February 9, 2000
Lilly R. Chiu
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, NW
Mail Stop 5-5
Washington, DC 20549
Re: Institutional Development Trust
33-78263
811-9335
Dear Ms. Chiu:
Enclosed for filing is Pre-Effective Amendment No. 2 to the Registration
Statement. We made every effort to ensure that all of your comments were
incorporated into this filing. Please review and advise whether you have further
comments.
Please call me with any questions at (978) 921-6688.
Very truly yours,
/s/
Debra M. Brown
Director, Investment Company Services
<PAGE>
As filed with the Securities and Exchange Commission on February 9, 2000
1933 Act Registration No. 33- 78263
1940 Act Registration No. 811- 9335
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 //
PRE-EFFECTIVE AMENDMENT NO. 2 /X/
(Check appropriate box or boxes)
(Exact name of registrant as specified in Charter)
INSTITUTIONAL DEVELOPMENT TRUST
(Address of Principal Executive Offices)
2901 Ohio Blvd, Suite 242
Terre Haute, IN 47803
Registrant's Telephone Number,
including Area Code: 888-837-1751
(Name and Address of Agent for Service)
James B. Exline
Wabash Valley Capital Management 2901 Ohio Blvd, Suite 242 Terre Haute, IN 47803
1-812-242-9113
Approximate date of proposed public offering: As soon as practicable after the
effective date of the Registration Statement
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission acting pursuant to said section 8(a),
may determine.
CHURCHMEN'S BOND FUND
PROSPECTUS
And
Application
February 14, 2000
2901 Ohio Blvd, Suite 242
Terre Haute, IN 47803
1-888-837-1751
TABLE OF CONTENTS
Fund Basics
Fund Expenses
Management
Shareholder Information
Distributions
Taxes
For More Information
INVESTMENT OBJECTIVE
High level of total return as is
consistent with capital preservation.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
<PAGE>
FUND BASICS
CHURCHMEN'S BOND FUND
GOAL AND PRINCIPAL STRATEGIES.
Goal: The Churchmen's Bond 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 debt securities of domestic
companies, municipal bonds and U.S. Government securities. The Fund invests at
least 80% of its total 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 the portfolio to pay higher levels of
income during periods of low interest rates.
The Fund invests in U.S. Government Securities, including issues of the U.S.
Treasury, such as bills, certificates of indebtedness, notes and bonds, and
issues of agencies and instrumentalities established under the authority of an
Act of Congress, including variable rate obligations such as floating rate
notes. The Fund also invests 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"), and commercial paper rated Prime-1 by Moody's or A-1+ or
A-1 by S&P.
In managing the Fund's assets, the Adviser 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 Adviser
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.
Under normal circumstances, the average maturity for the portfolio is expected
to be between 5 and 7 years. The average maturity of the Fund's portfolio is
adjusted based on the Adviser's assessment of relative yields on debt securities
and expectations of future interest rate patterns. Under normal circumstances
the Adviser does not sell the portfolio securities. Rather, the Adviser holds
the securities through the maturity date. However, the Adviser reviews the
ratings of portfolio securities on a regular basis and when a security is
downgraded lower than an A rating, under normal circumstances, the security will
be sold. 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 dealers
in U.S. Government Securities. The Fund may invest up to 15% of its net 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.
Although church bonds are unrated by agencies, independent credit analysis is
performed.
[side bar]
High Grade 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 corporate bonds and commercial paper
securities are rated.
[end of side bar]
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-grade debt securities.
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. The Fund is subject to risks that affect the bond markets in general,
such as general economic conditions and adverse changes 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.
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.
Church bonds present special risks. Since there is no established market for
them, Church bonds are illiquid securities. Therefore, the Adviser may be unable
to sell church bonds when desired. Additional 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.
This is a new fund and does not have any performance history.
[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.
[End of Side Bar]
<PAGE>
FUND FEES AND EXPENSES
As an investor, you pay certain fees and expenses in connection with
buying and holding shares of the fund, which are described in the table below.
SHAREHOLDER FEES ( fees paid directly from your investment) -
Maximum Sales Charge (Load) NONE
Imposed on Purchases
Redemption Fees (as a percentage of amount redeemed, if applicable) 1.00%1
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)
Management Fee .35%
Distribution (12b-1) Fees .50%
Other Expenses2 .50%
Total Annual Fund Operating Expenses 1.35%
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
$[ ] $[ ]
You would pay the following expenses if you did not redeem
your shares during the first year of investment:
1 year 3 years
$[ ] $[ ]
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, rather it is a charge used to discourage market timers
from investing in the Fund.
2 Other Expenses are based on estimated amounts for the current fiscal
year. Other expenses include fees paid for administration, custody and
registration fees.
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. WVCM was
established in November, 1997 and currently has over $55 million in assets under
management. The Fund pays the Adviser 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.
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 check
and completed application.
Opening an Account
Send the completed application and a check made payable to the fund to
Churchmen's Bond Fund.
c/o Unified Fund Services
P.O. Box 6110
Indianapolis, IN. 46206-6110
An account may also be opened by having your investment wired to the fund. You
must first call the Transfer Agent at 888-837-1751 to set up your account and
receive an account number. Then, you should provide your bank with the following
information:
Fifth Third Bank
ABA #
Attn: Churchmen's Bond Fund
D.D.A. #
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.
[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 regular trading at the New
York Stock Exchange ("NYSE") on each day that the NYSE is open for trading.
Normally the NYSE closes regular trading at 4:00 pm New York time.
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.
[end sidebar]
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 1-888-837-1751. Otherwise you may
redeem by sending your request by mail to the Fund.
c/o Unified Fund Service, Inc. .
P.O. Box 6110 .
Indianapolis, IN. 46206-6110
Your shares will be sold at the next NAV calculated after your order is received
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.
The Fund has elected to be governed by Rule 18f-1 under the Investment Company
Act of 1940 pursuant to which it is obligated to redeem shares solely in cash up
to the lesser of $250,000 or 1% of the NAV of a fund during any 90-day period
for any one shareholder. If a redemption is made in kind, the redeeming
shareholder would bear any transaction costs incurred in selling the securities.
Redemptions in excess of the above amounts will normally be paid in cash, but
may be paid wholly or partly by a distribution in kind of securities.
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 these 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.
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 or
ordinary income; 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 Fund is
permitted to invest.
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.
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.
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'sletter 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.
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.
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 888-837-1751. 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- 9335
Institutional Development Trust
------------------------------------------------------------------------------
CHURCHMEN'S BOND FUND
STATEMENT OF ADDITIONAL INFORMATION
February 14 ,2000
------------------------------------------------------------------------------
This Statement of Additional Information is not a prospectus. It should be read
in conjunction with the Prospectus of the Churchmen's Bond Fund, dated February
14 , 2000. Churchmen's Bond Fund is a portfolio of Institutional Development
Trust. A copy of the Prospectus can be obtained by writing the Fund at Unified
Fund Services, Inc., 431 N. Pennsylvania Street, Indianapolis, IN. 46204. You
may also call 888-837-1751.
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
Churchmen's Bond Fund (CBF) (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 as a fundamental policy, 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 25% or
more of its total assets in any one industry. This limit does not apply to U.S.
Government Securities 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.
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 Adviser 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 Adviser 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.
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 Adviser 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 Adviser. If
institutional trading in restricted securities were to decline, the liquidity of
a Fund could be adversely affected.
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. The yield and credit characteristics
of mortgage-backed securities differ in a number of respects from traditional
fixed income securities. The major differences are that these instruments
typically include more frequent interest and principal payments, usually
monthly, and the possibility that prepayment of principal may be made at any
time. Prepayment rates are influenced by changes in current interest rates and a
variety of other factors. In general, changes in the rate of prepayment on a
security will change the yield to maturity of that security. Under certain
interest rate or prepayment rate scenarios, a Fund may fail to recoup fully its
investment in such securities notwithstanding the credit quality of the issuers
of such securities. Based on historic prepayment patterns, amounts available for
reinvestment are likely to be greater during a period of declining interest
rates and, thus, are likely to be reinvested at lower interest rates, than
during a period of rising interest rates. Mortgage-backed securities may
decrease in value as a result of increases in interest rates and may benefit
less than other fixed income securities from declining interest rates because of
the risk of prepayment.
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 Adviser monitors the creditworthiness of the banks and
securities dealers with whom the Fund engages in repurchase transactions.
DELAYED DELIVERY SECURITIES. The Fund 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. The Fund
will comply with all requirements for maintaining segregated accounts.
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.
The Fund does not expect the portfolio turnover rate to exceed 100% in the first
year.
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.
3. Underwriting. The Fund will not act as underwriter of securities issued
by other persons. This limitation is not applicable to the extent that, in
connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. Real Estate. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities, which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5. Commodities. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. Loans. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. Concentration. The Fund will not invest 25% or more of its total assets
in a particular industry. This limitation is not applicable to investments in
obligations issued or guaranteed by the U.S. government, its agencies and
instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
Non-Fundamental. The following limitations have been adopted
by the Trust with respect to the Fund and are Non-Fundamental (see "Investment
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.
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 ADVISER
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 Adviser 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
Adviser 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 Adviser a
fee computed and accrued daily and paid monthly at an annual rate of .35% of the
average daily net assets of the Fund. The Adviser may waive all or part of its
fee, at any time, and at its sole discretion, but such action shall not obligate
the Adviser to waive any fees in the future.
The Adviser may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. 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 retains AmeriPrime Fund Services as administrator to the Fund.
Unified Fund Services serves as the Fund's accounting agent and transfer agent,
dividend paying agent and shareholder service agent. The Trust retains
AmeriPrime Financial Services, Inc. (the "Distributor") to act as the principal
distributor of the Fund's shares. AmeriPrime 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
Directors of the Fund on a quarterly basis. Also, the 12b-1 Plan provides that
the selection and nomination of disinterested Directors (as defined in the 1940
Act) are committed to the discretion of the disinterested Directors then in
office. The Distribution Agreement and 12b-1 Plan may be continued annually if
approved by a majority vote of the Directors, including a majority of the
Directors 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 Directors on November 15, 1999 and by the
then shareholders on .
Pursuant to the provisions of the 12b-1 Plans and the Distribution
Agreement, the Fund may pay a distribution services fee each month to the
Distributor of up to 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 Funds.
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 Funds. Broker-dealers who
sell shares of the Funds 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.
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.
<TABLE>
<CAPTION>
===================================================================================================================================
Name, Age and Address Position Principal Occupations During Past 5 Years
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Clyde H. Freed, Jr Trustee Mr. Freed has over thirty-five years of business experience.
13608 Wisteria Drive He has been involved in every aspect from management of
Germantown, MD 20874 representatives to opening new accounts. He has extensive
knowledge in mutual funds and fixed income products. He is a
member of the executive committee Southern Baptist Convention
and is the pastor of a church in Germantown, MD.
- -----------------------------------------------------------------------------------------------------------------------------------
James B. Exline President Mr. Exline is a principal with Wabash Valley Capital
2901 Ohio Blvd., Suite 242 Management. Prior to 1997, he served as Vice President,
Terre Haute, IN. 47803 Business Development for Old National Trust Company.
- -----------------------------------------------------------------------------------------------------------------------------------
Robert Cook Trustee Mr. Cook serves as pastor of The First Church of the Nazarene
109 Harris Street in Fort Mills, SC. Mr. Cook has been involved in numerous bond
Fort Mills, SC. 29715 issues that helped his congregation grow over the last twenty
years. He has been involved in real estate and currently is
involved with Churchmen=s Capital Group financial services.
- -----------------------------------------------------------------------------------------------------------------------------------
Bryan Whitehead Trustee Mr. Whitehead serves as minister for the Church of Christ in
P.O. Box 34 Sandborn, Indiana and as the chaplain for the Green County
Lincoln, IN. 47441 General Hospital. Mr. Whitehead also has experience in real
estate.
- -----------------------------------------------------------------------------------------------------------------------------------
Abe Miller Trustee Mr. Miller serves as minister of the Eastside Church of Christ
9645 St. Road 42 in Terre Haute, IN. He is also the owner and founder of Abe's
Terre Haute, IN. 47803 Acres restaurant in Terre Haute, Indiana.
- -----------------------------------------------------------------------------------------------------------------------------------
Charles Hinson Trustee Mr. Hinson served as a missionary for many years. He has owned
and managed many business ventures for himself. He is
currently the founder and president of the Tall Pines Christian
Academy in Crestview, FL.
