As filed with the Securities and Exchange Commission on May 11, 1999
1933 Act Registration No. 33-
1940 Act Registration No. 811-
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /x/
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /x/
(Check appropriate box or boxes)
(Exact name of registrant as specified in Charter)
(Address of Principal Executive Offices)
Registrant's Telephone Number,
including Area Code:
James B. Exline
Wabash Valley Capital Management, Inc.
2901 Ohio Blvd, Suite 242
Terre Haute, IN 47803
1-812-242-9113
(Name and Address of Agent for Service)
[same as above]
Approximate date of proposed public offering: As soon as practicable after the
effective date of the Registration Statement
<PAGE>
PROSPECTUS
INSTITUTIONAL DEVELOPMENT FUND
Mutual Shareholder Services
1301 East Ninth Street, 36th Floor
Cleveland, OH 44114
(887) 593-8637
TABLE OF CONTENTS
Fund Basics
Fund Expenses
Management
Shareholder Information
Distributions
Taxes
For More Information
INVESTMENT OBJECTIVE
Maximum current income to the extent
consistent
with stability of principal.
As with all mutual funds, the Securities and Exchange Commission does not
approve, disapprove, or pass upon the accuracy or adequacy of the content of
this prospectus. Any representation to the contrary is a criminal offense.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
<PAGE>
FUND BASICS
Institutional Development Fund
Goals and Principal Strategies.
Goal: The Institutional Development Fund's investment objective is to provide as
high a level of total return as is consistent with capital preservation.
Strategies: The Fund seeks to achieve the objective by investing in a portfolio
of debt securities, including, convertible and nonconvertible debt securities of
domestic companies, including both well-known and established and new and
lesser- known companies, municipal bonds and U.S. Government securities. The
Fund invests at least 80% of its assets at the time of investment in debt
securities. The Fund's adviser staggers the maturities of the securities in the
portfolio to reduce the risk of reinvesting large sums of money during cyclical
lows in the interest rate cycle. This approach allows for the portfolio to pay
higher levels of income during periods of low interest rates. Under normal
circumstances, the average duration for the portfolio is expected to be between
5 and 7 years.
The Fund may invest in bonds, including municipal bonds (taxable and tax-exempt,
and other debt securities), rated Aaa, Aa, A or MIG-1 by Moody's Investors
Service, Inc. ("Moody's"), or AAA, AA, A or SP-1 by Standard & Poor's Ratings
Group ("S&P"), U.S. Government Securities, obligations issued or guaranteed by
national or state bank holding companies, and commercial paper rated Prime-1 by
Moody's or A-1+ or A-1 by S&P.
The adviser selects and holds debt securities that the adviser believes will
maximize total return at a level consistent with capital preservation. The
average maturity of the Fund's portfolio is adjusted based on the Advisor's
assessment of relative yields on debt securities and expectations of future
interest rate patterns. A change in the price of a debt security generally is
inversely related to market interest rates. This means that the value of the
Fund's investments will tend to decrease during periods of rising interest rates
and to increase during periods of falling rates. In general, as the average
maturity of the portfolio increases, so does the potential volatility in share
price. The Fund may hold cash and short-term fixed income securities and may
enter into repurchase agreements for temporary defensive purposes as determined
by the adviser. To the extent the Fund's assets are so invested, the Fund may
not achieve its investment objective.
The Fund may also invest up to 25% (in the aggregate) of its total assets in
lower-rated debt securities that are not rated below BBB or SP-2 by S&P or Baa
or MIG-2 by Moody's to the extent the Adviser views such investments as
consistent with this fund's investment objective. The Fund may enter into
repurchase agreements, terminable within seven days or less, involving U.S.
Treasury securities, with member banks of the Federal Reserve System or primary
dealers in U.S. Government Securities. The Fund may invest up to 15% of its
assets in restricted securities and in instruments having no ready market value,
primarily church bonds. Church bonds are debt securities issued by churches or
religious institutions that are typically used to finance capital projects.
[side bar]
High Quality Ratings are those securities rated Aaa, Aa, A or MIG-1 by Moody's ,
or AAA, AA, A or SP-1 by S&P. Most bonds and commercial paper securities are
rated. [end of side bar]
<PAGE>
Principal Risks
The principal risk of investing in the Fund is that while the Fund seeks
investments that will satisfy the investment objective, the Fund's investments
could decline in value and you could lose money. Concerns about an issuer's
ability to repay its borrowings or to pay interest will adversely affect the
value of the securities. The Fund's adviser seeks to limit this risk generally
by selecting higher-quality debt securities. In addition, the Fund is subject to
risks that affect the bond markets in general, such as general economic
conditions and adverse changes in interest rates. These factors also could
adversely affect your investment.
The Fund is subject to risks that affect the bond markets in general, such as
general economic conditions and adverse changes (generally increases) in
interest rates. During periods of economic expansion, corporate bonds tend to
outperform U.S. Government obligations as their financial ability to repay debt
improves. During economic contractions, U.S. Government obligations tend to
outperform corporate bonds because investors tend to emphasize quality in their
security selection. In managing the fund's assets, the advisor will monitor
economic data to determine future expectations regarding the strength of the
economy, both domestically and globally. During periods of strong economic
growth the advisor may choose to overweight the fund's exposure to corporate
debt. During periods of economic contraction (recession) the adviser may choose
to overweight the fund's exposure to U.S. Government obligations, sacrificing
yield for quality.
The Fund may purchase church bond debt securities. Church bond debt securities
present special risks and they may be considered to be illiquid securities.
These risks include the possibility that the Church may default, the possible
inadequacy or absence of collateral, the absence of independent ratings of the
bonds and the absence of a recognized market for reselling the bonds. These
bonds are sold through a limited number of brokers.
Side Bar
PORTFOLIO MATURITY
The maturity date is the date that the principal amount of the notes, drafts, or
other debt instruments are due and payable. A money market fund's portfolio is
appropriately weighted and adjusted to ensure that the portfolio always has an
average maturity of 5 to 7 years.
<PAGE>
FUND EXPENSES
As an investor, you pay certain fees and expenses in connection with the
funds, which are described in the table below. Annual fund operating
expenses are paid out of the fund assets. Shareholder transaction fees are
paid from your account.
Shareholder Fees (expenses that are deducted from your account) -
Sales Commissions to Purchase NONE
Shares
Commissions to Reinvest NONE
Dividends
Redemption Fees 1.00%1
Annual Fund Operating Expenses (expenses that are deducted from Fund
assets)
Investment Advisory Fee .35%
12b-1 Fees .50%
Other Expenses .50.%
Total Annual Fund Operating 1.35%
Expenses
Example: This example is intended to help you compare the cost of
investment in the Fund with the cost of investing in other mutual
funds.
This 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, based on
these assumptions your costs would be:
1 year 3 years
$ $
Other expenses are based on estimated amounts for the current year.
Fees:
Management fee: fee paid to the investment adviser for managing the fund's
portfolio.
Distribution fee: fee paid to the fund's distributor for maintaining
shareholder accounts, providing information for prospective investors and
account maintenance.
Other expenses: fees paid by the Fund for miscellaneous items such as
custody, administration and registration fees.
1 The redemption fee of 1% is imposed for any investor withdrawal during the
first year of the investment. This redemption charge is not a sales charge.
<PAGE>
MANAGEMENT
HOW THE FUND IS MANAGED
The investment adviser for the Fund is the Wabash Valley Capital Management,
Inc., (WVCM) located at 2901 Ohio Boulevard, Suite 242, Terre Haute, Indiana,
47803. WVCM is an Indiana based S-corporation that provides customized
investment management for high net worth individuals and institutions. The fund
pays the advisor a fee of equal to an average annual rate of .35% of the value
of the average daily net assets. The portfolio managers for the fund are Donald
B. Edwards, CFA, MBA and Christopher S. Doll, MBA. Prior to founding WVCM in
1997, Mr. Edwards and Mr. Doll managed individual and institutional assets for
Old National Trust Company.
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 can't guarantee that this won't be a
problem, the Fund's service providers have been working on adapting their
computer systems. They expect that their systems, and the systems of their
service providers, will be ready for the new millennium.
In addition, your investment in the Fund could be adversely affected if a
company that the Fund has invested in has, or is perceived to have, a Year 2000
problem.
<PAGE>
SHAREHOLDER INFORMATION
Purchasing Shares
You may purchase shares of the Fund with an initial investment of $1,000. and
additional investments of as little as $50.00. You can also choose to
participate in the automatic investment program with automatic purchases in an
amount as little as $25.00. Your price for fund shares is the fund's net asset
value per share ("NAV") next calculated after receipt by the Fund of your
investment in proper form. The NAV is calculated each day that the New York
Stock Exchange (NYSE) is open and is based on the market price of the funds'
investments.
Opening an Account
Send the application and a check made payable to the fund to Institutional
Development Fund
c/o Mutual Shareholder Services
1301 East Ninth Street, Suite 1005
Cleveland, OH 44114
.
An account may also be opened by having your investment wired to the fund. You
must first call the Transfer Agent at 877-593-8637 to set up your account and
receive an account number. Then, you should provide your bank with the following
information:
To come
ABA #0420-0001-3
Attn: Institutional Development Fund
D.D.A. #488920927
Account Name
For the Account #
Additional Investments
You may purchase additional shares at any time by mail or wire. Each additional
purchase should reference your name, account number and the name of the fund.
Shareholders must call the transfer agent prior to wiring any funds.
<PAGE>
[sidebar]
Net Asset Value- Net Asset Value per share (or "NAV") is the price per share of
a mutual fund. It is determined by taking the total value of the fund (assets
liabilities) and dividing the difference by the total number of fund shares
outstanding. The NAV is determined at the close of the New York Stock Exchange
is open for trading.
For purposes of computing NAV, the Fund is valued at the current market value
determined on the basis of market quotations or, if such quotations are not
readily available, such other methods as the Trustees believe in good faith
would accurately reflect the fair value.
Selling shares
You may sell all or some of your shares on any day that the Fund is open
for business. If you completed the Optional Telephone Redemption and
Exchange section of the fund's application you may call 1-877-593-8637 .
Otherwise you may redeem by sending your request by mail to the Fund c/o
Mutual Shareholder Services 1301 East Ninth Street, Suite 1005 Cleveland,
OH 44114
Your shares will be sold at the next NAV calculated after your order is accepted
by the Funds' transfer agent. There is a 1% redemption charge for any withdrawal
within the first year of investment. You may receive your payment by check or
federal wire transfer. The proceeds may be more or less than the purchase price
of your shares. Payments sent out by federal wire transfer are subject to a
transaction processing charge of $20.00.
Other Information
The Fund has adopted a 12b-1 Plan pursuant to the rules of the Investment
Company Act of 1940. This plan allows the Fund to pay distribution and service
fees for the sale and servicing of the Fund's shares in an amount equal to .50%
of the average daily net assets of the Fund. Since these fees are paid out of
the Fund's assets on an on-going basis, over time theses fees will increase the
cost of your investment. These fees may cost you more than paying other types of
sales charges.
DISTRIBUTIONS
The Fund pays dividends to shareholders from net investment income every month.
Although the Fund is not likely to realize capital gains because of the types of
securities purchased, any capital gains realized will be distributed to
shareholders once a year. For purposes of this calculation, net investment
income consists of all accrued interest income on Fund assets less the Fund's
expenses applicable to that dividend period.
<PAGE>
For your convenience, dividends and capital gains are automatically reinvested
in the Fund. If you ask us to pay the distributions in cash, we will send you a
check instead of purchasing more shares of the Fund. You will receive
confirmation that shows the payment amount and a summary of all transactions.
Checks are normally mailed within five business days of the payment date.
TAXES
As with any investment, you should consider how your investment in the Fund
would be taxed. If your account is not a tax-deferred retirement account, you
should be aware of these tax consequences. For federal tax purposes, the Fund's
income and short-term capital gain distributions are taxed as dividends;
long-term capital gain distributions are taxed as long-term capital gains. Your
distributions may also be subject to state income tax. The distributions are
taxable when they are paid, whether you take them in cash or participate in the
dividend reinvestment program. Each January, the fund mails you a form
indicating the federal tax status of your dividend and capital gain
distributions.
Please see the statement of additional information and your own tax adviser for
further information.
The Taxpayer Relief Act of 1997 made certain changes to capital gains tax rates.
Under the law, taxpayers in all brackets will have an advantage when it comes to
capital gains tax rates. The Fund will provide information relating to the
portion of any fund distribution that is eligible for the reduced capital gains
tax rate. APPENDIX A
SECURITIES RATINGS
The following is a description of the ratings given by S&P and Moody's
to U.S. municipal and government securities in which the Funds are permitted to
invest in accordance with Rule 2a-7 of the Act.
Rating of Municipal Obligations
S&P:
The two highest ratings of S&P for municipal bonds are AAA (Prime) and
AA (High-grade). Bonds rated AAA have the highest rating assigned by S&P to a
municipal obligation. Capacity to pay interest and repay principal is extremely
strong. Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in a small degree. The
rating may be modified by the addition of a plus (+) or a minus (-) to show
relative standing within the category.
S&P top ratings for municipal notes are SP-1 and SP-2. The
designation SP-1 indicates a very strong capacity to pay principal and interest.
A "+" is added for those issues determined to possess overwhelming safety
characteristics. An "SP-2" designation indicates a satisfactory capacity to pay
principal and interest.
<PAGE>
Moody's:
The two highest ratings of Moody's for municipal bonds are Aaa and Aa.
Bonds rated Aaa are judged by Moody's to be of the best quality. Bonds rated Aa
are judged to be of high quality by all standards. Together with the Aaa group,
they comprise what are generally known as high-grade bonds. Moody's states that
Aa bonds are rated lower than the best bonds because margins of protection or
other elements make long-term risks appear somewhat larger than for Aaa
municipal bonds. Moody's rates a bond in the Aa category as Aa1 if Moody's
believes the bond possesses strong attributes within the category.
Moody's ratings for municipal notes and other short-term loans are
designated Moody's Investment Grade (MIG) and Variable Rate Demand Obligation
Moody's Investment Grade (VMIG). This distinction is in recognition of the
differences between short-term and long-term credit risk. Loans bearing the
designation MIG1/VMIG1 are of the best quality, enjoying strong protection by
establishing cash flows of funds for their servicing or by established and
broad-based access to the market for refinancing, or both. Loans bearing the
designation MIG2/VMIG2 are of high quality with margins of protection ample
although not as large as in the preceding group.
Commercial Paper Ratings
S&P:
Commercial paper rated A-1 or better by S&P has the following
characteristics: liquidity ratios are adequate to meet cash requirements;
long-term senior debt is rated "A" or better, although in some cases "BBB"
credits may be allowed; the issuer has access to at least two additional
channels of borrowing; and basic earnings and cash flow have an upward trend
with allowance made for unusual circumstances. Typically, the issuer's industry
is well established and the issuer has a strong position within the industry.
The reliability and quality of management are unquestioned.
Moody's:
The rating Prime-1 is the highest commercial paper rating assigned by
Moody's. Among the factors considered by Moody's in assigning ratings are the
following: (1) evaluation of the management of the issuer; (2) economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; (3) evaluation of
the issuer's products in relation to competition and customer acceptance; (4)
liquidity; (5) amount and quality of long-term debt; (6) trend earnings over a
period of ten years; (7) financial strength of a parent company and the
relationship which exists with the issuer; and (8) recognition by the management
of obligations which may be present or may arise as a result of public interest
questions and preparations to meet such obligations.
<PAGE>
Ratings of Corporate Bonds
S& P
AAA--Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA--Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A--Bonds rated A have a strong capacity to pay interest and repay principal
although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in higher
rated categories.
BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than for bonds in
higher rated categories.
BB--Bonds rated BB have less near-term vulnerability to default than other
speculative grade debt. However, they face major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
B--Bonds rated B have a greater vulnerability to default but presently have
the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.
CCC--Bonds rated CCC have a current identifiable vulnerability to default
and are dependent upon favorable business, financial and economic
conditions to meet timely payments of interest and repayment of principal.
In the event of adverse business, financial or economic conditions, they
are not likely to have the capacity to pay interest and repay principal.
CC--The rating CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC rating.
C--The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating.
D--Bonds rated D are in default, and payment of interest and/or repayment
of principal is in arrears.
S&P's letter ratings may be modified by the addition of a plus (+) or a
minus (-) sign designation, which is used to show relative standing within
the major rating categories, except in the AAA (Prime Grade) category.
<PAGE>
Moody's
Aaa--Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and generally are
referred to as "gilt edge." Interest payments are protected by a large or
by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of
such issuers.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities.
A--Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations.
Factors giving security to principal and interest are considered adequate,
but elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa--Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present
but certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.
Ba--Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and, therefore, not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B--Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.
Caa--Bonds which are rated Caa are of poor standing. Such issuers may
be in default or there may be present elements of danger with respect to
principal or interest.
Ca--Bonds which are rated Ca present obligations which are speculative
in a high degree. Such issuers are often in default or have other marked
shortcomings.
C--Bonds which are rated C are the lowest rated class of bonds, and
issuers so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
<PAGE>
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category and
in the categories below B. The modifier 1 indicates a ranking for the
security in the higher end of a rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates a ranking in the lower end
of a rating category.
[Back Cover]
FOR MORE INFORMATION
General Information and Other Available Information
The Fund sends investors a semi-annual report and an audited annual report.
These reports include a list of the Fund investments and the Fund's financial
statements. The annual report will also contain a statement from the investment
adviser discussing market conditions and investment strategies that
significantly affected the fund's performance during its last fiscal year.
The Fund has a Statement of Additional Information that contains more detailed
information on all aspects of the Fund and is incorporated by reference into
this prospectus. The Statement of Additional Information has been filed with the
Securities and Exchange Commission and is available for review at the SEC's
Public Reference Room (1-800-SEC-0330) or on the SEC's web site at
http://www.sec.gov.
Shareholders may obtain any of these documents free of charge by calling the
fund at 877- 593-8637. Shareholders may also call this number to request other
information about the Fund and to make shareholder inquiries.
.
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 1-800-SEC-0330) or by sending your request and a
duplicating fee to the SEC's Public Reference Section, Washington, DC 20549-
6009.
