As filed with the Securities and Exchange Commission on July 22, 1999.
1933 Act Registration File No. 33-_____
1940 Act File No. 811-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No. |_|
Post-Effective Amendment No. |_|
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. |X|
IGAM GROUP FUNDS
(Exact Name of Registrant as Specified in Charter)
133 Old Tower Hill Road, Suite 1, Wakefield, RI 02879
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (401) 788-0977
Eugene Y. W. Lee Copy to:
IGAM Group Funds. Michael P. O'Hare, Esq.
133 Old Tower Hill Road, Suite 1, Stradley, Ronon, Stevens & Young, LLP
Wakefield, RI 02879 2600 One Commerce Square
(Name and Address of Agent for Service) Philadelphia, PA 19103-7098
Approximate Date of Proposed Public Offering: As soon as
practical after the effective date of this registration statement.
It is proposed that this filing will become effective
/_/ immediately upon filing pursuant to paragraph (b)
/_/ on ____________ pursuant to paragraph (b)
/_/ 60 days after filing pursuant to paragraph (a)(1)
/_/ on ____________ pursuant to paragraph (a)(1)
/_/ 75 days after filing pursuant to paragraph (a)(2)
/_/ on ____________ pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
/_/ This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Registrant hereby amends this Registration Statement on such 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 this Registration Statement shall become effective on such
date as the Commission, acting pursuant to such Section 8(a), may determine.
<PAGE>
THE INTERNET INDEX FUND
a series of
IGAM GROUP FUNDS
PROSPECTUS
Dated September [__], 1999
An index fund using statistical procedures to parallel the
AMEX/Inter@ctive Week Internet Index
Investment advisor:
INTEGRITY GLOBAL ASSET MANAGEMENT, INC.
Wakefield, Rhode Island
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>
The Internet Index Fund
Summary
The Internet is a world-wide network of computers that allows users to
easily and efficiently communicate and share data. Currently, the most
popular application on the Internet is the World Wide Web, a
graphic-user-interface that allows information sharing and data transfer
through "web-sites." Other Internet applications include e-mail, Intranet,
extranet and electronic commerce.
The Internet industry consists of various subsectors, including Internet
access providers, software developers, hardware manufacturers, companies
that provide materials or services to access the Internet, companies that
provide content for Internet sites and companies that specialize in
providing security for transactions over the Internet. The Internet
industry also includes companies that engage in electronic commerce and
retailing through the use of the Internet.
The Fund's investment advisor believes that the Internet is
revolutionizing the way we obtain information and communicate with each
other, and the way companies do business all over the world. The Internet
Index Fund (the "Fund") is a "no-load" index mutual fund designed to
provide investors with a convenient and cost-effective way to invest in
the Internet industry.
What is the Fund's Investment Objective?
The investment objective of the Fund is to provide investment results,
using statistical procedures, that parallel the investment return of the
AMEX/Inter@ctive Week Internet Index.
What is the AMEX/Inter@ctive Week Internet Index?
An index is an unmanaged group of securities that are selected because
their overall performance can be used as a standard to measure investment
performance of a particular sector or market.
The "AMEX/Inter@ctive Week Internet Index," which is also known as the
"@Net Index," is a diversified index comprised of a modified market
capitalization - weighted group of approximately fifty stocks of companies
engaged in Internet or Internet-related activities whose stocks are
publicly traded on U. S. exchanges. The companies included in the index
(hereafter referred to as the "Index") are selected as being the "key
drivers of development of the Internet." The Index was established in
October, 1995 and was developed jointly by Inter@ctive Week, a weekly
magazine published by Inter@ctive Enterprises L.L.C. and the American
Stock Exchange (American Stock Exchange Symbol: IIX). The companies in the
Index are selected by a committee of American Stock Exchange and
Inter@ctive Week personnel and the Index is reviewed each calendar quarter
to add or delete companies that best represent the Internet industry. The
American Stock Exchange calculates the Index and adjusts the composition
and percentage weightings of the stocks in the Index.
The historical performance of the Index and a complete listing of the
stocks that are currently included in the Index is included in this
Prospectus in the section entitled "More Information about the
AMEX/Inter@ctive Week Internet Index." The Fund is neither sponsored by,
nor affiliated with the American Stock Exchange or Inter@ctive Week
magazine.
What are the Fund's Principal Investment Strategies?
The Fund's investment advisor believes that Internet and Internet-related
companies have substantial growth potential. Though Internet stocks may be
volatile, the advisor believes that the Internet industry as a whole could
continue to outperform the broader securities markets for the foreseeable
future.
In view of the rapid pace of development and change within the Internet
industry, it may be very difficult to forecast which companies or industry
sectors will be successful and outperform or outgrow other companies or
sectors. For these reasons, the Fund's advisor believes that a passive
management strategy, or "indexing" approach, is a particularly effective
way for investors to participate in the investment performance of the
Internet industry over the long term.
A passively managed "index" fund seeks to match, as closely as possible,
the performance of an established securities index. An index fund does
this by holding all, or a representative sample, of the securities in the
index. The advisor to an index fund does not buy and sell securities based
on research and analysis in an attempt to outperform the particular index.
Instead, an index fund seeks to mirror what the target index does, for
better or worse. Index funds have operating expenses and transaction
costs, and generally keep a portion of their assets in cash or cash
equivalent investments, in order to be ready to meet redemption requests.
Therefore, while the performance for an index fund is expected to track
the target index closely, it will generally be less than that of the index
itself.
In order to track the Index as closely as possible, the Fund will remain
substantially fully invested in the stocks that are included in the Index,
in roughly the same proportions as the stocks are represented in the
Index. As the Fund receives cash from new investors, or processes
redemption requests from shareholders, the Fund will purchase or sell
securities in an effort to attempt to approximate the return of the Index.
Also, the Fund's investments are reviewed and adjusted each quarter to
reflect any quarterly adjustments in the Index, in an effort to track the
Index as closely as possible.
Because the Fund is a passively managed index fund, it generally takes a
buy-and-hold approach to investing. The Fund normally sells portfolio
securities only to respond to redemption requests or to adjust the number
of its shares to track the weighting or composition of the Index. As a
result, the Fund's portfolio turnover rate is expected to be extremely
low. A low portfolio turnover rate usually results in low transaction
costs and tax efficiencies for shareholders.
What are the Main Risks of Investing in the Fund?
The Fund may involve significantly greater risks than a mutual fund that
diversifies its investments among many industries, or one that does not
invest in the Internet industry. The share price of the Fund will go up
and down and you could lose money.
Any investment in the Internet industry involves special risks because the
Industry is subject to rapid technological change and development.
Companies in the industry are exposed to a high risk that their products
or services may quickly become obsolete. Also, increasing competition,
rapidly changing markets, frequent mergers or acquisitions of Internet
companies and changes in strategic alliances among various Internet
businesses, all may have a significant effect on the financial condition
of companies in the Internet industry. Changes in government policies,
such as telephone and cable regulations and antitrust enforcement and the
need for regulatory approvals, can also have a material effect on
companies in the industry.
Many of the companies included in the Index have a smaller market
capitalization (less than $1 billion) and may be unseasoned companies
(those with less than a three year operating history). Investments in
smaller and unseasoned companies present greater risks than securities of
larger or more established companies. Small or unseasoned companies may be
developing or marketing new products or services for which markets are not
yet established and may never be established. They also may lack depth or
experience of management and may have difficulty generating or obtaining
funds necessary for growth and development of their businesses. Due to
these and other factors, small and unseasoned companies may suffer
significant losses, as well as realize substantial growth.
Historically, the prices of stocks of smaller companies have been more
volatile than stocks of larger companies and are, therefore, more
speculative than stocks of larger companies. You should expect that the
price of the Fund's shares will also fluctuate more than shares of a
mutual fund that invests primarily in larger stocks.
The Fund is authorized to invest a portion of its assets in futures and
options contracts. Losses (or gains) involving these investments can be
substantial in relation to the amount of money deposited to enter into the
contract. For this reason, the Fund will not use these types of
investments as leveraged investments.
The Fund could be adversely affected if the computer systems used by the
Fund, its advisor or other service providers do not function properly when
processing date-related information on or after January 1, 2000. This is
commonly known as the "Year 2000 Issue." The Fund is taking steps it
believes are reasonably designed to address the Year 2000 Issue for
computer systems that it uses and has obtained reasonable assurances that
similar steps are being taken by its major service providers. Fund
management does not currently anticipate that the Year 2000 Issue will
have any material negative impact to the Fund.
The Year 2000 Issue is also of critical concern to the companies that are
included in the Index, because they are heavily involved in
computer-related technology. If the Year 2000 Issue has a negative impact
on the stock price of any of the companies in the Index, the Fund will be
affected by that impact.
Who May Want to Invest in the Fund?
The Fund may be appropriate for investors who want to participate in the
investment performance of the Internet industry over the long term, by
following a simple, cost-efficient indexing approach.
The Fund is designed for long-term investors who want to allocate a
portion of the investments to aggressive equity investing and who
understand and are willing to accept the risk of loss associated with
investing in Internet stocks. Investors should be willing to accept the
above average price fluctuations that the Fund is expected to experience.
The Fund is not a complete investment program.
What is the Fund's Past Performance?
Since this is a new fund, there is no past performance history. The
performance of the Index since its inception in 1995 is set forth below
under the heading "More about the AMEX/Inter@ctive Week Internet Index."
What are the Fund's Fees and Expenses?
The following table describes the fees and expenses that you may pay if
you buy and hold shares of the Fund.
Shareholder Fees (fees paid directly from your investment)
Sales Charges (Loads) on Purchases None
Sales Charges (Loads) on Reinvested Dividends
and Other Distributions None
Deferred Sales Charges (Loads) None
Redemption Fee (as a percentage of amount
redeemed, if shares are redeemed within one 1.00%1
year of purchase)
Account Fees None 2
1. The Fund's custodian charges a $12.00 fee for outgoing wire transfers.
2. IRA accounts are subject to an annual trustee fee of $12.50.
<PAGE>
Annual Fund Operating Expenses (expenses deducted from Fund assets)
Management Fees 0.65%
Distribution and/or Service (12b-1) Fees 0.25%
Other Expenses 0.50%
Total Annual Fund Operating Expenses 1.40%
*IGAM has voluntarily agreed to waive its management fees or make payments
to limit expenses of the Fund, if necessary to ensure that Total Annual
Fund Operating Expenses do not exceed 1.40% during the Fund's first year
of operations. This voluntary arrangement can be terminated at any time.
Example
The following Example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time
periods indicated and then redeem all 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
$251 $457
You would pay the following expenses if you did not redeem your shares:
1 Year 3 Years
$147 $457
More Information About the AMEX/Inter@ctive Week Internet Index
The AMEX/Inter@ctive Week Internet Index, also known as the @Net Index (and
referred to herein as the "Index") is an index comprised of approximately fifty
stocks of companies in the Internet industry whose shares are publicly traded on
U.S. stock exchanges. The Index is intended to provide the broadest possible
representation of publicly traded companies in the Internet industry. The Index
includes companies from the following sectors: Commerce Technologies and
Service; Content Services; Internet Software; and Security. Each calendar
quarter, a committee re-evaluates the publicly traded companies in the Internet
industry and determines whether to add additional stocks to the Index or remove
stocks from the Index.
The following table shows the performance of the Index since its inception in
October, 1995. Please note that the performance shown is not the performance of
the Fund and is not intended to predict or suggest the return that might be
experienced by an investor in the Fund. The Fund will attempt to track the Index
as closely as possible, but the performance of the Fund will be less than the
performance of the Index because the Fund is subject to operational and
transaction costs, while the Index is not.
Period Total Return
1995 (last three months) 15.93%
1996 4.67%
1997 6.62%
1998 145.35%
1999 (first six months) 46.35%
The average annual total return of the Index since its
inception was 50.71% per year.
The Index is a modified capitalization-weighted index. This means that the Index
restricts the weighting of the largest component stocks (based on market
capitalization) as follows: (1) the weight of any single component securities in
the Index may not account for 25% or more of the total value of the Index; (2)
the five highest weighted component securities in the Index may not in the
aggregate account for more than 50% of the weight of the Index; and (3) the
aggregate weight of those component stocks which individually represent less
than 5% of the total value of the Index must account for at least 50% of the
total value.
The following is a list of the forty seven stocks that compromised the Index as
of May 30, 1999. The Index can change quarterly, so this listing is only a
"snapshot" of the Index at one point in time.
- ----------------------------------------------------------------------
Company Name Symbol Company Name Symbol
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Adobe Systems, Inc. ADBE Mindspring Enterprises, MSPG
Inc.
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Amazon.com, Inc. AMZN Network Associates, Inc. NETA
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
America Online, Inc. AOL Network Solutions, Inc. NSOL
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
At Home Corporations, Inc. ATHM Newbridge Networks Corp. NN
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Broadcast.com Inc. BCST Novell, Inc. NOVL
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
BroadVision, Inc. BVSN ONSALE, Inc. ONSL
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
CD Now, Inc. CDNW Open Market, Inc. OMKT
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
CheckFree Holdings CKFR Pairgain Technologies, PAIR
Corporation Inc.
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
CheckPoint Software Tech. CHKP Priceline.com, Inc. PCLN
Ltd.
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Cisco Systems, Inc. CSCO PSINET, Inc. PSIX
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
CMGI, Inc. CMGI QUALCOMM, Inc. QCOM
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
C/NET Inc. CNET QWEST Communications QWST
Int'l Inc.
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Cybercash, Inc. CYCH RealNetworks, Inc. RNWK
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
DoubleClick Inc. DCLK Security Dynamics SDTI
Technologies
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
E*TRADE Group, Inc. EGRP Silicon Graphics, Inc. SGI
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
EarthLink Network, Inc. ELNK SportsLine USA, Inc. SPLN
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
eBay, Inc. EBAY Spyglass, Inc. SPYG
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Exodus Communication, Inc. EXDS Sterling Commerce, Inc. SE
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Harbinger Corporation HRBC Sun Microsystems, Inc. SUNW
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Infoseek Corporation SEEK 3Com Corporation COMS
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Inktomi Corporation INKT USWeb Corporation USWB
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Intuit, Inc. INTU VeriSign, Inc. VRSN
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Level 3 Communications, LVLT Vocal Tec VOCL
Inc. Communications, Inc.