- -----------------------------------------------------------------------------------------------------------------------------------
Donald Edwards Secretary Mr. Edwards, CFA, MBA, is a principal of Wabash Valley Capital
2901 Ohio Blvd., Suite 242 Management. He serves as portfolio manager for the Fund.
Terre Haute, IN. 47803 Prior to founding WVCM in 1997, Mr. Edwards managed individual
and institutional assets for Old National Trust Company.
===================================================================================================================================
</TABLE>
The compensation paid to the Trustees of the Trust is estimated to be
the following:
<TABLE>
<CAPTION>
==============================================================================================
AGGREGATE TOTAL COMPENSATION
COMPENSATION FROM TRUST (THE TRUST IS
NAME FROM TRUST NOT IN A FUND COMPLEX)
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Clyde Freed 400 400
- ----------------------------------------------------------------------------------------------
James B. Exline 0 0
- ----------------------------------------------------------------------------------------------
Robert Cook 400 400
- ----------------------------------------------------------------------------------------------
Bryan Whitehead 400 400
- ----------------------------------------------------------------------------------------------
Abe Miller 400 400
- ----------------------------------------------------------------------------------------------
Charles Hinson 400 400
- ----------------------------------------------------------------------------------------------
Donald Edwards 0 0
==============================================================================================
</TABLE>
Control Persons and Principal Holders of Securities.
As of February 14, 2000, [ ] owned 100% of the outstanding shares of
the Fund.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Adviser is responsible for the Fund's portfolio decisions and the placing of
the Fund's portfolio transactions. In placing portfolio transactions, the
Adviser 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 Adviser generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received.
The Adviser 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 Adviser 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 Adviser 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 Adviser'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 Adviser in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Adviser in connection with its services to the
Fund. Although research services and other information are useful to the Fund
and the Adviser, 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
Adviser that the review and study of the research and other information will not
reduce the overall cost to the Adviser 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 Adviser'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.
PURCHASE AND SALE INFORMATION
HOW TO INVEST IN THE FUND
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 Adviser 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, except that during the first year of investment, investors will be
charged a 1% redemption fee for the purpose of discouraging market timers in the
Fund. 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 CBF Fund, and sent to the P.O. Box listed below. If you prefer
overnight delivery, use the overnight address listed below.
Unified Fund Service, Inc.
P.O. Box 6110
Indianapolis, IN. 46206-6110
or
Unified Fund Service, Inc.
431 N. Pennsylvania Street
Indianapolis, IN. 46204
Your purchase of shares of the Fund will be effected at the next share
price calculated after receipt of your investment.
BY WIRE - You may also purchase shares of the Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. If money is to be
wired, you must call the Transfer Agent at 888-837-1751 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:
Fifth Third Bank
ABA #
Attn: Churchmen's Bond 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.
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
(SEP's); 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
Adviser regarding these plans is advisable. Custodial fees for an IRA will be
paid by the shareholder by redemption of sufficient shares of the Fund from the
IRA unless the fees are paid directly to the IRA custodian. 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.
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.
BY MAIL - You may redeem any part of your account in the Fund at no
charge by mail. Your request should be addressed to:
Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, IN. 46204-6110
"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 888-837-1751. 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 888-837-1751 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.
NET ASSET VALUE
The price (net asset value) of the shares of the Fund is determined as
of the close of regular trading on the New York Stock Exchange, which is
currently 4:00 p.m., New York time. 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 Adviser 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.
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 tho 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.
OTHER INFORMATION
CUSTODIAN
Fifth Third Bank, Mutual Fund Services Group, 38 Fountain Square Plaza,
Cincinnati, OH. 45263, 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.
The firm of McCurdy & Associates CPA's, Inc., has been selected as
independent public accountants for the Trust for the fiscal year ending November
30, 2000. The independent accountant performs an annual audit of the Fund's
financial statements and provides financial, tax and accounting consulting
services as requested.
Other Service Providers
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator") to
manage the Fund's business affairs and provide the Fund with administrative
services, including all regulatory reporting and necessary office equipment,
personnel and facilities. The Administrator receives a monthly fee from the
Adviser equal to an annual average rate of [0.10% of the Fund's average daily
net assets up to fifty million dollars, 0.075% of the Fund's average daily net
assets from fifty to one hundred million dollars and 0.050% of the fund's
average daily net assets over one hundred million dollars.] The Fund retains
Unified Fund Services, Inc., 431 North Pennsylvania Street, Indianapolis,
Indiana 46204 (the "Transfer Agent") to serve as transfer agent, dividend paying
agent and shareholder service agent. The Trust retains AmeriPrime Financial
Securities, Inc. 1793 Kingswood Drive, Suite 200, Southlake, TX 76092 (the
"Distributor") to act as the principal distributor of the Fund's shares. Kenneth
D. Trumpfheller, officer and sole shareholder of the Administrator and the
Distributor, is an officer and trustee of the Trust. The services of the
Administrator, Transfer Agent and Distributor are operating expenses paid by
CMS.
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 incorporated by reference
from the Registration Statement filed on May 11, 1999. .
(b) By-Laws of Registrant is incorporated by reference from the
Registration Statement filed on May 11, 1999.
(C) Not applicable.
(d) Form of Investment Advisory Agreement between Wabash Valley
Capital Management, Inc. and Registrant is incorporated by reference from the
Registration Statement filed on May 11, 1999 .
(e) Form of Underwriting Agreement between AmeriPrime Financial
Securities, Inc. and Registrant is filed herein.
(f) Not applicable.
(g) Custody Agreement is filed herein .
(h) Other Material Contracts
Form of Mutual Funds Services Agreement between Registrant and Unified Fund
Services, Inc. is filed herein.
Form of Administration Agreement between Ameri Prime Financial Services and
Registrant is filed herein.
Form of Transfer Agency Agreement between Registrant and Unified Fund
Services, Inc is filed herein.
(i) To be filed by amendment.
(j) Not applicable.
(k) Not applicable.
(l) Not applicable .
(m) Form of 12b-1 Plan is filed herein.
(n) 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
(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
(a) AmeriPrime Financial Securities, Inc. is the Registrant's
principal underwriter. Kenneth D. Trumpfheller, 1793 Kingswood
Drive, Suite 200, Southlake, Texas 76092, is the President,
Secretary and Treasurer of the underwriter and the President and
a Trustee of the Registrant. It is also the underwriter for the
AmeriPrime Funds, AmeriPrime Insurance Trust, AmeriPrime Advisors
Trust, the Kenwood Funds, the Rockland Funds Trust, 10k Smart
Trust, and the TANAKA Funds, Inc.
(b) Information with respect to each director and officer of
AmeriPrime Financial Securities, Inc. is incorporated by
reference to Schedule A of Form BD filed by it under the
Securities Exchange Act of 1934 (File No. 8-48143).
<TABLE>
AmeriPrime
<CAPTION>
Name: Positions and Offices with Underwriter: Positions and Offices with Registrant:
<S> <C> <C>
President None
Sr. Vice President and Secretary None
Vice President None
</TABLE>
(c) Not applicable.
- -------------
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 Fifth Third Bank, Fifth Third Center,
Cincinnati, Ohio 45263.
(c)All books and record required to be maintained by the transfer
agent and accounting agent are held at:
Unified Fund Services, Inc.
.431 N. Pennsylvania Street
Indianapolis, IN. 46204
Ameri Prime Financial Services
1793 Kingswood Drive, Suite 200
Southlake, Texas 76092
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
Pre-Effective Amendment Number 2 to the Fund's Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorized in the City of
Terre Haute, and State of Indiana on the day of February , 2000.
Institutional Development Trust
Churchmen's Bond Fund
By: /s/ James B. Exline
---------------------------------------
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/ February 9, 2000
- -------------------------------------------------------------------------------
Clyde H. Freed, Jr, Trustee
/s/ February 9, 2000
- -------------------------------------------------------------------------------
Robert Cook, Trustee
/s/ February 9, 2000
- -------------------------------------------------------------------------------
Bryan Whitehead, Trustee
/s/ February 9, 2000
- -------------------------------------------------------------------------------
Abe Miller, Trustee
/s/ February 9, 2000
- -------------------------------------------------------------------------------
Charles Hinson, Trustee
EXHIBIT INDEX
Exhibit
Letter Document Title
(a) Custody Agreement................EX-99.g
(b) Underwriting Agreement...........EX-99.e
(c) Administration Agreement.........EX-99.h.1
(d) Transfer Agency Agreement........EX-99.h.2
(e) 12b-1 Plan.......................EX-99.m
3
FIFTH THIRD BANK
CUSTODY SERVICES AGREEMENT
This CUSTODY SERVICES AGREEMENT is made effective as of February, , 2000 by and
between FIFTH THIRD BANK, 38 Fountain Square Plaza, MD #1090E5, Cincinnati, Ohio
("Custodian"), and the undersigned customer Wabash Valley Capital Management
("Customer"). Custodian and Customer hereby agree as follows:
1. Customer has deposited with Custodian the property listed on the receipt(s)
or as indicated on the confirmation supplied by Custodian to Customer in
connection with this Agreement, and may from time to time hereafter deposit
additional property (hereinafter the "Property"), for the purpose of obtaining
from Custodian, the Custody Services ("Services") described in the Custody
Services Schedule.
2. Customer represents and acknowledges that the description of the property
listed on the receipt(s) or confirmation is an accurate description of the
property delivered to Custodian. Securities held by Custodian shall, unless
payable to bearer, be registered in the name of the Custodian for the account of
the Customer or its nominee. Custodian may deposit all or a part of the Property
in the Depository Trust Company, or the Federal Reserve or such other
sub-custodian; (hereinafter collectively known as "Depository") but, Custodian
shall have the same responsibility to Customer regardless of where specific
property is deposited. Custodian may register that portion of the Property that
are securities in the name of a nominee of Custodian or Depository. Custodian
will segregate and identify on its books as belonging to the Customer all
Property held by Custodian or any other entity authorized to hold Property in
accordance with this Agreement.
3. Custodian shall act in the capacity as custodian with respect to the
Property, holding and controlling the Property, and assumes full responsibility
to exercise a commercially reasonable standard of care that it exercises over
its own assets in providing the Services. Custodian shall have no investment
authority, nor any duty or obligation to supervise or advise Customer on any
investments. Under no circumstances will Custodian be liable to Customer or
other person(s) or entity for any loss or expense arising out of this Agreement
other than in connection with any act or failure to act which constitutes
willful, intentional or reckless misconduct.
4. Customer or designated agent will pay Custodian for all fees and expenses
charged for the Services in accordance with the Fee Schedule in effect.
Custodian will perform the Services described, which are generally the
maintenance of a custodial account, in the name of and on behalf of Customer
(the "Account"). Custodian may make changes to Services (including the Fee
Schedule) based upon, but not limited to, technological developments;
legislative, regulatory, third party depository or sub-custodian operational
changes; or the introduction of new services by Custodian. Custodian will notify
Customer of any changes to the Services that will affect Customer at least 30
days prior to the effective date of such changes. The Services shall include
those as normally provided by Custodian in its standard procedures with respect
to safekeeping, trading, deposits, withdrawals, income, corporate actions, puts,
calls, overdrafts, record retention, reports and such other items as Custodian
may offer.
5. Custodian is authorized to rely and act upon the written and manually signed
instructions ("Proper Instruction") of the person(s) identified as having
authority over the Property. Custodian is authorized to rely and act upon Proper
Instructions received from telephone, facsimile transaction or by bank wire
which Custodian believes to be in good faith given by an authorized person or
agent acting on behalf of customer. Custodian is also authorized to rely and act
upon instructions transmitted electronically through the Institutional Delivery
System (IDS), a customer data entry system, or any other similar electronic
instruction system acceptable to the Custodian. Custodian will not be liable for
failures to execute, or failures to receive property due to incorrect,
incomplete, conflicting or untimely instructions. Custodian, in its discretion,
is authorized to accept and act upon orders from Customer, whether given orally
by telephone, or otherwise, which Custodian in good faith believes to be
genuine. Custodian's records will be conclusive as to the content of any such
instruction, whether or not confirmation is received.
6. Custodian will be authorized to take the reasonably necessary steps to
complete a transaction and will be reimbursed for all costs, losses and
liabilities if settlement is not accomplished due to Customer's failure to pay
or deliver the Property for any reason. Custodian is authorized to execute, in
the name of Customer, any certificates of ownership, declarations or other
certificates required under any tax laws or other laws or governmental
regulation now or hereafter in effect. Custodian will have the right to setoff
against the property held by Customer hereunder, and upon any deposit account of
Customer for the following: (i) Compensation, expenses, commitments made by
Custodian upon instructions of Customer or Authorized Agent; (ii) Reimbursement
of taxes incurred by Custodian for Account of Customer; or (iii) Other
liabilities of Customer to Custodian, however created.