Investment Company File No. 811-
Institutional Development Fund
<PAGE>
- --------------------------------------------------------------------------------
---
INSTITUTIONAL DEVELOPMENT FUND
STATEMENT OF ADDITIONAL INFORMATION
[date]
- --------------------------------------------------------------------------------
---
This Statement of Additional Information is not a prospectus. It should be read
in conjunction with the Prospectus of the Institutional Development Fund, dated
June , 1999. A copy of the Prospectus can be obtained by writing the Fund at
Mutual Shareholder Services, 1301 East Ninth Street, Suite 1005, Cleveland, OH
44114. You may also call 1-877-593-8637 .
TABLE OF CONTENTS PAGE
Fund History
Types of Investments and Investment Techniques
Investment Limitations
Investment Adviser
Management of the Fund
Control Persons and Principal Holders of Securities
Portfolio Transactions and Brokerage
How to Invest in the Fund
How to Redeem Shares
Share Price Calculation
Performance
Taxes
Other Information
<PAGE>
FUND HISTORY
Institutional Development Fund (the "Fund") is a portfolio of Institutional
Development Trust (the "Trust"), a newly organized, open-end management
investment company established under the laws of Delaware by an Agreement and
Declaration of Trust dated March 31, 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.
Presently, the Trustees have established only one series of shares of the
Trust, namely the shares of this Fund. Each share of a series represents an
equal proportionate interest in the assets and liabilities belonging to that
series. Each other share of that series is entitled to 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. In case of any liquidation of a series, shareholders of the
series being liquidated will be entitled to receive as a group, 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.
TYPES OF INVESTMENTS AND INVESTMENT TECHNIQUES
The Fund is a diversified fund. This means that with respect to 75% of the
Fund's assets, the Fund may not invest more than 5% in the securities of any
single issuer. In addition, the Fund does not invest more than 25% of its total
assets in any one industry. This limit does not apply to U.S. Government
Securities, bank obligations or municipal securities.
The Fund seeks to achieve the objective by investing in a portfolio of debt
securities, including, convertible and nonconvertible debt securities of
domestic companies, including both well-known and established and new and
lesser- known companies, municipal bonds and U.S. Government securities. The
Fund invests at least 80% of its assets at the time of investment in debt
securities. The Fund's adviser staggers the maturities of the securities in the
portfolio to reduce the risk of reinvesting large sums of money during cyclical
lows in the interest rate cycle. This approach allows for the portfolio to pay
higher levels of income during periods of low interest rates. Under normal
circumstances, the average duration for the portfolio is expected to be between
5 and 7 years.
Fixed Income Securities - The Fund invests in fixed income securities.
Fixed income securities include corporate debt securities, U.S. government
securities and participation interests in such securities. Fixed income
securities are generally considered to be interest rate sensitive, which means
that their value will generally decrease when interest rates rise and increase
when interest rates fall. Securities with shorter maturities, while offering
lower yields, generally provide greater price stability than longer-term
securities and are less affected by changes in interest rates.
<PAGE>
Corporate Debt Securities - Corporate debt securities are long and
short-term debt obligations issued by companies (such as publicly issued and
privately placed bonds, notes and commercial paper). The Advisor considers
corporate debt securities to be of investment grade quality if they are rated
BBB or higher by Standard & Poor's Corporation, or Baa or higher by Moody's
Investors Services, Inc., or if unrated, determined by the Advisor to be of
comparable quality. Investment grade debt securities generally have adequate to
strong protection of principal and interest payments. In the lower end of this
category, credit quality may be more susceptible to potential future changes in
circumstances and the securities have speculative elements. The Fund will not
invest more than 15% of the value of its net assets in securities that are below
investment grade.
U.S. Government Obligations - The Fund may invest without limit in U.S.
government securities. U.S. government securities include securities issued or
guaranteed by the U.S. government, its agencies and instrumentalities. U.S.
Treasury bonds, notes, and bills and some agency securities, such as those
issued by the Federal Housing Administration and the Government National
Mortgage Association (GNMA), are backed by the full faith and credit of the U.S.
government as to payment of principal and interest and are the highest quality
government securities. Other securities issued by U.S. government agencies or
instrumentalities, such as securities issued by the Federal Home Loan Banks and
the Federal Home Loan Mortgage Corporation, are supported only by the credit of
the agency that issued them, and not by the U.S. government. Securities issued
by the Federal Farm Credit System, the Federal Land Banks, and the Federal
National Mortgage Association (FNMA) are supported by the agency's right to
borrow money from the U.S. Treasury under certain circumstances, but are not
backed by the full faith and credit of the U.S. government. There is no
guarantee that the U.S. government will support securities not backed by its
full faith and credit. Accordingly, although these securities have historically
involved little risk of loss of principal if held to maturity. These securities
may involve more risk than securities backed by the full faith and credit of the
U.S. government.
Municipal Securities. The municipal securities in which the Fund may invest
include municipal notes and short-term municipal bonds. Municipal notes are
generally used to provide for the issuer's short-term capital needs and
generally have maturities of 397 days or less. Examples include tax anticipation
and revenue anticipation notes, which generally are issued in anticipation of
various seasonal revenues, bond anticipation notes, construction loan notes and
tax-exempt commercial paper. Short-term municipal bonds may include general
obligation bonds, revenue bonds and industrial development bonds. General
obligation bonds are secured by the issuer's pledge of its faith, credit and
taxing power for payment of principal and interest. Revenue bonds are generally
paid from the revenues of a particular facility or a specific excise tax or
other source. Industrial development bonds are issued by or on behalf of public
authorities to provide funding for various privately operated industrial and
commercial facilities. The Fund may also invest in high quality participation
interests in municipal securities.
Rule 144A Securities are securities in the United States that are not
registered for sale under Federal securities laws but which can be resold to
institutions under SEC Rule 144A. Provided that a dealer or institutional
trading market in such securities exists, these restricted securities are
treated as exempt from the 15% limit on illiquid securities. Under the
supervision of the Board of Trustees, the Advisor for each Fund determines the
liquidity of restricted securities. The Board of Trustees monitors trading
activity in restricted securities through reports from each Fund's Advisor. If
institutional trading in restricted securities were to decline, the liquidity of
a Fund could be adversely affected.
<PAGE>
Church Bond Securities are securities that are issued to provide churches
with income to complete capital projects relating to the church. The church's
income is dependent upon voluntary contributions, tithes, gifts and offerings
and is maintained on a cash basis. There is no assurance that membership and
income will increase or continue at an adequate level to retire the principal
and interest on the bonds.
Demand Features. The Fund may invest in securities that are subject to puts
and stand-by commitments, which are defined as, demand features. Demand features
give the Fund the right to resell securities at specified periods prior to their
maturity dates to the seller or to some third party at an agreed-upon price or
yield. Securities with demand features may involve certain expenses and risks,
including the inability of the issuer of the instrument to pay for the
securities at the time the instrument is exercised, non-marketability of the
instrument and differences between the maturity of the underlying security and
the maturity of the instrument. Securities may cost more with demand features
than without them. Demand features can serve three purposes: to shorten the
maturity of a variable or floating rate security, to enhance the instrument's
credit quality and to provide a source of liquidity.
Mortgage- and Asset-Backed Securities. The Fund may purchase fixed or
adjustable rate mortgage-backed securities issued by the Government National
Mortgage Association, Federal National Mortgage Association, the Federal Home
Loan Mortgage Corporation, or other governmental or government-related entities.
The Fund may also purchase other asset-backed securities, including securities
backed by automobile loans, equipment leases or credit card receivables. These
securities directly or indirectly represent a participation in, or are secured
by and payable from, fixed or adjustable rate mortgage or other loans, which may
be secured by real estate or other assets. Unlike traditional debt instruments,
payments on these securities include both interest and a partial payment of
principal. Prepayments of the principal of underlying loans may shorten the
effective maturities of these securities and may result in a Fund having to
reinvest proceeds at a lower interest rate.
Repurchase Agreements. The Fund may invest in repurchase agreements fully
collateralized by U.S. Government obligations. Repurchase agreements are
transactions in which a Fund purchases securities and simultaneously commits to
resell those securities to the seller at an agreed-upon price on an agreed-upon
future date. The resale price reflects a market rate of interest that is not
related to the coupon rate or maturity of the purchased securities. If the
seller of the securities underlying a repurchase agreement fails to pay the
agreed resale price on the agreed delivery date, a Fund may incur costs in
disposing of the collateral and may experience losses if there is any delay in
its ability to do so. Any repurchase transaction will require full
collateralization of the seller's obligation during the entire term of the
repurchase agreement. The Advisor monitors the creditworthiness of the banks and
securities dealers with whom the Fund engages in repurchase transactions.
Delayed Delivery Securities. TheFund may purchase securities on a when-
issued or delayed delivery basis. Securities so purchased are subject to market
price fluctuation from the time of purchase but no interest on the securities
accrues to a Fund until delivery and payment for the securities take place.
Accordingly, the value of the securities on the delivery date may be more or
less than the purchase price. Forward commitments will be entered into only when
a Fund has the intention of taking possession of the securities, but a Fund may
sell the securities before the settlement date if deemed advisable.
<PAGE>
Illiquid Securities. The portfolio of the Fund may contain illiquid
securities. Illiquid securities generally include securities which cannot be
disposed of promptly and in the ordinary course of business without taking a
reduced price. Securities may be illiquid due to contractual or legal
restrictions on resale or lack of a ready market. The following securities are
considered to be illiquid: repurchase agreements and reverse repurchase
agreements maturing in more than seven days, nonpublicly offered securities and
restricted securities. Restricted securities are securities the resale of which
is subject to legal or contractual restrictions. Church bond securities
generally are considered illiquid. Restricted securities may be sold only in
privately negotiated transactions, in a public offering with respect to which a
registration statement is in effect under the Securities Act of 1933 or pursuant
to Rule 144 or Rule 144A promulgated under such Act. Where registration is
required, the Fund may be obligated to pay all or part of the registration
expense, and a considerable period may elapse between the time of the decision
to sell and the time such security may be sold under an effective registration
statement. If during such a period adverse market conditions were to develop;
the Fund might obtain a less favorable price than the price it could have
obtained when it decided to sell. The Fund will not invest more than 15% of its
net assets in illiquid securities.
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 (a) 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 and (b) as described in the Prospectus and this
Statement of Additional Information.
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.
<PAGE>
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
Limitations - Fundamental " above).
i. 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.
<PAGE>
ii. Borrowing. The Fund will not purchase any security while borrowings
(including reverse repurchase agreements) representing more than 5% of its total
assets are outstanding. The Fund will not invest more than 5% of its net assets
in reverse repurchase agreements.
iii. 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.
iv. Short Sales. The Fund will not effect short sales of securities unless
it owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short.
v. Options. The Fund will not purchase or sell puts, calls, options or
straddles, except as described in the Prospectus and the Statement of Additional
Information.
vi. Repurchase Agreements. The Fund will not invest more than 5% of its
net assets in repurchase agreements.
vii. Illiquid Investments. The Fund will not invest more than 15% of its
net assets in securities for which there are legal or contractual restrictions
on resale and other illiquid securities.
THE INVESTMENT ADVISOR
The investment adviser for the Fund is the Wabash Valley Capital
Management, Inc., (WVCM) located at 2901 Ohio Boulevard, Suite 242, Terre Haute,
Indiana, 47803. WVCM is an Indiana based S-corporation that provides customized
investment management for high net worth individuals and institutions. The fund
pays the advisor a fee of equal to an average annual rate of .35% of the value
of the average daily net assets. The portfolio managers for the fund are Donald
B. Edwards, CFA, MBA and Christopher S. Doll, MBA. Prior to founding WVCM in
1997, Mr. Edwards and Mr. Doll managed individual and institutional assets for
Old National Trust Company.
Under the terms of the management agreement (the "Agreement"), the Advisor
is responsible for managing the Fund's investments subject to approval of the
Board of Trustees. 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 .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 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.
<PAGE>
The Fund retains Mutual Shareholder Services (the "Accounting Agent") to
manage the Fund's business affairs and provide the Fund with accounting
services, and certain administrative services, including all regulatory
reporting and necessary office equipment, personnel and facilities. The Fund
retains Mutual Shareholder Services (the "Transfer Agent") to serve as transfer
agent, dividend paying agent and shareholder service agent. The Trust retains
[to come] (the "Distributor") to act as the principal distributor of the Fund's
shares. Mutual Shareholder Services receives a monthly fee from the Fund equal
to an annual average rate of . % of the Fund's average daily net assets.
Distribution Plan
Pursuant to Rule 12b-1 adopted by the SEC under the 1940 Act, the Fund will
adopt a Distribution Agreement (the 'Distribution Agreement') and a Rule 12b-1
Plan (the "12b-1 Plan") to permit the Fund to directly or indirectly pay
expenses associated with the distribution of shares.
Pursuant to the Distribution Agreement and the 12b-1 Plans, the Treasurer
of the Fund reports the amounts expended under the Distribution Agreement and
the purposes for which such expenditures were made to the Trustees of the Fund
on a quarterly basis. Also, the 12b-1 Plan provides that the selection and
nomination of disinterested Trustees (as defined in the 1940 Act) are committed
to the discretion of the disinterested Trustees then in office. The
Distribution Agreement and 12b-1 Plan may be continued annually if approved by a
majority vote of the Trustees, including a majority of the Trustees who
neither are interested persons of the Fund nor have any direct or indirect
financial interest in the Distribution Agreement, the 12b-1 Plan or in any other
agreements related to the 12b-1 Plans, cast in person at a meeting called for
the purpose of voting on such approval. The Distribution Agreement was initially
approved by the Fund's Trustees on and by the then shareholders on . The
Distribution Agreement was approved on .
Pursuant to the provisions of the 12b-1 Plans and the Distribution
Agreement, the Fund pays a distribution services fee each month to the
Distributor, at an annual rate of up to .50 of 1%.
With respect to sales of shares through a broker-dealer, the broker-dealer
is paid a concession at the time of sale. In addition, an ongoing maintenance
fee may be paid to broker-dealers on sales of shares of the Fund. The payments
to the broker-dealer, although a Fund expense which is paid by all shareholders,
will only directly benefit investors who purchase their shares through a
broker-dealer rather than directly from the Fund. Broker-dealers who sell
shares of the Fund may provide services to their customers that are not
available to investors who purchase their shares directly. Investors who
purchase their shares directly from the Fund will pay a pro rata share of the
Fund's expenses of encouraging broker-dealers to provide such services but will
not receive any of the direct benefits of such services. The payments to the
broker-dealers will continue to be paid for as long as the related assets remain
in the Fund.
<PAGE>
MANAGEMENT OF THE FUND
TRUSTEES AND OFFICERS
The Board of Trustees are responsible for the management and supervision of
the Fund. The Board of Trustees approves all contracts with the Fund. The names
of the Trustees and executive officers of the Trust are shown below. An asterisk
indicates each Trustee who is an "interested person" of the Trust, as defined in
the Investment Company Act of 1940.
Name, Age and Position Principal Occupations
Address During Past 5 Years
Clyde H. Freed, Jr President and
13608 Wisteria Trustee
Drive
Germantown, MD
20874
Secretary,
Treasurer
Trustee
Trustee
The compensation paid to the Trustees of the Trust is estimated to be the
following:
Aggregate Total Compensation
Compensation from Trust (the Trust
Name from trust is not in a Fund Complex)
0 0
Control Persons and Principal Holders of Securities
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.
<PAGE>
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 normally be made by random client selection.
<PAGE>
PURCHASE AND SALE INFORMATION
HOW TO INVEST IN THE FUND
The Fund is "no-load" and shares of the Fund are sold directly to investors
on a continuous basis, subject to a minimum initial investment of $1,000. and
minimum subsequent investments of $50. These minimums may be waived by the
Advisor for accounts participating in an automatic investment program. Investors
choosing to purchase or redeem their shares through a broker/dealer or other
institution may be charged a fee by that institution. Investors choosing to
purchase or redeem shares directly from the Fund will not incur charges on
purchases or redemptions. To the extent investments of individual investors are
aggregated into an omnibus account established by an investment adviser, broker
or other intermediary, the account minimums apply to the omnibus account, not to
the account of the individual investor.
Initial Purchase
By Mail - You may purchase shares of the Fund by completing and signing the
investment application form which accompanies this Prospectus and mailing it, in
proper form, together with a check (subject to the above minimum amounts) made
payable to Mutual Fund, and sent to the P.O. Box listed below. If you prefer
overnight delivery, use the overnight address listed below.
Institutional Development Fund
Mutual Shareholder Services
1301 East 9th Street, Suite 1005
Cleveland, OH 44141
Your purchase of shares of the Fund will be effected at the next share
price calculated after receipt of your investment.
By Wire - You may also purchase shares of the Fund by wiring federal funds
from your bank, which may charge you a fee for doing so. If money is to be
wired, you must call the Transfer Agent at 877-593-8637 to set up your account
and obtain an account number. You should be prepared at that time to provide the
information on the application. Then, you should provide your bank with the
following information for purposes of wiring your investment:
Bank
ABA #
Attn: Mutual Fund
D.D.A. # __________
Account Name_________________ (write in shareholder name) For the
Account # ______________ (write in account number)
You are required to mail a signed application to the Custodian at the above
address in order to complete your initial wire purchase. Wire orders will be
accepted only on a day on which the Fund, Custodian and Transfer Agent are open
for business. A wire purchase will not be considered made until the wired money
is received and the purchase is accepted by the Fund. Any delays which may occur
in wiring money, including delays which may occur in processing by the banks,
are not the responsibility of the Fund or the Transfer Agent.
<PAGE>
Additional Investments
You may purchase additional shares of the Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain your name, the name of your
account(s), your account number(s), and the name of the Fund. Checks should be
made payable to Mutual Fund and should be sent to the address listed above. A
bank wire should be sent as outlined above.
Automatic Investment Plan
You may make regular investments in the Fund with an Automatic Investment
Plan by completing the appropriate section of the account application and
attaching a voided personal check. Investments may be made monthly to allow
dollar-cost averaging by automatically deducting $50 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time.
Tax Sheltered Retirement Plans
Since the Fund is oriented to longer term investments, shares of the Fund
may be an appropriate investment medium for tax sheltered retirement plans,
including: individual retirement plans (IRAs); simplified employee pensions
(SEPs); SIMPLE plans; 401(k) plans; qualified corporate pension and profit
sharing plans (for employees); tax deferred investment plans (for employees of
public school systems and certain types of charitable organizations); and other
qualified retirement plans. You should contact the Transfer Agent for the
procedure to open an IRA or SEP plan, as well as more specific information
regarding these retirement plan options. Consultation with an attorney or tax
advisor regarding these plans is advisable. Custodial fees for an IRA will be
paid by the shareholder by redemption of sufficient shares of the Fund from the
IRA unless the fees are paid directly to the IRA custodian. You can obtain
information about the IRA custodial fees from the Transfer Agent.
Other Purchase Information
Dividends begin to accrue after you become a shareholder. The Fund does
not issue share certificates. All shares are held in non-certificate form
registered on the books of the Fund and the Fund's Transfer Agent for the
account of the shareholder. The rights to limit the amount of purchases and to
refuse to sell to any person are reserved by the Fund. If your check or wire
does not clear, you will be responsible for any loss incurred by the Fund. If
you are already a shareholder, the Fund can redeem shares from any identically
registered account in the Fund as reimbursement for any loss incurred. You may
be prohibited or restricted from making future purchases in the Fund.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined after the
redemption request has been received by the Transfer Agent in proper order.