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Macromedia, Inc. MACR Yahoo! Inc. YHOO
- ----------------------------------------------------------------------
More Information About the Fund's Investment Strategies
In addition to investing directly in the stocks that make up the Index, the Fund
may invest, to a limited extent, in futures or options contracts, which are
types of derivatives that enable the Fund to simulate investment in the stocks
that make up the index and have the same effect as if the Fund held these
stocks. These types of investments are used to keep cash on hand to meet
redemptions or other needs. They are also used to reduce transaction costs and
are used when the Fund's investment advisor determines that these investments
are favorably priced when compared to direct purchases of securities.
The Fund will not use futures or options contracts as leveraged investments that
magnify the gains or losses of an investment. Instead, the Fund will keep
separate cash reserves or other liquid portfolio securities in the amount of the
obligation underlying the contract. No more than 5% of the Fund's assets may be
applied towards the deposits required on futures contracts, and the value of all
futures contracts in which the Fund acquires an interest cannot exceed 20% of
the Fund's total assets.
In order to increase the Fund's income, the Fund may lend its portfolio
securities to qualified securities dealers or other institutional investors. The
lending of securities is a common practice in the securities industry.
For cash management purposes, the Fund may invest in short-term fixed income
securities, including U.S. Government securities, bank obligations, commercial
paper or repurchase agreements. The Fund is authorized to invest up to 100% of
its total assets in such investments for temporary or defensive purposes in
response to extreme or adverse market, economic or other conditions.
The investment objective and policies of the Fund are not fundamental and so may
be changed by the Board of Trustees without shareholder approval. However,
shareholders would be notified prior to a material change
Management of the Fund
IGAM Group Funds was organized as a Delaware business trust on July 16, 1999 and
is operated under the supervision of a Board of Trustees. The Fund is the first
mutual fund within the IGAM Group Funds family.
Investment Advisor. The Fund's investment advisor is Integrity Global Asset
Management, Inc. ("IGAM"). IGAM is a [federally] registered investment advisory
firm founded in April, 1997 that previously provided asset management services
for individuals and institutional clients. The firm no longer manages client
assets outside of the Fund. IGAM's principal office is located at 133 Old Tower
Road, Suite 1, Wakefield, Rhode Island 02879.
IGAM has entered into an Investment Management Agreement with IGAM Group Funds
under which IGAM is responsible for the purchase and sale of securities held by
the Fund. IGAM uses statistical techniques to track the composition and
weighting of the stocks in the index, and to continually rebalance the Fund's
portfolio of investments in an effort to track the performance of the index as
closely as possible. The advisor is also responsible for selecting brokers or
dealers to execute securities transactions for the Fund. For its services, IGAM
receives annual fees from the Fund equal to 0.65% of the Fund's average daily
net assets.
Eugene Y.W. Lee, Ph.D., is the President and founder of IGAM and the Chief
Portfolio Manager for the Fund. He is also the Vice President and Treasurer of
IGAM Group Funds, and serves on its Board of Trustees. Dr. Lee was Assistant
Professor of Finance at University of Missouri - Columbia from 1986 to 1992 and
has been Assistant and Associate Professor at the University of Rhode Island
since 1992. Dr. Lee received his Master of Arts degree in Mathematics from the
University of Texas at Austin in 1985 followed by his doctoral degree in Finance
in 1986.
Keith M. Moore, CFA, also acts as a Portfolio Manager for the Fund and assists
Dr. Lee in the day-to-day management of the Fund's portfolio. He is a Vice
President of IGAM and has more than fifteen years of investment management
experience. From 1997 through June, 1999, Mr. Moore was President of Jupiter
Capital, L.L.C., a closed-end fund and, from October 1996 to August 1997, he was
a Partner and Portfolio Manager at Brook Asset Management, L.L.C. Previously,
Mr. Moore was a Partner at Neuberger & Berman from 1989 to 1996, and Senior Vice
President at Donaldson, Lufkin & Jenrette from 1983 to 1989. Mr. Moore received
his Bachelor of Science degree from the University of Rhode Island in 1974 and
his Master of Business Administration degree from New York University in 1978.
Fund Administrator, Accounting and Transfer Agent. Firstar Mutual Fund Services,
LLC, 615 East Michigan Street, Milwaukee, Wisconsin 53202 ("Firstar") serves as
the Fund's administrator, accounting agent and transfer agent. Firstar assists
in the daily business operations of the Fund, provides accounting services which
include the daily pricing of the Fund's shares, maintains shareholder records
and provides shareholder services.
Pricing of Fund Shares
The shares of the Fund are priced at the net asset value per share ("NAV"),
which is determined by the Fund as of the close of regular trading (generally
4:00 p.m. eastern time) on each day that the New York Stock Exchange is open for
unrestricted trading. Purchase and redemption requests are priced at the next
NAV calculated after receipt and acceptance of a completed purchase or
redemption request. The NAV is determined by dividing the value of the Fund's
securities, cash and other assets, minus all expenses and liabilities, by the
number of shares outstanding (assets - liabilities/# of shares = NAV). The
expenses and fees of the Fund, which are accrued daily, are included in the
calculation of the NAV.
The Fund's portfolio securities are valued each day at their market value, which
usually means the last quoted sale price on the security's principal exchange
that day. If market quotations are not readily available, securities will be
valued at their fair market value as determined in good faith, or under
procedures approved by, the Board of Trustees. The Fund may use independent
pricing services to assist in calculating NAV.
Marketing and Distribution
The principal underwriter and national distributor for the Fund's shares is T.O.
Richardson Securities, Inc., located at Bridgewater Road, Farmington,
Connecticut 06032. T.O. Richardson is a federally registered broker-dealer firm
and is a member in good standing of the National Association of Securities
Dealers, Inc.
Shareholder Servicing and Distribution Plan. Under a plan adopted by the Fund's
Board of Trustees pursuant to Rule 12b-1 under the 1940 Act (the "Plan"), the
Fund is authorized to pay the distributor, the advisor or others shareholder
servicing and/or distribution fees at the annual rate of 0.25% of the average
daily net assets of the Fund. Such fees will be used to reimburse persons who
make payments for administration, shareholder services and distribution
assistance for the Fund, including paying for the preparation of advertising and
sales literature and the printing and distribution of such promotional materials
to prospective investors. The Fund understands that third parties also may
charge fees to their clients who are beneficial owners of Fund shares in
connection with their client accounts. These fees would be in addition to any
amounts paid by the Fund under the Plan.
How to Purchase Shares
You may purchase shares at the first net asset value calculated after Firstar
receives your purchase order in proper form. Shares of the Fund are sold at net
asset value without a sales charge. The Fund reserves the right to reject any
purchase order if, in its opinion, it is in the Fund's best interest to do so.
Minimum Purchase Amounts. The minimum amount that you may invest in the Fund
is as follows:
Minimum Minimum
Initial Subsequent
Type of Account Purchase Purchase
Regular Accounts $2,500 $100
Individual Retirement $500 $100
Accounts
The Fund reserves the right to vary or waive the initial and subsequent
investment minimum requirements at any time.
Initial Purchases
By Mail - You may purchase shares of the Fund by completing and signing the
application form which accompanies this Prospectus and mailing it, in proper
form, together with a check (subject to the above minimum amounts) or money
order made payable to The Internet Index Fund, and sending it to one of the
addresses listed below. A service fee of $25 will be deducted from your fund
account for any purchases that do not clear due to insufficient funds.
Regular Mail: Overnight or Express Mail:
The Internet Index Fund The Internet Index Fund
c/o Firstar Mutual Fund Services, LLC c/o Firstar Mutual Fund Services, LLC
P.O. Box xxx 615 East Michigan Street, 3rd Floor
Milwaukee, WI 53201-0701 Milwaukee, WI 53202
Via the Internet - [To Be Provided]
By Wire - You may also purchase shares of the Fund by wiring federal funds from
your bank. Your bank may charge you a fee for this service. If money is to be
wired, you must call Firstar at (800) xxx-xxxx to set up your account and obtain
an account number. You should be prepared to provide the information on the
application form to the Firstar representative. Then, you should provide your
bank with the following information for purposes of wiring your investment.
Firstar Mutual Fund Services, LLC
ABA #
Attn: IGAM Group: the Internet Index Fund
D.D.A. #
Account Name
(Write in account registration name)
For the Account #
(Write in account # assigned by Firstar)
You are required to send a signed application to Firstar by regular or overnight
mail at the addresses shown above in order to complete your initial wire
purchase. Wire orders will be accepted only on a day on which the Fund, the
Custodian and Firstar 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 that may occur in wiring money, including delays that
may occur in processing by the banks, are not the responsibility of the Fund or
Firstar. There is presently no fee for the receipt of wire funds, but the right
to charge shareholders for this service is reserved by the Fund.
Subsequent Purchases. You may purchase additional shares of the Fund at any time
(minimum of $100) by mail or wire. Each additional mail purchase request must
contain the additional investment portion of your shareholder statement or a
letter containing your name, the name of your account, your account number and
the name of the Fund. Checks should be made payable to Internet Index Fund and
should be sent to the Custodian as set forth above under "Initial Purchases - By
Mail." A bank wire should be sent as set forth above under "Initial Purchases -
By Wire." [Internet Purchases]
Purchasing through Processing Organizations. Shares of the Fund may also be
purchased through a "Processing Organization," which is a broker-dealer, bank or
other financial institution that purchases shares for its customers. When shares
are purchased this way, the Processing Organization, rather than its customer,
may be the shareholder of record of the shares. Such shares may be transferred
into the investor's name following procedures established by the Processing
Organization and Firstar. The minimum initial and subsequent investments in the
Fund for shareholders who invest through a Processing Organization generally
will be set by the Processing Organization. Processing Organizations may also
impose other charges and restrictions in addition to or different from those
applicable to investors who remain the shareholder of record of their shares.
Certain Processing Organizations may receive payments from the Fund under its
Distribution and Shareholder Servicing Plan or payments from the Advisor.
Tax Sheltered Retirement Plans. Shares of the Fund may be used as investments in
retirement plans such as: individual retirement plans (IRAs); simplified
employee pensions (SEPs); 401(k) plans; qualified corporate pension and profit
sharing plans (for employees); tax deferred investment plans (for employees of
public school systems and certain types of charitable organizations); and other
qualified retirement plans. You should contact Firstar for the procedure to open
an IRA or SEP plan, as well as more specific information regarding these
retirement plan options. Consultation with an attorney or tax advisor regarding
these plans is advisable. Custodial fees and other processing fees for an IRA
will be paid by the shareholder by redemption of sufficient shares of the Fund
from the IRA unless the fees are paid directly to the IRA custodian. You can
obtain information about IRA fees by calling Firstar at (xxx) xxx-xxxx.
Automatic Investment Option. The Automatic Investment Plan permits investors to
purchase shares of the Fund (minimum initial investment of $500 and minimum
subsequent investments of $25 per transaction) at regular intervals selected by
the investor. Provided the investor's bank or other financial institution allows
automatic withdrawals, shares may be purchased by transferring funds from the
account designated by the investor. At the investor's option, the account
designated will be debited in the specific amount, and shares will be purchased
once a month, on the twentieth day. Only an account maintained at a domestic
financial institution which is an Automated Clearing House member may be so
designated. Investors desiring to participate in the Automatic Investment Plan
should call Firstar at (xxx) xxx-xxxxx to obtain the appropriate forms. The
Automatic Investment Plan does not assure a profit and does not protect against
loss in declining markets. Since the Automatic Investment Plan involves the
continuous investment in the Fund regardless of fluctuating price levels of the
Fund's shares, investors should consider their financial ability to continue to
purchase through periods of low price levels. The Fund may modify or terminate
the Automatic Investment Plan at any time or charge a service fee. No such fee
is currently contemplated.
Additional Information. Federal regulations require that investors provide a
certified Taxpayer Identification Number (a "TIN") upon opening or reopening an
account. See "Tax Considerations." Failure to furnish a certified TIN to the
Fund could subject the investor to a $50 penalty imposed by the Internal Revenue
Service (the "IRS") and may result in mandatory withholding by the Fund of gain
and income distributions.
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'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. If you are already a shareholder, the Fund
can redeem shares from any identically registered account in the Fund as
reimbursement for any loss incurred. You may be prohibited or restricted from
making future purchases in the Fund.
How to Redeem Shares
General. You may request redemption of Fund shares at any time. When a request
is received in proper form, the Fund will redeem the shares at the next
determined net asset value.
The Fund ordinarily will make payment for all shares redeemed within three days
after receipt by Firstar of a redemption request in proper form, except as
provided by the rules of the Securities and Exchange Commission. However, if you
purchase Fund shares by check and subsequently submit a redemption request, the
redemption proceeds will not be transmitted until the check used for investment
has cleared, which may take up to 15 days. This procedure does not apply to
shares purchased by wire payment.
The Fund reserves the right to redeem investor accounts at its option upon not
less than 60 days written notice, if the account's net asset value is $2,500
($500 for IRA's) or less, for reasons other than market conditions, and remains
so during the notice period.
Contingent Redemption Fee. A redemption fee of 1% payable to the Fund is imposed
on any redemption of shares within one year of the date of purchase. No
redemption fee will be imposed to the extent that the net asset value of the
shares redeemed does not exceed (1) the current net asset value of shares
acquired through reinvestment of dividends or capital gain distributions, plus
(2) increases in the net asset value of an investor's shares above the dollar
amount of all such investor's payments for the purchase of shares held by the
investor at the time of redemption. If the aggregate value of shares redeemed
has declined below their original cost as a result of the Fund's performance,
the applicable redemption fee will be applied to the then-current net asset
value rather than the purchase price.
In determining whether a redemption fee is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible rate.
It will be assumed that the redemption is made first of amounts representing
shares acquired pursuant to the reinvestment of dividends and distributions;
then of amounts representing the increase in net asset value of shares above the
total amount of payments for the purchase of shares made during the preceding
year; then of amounts representing shares purchased more than one year prior to
the redemption; and finally, of amounts representing the cost of shares
purchased within one year prior to the redemption.
Redemption Procedures. Shareholders who wish to redeem shares must do so through
the Transfer Agent by mail, telephone [or via the Internet].