7. Custodian will settle trade orders as instructed by the Customer. Custodian
will not be liable or accountable for any act or omission by or for the solvency
of any broker or agent effecting such transaction. Customer will be protected
for such orders under the terms of the broker-dealer's operating agreement.
8. Customer agrees to indemnify, defend and hold Custodian harmless against all
claims, damages, or liabilities from any third party to which Custodian or its
nominee may be subjected by reason of any registration of Securities or other
Property in the name of Custodian or its nominee or otherwise arising out of or
connected with Custodian's Services under this Agreement, except for any claims,
damages or liability arising out of Custodian's intentional, reckless or willful
misconduct.
9. Custodian shall not be liable for any losses, damages or liabilities
resulting from any action taken or omitted, or from any loss or injury resulting
from the Custodian's performance or lack of performance of its duties under this
Agreement in the absence of intentional, reckless or willful misconduct on
Custodian's part. In no event shall Custodian be liable (i) for acting in
accordance with Proper Instructions; (ii) for special, consequential or punitive
damages or lost profits; (iii) for the acts or omissions of its Depositories,
sub-custodians or nominees or agents; or (iv) for holding property involved in
any nationalization, expropriation or other governmental actions, acts of war or
terrorism, insurrection, revolution or national catastrophes or acts of God.
10. Custodian will treat all records and information relating to Customer or the
Account as confidential, except that it may disclose such information after
prior approval of Customer, which will not be unreasonably withheld. Custodian
will be authorized to supply any information regarding the account which is
required by any law or governmental regulation in effect without having received
Customer's prior approval. Customer agrees to review statements and reports
promptly on receipt and inquiries regarding any valuations or other reports must
be submitted within one month of the receipt of the Custodian's statement or
report, and on expiration of this period, statements and reports are considered
correct and agreed to. Express or tacit approval of such statement or report
implies acceptance of the various entries listed therein and approval of any
reservations made by Custodian. Thereafter, Customer assumes the responsibility
to correct any errors.
11. Customer or designated agent will pay Custodian for all fees and expenses
for the Services in accordance with the Fee Schedule in effect and billed or
charged according to the Customer Profile Schedule. Customer will receive at
least 30 days prior notice of any changes in the Fee Schedule. If Customer fails
to pay Custodian for any fees and expenses owed within 30 days after invoice,
Custodian may charge such fees and expenses to any deposit account of Customer
or in the name of Customer. Custodian may also assess late payment fees for
payments past due more than 30 days after invoice.
12. This Agreement will be governed by and construed according to the laws of
the State of Ohio. The Customer or Custodian may terminate this agreement upon
thirty (30) days prior written notice to the other party by registered,
certified or express mail. Custodian will charge fees up to and including the
last day of the billing period in which the effective date of termination
occurs. Notice shall be effective on the date of receipt thereof. This Agreement
may not be amended except by writing signed by both parties.
FIFTH THIRD BANK Wabash Valley Capital Management :
By: By:
------------------------------------ -----------------------------
James B. Exline, President
Its: Its:
------------------------------------ -----------------------------
CHURCHMEN'S BOND FUNDS
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (the "Agreement") is made as of the _____
day of February , 2000 by and among the Churchmen's Bond Fund (the "Fund"), a
Delaware Business Trust, Wabash Valley Capital Management _(the "Adviser"), a
Indiana corporation, and AmeriPrime Financial Securities, Inc. (the
"Distributor"), a Texas corporation.
WITNESSETH THAT:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act")
and has registered its shares of common stock (the "Shares") under the
Securities Act of 1933, as amended (the "1933 Act") in one or more distinct
series of Shares, and classes thereof (each class is hereinafter referred to as
a "Portfolio");
WHEREAS, the Adviser has been appointed investment adviser to the Fund;
WHEREAS, the Distributor is a broker-dealer registered with the U.S.
Securities and Exchange Commission (the "SEC") and a member in good standing of
the National Association of Securities Dealers, Inc. (the "NASD");
WHEREAS, the Fund has adopted a plan of distribution (the "Distribution
Plan") pursuant to Rule 12b-1 under the 1940 Act relating to the payment by the
Fund of distribution expenses; and
WHEREAS, the Fund, the Adviser and the Distributor desire to enter into
this Agreement pursuant to which the Distributor will provide distribution
services to the Portfolios of the Fund identified on Schedule A, as may be
amended from time to time, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Fund, the Adviser and the Distributor,
intending to be legally bound hereby, agree as follows:
1. APPOINTMENT OF DISTRIBUTOR. The Fund hereby appoints the Distributor
as its exclusive agent for the distribution of the Shares, and the Distributor
hereby accepts such appointment under the terms of this Agreement. The Fund
shall not sell any Shares to any person except to fill orders for the Shares
received through the Distributor; provided, however, that the foregoing
exclusive right shall not apply: (i) to Shares issued or sold in connection with
the merger or consolidation of any other investment company with the Fund or the
acquisition by purchase or otherwise of all or substantially all of the assets
of any investment company or substantially all of the outstanding shares of any
such company by the Fund; (ii) to Shares which may be offered by the Fund to its
shareholders for reinvestment of cash distributed from capital gains or net
investment income of the Fund; (iii) to Shares which may be issued to
shareholders of other funds who exercise any exchange privilege set forth in the
Fund's Prospectus; or (iv) to Shares which may be sold to persons purchasing
such Shares directly from the Fund or the Fund's Transfer Agent. Notwithstanding
any other provision hereof, the Fund may terminate, suspend, or withdraw the
offering of the Shares whenever, in its sole discretion, it deems such action to
be desirable, and the Distributor shall process no further orders for Shares
after it receives notice of such termination, suspension or withdrawal.
2. FUND DOCUMENTS. The Fund has provided the Distributor with properly
certified or authenticated copies of the following Fund related documents in
effect on the date hereof: the Fund's organizational documents, including the
Trust Instrument and By-Laws; the Fund's Registration Statement on Form N-1A,
including all exhibits thereto; the Fund's most current Prospectus and Statement
of Additional Information; and resolutions of the Fund's Board of Trustees
authorizing the appointment of the Distributor and approving this Agreement. The
Fund shall promptly provide to the Distributor copies, properly certified or
authenticated, of all amendments or supplements to the foregoing. The Fund shall
provide to the Distributor copies of all other information which the Distributor
may reasonably request for use in connection with the distribution of Shares,
including, but not limited to, a certified copy of all financial statements
prepared for the Fund by its independent public accountants. The Fund shall also
supply the Distributor with such number of copies of the current Prospectus,
Statement of Additional Information and shareholder reports as the Distributor
shall reasonably request.
3. DISTRIBUTION SERVICES. The Distributor shall sell and repurchase
Shares as set forth below, subject to the registration requirements of the 1933
Act and the rules and regulations thereunder, and the laws governing the sale of
securities in the various states ("Blue Sky Laws"):
a. The Distributor, as agent for the Fund, shall sell Shares to the
public against orders therefor at the public offering price, which
shall be the net asset value of the Shares then in effect plus any
applicable sales loads.
b. The net asset value of the Shares shall be determined in the manner
provided in the then current Prospectus and Statement of Additional
Information. The net asset value of the Shares shall be calculated by
the Fund or by another entity on behalf of the Fund. The Distributor
shall have no duty to inquire into or liability for the accuracy of
the net asset value per Share as calculated.
c. Upon receipt of purchase instructions, the Distributor shall transmit
such instructions to the Fund or its transfer agent for registration
of the Shares purchased.
d. The Distributor, in light of Fund policies, procedures and disclosure
documents, shall also have the right to take, as agent for the Fund,
all actions which, in the Distributor's judgment, are necessary to
effect the distribution of Shares.
e. Nothing in this Agreement shall prevent the Distributor or any
"affiliated person" from buying, selling or trading any securities for
its or their own account or for the accounts of others for whom it or
they may be acting; provided, however, that the Distributor expressly
agrees that it shall not for its own account purchase any Shares of
the Fund except for investment purposes and that it shall not for its
own account sell any such Shares except for redemption of such Shares
by the Fund, and that it shall not undertake activities which, in its
judgment, would adversely affect the performance of its obligations to
the Fund under this Agreement.
f. The Distributor, as agent for the Fund, shall repurchase Shares at
such prices and upon such terms and conditions as shall be specified
in the Prospectus.
4. DISTRIBUTION SUPPORT SERVICES. In addition to the sale and
repurchase of Shares, the Distributor shall perform the distribution support
services set forth on Schedule B attached hereto, as may be amended from time to
time.
5. REASONABLE EFFORTS. The Distributor shall use all reasonable
efforts in connection with the distribution of Shares. The Distributor shall
have no obligation to sell any specific number of Shares and shall only sell
Shares against orders received therefor. The Fund shall retain the right to
refuse at any time to sell any of its Shares for any reason deemed adequate by
it.
6. COMPLIANCE. In furtherance of the distribution services being
provided hereunder, the Distributor and the Fund agree as follows:
a. The Distributor shall comply with the Rules of Fair Practice of the
NASD and the securities laws of any jurisdiction in which it sells,
directly or indirectly, Shares.
b. The Distributor shall require each dealer with whom the Distributor
has a selling agreement to conform to the applicable provisions of the
Fund's most current Prospectus and Statement of Additional
Information, with respect to the public offering price of the Shares.
c. The Fund agrees to furnish to the Distributor sufficient copies of any
agreements, plans, communications with the public or other materials
it intends to use in connection with any sales of Shares in a timely
manner in order to allow the Distributor to review, approve and file
such materials with the appropriate regulatory authorities and obtain
clearance for use. The Fund agrees not to use any such materials until
so filed and cleared for use by appropriate authorities and the
Distributor.
d. The Distributor, at its own expense, shall qualify as a broker or
dealer, or otherwise, under all applicable Federal or state laws
required to permit the sale of Shares in such states as shall be
mutually agreed upon by the parties; provided, however that the
Distributor shall have no obligation to register as a broker or dealer
under the Blue Sky Laws of any jurisdiction if it determines that
registering or maintaining registration in such jurisdiction would be
uneconomical.
e. The Distributor shall not, in connection with any sale or solicitation
of a sale of the Shares, or make or authorize any representative,
service organization, broker or dealer to make, any representations
concerning the Shares except those contained in the Fund's most
current Prospectus covering the Shares and in communications with the
public or sales materials approved by the Distributor as information
supplemental to such Prospectus.
7. EXPENSES. Expenses shall be allocated as follows: --------
a. The Fund shall bear the following expenses: preparation, setting in
type, and printing of sufficient copies of the Prospectus and
Statement of Additional Information for distribution to existing
shareholders; preparation and printing of reports and other
communications to existing shareholders; distribution of copies of the
Prospectus, Statement of Additional Information and all other
communications to existing shareholders; registration of the Shares
under the Federal securities laws; qualification of the Shares for
sale in the jurisdictions mutually agreed upon by the Fund and the
Distributor; transfer agent/shareholder servicing agent services;
supplying information, prices and other data to be furnished by the
Fund under this Agreement; any original issue taxes or transfer taxes
applicable to the sale or delivery of the Shares or certificates
therefor; and items covered by the Distribution Plan.
b. To the extent not covered by the Distribution Plan, the Adviser shall
pay all other expenses incident to the sale and distribution of the
Shares sold hereunder, including, without limitation: printing and
distributing copies of the Prospectus, Statement of Additional
Information and reports prepared for use in connection with the
offering of Shares for sale to the public; advertising in connection
with such offering, including public relations services, sales
presentations, media charges, preparation, printing and mailing of
advertising and sales literature; filing fees required by regulatory
authorities for sales literature and advertising materials; any
additional out-of-pocket expenses incurred in connection with the
foregoing and any other costs of distribution.