Shareholders may receive redemption payments in the form of a check or federal
wire transfer. The proceeds of the redemption may be more or less than the
purchase price of your shares, depending on the market value of the Fund's
securities at the time of your redemption. There is a 20.00 transaction fee for
all wires requested out of the Fund. Any charges for wire redemptions will be
deducted from the shareholder's Fund account by redemption of shares. Investors
choosing to purchase or redeem their shares through a broker/dealer or other
institution may be charged a fee by that institution.
<PAGE>
By Mail - You may redeem any part of your account in the Fund at no charge
by mail. Your request should be addressed to:
Institutional Development Fund
Mutual Shareholder Services
1301 East 9th Street, Suite 3600
Cleveland, OH 44141
"Proper order" means your request for a redemption must include your letter
of instruction, including the Fund name, account number, account name(s), the
address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For certain redemptions (i.e.
when a shareholder wants the redemption check sent to an address other than the
record address), the Fund requires that signatures be guaranteed by a bank or
member firm of a national securities exchange. Signature guarantees are for the
protection of shareholders. At the discretion of the Fund or the Fund's Transfer
Agent, a shareholder, prior to redemption, may be required to furnish additional
legal documents to insure proper authorization.
By Telephone - You may redeem any part of your account in the Fund by
calling the Transfer Agent at (877)593-8637. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Fund, the Transfer Agent and the Custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be terminated at any
time by the Fund or the Transfer Agent. During periods of extreme market
activity it is possible that shareholders may encounter some difficulty in
telephoning the Fund, although neither the Fund nor the Transfer Agent has ever
experienced difficulties in receiving and in a timely fashion responding to
telephone requests for redemptions or exchanges. If you are unable to reach the
Fund by telephone, you may request a redemption or exchange by mail.
Additional Information - If you are not certain of the requirements for a
redemption please call the Transfer Agent at (877)593-8637 Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen days. Also, when the New York Stock Exchange is
closed (or when trading is restricted) for any reason other than its customary
weekend or holiday closing or under any emergency circumstances, as determined
by the Securities and Exchange Commission, the Fund may suspend redemptions or
postpone payment dates.
<PAGE>
NET ASSET VALUE
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 "Net Asset Value" in
the Prospectus.
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. The net asset value per share of the Fund will fluctuate.
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, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith 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.
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.
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.
<PAGE>
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.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. For the Money Market Fund, comparisons may
also include Bank Rate Monitor (TM), N. Palm Beach, Fla. 33408, IBC's Money Fund
Report(TM), CDA Investment Technologies, Inc., Wiesenberger Investment Companies
Services, and other industry publications. 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.
TAXES
The Fund intends to qualify each year as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended. By so qualifying, the Fund
will not be subject to federal income taxes to the extent that it distributes
substantially all of its net investment income and any realized capital gains.
Should the Fund fail to qualify, the Fund's income could be subject to federal
taxes.
For federal income tax purposes, dividends paid by the Fund from ordinary
income are taxable to shareholders as ordinary income, but may be eligible in
part for the dividends received deduction for corporations. Pursuant to the Tax
Reform Act of 1986 (the "Tax Reform Act"), all distributions of net short term
capital gains to individuals are taxed at the same rate as ordinary income. All
distributions of net capital gains to corporations are taxed at regular
corporate rates. Any distributions designated as being made from net realized
long term capital gains are taxable to shareholders as long term capital gains
regardless of the holding period of the shareholder.
The Fund will mail to each shareholder after the close of the calendar year
a statement setting forth the federal income tax status of distributions made
during the year. Dividends and capital gains distributions may also be subject
to state and local taxes. Shareholders are urged to consult their own tax
advisors regarding specific questions as to federal, state or local taxes and
the tax effect of distributions and withdrawals from the Fund.
On the application or other appropriate form, the Fund will request the
shareholder's certified taxpayer identification number (social security number
for individuals) and a certification that the shareholder is not subject to
backup withholding. Unless the shareholder provides this information, the Fund
will be required to withhold and remit to the U.S. Treasury 31% of the
dividends, distributions and redemption proceeds payable to the shareholder.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, the Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed with respect to a specific account in any year, the Fund may
make a corresponding charge against the account.
<PAGE>
OTHER INFORMATION
CUSTODIAN
Bank, 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.
ACCOUNTING AGENT AND TRANSFER AGENT
The Fund has engaged Mutual Shareholder Services to serve as transfer agent and
accounting agent for the Funds. The Accounting Agent calculates the Fund's daily
net asset value and maintains certain records for the Fund. The Transfer Agent
processes all shareholder transactions for the Fund.
The firm of [to come], has been selected as independent public accountants
for the Trust for the fiscal year ending December 31, 1999. [To come] performs
an annual audit of the Fund's financial statements and provides financial, tax
and accounting consulting services as requested.
DISTRIBUTOR
[To come], 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.
<PAGE>
FORM N-1A
PART C. OTHER INFORMATION
Item 23. Exhibits: Except as noted, the following exhibits are being filed
herewith:
(a) Declaration of Trust of Registrant is filed herein.
(b) By-Laws of Registrant are filed herein.
(c) Not applicable.
(d) Investment Advisory Agreement between Wabash Valley Capital
Management, Inc. and Registrant is filed herein.
(e) To be filed by amendment.
(f) Not applicable.
(g) Custody Agreement to be filed by amendment.
(h) Other Material Contracts
(1) Accounting Services Agreement between Registrant and Mutual
Shareholder Services, Inc. is filed herein.
(2) The Transfer Agency Agreement is filed herein.
(i) To be filed by amendment.
(j) Not applicable.
(k) Not applicable.
(l). To be filed by amendment.
(m) To be filed by amendment.
(n) To be filed by amendment.
(o) Not applicable.
Item 24. Persons Controlled by or Under Common Control with Registrant.
The Registrant does not directly or indirectly control any person.
Item 25. Indemnification
Section 4.3 of the Declaration of Trust filed herein provides for
indemnification of the Registrant's trustees and officers under certain
circumstances.
Indemnification. (a) Subject to the exceptions and limitations contained
in subsection (b) below:
(i) every person who is, or has been, a Trustee or an officer,
employee or agent of the Trust (including any individual who
serves at its request as director, officer, partner, trustee or
the like of another organization in which it has any interest as
a shareholder, creditor or otherwise) ("Covered Person") shall be
indemnified by the trust or the appropriate Series to the fullest
extent permitted by law against any claim, action, suit or
proceeding in which he becomes involved as a party or otherwise
by virtue of his being or having been a Covered Person and
against amounts paid or incurred by him in the settlement
thereof; and
<PAGE>
(ii)
as used herein, the words "claim," "action," "suit", or "proceeding"
shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals) actual or threatened, and the
words "liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
The application of these provisions is limited by the following
undertaking set forth in the rules promulgated by the Securities and
Exchange Commission;
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in such Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a trustee, officer or controlling person of the
registrant 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 registrant
will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is
against public policy as expressed in such Act and will be governed by
the final adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser
All of the information required by this item is set forth in the Form ADV,
as amended, of Wabash Valley Capital Management, Inc. (File No. 801- 56063). The
following sections of Form ADV are incorporated herein by reference:
(a) Items 1 and 2 of Part II
(b) Section 6, Business Background, of each Schedule D.
Item 27. Principal Underwriter
Name: Positions and Positions and
Offices with Offices with
Underwriter: Registrant:
President None
Sr. Vice President None
and Secretary
Vice President None
(c)
Item 28. Location of Accounts and Records
(a)Wabash Valley Capital Management, Inc. serves as the principal holder of
records for the Registrant. The Declaration of Trust, by-laws, minute books
and procedural information of the Registrant are in the physical possession
of Wabash Valley Capital Management, Inc. 2901 Ohio Blvd., Suite 242, Terre
Haute, IN 47803.
(b)All books and records required to be maintained by the custodian will be
maintained by
(c)All books and record required to be maintained by the transfer agent and
accounting agent are held at:
Mutual Fund Services
1301 East Ninth Street, Suite 1005
Cleveland, OH 44114
<PAGE>
Item 29. Management Services.
none
Item 30. Undertakings.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized in the City of , and State of on the day of May , 1999.
Institutional Development Trust
Institutional Development Fund
By:_/s/ Clyde H. Freed, Jr.
President
Pursuant to the requirements of the Securities Act of 1933, this Fund's
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
Signature Date
/s/ May , 1999
Trustee and President of the Fund
<PAGE>
EXHIBIT INDEX
Exhibit
Letter Document Title
a. Declaration of Trust
b. By-laws
c. Investment Advisory Agreement
H (1) Accounting Services Agreement
(2) Transfer Agency Agreement
- -------------------------------
<PAGE>
INSTITUTIONAL DEVELOPMENT TRUST
AGREEMENT AND
DECLARATION OF TRUST
This AGREEMENT AND DECLARATION OF TRUST is made on March 31, 1999 by Clyde
H. Freed, Jr. (together with all other persons from time to time duly elected,
qualified and serving as Trustees in accordance with the provisions of Article
II hereof, the "Trustees");
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the Trust shall be held and managed in trust pursuant to this
Agreement and Declaration of Trust.
ARTICLE I
NAME AND DEFINITIONS
Section 1. Name. The name of the Trust created by this Agreement and
Declaration of Trust is "Institutional Development Trust."
Section 2. Definitions. Unless otherwise provided or required by the
context:
(a) "Administrator" means the party, other than the Trust, to the
contract described in Article III, Section 3 hereof.
(b) "By-laws" means the By-laws of the Trust adopted by the Trustees,
as amended from time to time, which By-laws are expressly herein
incorporated by reference as part of the "governing instrument" within the
meaning of the Delaware Act.
(c) "Class" means the class of Shares of a Series established pursuant
to Article V.
(d) "Commission," "Interested Person" and "Principal Underwriter" have
the meanings provided in the 1940 Act. Except as such term may be otherwise
defined by the Trustees in conjunction with the establishment of any Series
of Shares, the term "vote of a majority of the Shares outstanding and
entitled to vote" shall have the same meaning as is assigned to the term
"vote of a majority of the outstanding voting securities" in the 1940 Act.
(e) "Covered Person" means a person so defined in Article IV, Section
2.
(f) "Custodian" means any Person other than the Trust who has custody
of any Trust Property as required by Section 17(f) of the 1940 Act, but
does not include a system for the central handling of securities described
in said Section 17(f).
(g) "Declaration" shall mean this Agreement and Declaration of Trust,
as amended or restated from time to time. Reference in this Declaration of
Trust to "Declaration," "hereof," "herein," and "hereunder" shall be deemed
to refer to this Declaration rather than exclusively to the article or
section in which such words appear.
<PAGE>
(h) "Delaware Act" means Chapter 38 of Title 12 of the Delaware Code
entitled "Treatment of Delaware Business Trusts," as amended from time to
time.
(i) "Distributor" means the party, other than the Trust, to the
contract described in Article III, Section 1 hereof.
(j) "His" shall include the feminine and neuter, as well as the
masculine, genders.
(k) "Investment Adviser" means the party, other than the Trust, to the
contract described in Article III, Section 2 hereof.
(l) "Net Asset Value" means the net asset value of each Series of the
Trust, determined as provided in Article VI, Section 3.
(m) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures, estates and other
entities, and governments and agencies and political subdivisions, thereof,
whether domestic or foreign.
(n) "Series" means a series of Shares established pursuant to Article
V.
(o) "Shareholder" means a record owner of Outstanding Shares;
(p) "Shares" means the equal proportionate transferable units of
interest into which the beneficial interest of each Series or Class is
divided from time to time (including whole Shares and fractions of Shares).
"Outstanding Shares" means Shares shown in the books of the Trust or its
transfer agent as then issued and outstanding, but does not include Shares
which have been repurchased or redeemed by the Trust and which are held in
the treasury of the Trust.
(q) "Transfer Agent" means any Person other than the Trust who
maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the like.
(r) "Trust" means Institutional Development Trust established hereby,
and reference to the Trust, when applicable to one or more Series, refers
to that Series.
(s) "Trustees" means the person who has signed this Declaration of
Trust, so long as he shall continue in office in accordance with the terms
hereof, and all other persons who may from time to time be duly qualified
and serving as Trustees in accordance with Article II, in all cases in
their capacities as Trustees hereunder.
<PAGE>
(t) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the Trust or any
Series or the Trustees on behalf of the Trust or any Series.
(u) The "1940 Act" means the Investment Company Act of 1940, as
amended from time to time.
ARTICLE II
THE TRUSTEES
Section 1. Management of the Trust. The business and affairs of the Trust
shall be managed by or under the direction of the Trustees, and they shall have
all powers necessary or desirable to carry out that responsibility. The Trustees
may execute all instruments and take all action they deem necessary or desirable
to promote the interests of the Trust. Any determination made by the Trustees in
good faith as to what is in the interests of the Trust shall be conclusive. In
construing the provisions of this Declaration, the presumption shall be in favor
of a grant of power to the Trustees.
Section 2. Powers. The Trustees in all instances shall act as principals,
free of the control of the Shareholders. The Trustees shall have full power and
authority to take or refrain from taking any action and to execute any contracts
and instruments that they may consider necessary or desirable in the management
of the Trust. The Trustees shall not in any way be bound or limited by current
or future laws or customs applicable to trust investments, but shall have full
power and authority to make any investments which they, in their sole
discretion, deem proper to accomplish the purposes of the Trust. The Trustees
may exercise all of their powers without recourse to any court or other
authority. Subject to any applicable limitation herein or in the By-laws or
resolutions of the Trust, the Trustees shall have power and authority, without
limitation:
(a) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of
such operations.
(b) To invest in, hold for investment, or reinvest in, cash;
securities, including common, preferred and preference stocks; warrants;
subscription rights; profit-sharing interests or participations and all
other contracts for or evidence of equity interests; bonds, debentures,
bills, time notes and all other evidences of indebtedness; negotiable or
non-negotiable instruments; government securities, including securities of
any state, municipality or other political subdivision thereof, or any
governmental or quasi-governmental agency or instrumentality; and money
market instruments including bank certificates of deposit, finance paper,
commercial paper, bankers' acceptances and all kinds of repurchase
agreements, of any corporation, company, trust, association, firm or other
business organization however established, and of any country, state,
municipality or other political subdivision, or any governmental or
quasi-governmental agency or instrumentality; or any other security,
property or instrument in which the Trust or any of its Series shall be
authorized to invest.
<PAGE>
(c) To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell,
to sell or otherwise dispose of, to lend and to pledge any such securities,
to enter into repurchase agreements, reverse repurchase agreements, firm
commitment agreements and forward foreign currency exchange contracts, to
purchase and sell options on securities, securities indices, currency and
other financial assets, futures contracts and options on futures contracts
of all descriptions and to engage in all types of hedging and
risk-management transactions.
(d) To exercise all rights, powers and privileges of ownership or
interest in all securities and repurchase agreements included in the Trust
Property, including the right to vote thereon and otherwise act with
respect thereto and to do all acts for the preservation, protection,
improvement and enhancement in value of all such securities and repurchase
agreements.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real
or personal, including cash or foreign currency, and any interest therein.
(f) To borrow money or other property in the name of the Trust
exclusively for Trust purposes and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; and to endorse,
guarantee, or undertake the performance of any obligation or engagement of
any other Person and to lend Trust Property.
(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in
the Trust Property or in the affairs of which the Trustees have any direct
or indirect interest; to do all acts and things designed to protect,
preserve, improve or enhance the value of such obligation or interest; and
to guarantee or become surety on any or all of the contracts, stocks,
bonds, notes, debentures and other obligations of any such corporation,
company, trust, association or firm.
(h) To adopt By-laws not inconsistent with this Declaration providing
for the conduct of the business of the Trust and to amend and repeal them
to the extent such right is not reserved to the Shareholders.
(i) To elect and remove such officers and appoint and terminate such
agents as they deem appropriate.
(j) To employ as custodian of any assets of the Trust, subject to any
provisions herein or in the By-laws, one or more banks, trust companies or
companies that are members of a national securities exchange, or other
entities permitted by the Commission to serve as such.
<PAGE>
(k) To retain one or more transfer agents and shareholder servicing
agents, or both.
(l) To provide for the distribution of Shares either through a
Principal Underwriter as provided herein or by the Trust itself, or both,
or pursuant to a distribution plan of any kind.
(m) To set record dates in the manner provided for herein or in the
By-laws.
(n) To delegate such authority as they consider desirable to any
officers of the Trust and to any agent, independent contractor, manager,
investment adviser, custodian or underwriter.
(o) To hold any security or other property (i) in a form not
indicating any trust, whether in bearer, book entry, unregistered or other
negotiable form, or (ii) either in the Trust's or Trustees' own name or in
the name of a custodian or a nominee or nominees, subject to safeguards
according to the usual practice of business trusts or investment companies.
(p) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes, and
with separate Shares representing beneficial interests in such Series, and
to establish separate Classes, all in accordance with the provisions of
Article V.
(q) To the full extent permitted by Section 3804 of the Delaware Act,
to allocate assets, liabilities and expenses of the Trust to a particular
Series and assets, liabilities and expenses to a particular Class or to
apportion the same between or among two or more Series or Classes, provided
that any liabilities or expenses incurred by a particular Series or Class
shall be payable solely out of the assets belonging to that Series or Class
as provided for in Article V, Section 4.
(r) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern whose securities are
held by the Trust; to consent to any contract, lease, mortgage, purchase,
or sale of property by such corporation or concern; and to pay calls or
subscriptions with respect to any security held in the Trust.
(s) 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.
(t) To make distributions of income, capital gains, returns of capital
(if any) and redemption proceeds to Shareholders in the manner hereinafter
provided for.
<PAGE>
(u) To establish committees for such purposes, with such membership,
and with such responsibilities as the Trustees may consider proper,
including a committee consisting of fewer than all of the Trustees then in
office, which may act for and bind the Trustees and the Trust with respect
to the institution, prosecution, dismissal, settlement, review or
investigation of any legal action, suit or proceeding, pending or
threatened.
(v) To issue, sell, repurchase, redeem, cancel, retire, acquire, hold,
resell, reissue, dispose of and otherwise deal in Shares; to establish
terms and conditions regarding the issuance, sale, repurchase, redemption,
cancellation, retirement, acquisition, holding, resale, reissuance,
disposition of or dealing in Shares; and, subject to Articles V and VI, to
apply to any such repurchase, redemption, retirement, cancellation or
acquisition of Shares any funds or property of the Trust or of the
particular Series with respect to which such Shares are issued.