By mail - Redemption requests by mail must include your letter of instruction
(including Fund name, account number, account names(s), address and the dollar
amount or number of shares you wish to redeem) and should be addressed to:
Regular Mail: Overnight or Express Mail:
The Internet Index Fund The Internet Index Fund
c/o Firstar Mutual Fund Services, LLC c/o Firstar Mutual Fund
Services, LLC
P.O. Box xxx 615 East Michigan Street,
3rd Floor
Milwaukee, WI 53201-0701 Milwaukee, WI 53202
By Telephone - Shareholders who have elected the telephone redemption option on
the shareholder application form may make a telephone redemption request by
calling Firstar at (800) xxx-xxxx. Firstar may act on telephone instructions
from any person representing himself or herself to be a shareholder and
reasonably believed by Firstar to be genuine. The Fund will require Firstar to
employ reasonable procedures, such as requiring a form of personal
identification, to confirm that instructions are genuine and, if it follows such
procedures, neither Firstar nor the Fund will be liable for following telephone
instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, investors may experience
difficulty in contacting Firstar by telephone to request a redemption of Fund
shares. In such cases, investors should consider using the other redemption
procedures described herein. Use of these other redemption procedures may result
in the redemption request being processed at a later time than it would have
been if telephone redemption had been used. During the delay, the Fund's net
asset value may fluctuate.
Via the Internet [to be provided]:
Additional Information about Redemptions. A shareholder may have redemption
proceeds of $500 or more wired to the shareholder's brokerage account or a
commercial bank account designated by the shareholder. A transaction fee of
$15.00 will be charged for payments by wire. Questions about this option, or
redemption requirements generally, should be referred to Firstar at (800)
xxx-xxxx.
Written redemption instructions must be received by Firstar in proper form and
signed exactly as the shares are registered. [Firstar to confirm when signature
guarantee required]. Firstar has adopted standards and procedures pursuant to
which signature guarantees in proper form generally will be accepted from
domestic banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings associations,
as well as from participants in the New York Stock Exchange Medallion Signature
Program, the Stock Exchange Medallion Program and the Securities Transfer Agents
Medallion Program ("STAMP"). Such guarantees must be signed by an authorized
signatory thereof with "Signature Guaranteed" appearing with the shareholder's
signature. If the signature is guaranteed by a broker or dealer, such broker or
dealer must be a member of a clearing corporation and maintain net capital of at
least $100,000. Signature-guarantees may not be provided by notaries public.
Redemption requests by corporate and fiduciary shareholders must be accompanied
by appropriate documentation establishing the authority of the person seeking to
act on behalf of the account. Investors may obtain from the Fund or Firstar
forms of resolutions and other documentation which have been prepared in advance
to assist compliance with the Fund's procedures. Any questions with respect to
signature guarantees should be directed to Firstar by calling (800) xxx-xxxx.
Systematic Withdrawal Plan. If you own shares with a value of $10,000 or more,
you may participate in the Systematic Withdrawal Plan. The Systematic Withdrawal
Plan allows you to make automatic withdrawals of $100 or more from your account
at regular intervals. Funds will be transferred from your fund account to the
account you chose at the interval you select on the New Account Application
form. If you expect to purchase additional shares, it may not be to your
advantage to participate in the Systematic Withdrawal Plan because of the
possible adverse tax consequences of making contemporaneous purchases and
redemptions.
IRA Redemption. If you are an IRA shareholder, you must indicate on your
redemption request whether or not to withhold federal income tax. Requests that
do not indicate a preference will be subject to withholding.
Distributions and Taxation
The Fund will distribute substantially all of the net investment income and net
capital gains that it has realized in the sale of securities. These income and
gains distributions will generally be paid once each year, on or before December
31. Distributions will automatically be reinvested in additional shares of the
Fund, unless you elect to have the distributions paid to you in cash. There are
no sales charges or transaction fees for reinvested dividends and all shares
will be purchased at NAV.
Distributions made by the Fund are taxable to most investors (unless the
investment is in IRA or qualified retirement plan or account), whether received
in cash or additional shares. Income dividends and short-term capital gains are
taxed as ordinary income, while long-term capital gains are taxed as such,
regardless of how long you own your shares of the Fund. The tax status of
distributions made to you, whether ordinary income or long-term capital gain,
will be detailed in your annual tax statement from the Fund. If the Fund
distributes unrealized gains soon after you purchase shares, a portion of your
investment may be returned as a taxable distribution.
A sale or exchange of Fund shares is a taxable event and may result in a capital
gain or loss to you if you are subject to tax. Non-U.S. investors may be subject
to U.S. withholding and state tax. In addition, distributions from the Fund must
withhold 31% of your taxable distributions and proceeds if you do not provide a
correct taxpayer identification number ("TIN") or certify that your TIN is
correct, or if the IRS instructs the Fund to do so.
Because everyone's tax situation is unique, always consult your tax professional
about federal, state and local tax consequences.
<PAGE>
Prospectus
[Date]
Investment Advisor
Integrity Global Asset Management, Inc.
Wakefield, Rhode Island
Legal Counsel
Stradley, Ronon, Stevens & Young, LLP
Philadelphia, Pennsylvania
Independent Auditors
- -------------------------
Transfer Agent, Fund Accounting Agent,
Fund Administrator
Firstar Mutual Fund Services, LLC
Milwaukee, Wisconsin
Custodian
Firstar Bank Milwaukee, N.A.
Milwaukee, Wisconsin
A Statement of Additional Information (SAI) for the Fund contains more
information about the Fund's policies and management and is incorporated by
reference into this prospectus. The Fund's annual and semi-annual reports to
shareholders will contain additional information about the Fund's investments
and a discussion of the market conditions that significantly affected the Fund
and the Index during each fiscal year. You may obtain free copies of these
documents by:
Telephone: 1-800-xxx-xxxx
Internet: www.igam.com
Mail: Regular Mail: Overnight or Express Mail:
Internet Index Fund Internet Index Fund
c/o Firstar Mutual Fund Services, c/o Firstar Mutual Fund Services,
LLC LLC
P.O. Box xxx 615 East Michigan Street, 3rd Floor
Milwaukee, WI 53201-0701 Milwaukee, WI 53202
You may review and copy the SAI and other information about the Fund by visiting
the Securities and Exchange Commission's Public Reference Room in Washington, DC
or by visiting the Commission's Internet site at http://www.sec.gov. Copies of
this information may also be obtained, upon payment of a duplicating fee, by
writing to the Public Reference Section of the Commission, Washington, DC
20549-6009. You may call the Commission at 1-800-SEC-0330 for information about
the operation of the public reference room.
1940 Act File No. 811-xxxxx
<PAGE>
IGAM Group Funds
Internet Index Fund
133 Old Tower Hill Road, Suite 1
Wakefield, RI 02879
(401) 788-0977
Website: igam.com
Statement of Additional Information
Dated _____________, 1999
This Statement of Additional Information relates to the Internet Index Fund (the
"Fund"), which is the first mutual fund within the IGAM Group Funds family. The
SAI is not a prospectus but should be read in conjunction with the Fund's
current Prospectus dated xxxxx, 1999. To obtain the Prospectus, please visit the
Fund's website, call 1-800-___-____ or write to the Fund as shown below:
Regular Mail: Overnight or Express Mail:
Internet Index Fund Internet Index Fund
c/o Firstar Mutual Fund Services, LLC c/o Firstar Mutual Fund Services, LLC
P.O. Box xxx 615 East Michigan Street, 3rd Floor
Milwaukee, WI 53201-0701 Milwaukee, WI 53202
TABLE OF CONTENTS
[To be completed]
<PAGE>
The Fund
IGAM Group Funds (the "Trust") is an open-end investment company which is
currently comprised of a single fund called the Internet Index Fund (the
"Fund"). The Trust was organized as a business trust under the Delaware Business
Trust Act on July 16, 1999. The Fund's registered office in Delaware is The
Corporation Trust Company, 1209 Orange Street, Wilmington, DE 19801 and its
principal office is at 133 Old Tower Hill Road, Suite 1, Wakefield, RI 02879.
The Fund is a non-diversified, open-end management investment company.
Investment Objective and Strategies
The Fund's investment objective is to provide investment results, using
statistical procedures, that parallel the AMEX/Inter@ctive Week Internet Index,
a diversified index which is comprised of approximately fifty stocks of publicly
traded companies on U. S. exchanges, that are engaged in the Internet and
Internet-related activities.
The AMEX/Inter@ctive Week Internet Index, hereafter (the "Index") was developed
by the American Stock Exchange and Inter@ctive Week, a biweekly magazine
published by Inter@ctive Enterprises L.L.C. The Fund is neither sponsored by nor
affiliated with the American Stock Exchange or Inter@ctive Week.
How the Index is Calculated
At its inception in October, 1995, the Index was calculated by weighting all of
the component securities according to their market values (a.k.a., market
capitalizations) without modification. After the close of trading on March 19,
1999, the Index began using a method of calculation that modifies the weights of
the market values of the stocks in the Index.
At the same time, a 3-for-one split was applied to the Index, lowering its
overall value. Now, the AMEX/Inter@ctive Week Internet Index (Amex symbol: IIX)
is weighted based on the market capitalization of each of the component stocks,
subject to the following asset diversification requirements: (1) the weight of
any single component stock may not account for 25% or more of the total value of
the Index; (2) the five highest weighted component securities in the Index may
not in aggregate account for more than 50% of the weight of the Index; and (3)
the aggregate weight of those component stocks which individually represent less
than 5% of the total value of the Index must account for at least 50% of the
total Index value.
In order, to insure that these weighting criteria are met on a quarterly basis,
at the time of the IIX Index quarterly share overhaul (taking into account
component changes and scheduled share adjustments), the weights for the
components stocks will be adjusted by incorporating multipliers determined in
accordance with the following plan.
If any component stock exceeds 20% of the total value of the IIX Index, then all
stocks greater than 15% of the Index will be reduced to represent 15% of the
value of the Index. The aggregate amount by which all component stocks are
reduced will be redistributed proportionately across the remaining stocks that
represent less than 15% of the Index Value. After this redistribution, if any
other stock then exceeds 15%, the stock will be set to 15% of the Index value
and the redistribution will be repeated.
If the aggregate weight of the five largest component stocks (following any
necessary adjustments made in the first step) is greater than 50% of the Index
weight, then the weight of each of the five largest stocks will be scaled down
proportionately so that the aggregate weight of the five largest components will
be reduced to 45% of the Index. The amount by which the aggregate weight of the
five largest stocks exceeds 45% will be redistributed proportionately to those
stocks which are not among the five largest component stocks. If any stock as a
result of the redistribution exceeds the lesser of 4.0% and the scaled down
weight of the fifth largest stock, then the weight of that stock is set at a
weight equal to the lesser of 4.0% and the scaled down weight of the fifth
largest stock. The redistribution of weight to the remaining stocks is repeated
until the entire amount has been redistributed.
If the aggregate weight of those stocks which represent greater than 4.5% of the
Index is greater than 45% of the total Index value, then the weight of these
component stocks is scaled down proportionately to represent in aggregate 40% of
the Index weight. The amount by which these stocks in aggregate exceed 40% will
be redistributed proportionately to those stocks which represent less than 4.5%
of the index. If as a result of this distribution any component stock exceeds a
weight equal to the product of 4.5% and the proportion by which the stocks were
scaled down, then the weight of the stock is set equal to the product of 4.5%
and the proportion by which the stocks were scaled down. The redistribution of
weight to the remaining stocks is repeated until the entire amount has been
redistributed.
Additional Investment Information
The following discussion of investment techniques and instruments supplements
and should be read in conjunction with the investment information set forth in
the Fund's Prospectus. The investment practices described below, except for the
discussion of certain specified investment policies and restrictions, are not
fundamental and may be changed by the Board of Trustees without the approval of
the shareholders. In seeking to meet its investment objective, the Fund may
invest in any type of security whose characteristics are consistent with the
Fund's investment program. The securities in which the Fund may invest include
those described below.
Non-Diversified Fund
The Fund is non-diversified under the 1940 Act, which means that there is no
restriction under the 1940 Act on how much the Fund may invest in the securities
of any one issuer. However, to qualify for tax treatment as a regulated
investment company under the Internal Revenue Code ("Code"), the Fund intends to
comply, as of the end of each taxable quarter, with certain diversification
requirements imposed by the Code. Pursuant to these requirements, the Fund will,
among other things, limit its investments in the securities of any one issuer
(other than U. S. Government securities or securities of other regulated
investment companies) to no more than 25% of the value of the Fund's total
assets. In addition, the Fund, with respect to 50% of its total assets, will
limit its investments in the securities of any issuer to 5% of the Fund's total
assets, and will not purchase more than 10% of the outstanding voting securities
of any one issuer. Nevertheless, as a general matter, the Fund may be more
susceptible than a diversified mutual fund to the effects of adverse economic,
political or regulatory developments affecting a single issuer or industry
sector in which the fund may maintain investments.
Common and Preferred Stock
Common stocks are units of ownership of a corporation. Preferred stocks are
stocks that often pay dividends at a specific rate and have a preference over
common stocks in dividend payments and liquidation of assets. Some preferred
stocks may be convertible into common stock. Convertible securities are
securities that may be converted into or exchanged for a specific amount of
common stock of the same or different issuer within a particular period of time
at a specified price or formula.
Futures
The Fund may enter into contracts for the purchase or sale for future delivery
of securities. The Fund will not use futures contacts as leveraged investments
that magnify the gains and losses of an investment. A purchase of a futures
contract means the acquisition of a contractual right to obtain delivery to the
Fund of the securities or foreign currency called for by the contract at a
specified price and future date. When the Fund enters into a futures
transaction, it must deliver to the futures commission merchant selected by the
Fund an amount referred to as "initial margin." This amount is maintained by the
futures commission merchant in segregated account at the custodian bank.
Thereafter, a "variation margin" may be paid by the Fund to, or drawn by the
Fund from, such account in accordance with controls set for such accounts,
depending upon changes in the price of the underlying securities subject to the
futures contract.