8. COMPENSATION. For the distribution and distribution support services
provided by the Distributor pursuant to the terms of the Agreement, the Fund
shall, pursuant to the Distribution Plan, pay to the Distributor the
compensation set forth in Schedule A attached hereto, which schedule may be
amended from time to time. In addition, the Distributor may retain any portion
of any sales load which is imposed on the sale of Shares and not reallocated by
the Distributor to a dealer, as set forth in the Prospectus and subject to
applicable NASD rules, and offset the amount payable to the Distributor pursuant
to Schedule A against any amounts so retained. To the extent not covered by the
Distribution Plan or offset by the retention of sales loads, the Adviser shall
pay to Distributor the compensation set forth in Schedule A and shall also
reimburse the Distributor for its out-of-pocket expenses related to the
performance of its duties hereunder, including, without limitation,
telecommunications charges, postage and delivery charges, record retention
costs, reproduction charges and traveling and lodging expenses incurred by
officers and employees of the Distributor. If this Agreement becomes effective
subsequent to the first day of the month or terminates before the last day of
the month, the Fund shall pay to the Distributor a distribution fee that is
prorated for that part of the month in which this Agreement is in effect. All
rights of compensation and reimbursement under this Agreement for services
performed by the Distributor as of the termination date shall survive the
termination of this Agreement.
9. USE OF DISTRIBUTOR'S NAME. The Fund shall not use the name of the
Distributor or any of its affiliates in the Prospectus, Statement of Additional
Information, sales literature or other material relating to the Fund in a manner
not approved prior thereto in writing by the Distributor; provided, however,
that the Distributor shall approve all uses of its and its affiliates' names
that merely refer in accurate terms to their appointments or that are required
by the Securities and Exchange Commission (the "SEC") or any state securities
commission; and further provided, that in no event shall such approval be
unreasonably withheld.
10. USE OF FUND'S NAME. Neither the Distributor nor any of its
affiliates shall use the name of the Fund or material relating to the Fund on
any forms (including any checks, bank drafts or bank statements) for other than
internal use in a manner not approved prior thereto in writing by the Fund;
provided, however, that the Fund shall approve all uses of its name that merely
refer in accurate terms to the appointment of the Distributor hereunder or that
are required by the SEC or any state securities commission; and further
provided, that in no event shall such approval be unreasonably withheld.
11. LIABILITY OF DISTRIBUTOR. The duties of the Distributor shall be
limited to those expressly set forth herein, and no implied duties, except the
duty to act in good faith, are assumed by or may be asserted against the
Distributor hereunder. The Distributor may, in connection with this Agreement
employ agents or attorneys in fact, and shall not be liable for any loss arising
out of or in connection with its actions under this Agreement, so long as it
acts in good faith and with due diligence, and is not negligent or guilty of any
willful misfeasance, bad faith or gross negligence, or reckless disregard of its
obligations and duties under this Agreement. As used in this Section 11 and in
Section 12 (except the second paragraph of Section 12), the term "Distributor"
shall include directors, officers, employees and other agents of the
Distributor.
12. INDEMNIFICATION OF DISTRIBUTOR. Any director, officer, employee,
shareholder or agent of the Distributor who may be or become an officer,
Trustee, employee or agent of the Fund, shall be deemed, when rendering services
to the Fund or acting on any business of the Fund (other than services or
business in connection with the Distributor's duties hereunder), to be rendering
such services to or acting solely for the Fund and not as a director, officer,
employee, shareholder or agent of, or one under the control or direction of, the
Distributor, even though receiving a salary from the Distributor.
The Fund agrees to indemnify and hold harmless the Distributor, and
each person, who controls the Distributor within the meaning of Section 15 of
the 1933 Act, or Section 20 of the Securities Exchange Act of 1934, as amended
("1934 Act"), against any and all liabilities, losses, damages, claims and
expenses, joint or several (including, without limitation, reasonable attorneys'
fees and disbursements and investigation expenses incident thereto) to which
they, or any of them, may become subject under the 1933 Act, the 1934 Act, the
1940 Act or other Federal or state laws or regulations, at common law or
otherwise, insofar as such liabilities, losses, damages, claims and expenses (or
actions, suits or proceedings in respect thereof) arise out of or relate to any
untrue statement or alleged untrue statement of a material fact contained in a
Prospectus, Statement of Additional Information, supplement thereto, sales
literature or other written information prepared by the Fund and provided by the
Fund to the Distributor for the Distributor's use hereunder, or arise out of or
relate to any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading. The Distributor (or any person controlling the Distributor) shall
not be entitled to indemnity hereunder for any liabilities, losses, damages,
claims or expenses (or actions, suits or proceedings in respect thereof)
resulting from (i) an untrue statement or omission or alleged untrue statement
or omission made in the Prospectus, Statement of Additional Information, or
supplement, sales or other literature, in reliance upon and in conformity with
information furnished in writing to the Fund by the Distributor specifically for
use therein or (ii) the Distributor's own willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties and obligations in the
performance of this Agreement
The Distributor agrees to indemnify and hold harmless the Fund, and
each person who controls the Fund within the meaning of Section 15 of the 1933
Act, or Section 20 of the 1934 Act, against any and all liabilities, losses,
damages, claims and expenses, joint or several (including, without limitation
reasonable attorneys' fees and disbursements and investigation expenses incident
thereto) to which they, or any of them, may become subject under the 1933 Act,
the 1934 Act, the 1940 Act or other Federal or state laws, at common law or
otherwise, insofar as such liabilities, losses, damages, claims or expenses
arise out of or relate to any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus or Statement of Additional Information
or any supplement thereto, sales literature or other written material, or arise
out of or relate to actions or oral representations of Distributor's associated
persons and to any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, if based upon information furnished in writing to the Fund by the
Distributor specifically for use therein.
A party seeking indemnification hereunder (the "Indemnitee") shall give
prompt written notice to the party from whom indemnification is sought
("Indemnitor") of a written assertion or claim of any threatened or pending
legal proceeding which may be subject to indemnity under this Section; provided,
however, that failure to notify the Indemnitor of such written assertion or
claim shall not relieve the Indemnitor of any liability arising from this
Section. The Indemnitor shall be entitled, if it so elects, to assume the
defense of any suit brought to enforce a claim subject to this Agreement and
such defense shall be conducted by counsel chosen by the Indemnitor and
satisfactory to the Indemnitee; provided, however, that if the defendants
include both the Indemnitee and the Indemnitor, and the Indemnitee shall have
reasonably concluded that there may be one or more legal defenses available to
it which are different from or additional to those available to the Indemnitor
("conflict of interest"), the Indemnitor shall not have the right to elect to
defend such claim on behalf of the Indemnitee, and the Indemnitee shall have the
right to select separate counsel to defend such claim on behalf of the
Indemnitee. In the event that the Indemnitor elects to assume the defense of any
suit pursuant to the preceding sentence and retains counsel satisfactory to the
Indemnitee, the Indemnitee shall bear the fees and expenses of additional
counsel retained by it except for reasonable investigation costs which shall be
borne by the Indemnitor. If the Indemnitor (i) does not elect to assume the
defense of a claim, (ii) elects to assume the defense of a claim but chooses
counsel that is not satisfactory to the Indemnitee or (iii) has no right to
assume the defense of a claim because of a conflict of interest, the Indemnitor
shall advance or reimburse the Indemnitee, at the election of the Indemnitee,
reasonable fees and disbursements of any counsel retained by Indemnitee,
including reasonable investigation costs.
13. ADVISER PERSONNEL. The Adviser agrees that only its employees who
are registered representatives of the Distributor ("dual employees") or
registered representatives of another NASD member firm shall offer or sell
Shares of the Portfolios. The Adviser further agrees that the activities of any
such employees as registered representatives of the Distributor shall be limited
to offering and selling Shares. If there are dual employees, one employee of the
Adviser shall register as a principal of the Distributor and assist the
Distributor in monitoring the marketing and sales activities of the dual
employees. The Adviser shall maintain errors and omissions and fidelity bond
insurance policies providing reasonable coverage for its employees activities
and shall provide copies of such policies to the Distributor. The Adviser shall
indemnify and hold harmless the Distributor against any and all liabilities,
losses, damages, claims and expenses (including reasonable attorneys' fees and
disbursements and investigation costs incident thereto) arising from or related
to the Adviser's employees' activities as registered representatives, including,
without limitation, any and all such liabilities, losses, damages, claims and
expenses arising from or related to the breach by such employees of any rules or
regulations of the NASD or SEC.
14. FORCE MAJEURE. The Distributor shall not be liable for any delays
or errors occurring by reason of circumstances not reasonably foreseeable and
beyond its control, including, but not limited, to acts of civil or military
authority, national emergencies, work stoppages, fire, flood, catastrophe, acts
of God, insurrection, war, riot or failure of communication or power supply. In
the event of equipment breakdowns which are beyond the reasonable control of the
Distributor and not primarily attributable to the failure of the Distributor to
reasonably maintain or provide for the maintenance of such equipment, the
Distributor shall, at no additional expense to the Fund, take reasonable steps
in good faith to minimize service interruptions, but shall have no liability
with respect thereto.
15. SCOPE OF DUTIES. The Distributor and the Fund shall regularly
consult with each other regarding the Distributor's performance of its
obligations and its compensation under the foregoing provisions. In connection
therewith, the Fund shall submit to the Distributor at a reasonable time prior
to or at the same time as filing with the SEC copies of any amended or
supplemented Registration Statement of the Fund (including exhibits) under the
1940 Act and the 1933 Act, and at a reasonable time in advance of their proposed
use, copies of any amended or supplemented forms relating to any plan, program
or service offered by the Fund. Any change in such materials that would require
any change in the Distributor's obligations under the foregoing provisions shall
be subject to the Distributor's approval. In the event that a change in such
documents or in the procedures contained therein increases the cost or burden to
the Distributor of performing its obligations hereunder, the Distributor shall
be entitled to receive reasonable compensation therefore.
16. DURATION. This Agreement shall become effective as of the date
first above written, and shall continue in force for two years from that date
and thereafter from year to year, provided continuance is approved at least
annually by (i) either the vote of a majority of the Trustees of the Fund, or by
the vote of a majority of the outstanding voting securities of each Portfolio,
and (ii) the vote of a majority of those Trustees of the Fund who are not
interested persons of the Fund, and who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on the approval.
17. TERMINATION. This Agreement shall terminate as follows:
-----------
a. This Agreement shall terminate automatically in the event of its
assignment.
b. This Agreement shall terminate upon the failure to approve the
continuance of the Agreement after the initial two year term as
set forth in Section 16 above.
c. This Agreement shall terminate at any time upon a vote of the
majority of the Trustees who are not interested persons of the
Fund or by a vote of the majority of the outstanding voting
securities of each Portfolio, upon not less than 60 days prior
written notice to the Distributor.
d. The Distributor may terminate this Agreement upon not less than
60 days prior written notice to the Fund.
Upon the termination of this Agreement, the Fund shall pay to the
Distributor such compensation and out-of-pocket expenses as may be payable for
the period prior to the effective date of such termination. In the event that
the Fund designates a successor to any of the Distributor's obligations
hereunder, the Distributor shall, at the expense and direction of the Fund,
transfer to such successor all relevant books, records and other data
established or maintained by the Distributor pursuant to the foregoing
provisions.
Sections 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 17, 20, 21, 22, 23, 24,
25, 26 and 27 shall survive any termination of this Agreement.
18. AMENDMENT. The terms of this Agreement shall not be waived,
altered, modified, amended or supplemented in any manner whatsoever except by a
written instrument signed by the Distributor and the Fund and shall not become
effective unless its terms have been approved by the majority of the Trustees of
the Fund or by a "vote of majority of the outstanding voting securities" of each
Portfolio and by a majority of those Trustees who are not "interested persons"
of the Fund or any party to this Agreement.
19. NON-EXCLUSIVE SERVICES. The services of the Distributor rendered
to the Fund are not exclusive. The Distributor may render such services to any
other investment company.
20. DEFINITIONS. As used in this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignment," "interested
person" and "affiliated person" shall have the respective meanings specified in
the 1940 Act and the rules enacted thereunder as now in effect or hereafter
amended.
21. CONFIDENTIALITY. The Distributor shall treat confidentially and as
proprietary information of the Fund all records and other information relating
to the Fund and prior, present or potential shareholders and shall not use such
records and information for any purpose other than performance of its
responsibilities and duties hereunder, except as may be required by
administrative or judicial tribunals or as requested by the Fund.
22. NOTICE. Any notices and other communications required or permitted
hereunder shall be in writing and shall be effective upon delivery by hand or
upon receipt if sent by certified or registered mail (postage prepaid and return
receipt requested) or by a nationally recognized overnight courier service
(appropriately marked for overnight delivery) or upon transmission if sent by
telex or facsimile (with request for immediate confirmation of receipt in a
manner customary for communications of such respective type and with physical
delivery of the communication being made by one or the other means specified in
this Section 22 as promptly as practicable thereafter). Notices shall be
addressed as follows:
(a) if to the Fund:
Unified Fund Service, Inc.
