance of share certificates and may, by written notice
to each shareholder, require the surrender of share certificates to the Trust
for cancellation. Such surrender and cancellation shall not affect the ownership
of shares in the Trust.
ARTICLE 10
Custodian
10.1 General. The Trust shall at all times employ a bank or trust
company having a capital, surplus and undivided profits of at least Five Hundred
Thousand ($500,000) Dollars as Custodian of the capital assets of the Trust. The
Custodian shall be compensated for its services by the Trust and upon such basis
as shall be agreed upon from time to time between the Trust and the Custodian.
ARTICLE 11
Dealings with Trustees and Officers
11.1 General. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of shares of the Trust to the same extent as if he were
not a Trustee, officer or agent; and the Trustees may accept subscriptions to
shares or repurchase shares from any firm or company in which he is interested.
ARTICLE 12
Shareholders
12.1 Meetings. A meeting of the shareholders of the Trust shall be held
whenever called by the Trustees, whenever election of a Trustee or Trustees by
shareholders is required by the provisions of Section 16(a) of the Investment
Company Act of 1940 for that purpose or whenever otherwise required pursuant to
the Declaration of Trust. Any meeting shall be held on such day and at such time
as the President or the Trustees may fix in the notice of the meeting.
12.2 Record Dates. For the purpose of determining the shareholders who
are entitled to vote or act at any meeting or any adjournment thereof, or who
are entitled to receive payment of any dividend or of any other distribution,
the Trustees may from time to time fix a time, which shall be not more than 60
days before the date of any meeting of shareholders or the date for the payment
of any dividend or of any other distribution, as the record date for determining
the shareholders having the right to notice of and to vote at such meeting and
any adjournment thereof or the right to receive such dividend or distribution,
and in such case only shareholders of record on such record date shall have such
right, notwithstanding any transfer of shares on the books of the Trust after
the record date; or without fixing such record date the Trustees may for any
such purposes close the register or transfer books for all or any part of such
period.
ARTICLE 13
Amendments to the By-Laws
13.1 General. These By-Laws may be amended or repealed, in whole or in
part, by a majority of the Trustees then in office at any meeting of the
Trustees, or by one or more writings signed by such a majority.
MANAGEMENT AGREEMENT
TO: Monument Investments
5952 Royal Lane, Suite 270
Dallas, TX 75230
Dear Sirs:
10k SmartTrust (the "Trust") herewith confirms our agreement with you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers one series of shares to investors, the 10k
SmartTrust Fund (the "Fund").
You have been selected to act as the sole investment adviser of the
Fund and to provide certain other services, as more fully set forth below, and
you are willing to act as such investment adviser and to perform such services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows effective upon the date of the execution of this
Agreement.
1. ADVISORY SERVICES
You will regularly provide the Fund with such investment
advice as you in your discretion deem advisable and will furnish a continuous
investment program for the Fund consistent with the Fund's investment objectives
and policies. You will determine the securities to be purchased for the Fund,
the portfolio securities to be held or sold by the Fund and the portion of the
Fund's assets to be held uninvested, subject always to the Fund's investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect, and subject further to such policies and instructions as the
Board may from time to time establish. You will advise and assist the officers
of the Trust in taking such steps as are necessary or appropriate to carry out
the decisions of the Board and the appropriate committees of the Board regarding
the conduct of the business of the Fund. You may delegate any or all of the
responsibilities, rights or duties described in this paragraph 1 to one or more
sub-advisers who shall enter into agreements with you, which agreements shall be
approved and ratified by the Board including a majority of the trustees who are
not interested persons of you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval, and (if required under
interpretations of the 1940 Act by the Securities and Exchange Commission or its
staff) by vote of the holders of a majority of the outstanding voting securities
of the Fund.
2. ALLOCATION OF CHARGES AND EXPENSES
You will pay all operating expenses of the Fund, including the
compensation and expenses of any employees of the Fund and of any other persons
rendering any services to the Fund; clerical and shareholder service staff
salaries; office space and other office expenses; fees and expenses incurred by
the Fund in connection with membership in investment company organizations;
legal, auditing and accounting expenses; expenses of registering shares under
federal and state securities laws, [excluding] [including] expenses incurred by
the Fund in connection with the organization and initial registration of shares
of the Fund; insurance expenses; fees and expenses of the custodian, transfer
agent, dividend disbursing agent, shareholder service agent, plan agent,
administrator, accounting and pricing services agent and underwriter of the
Fund; expenses, including clerical expenses, of issue, sale, redemption or
repurchase of shares of the Fund; the cost of preparing and distributing reports
and notices to shareholders, the cost of printing or preparing prospectuses and
statements of additional information for delivery to the Fund's current and
prospective shareholders; the cost of printing or preparing stock certificates
or any other documents, statements or reports to shareholders; expenses of
shareholders' meetings and proxy solicitations; advertising, promotion and other
expenses incurred directly or indirectly in connection with the sale or
distribution of the Fund's shares [(including)/excluding expenses which the Fund
is authorized to pay pursuant to Rule 12b-1 under the Investment Company Act of
1940, (the"1940 Act") as amended); and all other operating expenses not
specifically assumed by the Fund.
The Fund will pay all brokerage fees and commissions, taxes,
borrowing costs (such as (a) interest and (b) dividend expenses on securities
sold short), fees and expenses of the non-interested person trustees and such
extraordinary or non-recurring expenses as may arise, including litigation to
which the Fund may be a party and indemnification of the Trust's trustees and
officers with respect thereto. [The Fund will also pay expenses which it is
authorized to pay pursuant to Rule 12b-1 under the 1940 Act.] You may obtain
reimbursement from the Fund, at such time or times as you may determine in your
sole discretion, for any of the expenses advanced by you, which the Fund is
obligated to pay, and such reimbursement shall not be considered to be part of
your compensation pursuant to this Agreement.
3. COMPENSATION OF THE ADVISER
For all of the services to be rendered and payments to be made
as provided in this Agreement, as of the last business day of each month, the
Fund will pay you a fee at the annual rate of 1.5% of the average value of its
daily net assets.
The average value of the daily net assets of the Fund shall be
determined pursuant to the applicable provisions of the Declaration of Trust of
the Trust or a resolution of the Board, if required. If, pursuant to such
provisions, the determination of net asset value of the Fund is suspended for
any particular business day, then for the purposes of this paragraph, the value
of the net assets of the Fund as last determined shall be deemed to be the value
of the net assets as of the close of the business day, or as of such other time
as the value of the Fund's net assets may lawfully be determined, on that day.
If the determination of the net asset value of the Fund has been suspended for a
period including such month, your compensation payable at the end of such month
shall be computed on the basis of the value of the net assets of the Fund as
last determined (whether during or prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
In connection with purchases or sales of portfolio securities
for the account of the Fund, it is understood that you will arrange for the
placing of all orders for the purchase and sale of portfolio securities for the
account with brokers or dealers selected by you, subject to review of this
selection by the Board from time to time. You will be responsible for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed at all times to seek for the Fund the best qualitative execution,
taking into account such factors as price (including the applicable brokerage
commission or dealer spread), the execution capability, financial responsibility
and responsiveness of the broker or dealer and the brokerage and research
services provided by the broker or dealer.
You should generally seek favorable prices and commission
rates that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services to the Fund and/or the other accounts
over which you exercise investment discretion. You are authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a Fund portfolio transaction which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if you determine in good faith that the amount of the commission is
reasonable in relation to the value of the brokerage and research services
provided by the executing broker or dealer. The determination may be viewed in
terms of either a particular transaction or your overall responsibilities with
respect to the Fund and to accounts over which you exercise investment
discretion. The Fund and you understand and acknowledge that, although the
information may be useful to the Fund and you, it is not possible to place a
dollar value on such information. The Board shall periodically review the
commissions paid by the Fund to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits to
the Fund.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best qualitative
execution as described above, you may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute Fund
portfolio transactions.
Subject to the provisions of the 1940 Act, and other
applicable law, you, any of your affiliates or any affiliates of your affiliates
may retain compensation in connection with effecting the Fund's portfolio
transactions, including transactions effected through others. If any occasion
should arise in which you give any advice to clients of yours concerning the
shares of the Fund, you will act solely as investment counsel for such client
and not in any way on behalf of the Fund. Your services to the Fund pursuant to
this Agreement are not to be deemed to be exclusive and it is understood that
you may render investment advice, management and other services to others,
including other registered investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the 1940 Act or
the rules thereunder, neither you nor your shareholders, members, officers,
directors, employees, agents, control persons or affiliates of any thereof shall
be subject to any liability for, or any damages, expenses or losses incurred by
the Trust in connection with, any error of judgment, mistake of law, any act or
omission connected with or arising out of any services rendered under, or
payments made pursuant to, this Agreement or any other matter to which this
Agreement relates, except by reason of willful misfeasance, bad faith or gross
negligence on the part of any such persons in the performance of your duties
under this Agreement, or by reason of reckless disregard by any of such persons
of your obligations and duties under this Agreement.
Any person, even though also a director, officer, employee,
member, shareholder or agent of you, who may be or become an officer, director,
trustee, employee or agent of the Trust, shall be deemed, when rendering
services to the Trust or acting on any business of the Trust (other than
services or business in connection with your duties hereunder), to be rendering
such services to or acting solely for the Trust and not as a director, officer,
employee, member, shareholder or agent of you, or one under your control or
direction, even though paid by you.
6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on the date of its execution,
and shall remain in force for a period of two (2) years from the date of its
execution, and from year to year thereafter, subject to annual approval by (i)
the Board or (ii) a vote of a majority of the outstanding voting securities of
the Fund, provided that in either event continuance is also approved by a
majority of the trustees who are not interested persons of you or the Trust, by
a vote cast in person at a meeting called for the purpose of voting such
approval.
This Agreement may, on sixty days written notice, be
terminated with respect to the Fund, at any time without the payment of any
penalty, by the Board, by a vote of a majority of the outstanding voting
securities of the Fund, or by you. This Agreement shall automatically terminate
in the event of its assignment.
7. USE OF NAME
The Trust and you acknowledge that all rights to the name
"Monument Investments, Inc." or any variation thereof belong to you, and that
the Trust is being granted a limited license to use such words in its Fund name
or in any class name. In the event you cease to be the adviser to the Fund, the
Trust's right to the use of the name "Monument Investments, Inc." shall
automatically cease on the ninetieth day following the termination of this
Agreement. The right to the name may also be withdrawn by you during the term of
this Agreement upon ninety (90) days' written notice by you to the Trust.
Nothing contained herein shall impair or diminish in any respect, your right to
use the name " Monument Investments, Inc." in the name of, or in connection
with, any other business enterprises with which you are or may become
associated. There is no charge to the Trust for the right to use this name.
8. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived,
discharged or terminated orally, and no amendment of this Agreement shall be
effective until approved by the Board, including a majority of the trustees who
are not interested persons of you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval, and (if required under
interpretations of the 1940 Act by the Securities and Exchange Commission or its
staff) by vote of the holders of a majority of the outstanding voting securities
of the series to which the amendment relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
The term "10k SmartTrust" means and refers to the Trustees
from time to time serving under the Trust's Declaration of Trust as the same may
subsequently thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees and shareholders
of the Trust and signed by officers of the Trust, acting as such, and neither
such authorization by such trustees and shareholders nor such execution and
delivery by such officers 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 trust property of the Trust as provided in its Declaration of
Trust. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the State of Ohio.
10. SEVERABILITY
In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder of
this Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
(a) This Agreement shall be governed by the laws of the State
of Ohio.
(b) For the purpose of this Agreement, the terms "majority of
the outstanding voting securities," "control" and "interested person" shall have
their respective meanings as defined in the 1940 Act and rules and regulations
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under the 1940 Act; and the term "brokerage
and research services" shall have the meaning given in the Securities Exchange
Act of 1934.
(c) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretation thereof, if any, by the United
States courts or in the absence of any controlling decision of any such court,
by the Securities and Exchange Commission or its staff. In addition, where the
effect of a requirement of the 1940 Act, reflected in any provision of this
Agreement, is revised by rule, regulation, order or interpretation of the
Securities and Exchange Commission or its staff, such provision shall be deemed
to incorporate the effect of such rule, regulation, order or interpretation.