The Fund may enter into futures contracts and engage in options on futures to
the extent that no more than 5% of the Fund's assets are required as futures
contract margin deposits and premiums on options, and may engage in such
transactions to the extent that obligations relating to such futures and related
options on futures transactions represent not more than 20% of the Fund's
assets.
The Fund will enter into futures transactions on domestic exchanges and, to the
extent such transactions have been approved by the Commodity Futures Trading
Commission for sale to customers in the United States, on foreign exchanges. In
addition, the Fund may sell stock index futures in anticipation of or during a
market decline to attempt to offset the decrease in market value of their common
stocks that might otherwise result; and they may purchase such contracts in
order to offset increases in the cost of common stocks that they intend to
purchase. Unlike other futures contracts, a stock index futures contract
specifies that no delivery of the actual stocks making up the index will take
place. Instead, settlement in cash must occur upon the termination of the
contract. While futures contracts provide for the delivery of securities,
deliveries usually do not occur. Contracts are generally terminated by entering
into offsetting transactions.
Index Options
The Fund may purchase exchange-listed put and call options on stock indices and
sell such options in closing sale transactions. The Fund may purchase call
options on indices to temporarily achieve market exposure when the Fund is not
fully invested. The Fund may also purchase exchange-listed call options on
particular market segment indices to achieve temporary exposure to a specific
industry. [The Fund may purchase put options on broad market indices in order to
protect its fully invested portfolio from a general market decline. Put options
on market segments may be bought to protect the Fund from a decline in value of
heavily weighted industries in the Fund's portfolio. Put options on stock
indices may be used to protect the Fund's investments in the case of a major
redemption.] While the option is open, the Fund will maintain a segregated
account with its custodian in an amount equal to the market value of the option.
Options on indices are similar to regular options except that an option on an
index gives the holder the right, upon exercise, to receive an amount of cash if
the closing level of the index upon which the option is based is greater than
(in the case of a call) or lesser than (in the case of a put) the exercise price
of the option. This amount of cash is equal to the difference between the
closing price of the index and the exercise price of the option expressed in
dollars times a specified multiple (the "multiplier").
The Fund's purchases of options on indices will subject it to the following
risks described below. First, because the value of an index option depends upon
movements in the level of the index rather than the price of a particular
security, whether the Fund will realize gain or loss on the purchase of an
option on an index depends upon movements in the level of prices in the market
generally or in an industry or market segment rather than movements in the level
of prices in the market generally or in an industry or market segment rather
than movements in the price of a particular security.
Second, index prices may be distorted if trading of a substantial number of
securities included in the index is interrupted causing the trading of options
on that index to be halted. If a trading halt occurred, the Fund would not be
able to close put options which it had purchased and the Fund may incur losses
if the underlying index moved adversely before trading resumed. If a trading
halt occurred and restrictions prohibiting the exercise of options were imposed
through the close of trading on the last day before expiration, exercises on
that day would be settled on the basis of a closing index value that may not
reflect current price information for securities representing a substantial
portion of the value of the index.
Third, if the Fund holds an index option and exercises it before final
determination of the closing index value for that day, it runs the risk that the
level of the underlying index may change before closing. If such a change causes
the exercised option to fall "out-of-the-money," the Fund will be required to
pay the difference between the closing index value and the exercise price of the
option (times the applicable multiplier) to the assigned writer. Although the
Fund may be able to minimize this risk by withholding exercise instructions
until just before the daily cutoff time or by selling rather than exercising the
option when the index level is close to the exercise price, it may not be
possible to eliminate this risk entirely because the cutoff times for index
options may be earlier than those fixed for other types of options and may occur
before definitive closing index values are announced.
Convertible Securities
Traditional convertible securities include corporate bonds, notes and preferred
stocks that may be converted into or exchanged for common stock, and other
securities that also provide an opportunity for equity participation. These
securities are generally convertible either at a stated price or a stated rate
(that is, for a specific number of shares of common stock or other security). As
with other fixed income securities, the price of a convertible security to some
extent varies inversely with interest rates. While providing a fixed-income
stream (generally higher in yield than the income derivable from a common stock
but lower than that afforded by a non-convertible debt security), a convertible
security also affords the investor an opportunity, through its conversion
feature, to participate in the capital appreciation of the common stock into
which it is convertible. As the market price of the underlying common stock
declines, convertible securities tend to trade increasingly on a yield basis and
so may not experience market value declines to the same extent as the underlying
common stock. When the market price of the underlying common stock increases,
the price of a convertible security tends to rise as a reflection of the value
of the underlying common stock. To obtain such a higher yield, the Fund may be
required to pay for a convertible security an amount in excess of the value of
the underlying common stock. Common stock acquired by the Fund upon conversion
of a convertible security will generally be held for so long as the Advisor
anticipates such stock will provide the Fund with opportunities which are
consistent with the Fund's investment objective and policies.
Warrants and Rights
The Fund may invest in warrants; however, not more than 10% of the Fund's total
assets (at the time of purchase) will be invested in warrants other than
warrants acquired in units or attached to other securities. Warrants are pure
speculation in that they have no voting rights, pay no dividends and have no
rights with respect to the assets of the corporation issuing them. Warrants
basically are options to purchase equity securities at a specific price valid
for a specific period of time. They do not represent ownership of the
securities, but only the right to buy them. Warrants differ from call options in
that warrants are issued by the issuer of the security which may be purchased on
their exercise, whereas call options may be written or issued by anyone. The
prices of warrants do not necessarily move parallel to the prices of the
underlying securities. Rights represent a preemptive right to purchase
additional shares of stock at the time of new issuance, before stock is offered
to the general public, so that the stockholder can retain the same ownership
percentage after the offering.
Illiquid Securities
The Fund may invest up to 15% of its net assets in illiquid securities. The term
"illiquid securities" for this purpose means securities that cannot be disposed
of within seven days in the ordinary course of business at approximately the
amount at which the Fund has valued the securities. Illiquid securities are
considered to include generally, among other things, certain written
over-the-counter options, securities or other liquid assets being used as cover
for such options, repurchase agreements with maturities in excess of seven days,
certain loan participation interests and other securities whose disposition is
restricted under the federal securities laws. The Fund's illiquid investments
may include privately placed securities which are not registered for sale under
the Securities Act of 1933, as amended (the "1933 Act").
Rule 144A Securities
The Fund may invest in securities that are restricted as to resale, but which
are regularly traded among qualified institutional buyers because they are
exempt under Rule 144A from the registration requirements of the 1933 Act. The
Board of Trustees of the Trust has instructed the Advisor to consider the
following factors in determining the liquidity of a security purchased under
Rule 144A: (i) the frequency of trades and trading volume for the security; (ii)
whether at least three dealers are willing to purchase or sell the security and
the number of potential purchasers; (iii) whether at least two dealers are
making a market in the security, the method of soliciting offers and the
mechanics of transfer. Although having delegated the day-to-day functions, the
Board of Trustees will continue to monitor and periodically review the Advisor's
selection of Rule 144A securities, as well as the Advisor's determinations as to
their liquidity. Investing in securities under Rule 144A could affect the Fund's
illiquidity to the extent that qualified institutional buyers become, for a
time, uninterested in purchasing these securities. After the purchase of a
security under Rule 144A, the Board of Trustees and the Advisor will continue to
monitor the liquidity of that security to ensure that the Fund has no more than
15% of its net assets in illiquid securities.
When Issued, Delayed Delivery Securities and Forward Commitments
The Fund may enter into forward commitments for the purchase or sale of
securities, including on a "when issued" or "delayed delivery" basis in excess
of customary settlement periods for the type of security involved. In some
cases, a forward commitment may be conditioned upon the occurrence of a
subsequent event, such as approval and consummation of a merger, corporate
reorganization or debt restructuring, i.e., a when, as and if issued security.
When such transactions are negotiated, the price is fixed at the time of the
commitment, with payment and delivery taking place in the future, generally a
month or more after the date of the commitment. While the Fund will only enter
into a forward commitment with the intention of actually acquiring the security,
the Fund may sell the security before the settlement date if it is deemed
advisable.
Securities purchased under a forward commitment are subject to market
fluctuation, and no interest (or dividends) accrues to the Fund prior to the
settlement date. The Fund will segregate with its Custodian cash or liquid
high-grade debt securities in an aggregate amount at least equal to the amount
of its outstanding forward commitments.
U.S. Government Securities
U.S. Government securities are obligations of, or guaranteed by, the U.S.
Government, its agencies or instrumentalities. The U.S. Government does not
guarantee the net asset value of the Funds' shares. Some U.S. Government
securities, such as Treasury bills, notes and bonds, and securities guaranteed
by the Government National Mortgage Association ("GNMA"), are supported by the
full faith and credit of the United States; others, such as those of the Federal
Home Loan Banks, are supported by the right of the issuer to borrow from the
U.S. Treasury; others, such as those of the Federal National Mortgage
Association ("FNMA"), are supported by the discretionary authority of the U.S.
Government to purchase the agency's obligations; and still others, such as those
of the Student Loan Marketing Association, are supported only by the credit of
the instrumentality. U.S. Government securities include securities that have no
coupons, or have been stripped of their unmatured interest coupons, individual
interest coupons from such securities that trade separately, and evidences of
receipt of such securities. Such securities may pay no cash income, and are
purchased at a deep discount from their value at maturity. Because interest on
zero coupon securities is not distributed on a current basis but is, in effect,
compounded, zero coupon securities tend to be subject to greater market risk
than interest-payment securities, such as CATs and TIGRs, which are not issued
by the U.S. Treasury, and are new therefore not U.S. Government securities,
although the underlying bond represented by such receipt is a debt obligation of
the U.S. Treasury. Other zero coupon Treasury securities (STRIPs and CUBEs) are
direct obligations of the U.S. Government.
Bank Obligations
Certificates of deposit are short-term obligations of commercial banks. A
bankers' acceptance is a time draft drawn on a commercial bank by a borrower,
usually in connection with international commercial transactions. Certificates
of deposit may have fixed or variable rates.
Loans of Portfolio Securities
The Fund may lend its investment securities to approved borrowers who need to
borrow securities in order to complete certain transactions, such as covering
short sales, avoiding failures to deliver securities or completing arbitrage
operations, provided that such loans do not exceed 10% of the Fund's total
assets at the time of the most recent loan.. By lending its investment
securities, the Fund attempts to increase its income through the receipt of
interest on the loan. Any gain or loss in the market price of the securities
loaned that might occur during the term of the loan would be for the account of
the Fund. The Fund may lend its investment securities to qualified brokers,
dealers, domestic and foreign banks or other financial institutions, so long as
the terms, the structure and the aggregate amount of such loans are not
inconsistent with the 1940 Act or the rules and regulations or interpretations
of the Securities and Exchange Commission (the "SEC") thereunder, which
currently require that: (a) the borrower pledge and maintain with a Fund
collateral consisting of cash, an irrevocable letter of credit issued by a bank
or securities issued or guaranteed by the United States Government having a
value at all times not less than 100% of the value of the securities loaned; (b)
the borrower add to such collateral whenever the price of the securities loaned
rises (i.e., the borrower "marks to the market" on a daily basis); (c) the loan
be made subject to termination by a Fund at any time; and (d) the Fund receives
reasonable interest on the loan (which may include the Fund investing any cash
collateral in interest bearing short-term investments). All relevant facts and
circumstances, including the creditworthiness of the broker, dealer or
institution, will be considered in making decisions with respect to the lending
of securities, subject to review by the Board of Trustees.
At the present time, the staff of the SEC does not object if an investment
company pays reasonable negotiated fees in connection with loaned securities so
long as such fees are set forth in a written contract and approved by the
investment company's Board of Trustees. In addition, voting rights may pass with
the loaned securities, but if a material event occurs affecting an investment on
a loan, the loan must be called and the securities voted.
Repurchase Agreements
When the Fund enters into a repurchase agreement, it purchases securities from a
bank or broker-dealer which simultaneously agrees to repurchase the securities
at a mutually agreed upon time and price, thereby determining the yield during
the term of the agreement. As a result, a repurchase agreement provides a fixed
rate of return insulated from market fluctuations during the term of the
agreement. The term of a repurchase agreement generally is short, possibly
overnight or for a few days, although it may extend over a number of months (up
to one year) from the date of delivery. Repurchase agreements will be fully
collateralized and the collateral will be marked-to-market daily. The Fund may
not enter into a repurchase agreement having more than seven days remaining to
maturity if, as a result, such agreement, together with any other illiquid
securities held by the Fund, would exceed 15% of the value of the net assets of
the Fund.
In the event of bankruptcy or other default by the seller of the security under
a repurchase agreement, the Fund may suffer time delays and incur costs or
possible losses in connections with the disposition of the collateral. In such
event, instead of the contractual fixed rate of return, the rate of return to
the Fund would be dependent upon intervening fluctuations of the market value of
the underlying security and the accrued interest on the security. Although the
Fund would have rights against the seller for breach of contract with respect to
any losses arising from market fluctuations following the failure of the seller
to perform, the ability of the Fund to recover damages from a seller in
bankruptcy or otherwise in default would be reduced.
Repurchase agreements are securities for purposes of the tax diversification
requirements that must be met for pass-through treatment under Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, the
Fund will limit the value of its repurchase agreements on each of the quarterly
testing dates to ensure compliance with Subchapter M of the Code.
Reverse Repurchase Agreements
Reverse repurchase agreements involve sales of portfolio securities of the Fund
to member banks of the Federal Reserve System or securities dealers believed
creditworthy, concurrently with an agreement by the Series to repurchase the
same securities at a later date at a fixed price which is generally equal to the
original sales price plus interest. The Fund retains record ownership and the
right to receive interest and principal payments on the portfolio securities
involved. In connection with each reverse repurchase transaction, the Fund will
direct its custodian bank to place cash, U.S. government securities, equity
securities and/or investment and non-investment grade debt securities in a
segregated account of the Series in an amount equal to the repurchase price. Any
assets held in any segregated securities, options, futures, forward contracts or
other derivative transactions shall be liquid, unencumbered and marked-to-market
daily (any such assets held in a segregated account are referred to in this
Statement of Additional Information as "Segregated Assets").
A reverse repurchase agreement involves the risk that the market value of the
securities retained by the Fund may decline below the price of the securities
the Series has sold but is obligated to repurchase under the agreement. In the
event the buyer of securities under a reverse repurchase agreement files for
bankruptcy or becomes insolvent, the Fund's use of the proceeds of the agreement
may be restricted pending a determination by the other party, or its trustee or
receiver, whether to enforce the Fund's obligation to repurchase the securities.