P.O. Box 6110
Indianapolis, IN. 46206-6110
Attn: Linda Lawson
(b) if to the Adviser:
Wabash Valley Capital Management
2901 Ohio Blvd, Suite 242
Terre Haute, IN. 47803
Attn: James B. Exline
(c) if to the Distributor:
AmeriPrime Financial Securities, Inc.,
1793 Kingswood Drive
Suite 200
Southlake, TX 76092
Attn: Kenneth D. Trumpfheller
or to such other respective addresses as the parties shall designate by like
notice, provided that notice of a change of address shall be effective only upon
receipt thereof.
23. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
24. GOVERNING LAW. This Agreement shall be administered, construed and
enforced in accordance with the laws of the State of Texas to the extent that
such laws are not preempted by the provisions of any law of the United States
heretofore or hereafter enacted, as the same may be amended from time to time.
25. ENTIRE AGREEMENT. This Agreement (including the Schedules attached
hereto) contains the entire agreement and understanding of the parties with
respect to the subject matter hereof and supersedes all prior written or oral
agreements and understandings with respect thereto.
26. MISCELLANEOUS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction. This Agreement may be executed in three counterparts,
each of which taken together shall constitute one and the same instrument.
27. LIMITATION OF LIABILITY. The term "Churchmen's Bond Fund" means and
refers to the Trustees from time to time serving under the Trust Instrument of
the Fund dated March 31, 1999, as the same may subsequently thereto have been,
or subsequently hereto be, amended. It is expressly agreed that obligations of
the Fund hereunder shall not be binding upon any Trustee, shareholder, nominees,
officers, agents or employees of the Fund, personally, but bind only the assets
and property of the Fund, as provided in the Trust Instrument. The execution and
delivery of this Agreement have been authorized by the Trustees and signed by an
authorized officer of the Fund, acting as such, and neither such authorization
nor such execution and delivery shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the assets and property of the Fund as provided in the Trust
Instrument. The Trust Instrument is on file with the Secretary of the State of
Delaware.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
CHURCHMEN'S BOND FUND
By: _______________________________________
James B Exline, President
AMERIPRIME FINANCIAL SECURITIES, INC.
By: ________________________________________
Kenneth D. Trumpfheller
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT dated as of February____,2000, between Churchmen's Bond Fund
(the "Trust"), a Delaware Business Trust, and AmeriPrime Financial Services,
Inc. (the "Administrator"), a Texas corporation.
WHEREAS, the Trust has been organized to operate as an open-end
management investment company registered under the Investment Company Act of
1940 (the "Act"); and
WHEREAS, the Trust wishes to avail itself of the information, advice,
assistance and facilities of the Administrator to perform on behalf of the Trust
the services as hereinafter described; and
WHEREAS, the Administrator wishes to provide such services to the
Trust under the conditions set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Trust and the Administrator agree as follows:
1. Employment. The Trust, being duly authorized, hereby employs the
Administrator to perform those services described in this Agreement. The
Administrator shall perform the obligations thereof upon the terms and
conditions hereinafter set forth. Any administrative services undertaken by the
Administrator pursuant to this Agreement, as well as any other activities
undertaken by the Administrator on behalf of the Trust pursuant hereto, shall at
all times be subject to any directives of the Board of Trustees of the Trust.
2. Trust Administration. The Administrator shall give the Trust the
benefit of its best judgment, efforts and facilities in rendering its services
as administrator. The Administrator shall at all times conform to: (i) all
applicable provisions of the Act and any rules and regulations adopted
thereunder, (ii) the provisions of the Registration Statement of the Trust under
the Securities Act of 1933 and the Act as amended from time to time, (iii) the
provisions of the Agreement and Declaration of Trust and the By-Laws of the
Trust, and (iv) any other applicable provisions of state and federal law.
Subject to the direction and control of the Trust, the Administrator
shall supervise the Trust's business affairs not otherwise supervised by other
agents of the Trust. To the extent not otherwise the primary responsibility of,
or provided by, other parties under agreement with the Trust, the Administrator
shall supply (i) non-investment related statistical and research data, (ii)
internal regulatory compliance services, and (iii) executive and administrative
services. The Administrator shall supervise the preparation of (i) tax returns,
(ii) reports to shareholders of the Trust, (iii) reports to and filings with the
Securities and Exchange Commission, state securities commissions and Blue Sky
authorities including preliminary and definitive proxy materials and
post-effective amendments to the Trust's registration statement, and (iv)
necessary materials for meetings of the Trust's Board of Trustees. The
Administrator shall provide personnel to serve as officers of the Trust if so
elected by the Board of Trustees; provided, however, that the Trust shall
reimburse the Administrator for the expenses incurred by such personnel in
attending Board of Trustees' meetings and shareholders' meetings of the Trust.
Executive and administrative services include, but are not limited to, the
coordination of all third parties furnishing services to the Trust, review of
the books and records of the Trust maintained by such third parties, and the
review and submission to the officers of the Trust for their approval, of
invoices or other requests for payment of Trust expenses; and such other action
with respect to the Trust as may be necessary in the opinion of the
Administrator to perform its duties hereunder.
3. Record Keeping and Other Information. The Administrator shall
create and maintain all necessary records in accordance with all applicable
laws, rules and regulations, including but not limited to records required by
Section 31(a) of the Investment Company Act of 1940 and the rules thereunder, as
the same may be amended from time to time, pertaining to the various functions
performed by it and not otherwise created and maintained by another party
pursuant to contract with the Trust. Where applicable, such records shall be
maintained by the Administrator for the periods and in the places required by
Rule 31a-2 under the Investment Company Act of 1940.
4. Audit, Inspection and Visitation. The Administrator shall make
available to the Trust during regular business hours all records and other data
created and maintained pursuant to the foregoing provisions of this Agreement
for reasonable audit and inspection by the Trust or any regulatory agency having
authority over the Trust.
5. Compensation. For the performance of the Administrator's
obligations under this Agreement, each series of the Trust shall pay the
Administrator, on the first business day following the end of each month, a fee
as set out in the fee schedule attached hereto as Exhibit A. The Administrator
shall not be required to reimburse the Trust or the Trust's investment adviser
for (or have deducted from its fees) any expenses in excess of expense
limitations imposed by certain state securities commissions having jurisdiction
over the Trust.
6. Limitation of Liability. Administrator may rely on information
reasonably believed by it to be accurate and reliable. Except as may otherwise
be required by the Act or the rules thereunder, neither Administrator nor its
shareholders, officers, directors, employees, agents, control persons or
affiliates of any thereof (collectively, the "Administrator's Employees") shall
be subject to any liability for, or any damages, expenses or losses incurred by
the Trust in connection with, any error of judgment, mistake of law, any act or
omission in connection with or arising out of any services rendered under or
payments made pursuant to this Agreement or any other matter to which this
Agreement relates, except by reason of willful misfeasance, bad faith or gross
negligence on the part of any such persons in the performance of the duties of
Administrator under this Agreement or by reason of reckless disregard by any of
such persons of the obligations and duties of Administrator under this
Agreement. Any person, even though also a director, officer, employee,
shareholder or agent of the Administrator, who may be or become an officer,
trustee, employee or agent of the Trust, shall be deemed, when rendering
services to the Trust or acting on any business of the Trust (other than
services or business in connection with the Administrator's duties hereunder),
to be rendering such services to or acting solely for the Trust and not as a
director, officer, employee, shareholder or agent, or one under the control or
direction of the Administrator, even though paid by it.
7. Indemnification of Administrator. Subject to and except as
otherwise provided in the Securities Act of 1933, as amended, and the Act, the
Trust shall indemnify Administrator and each of Administrator's Employees
(hereinafter collectively referred to as a "Covered Person") against all
liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while serving as the administrator for the Trust or as one of
Administrator's Employees, or, thereafter, by reason of being or having been the
administrator for the Trust or one of Administrator's Employees, including but
not limited to liabilities arising due to any misrepresentation or misstatement
in the Trust's prospectus, other regulatory filings, and amendments thereto, or
in other documents originating from the Trust. In no case shall a Covered Person
be indemnified against any liability to which such Covered Person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties of such Covered Person.
8. Services for Others. Nothing in this Agreement shall prevent the
Administrator or any affiliated person of the Administrator from providing
services for any other person, firm or corporation, including other investment
companies; provided, however, that the Administrator expressly represents that
it will undertake no activities which, in its judgment, will adversely affect
the performance of its obligations to the Trust under this Agreement.
9. Compliance with the Act. The parties hereto acknowledge and agree
that nothing contained herein shall be construed to require the Administrator to
perform any services for any series of the Trust which services could cause the
Administrator to be deemed an "investment adviser" of the Series within the
meaning of Section 2(a)(20) of the Act or to supersede or contravene the
Prospectus or Statement of Additional Information of any series of the Trust or
any provisions of the Act and the rules thereunder.
10. Renewal and Termination. This Agreement shall become effective on
the date first above written and shall remain in force for a period of two (2)
years from such date, and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by the vote of a majority
of the Trustees who are not interested persons of the Trust or the
Administrator, cast in person at a meeting called for the purpose of voting on
such approval and by a vote of the Board of Trustees or of a majority of the
Trust's outstanding voting securities. This Agreement may be terminated without
the payment of any penalty by either party upon sixty (60) days' written notice
to the other party. This Agreement shall terminate automatically in the event of
its assignment. Upon the termination of this Agreement, the Trust shall pay the
Administrator such compensation as may be payable for the period prior to the
effective date of such termination.
11. The Trust. The term "Churchmen's Bond Funds" means and refers to
the Trustees from time to time serving under the Trust's Agreement and
Declaration of Trust as the same may subsequently thereto have been, or
subsequently hereto may be, amended. It is expressly agreed that the obligations
of the Trust hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agent or employees of the Trust, personally,
but bind only the trust property of the Trust. The execution and delivery of
this Agreement have been authorized by the Trustees of the Trust and signed by
an officer of the Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of the Trust.
12. Miscellaneous. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Texas. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
CHURCHMEN'S BOND FUND TRUST
By: ________________________________
Its: James B. Exline, President
AMERIPRIME FINANCIAL SERVICES, INC.
By: ________________________________
Its: Kenneth D. Trumpfheller, President
MUTUAL FUND SERVICES AGREEMENT
FUND ACCOUNTING SERVICES
AND
TRANSFER AGENCY SERVICES
between
CHURCHMEN'S BOND FUND
and
UNIFIED FUND SERVICES, INC.
DATED: FEBRUARY,____2000
Exhibit A - Portfolio Listing
Exhibit B - Fund Accounting Services Description
Exhibit C - Transfer Agency Services Description
Exhibit D - Fees and Expenses
<PAGE>
MUTUAL FUND SERVICES AGREEMENT
AGREEMENT (this "Agreement"), dated as of February , 2000, between the
Churchmen's Bond Fund, a Delaware Business Trust (the "Fund"), and Unified Fund
Services, Inc., an Indiana corporation ("Unified").
WITNESSTH:
WHEREAS, the Fund is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain Unified to provide certain transfer
agent and fund accounting services with respect to the Fund, and Unified is
willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:
SECTION 1. Appointment. The Fund hereby appoints Unified to provide
transfer agent and fund accounting services for the Fund, subject to the
supervision of the Board of Trustees of the Fund (the "Board"), for the period
and on the terms set forth in this Agreement. Unified accepts such appointment
and agrees to furnish the services herein set forth in return for the
compensation as provided in Section 6 and Exhibit D to this Agreement. The Fund
will initially consist of the portfolios, funds and/or classes of shares (each a
"Portfolio"; collectively the "Portfolios") listed on Exhibit A. The Fund shall
notify Unified in writing of each additional Portfolio established by the Fund.
Each new Portfolio shall be subject to the provisions of this Agreement, except
to the extent that the provisions (including those relating to the compensation
and expenses payable by the Fund and its Portfolios) may be modified with
respect to each new Portfolio in writing by the Fund and Unified at the time of
the addition of the new Portfolio.