(w) To invest part or all of the Trust Property (or part or all of the
assets of any Series), or to dispose of part or all of the Trust Property
(or part or all of the assets of any Series) and invest the proceeds of
such disposition, in securities issued by one or more other investment
companies registered under the 1940 Act all without any requirement of
approval by Shareholders. Any such other investment company may (but need
not) be a trust (formed under the laws of the State of Delaware or of any
other state) which is classified as a partnership for federal income tax
purposes.
(x) To carry on any other business in connection with or incidental to
any of the foregoing powers, to do everything necessary or desirable to
accomplish any purpose or to further any of the foregoing powers, and to
take every other action incidental to the foregoing business or purposes,
objects or powers.
(y) To sell or exchange any or all of the assets of the Trust, subject
to Article IX, Section 4.
(z) To enter into joint ventures, partnerships and other combinations
and associations.
(aa) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that connection
to deposit any security with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such power and
authority with relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and to
pay, such portion of the expenses and compensation of such Committee,
depositary or trustee as the Trustees shall deem proper;
<PAGE>
(bb) To purchase and pay for entirely out of Trust Property such
insurance as the Trustees may deem necessary or appropriate for the conduct
of the business, including, without limitation, insurance policies insuring
the assets of the Trust or payment of distributions and principal on its
portfolio investments, and, subject to applicable law and any restrictions
set forth in the By-laws, insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers, Principal
Underwriters, or independent contractors of the Trust, individually,
against all claims and liabilities of every nature arising by reason of
holding Shares, holding, being or having held any such office or position,
or by reason of any action alleged to have been taken or omitted by any
such Person as Trustee, officer, employee, agent, investment adviser,
Principal underwriter, or independent contractor, including any action
taken or omitted that may be determined to constitute negligence, whether
or not the Trust would have the power to indemnify such Person against
liability;
(cc) To adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans and trusts, including the purchasing of life insurance and
annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Trustees, officers, employees and agents of
the Trust;
(dd) To enter into contracts of any kind and description;
(ee) To interpret the investment policies, practices or limitations of
any Series or Class; and
(ff) To guarantee indebtedness and contractual obligations of others.
The clauses above shall be construed as objects and powers, and the
enumeration of specific powers shall not limit in any way the general powers of
the Trustees. Any action by one or more of the Trustees in their capacity as
such hereunder shall be deemed an action on behalf of the Trust or the
applicable Series, and not an action in an individual capacity. No one dealing
with the Trustees shall be under any obligation to make any inquiry concerning
the authority of the Trustees, or to see to the application of any payments made
or property transferred to the Trustees or upon their order. In construing this
Declaration, the presumption shall be in favor of a grant of power to the
Trustees.
Section 3. Certain Transactions. Except as prohibited by applicable law,
the Trustees may, on behalf of the Trust, buy any securities from or sell any
securities to, or lend any assets of the Trust to, any Trustee or officer of the
Trust or any firm of which any such Trustee or officer is a member acting as
principal, or have any such dealings with any investment adviser, administrator,
distributor or transfer agent for the Trust or with any Interested Person of
such person. The Trust may employ any such person or entity in which such person
is an Interested Person, as broker, legal counsel, registrar, investment
adviser, administrator, distributor, transfer agent, dividend disbursing agent,
custodian or in any other capacity upon customary terms.
<PAGE>
Section 4. Initial Trustees; Election and Number of Trustees. The initial
Trustee shall be the person initially signing this Declaration. The number of
Trustees (other than the initial Trustee) shall be fixed from time to time by a
majority of the Trustees; provided, that there shall be at least one (1) Trustee
and no more than fifteen (15). The Shareholders shall elect the Trustees (other
than the initial Trustee) on such dates as the Trustees may fix from time to
time.
Section 5. Term of Office of Trustees. Each Trustee shall hold office for
life or until his successor is elected or the Trust terminates; except that (a)
any Trustee may resign by delivering to the other Trustees or to any Trust
officer a written resignation effective upon such delivery or a later date
specified therein; (b) any Trustee may be removed with or without cause at any
time by a written instrument signed by at least a majority of the then Trustees,
specifying the effective date of removal; (c) any Trustee who requests to be
retired, or who is declared bankrupt or has become physically or mentally
incapacitated or is otherwise unable to serve, may be retired by a written
instrument signed by a majority of the other Trustees, specifying the effective
date of retirement; and (d) any Trustee may be removed at any meeting of the
Shareholders by a vote of at least two-thirds of the Outstanding Shares.
Section 6. Vacancies; Appointment of Trustees. Whenever a vacancy shall
exist in the Board of Trustees, regardless of the reason for such vacancy, the
remaining Trustees shall appoint any person as they determine in their sole
discretion to fill that vacancy, consistent with the limitations under the 1940
Act. Such appointment shall be made by a written instrument signed by a majority
of the Trustees or by a resolution of the Trustees, duly adopted and recorded in
the records of the Trust, specifying the effective date of the appointment. The
Trustees may appoint a new Trustee as provided above in anticipation of a
vacancy expected to occur because of the retirement, resignation or removal of a
Trustee, or an increase in number of Trustees, provided that such appointment
shall become effective only at or after the expected vacancy occurs. As soon as
any such Trustee has accepted his appointment in writing, the trust estate shall
vest in the new Trustee, together with the continuing Trustees, without any
further act or conveyance, and he shall be deemed a Trustee hereunder. The
Trustees' power of appointment is subject to Section 16(a) of the 1940 Act.
Whenever a vacancy in the number of Trustees shall occur, until such vacancy is
filled as provided in this Article II, the Trustees in office, regardless of
their number, shall have all the powers granted to the Trustees and shall
discharge all the duties imposed upon the Trustees by the Declaration. The
death, declination to serve, resignation, retirement, removal or incapacity of
one or more Trustees, or all of them, shall not operate to annul the Trust or to
revoke any existing agency created pursuant to the terms of this Declaration of
Trust.
Section 7. Temporary Vacancy or Absence. Whenever a vacancy in the Board of
Trustees shall occur, until such vacancy is filled, or while any Trustee is
absent from his domicile (unless that Trustee has made arrangements to be
informed about, and to participate in, the affairs of the Trust during such
absence), or is physically or mentally incapacitated, the remaining Trustees
shall have all the powers hereunder and their certificate as to such vacancy,
absence, or incapacity shall be conclusive. Any Trustee may, by power of
attorney, delegate his powers as Trustee for a period not exceeding six (6)
months at any one time to any other Trustee or Trustees.
<PAGE>
Section 8. Chairman. The Trustees shall appoint one of their number to be
Chairman of the Board of Trustees. The Chairman shall preside at all meetings of
the Trustees, shall be responsible for the execution of policies established by
the Trustees and the administration of the Trust, and may be the chief
executive, financial and/or accounting officer of the Trust.
Section 9. Action by the Trustees. The Trustees shall act by majority vote
at a meeting duly called at which a quorum is present, including a meeting held
by conference telephone, teleconference or other electronic media or
communication equipment by means of which all persons participating in the
meeting can communicate with each other; or by written consent of a majority of
Trustees (or such greater number as may be required by applicable law) without a
meeting. A majority of the Trustees shall constitute a quorum at any meeting.
Meetings of the Trustees may be called orally or in writing by the President or
by any one of the Trustees. Notice of the time, date and place of all Trustees'
meetings shall be given to each Trustee as set forth in the By-laws; provided,
however, that no notice is required if the Trustees provide for regular or
stated meetings. Notice need not be given to any Trustee who attends the meeting
without objecting to the lack of notice or who signs a waiver of notice either
before or after the meeting. The Trustees by majority vote may delegate to any
Trustee or Trustees or committee authority to approve particular matters or take
particular actions on behalf of the Trust. Any written consent or waiver may be
provided and delivered to the Trust by facsimile or other similar electronic
mechanism.
Section 10. Ownership of Trust Property. The Trust Property of the Trust
and of each Series shall be held separate and apart from any assets now or
hereafter held in any capacity other than as Trustee hereunder by the Trustees
or any successor Trustees. Legal title in and beneficial ownership of all of the
assets of the Trust shall at all times be considered as vested in the Trust,
except that the Trustees may cause legal title in and beneficial ownership of
any Trust Property to be held by, or in the name of one or more of the Trustees
acting for and on behalf of the Trust, or in the name of any person as nominee
acting for and on behalf of the Trust. No Shareholder shall be deemed to have a
severable ownership in any individual asset of the Trust or of any Series or any
right of partition or possession thereof, but each Shareholder shall have, as
provided in Article V, a proportionate undivided beneficial interest in the
Trust or Series or Class thereof represented by Shares. The Shares shall be
personal property giving only the rights specifically set forth in this Trust
Instrument. The Trust, or at the determination of the Trustees one or more of
the Trustees or a nominee acting for and on behalf of the Trust, shall be deemed
to hold legal title and beneficial ownership of any income earned on securities
of the Trust issued by any business entities formed, organized, or existing
under the laws of any jurisdiction, including the laws of any foreign country.
Upon the resignation or removal of a Trustee, or his otherwise ceasing to be a
Trustee, he shall execute and deliver such documents as the remaining Trustees
shall require for the purpose of conveying to the Trust or the remaining
Trustees any Trust Property held in the name of the resigning or removed
Trustee. Upon the incapacity or death of any Trustee, his legal representative
shall execute and deliver on his behalf such documents as the remaining Trustees
shall require as provided in the preceding sentence.
<PAGE>
Section 11. Effect of Trustees Not Serving. The death, resignation,
retirement, removal, incapacity or inability or refusal to serve of the
Trustees, or any one of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of this Declaration.
Section 12. Trustees, etc. as Shareholders. Subject to any restrictions in
the By-laws, any Trustee, officer, agent or independent contractor of the Trust
may acquire, own and dispose of Shares to the same extent as any other
Shareholder; the Trustees may issue and sell Shares to and buy Shares from any
such person or any firm or company in which such person is interested, subject
only to any general limitations herein.
Section 13. Series Trustees. In connection with the establishment of one or
more Series or Classes, the Trustees establishing such Series or Class may
appoint, to the extent permitted by the Delaware Act, separate Trustees with
respect to such Series or Classes (the "Series Trustees"). Series Trustees may,
but are not required to, serve as Trustees of the Trust or any other Series or
Class of the Trust. The Series Trustees shall have, to the exclusion of any
other Trustee of the Trust, all the powers and authorities of Trustees hereunder
with respect to such Series or Class, but shall have no power or authority with
respect to any other Series or Class. Any provision of this Declaration relating
to election of Trustees by Shareholders only shall entitle the Shareholders of a
Series or Class for which Series Trustees have been appointed to vote with
respect to the election of such Series Trustees and the Shareholders of any
other Series or Class shall not be entitled to participate in such vote. In the
event that Series Trustees are appointed, the Trustees initially appointing such
Series Trustees shall, without the approval of any Outstanding Shares, amend
either the Declaration or the By-laws to provide for the respective
responsibilities of the Trustees and the Series Trustees in circumstances where
an action of the Trustees or Series Trustees affects all Series of the Trust or
two or more Series represented by different Trustees.
ARTICLE III
CONTRACTS WITH SERVICE PROVIDERS
Section 1. Underwriting Contract. The Trustees may in their discretion from
time to time enter into an exclusive or non-exclusive distribution contract or
contracts providing for the sale of the Shares whereby the Trustees may either
agree to sell the Shares to the other party to the contract or appoint such
other party as their sales agent for the Shares, and in either case on such
terms and conditions, if any, as may be prescribed in the By-laws, and such
further terms and conditions as the Trustees may in their discretion determine
not inconsistent with the provisions of this Article III or of the By-laws; and
such contract may also provide for the repurchase of the Shares by such other
party as agent of the Trustees.
Section 2. Advisory or Management Contract. The Trustees may in their
discretion from time to time enter into one or more investment advisory or
management contracts or, if the Trustees establish multiple Series, separate
investment advisory or management contracts with respect to one or more Series
whereby the other party or parties to any such contracts shall undertake to
furnish the Trust or such Series management, investment advisory,
administration, accounting, legal, statistical and research facilities and
services, promotional or marketing activities, and such other facilities and
services, if any, as the Trustees shall from time to time consider desirable and
all upon such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of the Declaration, the Trustees may
authorize the Investment Advisers or persons to whom the Investment Adviser
delegates certain or all of their duties, or any of them, under any such
contracts (subject to such general or specific instructions as the Trustees may
from time to time adopt) to effect purchases, sales, loans or exchanges of
portfolio securities and other investments of the Trust on behalf of the
Trustees or may authorize any officer, employee or Trustee to effect such
purchases, sales, loans or exchanges pursuant to recommendations of such
Investment Advisers, or any of them (and all without further action by the
Trustees). Any such purchases, sales, loans and exchanges shall be deemed to
have been authorized by all of the Trustees.
<PAGE>
Section 3. Administration Agreement. The Trustees may in their discretion
from time to time enter into an administration agreement or, if the Trustees
establish multiple Series or Classes, separate administration agreements with
respect to each Series or Class, whereby the other party to such agreement shall
undertake to manage the business affairs of the Trust or of a Series or Class
thereof of the Trust and furnish the Trust or a Series or a Class thereof with
office facilities, and shall be responsible for the ordinary clerical,
bookkeeping and recordkeeping services at such office facilities, and other
facilities and services, if any, and all upon such terms and conditions as the
Trustees may in their discretion determine.
Section 4. Service Agreement. The Trustees may in their discretion from
time to time enter into service agreements with respect to one or more Series or
Classes of Shares whereby the other parties to such Service Agreements will
provide administration and/or support services pursuant to administration plans
and service plans, and all upon such terms and conditions as the Trustees in
their discretion may determine.
Section 5. Transfer Agent. The Trustees may in their discretion from time
to time enter into a transfer agency and shareholder service contract whereby
the other party to such contract shall undertake to furnish transfer agency and
shareholder services to the Trust. The contract shall have such terms and
conditions as the Trustees may in their discretion determine not inconsistent
with the Declaration. Such services may be provided by one or more Persons.
Section 6. Custodian. The Trustees may appoint or otherwise engage one or
more banks or trust companies, each having aggregate capital, surplus and
undivided profits (as shown in its last published report) of at least two
million dollars ($2,000,000), or any other entity satisfying the requirements of
the 1940 Act, to serve as Custodian with authority as its agent, but subject to
such restrictions, limitations and other requirements, if any, as may be
contained in the By-laws of the Trust. The Trustees may also authorize the
Custodian to employ one or more sub-custodians, including such foreign banks and
securities depositories as meet the requirements of applicable provisions of the
1940 Act, and upon such terms and conditions as may be agreed upon between the
Custodian and such sub-custodian, to hold securities and other assets of the
Trust and to perform the acts and services of the Custodian, subject to
applicable provisions of law and resolutions adopted by the Trustees.
<PAGE>
Section 7. Affiliations of Trustees or Officers, Etc. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust or
any Series thereof is a shareholder, director, officer, partner,
trustee, employee, manager, adviser or distributor of or for any
partnership, corporation, trust, association or other organization or
of or for any parent or affiliate of any organization, with which a
contract of the character described in this Article III or for
services as Custodian, Transfer Agent or disbursing agent or for
related services may have been or may hereafter be made, or that any
such organization, or any parent or affiliate thereof, is a
Shareholder of or has an interest in the Trust, or that
(ii) any partnership, corporation, trust, association or other
organization with which a contract of the character described in
Sections 1, 2, 3 or 4 of this Article III or for services as
Custodian, Transfer Agent or disbursing agent or for related services
may have been or may hereafter be made also has any one or more of
such contracts with one or more other partnerships, corporations,
trusts, associations or other organizations, or has other business or
interests, shall not affect the validity of any such contract or
disqualify any Shareholder, Trustee or officer of the Trust from
voting upon or executing the same or create any liability or
accountability to the Trust or its Shareholders.
ARTICLE IV
COMPENSATION, LIMITATION OF
LIABILITY AND INDEMNIFICATION
Section 1. Compensation. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and they may fix the amount of such
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
Section 2. Limitation of Liability. All persons contracting with or having
any claim against the Trust or a particular Series shall look only to the assets
of all Series or such particular Series for payment under such contract or
claim; and neither the Trustees nor, when acting in such capacity, any of the
Trust's officers, employees or agents, whether past, present or future, shall be
personally liable therefor. Every written instrument or obligation on behalf of
the Trust or any Series shall contain a statement to the foregoing effect, but
the absence of such statement shall not operate to make any Trustee or officer
of the Trust liable thereunder. Provided they have exercised reasonable care and
have acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees and officers of the Trust shall not be
responsible or liable for any act or omission or for neglect or wrongdoing of
them or any officer, agent, employee, investment adviser or independent
contractor of the Trust, but nothing contained in this Declaration or in the
Delaware Act shall protect any Trustee or officer of the Trust against liability
to the Trust or to Shareholders to which he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
<PAGE>
Section 3. Indemnification. (a) Subject to the exceptions and
limitations contained in subsection (b) below:
(i) every person who is, or has been, a Trustee or an officer,
employee or agent of the Trust (including any individual who serves at
its request as director, officer, partner, trustee or the like of
another organization in which it has any interest as a shareholder,
creditor or otherwise) ("Covered Person") shall be indemnified by the
Trust or the appropriate Series to the fullest extent permitted by law
against liability and against all expenses reasonably incurred or paid
by him in connection with any claim, action, suit or proceeding in
which he becomes involved as a party or otherwise by virtue of his
being or having been a Covered Person and against amounts paid or
incurred by him in the settlement thereof; and
(ii) as used herein, the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or proceedings
(civil, criminal or other, including appeals), actual or threatened,
and the words "liability" and "expenses" shall include, without
limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office, or (B) not to have acted in good faith in the
reasonable belief that his action was in the best interest of the
Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Covered Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office: (A) by the court or
other body approving the settlement; (B) by at least a majority of
those Trustees who are neither Interested Persons of the Trust nor are
parties to the matter based upon a review of readily available facts
(as opposed to a full trial-type inquiry); (C) by written opinion of
independent legal counsel based upon a review of readily available
facts (as opposed to a full trial-type inquiry) or (D) by a vote of a
majority of the Outstanding Shares entitled to vote (excluding any
Outstanding Shares owned of record or beneficially by such
individual).
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not
be exclusive of or affect any other rights to which any Covered Person may
now or hereafter be entitled, and shall inure to the benefit of the heirs,
executors and administrators of a Covered Person.