Reverse repurchase agreements are considered borrowings and as such, are subject
to the same investment limitations.
Borrowing
The Fund may borrow money as a temporary measure for extraordinary purposes or
to facilitate redemptions subject to the fundamental investment restriction
described below under the heading "Investment Restrictions." The Fund will not
borrow money in excess of 33 1/3% of the value of its total assets. The Fund has
no intention of increasing its net income through borrowing. Any borrowing will
be done from a bank with the required asset coverage of at least 300%. In the
event that such asset coverage shall at any time fall below 300%, the Fund
shall, within three days thereafter (not including Sundays or holidays), or such
longer period as the SEC may prescribe by rules and regulations, reduce the
amount of its borrowings to such an extent that the asset coverage of such
borrowings shall be at least 300%.
Other Investments
The Board of Trustees may, in the future, authorize the Fund to invest in
securities other than those listed in this SAI and in the prospectus, provided
such investment would be consistent with the Fund's investment objective and
that it would not violate any fundamental investment policies or restrictions.
Investment Restrictions
Fundamental Investment Policies and Restrictions: The Fund has adopted the
following fundamental investment policies and restrictions which cannot be
changed without the approval of a "majority of the outstanding voting
securities" of the Fund. Under the 1940 Act, a "majority of the outstanding
voting securities" of a fund means the vote of: (i) more than 50% of the
outstanding voting securities of the fund; or (ii) 67% or more of the voting
securities of the fund present at a meeting, if the holders of more than 50% of
the outstanding voting securities are present or represented by proxy, whichever
is less.
Concentration: The Fund has adopted a policy of concentrating in securities
issued by companies within the Internet industry but will, otherwise, not make
investments that result in the concentration (as that term may be defined in the
1940 Act, any rule or order thereunder, or U.S. Securities and Exchange
Commission ("SEC") staff interpretation thereof) of its investments in the
securities of issuers primarily engaged in the same industry. This restriction,
however, does not limit the Fund from investing in obligations issued or
guaranteed by the U.S. government, or its agencies or instrumentalities. The SEC
staff currently takes the position that a fund concentrates its investments in a
particular industry if more than 25% of its net assets is invested in issuers
within the industry.
Senior Securities & Borrowing: The Fund may not borrow money or issue senior
securities, except as the 1940 Act, any rule or order thereunder, or SEC staff
interpretation thereof, may permit.
Underwriting: The Fund may not underwrite the securities of other issuers,
except that the Fund may engage in transactions involving the acquisition,
disposition or resale of its portfolio securities, under circumstances where it
may be considered to be an underwriter under the Securities Act of 1933.
Real Estate: The Fund may not purchase or sell real estate, unless acquired as a
result of ownership of securities or other instruments and provided that this
restriction does not prevent the Fund from investing in issuers which invest,
deal or otherwise engage in transactions in real estate or interests therein, or
investing in securities that are secured by real estate or interests therein.
Commodities: The Fund may not purchase or sell physical commodities, unless
acquired as a result of ownership of securities or other instruments and
provided that this restriction does not prevent the Fund from engaging in
transactions involving futures contracts and options thereon or investing in
securities that are secured by physical commodities.
Lending: The Fund may not make loans, provided that this restriction does not
prevent the Fund from purchasing debt obligations, entering into repurchase
agreements, loaning its assets to broker/dealers or institutional investors and
investing in loans, including assignments and participation interests.
Non-Fundamental Policies and Restrictions: In addition to the fundamental
policies and investment restrictions described above, and the various general
investment policies described in the Prospectus and this SAI, the Fund will be
subject to the following investment restrictions, which are considered
non-fundamental and may be changed by the Board of Trustees without shareholder
approval.
Other Investment Companies: The Fund is permitted to invest in other investment
companies, including open-end, closed-end or unregistered investment companies,
either within the percentage limits set forth in the 1940 Act, any rule or order
thereunder, or SEC staff interpretation thereof, or without regard to percentage
limits in connection with a merger, reorganization, consolidation or other
similar transaction. However, the Fund may not operate as a "fund of funds"
which invests primarily in the shares of other investment companies as permitted
by Section 12(d)(1)(F) or (G) of the 1940 Act, if its own shares are utilized as
investments by such a "fund of funds."
Illiquid Securities: The Fund may not invest more than 15% of its net assets in
securities which it can not sell or dispose of in the ordinary course of
business within seven days at approximately the value at which the Fund has
valued the investment.
In applying the Fund's fundamental policy concerning concentration that is
described above, it is a matter of non-fundamental policy that investments in
certain categories of companies will not be considered to be investments in a
particular industry. For example: (i) financial service companies will be
classified according to the end users of their services, for example, automobile
finance, bank finance and diversified finance will each be considered a separate
industry; (ii) technology companies will be divided according to their products
and services, for example, hardware, software, information services and
outsourcing, or telecommunications will each be a separate industry; (iii)
asset-backed securities will be classified according to the underlying assets
securing such securities; and (iv) utility companies will be divided according
to their services, for example, gas, gas transmission, electric and telephone
will each be considered a separate industry.
Management of the Fund
The Trust is governed by a Board of Trustees. The Board of Trustees consists of
[seven] individuals, four of whom are not "interested persons" of the Trust as
that term is defined in the 1940 Act. The Trustees are experienced business
persons who meet throughout the year to oversee the Trust's activities, review
contractual arrangements with companies that provide services to the Fund, and
review performance. The names and business addresses of the Trustees and
officers of the Trust, together with information as to their principal
occupations during the past five years, are listed below. The Trustees who are
considered "interested persons" of the investment advisor or of the Trust, as
defined in Section 2(a)(19) of the 1940 Act, are noted with an asterisk (*).
- ----------------------------------------------------------------------
Name and Address Age Position Principal
Occupations during
the Past Five Years
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
George Hadfield III* 60 President and Retired Private
111 Harrison Avenue, MH5 Trustee Investor, General
Newport, RI 02840 Partner of East
Bay International
Fund, New York
(1988-96), Vice
Pres.
Institutional
Sales, Saloman
Brothers, Inc.,
New York (1982-88)
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Eugene Y.W. Lee, Ph.D.* 48 Vice President,
310 Spring Valley Dr. President, Integrity Global
East Treasurer Asset Management,
Greenwich, RI 02818 Inc. Associate
Professor of
Finance University
of Rhode Island
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Jong Ho Hwang* 29 Secretary and
Trustee
- ----------------------------------------------------------------------
* This trustee is deemed to be an interested person as defined in
the 1940 Act.
Trustee Compensation
For their service as directors, the independent trustees receive $8,000 per
year, as well as reimbursement for expenses incurred in connection with
attendance at such meetings. The interested trustees of the Fund receive no
compensation for their service as directors.
Control Persons and Principal Holders of Securities
As of June 30, 1999, there were no control persons or principal holders of
securities of the Fund. Control persons are persons deemed to control the Fund
because they own beneficially over 25% of the outstanding equity securities.
Principal holders are persons that own beneficially 5% or more of the Fund's
outstanding equity securities.
Management Ownership
As of June 30, 1999, the officers and trustees of the Fund as a group own less
than 1% of the outstanding shares of the Fund.
Investment Advisor
Integrity Global Asset Management, Inc., is a Delaware corporation that serves
as an investment advisor to the Fund pursuant to a Investment Management
Agreement dated xxx, 1999.
This Investment Management Agreement is effective for an initial term of two
years and will continue on a year-to-year basis thereafter provided that
specific approval is voted at least annually by the Board of Trustees of the
Trust or by the vote of the holders of a majority of the outstanding voting
securities of the Fund. In either event, it must also be approved by a majority
of the trustees of the Trust who are neither parties to the Agreement nor
interested persons as defined in the Investment Company Act of 1940 at a meeting
called for the purpose of voting on such approval. The Investment Advisor's
decisions are made subject to direction of the Fund's Board of Trustees. The
Agreement may be terminated at any time, without the payment of any penalty, by
vote of a majority of the outstanding voting securities of the Fund. Ultimate
decisions as to the investment policy and as to individual purchases and sales
of securities are made by the Fund's officers and trustees.
Under the Agreement, Integrity Global Asset Management, Inc.
furnishes investment advice to the Fund by continuously reviewing
the portfolio and recommends to the Fund, when, and to what
extent, securities should be purchased or disposed. Pursuant to
the Agreement, the Investment Advisor:
(1) renders research, statistical and advisory services to the
Fund;
(2) makes specific recommendations based on the Fund's
investment requirements;
(3) pays the salaries of those of the Fund's employees who may be officers or
directors or employees of the Investment Advisor.
For these services, the Trust, on behalf of the Fund, has agreed to pay to
Integrity Global Asset Management, Inc. an annual fee of 0.65% of the Fund's
average daily net assets. All fees are computed on the average daily closing net
asset value of the Fund and are payable monthly. The fee is higher than the fee
paid by most other funds.
Code of Ethics
Both the Fund and the investment advisor have adopted a Code of Ethics that
governs the conduct of employees of the Fund and advisor who may have access to
information about the Fund's securities transactions. The Code recognizes that
such persons owe a fiduciary duty to the Fund's shareholders and must place the
interests of shareholders ahead of their own interests. Among other things, the
Code requires preclearance of personal securities transactions; certain blackout
periods for personal trading of securities which may be considered for purchase
or sale by the Fund or other clients of the advisor; and prohibitions against
personal trading of initial public offerings. Material violations of the code
are subject to review by the Trustees and could result in severe penalties.
Administrative Services
Administrative services include, but are not limited to, providing office space,
equipment, telephone facilities, various personnel, including clerical and
supervisory, and computers, as is necessary or beneficial to provide compliance
services to the Fund. Firstar Mutual Fund Services, LLC, a subsidiary of Firstar
Bank Milwaukee, N.A., will provide administrative personnel and services
(including blue-sky services) to the Fund. Firstar provides these services at an
annual minimum fee of $xxxxx. Firstar Mutual Fund Services, LLC charges the Fund
an annual fee of xxx% of average daily net assets on the first $200 million,
xxx% on the next $500 million and xxx% on the balance. Firstar Mutual Fund
Services, LLC also will serve as fund accountant and transfer agent under
separate agreements.
Custodian
Firstar Bank Milwaukee, N.A. is custodian for the securities and cash of the
Fund. Under the Custodian Agreement, Firstar Bank Milwaukee, N.A. holds the
Fund's portfolio securities in safekeeping and keeps all necessary records and
documents relating to its duties.
Distributor
T.O. Richardson Securities, Inc. (the "Distributor"), located at 2 Bridgewater
Road, Farmington, Connecticut, 06032 serves as the principal underwriter and
national distributor for the shares of the Fund pursuant to a Distribution
Agreement with the Trust dated as of ____________ __, ____ (the "Distribution
Agreement"). T.O. Richardson Securities, Inc. is registered as a broker-dealer
under the 1934 Act and each state's securities laws and is a member of the NASD.
The offering of the Fund's shares is continuous. The Distribution Agreement
provides that the Distributor, as agent in connection with the distribution of
Fund shares, will use appropriate efforts to solicit orders for the sale of Fund
shares and undertake such advertising and promotion as it deems reasonable,
including, but not limited to, advertising, compensation to underwriters,
dealers and sales personnel, printing and mailing prospectuses to persons other
than current Fund shareholders, and printing and mailing sales literature.
Distribution and Shareholder Servicing Plan
The Board of Trustees has adopted a Distribution and Shareholder Serving Plan on
behalf of the Fund, in accordance with Rule 12b-1 (the "Rule") under the 1940
Act. The Fund is authorized under the Plan to use the assets of the Fund to
reimburse the Distributor or others for certain activities relating to the
distribution of shares of the Fund to investors and the provision of shareholder
services. The maximum amount payable under the Plan is 0.25% of the Fund's
average net assets on an annual basis. Because these fees are paid out of the
Fund's assets on an ongoing basis, over time these fees will increase the cost
of your investment.
The NASD's maximum sales charge rule relating to mutual fund shares establishes
limits on all types of sales charges, whether front-end, deferred or
asset-based. This rule may operate to limit the aggregate distribution fees to
which shareholders may be subject under the terms of the Plan.
The Plan authorizes the use of distribution fees to pay, or reimburse expenses
incurred by, banks, broker/dealers and other institutions which provide
distribution assistance and/or shareholder services including, but not limited
to, printing and distributing prospectuses to persons other than Fund
shareholders, printing and distributing advertising and sales literature and
reports to shareholders used in connection with selling shares of the Fund,
furnishing personnel and communications equipment to service shareholder
accounts and prospective shareholder inquiries. Such services may be performed
by the Distributor, the Advisor or others.
The Plan requires that any person authorized to direct the disposition of monies
paid or payable by the Fund pursuant to the Plan or any related agreement
prepare and furnish to the Trustees for their review, at least quarterly,
written reports complying with the requirements of the Rule and setting out the
amounts expended under the Plan and the purposes for which those expenditures
were made. The Plan provides that so long as it is in effect the selection and
nomination of Trustees who are not interested persons of the Trust will be
committed to the discretion of the Trustees then in office who are not
interested persons of the Trust.
Neither the Plan nor any related agreements can take effect until approved by a
majority vote of both all the Trustees and those Trustees who are not interested
persons of the Trust and who have no direct or indirect financial interest in
the operation of the Plan or in any agreements related to the Plan, cast in
person at a meeting called for the purpose of voting on the Plan and the related
agreements. The Trustees approved the Plan on
- -------------- --, -----.
The Plan will continue in effect only so long as its continuance is specifically
approved at least annually by the Trustees in the manner described above for
Trustee approval of the Plan. The Plan for the Fund may be terminated at any
time by a majority vote of the Trustees who are not interested persons of the
Trust and who have no direct or indirect financial interest in the operations of
the Plan or in any agreement related to the Plan or by vote of a majority of the
outstanding voting securities of the Fund.
The Plan may not be amended so as to materially increase the amount of the
distribution fees for the Fund unless the amendment is approved by a vote of at
least a majority of the outstanding voting securities of the Fund. In addition,
no material amendment may be made unless approved by the Trustees in the manner
described above for Trustee approval of the Plan.