12. NOTICES
Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust is
5952 Royal Lane, Suite 270, Dallas, Texas 75230, and your address for this
purpose shall be 5952 Royal Lane, Suite 270, Dallas, Texas 75230.
13. COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
14. BINDING EFFECT
Each of the undersigned expressly warrants and represents that
he has the full power and authority to sign this Agreement on behalf of the
party indicated, and that his signature will operate to bind the party indicated
to the foregoing terms.
15. CAPTIONS
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
If you are in agreement with the foregoing, please sign the
form of acceptance on the accompanying counterpart of this letter and return
such counterpart to the Trust, whereupon this letter shall become a binding
contract upon the date thereof.
......... Yours very truly,
ATTEST: .........
......... 10k SmartTrust
By: _____/s/__________________________. By:___________/s/____________________
Kenneth D. Trumpfheller ......... J. Paul Hamilton
Dated: November 16, 1999
ACCEPTANCE
The foregoing Agreement is hereby accepted.
ATTEST: .........
......... Monument Investments, Inc.
By: _____/s/__________________________. By:___________/s/____________________
Kenneth D. Trumpfheller ......... J. Paul Hamilton
Dated: November 16, 1999
10K SMARTTRUST FUND
.........
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (the "Agreement") is made as of the 16th
day of November, 1999 by and among 10k SmartTrust Fund (the "Fund"), an Ohio
business trust, Monument Investments, Inc. (the "Adviser"), a Texas corporation,
and AmeriPrime Financial Securities, Inc. (the "Distributor"), a Texas
corporation.
WITNESSETH THAT:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act")
and has registered its shares of common stock (the "Shares") under the
Securities Act of 1933, as amended (the "1933 Act") in one or more distinct
series of Shares, and classes thereof (each class is hereinafter referred to as
a "Portfolio");
WHEREAS, the Adviser has been appointed investment adviser to the Fund;
WHEREAS, the Distributor is a broker-dealer registered with the
U.S. Securities and Exchange Commission (the "SEC") and a member in good
standing of the National Association of Securities Dealers, Inc. (the "NASD");
WHEREAS, the Fund has adopted a plan of distribution (the "Distribution
Plan") pursuant to Rule 12b-1 under the 1940 Act relating to the payment by the
Fund of distribution expenses; and
WHEREAS, the Fund, the Adviser and the Distributor desire to enter into
this Agreement pursuant to which the Distributor will provide distribution
services to the Portfolios of the Fund identified on Schedule A, as may be
amended from time to time, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Fund, the Adviser and the Distributor,
intending to be legally bound hereby, agree as follows:
1. APPOINTMENT OF DISTRIBUTOR. The Fund hereby appoints the Distributor
as its exclusive agent for the distribution of the Shares, and the Distributor
hereby accepts such appointment under the terms of this Agreement. The Fund
shall not sell any Shares to any person except to fill orders for the Shares
received through the Distributor; provided, however, that the foregoing
exclusive right shall not apply: (i) to Shares issued or sold in connection with
the merger or consolidation of any other investment company with the Fund or the
acquisition by purchase or otherwise of all or substantially all of the assets
of any investment company or substantially all of the outstanding shares of any
such company by the Fund; (ii) to Shares which may be offered by the Fund to its
shareholders for reinvestment of cash distributed from capital gains or net
investment income of the Fund; (iii) to Shares which may be issued to
shareholders of other funds who exercise any exchange privilege set forth in the
Fund's Prospectus; or (iv) to Shares which may be sold to persons purchasing
such Shares directly from the Fund or the Fund's Transfer Agent. Notwithstanding
any other provision hereof, the Fund may terminate, suspend, or withdraw the
offering of the Shares whenever, in its sole discretion, it deems such action to
be desirable, and the Distributor shall process no further orders for Shares
after it receives notice of such termination, suspension or withdrawal.
2. FUND DOCUMENTS. The Fund has provided the Distributor with properly
certified or authenticated copies of the following Fund related documents in
effect on the date hereof: the Fund's organizational documents, including the
Trust Instrument and By-Laws; the Fund's Registration Statement on Form N-1A,
including all exhibits thereto; the Fund's most current Prospectus and Statement
of Additional Information; and resolutions of the Fund's Board of Trustees
authorizing the appointment of the Distributor and approving this Agreement. The
Fund shall promptly provide to the Distributor copies, properly certified or
authenticated, of all amendments or supplements to the foregoing. The Fund shall
provide to the Distributor copies of all other information which the Distributor
may reasonably request for use in connection with the distribution of Shares,
including, but not limited to, a certified copy of all financial statements
prepared for the Fund by its independent public accountants. The Fund shall also
supply the Distributor with such number of copies of the current Prospectus,
Statement of Additional Information and shareholder reports as the Distributor
shall reasonably request.
3. DISTRIBUTION SERVICES. The Distributor shall sell and repurchase
Shares as set forth below, subject to the registration requirements of the 1933
Act and the rules and regulations thereunder, and the laws governing the sale of
securities in the various states ("Blue Sky Laws"):
a. The Distributor, as agent for the Fund, shall sell Shares to
the public against orders therefor at the public offering price, which shall be
the net asset value of the Shares then in effect plus any applicable sales
loads.
b. The net asset value of the Shares shall be determined in the
manner provided in the then current Prospectus and Statement of Additional
Information. The net asset value of the Shares shall be calculated by the Fund
or by another entity on behalf of the Fund. The Distributor shall have no duty
to inquire into or liability for the accuracy of the net asset value per Share
as calculated.
c. Upon receipt of purchase instructions, the Distributor shall
transmit such instructions to the Fund or its transfer agent for registration of
the Shares purchased.
d. The Distributor, in light of Fund policies, procedures and
disclosure documents, shall also have the right to take, as agent for the Fund,
all actions which, in the Distributor's judgment, are necessary to effect the
distribution of Shares.
e. Nothing in this Agreement shall prevent the Distributor or any
"affiliated person" from buying, selling or trading any securities for its or
their own account or for the accounts of others for whom it or they may be
acting; provided, however, that the Distributor expressly agrees that it shall
not for its own account purchase any Shares of the Fund except for investment
purposes and that it shall not for its own account sell any such Shares except
for redemption of such Shares by the Fund, and that it shall not undertake
activities which, in its judgment, would adversely affect the performance of its
obligations to the Fund under this Agreement.
f. The Distributor, as agent for the Fund, shall repurchase Shares
at such prices and upon such terms and conditions as shall be specified in the
Prospectus.
4. DISTRIBUTION SUPPORT SERVICES. In addition to the sale and
repurchase of Shares, the Distributor shall perform the distribution support
services set forth on Schedule B attached hereto, as may be amended from time to
time.
5. REASONABLE EFFORTS. The Distributor shall use all reasonable efforts
in connection with the distribution of Shares. The Distributor shall have no
obligation to sell any specific number of Shares and shall only sell Shares
against orders received therefor. The Fund shall retain the right to refuse at
any time to sell any of its Shares for any reason deemed adequate by it.
6. COMPLIANCE. In furtherance of the distribution services being
provided hereunder, the Distributor and the Fund agree as follows:
a. The Distributor shall comply with the Rules of Fair Practice
of the NASD and the securities laws of any jurisdiction in which it sells,
directly or indirectly, Shares.
b. The Distributor shall require each dealer with whom the
Distributor has a selling agreement to conform to the applicable provisions of
the Fund's most current Prospectus and Statement of Additional Information, with
respect to the public offering price of the Shares.
c. The Fund agrees to furnish to the Distributor sufficient
copies of any agreements, plans, communications with the public or other
materials it intends to use in connection with any sales of Shares in a timely
manner in order to allow the Distributor to review, approve and file such
materials with the appropriate regulatory authorities and obtain clearance for
use. The Fund agrees not to use any such materials until approved for use by
appropriate authorities and the Distributor.
d. The Distributor, at its own expense, shall qualify as a broker
or dealer, or otherwise, under all applicable Federal or state laws required to
permit the sale of Shares in such states as shall be mutually agreed upon by the
parties; provided, however that the Distributor shall have no obligation to
register as a broker or dealer under the Blue Sky Laws of any jurisdiction if it
determines that registering or maintaining registration in such jurisdiction
would be uneconomical.
e. The Distributor shall not, in connection with any sale or
solicitation of a sale of the Shares, or make or authorize any representative,
service organization, broker or dealer to make, any representations concerning
the Shares except those contained in the Fund's most current Prospectus covering
the Shares and in communications with the public or sales materials approved by
the Distributor as information supplemental to such Prospectus.
7. EXPENSES. Expenses shall be allocated as follows:
a. The Fund shall bear the following expenses: preparation,
setting in type, and printing of sufficient copies of the Prospectus and
Statement of Additional Information for distribution to existing shareholders;
preparation and printing of reports and other communications to existing
shareholders; distribution of copies of the Prospectus, Statement of Additional
Information and all other communications to existing shareholders; registration
of the Shares under the Federal securities laws; qualification of the Shares for
sale in the jurisdictions mutually agreed upon by the Fund and the Distributor;
transfer agent/shareholder servicing agent services; supplying information,
prices and other data to be furnished by the Fund under this Agreement; any
original issue taxes or transfer taxes applicable to the sale or delivery of the
Shares or certificates therefor; and items covered by the Distribution Plan.
b. To the extent not covered by the Distribution Plan, the
Adviser shall pay all other expenses incident to the sale and distribution of
the Shares sold hereunder, including, without limitation: printing and
distributing copies of the Prospectus, Statement of Additional Information and
reports prepared for use in connection with the offering of Shares for sale to
the public; advertising in connection with such offering, including public
relations services, sales presentations, media charges, preparation, printing
and mailing of advertising and sales literature; filing fees required by
regulatory authorities for sales literature and advertising materials; any
additional out-of-pocket expenses incurred in connection with the foregoing and
any other costs of distribution.
8. COMPENSATION. For the distribution and distribution support services
provided by the Distributor pursuant to the terms of the Agreement, the Fund
shall, pursuant to the Distribution Plan, pay to the Distributor the
compensation set forth in Schedule A attached hereto, which schedule may be
amended from time to time. In addition, the Distributor may retain any portion
of any sales load which is imposed on the sale of Shares and not reallocated by
the Distributor to a dealer, as set forth in the Prospectus and subject to
applicable NASD rules, and offset the amount payable to the Distributor pursuant
to Schedule A against any amounts so retained. To the extent not covered by the
Distribution Plan or offset by the retention of sales loads, the Adviser shall
pay to Distributor the compensation set forth in Schedule A and shall also
reimburse the Distributor for its out-of-pocket expenses related to the
performance of its duties hereunder, including, without limitation,
telecommunications charges, postage and delivery charges, record retention
costs, reproduction charges and traveling and lodging expenses incurred by
officers and employees of the Distributor. If this Agreement becomes effective
subsequent to the first day of the month or terminates before the last day of
the month, the Fund shall pay to the Distributor a distribution fee that is
prorated for that part of the month in which this Agreement is in effect. All
rights of compensation and reimbursement under this Agreement for services
performed by the Distributor as of the termination date shall survive the
termination of this Agreement.
9. USE OF DISTRIBUTOR'S NAME. The Fund shall not use the name of the
Distributor or any of its affiliates in the Prospectus, Statement of Additional
Information, sales literature or other material relating to the Fund in a manner
not approved prior thereto in writing by the Distributor; provided, however,
that the Distributor shall approve all uses of its and its affiliates' names
that merely refer in accurate terms to their appointments or that are required
by the Securities and Exchange Commission (the "SEC") or any state securities
commission; and further provided, that in no event shall such approval be
unreasonably withheld.
10. USE OF FUND'S NAME. Neither the Distributor nor any of its
affiliates shall use the name of the Fund or material relating to the Fund on
any forms (including any checks, bank drafts or bank statements) for other than
internal use in a manner not approved prior thereto in writing by the Fund;
provided, however, that the Fund shall approve all uses of its name that merely
refer in accurate terms to the appointment of the Distributor hereunder or that
are required by the SEC or any state securities commission; and further
provided, that in no event shall such approval be unreasonably withheld.