<PAGE>
(d) To the maximum extent permitted by applicable law, expenses in
connection with the preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in subsection (a) of
this Section may be paid by the Trust or applicable Series from time to
time prior to final disposition thereof upon receipt of an undertaking by
or on behalf of such Covered Person that such amount will be paid over by
him to the Trust or applicable Series if it is ultimately determined that
he is not entitled to indemnification under this Section; provided,
however, that either (i) such Covered Person shall have provided
appropriate security for such undertaking, (ii) the Trust is insured
against losses arising out of any such advance payments or (iii) either a
majority of the Trustees who are neither Interested Persons of the Trust
nor parties to the matter, or independent legal counsel in a written
opinion, shall have determined, based upon a review of readily available
facts (as opposed to a full trial-type inquiry) that there is reason to
believe that such Covered Person will not be disqualified from
indemnification under this Section.
(e) Any repeal or modification of this Article IV by the Shareholders,
or adoption or modification of any other provision of the Declaration or
By-laws inconsistent with this Article, shall be prospective only, to the
extent that such repeal, or modification would, if applied retrospectively,
adversely affect any limitation on the liability of any Covered Person or
indemnification available to any Covered Person with respect to any act or
omission which occurred prior to such repeal, modification or adoption.
Section 3. Indemnification of Shareholders. If any Shareholder or former
Shareholder of any Series shall be held personally liable solely by reason of
his being or having been a Shareholder and not because of his acts or omissions
or for some other reason, the Shareholder or former Shareholder (or his heirs,
executors, administrators or other legal representatives or in the case of any
entity, its general successor) shall be entitled out of the assets belonging to
the applicable Series to be held harmless from and indemnified against all loss
and expense arising from such liability. The Trust, on behalf of the affected
Series, shall, upon request by such Shareholder, assume the defense of any claim
made against such Shareholder for any act or obligation of the Series and
satisfy any judgment thereon from the assets of the Series.
Section 4. No Bond Required of Trustees. No Trustee shall be obligated
to give any bond or other security for the performance of any of his duties
hereunder.
<PAGE>
Section 5. No Duty of Investigation; Notice in Trust Instruments, Etc. No
purchaser, lender, transfer agent or other Person dealing with the Trustees or
any officer, employee or agent of the Trust or a Series thereof shall be bound
to make any inquiry concerning the validity of any transaction purporting to be
made by the Trustees or by said officer, employee or agent or be liable for the
application of money or property paid, loaned, or delivered to or on the order
of the Trustees or of said officer, employee or agent. Every obligation,
contract, instrument, certificate, Share, other security of the Trust or a
Series thereof or undertaking, and every other act or thing whatsoever executed
in connection with the Trust shall be conclusively presumed to have been
executed or done by the executors thereof only in their capacity as Trustees
under this Declaration or in their capacity as officers, employees or agents of
the Trust or a Series thereof. Every written obligation, contract, instrument,
certificate, Share, other security of the Trust or a Series thereof or
undertaking made or issued by the Trustees may recite that the same is executed
or made by them not individually, but as Trustees under the Declaration, and
that the obligations of the Trust or a Series thereof under any such instrument
are not binding upon any of the Trustees or Shareholders individually, but bind
only the Trust Property or the Trust Property of the applicable Series, and may
contain any further recital which they may deem appropriate, but the omission of
such recital shall not operate to bind the Trustees individually. The Trustees
shall at all times maintain insurance for the protection of the Trust Property
or the Trust Property of the applicable Series, its Shareholders, Trustees,
officers, employees and agents in such amount as the Trustees shall deem
adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.
Section 6. Reliance on Experts, Etc. Each Trustee, officer or employee of
the Trust or a Series thereof shall, in the performance of his duties, powers
and discretions hereunder be fully and completely justified and protected with
regard to any act or any failure to act resulting from reliance in good faith
upon the books of account or other records of the Trust or a Series thereof,
upon an opinion of counsel, or upon reports made to the Trust or a Series
thereof by any of its officers or employees or by the Investment Adviser, the
Administrator, the Distributor, Transfer Agent, selected dealers, accountants,
appraisers or other experts or consultants selected with reasonable care by the
Trustees, officers or employees of the Trust, regardless of whether such counsel
or expert may also be a Trustee.
<PAGE>
ARTICLE V
SERIES; CLASSES; SHARES
Section 1. Establishment of Series or Class. The Trust shall consist of one
or more Series. Without limiting the authority of the Trustees to establish and
designate any further Series, the Trustees hereby establish one Series which
shall be designated Institutional Development Fund. Each additional Series shall
be established and is effective upon the adoption of a resolution of a majority
of the Trustees or any alternative date specified in such resolution. The
Trustees may designate the relative rights and preferences of the Shares of each
Series. The Trustees may divide the Shares of any Series into Classes. Without
limiting the authority of the Trustees to establish and designate any further
Classes, the Trustees hereby establish a single Class of Shares. The Classes of
Shares of the existing Series herein established and designated and any Shares
of any further Series and Classes that may from time to time be established and
designated by the Trustees shall be established and designated, and the
variations in the relative rights and preferences as between the different
Series shall be fixed and determined, by the Trustees; provided, that all Shares
shall be identical except for such variations as shall be fixed and determined
between different Series or Classes by the Trustees in establishing and
designating such Class or Series. In connection therewith with respect to the
existing Classes, the purchase price, the method of determining the net asset
value, and the relative dividend rights of holders shall be as set forth in the
Trust's Registration Statement on Form N-1A under the Securities Act of 1933
and/or the 1940 Act and as in effect at the time of issuing Shares of the
existing Classes.
All references to Shares in this Declaration shall be deemed to be Shares
of any or all Series or Classes as the context may require. The Trust shall
maintain separate and distinct records for each Series and hold and account for
the assets thereof separately from the other assets of the Trust or of any other
Series. A Series may issue any number of Shares or any Class thereof and need
not issue Shares. Each Share of a Series shall represent an equal beneficial
interest in the net assets of such Series. Each holder of Shares of a Series or
a Class thereof shall be entitled to receive his pro rata share of all
distributions made with respect to such Series or Class. Upon redemption of his
Shares, such Shareholder shall be paid solely out of the funds and property of
such Series. The Trustees may adopt and change the name of any Series or Class.
Section 2. Shares. The beneficial interest in the Trust shall be divided
into transferable Shares of one or more separate and distinct Series or Classes
established by the Trustees. The number of Shares of each Series and Class is
unlimited and each Share shall have no par value per Share or such other amount
as the Trustees may establish. All Shares issued hereunder shall be fully paid
and nonassessable. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust. The
Trustees shall have full power and authority, in their sole discretion and
without obtaining Shareholder approval, to issue original or additional Shares
at such times and on such terms and conditions as they deem appropriate; to
issue fractional Shares and Shares held in the treasury; to establish and to
change in any manner Shares of any Series or Classes with such preferences,
terms of conversion, voting powers, rights and privileges as the Trustees may
determine (but the Trustees may not change Outstanding Shares in a manner
materially adverse to the Shareholders of such Shares); to divide or combine the
Shares of any Series or Classes into a greater or lesser number; to classify or
reclassify any unissued Shares of any Series or Classes into one or more Series
or Classes of Shares; to abolish any one or more Series or Classes of Shares; to
issue Shares to acquire other assets (including assets subject to, and in
connection with, the assumption of liabilities) and businesses; and to take such
other action with respect to the Shares as the Trustees may deem desirable.
Shares held in the treasury shall not confer any voting rights on the Trustees
and shall not be entitled to any dividends or other distributions declared with
respect to the Shares.
<PAGE>
Section 3. Investment in the Trust. The Trustees shall accept investments
in any Series or Class from such persons and on such terms as they may from time
to time authorize. At the Trustees' discretion, such investments, subject to
applicable law, may be in the form of cash or securities in which that Series is
authorized to invest, valued as provided in Article VI, Section 3. Investments
in a Series shall be credited to each Shareholder's account in the form of full
Shares at the Net Asset Value per Share next determined after the investment is
received or accepted as may be determined by the Trustees; provided, however,
that the Trustees may, in their sole discretion, (a) impose a sales charge upon
investments in any Series or Class, (b) issue fractional Shares, (c) determine
the Net Asset Value per Share of the initial capital contribution or (d)
authorize the issuance of Shares at a price other than Net Asset Value to the
extent permitted by the 1940 Act or any rule, order or interpretation of the
Commission thereunder. The Trustees shall have the right to refuse to accept
investments in any Series at any time without any cause or reason therefor
whatsoever.
Section 4. Assets and Liabilities of Series. All consideration received by
the Trust for the issue or sale of Shares of a particular Series, together with
all assets in which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof (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
be held and accounted for separately from the assets of every other Series and
are referred to as "assets belonging to" that Series. The assets belonging to a
Series shall belong only to that Series for all purposes, and to no other
Series, subject only to the rights of creditors of that Series. Any assets,
income, earnings, profits, and proceeds thereof, funds, or payments which are
not readily identifiable as belonging to any particular Series shall be
allocated by the Trustees between and among one or more Series as the Trustees
deem fair and equitable. Each such allocation shall be conclusive and binding
upon the Shareholders of all Series for all purposes, and such assets, earnings,
income, profits or funds, or payments and proceeds thereof shall be referred to
as assets belonging to that Series. The assets belonging to a Series shall be so
recorded upon the books of the Trust, and shall be held by the Trustees in trust
for the benefit of the Shareholders of that Series. The assets belonging to a
Series shall be charged with the liabilities of that Series and all expenses,
costs, charges and reserves attributable to that Series, except that liabilities
and expenses allocated solely to a particular Class shall be borne by that
Class. 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 between or among any one
or more of the Series or Classes in such manner as the Trustees deem fair and
equitable. Each such allocation shall be conclusive and binding upon the
Shareholders of all Series or Classes for all purposes.
<PAGE>
Without limiting the foregoing, but subject to the right of the Trustees to
allocate general liabilities, expenses, costs, charges or reserves as herein
provided, the debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to a particular Series shall be
enforceable against the assets of such Series only, and not against the assets
of any other Series. Notice of this contractual limitation on liabilities among
Series may, in the Trustees' discretion, be set forth in the certificate of
trust of the Trust (whether originally or by amendment) as filed or to be filed
in the Office of the Secretary of State of the State of Delaware pursuant to the
Delaware Act, and upon the giving of such notice in the certificate of trust,
the statutory provisions of Section 3804 of the Delaware Act relating to
limitations on liabilities among Series (and the statutory effect under Section
3804 of setting forth such notice in the certificate of trust) shall become
applicable to the Trust and each Series. Any person extending credit to,
contracting with or having any claim against any Series may look only to the
assets of that Series to satisfy or enforce any debt, with respect to that
Series. No Shareholder or former Shareholder of any Series shall have a claim on
or any right to any assets allocated or belonging to any other Series.
Section 5. Ownership and Transfer of Shares. The Trust or a transfer or
similar agent for the Trust shall maintain a register containing the names and
addresses of the Shareholders of each Series and Class thereof, the number of
Shares of each Series and Class held by such Shareholders, and a record of all
Share transfers. The register shall be conclusive as to the identity of
Shareholders of record and the number of Shares held by them from time to time.
The Trustees may authorize the issuance of certificates representing Shares and
adopt rules governing their use. The Trustees may make rules governing the
transfer of Shares, whether or not represented by certificates. Except as
otherwise provided by the Trustees, Shares shall be transferable on the books of
the Trust only by the record holder thereof or by his duly authorized agent upon
delivery to the Trustees or the Trust's transfer agent of a duly executed
instrument of transfer, together with a Share certificate if one is outstanding,
and such evidence or the genuineness of each such execution and authorization
and of such other matters as may be required by the Trustees. Upon such
delivery, and subject to any further requirements specified by the Trustees or
contained in the By-laws, the transfer shall be recorded on the books of the
Trust. Until a transfer is so recorded, the Shareholder of record of Shares
shall be deemed to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor the Trust, nor any transfer agent or registrar or any
officer, employee or agent of the Trust, shall be affected by any notice of a
proposed transfer.
Section 6. Status of Shares; Limitation of Shareholder Liability. Shares
shall be deemed to be personal property giving Shareholders only the rights
provided in this Declaration. Every Shareholder, by virtue of having acquired a
Share, shall be held expressly to have assented to and agreed to be bound by the
terms of this Declaration and to have become a party hereto. No Shareholder
shall be personally liable for the debts, liabilities, obligations and expenses
incurred by, contracted for, or otherwise existing with respect to, the Trust or
any Series. The death, incapacity, dissolution, termination or bankruptcy of a
Shareholder during the existence of the Trust shall not operate to terminate the
Trust, nor entitle the representative of any such Shareholder to an accounting
or to take any action in court or elsewhere against the Trust or the Trustees,
but entitles such representative only to the rights of such Shareholder under
this Trust. Ownership of Shares shall not entitle the Shareholder to any title
in or to the whole or any part of the Trust Property or right to call for a
partition or division of the same or for an accounting, nor shall the ownership
of Shares constitute the Shareholders as partners. Neither the Trust nor the
Trustees shall have any power to bind any Shareholder personally or to demand
payment from any Shareholder for anything, other than as agreed by the
Shareholder. Shareholders shall have the same limitation of personal liability
as is extended to shareholders of a private corporation for profit incorporated
in the State of Delaware. Every written obligation of the Trust or any Series
shall contain a statement to the effect that such obligation may only be
enforced against the assets of the appropriate Series or all Series; however,
the omission of such statement shall not operate to bind or create personal
liability for any Shareholder or Trustee.
<PAGE>
ARTICLE VI
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions. The Trustees or a committee of one or more
Trustees and one or more officers may declare and pay dividends and other
distributions, including dividends on Shares of a particular Series and other
distributions from the assets belonging to that Series. No dividend or
distribution, including, without limitation, any distribution paid upon
termination of the Trust or of any Series (or Class) with respect to, nor any
redemption or repurchase of, the Shares of any Series (or Class) shall be
effected by the Trust other than from the assets held with respect to such
Series, nor shall any Shareholder of any particular Series otherwise have any
right or claim against the assets held with respect to any other Series except
to the extent that such Shareholder has such a right or claim hereunder as a
Shareholder of such other Series. The Trustees shall have full discretion to
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. The amount and payment of dividends or distributions and their
form, whether they are in cash, Shares or other Trust Property, shall be
determined by the Trustees. Dividends and other distributions may be paid
pursuant to a standing resolution adopted once or more often as the Trustees
determine. All dividends and other distributions on Shares of a particular
Series shall be distributed pro rata to the Shareholders of that Series in
proportion to the number of Shares of that Series they held on the record date
established for such payment, except that such dividends and distributions shall
appropriately reflect expenses allocated to a particular Class of such Series.
The Trustees may adopt and offer to Shareholders such dividend reinvestment
plans, cash dividend payout plans or similar plans as the Trustees deem
appropriate.
<PAGE>
Section 2. Redemptions. Each Shareholder of a Series shall have the right
at such times as may be permitted by the Trustees to require the Series to
redeem all or any part of his Shares at a redemption price per Share equal to
the Net Asset Value per Share at such time as the Trustees shall have prescribed
by resolution, or, to the extent permitted by the 1940 Act, at such other
redemption price and at such times as the Trustees shall prescribe by
resolution. In the absence of such resolution, the redemption price per Share
shall be the Net Asset Value next determined after receipt by the Series of a
request for redemption in proper form less such charges as are determined by the
Trustees and described in the Trust's Registration Statement for that Series
under the Securities Act of 1933. The Trustees may specify conditions, prices,
and places of redemption, may specify binding requirements for the proper form
or forms of requests for redemption and may specify the amount of any deferred
sales charge to be withheld from redemption proceeds. Payment of the redemption
price may be wholly or partly in securities or other assets at the value of such
securities or assets used in such determination of Net Asset Value, or may be in
cash. Upon redemption, Shares may be reissued from time to time. The Trustees
may require Shareholders to redeem Shares for any reason under terms set by the
Trustees, including, but not limited to, the failure of a Shareholder to supply
a taxpayer identification number if required to do so, or to have the minimum
investment required, or to pay when due for the purchase of Shares issued to
him. To the extent permitted by law, the Trustees may retain the proceeds of any
redemption of Shares required by them for payment of amounts due and owing by a
Shareholder to the Trust or any Series or Class or any governmental authority.
Notwithstanding the foregoing, the Trustees may postpone payment of the
redemption price and may suspend the right of the Shareholders to require any
Series or Class to redeem Shares during any period of time when and to the
extent permissible under the 1940 Act.
Section 3. Determination of Net Asset Value. The Trustees shall cause the
Net Asset Value of Shares of each Series or Class to be determined from time to
time in a manner consistent with applicable laws and regulations. The Trustees
may delegate the power and duty to determine Net Asset Value per Share to one or
more Trustees or officers of the Trust or to a custodian, depository or other
agent appointed for such purpose. The Net Asset Value of Shares shall be
determined separately for each Series or Class at such times as may be
prescribed by the Trustees or, in the absence of action by the Trustees, as of
the close of regular trading on the New York Stock Exchange on each day for all
or part of which such Exchange is open for unrestricted trading.
Section 4. Suspension of Right of Redemption. If, as referred to in Section
2 of this Article, the Trustees postpone payment of the redemption price and
suspend the right of Shareholders to redeem their Shares, such suspension shall
take effect at the time the Trustees shall specify, but not later than the close
of business on the business day next following the declaration of suspension.
Thereafter Shareholders shall have no right of redemption or payment until the
Trustees declare the end of the suspension. If the right of redemption is
suspended, a Shareholder may either withdraw his request for redemption or
receive payment based on the Net Asset Value per Share next determined after the
suspension terminates.
Section 5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Distributor or another agent designated for the
purpose, by agreement with the owner thereof at a price not exceeding the Net
Asset Value per Share determined as of the time when the purchase or contract of
purchase is made or the Net Asset Value as of any time which may be later
determined, provided payment is not made for the Shares prior to the time as of
which such Net Asset Value is determined.
<PAGE>
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers. The Shareholders shall have power to vote only
with respect to (a) the election of Trustees as provided in Section 2 of this
Article; (b) the removal of Trustees as provided in Article II, Section 3(d);
(c) any investment advisory or management contract as provided in Article VIII,
Section 1; (d) any termination of the Trust as provided in Article IX, Section
4; (e) the amendment of this Declaration to the extent and as provided in
Article X, Section 8; and (f) such additional matters relating to the Trust as
may be required or authorized by law, this Declaration, or the By-laws or any
registration of the Trust with the Commission or any State, or as the Trustees
may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares shall be
voted by individual Series or Class, except (a) when required by the 1940 Act,
Shares shall be voted in the aggregate and not by individual Series or Class,
and (b) when the Trustees have determined that the matter affects the interests
of more than one Series or Class, then the Shareholders of all such Series or
Classes shall be entitled to vote thereon. As determined by the Trustees without
the vote or consent of shareholders, on any matter submitted to a vote of
Shareholders either (i) each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote or (ii) each dollar of net asset
value (number of Shares owned times net asset value per share of such Series or
Class, as applicable) shall be entitled to one vote on any matter on which such
Shares are entitled to vote and each fractional dollar amount shall be entitled
to a proportionate fractional vote. Without limiting the power of the Trustees
in any way to designate otherwise in accordance with the preceding sentence, the
Trustees hereby establish that each whole Share shall be entitled to one vote as
to any matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote. There shall be no cumulative voting
in the election of Trustees. Shares may be voted in person or by proxy or in any
manner provided for in the By-laws. The By-laws may provide that proxies may be
given by any electronic or telecommunications device or in any other manner, but
if a proposal by anyone other than the officers or Trustees is submitted to a
vote of the Shareholders of any Series or Class, or if there is a proxy contest
or proxy solicitation or proposal in opposition to any proposal by the officers
or Trustees, Shares may be voted only in person or by written proxy. Until
Shares of a Series are issued, as to that Series the Trustees may exercise all
rights of Shareholders and may take any action required or permitted to be taken
by Shareholders by law, this Declaration or the By-laws. Meetings of
Shareholders shall be called and notice thereof and record dates therefor shall
be given and set as provided in the By-laws.