SECTION 2. Representations and Warranties of Unified. Unified
represents and warrants to the Fund that:
(a) Unified is a corporation duly organized and existing under the laws of
the State of Indiana;
(b) Unified is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement,
and all requisite corporate proceedings have been taken by Unified to
authorize Unified to enter into and perform this Agreement;
(c) Unified has, and will continue to have, access to the facilities,
personnel and equipment required to fully perform its duties and
obligations hereunder;
(d) no legal or administrative proceedings have been instituted or
threatened against Unified that would impair its ability to perform
its duties and obligations under this Agreement; and
(e) Unified's entrance into this Agreement will not cause a material
breach or be in material conflict with any other agreement or
obligation of Unified or any law or regulation applicable to Unified.
SECTION 3. Representations and Warranties of the Fund. The Fund
represents and warrants to Unified that:
(a) the Fund is a business trust duly organized and existing under the
laws of the State of ________;
(b) the Fund is empowered under applicable laws and by its Declaration of
Trust and By-Laws to enter into and perform this Agreement, and the
Fund has taken all requisite proceedings to authorize the Fund to
enter into and perform this Agreement;
(c) the Fund is an investment company properly registered under the 1940
Act; a registration statement under the Securities Act of 1933, as
amended ("1933 Act") and the 1940 Act on Form N-lA has been filed and
will be effective and will remain effective during the term of this
Agreement, and all necessary filings under the laws of the states will
have been made and will be current during the term of this Agreement;
(d) no legal or administrative proceedings have been instituted or
threatened against the Fund that would impair its ability to perform
its duties and obligations under this Agreement; and
(e) the Fund's entrance into this Agreement will not cause a material
breach or be in material conflict with any other agreement or
obligation of the Fund or any law or regulation applicable to it.
SECTION 4. Delivery of Documents. The Fund will promptly furnish to
Unified such copies, properly certified or authenticated, of contracts,
documents and other related information that Unified may request or requires to
properly discharge its duties. Such documents may include but are not limited to
the following:
(a) Resolutions of the Board authorizing the appointment of Unified to
provide certain transfer agency and fund accounting services to the
Fund and approving this Agreement;
(b) The Fund's Declaration of Trust;
(c) The Fund's By-Laws;
(d) The Fund's Notification of Registration on Form N-8A under the 1940
Act as filed with the Securities and Exchange Commission ("SEC");
(e) The Fund's registration statement including exhibits, as amended, on
Form N-1A (the "Registration Statement") under the 1933 Act and the
1940 Act, as filed with the SEC;
(f) Copies of the Management Agreement between the Fund and its investment
adviser (the "Advisory Agreement");
(g) Opinions of counsel and auditors reports;
(h) The Fund's Prospectus and Statement of Additional Information relating
to all Portfolios and all amendments and supplements thereto (such
Prospectus and Statement of Additional Information and supplements
thereto, as presently in effect and as from time to time hereafter
amended and supplemented, herein called the "Prospectuses"); and
(i) Such other agreements as the Fund may enter into from time to time
including securities lending agreements; futures and commodities
account agreements, brokerage agreements, and options agreements.
SECTION 5. Services Provided by Unified.
(a) Unified will provide the following services subject to the control,
direction and supervision of the Board and in compliance with the
objectives, policies and limitations set forth in the Fund's
Registration Statement, Declaration of Trust and By-Laws; applicable
laws and regulations; and all resolutions and policies implemented by
the Board:
(i) Fund Accounting, as described on Exhibit B to this
Agreement. ---------------
(ii) Transfer Agency, as described on Exhibit C to this
Agreement. ---------------
(iii)Dividend Disbursing. Unified will serve as the Fund's
dividend disbursing agent. Unified will prepare and mail
checks, place wire transfers of credit income and capital
gain payments to shareholders. The Fund will advise Unified
in advance of the declaration of any dividend or
distribution and the record and payable date thereof.
Unified will, on or before the payment date of any such
dividend or distribution, notify the Fund's Custodian of the
estimated amount required to pay any portion of such
dividend or distribution payable in cash, and on or before
the payment date of such distribution, the Fund will
instruct its Custodian to make available to Unified
sufficient funds for the cash amount to be paid out. If a
shareholder is entitled to receive additional shares by
virtue of any such distribution or dividend, appropriate
credits will be made to each shareholder's account and/or
certificates delivered where requested. A shareholder not
receiving certificates will receive a confirmation from
Unified indicating the number of shares credited to his/her
account.
(b) Unified will also:
(i) provide office facilities with respect to the provision of
the services contemplated herein (which may be in the
offices of Unified or a corporate affiliate of Unified);
(ii) provide or otherwise obtain personnel sufficient, in
Unified's sole discretion, for provision of the services
contemplated herein;
(iii)furnish equipment and other materials, which Unified, in
its sole discretion, believes are necessary or desirable for
provision of the services contemplated herein; and
(iv) keep records relating to the services provided hereunder in
such form and manner as set forth on Exhibits B and C and as
Unified may otherwise deem appropriate or advisable, all in
accordance with the 1940 Act. To the extent required by
Section 31 of the 1940 Act and the rules thereunder, Unified
agrees that all such records prepared or maintained by
Unified relating to the services provided hereunder are the
property of the Fund and will be preserved for the periods
prescribed under Rule 31a-2 under the 1940 Act, maintained
at the Fund's expense, and made available in accordance with
such Section and rules. Unified further agrees to surrender
promptly to the Fund upon its request and cease to retain in
its records and files those records and documents created
and maintained by Unified pursuant to this Agreement.
SECTION 6. Fees: Expenses: Expense Reimbursement.
(a) As compensation for the services rendered to the Fund pursuant to
this Agreement the Fund shall pay Unified monthly fees determined
as set forth on Exhibit D to this Agreement. Such fees are to be
billed monthly and shall be due and payable upon receipt of the
invoice. Upon any termination of this Agreement and before the
end of any month, the fee for the part of the month before such
termination shall be equal to the fee normally due for the full
monthly period and shall be payable upon the date of termination
of this Agreement.
(b) For the purpose of determining fees calculated as a function of a
Portfolio's net assets, the value of the Portfolio's net assets
shall be computed as required by the Prospectus, generally
accepted accounting principles, and resolutions of the Board.
(c) Unified will from time to time employ or associate with such
person or persons as may be appropriate to assist Unified in the
performance of this Agreement. Such person or persons may be
officers and employees who are employed or designated as officers
by both Unified and the Fund. The compensation of such person or
persons for such employment shall be paid by Unified and no
obligation will be incurred by or on behalf of the Fund in such
respect.
(d) Unified will bear all of its own expenses in connection with the
performance of the services under this Agreement except as
otherwise expressly provided herein. The Fund agrees to promptly
reimburse Unified for any equipment and supplies specially
ordered by or for the Fund through Unified and for any other
expenses not contemplated by this Agreement that Unified may
incur on the Fund's behalf at the Fund's request or as consented
to by the Fund. Such other expenses to be incurred in the
operation of the Fund and to be borne by the Fund, include, but
are not limited to: taxes; interest; brokerage fees and
commissions; salaries and fees of officers and directors who are
not officers, directors, shareholders or employees of Unified, or
the Fund's investment adviser or distributor; SEC and state Blue
Sky registration and qualification fees, levies, fines and other
charges; advisory fees; charges and expenses of custodians;
insurance premiums including fidelity bond premiums; auditing and
legal expenses; costs of maintenance of corporate existence;
expenses of typesetting and printing of prospectuses and for
distribution to current shareholders of the Fund; expenses of
printing and production cost of shareholders' reports and proxy
statements and materials; costs and expense of Fund stationery
and forms; costs and expenses of special telephone and data lines
and devices; costs associated with corporate, shareholder, and
Board meetings; and any extraordinary expenses and other
customary Fund expenses. In addition, Unified may utilize one or
more independent pricing services, approved from time to time by
the Board, to obtain securities prices and to act as backup to
the primary pricing services, in connection with determining the
net asset values of the Fund, and the Fund will reimburse Unified
for the Fund's share of the cost of such services based upon the
actual usage, or a pro-rata estimate of the use, of the services
for the benefit of the Fund.
(e) The Fund may request additional services, additional processing,
or special reports. Such requests may be provided by Unified at
additional charges. In this event, the Fund shall submit such
requests in writing together with such specifications as may be
reasonably required by Unified, and Unified shall respond to such
requests in the form of a price quotation. The Fund's written
acceptance of the quotation must be received prior to
implementation of such request. Additional services will be
charged at Unified's standard rates.
(f) All fees, out-of-pocket expenses, or additional charges of
Unified shall be billed on a monthly basis and shall be due and
payable upon receipt of the invoice.
Unified will render, after the close of each month in which services
have been furnished, a statement reflecting all of the charges for such month.
Charges remaining unpaid after thirty (30) days shall bear interest in finance
charges equivalent to, in the aggregate, the Prime Rate (as publicly announced
by Star Bank, N.A., from time to time) plus 2.00% per year and all costs and
expenses of effecting collection of any such sums, including reasonable
attorney's fees, shall be paid by the Fund to Unified.
In the event that the Fund is more than sixty (60) days delinquent in
its payments of monthly billings in connection with this Agreement (with the
exception of specific amounts which may be contested in good faith by the Fund),
this Agreement may be terminated upon thirty (30) days' written notice to the
Fund by Unified. The Fund must notify Unified in writing of any contested
amounts within thirty (30) days of receipt of a billing for such amounts.
Disputed amounts are not due and payable while they are being investigated.
SECTION 7. Proprietary and Confidential Information. Unified agrees on
behalf of itself and its employees to treat confidentially and as proprietary
information of the Fund, all records and other information relative to the
Fund's prior, present or potential shareholders, and to not use such records and
information for any purpose other than performance of Unified's responsibilities
and duties hereunder. Unified may seek a waiver of such confidentiality
provisions by furnishing reasonable prior notice to the Fund and obtaining
approval in writing from the Fund, which approval shall not be unreasonably
withheld and may not be withheld where the service agent may be exposed to civil
or criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities. Waivers of
confidentiality are automatically effective without further action by Unified
with respect to Internal Revenue Service levies, subpoenas and similar actions,
or with respect to any request by the Fund.
SECTION 8. Duties, Responsibilities and Limitations of Liability.
(a) In the event performance of its duties hereunder, Unified shall
be obligated to exercise due care and diligence, and to act in
good faith in performing the services provided for under this
Agreement. In performing its services hereunder, Unified shall be
entitled to rely on any oral or written instructions, notices or
other communications from the Fund and its Custodian, officers
and Trustees, investors, agents and other service providers which
Unified reasonably believes to be genuine, valid and authorized.
Unified shall also be entitled to consult with and rely on the
advice and opinions of outside legal counsel retained by the
Fund, as necessary or appropriate.
(b) Unified shall not be liable for any error of judgment or mistake
of law or for any loss or expense suffered by the Fund, in
connection with the matters to which this Agreement relates,
except for a loss or expense solely caused by or resulting from
willful misfeasance, bad faith or negligence on Unified's part in
the performance of its duties or from reckless disregard by
Unified of its obligations and duties under this Agreement. Any
person, even though also an officer, director, partner, employee
or agent of Unified, who may be or become an officer, director,
partner, employee or agent of the Fund, shall be deemed when
rendering services to the Fund or acting on any business of the
Fund (other than services or business in connection with
Unified's duties hereunder) to be rendering such services to or
acting solely for the Fund and not as an officer, director,
partner, employee or agent or person under the control or
direction of Unified even though paid by Unified.
(c) Except for a loss or expense solely caused by or resulting from
willful misfeasance, bad faith or negligence on Unified's part in
the performance of its duties or from reckless disregard by
Unified of its obligations and duties under this Agreement,
Unified shall not be responsible for, and the Fund shall
indemnify and hold Unified harmless from and against, any and all
losses, damages, costs, reasonable attorneys' fees and expenses,
payments, expenses and liabilities arising out of or attributable
to:
(i) all action of Unified or its officers or agents
required to be taken pursuant to this Agreement;
(ii) the reliance on or use by Unified or its officers or
agents of information, records, or documents which are
received by Unified or its officers or agents and
furnished to it or them by or on behalf of the Fund,
and which have been prepared or maintained by the Fund
or any third party on behalf of the Fund;
(iii)the Fund's refusal or failure to comply with the terms
of this Agreement or the Fund's lack of good faith, or
its actions, or lack thereof involving negligence or
willful misfeasance;
(iv) the breach of any representation or warranty of the
Fund hereunder;
(v) the taping or other form of recording of telephone
conversations or other forms of electronic
communications with investors and shareholders, or
reliance by Unified on telephone or other electronic
instructions of any person acting on behalf of a
shareholder or shareholder account for which telephone
or other electronic services have been authorized;
(vi) the reliance on or the carrying out by Unified or its
officers or agents of any proper instructions
reasonably believed to be duly authorized, or requests
of the Fund or recognition by Unified of any share
certificates which are reasonably believed to bear the
proper signatures of the officers of the Fund and the
proper countersignature of any transfer agent or
registrar of the Fund;
(vii)any delays, inaccuracies, errors in or omissions from
data provided to Unified by data and pricing services;
(viii) the offer or sale of shares by the Fund in violation
of any requirement under the federal securities laws or
regulations or the securities laws or regulations of
any state, or in violation of any stop order or other
determination or ruling by any federal agency or any
state agency with respect to the offer or sale of such
shares in such state (1) resulting from activities,
actions, or omissions by the Fund or its other service
providers and agents, or (2) existing or arising out of
activities, actions or omissions by or on behalf of the
Fund prior to the effective date of this Agreement; and
(ix) the compliance by the Fund, its investment adviser, and
its distributor with applicable securities, tax,
commodities and other laws, rules and regulations.