11. LIABILITY OF DISTRIBUTOR. The duties of the Distributor shall be
limited to those expressly set forth herein, and no implied duties, except the
duty to act in good faith, are assumed by or may be asserted against the
Distributor hereunder. The Distributor may, in connection with this Agreement
employ agents or attorneys in fact, and shall not be liable for any loss arising
out of or in connection with its actions under this Agreement, so long as it
acts in good faith and with due diligence, and is not negligent or guilty of any
willful misfeasance, bad faith or gross negligence, or reckless disregard of its
obligations and duties under this Agreement. As used in this Section 11 and in
Section 12 (except the second paragraph of Section 12), the term "Distributor"
shall include directors, officers, employees and other agents of the
Distributor.
12. INDEMNIFICATION OF DISTRIBUTOR. Any director, officer, employee,
shareholder or agent of the Distributor who may be or become an officer,
Trustee, employee or agent of the Fund, shall be deemed, when rendering services
to the Fund or acting on any business of the Fund (other than services or
business in connection with the Distributor's duties hereunder), to be rendering
such services to or acting solely for the Fund and not as a director, officer,
employee, shareholder or agent of, or one under the control or direction of, the
Distributor, even though receiving a salary from the Distributor.
The Fund agrees to indemnify and hold harmless the Distributor, and
each person, who controls the Distributor within the meaning of Section 15 of
the 1933 Act, or Section 20 of the Securities Exchange Act of 1934, as amended
("1934 Act"), against any and all liabilities, losses, damages, claims and
expenses, joint or several (including, without limitation, reasonable attorneys'
fees and disbursements and investigation expenses incident thereto) to which
they, or any of them, may become subject under the 1933 Act, the 1934 Act, the
1940 Act or other Federal or state laws or regulations, at common law or
otherwise, insofar as such liabilities, losses, damages, claims and expenses (or
actions, suits or proceedings in respect thereof) arise out of or relate to any
untrue statement or alleged untrue statement of a material fact contained in a
Prospectus, Statement of Additional Information, supplement thereto, sales
literature or other written information prepared by the Fund and provided by the
Fund to the Distributor for the Distributor's use hereunder, or arise out of or
relate to any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading. The Distributor (or any person controlling the Distributor) shall
not be entitled to indemnity hereunder for any liabilities, losses, damages,
claims or expenses (or actions, suits or proceedings in respect thereof)
resulting from (i) an untrue statement or omission or alleged untrue statement
or omission made in the Prospectus, Statement of Additional Information, or
supplement, sales or other literature, in reliance upon and in conformity with
information furnished in writing to the Fund by the Distributor specifically for
use therein or (ii) the Distributor's own willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties and obligations in the
performance of this Agreement.
The Distributor agrees to indemnify and hold harmless the Fund, and
each person who controls the Fund within the meaning of Section 15 of the 1933
Act, or Section 20 of the 1934 Act, against any and all liabilities, losses,
damages, claims and expenses, joint or several (including, without limitation
reasonable attorneys' fees and disbursements and investigation expenses incident
thereto) to which they, or any of them, may become subject under the 1933 Act,
the 1934 Act, the 1940 Act or other Federal or state laws, at common law or
otherwise, insofar as such liabilities, losses, damages, claims or expenses
arise out of or relate to any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus or Statement of Additional Information
or any supplement thereto, sales literature or other written material, or arise
out of or relate to actions or oral representations of Distributor's associated
persons and to any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, if based upon information furnished in writing to the Fund by the
Distributor specifically for use therein.
A party seeking indemnification hereunder (the "Indemnitee") shall give
prompt written notice to the party from whom indemnification is sought
("Indemnitor") of a written assertion or claim of any threatened or pending
legal proceeding which may be subject to indemnity under this Section; provided,
however, that failure to notify the Indemnitor of such written assertion or
claim shall not relieve the Indemnitor of any liability arising from this
Section. The Indemnitor shall be entitled, if it so elects, to assume the
defense of any suit brought to enforce a claim subject to this Agreement and
such defense shall be conducted by counsel chosen by the Indemnitor and
satisfactory to the Indemnitee; provided, however, that if the defendants
include both the Indemnitee and the Indemnitor, and the Indemnitee shall have
reasonably concluded that there may be one or more legal defenses available to
it which are different from or additional to those available to the Indemnitor
("conflict of interest"), the Indemnitor shall not have the right to elect to
defend such claim on behalf of the Indemnitee, and the Indemnitee shall have the
right to select separate counsel to defend such claim on behalf of the
Indemnitee. In the event that the Indemnitor elects to assume the defense of any
suit pursuant to the preceding sentence and retains counsel satisfactory to the
Indemnitee, the Indemnitee shall bear the fees and expenses of additional
counsel retained by it except for reasonable investigation costs which shall be
borne by the Indemnitor. If the Indemnitor (i) does not elect to assume the
defense of a claim, (ii) elects to assume the defense of a claim but chooses
counsel that is not satisfactory to the Indemnitee or (iii) has no right to
assume the defense of a claim because of a conflict of interest, the Indemnitor
shall advance or reimburse the Indemnitee, at the election of the Indemnitee,
reasonable fees and disbursements of any counsel retained by Indemnitee,
including reasonable investigation costs.
13. ADVISER PERSONNEL. The Adviser agrees that only its employees who
are registered representatives of the Distributor ("dual employees") or
registered representatives of another NASD member firm shall offer or sell
Shares of the Portfolios. The Adviser further agrees that the activities of any
such employees as registered representatives of the Distributor shall be limited
to offering and selling Shares. If there are dual employees, one employee of the
Adviser shall register as a principal of the Distributor and assist the
Distributor in monitoring the marketing and sales activities of the dual
employees. The Adviser shall maintain errors and omissions and fidelity bond
insurance policies providing reasonable coverage for its employees activities
and shall provide copies of such policies to the Distributor. The Adviser shall
indemnify and hold harmless the Distributor against any and all liabilities,
losses, damages, claims and expenses (including reasonable attorneys' fees and
disbursements and investigation costs incident thereto) arising from or related
to the Adviser's employees' activities as registered representatives, including,
without limitation, any and all such liabilities, losses, damages, claims and
expenses arising from or related to the breach by such employees of any rules or
regulations of the NASD or SEC.
14. FORCE MAJEURE. The Distributor shall not be liable for any delays
or errors occurring by reason of circumstances not reasonably foreseeable and
beyond its control, including, but not limited, to acts of civil or military
authority, national emergencies, work stoppages, fire, flood, catastrophe, acts
of God, insurrection, war, riot or failure of communication or power supply. In
the event of equipment breakdowns which are beyond the reasonable control of the
Distributor and not primarily attributable to the failure of the Distributor to
reasonably maintain or provide for the maintenance of such equipment, the
Distributor shall, at no additional expense to the Fund, take reasonable steps
in good faith to minimize service interruptions, but shall have no liability
with respect thereto.
15. SCOPE OF DUTIES. The Distributor and the Fund shall regularly
consult with each other regarding the Distributor's performance of its
obligations and its compensation under the foregoing provisions. In connection
therewith, the Fund shall submit to the Distributor at a reasonable time prior
to or at the same time as filing with the SEC copies of any amended or
supplemented Registration Statement of the Fund (including exhibits) under the
1940 Act and the 1933 Act, and at a reasonable time in advance of their proposed
use, copies of any amended or supplemented forms relating to any plan, program
or service offered by the Fund. Any change in such materials that would require
any change in the Distributor's obligations under the foregoing provisions shall
be subject to the Distributor's approval. In the event that a change in such
documents or in the procedures contained therein increases the cost or burden to
the Distributor of performing its obligations hereunder, the Distributor shall
be entitled to receive reasonable compensation therefore.
16. DURATION. This Agreement shall become effective as of the date
first above written, and shall continue in force for two years from that date
and thereafter from year to year, provided continuance is approved at least
annually by (i) either the vote of a majority of the Trustees of the Fund, or by
the vote of a majority of the outstanding voting securities of each Portfolio,
and (ii) the vote of a majority of those Trustees of the Fund who are not
interested persons of the Fund, and who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on the approval.
17. TERMINATION. This Agreement shall terminate as follows:
a. This Agreement shall terminate automatically in the event of
its assignment.
b. This Agreement shall terminate upon the failure to approve the
continuance of the Agreement after the initial two year term as set forth in
Section 16 above.
c. This Agreement shall terminate at any time upon a vote of the
majority of the Trustees who are not interested persons of the Fund or by a vote
of the majority of the outstanding voting securities of each Portfolio, upon not
less than 60 days prior written notice to the Distributor.
d. The Distributor may terminate this Agreement upon not less
than 60 days prior written notice to the Fund.
Upon the termination of this Agreement, the Fund shall pay to the
Distributor such compensation and out-of-pocket expenses as may be payable for
the period prior to the effective date of such termination. In the event that
the Fund designates a successor to any of the Distributor's obligations
hereunder, the Distributor shall, at the expense and direction of the Fund,
transfer to such successor all relevant books, records and other data
established or maintained by the Distributor pursuant to the foregoing
provisions.
Sections 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 17, 20, 21, 22, 23, 24,
25, 26 and 27 shall survive any termination of this Agreement.
18. AMENDMENT. The terms of this Agreement shall not be waived,
altered, modified, amended or supplemented in any manner whatsoever except by a
written instrument signed by the Distributor and the Fund and shall not become
effective unless its terms have been approved by the majority of the Trustees of
the Fund or by a "vote of majority of the outstanding voting securities" of each
Portfolio and by a majority of those Trustees who are not "interested persons"
of the Fund or any party to this Agreement.
19. NON-EXCLUSIVE SERVICES. The services of the Distributor rendered to
the Fund are not exclusive. The Distributor may render such services to any
other investment company.
20. DEFINITIONS. As used in this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignment," "interested
person" and "affiliated person" shall have the respective meanings specified in
the 1940 Act and the rules enacted thereunder as now in effect or hereafter
amended.
21. CONFIDENTIALITY. The Distributor shall treat confidentially and as
proprietary information of the Fund all records and other information relating
to the Fund and prior, present or potential shareholders and shall not use such
records and information for any purpose other than performance of its
responsibilities and duties hereunder, except as may be required by
administrative or judicial tribunals or as requested by the Fund.
22. NOTICE. Any notices and other communications required or permitted
hereunder shall be in writing and shall be effective upon delivery by hand or
upon receipt if sent by certified or registered mail (postage prepaid and return
receipt requested) or by a nationally recognized overnight courier service
(appropriately marked for overnight delivery) or upon transmission if sent by
telex or facsimile (with request for immediate confirmation of receipt in a
manner customary for communications of such respective type and with physical
delivery of the communication being made by one or the other means specified in
this Section 22 as promptly as practicable thereafter). Notices shall be
addressed as follows:
(a) if to the Fund:
10k SmartTrust
5952 Royal Lane, Suite 270 (c) if to the Distributor:
Dallas, TX 75230 AmeriPrime Financial Securities
Attn: President 1793 Kingswood Drive, Suite 200
......... Southlake, TX 76092
(b) if to the Adviser: Attn: President
Monument Investments
5952 Royal Lane, Suite 270
Dallas, TX 75230
Attn: President
or to such other respective addresses as the parties shall designate by like
notice, provided that notice of a change of address shall be effective only upon
receipt thereof.
23. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
24. GOVERNING LAW. This Agreement shall be administered, construed and
enforced in accordance with the laws of the State of Texas to the extent that
such laws are not preempted by the provisions of any law of the United States
heretofore or hereafter enacted, as the same may be amended from time to time.
25. ENTIRE AGREEMENT. This Agreement (including the Schedules attached
hereto) contains the entire agreement and understanding of the parties with
respect to the subject matter hereof and supersedes all prior written or oral
agreements and understandings with respect thereto.
26. MISCELLANEOUS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction. This Agreement may be executed in three counterparts,
each of which taken together shall constitute one and the same instrument.