<PAGE>
Section 2. Quorum; Required Vote. One-third of the Outstanding Shares of
each Series or Class, or one-third of the Outstanding Shares of the Trust,
entitled to vote in person or by proxy shall be a quorum for the transaction of
business at a Shareholders' meeting with respect to such Series or Class, or
with respect to the entire Trust, respectively. Any lesser number shall be
sufficient for adjournments. Any adjourned session of a Shareholders' meeting
may be held within a reasonable time without further notice. Except when a
larger vote is required by law, this Declaration or the By-laws, a majority of
the Shares voting at a Shareholders' meeting in person or by proxy shall decide
any matters to be voted upon with respect to the entire Trust and a plurality of
such Shares shall elect a Trustee; provided, that if this Declaration or
applicable law permits or requires that Shares be voted on any matter by
individual Series or Classes, then a majority of the Shares of that Series or
Class (or, if required by law, a majority of the Shares outstanding and entitled
to vote of that Series or Class) voting at a Shareholders' meeting in person or
by proxy on the matter shall decide that matter insofar as that Series or Class
is concerned. Shareholders may act as to the Trust or any Series or Class by the
written consent of a majority (or such other amount as may be required by
applicable law) of the Outstanding Shares of the Trust or of such Series or
Class, as the case may be.
Section 3. Record Dates. For the purpose of determining the Shareholders of
any Series (or Class) who are entitled to receive payment of any dividend or of
any other distribution, the Trustees may from time to time fix a date, which
shall be before the date for the payment of such dividend or such other payment,
as the record date for determining the Shareholders of such Series (or Class)
having the right to receive such dividend or distribution. Without fixing a
record date, the Trustees may for distribution purposes close the register or
transfer books for one or more Series (or Classes) any time prior to the payment
of a distribution. Nothing in this Section shall be construed as precluding the
Trustees from setting different record dates for different Series (or Classes).
Section 4. Additional Provisions. The By-laws may include further
provisions for Shareholders' votes and meetings and related matters.
<PAGE>
ARTICLE VIII
EXPENSES OF THE TRUST AND SERIES
Section 1. Payment of Expenses by the Trust. Subject to Article V, Section
4, the Trust or a particular Series shall pay, or shall reimburse the Trustees
from the assets belonging to all Series or the particular Series, for their
expenses (or the expenses of a Class of such Series) and disbursements,
including, but not limited to, interest charges, taxes, brokerage fees and
commissions; expenses of issue, repurchase and redemption of Shares; certain
insurance premiums; applicable fees, interest charges and expenses of third
parties, including the Trust's investment advisers, managers, administrators,
distributors, custodians, transfer agents and fund accountants; fees of pricing,
interest, dividend, credit and other reporting services; costs of membership in
trade associations; telecommunications expenses; funds transmission expenses;
auditing, legal and compliance expenses; costs of forming the Trust and its
Series and maintaining its existence; costs of preparing and printing the
prospectuses of the Trust and each Series, statements of additional information
and Shareholder reports and delivering them to Shareholders; expenses of
meetings of Shareholders and proxy solicitations therefor; costs of maintaining
books and accounts; costs of reproduction, stationery and supplies; fees and
expenses of the Trustees; compensation of the Trust's officers and employees and
costs of other personnel performing services for the Trust or any Series; costs
of Trustee meetings; Commission registration fees and related expenses; state or
foreign securities laws registration fees and related expenses; and for such
non-recurring items as may arise, including litigation to which the Trust or a
Series (or a Trustee or officer of the Trust acting as such) is a party, and for
all losses and liabilities by them incurred in administering the Trust. The
Trustees shall have a lien on the assets belonging to the appropriate Series, or
in the case of an expense allocable to more than one Series, on the assets of
each such Series, prior to any rights or interests of the Shareholders thereto,
for the reimbursement to them of such expenses, disbursements, losses and
liabilities.
Section 2. Payment of Expenses by Shareholders. The Trustees shall have the
power, as frequently as they may determine, to cause each Shareholder, or each
Shareholder of any particular Series, to pay directly, in advance or arrears,
for charges of the Trust's custodian or transfer, shareholder servicing or
similar agent, an amount fixed from time to time by the Trustees, by setting off
such charges due from such Shareholder from declared but unpaid dividends owed
such Shareholder and/or by reducing the number of Shares in the account of such
Shareholder by that number of full and/or fractional Shares which represents the
outstanding amount of such charges due from such Shareholder.
ARTICLE IX
MISCELLANEOUS
Section 1. Trust Not a Partnership. This Declaration creates a trust
and not a partnership. No Trustee shall have any power to bind personally
either the Trust's officers or any Shareholder.
Section 2. Trustee Action. The exercise by the Trustees of their powers and
discretion hereunder in good faith and with reasonable care under the
circumstances then prevailing shall be binding upon everyone interested. Subject
to the provisions of Article IV, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law.
<PAGE>
Section 3. Record Dates. The Trustees may fix in advance a date up to
ninety (90) days before the date of any Shareholders' meeting, or the date for
the payment of any dividends or other distributions, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Shares shall go into effect as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting, or
entitled to receive payment of such dividend or other distribution, or to
receive any such allotment of rights, or to exercise such rights in respect of
any such change, conversion or exchange of Shares.
Section 4. Termination of the Trust.
(a) This Trust shall have perpetual existence. Subject to the vote of
a majority of the Shares outstanding and entitled to vote of the Trust or
of each Series to be affected, the Trustees may
(i) sell and convey all or substantially all of the assets of all
Series or any affected Series to another Series or to another entity
which is an open-end investment company as defined in the 1940 Act, or
is a series thereof, for adequate consideration, which may include the
assumption of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of the Trust or any affected
Series, and which may include shares of or interests in such Series,
entity, or series thereof; or
(ii) at any time sell and convert into money all or substantially all
of the assets of all Series or any affected Series.
Upon making reasonable provision for the payment of all known liabilities
of all Series or any affected Series in either (i) or (ii), by such
assumption or otherwise, the Trustees shall distribute the remaining
proceeds or assets (as the case may be) ratably among the Shareholders of
all Series or any affected Series; however, the payment to any particular
Class of such Series may be reduced by any fees, expenses or charges
allocated to that Class.
(b) The Trustees may take any of the actions specified in subsection
(a)(i) and (ii) above without obtaining the vote of a majority of the
Shares Outstanding and entitled to vote of the Trust or any Series if a
majority of the Trustees determines that the continuation of the Trust or
Series is not in the best interests of the Trust, such Series, or their
respective Shareholders as a result of factors or events adversely
affecting the ability of the Trust or such Series to conduct its business
and operations in an economically viable manner. Such factors and events
may include the inability of the Trust or a Series to maintain its assets
at an appropriate size, changes in laws or regulations governing the Trust
or the Series or affecting assets of the type in which the Trust or Series
invests, or economic developments or trends having a significant adverse
impact on the business or operations of the Trust or such Series.
<PAGE>
(c) Upon completion of the distribution of the remaining proceeds or
assets pursuant to subsection (a), the Trust or affected Series shall
terminate and the Trustees and the Trust shall be discharged of any and all
further liabilities and duties hereunder with respect thereto and the
right, title and interest of all parties therein shall be canceled and
discharged. Upon termination of the Trust, following completion of winding
up of its business, the Trustees shall cause a certificate of cancellation
of the Trust's certificate of trust to be filed in accordance with the
Delaware Act, which certificate of cancellation may be signed by any one
Trustee.
Section 5. Reorganization.
(a) Notwithstanding anything else herein, to change the Trust's form
or place of organization the Trustees may, without Shareholder approval
unless such approval is required by applicable law, (i) cause the Trust to
merge or consolidate with or into one or more entities, if the surviving or
resulting entity is the Trust or another open-end management investment
company under the 1940 Act, or a series thereof, that will succeed to or
assume the Trust's registration under the 1940 Act, (ii) cause the Shares
to be exchanged under or pursuant to any state or federal statute to the
extent permitted by law, or (iii) cause the Trust to incorporate under the
laws of Delaware or any other U.S. jurisdiction. Any agreement of merger or
consolidation or certificate of merger may be signed by a majority of
Trustees and facsimile signatures conveyed by electronic or
telecommunication means shall be valid.
(b) Pursuant to and in accordance with the provisions of Section
3815(f) of the Delaware Act, an agreement of merger or consolidation
approved by the Trustees in accordance with this Section 5 may effect any
amendment to the Declaration or effect the adoption of a new trust
instrument of the Trust if it is the surviving or resulting trust in the
merger or consolidation.
(c) The Trustees may create one or more business trusts to which all
or any part of the assets, liabilities, profits or losses of the Trust or
any Series or Class thereof may be transferred and may provide for the
conversion of Shares in the Trust or any Series or Class thereof into
beneficial interests in any such newly created trust or trusts or any
series or classes thereof.
Section 6. Declaration of Trust. The original or a copy of this Declaration
of Trust and of each amendment hereto or Declaration of Trust supplemental shall
be kept at the office of the Trust where it may be inspected by any Shareholder.
Anyone dealing with the Trust may rely on a certificate by a Trustee or an
officer of the Trust as to the authenticity of the Declaration of Trust or any
such amendments or supplements and as to any matters in connection with the
Trust. The masculine gender herein shall include the feminine and neuter
genders. Headings herein are for convenience only and shall not affect the
construction of this Declaration of Trust. This Declaration of Trust may be
executed in any number of counterparts, each of which shall be deemed an
original.
<PAGE>
Section 7. Applicable Law. This Declaration and the Trust created hereunder
are governed by and construed and administered according to the Delaware Act and
the applicable laws of the State of Delaware; provided, however, that there
shall not be applicable to the Trust, the Trustees or this Declaration of Trust
(a) the provisions of Section 3540 of Title 12 of the Delaware Code, or (b) any
provisions of the laws (statutory or common) of the State of Delaware (other
than the Delaware Act) pertaining to trusts which relate to or regulate (i) the
filing with any court or governmental body or agency of trustee accounts or
schedules of trustee fees and charges, (ii) affirmative requirements to post
bonds for trustees, officers, agents or employees of a trust, (iii) the
necessity for obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (iv) fees or
other sums payable to trustees, officers, agents or employees of a trust, (v)
the allocation of receipts and expenditures to income or principal, (vi)
restrictions or limitations on the permissible nature, amount or concentration
of trust investments or requirements relating to the titling, storage or other
manner of holding of trust assets, or (vii) the establishment of fiduciary or
other standards of responsibilities or limitations on the acts or powers of
trustees, which are inconsistent with the limitations or liabilities or
authorities and powers of the Trustees set forth or referenced in this
Declaration. The Trust shall be of the type commonly called a Delaware business
trust, and, without limiting the provisions hereof, the Trust may exercise all
powers which are ordinarily exercised by such a trust under Delaware law. The
Trust specifically reserves the right to exercise any of the powers or
privileges afforded to trusts or actions that may be engaged in by trusts under
the Delaware Act, and the absence of a specific reference herein to any such
power, privilege or action shall not imply that the Trust may not exercise such
power or privilege or take such actions.
Section 8. Amendments. The Trustees may, without any Shareholder vote,
amend or otherwise supplement this Declaration by making an amendment, a
Declaration of Trust supplemental hereto or an amended and restated trust
instrument; provided, that Shareholders shall have the right to vote on any
amendment (a) which would affect the voting rights of Shareholders granted in
Article VII, Section l, (b) to this Section 8, (c) required to be approved by
Shareholders by law or by the Trust's registration statement(s) filed with the
Commission, and (d) submitted to them by the Trustees in their discretion. Any
amendment submitted to Shareholders which the Trustees determine would affect
the Shareholders of any Series shall be authorized by vote of the Shareholders
of such Series and no vote shall be required of Shareholders of a Series not
affected. Notwithstanding anything else herein, any amendment to Article IV
which would have the effect of reducing the indemnification and other rights
provided thereby to Trustees, officers, employees, and agents of the Trust or to
Shareholders or former Shareholders, and any repeal or amendment of this
sentence shall each require the affirmative vote of the holders of two-thirds of
the Outstanding Shares of the Trust entitled to vote thereon.
Section 9. Derivative Actions. In addition to the requirements set
forth in Section 3816 of the Delaware Act, a Shareholder may bring a derivative
action on behalf of the Trust only if the following conditions are met:
<PAGE>
(a) Shareholders eligible to bring such derivative action under the
Delaware Act who hold at least 10% of the Outstanding Shares of the Trust,
or 10% of the Outstanding Shares of the Series or Class to which such
action relates, shall join in the request for the Trustees to commence such
action; and
(b) the Trustees must be afforded a reasonable amount of time to
consider such shareholder request and to investigate the basis of such
claim. The Trustees shall be entitled to retain counsel or other advisers
in considering the merits of the request and shall require an undertaking
by the Shareholders making such request to reimburse the Trust for the
expense of any such advisers in the event that the Trustees determine not
to bring such action.
Section 10. Fiscal Year. The fiscal year of the Trust shall end on a
specified date as set forth in the By-laws. The Trustees may change the fiscal
year of the Trust without Shareholder approval.
Section 11. Severability. The provisions of this Declaration are severable.
If the Trustees determine, with the advice of counsel, that any provision hereof
conflicts with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a part of this
Declaration; provided, however, that such determination shall not affect any of
the remaining provisions of this Declaration or render invalid or improper any
action taken or omitted prior to such determination. If any provision hereof
shall be held invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision only in such jurisdiction
and shall not affect any other provision of this Declaration.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of the
date first written above.
Clyde H. Freed, Jr., as Trustee and not
individually, 13608 Wisteria Drive,
Germantown, MD 20874
<PAGE>
<PAGE>
BY-LAWS
OF
INSTITUTIONAL DEVELOPMENT TRUST
ARTICLE I
DEFINITIONS
All capitalized terms have the respective meanings given them in the
Agreement and Declaration of Trust of Institutional Development Trust dated
March 31, 1999, as amended or restated from time to time.
ARTICLE II
OFFICES
Section 1. Principal Office. Until changed by the Trustees, the principal
office of the Trust shall be in Cleveland, Ohio.
Section 2. Other Offices. The Trust may have offices in such other places
without as well as within the State of Delaware as the Trustees may from time to
time determine.
Section 3. Registered Office and Registered Agent. The Board of Trustees
shall establish a registered office in the State of Delaware and shall appoint
as the Trust's registered agent for service of process in the State of Delaware
an individual resident of the State of Delaware or a Delaware corporation or a
corporation authorized to transact business in the State of Delaware; in each
case the business office of such registered agent for service of process shall
be identical with the registered Delaware office of the Trust.
ARTICLE III
SHAREHOLDERS
Section 1. Meetings. Meetings of the Shareholders of the Trust or a Series
or Class thereof shall be held as provided in the Declaration of Trust at such
place within or without the State of Delaware as the Trustees shall designate.
The holders of one-third of the Outstanding Shares of the Trust or a Series or
Class thereof present in person or by proxy and entitled to vote shall
constitute a quorum at any meeting of the Shareholders of the Trust or a Series
or Class thereof.
<PAGE>
Section 2. Notice of Meetings. Notice of all meetings of the Shareholders,
stating the time, place and purposes of the meeting, shall be given by the
Trustees by mail or telegraphic or electronic means to each Shareholder at his
address as recorded on the register of the Trust mailed at least ten (10) days
and not more than ninety (90) days before the meeting, provided, however, that
notice of a meeting need not be given to a Shareholder to whom such notice need
not be given under the proxy rules of the Commission under the 1940 Act and the
Securities Exchange Act of 1934, as amended. Only the business stated in the
notice of the meeting shall be considered at such meeting. Any adjourned meeting
may be held as adjourned without further notice. No notice need be given to any
Shareholder who shall have failed to inform the Trust of his current address or
if a written waiver of notice, executed before or after the meeting by the
Shareholder or his attorney thereunto authorized, is filed with the records of
the meeting.
Section 3. Record Date for Meetings and Other Purposes. For the purpose of
determining the Shareholders who are entitled to notice of and to vote at any
meeting, or to participate in any 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 thirty (30) days, as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date not more than
ninety (90) days prior to the date of any meeting of Shareholders or
distribution or other action as a record date for the determination of the
persons to be treated as Shareholders of record for such purposes, except for
dividend payments which shall be governed by the Declaration of Trust.
Section 4. Proxies. At any meeting of Shareholders, any holder of Shares
entitled to vote thereat may vote by proxy, provided that no proxy shall be
voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote shall be taken. A
proxy shall be deemed signed if the shareholder's name is placed on the proxy
(whether by manual signature, typewriting, telegraphic transmission, facsimile,
other electronic means or otherwise) by the Shareholder or the Shareholder's
attorney-in-fact. Proxies may be given by any electronic or telecommunication
device except as otherwise provided in the Declaration of Trust. Proxies may be
solicited in the name of one or more Trustees or one or more of the officers of
the Trust. Only Shareholders of record shall be entitled to vote. As determined
by the Trustees without the vote or consent of Shareholders, on any matter
submitted to a vote of Shareholders, either (i) each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote and each
fractional Share shall be entitled to a proportionate fractional vote or (ii)
each dollar of net asset value (number of Shares owned times net asset value per
Share of such Series or Class, as applicable) shall be entitled to one vote on
any matter on which such Shares are entitled to vote and each fractional dollar
amount shall be entitled to a proportionate fractional vote. Without limiting
their power to designate otherwise in accordance with the preceding sentence,
the Trustees have established in the Declaration of Trust that each whole share
shall be entitled to one vote as to any matter on which it is entitled by the
Declaration of Trust to vote and fractional shares shall be entitled to a
proportionate fractional vote. When any Share is held jointly by several
persons, any one of them may vote at any meeting in person or by proxy in
respect of such Share, but if more than one of them shall be present at such
meeting in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Share. 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. If the holder
of any such Share is a minor or a person of unsound mind, and subject to
guardianship or the legal control of any other person as regards the charge or
management of such Share, he may vote by his guardian or such other person
appointed or having such control, and such vote may be given in person or by
proxy.