Pricing of Shares
Shares of the Fund are sold on a continual basis at the net asset value per
share next computed following acceptance of an order by the Fund. The Fund's net
asset value per share for the purpose of pricing purchase and redemption orders
is determined at the close of normal trading (currently 4:00 p.m. Eastern Time)
on each day the New York Stock Exchange is open for trading. The NYSE is closed
on the following holidays: New Year's Day, Martin Luther King, Jr.'s Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
Securities listed on a U. S. securities exchange or Nasdaq for which market
quotations are readily available at the last quoted sale price on the day the
valuation is made. Price information on listed securities is taken from the
exchange where the security is primarily traded. Options, futures, unlisted U.
S. securities and listed U. S. securities not traded on the valuation date for
which market quotations are readily available are valued at the most recent
quoted bid price.
Fixed-income securities (other than obligations having a maturity of 60 days or
less) are normally valued on the basis of quotes obtained from pricing services,
which take into account appropriate factors such as institutional sized trading
in similar groups of securities, yield, quality, coupon rate, maturity, type of
issue, trading characteristics and other market data. Fixed-income securities
purchased with remaining maturities of 60 days or less are valued at amortized
cost if it reflects fair value. In the event that amortized cost does not
reflect market, market prices as determined above will be used. Other assets and
securities for which no quotations are readily available (including restricted
securities) will be valued in good faith at fair value using methods determined
by the Board of Trustees of the Fund.
Shares of Beneficial Interest
The Trust is a series business trust that currently offers one series of shares.
The beneficial interest of the Trust is divided into an unlimited number of
shares, with a par value of $0.001 each. Each share has equal dividend, voting,
liquidation and redemption rights. There are no conversion or preemptive rights.
Shares, when issued, will be fully paid and nonassessable. Fractional shares
have proportional voting rights. Shares of the Fund do not have cumulative
voting rights, which means that the holders of more than 50% of the shares
voting for the election of trustees can elect all of the trustees if they choose
to do so and, in such event, the holders of the remaining shares will not be
able to elect any person to the Board of Trustees. Shares will be maintained in
open accounts on the books of the Transfer Agent, and certificates for shares
will generally not be issued.
If they deem it advisable and in the best interests of shareholders, the
Trustees may create additional series of shares, each of which represents
interests in a separate portfolio of investments and is subject to separate
liabilities, and may create multiple classes of shares of such series, which may
differ from each other as to expenses and dividends. If additional series or
classes of shares are created, shares of each series or class are entitled to
vote as a series or class only to the extent required by the 1940 Act or as
permitted by the Trustees. Upon the Trust's liquidation, all shareholders of a
series would share pro-rata in the net assets of such series available for
distribution to shareholders of the series, but, as shareholders of such series,
would not be entitled to share in the distribution of assets belonging to any
other series.
Purchasing Shares
Shares of the Fund are sold in a continuous offering and may be purchased on any
business day through authorized investment dealers or directly from the Fund.
Stock Certificates and Confirmations
The Fund does not intend to issue stock certificates representing shares
purchased. Confirmations of the opening of an account and of all subsequent
transactions in the account are forwarded by the Fund to the stockholder's
address of record.
Special Incentive Programs
At various times the Fund may implement programs under which a dealer's sales
force may be eligible to win nominal awards for certain sales efforts or
recognition program conforming to criteria established by the Fund, or
participate in sales programs sponsored by the Fund. In addition, the Advisor,
in its discretion may from time to time, pursuant to objective criteria
established by the Advisor, sponsor programs designed to reward selected dealers
for certain services or activities that are primarily intended to result in the
sale of shares of the Fund. These programs will not change the price you pay for
your shares or the amount that the Fund will receive from the sale.
Investing Through Authorized Dealers
If any authorized dealer receives an order of at least $2,500, the dealer may
contact the Fund directly. Orders received by dealers by the close of trading on
the New York Stock Exchange on a business day that are transmitted to the Fund
by 4:00 p.m. EST on that day will be effected at the net asset value per share
determined as of the close of trading on the New York Stock Exchange on that
day. Otherwise, the orders will be effected at the next determined net asset
value. It is the dealer's responsibility to transmit orders so that they will be
received by the Distributor before 4:00 p.m. EST.
Redemption of Shares
To redeem shares, shareholders may send a written request to:
Regular Mail: Overnight or Express Mail:
The Internet Index Fund The Internet Index Fund
c/o Firstar Mutual Fund Services, LLC c/o Firstar Mutual
Fund Services, LLC
P.O. Box xxx 615 East Michigan Street,
3rd Floor
Milwaukee, WI 53201-0701 Milwaukee, WI 53202
The written letter of instructions must include
o include the investor's social security number or tax
identification number,
o the fund name,
o the account number,
o the share or dollar amount to be redeemed, and
o signature by all shareholders on the account.
The proceeds will be wired to the bank account of record or sent to the address
of record within seven days.
If a shareholder requests that redemption proceeds be sent to an address other
than that on record with the Fund or proceeds be made payable to someone other
than to the shareholder(s) of record, the written request must have signatures
guaranteed by:
o a trust company or commercial bank whose deposits are
insured by the BIF, which is administered by the FDIC;
o a member of the New York, Boston, American, Midwest, or
Pacific Stock Exchange;
o a savings bank or savings association whose deposits are
insured by the SAIF, which is administered by the FDIC; or
o any other "eligible guarantor institution" as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantor program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
Portfolio Transactions and Turnover
The Fund's portfolio securities transactions are placed by the Investment
Advisor. The objective of the Fund is to obtain the best available prices in its
portfolio transactions, taking into account the costs, promptness of executions
and other qualitative considerations. There is no pre-existing commitment to
place orders with any broker, dealer or member of an exchange. The Investment
Advisor evaluates a wide range of criteria in seeking the most favorable price
and market for the execution of transactions, including the broker's commission
rate, execution capability, positioning and distribution capabilities,
information in regard to the availability of securities, trading patterns,
statistical or factual information, opinions pertaining to trading strategy,
back office efficiency, ability to handle difficult trades, financial stability,
and prior performance in servicing the Investment Advisor and its clients. In
transactions on equity securities and U.S. Government securities executed in the
over-the-counter market, purchases and sales are transacted directly with
principal market-makers except in those circumstances where, in the opinion of
the Investment Advisor, better prices and executions are available elsewhere.
The Investment Advisor, when effecting purchases and sales of portfolio
securities for the account of the Fund, will seek execution of trades either (i)
at the most favorable and competitive rate of commission charged by any broker,
dealer or member of an exchange, or (ii) at a higher rate of commission charges,
if reasonable, in relation to brokerage and research services provided to the
Fund or the Investment Advisor by such member, broker, or dealer. Such services
may include, but are not limited to, any one or more of the following;
information as to the availability of securities for purchase or sale,
statistical or factual information, or opinions pertaining to investments. The
Investment Advisor may use research and services provided by brokers and dealers
in servicing all its clients, including the Fund, and not all such services will
be used by the Investment Advisor in connection with the Fund. In accordance
with the provisions of Section 28(e) of the 1934 Act, the Advisor may from
time-to-time receive services and products which serve both research and
non-research functions. In such event, the Advisor makes a good faith
determination of the anticipated research and non-research use of the product or
service and allocates brokerage only with respect to the research component.
Brokerage may also be allocated to dealers in consideration of the Fund's share
distribution but only when execution and price are comparable to that offered by
other brokers.
The Investment Advisor provides investment advisory services to individuals and
other institutional clients, including corporate pension plans, profit-sharing
and other employee benefit trusts, and other investment pools. There may be
occasions on which other investment advisory clients advised by the Investment
Advisor may also invest in the same securities as the Fund. When these clients
buy or sell the same securities at substantially the same time, the Investment
Advisor may average the transactions as to price and allocate the amount of
available investments in a manner which is believes to be equitable to each
client, including the Fund. On the other hand, to the extent permitted by law,
the Investment Advisor may aggregate the securities to be sold or purchased for
the Fund with those to be sold or purchased for other clients managed by it in
order to obtain lower brokerage commissions, if any.
Because of the Fund's indexing investment strategy, it generally only sells
securities to generate cash to satisfy redemption requests, or to rebalance its
portfolio to track the target index. As a result, the Fund's portfolio turnover
rate is expected to be extremely low. However, the Fund is not managed in a
manner designed to maximize tax efficiencies or reduce transaction costs, and
securities will be purchased and sold without regard to such factors as the
advisor deems appropriate. Of course, when selling portfolio securities, the
advisor will attempt to minimize taxable gains. The portfolio turnover rate is
calculated by dividing the lesser of the Fund's annual sales or purchases of
portfolio securities (exclusive of purchases or sales of securities whose
maturities at the time of acquisition were one year or less) by the monthly
average value of the securities in the portfolio during the year.
Additional Information on Distributions and Taxes
Distributions
A shareholder will automatically receive all income dividends and capital gain
distributions in additional full and fractional shares of the Fund at their net
asset value as of the date of payment unless the shareholder elects to receive
such dividends or distributions in cash. The reinvestment date normally precedes
the payment date by about seven days although the exact timing is subject to
change. Shareholders will receive a confirmation of each new transaction in
their account. The Trust will confirm all account activity, including the
payment of dividend and capital gain distributions and transactions made as a
result of an Automatic Withdrawal Plan or an Automatic Investment Plan.
Shareholders may rely on these statements in lieu of stock certificates. Stock
certificates representing shares of the Fund will not be issued.
Distributions of Net Investment Income. The Fund receives income generally in
the form of dividends and interest on its investments. This income, less
expenses incurred in the operation of the Fund, constitute its net investment
income from which dividends may be paid to you. Any distributions by the Fund
from such income will be taxable to you as ordinary income, whether you take
them in cash or in additional shares.
Distributions of Capital Gains. The Fund may derive capital gains and losses in
connection with sales or other dispositions of its portfolio securities.
Distributions derived from the excess of net short-term capital gain over net
long-term capital loss will be taxable to you as ordinary income. Distributions
paid from long-term capital gains realized by the Fund will be taxable to you as
long-term capital gain, regardless of how long you have held your shares in the
Fund. Any net short-term or long-term capital gains realized by the Fund (net of
any capital loss carryovers) generally will be distributed once each year, and
may be distributed more frequently, if necessary, in order to reduce or
eliminate federal excise or income taxes on the Fund.
Information on the Tax Character of Distributions. The Fund will inform you of
the amount and character of your distributions at the time they are paid, and
will advise you of the tax status for federal income tax purposes of such
distributions shortly after the close of each calendar year. If you have not
held Fund shares for a full year, you may have designated and distributed to you
as ordinary income or capital gain a percentage of income that is not equal to
the actual amount of such income earned during the period of your investment in
the Fund.
Taxes
Election to be Taxed as a Regulated Investment Company. The Fund intends to be
treated as a regulated investment company under Subchapter M of the Code, and
intends to so qualify during the current fiscal year. As a regulated investment
company, the Fund generally pays no federal income tax on the income and gains
it distributes to you. The Board reserves the right not to maintain the
qualification of the Fund as a regulated investment company if it determines
such course of action to be beneficial to you. In such case, the Fund will be
subject to federal, and possibly state, corporate taxes on its taxable income
and gains, and distributions to you will be taxed as ordinary dividend income to
the extent of the Fund's available earnings and profits.
Excise Tax Distribution Requirements. The Code requires the Fund to distribute
at least 98% of its taxable ordinary income earned during the calendar year and
98% of its capital gain net income earned during the twelve month period ending
October 31 (in addition to undistributed amounts from the prior year) to you by
December 31 of each year in order to avoid federal excise taxes. The Fund
intends to declare and pay sufficient dividends in December (or in January that
are treated by you as received in December) but does not guarantee and can give
no assurances that its distributions will be sufficient to eliminate all such
taxes.
Redemption of Fund Shares. Redemptions and exchanges of Fund shares are taxable
transactions for federal and state income tax purposes that cause you to
recognize a gain or loss. If you hold your shares as a capital asset, the gain
or loss that you realize will be capital gain or loss. Any loss incurred on the
redemption or exchange of shares held for six months or less will be treated as
a long-term capital loss to the extent of any long-term capital gains
distributed to you by the Fund on those shares.
All or a portion of any loss that you realize upon the redemption of your Fund
shares will be disallowed to the extent that you purchase other shares in the
Fund (through reinvestment of dividends or otherwise) within 30 days before or
after your share redemption. Any loss disallowed under these rules will be added
to your tax basis in the new shares you purchase.
Dividends-Received Deduction for Corporations. Dividends paid by the Fund will
generally qualify in part for the 70% dividends-received deduction for
corporations, but the portion of the dividends so qualifies depends on the
aggregate taxable qualifying dividend income received by such Fund from domestic
(U.S.) sources. The Fund will send to shareholders a statement each year
advising the amount designated by the Fund as eligible for such treatment. All
dividends (including the deducted portion) must be included in your alternative
minimum taxable income calculation.
Investment in Complex Securities. The Fund may invest in complex securities.
Such investments may be subject to numerous special and complicated tax rules.
These rules could affect whether gains and losses recognized by the Fund are
treated as ordinary income or capital gain and/or accelerate the recognition of
income to the Fund or defer the Fund's ability to recognize losses. In turn,
these rules may affect the amount, timing or character of the income distributed
to you by the Fund.
Performance Information
Total Return
Average annual total return quotations used in the Fund's advertising and
promotional materials are calculated according to the following formula:
P(1 + R)n = ERV
where P equals a hypothetical initial payment of $1,000; R equals average annual
total return; n equals the number of years; and ERV equals the ending redeemable
value at the end of the period of a hypothetical $1,000 payment made at the
beginning of the period.
Under the foregoing formula, the time periods used in advertising will be based
on rolling calendar quarters, updated to the last day of the most recent quarter
prior to submission of the advertising for publication. Average annual total
return, or "T" in the above formula, is computed by finding the average annual
compounded rates of return over the period that would equate the initial amount
invested to the ending redeemable value. Average annual total return assumes the
reinvestment of all dividends and distributions.
Cumulative Total Return
Cumulative total return represents the simple change in value of an investment
over a stated period and may be quoted as a percentage or as a dollar amount.