27. LIMITATION OF LIABILITY. The term "10k SmartTrust" means and refers
to the Trustees from time to time serving under the Trust Instrument of the Fund
dated March 16, 1999, as the same may subsequently thereto have been, or
subsequently hereto be, amended. It is expressly agreed that obligations of the
Fund hereunder shall not be binding upon any Trustee, shareholder, nominees,
officers, agents or employees of the Fund, personally, but bind only the assets
and property of the Fund, as provided in the Trust Instrument. The execution and
delivery of this Agreement have been authorized by the Trustees and signed by an
authorized officer of the Fund, acting as such, and neither such authorization
nor such execution and delivery 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 Fund as provided in the Trust
Instrument. The Trust Instrument is on file with the Secretary of the State of
Ohio.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
10k SmartTrust Fund
By: ____/s/__________________________
J. Paul Hamilton
President & Trustee
By: __/s/______________________________________
Kenneth D. Trumpfheller
AMERIPRIME FINANCIAL SECURITIES, INC.
<PAGE>
SCHEDULE A
10K SMARTTRUST FUND
Portfolios and Fee Schedule
Portfolios covered by Distribution Agreement:
Series ......... Portfolio
------ ---------
10k SmartTrust ......... 10k SmartTrust Fund
Fees for distribution and distribution support services on behalf of the
Portfolios:
Annual Fee .... $ 1,200
<PAGE>
SCHEDULE B
10K SMARTTRUST FUND
Distribution Support Services
1. Review and submit for approval all advertising and promotional materials.
2. Maintain all books and records required by the NASD.
3. Monitor Distribution Plan(s) and report to Board of Trustees.
4. Prepare quarterly reports to Board of Trustees relating to distribution
activities.
5. Subject to approval of Distributor, license personnel as registered
representatives of the Distributor.
CUSTODY AGREEMENT
This agreement (the "Agreement") is entered into as of the
Novembe 16, 1999, by and between 10K SMARTTRUST FUND, (the "Trust") and
Firstar Bank, National Association, (the "Custodian"), a national banking
association having its principal office at 425 Walnut Street, Cincinnati, Ohio,
45202.
WHEREAS, the Trust and the Custodian desire to enter into this
Agreement to provide for the custody and safekeeping of the assets of the Trust
as required by the Act (as hereafter defined).
THEREFORE, in consideration of the mutual promises hereinafter set
forth, the Trust and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
The following words and phrases, when used in this Agreement, unless
the context otherwise requires, shall have the following meanings:
Act - the Investment Company Act of 1940, as amended. 1934 Act - the
Securities and Exchange Act of 1934, as amended.
Authorized Person - any (i) Officer of the Trust or (ii) any other
person, whether or not any such person is an officer or employee of the Trust,
who is duly authorized by the Board of Trustees of the Trust to give Oral
Instructions and Written Instructions on behalf of the Trust or any Fund, and
named in Appendix A attached hereto and as amended from time to time by
resolution of the Board of Trustees, certified by an Officer, and received by
the Custodian.
Board of Trustees - the Trustees from time to time serving under the
Trust's Agreement and Declaration of Trust, as from time to time amended.
Book-Entry System - a federal book-entry system as provided in Subpart
O of Treasury Circular No. 300, 31 CFR 306, in Subpart B of 31 CFT Part 350, or
in such book-entry regulations of federal agencies as are substantially in the
form of Subpart O.
Business Day - any day recognized as a settlement day by The New York
Stock Exchange, Inc. and any other day for which the Trust computes the net
asset value of Shares of any fund.
Depository - The Depository Trust Company ("DTC"), a limited purpose
trust company, its successor(s) and its nominee(s). Depository shall include any
other clearing agency registered with the SEC under Section 17A of the 1934 Act
which acts as a system for the central handling of Securities where all
Securities of any particular class or series of an issuer deposited within the
system are treated as fungible and may be transferred or pledged by bookkeeping
entry without physical delivery of the Securities provided that the Custodian
shall have received a copy of a resolution of the Board of Trustees, certified
by an Officer, specifically approving the use of such clearing agency as a
depository for the Funds.
Dividend and Transfer Agent - the dividend and transfer agent
appointed, from time to time, pursuant to a written agreement between the
dividend and transfer agent and the Trust.
Foreign Securities - a) securities issued and sold primarily outside of
the United States by a foreign government, a national of any foreign country, or
a trust or other organization incorporated or organized under the laws of any
foreign country or; b) securities issued or guaranteed by the government of the
United States, by any state, by any political subdivision or agency thereof, or
by any entity organized under the laws of the United States or of any state
thereof, which have been issued and sold primarily outside of the United States.
Fund - each series of the Trust listed in Appendix B and any additional
series added pursuant to Proper Industries. A series is individually referred to
as a "Fund" and collectively referred to as the "Funds."
Money Market Security - debt obligations issued or guaranteed as to
principal and/or interest by the government of the United States or agencies or
instrumentalities thereof, commercial paper, obligations (including certificates
of deposit, bankers' acceptances, repurchase agreements and reverse repurchase
agreements with respect to the same), and time deposits of domestic banks and
thrift institutions whose deposits are insured by the Federal Deposit Insurance
Corporation, and short-term corporate obligations where the purchase and sale of
such securities normally require settlement in federal funds or their equivalent
on the same day as such purchase and sale, all of which mature in not more than
thirteen (13) months.
NASD - the National Association of Securities Dealers, Inc.
Officer - the Chairman, President, Secretary, Treasurer, any Vice
President, Assistant Secretary or Assistant Treasurer of the Trust.
Oral Instructions - instructions orally transmitted to and received by
the Custodian from an Authorized Person (or from a person that the Custodian
reasonably believes in good faith to be an Authorized Person) and confirmed by
Written Instructions in such a manner that such Written Instructions are
received by the Custodian on the Business Day immediately following receipt of
such Oral Instructions.
Proper Instructions - Oral Instructions or Written Instructions. Proper
Instructions may be continuing Written Instructions when deemed appropriate by
both parties.
Prospectus - the Trust's then currently effective prospectus and
Statement of Additional Information, as filed with and declared effective from
time to time by the Securities and Exchange Commission.
Security or Securities - Money Market Securities, common stock,
preferred stock, options, financial futures, bonds, notes, debentures, corporate
debt securities, mortgages, bank certificates of deposit, bankers' acceptances,
mortgage-backed securities or other obligations and any certificates, receipts,
warrants, or other instruments or documents representing rights to receive,
purchase, or subscribe for the same or evidencing or representing any other
rights or interest therein, or any similar property or assets that the Custodian
has the facilities to clear and to service.
SEC - the Securities and Exchange Commission of the United States of
America.
Shares - with respect to a Fund, the units of beneficial interest
issued by the Trust on account of such Fund. Trust - the 10K SMARTTRUST
a business trust organized under the laws of Ohio which is a open-end
management investment company registered under the Act.
Written Instructions - communications in writing actually received by
the Custodian from an Authorized Person. A communication in writing includes a
communication by facsimile, telex or between electro-mechanical or electronic
devices (where the use of such devices have been approved by resolution of the
Trustee and the resolution is certified by an Officer and delivered to the
Custodian). All written communications shall be directed to the Custodian,
attention:
Mutual Fund Custody Department.
ARTICLE II
APPOINTMENT; ACCEPTANCE; AND FURNISHING OF DOCUMENTS
A. Appointment of Custodian. The Trust hereby constitutes and
appoints the Custodian as custodian of all Securities and cash owned by the
Trust at any time during the term of this Agreement.
B. Acceptance of Custodian. The Custodian hereby accepts appointment as
such custodian and agrees to perform the duties thereof as hereinafter set
forth.
C. Documents to be Furnished. The following documents, including any
amendments thereto, will be provided contemporaneously with the execution of the
Agreement, to the Custodian by the Trust:
1. A copy of the Articles of Incorporation of the Trust certified by
the Secretary.
2. A copy of the By-Laws of the Trust certified by the Secretary.
3. A copy of the resolution of the Board of Trustees of the Trust
appointing the Custodian, certified by the Secretary.
4. A copy of the then current Prospectus.
5. A Certificate of the President and Secretary of the Trust setting
forth the names and signatures of the current Officers of the
Trust and other Authorized Persons.
D. Notice of Appointment of Dividend and Transfer Agent. The Trust
agrees to notify the Custodian in writing of the appointment, termination or
change in appointment of any Dividend and Transfer Agent.
ARTICLE III
RECEIPT OF TRUST ASSETS
A. Delivery of Moneys. During the term of this Agreement, the Trust
will deliver or cause to be delivered to the Custodian all moneys to be held by
the Custodian for the account of any Fund. The Custodian shall be entitled to
reverse any deposits made on any Fund's behalf where such deposits have been
entered and moneys are not finally collected within 30 days of the making of
such entry.
B. Delivery of Securities. During the term of this Agreement, the Trust
will deliver or cause to be delivered to the Custodian all Securities to be held
by the Custodian for the account of any Fund. The Custodian will not have any
duties or responsibilities with respect to such Securities until actually
received by the Custodian.
C. Payments for Shares. As and when received, the Custodian shall
deposit to the account(s) of a Fund any and all payments for Shares of that Fund
issued or sold from time to time as they are received from the Trust's
distributor or Dividend and Transfer Agent or from the Trust itself.
D. Duties Upon Receipt. The Custodian shall not be responsible for any
Securities, moneys or other assets of any Fund until actually received by it.
E. Validity of Title. The Custodian shall not be responsible for the
title, validity or genuineness of any property or evidence of title thereto
received or delivered by it pursuant to this Agreement.
ARTICLE IV
DISBURSEMENT OF TRUST ASSETS
A. Declaration of Dividends by Trust. The Trust shall furnish to the
Custodian a copy of the resolution of the Board of Trustees of the Trust,
certified by the Trust's Secretary, either (i) setting forth the date of the
declaration of any dividend or distribution in respect of Shares of any Fund of
the Trust, the date of payment thereof, the record date as of which the Fund
shareholders entitled to payment shall be determined, the amount payable per
share to Fund shareholders of record as of that date, and the total amount to be
paid by the Dividend and Transfer Agent on the payment date, or (ii) authorizing
the declaration of dividends and distributions in respect of Shares of a Fund on
a daily basis and authorizing the Custodian to rely on Written Instructions
setting forth the date of the declaration of any such dividend or distribution,
the date of payment thereof, the record date as of which the Fund shareholders
entitled to payment shall be determined, the amount payable per share to Fund
shareholders of record as of that date, and the total amount to be paid by the
Dividend and Transfer Agent on the payment date.
On the payment date specified in the resolution or Written Instructions
described above, the Custodian shall segregate such amounts from moneys held for
the account of the Fund so that they are available for such payment.
B. Segregation of Redemption Proceeds. Upon receipt of Proper
Instructions so directing it, the Custodian shall segregate amounts necessary
for the payment of redemption proceeds to be made by the Dividend and Transfer
Agent from moneys held for the account of the Fund so that they are available
for such payment.
C. Disbursements of Custodian. Upon receipt of a Certificate directing
payment and setting forth the name and address of the person to whom such
payment is to be made, the amount of such payment, the name of the Fund from
which payment is to be made, and the purpose for which payment is to be made,
the Custodian shall disburse amounts as and when directed from the assets of
that Fund. The Custodian is authorized to rely on such directions and shall be
under no obligation to inquire as to the propriety of such directions.
D. Payment of Custodian Fees. Upon receipt of Written Instructions
directing payment, the Custodian shall disburse moneys from the assets of the
Trust in payment of the Custodian's fees and expenses as provided in Article
VIII hereof.
ARTICLE V
CUSTODY OF TRUST ASSETS
A. Separate Accounts for Each Fund. As to each Fund, the Custodian
shall open and maintain a separate bank account or accounts in the United States
in the name of the Trust coupled with the name of such Fund, subject only to
draft or order by the Custodian acting pursuant to the terms of this Agreement,
and shall hold all cash received by it from or for the account of the Fund,
other than cash maintained by the Fund in a bank account established and used by
the Fund in accordance with Rule 17f-3 under the Act. Moneys held by the
Custodian on behalf of a Fund may be deposited by the Custodian to its credit as
Custodian in the banking department of the Custodian. Such moneys shall be
deposited by the Custodian in its capacity as such, and shall be withdrawable by
the Custodian only in such capacity.
B. Segregation of Non-Cash Assets. All Securities and non-cash property
held by the Custodian for the account of a Fund (other than Securities
maintained in a Depository or Book-entry System) shall be physically segregated
from other Securities and non-cash property in the possession of the Custodian
(including the Securities and non-cash property of the other Funds) and shall be
identified as subject to this Agreement.