SECTION 9. Terms. This Agreement shall become effective on the date
first herein above written. This Agreement may be modified or amended from time
to time by mutual agreement between the parties hereto. This Agreement shall
continue in effect unless terminated by either party on at least ninety (90)
days' prior written notice. Upon termination of this Agreement, the Fund shall
pay to Unified such compensation and any reimbursable expenses as may be due
under the terms hereof as of the date of termination or the date that the
provision of services ceases, whichever is sooner.
Should the Fund exercise its right to terminate this Agreement, the Fund agrees
to pay a termination/conversion fee, simultaneous with the transfer of all Fund
records to the successor mutual fund service provider(s), in an amount equal to
the total compensation under this agreement for the 90 day period immediately
preceding the termination notice date. In addition, the Fund agrees to pay for
all conversion tape set-up fees, test conversion preparation and processing fees
and final conversion fees.
Such compensation to Unified shall be for the expenses incurred in connection
with the retrieval, compilation and movement of books, records and materials
relative to the deconversion or conversion of Fund records to the successor
mutual fund service provider as directed by the Fund. Notwithstanding the
foregoing, any amount owed by the Fund to Unified prior to the
termination/conversion shall still be due and payable under the terms of this
Agreement. No such compensation shall be due to Unified if Unified terminates
this Agreement for reasons other than a default by the Fund.
Upon the termination of the Agreement for any reason, Unified agrees to provide
the Fund with complete and accurate transfer agency and fund accounting records
and to assist the Fund in the orderly transfer of accounts and records. Without
limiting the generality of the foregoing, Unified agrees upon termination of
this Agreement:
(a) to deliver to the successor mutual fund service provider(s),
computer tapes containing the Fund's accounts and records
together with such record layouts and additional information as
may be necessary to enable the successor mutual fund service
provider(s) to utilize the information therein;
(b) to cooperate with the successor mutual fund service provider(s)
in the interpretation of the Fund's account and records;
(c) to forward all shareholder calls, mail and correspondence to the
new mutual fund service provider(s) upon de-conversion; and
(d) to act in good faith, to make the conversion as smooth as
possible for the successor mutual fund service provider(s) and
the Fund.
SECTION 10. Notices. Any notice required or permitted hereunder shall
be in writing and shall be deemed to have been given when delivered in person or
by certified mail, return receipt requested, to the parties at the following
address (or such other address as a party may specify by notice to the other):
(a) If to the Fund, to:
Churchmen' Bond Fund
2901 Ohio Blvd, Suite 242
Terre Haute, IN. 47803
Attention: James, B. Exline, President
(b) If to Unified, to:
Unified Fund Services, Inc.
431 North Pennsylvania Street
Indianapolis, Indiana 46204
Attention: President
Notice shall be effective upon receipt if by mail, on the date of
personal delivery (by private messenger, courier service or otherwise) or upon
confirmed receipt of telex or facsimile, whichever occurs first.
SECTION 11. Assignability. This Agreement shall not be assigned by
either party hereto without the prior written consent of the other party.
SECTION 12. Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver nor shall it deprive such party of the right thereafter to insist upon
strict adherence to that term or any term of this Agreement. Any waiver must be
in writing signed by the waiving party.
SECTION 13. Force Majeure. Unified shall not be responsible or liable
for any failure or delay in performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
control, including without limitations, acts of God, earthquake, fires, floods,
wars, acts of civil or military authorities, or governmental actions, nor shall
any such failure or delay give the Fund the right to terminate this Agreement.
SECTION 14. Use or Name. The Fund and Unified agree not to use the
other's name nor the names of such other's affiliates, designees, or assignees
in any prospectus, sales literature, or other printed material written in a
manner not previously, expressly approved in writing by the other or such
other's affiliates, designees, or assignees except where required by the SEC or
any state agency responsible for securities regulation.
SECTION 15. Amendments. This Agreement may be modified or amended from
time to time by mutual written agreement between the parties. No provision of
this Agreement may be changed, discharged, or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, discharge or termination is sought.
SECTION 16. Severability. If any provision of this Agreement is
invalid or unenforceable, the balance of the Agreement shall remain in effect,
and if any provision is inapplicable to any person or circumstance it shall
nevertheless remain applicable to all other persons and circumstances.
SECTION 17. Governing Law. This Agreement shall be governed by the
laws of the State of Indiana.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Mutual Fund
Services Agreement to be signed by their respective duly authorized officers as
of the day and year first above written.
Churchmen's Bond Fund
By Date________________
--------------------------------
Print Name: James B. Exline
Title President
Attest
UNIFIED FUND SERVICES, INC.
By Date
-------------------------------
Print Name:
Title
By Date
--------------------------------
Print Name:
Title
Attest
<PAGE>
EXHIBIT A
to
Mutual Fund Services Agreement
List of Portfolios
Churchmen's Bond Fund
<PAGE>
EXHIBIT B
to
Mutual Fund Services Agreement
Description of Fund Accounting Services
I. General Description
Unified shall provide the following accounting services to the Fund:
A. Calculate dividend and capital gain distributions in accordance with
distribution policies detailed in the Fund's Prospectus. Assist Fund
management in making final determinations of distribution amounts.
B. Estimate and recommend year-end dividend and capital gain distributions
necessary to establish Fund's status as a regulated investment company
("RIC") under Section 4982 of the Internal revenue Code of 1986, as amended
(the "Code") regarding minimum distribution requirements.
C. Working with the Fund's public accountants or other professionals,
prepare and file Fund's Federal tax return on Form 1120-RIC along with all
state and local tax returns where applicable. Prepare and file Federal
Excise Tax Return (Form 8613).
D. Maintain the books and records and accounting controls for the Fund's
assets, including records of all securities transactions.
E. Calculate each Portfolio's net asset value in accordance with the
Prospectus and (once the Portfolio meets eligibility requirements) transmit
to NASDAQ and to such other entities as directed by the Fund.
F. Account for dividends and interest received and distributions made by the
Fund.
G. Prepare Fund or Portfolio expense projections, establish accruals and
review on a periodic basis, including expenses based on a percentage of
Fund's average daily net assets (advisory and administrative fees) and
expenses based on actual charges annualized and accrued daily (audit fees,
registration fees, directors' fees, etc.).
H. Produce transaction data, financial reports and such other periodic and
special reports as the Board may reasonably request.
I. Liaison with the Fund's independent auditors.
J. Monitor and administer arrangements with the Fund's Custodian and
depository banks.
K. A listing of reports that will be available to the Fund is included below.
<PAGE>
II. Daily Reports
A. General Ledger Reports
1. Trial Balance Report
2. General Ledger Activity Report
B. Portfolio Reports
1. Portfolio Report
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
5. Amortization/Accretion Report
6. Maturity Projection Report
C. Pricing Reports
1. Pricing Report
2. Pricing Report by Market Value
3. Pricing Variance by % Change
4. NAV Report
5. NAV Proof Report
6. Money Market Pricing Report
D. Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Report
2. Accounts Payable for Investments Report
3. Interest Accrual Report
4. Dividend Accrual Report
E. Other Reports
1. Dividend Computation Report
2. Cash Availability Report
3. Settlement Journal
IV. Monthly Reports
Standard Reports
1. Cost Proof Report
2. Transaction History Report
3. Realized Gain/Loss Report
4. Interest Record Report
5. Dividend Record Report
6. Broker Commission Totals
7. Broker Principal Trades
8. Shareholder Activity Report
9. Fund Performance Report
10. SEC Yield Calculation Work Sheet (fixed-income funds only)
<PAGE>
EXHIBIT C
to
Mutual Fund Services Agreement
Description of Transfer Agency Services
The following is a general description of the transfer agency services
Unified shall provide to the Fund.
A. Shareholder Recordkeeping. Maintain records showing for each Fund
shareholder the following: (i) name, address and tax identifying number;
(ii) number of shares of each Portfolio; (iii) historical information
including, but not limited to, dividends paid and date and price of all
transactions including individual purchases and redemptions; and (iv) any
dividend reinvestment order, application, dividend address and
correspondence relating to the current maintenance of the account.
B. Shareholder Issuance. Record the issuance of shares of each Portfolio.
Except as specifically agreed in writing between Unified and the Fund,
Unified shall have no obligation when countersigning and issuing and/or
crediting shares to take cognizance of any other laws relating to the issue
and sale of such shares except insofar as policies and procedures of the
Stock Transfer Association recognize such laws.
C. Purchase Orders. Process all orders for the purchase of shares of the Fund
in accordance with the Fund's current registration statement. Upon receipt
of any check or other payment for purchase of shares of the Fund from an
investor, Unified will (i) stamp the envelope with the date of receipt,
(ii) forthwith process the same for collection, (iii) determine the amounts
thereof due the Fund, and notify the Fund of such determination and
deposit, such notification to be given on a daily basis of the total
amounts determined and deposited to the Fund's custodian bank account
during such day. Unified shall then credit the share account of the
investor with the number of Portfolio shares to be purchased made on the
date such payment is received by Unified, as set forth in the Fund's
current prospectus and shall promptly mail a confirmation of said purchase
to the investor, all subject to any instructions which the Fund may give to
Unified with respect to the timing or manner of acceptance of orders for
shares relating to payments so received by it.
D. Redemption Orders. Receive and stamp with the date of receipt all requests
for redemptions or repurchase of shares held in certificate or
non-certificate form, and process redemptions and repurchase requests as
follows: (i) if such certificate or redemption request complies with the
applicable standards approved by the Fund, Unified shall on each business
day notify the Fund of the total number of shares presented and covered by
such requests received by Unified on such day; (ii) on or prior to the
seventh calendar day succeeding any such requests received by Unified,
Unified shall notify the Custodian, subject to instructions from the Fund,
to transfer monies to such account as designated by Unified for such
payment to the redeeming shareholder of the applicable redemption or
repurchase price; (iii) if any such certificate or request for redemption
or repurchase does not comply with applicable standards, Unified shall
promptly notify the investor of such fact, together with the reason
therefor, and shall effect such redemption at the Fund's
price next determined after receipt of documents complying with said
standards, or, at such other time as the Fund shall so direct.
E. Telephone Orders. Process redemptions, exchanges and transfers of Fund
shares upon telephone instructions from qualified shareholders in
accordance with the procedures set forth in the Fund's current Prospectus.
Unified shall be permitted to redeem, exchange and/or transfer Fund shares
from any account for which such services have been authorized.
F. Transfer of Shares. Upon receipt by Unified of documentation in proper form
to effect a transfer of shares, including in the case of shares for which
certificates have been issued the share certificates in proper form for
transfer, Unified will register such transfer on the Fund's shareholder
records maintained by Unified pursuant to instructions received from the
transferor, cancel the certificates representing such shares, if any, and
if so requested, countersign, register, issue and mail by first class mail
new certificates for the same or a smaller whole number of shares.
G. Shareholder Communications and Meetings. Address and mail all
communications by the Fund to its shareholders promptly following the
delivery by the Fund of the material to be mailed. Prepare shareholder
lists, mail and certify as to the mailing of proxy materials, receive the
tabulated proxy cards, render periodic reports to the Fund on the progress
of such tabulation, and provide the Fund with inspectors of election at any
meeting of shareholders.
H. Share Certificates. If the Fund issues certificates, and if a shareholder
of the Fund requests a certificate representing his shares, Unified as
Transfer Agent, will countersign and mail by first class mail with receipt
confirmed, a share certificate to the investor at his/her address as it
appears on the Fund's transfer hooks. Unified shall supply, at the expense
of the Fund, a supply of blank share certificates. The certificates shall
be properly signed, manually or by facsimile, as authorized by the Fund,
and shall bear the Fund's seal or facsimile; and notwithstanding the death,
resignation or removal of any officers of the Fund authorized to sign
certificates, Unified may, until otherwise directed by the Fund, continue
to countersign certificates which bear the manual or facsimile signature of
such officer.