Total returns may be broken down into their components or income and capital
(including capital gains and changes in share price) in order to illustrate the
relationship between these factors and their contributions to total return.
Other Information
The Fund's performance data quoted in advertising and other promotional
materials represents past performance and is not intended to predict or indicate
future results. The return and principal value of an investment in a Fund will
fluctuate, and an investor's redemption proceeds may be more or less than the
original investment amount.
If permitted by applicable law, the Fund may be compared to data prepared by
Lipper Analytical Services, Inc., CDA Investment Technologies, Inc.,
Morningstar, Inc., the Donoghue Organization, Inc. or other independent services
which monitor the performance of investment companies, and may be quoted in
advertising in terms of its ranking in each applicable universe. In addition,
the Fund may use performance data reported in financial and industry
publications, including Barron's, Business Week, Forbes, Fortune, Investor's
Daily, IBC/Donoghue's Money Fund Report, Money Magazine, The Wall Street Journal
and USA Today.
In addition to the Index, the Fund may from time to time use the following
unmanaged indices for performance comparison purposes:
o S&P 500 - The S&P 500 is an index of 500 stocks designed to
mimic the overall equity market's industry weightings.
Most, but not all, large capitalization stocks are in the
index. There are also some small capitalization names in
the index. The list is maintained by Standard & Poor's
Corporation. It is market capitalization weighted. There
are always 500 issuers in the S&P 500. Changes are made by
Standard & Poor's as needed.
o Russell 2000 - The Russell 2000 is composed of the 2,000
smallest stocks in the Russell 3000, a market value weighted
index of the 3,000 largest U. S. publicly-traded companies.
o The Nasdaq Composite Index - The Nasdaq Composite Index is a
broad-based market capitalization-weighted index of all Nasdaq stocks.
Auditors
[_______________________] serves as the Fund's independent auditors, whose
services include examination of the Fund's financial statements and the
performance of other related audit and tax services.
Financial Statements
[To be provided by amendment]
<PAGE>
IGAM GROUP FUNDS
PART C
OTHER INFORMATION
Item 23. EXHIBITS
(a) (1) Registrant's Agreement and Declaration of Trust dated as of
July 15, 1999.
(2) Certificate of Trust dated July 15, 1999
(b) By-Laws of Registrant.*
(c) Instruments Defining the Rights of Holders.*
(d) Form of Investment Management Agreement between
Integrity Global Asset Management, Inc. and the
Registrant on behalf of The Internet Index Fund. *
(e) Form of Distribution Agreement between T.O. Richardson
Securities, Inc and the Registrant on behalf of The
Internet Index Fund. *
(f) Bonus, Profit Sharing, Pension or Other Similar Plans
Not Applicable.
(g) Form of Custodian Servicing Agreement between the
Registrant and Firstar Bank Milwaukee, N.A. on behalf
of The Internet Index Fund.
(h) Other Material Contracts.
(1) Form of Fund Accounting Servicing Agreement between Firstar
Mutual Fund Services, LLC and the Registrant on behalf of
The Internet Index Fund.
(2) Form of Fund Administration Servicing
Agreement between Firstar Mutual Fund
Services, LLC and the Registrant on behalf of
The Internet Index Fund
(3) Form of Transfer Agent Servicing Agreement between Firstar
Mutual Fund Services, LLC and the Registrant on behalf of
The Internet Index Fund.
(i) Opinion and Consent of Counsel.*
(j) Other Opinions and Consents.
Not Applicable
(k) Financial Statements Omitted from Item 22.
Not Applicable.
(l) Initial Capital Agreements
Not Applicable
(m) 12b-1 Plans*
(n) Financial Data Schedule.
Not Applicable
(o) Multiple Class Plans Under Rule 18f-3.
Not Applicable.
*To be filed by amendment.
Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL OF THE
REGISTRANT.
None.
Item 25 INDEMNIFICATION.
Under the terms of the Delaware Business Trust Act and the
Registrant's Agreement and Declaration of Trust and By-Laws, no officer or
trustee of the Fund shall have any liability to the Fund or its
shareholders for damages, except to the extent such limitation of
liability is precluded by Delaware law, the Agreement and Declaration of
Trust, or the By-Laws.
Subject to the standards and restrictions set forth in the
Fund's Agreement and Declaration of Trust, the Delaware Business Trust
Act, Section 3817, permits a business trust to indemnify any trustee,
beneficial owner, or other person from and against any claims and demands
whatsoever. Section 3803 protects a Trustee, when acting in such capacity,
from liability to any person other than the business trust or beneficial
owner for any act, omission, or obligation of the business trust or any
trustee thereof, except as otherwise provided in the Agreement and
Declaration of Trust.
The Agreement and Declaration of Trust provides that the
officers and Trustees shall not be liable for any act or omission of any
agent or employee of the Trust, any Investment advisor or Principal
underwriter of the Trust, or with respect to each Trustee or officer, the
act or omission of any other Trustee. Subject to the provisions of the
By-Laws, the Trust, out of the Trust Property, shall indemnify and hold
harmless each and every officer and Trustee from and against any and all
claims and demands whatsoever arising out of or related to such officer's
or Trustee's performance of his or her duties as an officer or Trustee of
the Trust. This limitation on liability applies to events occurring at the
time a Person serves as a Trustee or officer of the Trust whether or not
such Person is a Trustee or officer at the time of any proceeding in which
liability is asserted. Nothing herein contained shall indemnify, hold
harmless or protect any officer or Trustee from or against any liability
to the Trust or any Shareholder to which such Person would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Person's
office.
The By-Laws provide that in actions by others than the Trust,
the Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any proceeding (other than an action by
or in the right of the Trust) by reason of the fact that such person is or
was an agent of the Trust, against expenses, judgments, fines, settlements
and other amounts actually and reasonably incurred in connection with such
proceeding if such person acted in good faith and in a manner that such
person reasonably believed to be in the best interests of the Trust and in
the case of a criminal proceeding, had no reasonable cause to believe the
conduct of such person was unlawful. The termination of any proceeding by
judgment, order, settlement, conviction or plea of nolo contendere or its
equivalent shall not of itself create a presumption that the person did
not act in good faith or in a manner which the person reasonably believed
to be in the best interests of the Trust or that the person had reasonable
cause to believe that the person's conduct was unlawful. The By-laws
provide that in actions by the Trust, the Trust shall indemnify any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action by or in the right of the Trust to
procure a judgment in its favor by reason of the fact that the person is
or was an agent of the Trust, against expenses actually and reasonably
incurred by that person in connection with the defense or settlement of
that action if that person acted in good faith, in a manner that person
believed to be in the best interests of the Trust and with such care,
including reasonable inquiry, as an ordinarily prudent person in a like
position would use under similar circumstances.
Notwithstanding any provision to the contrary contained in the
By-laws, there shall be no right to indemnification for any liability
arising by reason of willful misfeasance, bad faith, gross negligence, or
the reckless disregard of the duties involved in the conduct of the
agent's office with the Trust.
No indemnification shall be made under the provisions of the By-laws:
(a) In respect of any claim, issue or matter as to which that person
shall have been adjudged to be liable in the performance of that
person's duty to the Trust, unless and only to the extent that the
court in which that action was brought shall determine upon
application that in view of all the circumstances of the case, that
person was not liable by reason of the disabling conduct set forth in
the preceding paragraph and is fairly and reasonably entitled to
indemnity for the expenses which the court shall determine; or
(b) In respect of any claim, issue, or matter as to which that person
shall have been adjudged to be liable on the basis that personal
benefit was improperly received by him, whether or not the benefit
resulted from an action taken in the person's official capacity; or
(c) Of amounts paid in settling or otherwise disposing of a
threatened or pending action, with or without court approval, or of
expenses incurred in defending a threatened or pending action which
is settled or otherwise disposed of without court approval, unless
the required approval set forth in Section 6 of this Article is
obtained.
To the extent that an agent of the Trust has been successful on
the merits in defense of any proceeding referred to in the above
paragraphs or in defense of any claim, issue or matter therein, before the
court or other body before whom the proceeding was brought, the agent
shall be indemnified against expenses actually and reasonably incurred by
the agent in connection therewith, provided that the Board of Trustees,
including a majority who are disinterested, non-party trustees, also
determines that based upon a review of the facts, the agent was not liable
by reason of the disabling conduct referred to above and as set forth in
the By-laws.
Except as provided in the above paragraph concerning a
successful defense, any indemnification under the provisions of the
By-laws shall be made by the Trust only if authorized in the specific case
on a determination that indemnification of the agent is proper in the
circumstances because the agent has met the applicable standard of conduct
set forth in the By-laws and is not prohibited from indemnification
because of the disabling conduct referred to above and as set forth in the
By-laws:
(a) A majority vote of a quorum consisting of trustees who are not
parties to the proceeding and are not "interested persons" of the
Trust (as defined in the 1940 Act); or
(b) A written opinion by an independent legal counsel.
To the fullest extent permitted by applicable law, the officers
and Trustees shall be entitled and have the authority to purchase with
Trust Property, insurance for liability and for all expenses reasonably
incurred or paid or expected to be paid by a Trustee or officer in
connection with any claim, action, suit or proceeding in which such Person
becomes involved by virtue of such Person's capacity or former capacity
with the Trust, whether or not the Trust would have the power to indemnify
such Person against such liability under the provisions of this Article.
Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR.
In addition to acting as the investment manager of the Trust,
Integrity Global Asset Management, Inc. provides brokerage services and
related investment advice to institutional and individual investors.
Item 27. PRINCIPAL UNDERWRITERS.
(a) T.O. Richardson Securities, Inc., the only principal underwriter
of the Registrant, acts as principal underwriter, depositor or
investment advisor for the following other investment companies:
Information to be provided
(b) Herewith is the information required by the following table with
respect to each director, officer or partner of the only underwriter
named in answer to Item 21 of Part B:
Name and Principal Position and Offices Position and Offices
Business Address with Underwriter with Registrant
(c) Not applicable.
Item 28. LOCATION OF ACCOUNTS AND RECORDS.
All records described in Section 31(a) of the Investment Company
Act of 1940, as amended, and the Rules [17 CFR 270.31a-1 to 31a-3]
promulgated thereunder, are maintained by the Registrant's Investment
Advisor, Integrity Global Asset Management, Inc., 133 Old Tower Hill Road,
Suite 1, Wakefield, RI 02879, except for those maintained by the
Registrant's custodian, Firstar Bank Milwaukee, N.A., 777 East Wisconsin
Avenue, Milwaukee, Wisconsin 53202 and the Registrant's Administrator,
Transfer, Redemption, Dividend Disbursing and Accounting Agent, Firstar
Mutual Fund Services, LLC, 615 East Michigan Street, Milwaukee, Wisconsin
53202.
Item 29. MANAGEMENT SERVICES.
All management services are covered in the management agreement
between the Registrant and Integrity Global Asset Management, Inc., as
discussed in Parts A and B.
Item 30. UNDERTAKINGS.
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Wakefield and State of Rhode Island on the 20th day of July, 1999.
IGAM GROUP FUNDS
(Registrant)
By: /s/ Eugene Y.W. Lee, Ph.D.
Eugene Y.W. Lee, Ph.D.
Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the date indicated.
Signature Title Date
/s/ Eugene Y.W. Lee, Ph.D. Vice President, July 20, 1999
Eugene Y.W. Lee, Ph.D. Treasurer
and Trustee
/s/ George Hadfield III President July 20, 1999
George Hadfield III and Trustee
/s/ Jong Ho Hwang Secretary July 20, 1999
Jong Ho Hwang and Trustee
<PAGE>
EXHIBIT INDEX
Ex. 99.23(a)(1) Agreement and Declaration of Trust
Ex. 99.23(a)(2) Certificate of Trust dated July 15, 1999
Ex. 99.23(g) Form of Custodian Agreement between
Registrant and Firstar Bank Milwaukee, N.A.