<PAGE>
Section 5. Abstentions and Broker Non-Votes. Outstanding Shares represented
in person or by proxy (including Shares which abstain or do not vote with
respect to one or more of any proposals presented for Shareholder approval) will
be counted for purposes of determining whether a quorum is present at a meeting.
Abstentions will be treated as Shares that are present and entitled to vote for
purposes of determining the number of Shares that are present and entitled to
vote with respect to any particular proposal, but will not be counted as a vote
in favor of such proposal. If a broker or nominee holding Shares in "street
name" indicates on the proxy that it does not have discretionary authority to
vote as to a particular proposal, those Shares will not be considered as present
and entitled to vote with respect to such proposal.
Section 6. Inspection of Records. The records of the Trust shall be open
to inspection by Shareholders to the same extent as is permitted shareholders of
a Delaware business corporation.
Section 7. Action without Meeting. Any action which may be taken by
Shareholders may be taken without a meeting if a majority of Outstanding Shares
entitled to vote on the matter (or such larger proportion thereof as shall be
required by law) consent to the action in writing and the written consents are
filed with the records of the meetings of Shareholders. Such consents shall be
treated for all purposes as a vote taken at a meeting of Shareholders.
<PAGE>
ARTICLE IV
TRUSTEES
Section 1. Meetings of the Trustees. The Trustees may in their discretion
provide for regular or stated meetings of the Trustees. Notice of regular or
stated meetings need not be given. Meetings of the Trustees other than regular
or stated meetings shall be held whenever called by the President, the Chairman
or by any one of the Trustees, at the time being in office. Notice of the time
and place of each meeting other than regular or stated meetings shall be given
by the Secretary or an Assistant Secretary or by the officer or Trustee calling
the meeting and shall be mailed to each Trustee at least two days before the
meeting, or shall be given by telephone, cable, wireless, facsimile or other
electronic mechanism to each Trustee at his business address, or personally
delivered to him at least one day before the meeting. Such notice may, however,
be waived by any Trustee. Notice of a meeting need not be given to any Trustee
if a written waiver of notice, executed by him 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. A notice or waiver of notice need not specify the purpose of any meeting.
The Trustees may meet by means of a telephone conference circuit or similar
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 be deemed to have been held at a place designated by the Trustees at the
meeting. Participation in a telephone conference meeting shall constitute
presence in person at such meeting. Any action required or permitted to be taken
at any meeting of the Trustees may be taken by the Trustees without a meeting if
a majority of the Trustees consent to the action in writing and the written
consents are filed with the records of the Trustees' meetings. Such consents
shall be treated as a vote for all purposes.
Section 2. Quorum and Manner of Acting. A majority of the Trustees shall be
present in person at any regular or special meeting of the Trustees in order to
constitute a quorum for the transaction of business at such meeting and (except
as otherwise required by law, the Declaration of Trust or these By-laws) the act
of a majority of the Trustees present at any such meeting, at which a quorum is
present, shall be the act of the Trustees. In the absence of a quorum, a
majority of the Trustees present may adjourn the meeting from time to time until
a quorum shall be present. Notice of an adjourned meeting need not be given.
<PAGE>
ARTICLE V
COMMITTEES
Section 1. Executive and Other Committees. The Trustees by vote of a
majority of all the Trustees may elect from their own number an Executive
Committee to consist of not less than three (3) members to hold office at the
pleasure of the Trustees, which shall have the power to conduct the current and
ordinary business of the Trust while the Trustees are not in session, including
the purchase and sale of securities and the designation of securities to be
delivered upon redemption of Shares of the Trust or a Series thereof, and such
other powers of the Trustees as the Trustees may delegate to them, from time to
time, except those powers which by law, the Declaration of Trust or these
By-laws they are prohibited from delegating. The Trustees may also elect from
their own number other Committees from time to time; the number composing such
Committees, the powers conferred upon the same (subject to the same limitations
as with respect to the Executive Committee) and the term of membership on such
Committees to be determined by the Trustees. The Trustees may designate a
chairman of any such Committee. In the absence of such designation the Committee
may elect its own Chairman.
Section 2. Meetings, Quorum and Manner of Acting. The Trustees may (1)
provide for stated meetings of any Committee, (2) specify the manner of calling
and notice required for special meetings of any Committee, (3) specify the
number of members of a Committee required to constitute a quorum and the number
of members of a Committee required to exercise specified powers delegated to
such Committee, (4) authorize the making of decisions to exercise specified
powers by written assent of the requisite number of members of a Committee
without a meeting, and (5) authorize the members of a Committee to meet by means
of a telephone conference circuit.
The Executive Committee shall keep regular minutes of its meetings and
records of decisions taken without a meeting and cause them to be recorded in a
book designated for that purpose and kept in the office of the Trust.
ARTICLE VI
OFFICERS
Section 1. General Provisions. The officers of the Trust shall be a
President, a Treasurer and a Secretary, who shall be elected by the Trustees.
The Trustees may elect or appoint such other officers or agents as the business
of the Trust may require, including one or more Vice Presidents, one or more
Assistant Secretaries, and one or more Assistant Treasurers. The Trustees may
delegate to any officer or committee the power to appoint any subordinate
officers or agents.
<PAGE>
Section 2. Term of Office and Qualifications. Except as otherwise provided
by law, the Declaration of Trust or these By-laws, the President, the Treasurer,
the Secretary and any other officer shall each hold office at the pleasure of
the Board of Trustees or until his successor shall have been duly elected and
qualified. Any two or more offices may be held by the same person. Any officer
may be but none need be a Trustee or Shareholder.
Section 3. Removal. The Trustees, at any regular or special meeting of the
Trustees, may remove any officer with or without cause, by a vote of a majority
of the Trustees then in office. Any officer or agent appointed by an officer or
committee may be removed with or without cause by such appointing officer or
committee.
Section 4. Powers and Duties of the Chairman. The Trustees may, but need
not, appoint from among their number a Chairman. When present he shall preside
at the meetings of the Shareholders and of the Trustees. He may call meetings of
the Trustees and of any committee thereof whenever he deems it necessary. He
shall be an executive officer of the Trust and shall have, with the President,
general supervision over the business and policies of the Trust, subject to the
limitations imposed upon the President, as provided in Section 5 of this Article
VI.
Section 5. Powers and Duties of the President. The President may call
meetings of the Trustees and of any Committee thereof when he deems it necessary
and shall preside at all meetings of the Shareholders. Subject to the control of
the Trustees and to the control of any Committees of the Trustees, within their
respective spheres, as provided by the Trustees, he shall at all times exercise
a general supervision and direction over the affairs of the Trust. He shall have
the power to employ attorneys and counsel for the Trust or any Series or Class
thereof and to employ such subordinate officers, agents, clerks and employees as
he may find necessary to transact the business of the Trust or any Series or
Class thereof. He shall also have the power to grant, issue, execute or sign
such powers of attorney, proxies or other documents as may be deemed advisable
or necessary in furtherance of the interests of the Trust or any Series thereof.
The President shall have such other powers and duties, as from time to time may
be conferred upon or assigned to him by the Trustees.
Section 6. Powers and Duties of Vice Presidents. In the absence or
disability of the President, the Vice President or, if there be more than one
Vice President, any Vice President designated by the Trustees, shall perform all
the duties and may exercise any of the powers of the President, subject to the
control of the Trustees. Each Vice President shall perform such other duties as
may be assigned to him from time to time by the Trustees and the President.
Section 7. Powers and Duties of the Treasurer. The Treasurer shall be the
principal financial and accounting officer of the Trust. He shall deliver all
funds of the Trust or any Series or Class thereof which may come into his hands
to such Custodian as the Trustees may employ. He shall render a statement of
condition of the finances of the Trust or any Series or Class thereof to the
Trustees as often as they shall require the same and he shall in general perform
all the duties incident to the office of a Treasurer and such other duties as
from time to time may be assigned to him by the Trustees. The Treasurer shall
give a bond for the faithful discharge of his duties, if required so to do by
the Trustees, in such sum and with such surety or sureties as the Trustees shall
require.
<PAGE>
Section 8. Powers and Duties of the Secretary. The Secretary shall keep the
minutes of all meetings of the Trustees and of the Shareholders in proper books
provided for that purpose; he shall have custody of the seal of the Trust; he
shall have charge of the Share transfer books, lists and records unless the same
are in the charge of a transfer agent. He shall attend to the giving and serving
of all notices by the Trust in accordance with the provisions of these By-laws
and as required by law; and subject to these By-laws, he shall in general
perform all duties incident to the office of Secretary and such other duties as
from time to time may be assigned to him by the Trustees.
Section 9. Powers and Duties of Assistant Officers. In the absence or
disability of the Treasurer, any officer designated by the Trustees shall
perform all the duties, and may exercise any of the powers, of the Treasurer.
Each officer shall perform such other duties as from time to time may be
assigned to him by the Trustees. Each officer performing the duties and
exercising the powers of the Treasurer, if any, and any Assistant Treasurer,
shall give a bond for the faithful discharge of his duties, if required so to do
by the Trustees, in such sum and with such surety or sureties as the Trustees
shall require.
Section 10. Powers and Duties of Assistant Secretaries. In the absence or
disability of the Secretary, any Assistant Secretary designated by the Trustees
shall perform all the duties, and may exercise any of the powers, of the
Secretary. Each Assistant Secretary shall perform such other duties as from time
to time may be assigned to him by the Trustees.
Section 11. Compensation of Officers and Trustees and Members of the
Advisory Board. Subject to any applicable provisions of the Declaration of
Trust, the compensation of the officers and Trustees and members of an advisory
board shall be fixed from time to time by the Trustees or, in the case of
officers, by any Committee or officer upon whom such power may be conferred by
the Trustees. No officer shall be prevented from receiving such compensation as
such officer by reason of the fact that he is also a Trustee.
ARTICLE VII
FISCAL YEAR
The fiscal year of the Trust shall end on such day of each year as the
Trustees may from time to time determine. The taxable year of each Series of the
Trust shall be as determined by the Trustees from time to time.
<PAGE>
ARTICLE VIII
SEAL
The Trustees may adopt a seal which shall be in such form and shall have
such inscription thereon as the Trustees may from time to time prescribe.
ARTICLE IX
SUFFICIENCY AND WAIVERS OF NOTICE
Whenever any notice whatever is required to be given by law, the
Declaration of Trust or these By-laws, a waiver thereof in writing, signed by
the person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto. A notice shall be deemed to
have been sent by mail, telegraph, cable, wireless, facsimile or other
electronic means for the purposes of these By-laws when it has been delivered to
a representative of any company holding itself out as capable of sending notice
by such means with instructions that it be so sent.
ARTICLE X
AMENDMENTS
These By-laws, or any of them, may be altered, amended or repealed, or new
By-laws may be adopted by (a) vote of a majority of the Outstanding Shares
voting in person or by proxy at a meeting of Shareholders and entitled to vote
or (b) by the Trustees, provided, however, that no By-law may be amended,
adopted or repealed by the Trustees if such amendment, adoption or repeal
requires, pursuant to law, the Declaration of Trust or these By-laws, a vote of
the Shareholders. INSTITUTIONAL DEVELOPMENT TRUST - BY-LAWS
<PAGE>
INVESTMENT ADVISORY AGREEMENT
This Investment Advisory and Management Agreement ("Agreement"), is made
and entered into this day of , 1999 by and between Institutional Development
Trust, a Delaware business trust (the "Fund"), and Wabash Valley Capital
Management, Inc., an Indiana corporation (the "Advisor").
WHEREAS, the Fund is registered as an open-end, diversified investment
company under the Investment Company Act of 1940 (the "1940 Act") and has
registered its shares of common stock for sale to the public under the
Securities Act of 1933 and various state securities laws; and
WHEREAS, the Fund wishes to retain the Advisor to provide investment
advisory and portfolio management services to the Fund; and
WHEREAS, the Advisor is willing to furnish such services on the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, and intending to be legally bound, the Fund and the Advisor
agree as follows:
1. Appointment. The Fund hereby appoints the Advisor to manage the
investment and reinvestment of assets of the Institutional Development Trust and
any other portfolio of the Fund which may be hereafter designated as a separate
series for the period and on the terms set forth in this Agreement. The Advisor
accepts such appointment and agrees to render the services herein set forth, for
the compensation herein provided.
2. Duties of the Advisor. Subject to supervision by the Board, the Advisor
shall, during the term and subject to the provisions of this Agreement, (i)
determine the composition of the Fund's portfolio, the nature and timing of the
changes herein and the manner of implementing such changes and (ii) provide the
Fund with such investment advisory, research and related services as the Fund
may, from time to time, reasonably require for the investment of its funds. The
Advisor shall perform such duties in accordance with (a) applicable laws and
regulations, including, but not limited to, the 1940 Act, (b) the terms of this
Agreement, (c) the Trust's Declaration of Trust, By-Laws and currently effective
registration statement under the Securities Act of 1933, as amended, and the
1940 Act, and any amendments thereto, (d) relevant undertakings to state
securities regulators which also have been provided to the Advisor, (e) the
stated investment objective(s), policies and restrictions of each applicable
Series, and (f) such other guidelines as the Fund's Board of Trustees ("Board")
reasonably may establish.
<PAGE>
3. Services Not Exclusive. The services furnished by the Advisor hereunder
are not to be deemed exclusive and the Advisor shall be free to furnish similar
services to other so long as its services under this Agreement are not impaired
thereby. Nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of the Advisor, who may also be a Trustee, officer
or employee of the Fund, to engage in any other business or to devote his or her
time and attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature.
4. Expenses Payable by the Fund. Except as otherwise provided in Paragraphs
2 and 5 hereof, the Fund shall be responsible for effecting sales and redemption
of its shares, for determining the net asset value thereof and for all of its
other operations and shall pay all administrative and other costs and expenses
attributable to its operations and transactions, including, without limitation,
voluntary assessments and other expenses incurred connection with membership in
investment company organizations; transfer agent and custodian fees; legal,
administrative and clerical services; auditing; preparation, printing and
distribution of its prospectuses, proxy statements, stockholders reports and
notices; cost of supplies and postage; Federal and state registration fees;
Federal, state and local taxes; non-affiliated directors fees; interest on its
bank loans and brokerage commissions.
5. Expenses Payable by the Advisor. The Advisor is responsible for the
compensation of the Advisor's personnel and other expenses in connection with
the provisions of portfolio management services under this Agreement. Other than
as herein specifically indicated, the Advisor shall not be responsible for the
Fund's expenses. Specifically, the Advisor will not be responsible, except to
the extent of the reasonable compensation of employees of the Fund whose
services may be used by the Advisor.
No trustee, officer or employee of the Fund shall receive from the Fund any
salary or other compensation as such trustee, officer or employee while he is at
the same time a director, officer or employee of the Advisor or any affiliated
company of the Advisor. This paragraph shall not apply to trustees, executive
committee members, consultants and other persons who are not regular members of
the Advisor's or any affiliated company's staff.
6. Compensation. As compensation for the services performed by the Advisor,
the Fund shall pay the Advisor, as promptly as possible after the last day of
each month, a fee, accrued each calendar day (including weekends and holidays)
at the rate of .35% per annum of the daily net assets of the Fund. Advisor may
waive its fee or reimburse the Fund for any amount of the fee payable to it
during that fiscal year.
<PAGE>
7. Limitation of Liability of the Advisor. The Advisor shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the Fund
or any Series in connection with the matters to which this Agreement relate
except a loss resulting from the willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement. The Fund
shall indemnify the Advisor and hold it harmless from and against all damages,
liabilities, costs and expenses (including reasonable attorneys' fees and
amounts reasonably paid in settlement) incurred by the Advisor in or by reason
of any pending, threatened or completed action, suit, investigation or other
proceeding (including an action or suit by or in the right of the Fund or its
security holders) arising out of or otherwise based upon any action actually or
allegedly taken or omitted to be taken by the Advisor in connection with the
performance of any of its duties or obligations under this Agreement or
otherwise as an investment advisor of the Fund.
8. Responsibility of Dual Directors, Officers and/or Employees. If any
person who is a director, officer or employee of the Advisor is or becomes a
director, officer and/or employee of the Fund and acts as such in any business
of the Fund pursuant to this Agreement, then such director, officer and/or
employee of the Advisor shall be deemed to be acting in such capacity solely for
the Fund, and not as a director, officer or employee of the Advisor or under the
control or direction of the Advisor, although paid by the Advisor.
9. Execution of Transactions. In the selection of brokers or dealers and
the placement of orders for the purchase and sale of portfolio investments for
the Fund, the Advisor shall use its best efforts to obtain for the Fund the most
favorable price and execution available, except to the extent that it may be
permitted to pay higher brokerage commissions for brokerage or research
services. In doing so, the Advisor may consider such factors which it deems
relevant to the Fund's best interest, such as price, the size of the
transaction, the nature of the market for the security, the amount of the
commission, the timing of the transaction, the reputation, experience and
financial stability of the broker-dealer involved and the quality of service
rendered by the broker-dealer in other transactions. Subject to such policies as
the Board may determine, the Advisor shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or otherwise
solely by reason of its having caused a Fund to pay a broker that provides
brokerage or research services to the Advisor an amount of commission for
effecting a portfolio investment transaction in excess of the amount of
commission another broker would have charged for effecting that transaction if
the Advisor determines in good faith that such amount of commission is
reasonable in relation to the value of the brokerage or research services
provided by such broker or dealer, viewed in terms of either that particular
transaction or the Advisor 's overall responsibilities with respect to the Fund
and to other clients of the Advisor as to which the Advisor exercises investment
discretion.
<PAGE>
10. Duration and Termination. This Agreement will remain in effect for two
years from the date of its execution and from year to year thereafter so long as
specifically approved annually, (1) by vote of a majority of the trustees of the
Fund who are not parties to this Agreement or interested persons of such
parties, cast in person at a meeting called for that purpose, and (2) either by
vote of the holders of a majority of the outstanding voting securities of the
Fund or by a majority vote of the Fund's Board of Trustees.
This Agreement shall terminate automatically in the event of its assignment
by the Advisor and shall not be assignable by the Fund without the consent of
the Advisor. This Agreement may also be terminated at any time, without the
payment of penalty, by the Fund or by the Advisor on sixty (60) days' written
notice addressed to the other party at its principal place of business.
11. Amendment of This Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no material amendment of this Agreement
shall be effective until approved by vote of the holders of a majority of the
outstanding voting securities of such Series.
12. Definitions. As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested person, " and "assignment "shall
have the same meanings as such terms have in the 1940 Act.