I. Returned checks. In the event that any check or other order for the payment
of money is returned unpaid for any reason, Unified will take such steps,
including redepositing the check for collection or returning the check to
the investor, as Unified may, at its discretion, deem appropriate and
notify the Fund of such action, or as the Fund may instruct.
J. Shareholder Correspondence. Acknowledge all correspondence from
shareholders relating to their share accounts and undertake such other
shareholder correspondence as may from time to time be mutually agreed
upon.
<PAGE>
EXHIBIT D
to
MUTUAL FUND SERVICES AGREEMENT
TRANSFER AGENCY FEE SCHEDULE
I CONVERSION FEE:
Manual conversion/new fund establishment - fee not to exceed $1,500
per portfolio. Electronic conversions - $1.50 per shareholder account with a
$4,000 minimum fee.
II STANDARD BASE FEE FOR STANDARD BASE SERVICES
The Base Fee1 is $18.00 for money market funds and $15.60 for
equity/bond funds per active Shareholder Account per year with a minimum fee of
$15,0002 per initial portfolio and/or share classes per year plus $9,0002 per
year for each additional portfolio/share class. An Active Shareholder Account is
any Shareholder Account existing on Transfer Agent's computerized files with a
non-zero Share balance. There is a $.40 per account charge for any account with
a zero share balance for the current month, as determined on the last day of
each month. The base fee will be billed on a monthly basis.
1The Base Fee does not include: forms design and printing, statement
production, envelope design and printing, postage and handling, shipping,
statement microfiche copies and 800 number access to Unified's shareholder
services group.
2 Discount based on total fund assets:
$0 - 2 Million 50%
$2 - 5 Million 25%
$5 Plus Million 0%
Unified supports for an additional annual fee of $0.60 per account per service:
receivables accounting, 12b-1 fund reporting, back-end sales load recapture
accounting, and/or detailed dealer and representative load commission accounting
and reporting. Funds paying dividends more frequently than once per quarter
(generally, money market funds) are charged an additional $0.30 per month per
account.
Unified will provide lost account search services in connection of SEC Rules
17Ad-17 and 17a-24 at a cost of $2.50 per account searched. These "Electronic
Data Search Services" will be performed on a semi-annual basis. This service
will apply to only Active Shareholder Accounts maintained on the transfer agency
system coded as RPO accounts.
In addition to the above fees, there will be a $500.00 minimum fee/rerun charge
when the nightly processing has be repeated due to incorrect NAV or dividend
information received from the Fund Accountant/Portfolio Pricing Agent.
III STANDARD SERVICES PROVIDED
-Open new accounts
-Maintain Shareholder accounts
INCLUDING:
-Maintain certificate records
-Change addresses
-Prepare daily reports on number of Shares, accounts
-Prepare Shareholder federal tax information
-Withhold taxes on U.S. resident and non-resident alien accounts
-Reply to Shareholder calls and correspondence other than that for Fund
information and related inquiries
-Process purchase of Shares
-Issue/Cancel certificates (Excessive use may be subject to additional
charges)
-Process partial and complete redemptions
-Process regular and legal transfer of accounts
-Mail semi-annual and annual reports
-Process dividends and distributions
-Prepare Shareholder meeting lists
-Process one proxy per year per fund. Tabulation is limited to three.
-Receive and tabulate proxies
-Confirm all transactions as provided by the terms of each
Shareholder's account
-Provide a system which will enable Fund to monitor
the total number of Shares sold in each state. System has capability to
halt sales and warn of potential oversell. (Blue Sky Reports)
-Determine/Identify lost Shareholder accounts
IV STANDARD REPORTS AVAILABLE
-12b-1 Disbursement Report -Dealer Commission Summary Report
-12b-1 Disbursement Summary -Exchange Activity Report
-Dealer Commission Report -Fees Paid Summary Report
-Fund Accrual Details -Settlement Summary
-Holdings by Account Type -Tax Register
-Posting Details -Transactions Journal
-Posting Summary
V NSCC INTERFACES
-Fund/Serv and/or Networking set-up $1,000
-Fund/Serv processing $150 per month
-Networking processing $250 per month
-Fund/Serv transactions $0.35 per trade
-Direct Networking expenses
Per item $0.025 Monthly dividend fund
Per item $0.015 Non-monthly dividend fund
<TABLE>
VI ADDITIONAL FEES FOR SERVICES OUTSIDE THE STANDARD BASE
<S> <C>
-Interactive Voice Response System Set-up Pass through
-Archiving of old records/storage of aged records Pass through
-Off-line Shareholder research $25/hour (Billed to customer account)
-Check copies $3/each (Billed to customer account)
-Statement copies $5/each (Billed to customer account)
-Mutual Fund fulfillment/prospect file maintenance $1.00/item
-Shareholder communications charges (Faxes) Pass through
-Leased line/equipment on TA's computer system Pass through
-Dial-up access to TA's computer system Pass through
-Labels $.05 ea/$100 minimum
-Electronic filings of approved forms $75/transmission
-Monthly Director's Reports $25/mo/portfolio
-AD-HOC REPORTWRITER Report Generation $50.00 per report
-Bank Reconciliation Service $50.00 monthly maintenance fee per bank account
$1.50 per bank item
-Systems Programming Labor Charges:
Programmers or Consultants $125.00/hour
Officers $150.00/hour
-Additional Proxy Processing:
Each processing $225.00 fixed charge per processing
Preparation and Tabulation $0.145/proxy issued
(includes 3 tabulations, sixteen propositions)
-Each Extra Tabulation $23.00 fixed charge per processing
$0.02 per proxy tabulated
</TABLE>
<PAGE>
FUND ACCOUNTING FEE SCHEDULE
STANDARD FEE
0.05% for the first $50 million in total fund assets;
0.04% from $50 million to $100 million in total fund assets;
0.03% over $100 million in total fund assets.
Out of Pocket Fees:
------------------
Fees charged for outside pricing services and all accompanying
administrative expenditures.
Subject to a $18,0001 annual minimum per portfolio (one share class)
plus $7,5001 per additional share class. Fees are billed on a monthly
basis.
1 Discount based on total fund assets:
$0 - 2 Million 50%
$2 - 5 Million 25%
$5 Million Plus 0%
<TABLE>
OPTIONAL SERVICES AVAILABLE - INITIAL (FOR DESIRED SERVICES)
<S> <C> <C>
-Additional portfolio sub-adviser fee $10,000/portfolio
_______
-Multiple custodian fee $5,000/fund groups
_______
-GNMA securities fee $2,500/portfolio
_______
_______ -Quarterly financial statement preparation fee $5,000/portfolio
_______ -Statistical reporting fee (ICI, Lipper, Donoghue, etc.) $100/report
_______ -S.E.C. audit requirements pass through
-Processing of backup withholding $1,500/portfolio
_______
</TABLE>
SPECIAL REPORT GENERATION FEES
AD-HOC Report Generation $75.00 per report
Reruns $75.00 per run
Extract Tapes $110.00 plus
SYSTEMS PROGRAMMING LABOR CHARGES
System Support Representatives $100.00/hour
Programmers, Consultants or Department Heads $125.00/hour
Officers $150.00/hour
DE-CONVERSION FEES
De-Conversion fees will be subject to additional charges commensurate
with particular circumstances and dependent upon scope of problems.
PLAN PURSUANT TO RULE 12B-1
NOVEMBER 16, 1999
RECITALS
1. _Institutional Development Trust, a business trust organized under
the laws of the State of Delaware (the "Trust") is engaged in business as an
open-end management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "Act").
2. The Trust operates as a "series company" within the meaning of Rule
18f-2 under the Act and is authorized to issue shares of beneficial interest in
various series or sub-trusts (collectively the "Funds").
3. Funds of the Trust may utilize Fund assets to pay for, or reimburse
payment for, sales or promotional services or activities that have been or will
be provided in connection with distribution of shares of the Funds if such
payments are made pursuant to a Plan adopted and continued in accordance with
Rule 12b-1 under the Act.
4. The Trustees as a whole, and the Trustees who are not interested
persons of the Trust (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan and any agreements relating to
it (the "Qualified Trustees"), having determined, in the exercise of reasonable
business judgment and in light of their fiduciary duties under state law and
under Section 36(a) and (b) of the Act, that there is a reasonable likelihood
that this Plan will benefit the Fund and its shareholders, have approved the
Plan by votes cast in person at a meeting called for the purpose of voting on
this Plan and agreements related thereto.
5. Shareholder approval of the Plan was initially obtained in
connection with action taken to prepare and file the initial registration
statement on Form N-1A.
PLAN PROVISIONS
SECTION 1. EXPENDITURES
(a) PURPOSES. Fund assets may be utilized to pay for or reimburse
expenditures in connection with sales and promotional services related to the
distribution of Fund shares, including personal services provided to prospective
and existing Fund shareholders, which include the costs of: printing and
distribution of prospectuses and promotional materials; making slides and charts
for presentations; assisting shareholders and prospective investors in
understanding and dealing with the Fund; and travel and out-of-pocket expenses
(e.g. copy and long distance telephone charges) related thereto.
(b) AMOUNTS. Fund assets may be utilized to pay for or reimburse
expenditures in connection with sales and promotional services related to the
distribution of Fund shares, including personal services provided to prospective
and existing Fund shareholders, provided the total amount expended pursuant to
this Plan does not exceed 0.25% of net assets on an annual basis.
SECTION 2. TERM AND TERMINATION
(a) INITIAL TERM. This Plan shall become effective upon effective
registration of the Fund and shall continue in effect for a period of one year
thereafter unless terminated or otherwise continued or discontinued as provided
in this Plan.
(b) CONTINUATION OF THE PLAN. The Plan and any related agreements shall
continue in effect for periods of one year thereafter for so long as such
continuance is specifically approved at least annually by votes of a majority of
both (a) the Trustees of the Trust and (b) the Qualified Trustees, cast in
person at a meeting called for the purpose of voting on this Plan and such
related agreements.
(c) TERMINATION OF THE PLAN. This Plan may be terminated at any time
by vote of a majority of the Qualified Trustees, or by vote of a majority of the
outstanding voting securities of the Fund.
SECTION 3. AMENDMENTS
This Plan may not be amended to increase materially the amount of
distribution expenditures provided for in Section 1 hereof unless such amendment
is approved by a vote of the majority of the outstanding voting securities of
the Fund, and no material amendment to the Plan shall be made unless approved in
the manner provided for annual renewal in Section 2(b) hereof.
SECTION 4. INDEPENDENT TRUSTEES
While this Plan is in effect with respect to the Fund, the selection
and nomination of Trustees who are not interested persons of the Trust (as
defined in the Act) shall be committed to the discretion of the Trustees who are
not interested persons.
SECTION 5. QUARTERLY REPORTS
The Treasurer of the Trust shall provide to the Trustees and the
Trustees shall review, at least quarterly, a written report of the amounts
accrued and the amounts expended under this Plan for distribution, along with
the purposes for which such expenditures were made.
SECTION 6. RECORDKEEPING
The Trust shall preserve copies of this Plan and any related agreements
and all reports made pursuant to Section 5 hereof, for a period of not less than
six years from the date of this Plan, the agreements or such report, as the case
may be, the first two years in an easily accessible place.
SECTION 7. AGREEMENTS RELATED TO THIS PLAN
Agreements with persons providing distribution services to be paid for
or reimbursed under this Plan shall provide that:
(a) the agreement will continue in effect for a period of one year and
will continue thereafter only if specifically approved by vote of a majority of
the Trustees of the Trust;
(b) the agreement may be terminated at any time, without payment of any
penalty, by vote of a majority of (i) the Qualified Trustees or (ii) the
outstanding voting securities of the Fund, on not more than sixty (60) days
written notice to any other party to the agreement;
(c) the agreement will terminate automatically in the event of an
assignment;
(d) in the event the agreement is terminated or otherwise discontinued,
no further payments or reimbursements will be made by the Fund after the
effective date of such action; and
(e) payments and/or reimbursements may only be made for the specific
sales or promotional services or activities identified in Section 1 of this Plan
and must be made on or before the last day of the one year period commencing on
the last day of the calendar quarter during which the service or activity was
performed.