C. Securities in Bearer and Registered Form. All Securities held which
are issued or issuable only in bearer form, shall be held by the Custodian in
that form; all other Securities held for the Fund may be registered in the name
of the Custodian, any sub-custodian appointed in accordance with this Agreement,
or the nominee of any of them. The Trust agrees to furnish to the Custodian
appropriate instruments to enable the Custodian to hold, or deliver in proper
form for transfer, any Securities that it may hold for the account of any Fund
and which may, from time to time, be registered in the name of a Fund.
D. Duties of Custodian As to Securities. Unless otherwise instructed by
the Trust, with respect to all Securities held for the Trust, the Custodian
shall on a timely basis (concerning items 1 and 2 below, as defined in the
Custodian's Standards of Service Guide, as amended from time to time, annexed
hereto as Appendix D):
1.) Collect all income due and payable with respect to such
Securities;
2.) Present for payment and collect amounts payable upon all
Securities which may mature or be called, redeemed, or retired,
or otherwise become payable;
3.) Surrender interim receipts or Securities in temporary form for
Securities in definitive form; and
4.) Execute, as Custodian, any necessary declarations or certificates
of ownership under the Federal income tax laws or the laws or
regulations of any other taxing authority, including any foreign
taxing authority, now or hereafter in effect.
E. Certain Actions Upon Written Instructions. Upon receipt of a Written
Instructions and not otherwise, the Custodian shall:
1.) Execute and deliver to such persons as may be designated in such
Written Instructions proxies, consents, authorizations, and any
other instruments whereby the authority of the Trust as
beneficial owner of any Securities may be exercised;
2.) Deliver any Securities in exchange for other Securities or cash
issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation, or
recapitalization of any trust, or the exercise of any conversion
privilege;
3.) Deliver any Securities to any protective committee,
reorganization committee, or other person in connection with the
reorganization, refinancing, merger, consolidation,
recapitalization, or sale of assets of any trust, and receive and
hold under the terms of this Agreement such certificates of
deposit, interim receipts or other instruments or documents as
may be issued to it to evidence such delivery;
4.) Make such transfers or exchanges of the assets of any Fund and
take such other steps as shall be stated in the Written
Instructions to be for the purpose of effectuating any duly
authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Trust; and
5.) Deliver any Securities held for any Fund to the depository agent
for tender or other similar offers.
F. Custodian to Deliver Proxy Materials. The Custodian shall promptly
deliver to the Trust all notices, proxy material and executed but unvoted
proxies pertaining to shareholder meetings of Securities held by any Fund. The
Custodian shall not vote or authorize the voting of any Securities or give any
consent, waiver or approval with respect thereto unless so directed by Written
Instructions.
G. Custodian to Deliver Tender Offer Information. The Custodian shall
promptly deliver to the Trust all information received by the Custodian and
pertaining to Securities held by any Fund with respect to tender or exchange
offers, calls for redemption or purchase, or expiration of rights. If the Trust
desires to take action with respect to any tender offer, exchange offer or other
similar transaction, the Trust shall notify the Custodian at least five Business
Days prior to the date on which the Custodian is to take such action. The Trust
will provide or cause to be provided to the Custodian all relevant information
for any Security which has unique put/option provisions at least five Business
Days prior to the beginning date of the tender period.
ARTICLE VI
PURCHASE AND SALE OF SECURITIES
A. Purchase of Securities. Promptly after each purchase of Securities
by the Trust, the Trust shall deliver to the Custodian (i) with respect to each
purchase of Securities which are not Money Market Securities, Written
Instructions, and (ii) with respect to each purchase of Money Market Securities,
Proper Instructions, specifying with respect to each such purchase the;
1.) name of the issuer and the title of the Securities,
2.) the number of shares, principal amount purchased (and accrued
interest, if any) or other units purchased,
3.) date of purchase and settlement,
4.) purchase price per unit,
5.) total amount payable,
6.) name of the person from whom, or the broker through which, the
purchase was made,
7.) the name of the person to whom such amount is payable, and
8.) the Fund for which the purchase was made.
The Custodian shall, against receipt of Securities purchased by or for the
Trust, pay out of the moneys held for the account of such Fund the total amount
specified in the Written Instructions, or Oral Instructions, if applicable, to
the person named therein. The Custodian shall not be under any obligation to pay
out moneys to cover the cost of a purchase of Securities for a Fund, if in the
relevant Fund custody account there is insufficient cash available to the Fund
for which such purchase was made.
B. Sale of Securities. Promptly after each sale of Securities by a
Fund, the Trust shall deliver to the Custodian (i) with respect to each sale of
Securities which are not Money Market Securities, Written Instructions, and (ii)
with respect to each sale of Money Market Securities, Proper Instructions,
specifying with respect to each such sale the:
1.) name of the issuer and the title of the Securities,
2.) number of shares, principal amount sold (and accrued interest, if
any) or other units sold,
3.) date of sale and settlement,
4.) sale price per unit,
5.) total amount receivable,
6.) name of the person to whom, or the broker through which, the sale
was made,
7.) name of the person to whom such Securities are to be delivered,
and
8.) Fund for which the sale was made.
The Custodian shall deliver the Securities against receipt of the total amount
specified in the Written Instructions, or Oral Instructions, if applicable.
Notwithstanding any other provision of this Agreement, the Custodian, when
properly instructed as provided herein to deliver Securities against payment,
shall be entitled, if in accordance with generally accepted market practice, to
deliver such Securities prior to actual receipt of final payment therefor. In
any such case, the Fund for which the Securities were delivered shall bear the
risk that final payment for the Securities may not be made or that the
Securities may be returned or otherwise held or disposed of by or through the
person to whom they were delivered, and the Custodian shall have no liability
for any of the foregoing.
C. Payment on Settlement Date. On contractual settlement date, the
account of the Fund will be charged for all purchased Securities settling on
that day, regardless of whether or not delivery is made. Likewise, on
contractual settlement date, proceeds from the sale of Securities settling that
day will be credited to the account of the Fund, irrespective of delivery. Any
such credit shall be conditioned upon actual receipt by Custodian of final
payment and may be reversed if final payment is not actually received in full.
D. Credit of Moneys Prior to Receipt. With respect to any credit given
prior to actual receipt of final payment, the Custodian may, in its sole
discretion and from time to time, permit a Fund to use funds so credited to its
Fund custody account in anticipation of actual receipt of final payment. Any
such funds shall be deemed a loan from the Custodian to the Trust payable on
demand and bearing interest accruing from the date such loan is made up to but
not including the date on which such loan is repaid at the rate per annum
customarily charged by the Custodian on similar loans.
E. Segregated Accounts. The Custodian shall, upon receipt of Proper
Instructions so directing it, establish and maintain a segregated account or
accounts for and on behalf of a Fund. Cash and/or Securities may be transferred
into such account or accounts for specific purposes, to-wit:
1.) in accordance with the provision of any agreement among the
Trust, the Custodian, and a broker-dealer registered under the
1934 Act, and also 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,
the Commodity Futures Trading Commission, any registered contract
market, or any similar organization or organizations requiring
escrow or other similar arrangements in connection with
transactions by the Fund;
2.) for purposes of segregating cash or Securities in connection with
options purchased, sold, or written by the Fund or commodity
futures contracts or options thereon purchased or sold by the
Fund;
3.) for the purpose of compliance by the Fund with the procedures
required for reverse repurchase agreements, firm commitment
agreements, standby commitment agreements, and short sales by Act
Release No. 10666, or any subsequent release or releases or rule
of the SEC relating to the maintenance of segregated accounts by
registered investment companies;
4.) for the purpose of segregating collateral for loans of Securities
made by the Fund; and
5.) for other proper corporate purposes, but only upon receipt of, in
addition to Proper Instructions, a copy of a resolution of the
Board of Trustees, certified by an Officer, setting forth the
purposes of such segregated account.
Each segregated account established hereunder shall be established and
maintained for a single Fund only. All Proper Instructions relating to a
segregated account shall specify the Fund involved.
F. Advances for Settlement. Except as otherwise may be agreed upon by
the parties hereto, the Custodian shall not be required to comply with any
Written Instructions to settle the purchase of any Securities on behalf of a
Fund unless there is sufficient cash in the account(s) pertaining to such Fund
at the time or to settle the sale of any Securities from such an account(s)
unless such Securities are in deliverable form. Notwithstanding the foregoing,
if the purchase price of such Securities exceeds the amount of cash in the
account(s) at the time of such purchase, the Custodian may, in its sole
discretion, advance the amount of the difference in order to settle the purchase
of such Securities. The amount of any such advance shall be deemed a loan from
the Custodian to the Trust payable on demand and bearing interest accruing from
the date such loan is made up to but not including the date such loan is repaid
at the rate per annum customarily charged by the Custodian on similar loans.
ARTICLE VII
TRUST INDEBTEDNESS
In connection with any borrowings by the Trust, the Trust will cause to
be delivered to the Custodian by a bank or broker requiring Securities as
collateral for such borrowings (including the Custodian if the borrowing is from
the Custodian), a notice or undertaking in the form currently employed by such
bank or broker setting forth the amount of collateral. The Trust shall promptly
deliver to the Custodian Written Instructions specifying with respect to each
such borrowing: (a) the name of the bank or broker, (b) the amount and terms of
the borrowing, which may be set forth by incorporating by reference an attached
promissory note duly endorsed by the Trust, or a loan agreement, (c) the date,
and time if known, on which the loan is to be entered into, (d) the date on
which the loan becomes due and payable, (e) the total amount payable to the
Trust on the borrowing date, and (f) the description of the Securities securing
the loan, including the name of the issuer, the title and the number of shares
or other units or the principal amount. The Custodian shall deliver on the
borrowing date specified in the Written Instructions the required collateral
against the lender's delivery of the total loan amount then payable, provided
that the same conforms to that which is described in the Written Instructions.
The Custodian shall deliver, in the manner directed by the Trust, such
Securities as additional collateral, as may be specified in Written
Instructions, to secure further any transaction described in this Article VII.
The Trust shall cause all Securities released from collateral status to be
returned directly to the Custodian and the Custodian shall receive from time to
time such return of collateral as may be tendered to it.
The Custodian may, at the option of the lender, keep such collateral in
its possession, subject to all rights therein given to the lender because of the
loan. The Custodian may require such reasonable conditions regarding such
collateral and its dealings with third-party lenders as it may deem appropriate.
ARTICLE VIII
CONCERNING THE CUSTODIAN
A. Limitations on Liability of Custodian. Except as otherwise provided
herein, the Custodian shall not be liable for any loss or damage resulting from
its action or omission to act or otherwise, except for any such loss or damage
arising out of its own gross negligence or willful misconduct. The Trust shall
defend, indemnify and hold harmless the Custodian and its directors, officers,
employees and agents with respect to any loss, claim, liability or cost
(including reasonable attorneys' fees) arising or alleged to arise from or
relating to the Trust's duties hereunder or any other action or inaction of the
Trust or its Trustees, officers, employees or agents, except such as may arise
from the grossly negligent action or omission, willful misconduct or breach of
this Agreement by the Custodian. The Custodian shall be entitled to rely on and
may act upon the advice and opinion of counsel on all matters, at the expense of
the Trust, and shall be without liability for any action reasonably taken or
omitted pursuant to such advice or opinion of counsel. The provisions under this
paragraph shall survive the termination of this Agreement.
B. Actions Not Required By Custodian. Without limiting the generality
of the foregoing, the Custodian, acting in the capacity of Custodian hereunder,
shall be under no obligation to inquire into, and shall not be liable for:
1.) The validity of the issue of any Securities purchased by or for
the account of any Fund, the legality of the purchase thereof, or
the propriety of the amount paid therefor;
2.) The legality of the sale of any Securities by or for the account
of any Fund, or the propriety of the amount for which the same
are sold;
3.) The legality of the issue or sale of any Shares of any Fund, or
the sufficiency of the amount to be received therefor;
4.) The legality of the redemption of any Shares of any Fund, or the
propriety of the amount to be paid therefor;
5.) The legality of the declaration or payment of any dividend by the
Trust in respect of Shares of any Fund;
6.) The legality of any borrowing by the Trust on behalf of the Trust
or any Fund, using Securities as collateral;
7.) Whether the Trust or a Fund is in compliance with the 1940 Act,
the regulations thereunder, the provisions of the Trust's charter
documents or by-laws, or its investment objectives and policies
as then in effect.