13. 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. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors.
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only an din no way define or delimit nay of the
provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Attest: Institutional Development
Trust
/s/ BY /s/
Vice President of the Fund President
Wabash Valley Capital
Attest: Management
/s/ BY /s/
Vice President of the Fund President
<PAGE>
<PAGE>
Exhibit h(1)
ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made and entered into this ____ day of _______, 1999,
by and between Institutional Development Trust, a registered management
investment company (the "Fund"), and Maxus Information Systems, Inc., DBA
Mutual Shareholder Services, an Ohio corporation ("MSS").
RECITALS:
A. The Fund is a diversified, open-end management investment company
registered with the United States Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
B. MSS is a corporation experienced in providing accounting services to
mutual funds and possesses facilities sufficient to provide such services; and
C. The Fund desires to avail itself of the experience, assistance and
facilities of MSS and to have MSS perform the Fund certain services appropriate
to the operations of the Fund, and MSS is willing to furnish such services in
accordance with the terms hereinafter set forth.
AGREEMENTS:
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereby agree as follows:
1. DUTIES OF MSS.
MSS will provide the Fund with the necessary office space,
communication facilities and personnel to perform the following services for the
Fund:
(a) Timely calculate and transmit to NASDAQ the daily net
asset value of each class of shares of each portfolio of the Fund, and
communicate such value to the Fund and its transfer agent;
(b) Maintain and keep current all books and records of the
Fund as required by Rule 31a-1 under the 1940 Act, as such rule or any
successor rule may be amended from time to time ("Rule 31a-1"), that
are applicable to the fulfillment of MSS's duties hereunder, as well as
any other documents necessary or advisable for compliance with
applicable regulations as may be mutually agreed to between the Fund
and MSS. Without limiting the generality of the foregoing, MSS will
prepare and maintain the following records upon receipt of information
in proper form from the Fund or its authorized agents:
o Cash receipts journal
o Cash disbursements journal
o Dividend record
1
<PAGE>
o Purchase and sales - portfolio securities
journals
o Subscription and redemption journals
o Security ledgers
o Broker ledger
o General ledger
o Daily expense accruals
o Daily income accruals
o Securities and monies borrowed or loaned and
collateral therefore
o Foreign currency journals
o Trial balances
(c) Provide the Fund and its investment adviser with daily
portfolio valuation, net asset value calculation and other standard
operational reports as requested from time to time.
(d) Provide all raw data available from its fund accounting
system for the preparation by the Fund or its investment advisor of the
following:
1. Semi-annual financial statements; 2. Semi-annual
form N-SAR; 3. Annual tax returns; 4. Financial data
necessary to update form N-1A; 5. Annual proxy
statement.
(e) Provide facilities to accommodate annual audit and any
audits or examinations conducted by the Securities and Exchange
Commission or any other governmental or quasi-governmental entities
with jurisdiction.
MSS shall for all purposes herein be deemed to be an independent contractor and
shall, unless otherwise expressly provided or authorized, have no authority to
act for or represent the Fund in any way or otherwise be deemed an agent of the
Fund.
2. FEES AND EXPENSES.
(a) In consideration of the services to be performed by MSS
pursuant to this Agreement, the Fund agrees to pay MSS the fees set
forth in the fee schedule attached hereto as Exhibit A.
(b) In addition to the fees paid under paragraph (a) above,
the Fund agrees to reimburse MSS for out-of-pocket expenses or advances
incurred by MSS in connection with the performance of its obligations
under this Agreement. In addition, any other expenses incurred by MSS
at the request or with the consent of the Fund will be reimbursed by
the Fund.
2
<PAGE>
(c) The Fund agrees to pay all fees and reimburseable expenses
within five days following the receipt of the respective billing
notice.
3. LIMITATION OF LIABILITY OF MSS.
(a) MSS shall be held to the exercise of reasonable care in
carrying out the provisions of the Agreement, but shall not be liable
to the Fund for any action taken or omitted by it in good faith without
gross negligence, bad faith, willful misconduct or reckless disregard
of its duties hereunder. It shall be entitled to rely upon and may act
upon the accounting records and reports generated by the Fund, advice
of the Fund, or of counsel for the Fund and upon statements of the
Fund's independent accountants, and shall not be liable for any action
reasonably taken or omitted pursuant to such records and reports or
advice, provided that such action is not, to the knowledge of MSS, in
violation of applicable federal or state laws or regulations, and
provided further that such action is taken without gross negligence,
bad faith, willful misconduct or reckless disregard of its duties.
(b) Nothing herein contained shall be construed to protect MSS
against any liability to the Fund to which MSS shall otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence
in the performance of its duties to the Fund, reckless disregard of its
obligations and duties under this Agreement or the willful violation of
any applicable law.
(c) Except as may otherwise be provided by applicable law,
neither MSS nor its stockholders, officers, directors, employees or
agents shall be subject to, and the Fund shall indemnify and hold such
persons harmless from and against, any liability for and any damages,
expenses or losses incurred by reason of the inaccuracy of information
furnished to MSS by the Fund or its authorized agents.
4. REPORTS.
(a) The Fund shall provide to MSS on a quarterly basis a
report of a duly authorized officer of the Fund representing that all
information furnished to MSS during the preceding quarter was true,
complete and correct in all material respects. MSS shall not be
responsible for the accuracy of any information furnished to it by the
Fund or its authorized agents, and the Fund shall hold MSS harmless in
regard to any liability incurred by reason of the inaccuracy of such
information.
(b) Whenever, in the course of performing its duties under
this Agreement, MSS determines, on the basis of information supplied to
MSS by the Fund or its authorized agents, that a violation of
applicable law has occurred or that, to its knowledge, a possible
violation of applicable law may have occurred or, with the passage of
time, would occur, MSS shall promptly notify the Fund and its counsel
of such violation.
3
<PAGE>
5. ACTIVITIES OF MSS.
The services of MSS under this Agreement are not to be deemed
exclusive, and MSS shall be free to render similar services to others so long as
its services hereunder are not impaired thereby.
6. ACCOUNTS AND RECORDS.
The accounts and records maintained by MSS shall be the property of the
Fund, and shall be surrendered to the Fund promptly upon request by the Fund in
the form in which such accounts and records have been maintained or preserved.
MSS agrees to maintain a back-up set of accounts and records of the Fund (which
back-up set shall be updated on at least a weekly basis) at a location other
than that where the original accounts and records are stored. MSS shall assist
the Fund's independent auditors, or, upon approval of the Fund, any regulatory
body, in any requested review of the Fund's accounts and records. MSS shall
preserve the accounts and records as they are required to be maintained and
preserved by Rule 31a-1.
7. CONFIDENTIALITY.
MSS agrees that it will, on behalf of itself and its officers and
employees, treat all transactions contemplated by this Agreement, and all other
information germane thereto, as confidential and not to be disclosed to any
person except as may be authorized by the Fund.
8. TERM OF AGREEMENT.
(a) This Agreement shall become effective as of the date hereof and
shall remain in force for a period of three years; provided, however, that each
party to this Agreement have the option to terminate the Agreement, without
penalty, upon 90 days prior written notice.
(b) Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movements of records and material will be borne by
the Fund. Additionally, MSS reserves the right to charge for any other
reasonable expenses associated with such termination.
9. MISCELLANEOUS.
(a) Neither this Agreement nor any rights or obligations hereunder may
be assigned by either party without the written consent of the other party. This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective permitted successors and assigns.
(b) The provisions of this Agreement shall be construed and interpreted
in accordance with the laws of the State of Ohio as at the time in effect and
the applicable provisions of the 1940 Act. To the extent that the applicable law
of the State of Ohio, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
(c) This Agreement may be amended by the parties hereto only if such
amendment is in writing and signed by both parties.
4
<PAGE>
(d) This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof whether oral or written.
(e) All notices and other communications hereunder shall be in writing,
shall be deemed to have been given when received or when sent by telex or
facsimile, and shall be given to the following addresses (or such other
addresses as to which notice is given):
To the Fund: To MSS:
Institutional Development Trust Maxus Information Systems, Inc.
c/o WVCM DBA Mutual Shareholder Services
2901 Ohio Boulevard 1301 East Ninth Street, 36th Floor
Terre Haute, IN 47803 Cleveland, OH 44114
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
INSTITUTIONAL DEVELOPEMENT TRUST MAXUS INFORMATION SYSTEMS, INC.
By: By:
Its: Its:
5
<PAGE>
<PAGE>
Exhibit h(2)
TRANSFERS AGENCY AGREEMENT
THIS AGREEMENT is made and entered into this ____ day of _______, 1999,
by and between Institutional Development Trust, a registered management
investment company (the "Fund"), and Maxus Information Systems, Inc., DBA
Mutual Shareholder Services, an Ohio corporation ("MSS").
RECITALS:
A. The Fund is a diversified, open-end management investment company
registered with the United States Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
B. The Fund desires to appoint MSS as its transfer agent and dividend
disbursing and redemption agent, and MSS desires to accept such appointment.
AGREEMENTS:
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereby agree as follows:
1. DUTIES OF MSS.
1.01 Subject to the terms and conditions set forth in this Agreement,
the Fund hereby employs and appoints MSS to act, and MSS agrees to act, as
transfer agent for the Fund's authorized and issued shares of beneficial
interest of each class of each portfolio of the Fund (the "Shares), and as
dividend disbursing and redemption agent for the Fund.
1.02 MSS agrees that it will perform the following services:
(a) In accordance with procedures established from time to
time by agreement between the Fund and MSS, MSS shall:
(i) Receive for acceptance, orders for the purchase of
Shares, and promptly deliver payment and appropriate
documentation therefore to the Custodian of the Fund
authorized by the Board of Directors of the Fund (the
"Custodian");
(ii) Pursuant to purchase orders, issue the appropriate
number of Shares and hold such Shares in the appropriate
Shareholder account;
(iii) Receive for acceptance redemption requests and
redemption directions and deliver the appropriate
documentation therefore to the Custodian;
1
<PAGE>
(iv) At the appropriate time as and when it receives
monies paid to it by the Custodian with respect to any
redemption, pay over or cause to be paid over in the
appropriate manner such monies as instructed by the redeeming
Shareholders;
(v) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
(vi) Prepare and transmit payments for dividends and
distributions declared by the Fund;
(vii) Maintain records of account for and advise the Fund
and its Shareholders as to the foregoing; and
(viii) Record the issuance of shares of the Fund and
maintain pursuant to SEC Rule 17Ad-10(e) a record of the total
number of shares of the Fund which are authorized, based upon
data provided to it by the Fund, and issued and outstanding.
MSS shall also provide the Fund on a regular basis with the
total number of shares which are authorized and issued and
outstanding and shall have no obligation, when recording the
issuance of shares, to monitor the issuance of such shares or
to take cognizance of any laws relating to the issue or sale
of such shares, which functions shall be the sole
responsibility of the Fund.
(b) In addition, MSS shall perform all of the customary
services of a transfer agent, dividend disbursing and redemption agent,
including but not limited to: maintaining all Shareholder accounts,
preparing Shareholder meeting lists, mailing proxies, receiving and
tabulating proxies, mailing Shareholder reports and prospectuses to
current Shareholders, withholding taxes on U.S. resident and
non-resident alien accounts, preparing and filing U.S. Treasury
Department Forms 1099 and other appropriate forms required with respect
to dividends and distributions by federal authorities for all
Shareholders, preparing and mailing confirmation forms and statements
of account to Shareholders for all purchases and redemptions of Shares
and other confirmable transactions in Shareholder accounts, preparing
and mailing activity statements for Shareholders, and providing
Shareholder account information and provide a system and reports which
will enable the Fund to monitor the total number of Shares sold in each
State.
Procedures applicable to certain of these services may be established
from time to time by agreement between the Fund and MSS.
2. FEES AND EXPENSES
2.01 In consideration of the services to be performed by MSS pursuant
to this Agreement, the Fund agrees to pay MSS the fees set forth in the fee
schedule attached hereto as Exhibit "A".
2.02 In addition to the fee paid under Section 2.01 above, the Fund
agrees to reimburse MSS for out-of-pocket expenses or advances incurred by MSS
in connection with the performance of its obligations under this Agreement. In
addition, any other expenses incurred by MSS at the request or with the consent
of the Fund will be reimbursed by the Fund.
2
<PAGE>
2.03 The Fund agrees to pay all fees and reimbursable expenses within
five days following the receipt of the respective billing notice. Postage for
mailing of dividends, proxies, Fund reports and other mailings to all
shareholder accounts shall be advanced to MSS by the Fund at least seven days
prior to the mailing date of such materials.
3. REPRESENTATIONS AND WARRANTIES OF MSS
MSS represents and warrants to the Fund that:
3.01 It is a corporation duly organized and existing and in good
standing under the laws of the State of Ohio.
3.02 It is duly qualified to carry on its business in the State of
Ohio.
3.03 It is empowered under applicable laws and by its charter and
by-laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
3.06 MSS is duly registered as a transfer agent under the Securities
Act of 1934 and shall continue to be registered throughout the remainder of this
Agreement.
4. REPRESENTATIONS AND WARRANTIES OF The Fund
The Fund represents and warrants to MSS that:
4.01 It is a business trust duly organized and existing and in good
standing under the laws of Ohio.
4.02 It is empowered under applicable laws and by its Declaration of
Trust and By-Laws to enter into and perform this Agreement.
4.03 All corporate proceedings required by said Declaration of Trust
and By-Laws have been taken to authorize it to enter into and perform this
Agreement.
4.04 It is an open-end and diversified management investment company
registered under the 1940 Act.
3
<PAGE>
4.05 A registration statement under the Securities Act of 1933 is
currently or will become effective and will remain effective, and appropriate
state securities law filings as required, have been or will be made and will
continue to be made, with respect to all Shares of the Fund being offered for
sale.
5. INDEMNIFICATION
5.01 MSS shall not be responsible for, and the Fund shall indemnify and
hold MSS harmless from and against, any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or attributable
to:
(a) All actions of MSS or its agents or subcontractors
required to be taken pursuant to this Agreement, provided that such
actions are taken in good faith and without gross negligence or willful
misconduct.
(b) The Fund's refusal or failure to comply with the terms of
this Agreement, or which arise out of the Fund's lack good faith, gross
negligence or willful misconduct or which arise out of the breach of
any representation or warranty of the Fund hereunder.
(c) The reliance on or use by MSS or its agents or
subcontractors of information, records and documents which (i) are
received by MSS or its agents or subcontractors and furnished to it by
or on behalf of the Fund, and (ii) have been prepared and/or maintained
by the Fund or any other person or firm on behalf of the Fund.
(d) The reliance on, or the carrying out by MSS or its agents
or subcontractors of, any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any
requirement under the federal securities laws or regulations or the
securities laws or regulations of any state that such Shares be
registered in such state or in violation of any stop order or other
determination or ruling by any federal agency or any state with respect
to the offer or sale of such Shares in such state.
5.02 MSS shall indemnify and hold the Fund harmless from and against
any and all losses, damages, costs, charges, counsel fees, payments, expenses
and liability arising out of or attributable to any action or failure or
omission to act by MSS as a result of MSS's lack of good faith, gross negligence
or willful misconduct.
5.03 At any time MSS may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by MSS under this
Agreement, and MSS and its agents or subcontractors shall not be liable and
shall be indemnified by the Fund for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. MSS, its
agents and subcontractors shall be protected and indemnified in acting upon any
paper or document furnished by or on behalf of the Fund, reasonably believed to
be genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided MSS or its agents
or subcontractors by machine readable input, telex, CRT data entry or other
similar means authorized by the Fund, and shall not be held to have notice of
any change of authority of any person, until receipt of written notice thereof
from the Fund. MSS, its agents and subcontractors shall also be protected and
indemnified in recognizing stock certificates which are reasonably believed to
bear the proper manual or facsimile signatures of the officers of the Fund, and
the proper countersignature of any former transfer agent or registrar, or of a
co-transfer agent or co-registrar.
4
<PAGE>
5.04 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
5.05 Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement or for any act
or failure to act hereunder.
5.06 Upon the assertion of a claim for which either party may be
required to indemnify the other, the party of seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.
6. COVENANTS OF THE FUND AND MSS
6.01 The Fund shall promptly furnish to MSS a certified copy of the
resolution of the Board of Directors of the Fund authorizing the appointment of
MSS and the execution and delivery of this Agreement.
6.02 MSS hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
6.03 MSS shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the 1940 Act, as amended, and the Rules thereunder,
MSS agrees that all such records prepared or maintained by MSS relating to the
services to be performed by MSS hereunder are the property of the Fund and will
be preserved, maintained and made available in accordance with such Section and
Rules, and will be surrendered promptly to the Fund on and in accordance with
its request.
6.04 MSS and the Fund agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
5
<PAGE>
6.05 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, MSS will endeavor to notify the Fund and to
secure instructions from an authorized officer of the Fund as to such
inspection. MSS reserves the right, however, to exhibit the Shareholder records
to any person whenever it is advised by its counsel that it may be held liable
for the failure to exhibit the Shareholder records to such person, and shall
promptly notify the Fund of any unusual request to inspect or copy the
shareholder records of the Fund or the receipt of any other unusual request to
inspect, copy or produce the records of the Fund.
7. TERM OF AGREEMENT
7.01 This Agreement shall become effective as of the date hereof and
shall remain in force for a period of three years; provided, however, that each
party to this Agreement have the option to terminate the Agreement without
penalty, upon 90 days prior written notice.
7.02 Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Fund. Additionally, MSS reserves the right to charge for any other
reasonable expenses associated with such termination.
8. MISCELLANEOUS
8.01 Neither this Agreement nor any rights or obligations hereunder may
be assigned by eithero party without the written consent of the other party.
This Agreement shall inure to the benefit of and be binding upon the parties and
their respective permitted successors and assigns.
8.02 This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the Board
of Trustees of the Fund.
8.03 The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of Ohio as at the time in
effect and the applicable provisions of the 1940 Act. To the extent that the
applicable law of the State of Ohio, or any of the provisions here in, conflict
with the applicable provisions of the 1940 Act, the latter shall control.
8.04 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
8.05 All notices and other communications hereunder shall be in
writing, shall be deemed to have been given when received or when sent by telex
or facsimile, and shall be given to the following addresses (or such other
addresses as to which notice is given):
6
<PAGE>
To the Fund: To MSS:
Institutional Development Trust Maxus Information Systems, Inc.
c/o WVCM DBA Mutual Shareholder Services
2901 Ohio Boulevard 1301 East Ninth Street. 36th Floor
Terre Haute, IN 47803 Cleveland, OH 44114
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
INSTITUTIONAL DEVELOPEMENT TRUST MAXUS INFORMATION SYSTEMS, INC.
By: By:
Its: Its:
7
<PAGE>