C. No Duty to Collect Amounts Due From Dividend and Transfer Agent. The
Custodian shall not be under any duty or obligation to take action to effect
collection of any amount due to the Trust from any Dividend and Transfer Agent
of the Trust nor to take any action to effect payment or distribution by any
Dividend and Transfer Agent of the Trust of any amount paid by the Custodian to
any Dividend and Transfer Agent of the Trust in accordance with this Agreement.
D. No Enforcement Actions. Notwithstanding Section D of Article V, the
Custodian shall not be under any duty or obligation to take action, by legal
means or otherwise, to effect collection of any amount, if the Securities upon
which such amount is payable are in default, or if payment is refused after due
demand or presentation, unless and until (i) it shall be directed to take such
action by Written Instructions and (ii) it shall be assured to its satisfaction
(including prepayment thereof) of reimbursement of its costs and expenses in
connection with any such action.
E. Authority to Use Agents and Sub-Custodians. The Trust acknowledges
and hereby authorizes the Custodian to hold Securities through its various
agents described in Appendix C annexed hereto. The Fund hereby represents that
such authorization has been duly approved by the Board of Trustees of the Trust
as required by the Act.
In addition, the Trust acknowledges that the Custodian may appoint one
or more financial institutions, as agent or agents or as sub-custodian or
sub-custodians, including, but not limited to, banking institutions located in
foreign countries, for the purpose of holding Securities and moneys at any time
owned by the Fund. The Custodian shall not be relieved of any obligation or
liability under this Agreement in connection with the appointment or activities
of such agents or sub-custodians. Any such agent or sub-custodian shall be
qualified to serve as such for assets of investment companies registered under
the Act. The Funds shall reimburse the Custodian for all costs incurred by the
Custodian in connection with opening accounts with any such agents or
sub-custodians. Upon request, the Custodian shall promptly forward to the Trust
any documents it receives from any agent or sub-custodian appointed hereunder
which may assist trustees of registered investment companies to fulfill their
responsibilities under Rule 17f-5 of the Act.
F. No Duty to Supervise Investments. The Custodian shall not be under
any duty or obligation to ascertain whether any Securities at any time delivered
to or held by it for the account of the Trust are such as properly may be held
by the Trust under the provisions of the Articles of Incorporation and the
Trust's By-Laws.
G. All Records Confidential. The Custodian shall treat all records and
other information relating to the Trust and the assets of all Funds as
confidential and shall not disclose any such records or information to any other
person unless (i) the Trust shall have consented thereto in writing or (ii) such
disclosure is required by law.
H. Compensation of Custodian. The Custodian shall be entitled to
receive and the Trust agrees to pay to the Custodian such compensation as shall
be determined pursuant to Appendix E attached hereto, or as shall be determined
pursuant to amendments to Appendix E. The Custodian shall be entitled to charge
against any money held by it for the account of any Fund, the amount of any of
its fees, any loss, damage, liability or expense, including counsel fees. The
expenses which the Custodian may charge against the account of a Fund include,
but are not limited to, the expenses of agents or sub-custodians incurred in
settling transactions involving the purchase and sale of Securities of the Fund.
I. Reliance Upon Instructions. The Custodian shall be entitled to rely
upon any Proper Instructions. The Trust agrees to forward to the Custodian
Written Instructions confirming Oral Instructions in such a manner so that such
Written Instructions are received by the Custodian, whether by hand delivery,
telex, facsimile or otherwise, on the same Business Day on which such Oral
Instructions were given. The Trust agrees that the failure of the Custodian to
receive such confirming instructions shall in no way affect the validity of the
transactions or enforceability of the transactions hereby authorized by the
Trust. The Trust agrees that the Custodian shall incur no liability to the Trust
for acting upon Oral Instructions given to the Custodian hereunder concerning
such transactions.
J. Books and Records. The Custodian will (i) set up and maintain proper
books of account and complete records of all transactions in the accounts
maintained by the Custodian hereunder in such manner as will meet the
obligations of the Fund under the Act, with particular attention to Section 31
thereof and Rules 3la-1 and 3la-2 thereunder and those records are the property
of the Trust, and (ii) preserve for the periods prescribed by applicable Federal
statute or regulation all records required to be so preserved. All such books
and records shall be the property of the Trust, and shall be available, upon
request, for inspection by duly authorized officers, employees or agents of the
Trust and employees of the SEC.
K. Internal Accounting Control Systems. The Custodian shall send to the
Trust any report received on the systems of internal accounting control of the
Custodian, or its agents or sub-custodians, as the Trust may reasonably request
from time to time.
L. No Management of Assets By Custodian. The Custodian performs only
the services of a custodian and shall have no responsibility for the management,
investment or reinvestment of the Securities or other assets from time to time
owned by any Fund. The Custodian is not a selling agent for Shares of any Fund
and performance of its duties as custodian shall not be deemed to be a
recommendation to any Fund's depositors or others of Shares of the Fund as an
investment. The Custodian shall have no duties or obligations whatsoever except
such duties and obligations as are specifically set forth in this Agreement, and
no covenant or obligation shall be implied in this Agreement against the
Custodian.
M. Assistance to Trust. The Custodian shall take all reasonable action,
that the Trust may from time to time request, to assist the Trust in obtaining
favorable opinions from the Trust's independent accountants, with respect to the
Custodian's activities hereunder, in connection with the preparation of the
Fund's Form N- IA, Form N-SAR, or other annual reports to the SEC.
N. Grant of Security Interest. The Trust hereby pledges to and grants
the Custodian a security interest in the assets of any Fund to secure the
payment of any liabilities of the Trust to the Custodian, whether acting in its
capacity as Custodian or otherwise, or on account of money borrowed from the
Custodian. This pledge is in addition to any other pledge of collateral by the
Trust to the Custodian.
ARTICLE IX
INITIAL TERM; TERMINATION
A. Initial Term. This Agreement shall become effective as of
its execution and shall continue in full force and effect until terminated as
hereinafter provided.
B. Termination. Either party hereto may terminate this Agreement after
the Initial Term for any reason by giving to the other party a notice in writing
specifying the date of such termination, which shall be not less than ninety
(90) days after the date of giving of such notice. If such notice is given by
the Trust, it shall be accompanied by a copy of a resolution of the Board of
Trustees of the Trust, certified by the Secretary of the Trust, electing to
terminate this Agreement and designating a successor custodian or custodians. In
the event such notice is given by the Custodian, the Trust shall, on or before
the termination date, deliver to the Custodian a copy of a resolution of the
Board of Trustees of the Trust, certified by the Secretary, designating a
successor custodian or custodians to act on behalf of the Trust. In the absence
of such designation by the Trust, the Custodian may designate a successor
custodian which shall be a bank or trust company having not less than
$100,000,000 aggregate capital, surplus, and undivided profits. Upon the date
set forth in such notice this Agreement shall terminate, and the Custodian,
provided that it has received a notice of acceptance by the successor custodian,
shall deliver, on that date, directly to the successor custodian all Securities
and moneys then owned by the Fund and held by it as Custodian. Upon termination
of this Agreement, the Trust shall pay to the Custodian on behalf of the Trust
such compensation as may be due as of the date of such termination. The Trust
agrees on behalf of the Trust that the Custodian shall be reimbursed for its
reasonable costs in connection with the termination of this Agreement.
C. Failure to Designate Successor Custodian. If a successor custodian
is not designated by the Trust, or by the Custodian in accordance with the
preceding paragraph, or the designated successor cannot or will not serve, the
Trust shall, upon the delivery by the Custodian to the Trust of all Securities
(other than Securities held in the Book-Entry System which cannot be delivered
to the Trust) and moneys then owned by the Trust, be deemed to be the custodian
for the Trust, and the Custodian shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement, other than the duty with respect to
Securities held in the Book-Entry System, which cannot be delivered to the
Trust, which shall be held by the Custodian in accordance with this Agreement.
ARTICLE X
FORCE MAJEURE
Neither the Custodian nor the Trust shall be liable for any failure or
delay in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control,
including, without limitation, acts of God; earthquakes; fires; floods; wars;
civil or military disturbances; sabotage; strikes; epidemics; riots; power
failures; computer failure and any such circumstances beyond its reasonable
control as may cause interruption, loss or malfunction of utility,
transportation, computer (hardware or software) or telephone communication
service; accidents; labor disputes; acts of civil or military authority;
governmental actions; or inability to obtain labor, material, equipment or
transportation; provided, however, that the Custodian, in the event of a failure
or delay, shall use its best efforts to ameliorate the effects of any such
failure or delay.
ARTICLE XI
MISCELLANEOUS
A. Designation of Authorized Persons. Appendix A sets forth the names
and the signatures of all Authorized Persons as of this date, as certified by
the Secretary of the Trust. The Trust agrees to furnish to the Custodian a new
Appendix A in form similar to the attached Appendix A, if any present Authorized
Person ceases to be an Authorized Person or if any other or additional
Authorized Persons are elected or appointed. Until such new Appendix A shall be
received, the Custodian shall be fully protected in acting under the provisions
of this Agreement upon Oral Instructions or signatures of the then current
Authorized Persons as set forth in the last delivered Appendix A.
B. Limitation of Personal Liability. No recourse under any obligation
of this Agreement or for any claim based thereon shall be had against any
organizer, shareholder, officer, trustee, past, present or future as such, of
the Trust or of any predecessor or successor, either directly or through the
Trust or any such predecessor or successor, whether by virtue of any
constitution, statute or rule of law or equity, or by the enforcement of any
assessment or penalty or otherwise; it being expressly agreed and understood
that this Agreement and the obligations thereunder are enforceable solely
against the Trust, and that no such personal liability whatever shall attach to,
or is or shall be incurred by, the organizers, shareholders, officers, or
trustees of the Trust or of any predecessor or successor, or any of them as
such. To the extent that any such liability exists, it is hereby expressly
waived and released by the Custodian as a condition of, and as a consideration
for, the execution of this Agreement.
C. Authorization By Board. The obligations set forth in this Agreement
as having been made by the Trust have been made by the Board of Trustees, acting
as such Trustees for and on behalf of the Trust, pursuant to the authority
vested in them under the laws of the Commonwealth of Massachusetts, the
Declaration of Trust and the By-Laws of the Trust. This Agreement has been
executed by Officers of the Trust as officers, and not individually, and the
obligations contained herein are not binding upon any of the Trustees, Officers,
agents or holders of shares, personally, but bind only the Trust.
D. Custodian's Consent to Use of Its Name. The Trust shall review with
the Custodian all provisions of the Prospectus and any other documents
(including advertising material) specifically mentioning the Custodian (other
than merely by name and address) and shall obtain the Custodian's consent prior
to the publication and/or dissemination or distribution thereof.
E. Notices to Custodian. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the Custodian, shall be
sufficiently given if addressed to the Custodian and mailed or delivered to it
at its offices at Firstar Bank Center, 425 Walnut Street, M. L. 6118,
Cincinnati, Ohio 45202, attention Mutual Fund Custody Department, or at such
other place as the Custodian may from time to time designate in writing.
F. Notices to Trust. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the Trust shall be
sufficiently given when delivered to the Trust or on the second Business Day
following the time such notice is deposited in the U.S. mail postage prepaid and
addressed to the Trust at its office at 9802 Nicholas, Suite 250, Omaha,
Nebraska 68114 or at such other place as the Trust may from time to time
designate in writing.
G. Amendments In Writing. This Agreement, with the exception of the
Appendices, may not be amended or modified in any manner except by a written
agreement executed by both parties with the same formality as this Agreement,
and authorized and approved by a resolution of the Board of Trustees of the
Trust.
H. Successors and Assigns. This Agreement shall extend to and shall be
binding upon the parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by the Trust or
by the Custodian, and no attempted assignment by the Trust or the Custodian
shall be effective without the written consent of the other party hereto.
I. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Ohio.
J. Jurisdiction. Any legal action, suit or proceeding to be instituted
by either party with respect to this Agreement shall be brought by such party
exclusively in the courts of the State of Ohio or in the courts of the United
States for the Southern District of Ohio, and each party, by its execution of
this Agreement, irrevocably (i) submits to such jurisdiction and (ii) consents
to the service of any process or pleadings by first class U.S. mail, postage
prepaid and return receipt requested, or by any other means from time to time
authorized by the laws of such jurisdiction.
K. 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.
L. Headings. The headings of paragraphs in this Agreement are for
convenience of reference only and shall not affect the meaning or construction
of any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective Officers, thereunto duly authorized as of the
day and year first above written.
ATTEST: TRUST: 10K SMARTTRUST FUND
_______/s/_________ _______/s/___________________
Monta B. Henry By: J. Paul Hamilton
President_
ATTEST: CUSTODIAN: Firstar Bank, N.A.
_____/s/_____________ _____/s/__________________
Marty Hammond By: Marsha Croxton
Senior Vice President
<PAGE>
APPENDIX A
Authorized Persons Specimen Signatures
President: J. Paul Hamilton __/s/_________________
Vice President: Carole B. Kerby __/s/_________________
The two (2) signatures written above are the signatures of the persons holding
the offices indicated.
Dated: October 27, 1999 ________/s/_____________
J. Paul Hamilton
President
Monument Investments, Inc.
<PAGE>
APPENDIX B
SERIES OF THE TRUST
<PAGE>
APPENDIX C
AGENTS OF THE CUSTODIAN
The following agents are employed currently by Firstar Bank, N.A. for
securities processing and control
The Depository Trust Company (New York)
7 Hanover Square
New York, NY 10004
The Federal Reserve Bank
Cincinnati and Cleveland Branches
Bank of New York
1 Wall Street
New York, NY 10286
(For Foreign Securities and certain non-DTC eligible Securities)
<PAGE>
APPENDIX D
STANDARDS OF SERVICE GUIDE
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to all references to our
firm included in or made a part of this Post-Effective Amendment No. 1 to 10k
SmartTrust's Registration Statement on Form N-1A (file No. 333-82297), including
the reference to our firm under the heading "ACCOUNTANTS" in the Statement of
Additional Information.
_/ s /___________________________
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
November 10, 1999
November 8, 1999
AmeriPrime Advisors Trust
1793 Kingswood Drive
Southlake, Texas 76092
Gentlemen:
The undersigned hereby purchases 10,000 shares of the 10k SmartTrust
Fund at $10.00 per share, representing a total investment of $100,000 in the
shares of the series of 10k SmartTrust. The undersigned hereby
represents that (i) such purchase is for investment purposes, and (ii) the
undersigned has no present intention of redeeming or selling said shares.
Sincerely,
By: _/s/__________________________
Shirley Blackburn
10K SMARTTRUST FUND
SERVICE AGREEMENT
This Service Agreement (the "Agreement") is between AmeriPrime
Financial Securities, Inc. (the "Distributor") and _____________________ (the
"Service Organization"), and has been adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, (the "Act") with respect to 10k
SmartTrust Fund (the "Fund") a series of 10k SmartTrust (the "Trust") as an
agreement related to a 12b-1 distribution plan adopted pursuant to said Rule
(the "Plan"). This Agreement has been approved both by a majority of the
Trustees of the Trust, and by a majority of the Trustees who are not interested
persons of the Trust or the Fund and who have no direct or indirect financial
interest in the operation of the Plan or this Agreement (the "Disinterested
Trustees"), cast in person at a meeting called for the purpose of voting on this
Agreement. The Plan authorizes the Distributor to pay expenses which may be
deemed to be related the distribution of the Fund. Accordingly, in consideration
of the mutual covenants contained herein, the parties hereby agree as follows:
1. The Distributor hereby appoints the Service Organization (a) to
undertake from time to time distribution services to promote the sale of
shares of the Fund and (b) to render or cause to be rendered administrative
support services to the Fund and its shareholders, which distribution and
administrative support services may include, without limitation: forwarding
sales literature, aggregating and processing purchase and redemption
requests and placing net purchase and redemption orders with the Fund's
transfer agent; answering client inquiries about the Fund and referring to
the Fund those inquiries which the Service Organization is unable to
answer; assisting clients in changing dividend options, account
designations and addresses; performing sub-accounting; establishing,
maintaining and closing shareholder accounts and records; investing client
account cash balances automatically in shares of the Fund; providing
periodic statements showing a client's account balance, integrating such
statements with those of other transactions and balances in the client's
other accounts serviced by the Service Organization and performing such
other recordkeeping as is necessary for the Fund's transfer agent to comply
with the recordkeeping requirements of the Act and the regulations
promulgated thereunder; arranging for bank wires; and providing such other
information and services as the Fund reasonably may request, to the extent
the Service Organization is permitted by applicable statute, rule or
regulation to provide these services.
2. The Service Organization shall provide such office space and
equipment, telephone facilities and personnel (which may be all or any part
of the space, equipment and facilities currently used in the Service
Organization's business, or all or any personnel employed by the Service
Organization) as is necessary or beneficial for providing information and
services to shareholders of the Fund, and to assist the Fund in servicing
accounts of clients. Shares of the Fund purchased by Service Organization
on behalf of its clients may be registered in its name or the name of its
nominee. The client will be the beneficial owner of the shares of the Fund
purchased and held by Service Organization in accordance with the client's
instructions and the client may exercise all applicable rights of a holder
of such Shares. The Service Organization shall transmit promptly to clients
all prospectuses, proxy statements and other materials and communications
sent to it for transmittal to clients by or on behalf of the Trust, the
Fund or the Fund's investment advisor, administrator, underwriter,
custodian or transfer or dividend disbursing agent. Service Organization
agrees to transfer record ownership of a client's Fund shares to the client
promptly upon the request of a client. In addition, record ownership will
be promptly transferred to the client in the event that the person or
entity ceases to be Service Organization's client.
3. Distributor shall pay you a monthly fee based on the average net
asset value during any month of Fund shares which are attributable to
clients of your firm, at the rate set forth on Schedule A attached hereto
and made a part hereof. The Service Organization shall notify the Trust if
the Service Organization directly charges a fee to Fund shareholders for
its services as described in this Agreement.
4. The Service Organization agrees to comply with the requirements of
all laws applicable to it, including but not limited to, ERISA, federal and
state securities laws and the rules and regulations promulgated thereunder.
The Service Organization agrees to provide services hereunder in compliance
with the then current Prospectus and Statement of Additional Information of
the Fund and the operating procedures and policies established by the Fund,
including, but not limited to, required minimum investment and minimum
account size.
5. No person is authorized to make any representations concerning the
Fund or its shares except those contained in the current Prospectus or
Statement of Additional Information of the Fund and any such information as
may be officially designated as information supplemental to the Prospectus.
Additional copies of any Prospectus and any printed information officially
designated as supplemental to such Prospectus will be supplied by the Trust
to the Service Organization in reasonable quantities on request. Service
Organization is specifically authorized to distribute the Fund's Prospectus
and sales material received from the Fund or the Fund's Distributor. No
person is authorized to distribute any other sales material relating to the
Fund without the prior approval of the Fund.
6. The Service Organization agrees that it will provide distribution
and administrative support services only to those persons who reside in any
jurisdiction in which the Fund's shares are registered for sale and in
which the Service Organization may lawfully provide such services. Upon
request, the Fund shall provide the Service Organization with a list of the
states in which the Fund's shares are registered for sale and shall keep
such list updated. Distributor and the Trust assume no responsibility or
obligation as to the right of Service Organization to sell Fund shares in
any jurisdiction.
7. Service Organization represents that it is and will be at all times
relevant hereto a member in good standing of the National Association of
Securities Dealers, Inc., and further represents and warrants that it is
and will be at all times relevant hereto a broker-dealer properly
registered and qualified under all applicable federal, state and local laws
to engage in the business and transactions described in this Agreement.
Service Organization agrees to comply with all requirements applicable to
it of all applicable laws, including federal and state securities laws, the
Rules and Regulations of the Securities and Exchange Commission and the
Rules of Fair Practice of the National Association of Securities Dealers,
Inc. Service Organization agrees that it will not offer Fund shares to
persons in any jurisdiction in which the shares are not registered for sale
and in which Service Organization may not lawfully make such offer due to
the fact that it has not registered under, or is not exempt from, the
applicable registration or licensing requirements of such jurisdiction.
Service Organization further agrees that it will maintain all records
required by applicable law relating to transactions involving purchases or
redemptions of the shares by it or its clients. In all sales of Fund shares
to the public, Service Organization shall act as agent on behalf of the
Fund, and in no transaction, shall it act as dealer for its own account.
8. The Service Organization agrees not to solicit or cause to be
solicited directly, or indirectly at any time in the future, any proxies
from the shareholders of the Fund in opposition to proxies solicited by
management of the Trust, unless a court of competent jurisdiction shall
have determined that the conduct of a majority of the Board of Trustees of
the Trust constitutes willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties. This paragraph 8 will survive the
expiration or termination of this Agreement.
9. The Service Organization shall prepare such quarterly reports for
the Trust as shall reasonably be requested by the Trust. In addition, the
Service Organization will furnish the Trust or its designees with such
information as the Trust or they may reasonably request (including, without
limitation, periodic certifications confirming the provision to clients of
the services described herein), and will otherwise cooperate with the Trust
and its designees (including, without limitation, any auditors designated
by the Trust), in connection with the preparation of reports to the Trust's
Board of Trustees concerning this Agreement and the monies paid or payable
by the Distributor pursuant hereto, as well as any other reports or filings
that may be required by law.
10. The Service Organization acknowledges that the Distributor may
enter into similar agreements with others without the consent of the
Service Organization.
11. The Service Organization understands and acknowledges that the
Trust has the right, at its discretion and without notice, to suspend the
sale of shares or withdraw the sale of shares of the Fund.
12. This Agreement shall continue in effect for one year from the date
of its execution, and thereafter for successive periods of one year if the
form of this Agreement is approved as to the Fund at least annually by the
Trustees of the Trust, including a majority of the Disinterested Trustees,
cast in person at a meeting for that purpose. In the event this Agreement,
or any part thereof, is found invalid or is ordered terminated by any
regulatory or judicial authority, or the Service Organization shall fail to
perform the shareholder servicing and administrative functions contemplated
hereby, this Agreement is terminable effective upon receipt of notice
thereof by the Service Organization.
13. Notwithstanding paragraph 12, this Agreement may be terminated as
follows:
(a) at any time, without the payment of any penalty, by the
vote of a majority of the Disinterested Trustees of the Fund or by a vote
of a majority of the outstanding voting securities of the Fund on not more
than sixty (60) days' written notice to the parties to this Agreement;
(b) automatically in the event of the Agreement's assignment
as defined in the Act; or
(c) by any party to the Agreement without cause by giving the
other parties at least thirty (30) days' written notice of its intention to
terminate.
14. Any termination of this Agreement shall not affect the provisions
of paragraph 17, which shall survive the expiration or termination of this
Agreement and continue to be enforceable thereafter.
15. This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors.
16. This Agreement is not intended to, and shall not, create any rights
against any party hereto by any third person solely on account of this
Agreement.
17. The Service Organization shall provide such security as is
necessary to prevent unauthorized use of any computer hardware or software
provided to it by or on behalf of the Trust, if any. The Service
Organization agrees to release, indemnify and hold harmless the Fund, the
Trust, the Trust's transfer agent, custodian, investment advisor,
administrator and underwriter, and their respective principals, directors,
trustees, officers, employees and agents from any and all direct or
indirect liabilities or losses resulting from requests, directions, actions
or inactions of or by the Service Organization, its officers, employees or
agents regarding the purchase, redemption, transfer or registration of
shares for accounts of the Service Organization, its clients and other
shareholders. Such indemnity shall also cover any losses and liabilities
relating to the lawfulness of Service Organization's participation in this
Agreement, or resulting from the Service Organization's performance of or
failure to perform its obligations or its breach of any representations or
warranties under this Agreement. If any claims are asserted which may give
rise to indemnification hereunder, the indemnified parties shall have the
right to engage in their own defense, including the selection and
engagement of legal counsel of their choosing and all costs of such defense
shall be borne by Service Organization. Principals of the Service
Organization will be available to consult from time to time with the Trust
concerning the administration and performance of the services contemplated
by this Agreement.
18. This Agreement may be amended only by an agreement in writing
signed by the parties.
19. To the extent this Agreement may be deemed to create obligations on
the part of the Trust, such obligations shall not be binding upon any of
the Trustees, shareholders, nominees, officers, agents or employees of the
Trust, personally, but shall bind only the property of the Trust, as
provided in the Trust's Agreement and Declaration of Trust. The
authorization of this Agreement by the Trustees shall not be deemed to have
been made by any of them individually or to impose any liability on any of
them personally.
20. If any provision of this Agreement, or any covenant, obligation or
agreement contained herein, is determined by a court to be invalid or
unenforceable, the parties agree that (a) such determination shall not
affect any other provision, covenant, obligation or agreement contained
herein, each of which shall be construed and enforced to the full extent
permitted by law, and (b) such invalid or unenforceable portion shall be
deemed to be modified to the extent necessary to permit its enforcement to
the maximum extent permitted by applicable law.
21. This Agreement shall be construed in accordance with the laws of
the State of Texas.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed for the parties by
their duly authorized officers, on this ______ day of
______________________, 2000.
___________________________________ AMERIPRIME FINANCIAL SECURITIES, INC.
Service Organization Distributor
By: ________________________________ By: ______________________________________
Authorized Signature Authorized Signature
<PAGE>
SCHEDULE A
FUND FEE
10k SmartTrust Fund 1.0%
<PAGE>
10K SMARTTRUST.
10K SMARTTRUST FUND
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN, AS AMENDED
ON NOVEMBER 16, 1999
The following Distribution and Shareholder Servicing Plan, as amended
(the "Plan") has been adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940, as amended (the "Act"), by 10k SmartTrust (the "Trust"), an
Ohio Business Trust, on behalf of the 10k SmartTrust Fund (the "Fund"), a series
of the Trust. The Plan has been approved by a majority of the Trust's Board of
Trustees, including a majority of the Trustees who are not interested persons of
the Trust and who have no direct or indirect financial interest in the operation
of the Plan or in any Rule 12b-1 related agreement (as defined below) (the
"Disinterested Trustees"), cast in person at a meeting called for the purpose of
voting on such plan.
In considering whether the Trust should amend the Plan, the Board of
Trustees evaluated such information as it deemed necessary and determined that
there was a reasonable likelihood that the amendment of the Plan would benefit
the Fund and its shareholders.
The provisions of the Plan are as follows:
1. PAYMENTS BY THE FUND TO PROMOTE THE SALE OF FUND SHARES
(a) The Trust, on behalf of the Fund, will pay AmeriPrime
Financial Securities, Inc. (the "Distributor"), as principal
underwriter of the Fund's shares, a distribution and shareholder
servicing fee which will not exceed 1.00% of the average daily net
assets of the Fund in connection with the promotion and distribution of
Fund shares and the provision of personal services to shareholders. The
Distributor may pay all or a portion of these fees to any registered
securities dealer, financial institution or any other person (the
"Recipient") who renders assistance in distributing or promoting the
sale of shares, or who provides certain shareholder services, pursuant
to a written agreement (the "Rule 12b-1 Related Agreement"), a form of
which is attached hereto as Appendix A. Payment of these fees shall be
made promptly following the close of the quarter for which the fee is
payable, upon the Distributor forwarding to the Trust's Board of
Trustees the written report required by Section 2 of this Plan;
provided that the aggregate payments under the Plan to the Distributor
and all Recipients shall not exceed 0.25% (on an annualized basis) of
the average daily net assets for that quarter; and provided further
that no fees shall be paid in excess of the distribution and
shareholder servicing expenses verified in a written report and
submitted by the Distributor to the Trust's Board of Trustees as
required under Section 2 of this Plan.
(b) No Rule 12b-1 Related Agreement shall be entered into, and
no payments shall be made pursuant to any Rule 12b-1 Related Agreement,
unless such Rule 12b-1 Related Agreement is in writing and has first
been delivered to and approved by a vote of a majority of the Trust's
Board of Trustees, and of a majority of the Disinterested Trustees,
cast in person at a meeting called for the purpose of voting on such
Rule 12b-1 Related Agreement. The form of Rule 12b-1 Related Agreement
attached hereto as Appendix A has been approved by the Trust's Board of
Trustees as specified above.
(c) Any Rule 12b-1 Related Agreement shall describe the
services to be performed by the Recipient and shall specify the amount
of, or the method for determining, the compensation to the Recipient.
(d) No Rule 12b-1 Related Agreement may be entered into unless
it provides (i) that it may be terminated at any time, without the
payment of any penalty, by vote of a majority of the Fund's
shareholders, or by vote of a majority of the Disinterested Trustees,
on not more than 60 days' written notice to the other party to the Rule
12b-1 Related Agreement, and (ii) that it shall automatically terminate
in the event of its assignment.
(e) The Rule 12b-1 Related Agreement shall continue in effect
for a period of more than one year from the date of its execution only
if such continuance is specifically approved at least annually by a
vote of a majority of the Board of Trustees, and of the Disinterested
Trustees, cast in person at a meeting called for the purpose of voting
on such Rule 12b-1 Related Agreement.
2. QUARTERLY REPORTS
The Distributor shall provide to the Board of Trustees, and
the Trustees shall review, at least quarterly, a written report of all
amounts expended pursuant to the Plan. This report shall include the
identity of the Recipient of each payment and the purpose for which the
amounts were expended and such other information as the Board of
Trustees may reasonably request.
3. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective immediately upon approval by
the vote of a majority of the Board of Trustees, and of the
Disinterested Trustees, cast in person at a meeting called for the
purpose of voting on the approval of the Plan. The Plan shall continue
in effect for a period of one year from its effective date unless
terminated pursuant to its terms. Thereafter, the Plan shall continue
from year to year, provided that such continuance is approved at least
annually by a vote of a majority of the Board of Trustees, and of the
Disinterested Trustees, cast in person at a meeting called for the
purpose of voting on such continuance. The Plan may be terminated at
any time, without the payment of any penalty, by a majority vote of the
Fund's shareholders, or by vote of a majority of the Disinterested
Trustees.
4. SELECTION OF DISINTERESTED TRUSTEES
During the period in which the Plan is effective, the
selection and nomination of those Trustees who are Disinterested
Trustees of the Trust shall be committed to the discretion of the
Disinterested Trustees.
5. AMENDMENTS
All material amendments of the Plan shall be in writing and
shall be approved by a vote of a majority of the Board of Trustees, and
of the Disinterested Trustees, cast in person at a meeting called for
the purpose of voting on such amendment. In addition, the Plan may not
be amended to increase materially the amount to be expended by the
Trust on behalf of the Fund without the approval by a majority vote of
the Fund's shareholders.
6. RECORDKEEPING
The Trust shall preserve copies of the Plan, any Rule 12b-1
Related Agreement and all reports made pursuant to Section 2 for a
period of not less than six years from the date of this Plan, the first
two years in an easily accessible place.
<PAGE>
PLAN PURSUANT TO RULE 12B-1
NOVEMBER 16, 1999
RECITALS
1. 10k SmartTrust, an unincorporated business trust organized under the
laws of the State of Ohio (the "Trust") is engaged in business as an open-end
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act").
2. The Trust operates as a "series company" within the meaning of Rule
18f-2 under the Act and is authorized to issue shares of beneficial interest in
various series or sub-trusts (collectively the "Funds").
3. Funds of the Trust may utilize Fund assets to pay for, or reimburse
payment for, sales or promotional services or activities that have been or will
be provided in connection with distribution of shares of the Funds if such
payments are made pursuant to a Plan adopted and continued in accordance with
Rule 12b-1 under the Act.
4. The Trustees as a whole, and the Trustees who are not interested
persons of the Trust (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan and any agreements relating to
it (the "Qualified Trustees"), having determined, in the exercise of reasonable
business judgment and in light of their fiduciary duties under state law and
under Section 36(a) and (b) of the Act, that there is a reasonable likelihood
that this Plan will benefit the Fund and its shareholders, have approved the
Plan by votes cast in person at a meeting called for the purpose of voting on
this Plan and agreements related thereto.
5. Shareholder approval of the Plan was initially obtained in
connection with action taken to prepare and file the initial registration
statement on Form N-1A.
PLAN PROVISIONS
SECTION 1. EXPENDITURES
(a) PURPOSES. Fund assets may be utilized to pay for or reimburse
expenditures in connection with sales and promotional services related to the
distribution of Fund shares, including personal services provided to prospective
and existing Fund shareholders, which include the costs of: printing and
distribution of prospectuses and promotional materials; making slides and charts
for presentations; assisting shareholders and prospective investors in
understanding and dealing with the Fund; and travel and out-of-pocket expenses
(e.g. copy and long distance telephone charges) related thereto.
(b) AMOUNTS. Fund assets may be utilized to pay for or reimburse
expenditures in connection with sales and promotional services related to the
distribution of Fund shares, including personal services provided to prospective
and existing Fund shareholders, provided the total amount expended pursuant to
this Plan does not exceed 0.25% of net assets on an annual basis.
SECTION 2. TERM AND TERMINATION
(a) INITIAL TERM. This Plan shall become effective upon effective
registration of the Fund and shall continue in effect for a period of one year
thereafter unless terminated or otherwise continued or discontinued as provided
in this Plan.
(b) CONTINUATION OF THE PLAN. The Plan and any related agreements shall
continue in effect for periods of one year thereafter for so long as such
continuance is specifically approved at least annually by votes of a majority of
both (a) the Trustees of the Trust and (b) the Qualified Trustees, cast in
person at a meeting called for the purpose of voting on this Plan and such
related agreements.
(c) TERMINATION OF THE PLAN. This Plan may be terminated at any time by
vote of a majority of the Qualified Trustees, or by vote of a majority of the
outstanding voting securities of the Fund.
SECTION 3. AMENDMENTS
This Plan may not be amended to increase materially the amount of
distribution expenditures provided for in Section 1 hereof unless such amendment
is approved by a vote of the majority of the outstanding voting securities of
the Fund, and no material amendment to the Plan shall be made unless approved in
the manner provided for annual renewal in Section 2(b) hereof.
SECTION 4. INDEPENDENT TRUSTEES
While this Plan is in effect with respect to the Fund, the selection
and nomination of Trustees who are not interested persons of the Trust (as
defined in the Act) shall be committed to the discretion of the Trustees who are
not interested persons.
SECTION 5. QUARTERLY REPORTS
The Treasurer of the Trust shall provide to the Trustees and the
Trustees shall review, at least quarterly, a written report of the amounts
accrued and the amounts expended under this Plan for distribution, along with
the purposes for which such expenditures were made.
SECTION 6. RECORDKEEPING
The Trust shall preserve copies of this Plan and any related agreements
and all reports made pursuant to Section 5 hereof, for a period of not less than
six years from the date of this Plan, the agreements or such report, as the case
may be, the first two years in an easily accessible place.
SECTION 7. AGREEMENTS RELATED TO THIS PLAN
Agreements with persons providing distribution services to be paid for
or reimbursed under this Plan shall provide that:
(a) the agreement will continue in effect for a period of one year and
will continue thereafter only if specifically approved by vote of a majority of
the Trustees of the Trust;
(b) the agreement may be terminated at any time, without payment of any
penalty, by vote of a majority of (i) the Qualified Trustees or (ii) the
outstanding voting securities of the Fund, on not more than sixty (60) days
written notice to any other party to the agreement;
(c) the agreement will terminate automatically in the event of an
assignment;
(d) in the event the agreement is terminated or otherwise discontinued,
no further payments or reimbursements will be made by the Fund after the
effective date of such action; and
(e) payments and/or reimbursements may only be made for the specific
sales or promotional services or activities identified in Section 1 of this Plan
and must be made on or before the last day of the one year period commencing on
the last day of the calendar quarter during which the service or activity was
performed.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0001082216
<NAME> 10k SmartTrust
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<NUMBER> 1
<NAME> 10k SmartTrust Fund
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> Other
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> NOV-10-1999
<PERIOD-END> NOV-10-1999
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 100000
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 100000
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 100000
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<ACCUMULATED-NET-GAINS> 0
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<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> 10000
<NUMBER-OF-SHARES-REDEEMED> 0
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<ACCUMULATED-NII-PRIOR> 0
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<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0
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