Ex 99.23(h)(1) Form of Fund Accounting Agreement between
Registrant and Firstar Mutual Fund Services,
LLC
Ex 99.23(h)(2) Form of Fund Administration Agreement between
Registrant and Firstar Mutual Fund Services,
LLC
Ex 99.23(h)(3) Form of Transfer Agent Agreement between
Registrant and Firstar Mutual Fund Services,
LLC
<PAGE>
AGREEMENT AND DECLARATION OF TRUST
of
IGAM GROUP FUNDS
a Delaware Business Trust
<PAGE>
TABLE OF CONTENTS Page
ARTICLE I. Name and Definitions..................................1
Section 1. Name..................................................1
Section 2. Registered Agent and Registered Office;
Principal Place of Business...........................2
(a) Registered Agent and Registered Office............2
(b) Principal Place of Business.......................2
Section 3. Definitions...........................................2
(a) "1940 Act"........................................2
(b) "Affiliate".......................................2
(c) "Board of Trustees"...............................2
(d) "By-Laws".........................................2
(e) "Certificate of Trust"............................2
(f) "Code"............................................3
(g) "Commission"......................................3
(h) "DBTA"............................................3
(i) "Declaration of Trust"............................3
(j) "General Liabilities".............................3
(k) "Interested Person"...............................3
(l) "Investment Adviser" or "Adviser".................3
(m) "National Financial Emergency"....................3
(n) "Person"..........................................3
(o) "Principal Underwriter"...........................3
(p) "Series"..........................................4
(q) "Shares"..........................................4
(r) "Shareholder".....................................4
(s) "Trust"...........................................4
(t) "Trust Property"..................................4
(u) "Trustee" or "Trustees"...........................4
ARTICLE II. Purpose of Trust......................................4
ARTICLE III. Shares................................................8
Section 1. Division of Beneficial Interest.......................8
Section 2. Ownership of Shares...................................10
Section 3. Investments in the Trust..............................10
Section 4. Status of Shares and Limitation of Personal
Liability.............................................10
Section 5. Power of Board of Trustees to Change
Provisions Relating to Shares.........................11
Section 6. Establishment and Designation of Series...............11
(a) Assets Held with Respect to a Particular Series..12
(b) Liabilities Held with Respect to a Particular
Series...........................................12
(c) Dividends, Distributions, Redemptions and
Repurchases......................................13
(d) Voting............................................14
(e) Equality..........................................14
(f) Fractions.........................................14
(g) Exchange Privilege................................14
(h) Combination of Series.............................14
(i) Elimination of Series.............................15
Section 7. Indemnification of Shareholders........................15
ARTICLE IV. The Board of Trustees..................................15
Section 1. Number, Election and Tenure............................15
Section 2. Effect of Death, Resignation, Removal,
etc. of a Trustee................................16
Section 3. Powers.................................................16
Section 4. Payment of Expenses by the Trust.......................18
Section 5. Payment of Expenses by Shareholders....................18
Section 6. Ownership of Trust Property............................19
Section 7. Service Contracts......................................19
ARTICLE V. Shareholders' Voting Powers and Meetings...............20
Section 1. Voting Powers..........................................20
Section 2. Meetings...............................................21
Section 3. Quorum and Required Vote...............................21
Section 4. Shareholder Action by Written Consent
without a Meeting......................................21
Section 5. Record Dates...........................................22
Section 6. Additional Provisions..................................23
ARTICLE VI. Net Asset Value, Distributions and Redemptions..........23
Section 1. Determination of Net Asset Value, Net
Income and Distributions...............................23
Section 2. Redemptions at the Option of a Shareholder.............23
Section 3. Redemptions at the Option of the Trust.................25
ARTICLE VII. Compensation and Limitation of Liability of
Officers and Trustees..................................25
Section 1. Compensation...........................................25
Section 2. Indemnification and Limitation of Liability............25
Section 3. Officers and Trustees' Good Faith Action,
Expert Advice, No Bond or Surety.......................26
Section 4. Insurance..............................................26
ARTICLE VIII. Miscellaneous.........................................27
Section 1. Liability of Third Persons Dealing with
Trustees..............................................27
Section 2. Dissolution of Trust or Series........................27
Section 3. Merger and Consolidation; Conversion..................27
(a) Merger and Consolidation..........................28
(b) Conversion........................................28
Section 4. Reorganization........................................28
Section 5. Amendments............................................29
Section 6. Filing of Copies, References, Headings................30
Section 7. Applicable Law........................................30
Section 8. Provisions in Conflict with Law or
Regulations...........................................30
Section 9. Business Trust Only...................................31
Section 10. Use of the Names "IGAM Group" and
"Integrity Global Asset Management"...................31
<PAGE>
AGREEMENT AND DECLARATION OF TRUST
OF
IGAM GROUP FUNDS
AGREEMENT AND DECLARATION OF TRUST made as of this 15th day of July, 1999,
by the Trustees hereunder, and by the holders of shares of beneficial interest
to be issued hereunder as hereinafter provided. This Declaration of Trust shall
be effective upon the filing of the Certificate of Trust in the office of the
Secretary of State of the State of Delaware.
W I T N E S S E T H:
WHEREAS this Trust has been formed to carry on the business
of an investment company; and
WHEREAS this Trust is authorized to issue its shares of beneficial
interest in separate Series, and to issue classes of Shares of any Series or
divide Shares of any Series into two or more classes, all in accordance with the
provisions hereinafter set forth; and
WHEREAS the Trustees have agreed to manage all property coming into their
hands as trustees of a Delaware business trust in accordance with the provisions
of the Delaware Business Trust Act (12 Del. C. ss.3801, et seq.), as from time
to time amended and including any successor statute of similar import (the
"DBTA"), and the provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the benefit of the holders from time to time
of shares of beneficial interest in this Trust and the Series created hereunder
as hereinafter set forth.
ARTICLE I.
Name and Definitions
Section 1. Name. This trust shall be known as "IGAM Group Funds" and the
Trustees shall conduct the business of the Trust under that name, or any other
name as they may from time to time determine.
Section 2. Registered Agent and Registered Office; Principal Place of
Business.
(a) Registered Agent and Registered Office. The name of the registered
agent of the Trust and the address of the registered office of the Trust
are as set forth on the Certificate of Trust.
(b) Principal Place of Business. The principal place of business of
the Trust is 133 Old Tower Hill Road, Suite 1, Wakefield, Rhode Island,
02879 or such other location within or outside of the State of Delaware as
the Board of Trustees may determine from time to time.
Section 3. Definitions. Whenever used herein, unless
otherwise required by the context or specifically provided:
(a) "1940 Act" shall mean the Investment Company Act of 1940 and the
rules and regulations thereunder, all as adopted or amended from time to
time;
(b) "Affiliate" shall have the meaning given to it in Section 2(a)(3)
of the 1940 Act when used with reference to a specified Person.
(c) "Board of Trustees" shall mean the governing body of the Trust,
which is comprised of the Trustees of the Trust;
(d) "By-Laws" shall mean the By-Laws of the Trust, as amended from
time to time in accordance with Article X of the By-Laws, and incorporated
herein by reference;
(e) "Certificate of Trust" shall mean the certificate of trust filed
with the Office of the Secretary of State of the State of Delaware as
required under the DBTA to form the Trust;
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended,
and the rules and regulations thereunder;
(g) "Commission" shall have the meaning given it in Section 2(a)(7) of
the 1940 Act;
(h) "DBTA" shall mean the Delaware Business Trust Act, (12 Del. C.
ss.3801, et seq.), as amended from time to time;
(i) "Declaration of Trust" shall mean this Agreement and Declaration
of Trust, as amended or restated from time to time;
(j) "General Liabilities" shall have the meaning given it in Article
III, Section 6(b) of this Declaration Trust;
(k) "Interested Person" shall have the meaning given it in Section
2(a)(19) of the 1940 Act;
(l) "Investment Adviser" or "Adviser" shall mean a party furnishing
services to the Trust pursuant to any contract described in Article IV,
Section 7(a) hereof;
(m) "National Financial Emergency" shall mean the whole or any part of
any period set forth in Section 22(e) of the 1940 Act. The Board of
Trustees may, in its discretion, declare that the suspension relating to a
national financial emergency shall terminate, as the case may be, on the
first business day on which the New York Stock Exchange shall have reopened
or the period specified in Section 22(e) of the 1940 Act shall have expired
(as to which, in the absence of an official ruling by the Commission, the
determination of the Board of Trustees shall be conclusive);
(n) "Person" shall include a natural person, partnership, limited
partnership, trust, estate, association, corporation, custodian, nominee or
any other individual or entity in its own or any representative capacity;
(o) "Principal Underwriter" shall have the meaning given to it in
Section 2(a)(29) of the 1940 Act;
(p) "Series" shall refer to each Series of Shares established and
designated under or in accordance with the provisions of Article III and
shall mean an entity such as that described in Section 18(f)(2) of the 1940
Act, and subject to Rule 18f-2 thereunder;
(q) "Shares" shall mean the outstanding shares of beneficial interest
into which the beneficial interest in the Trust shall be divided from time
to time, and shall include fractional and whole shares;
(r) "Shareholder" shall mean a record owner of Shares;
(s) "Trust" shall refer to the Delaware business trust established by
this Declaration of Trust, as amended from time to time;
(t) "Trust Property" shall mean any and all property, real or
personal, tangible or intangible, which is owned or held by or for the
account of the Trust or one or more of any Series, including, without
limitation, the rights referenced in Article VIII, Section 2 hereof;
(u) "Trustee" or "Trustees" shall refer to each signatory to this
Declaration of Trust as a trustee, so long as such signatory continues in
office in accordance with the terms hereof, and all other Persons who may,
from time to time, be duly elected or appointed, qualified and serving on
the Board of Trustees in accordance with the provisions hereof. Reference
herein to a Trustee or the Trustees shall refer to such Person or Persons
in their capacity as trustees hereunder.
ARTICLE II.
Purpose of Trust
The purpose of the Trust is to conduct, operate and carry on the business
of a registered management investment company registered under the 1940 Act
through one or more Series investing primarily in securities and, in addition to
any authority given by law, to exercise all of the powers and to do any and all
of the things as fully and to the same extent as any private corporation
organized for profit under the general corporation law of the State of Delaware,
now or hereafter in force, including, without limitation, the following powers:
(a) To invest and reinvest cash, to hold cash uninvested, and to
subscribe for, invest in, reinvest in, purchase or otherwise acquire, own, hold,
pledge, sell, assign, mortgage, transfer, exchange, distribute, write options
on, lend or otherwise deal in or dispose of contracts for the future acquisition
or delivery of fixed income or other securities, and securities or property of
every nature and kind, including, without limitation, all types of bonds,
debentures, stocks, preferred stocks, negotiable or non-negotiable instruments,
obligations, evidences of indebtedness, certificates of deposit or indebtedness,
commercial paper, repurchase agreements, bankers' acceptances, and other
securities of any kind, issued, created, guaranteed, or sponsored by any and all
Persons, including, without limitation, states, territories, and possessions of
the United States and the District of Columbia and any political subdivision,
agency, or instrumentality thereof, any foreign government or any political
subdivision of the U.S. Government or any foreign government, or any
international instrumentality, or by any bank or savings institution, or by any
corporation or organization organized under the laws of the United States or of
any state, territory, or possession thereof, or by any corporation or
organization organized under any foreign law, or in "when issued" contracts for
any such securities, to change the investments of the assets of the Trust;
(b) To exercise any and all rights, powers and privileges with reference
to or incident to ownership or interest, use and enjoyment of any of such
securities and other instruments or property of every kind and description,
including, but without limitation, the right, power and privilege to own, vote,
hold, purchase, sell, negotiate, assign, exchange, lend, transfer, mortgage,
hypothecate, lease, pledge or write options with respect to or otherwise deal
with, dispose of, use, exercise or enjoy any rights, title, interest, powers or
privileges under or with reference to any of such securities and other
instruments or property, the right to consent and otherwise act with respect
thereto, with power to designate one or more Persons, to exercise any of said
rights, powers, and privileges in respect of any of said instruments, and to do
any and all acts and things for the preservation, protection, improvement and
enhancement in value of any of such securities and other instruments or
property;
(c) To sell, exchange, lend, pledge, mortgage, hypothecate, lease or
write options with respect to or otherwise deal in any property rights relating
to any or all of the assets of the Trust or any Series, subject to any
requirements of the 1940 Act;
(d) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
proxies or powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion with
relation to securities or property as the Trustees shall deem proper;
(e) To exercise powers and right of subscription or otherwise which in any
manner arise out of ownership of securities;
(f) To hold any security or property in a form not indicating that it is
trust property, whether in bearer, unregistered or other negotiable form, or in
its own name or in the name of a custodian or subcustodian or a nominee or
nominees or otherwise or to authorize the custodian or a subcustodian or a
nominee or nominees to deposit the same in a securities depository, subject in
each case to proper safeguards according to the usual practice of investment
companies or any rules or regulations applicable thereto;
(g) To consent to, or participate in, any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security which is
held in the Trust; to consent to any contract, lease, mortgage, purchase or sale
of property by such corporation or issuer; and to pay calls or subscriptions
with respect to any security held in the Trust;
(h) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Trustees shall deem
proper;
(i) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not limited to
claims for taxes;
(j) To enter into joint ventures, general or limited partnerships
and any other combinations or associations;
(k) To endorse or guarantee the payment of any notes or other obligations
of any Person; to make contracts of guaranty or suretyship, or otherwise assume
liability for payment thereof;
(l) To purchase and pay for entirely out of Trust Property such insurance
as the Trustees may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the assets
of the Trust or payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, Investment Advisers, Principal Underwriters, or
independent contractors of the Trust, individually against all claims and
liabilities of every nature arising by reason of holding Shares, holding, being
or having held any such office or position, or by reason of any action alleged
to have been taken or omitted by any such Person as Trustee, officer, employee,
agent, Investment Adviser, Principal Underwriter, or independent contractor, to
the fullest extent permitted by this Declaration of Trust, the Bylaws and by
applicable law; and
(m) To adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing of life insurance
and annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Trustees, officers, employees and agents of the
Trust.
(n) To purchase or otherwise acquire, own, hold, sell, negotiate,
exchange, assign, transfer, mortgage, pledge or otherwise deal with, dispose of,
use, exercise or enjoy, property of all kinds.
(o) To buy, sell, mortgage, encumber, hold, own, exchange, rent or
otherwise acquire and dispose of, and to develop, improve, manage, subdivide,
and generally to deal and trade in real property, improved and unimproved, and
wheresoever situated; and to build, erect, construct, alter and maintain
buildings, structures, and other improvements on real property.
(p) To borrow or raise moneys for any of the purposes of the Trust, and
to mortgage or pledge the whole or any part of the property and franchises of
the Trust, real, personal, and mixed, tangible or intangible, and wheresoever
situated.
(q) To enter into, make and perform contracts and undertakings of every
kind for any lawful purpose, without limit as to amount.
(r) To issue, purchase, sell and transfer, reacquire, hold, trade and
deal in Shares, bonds, debentures and other securities, instruments or other
property of the Trust, from time to time, to such extent as the Board of
Trustees shall, consistent with the provisions of this Declaration of Trust,
determine; and to repurchase, re-acquire and redeem, from time to time, its
Shares or, if any, its bonds, debentures and other securities.
The Trust shall not be limited to investing in obligations maturing before
the possible dissolution of the Trust or one or more of its Series. The Trust
shall not in any way be bound or limited by any present or future law or custom
in regard to investment by fiduciaries. Neither the Trust nor the Trustees shall
be required to obtain any court order to deal with any assets of the Trust or
take any other action hereunder.
The foregoing clauses shall each be construed as purposes, objects and
powers, and it is hereby expressly provided that the foregoing enumeration of
specific purposes, objects and powers shall not be held to limit or restrict in
any manner the powers of the Trust, and that they are in furtherance of, and in
addition to, and not in limitation of, the general powers conferred upon the
Trust by the DBTA and the other laws of the State of Delaware or otherwise; nor
shall the enumeration of one thing be deemed to exclude another, although it be
of like nature, not expressed.
ARTICLE III.
Shares
Section 1. Division of Beneficial Interest.
The beneficial interest in the Trust shall at all times be divided into
Shares, all without par value. The number of Shares authorized hereunder is
unlimited. The Board of Trustees may authorize the division of Shares into
separate and distinct Series and the division of any Series into separate
classes of Shares. The different Series and classes shall be established and
designated, and the variations in the relative rights and preferences as between
the different Series and classes shall be fixed and determined by the Board of
Trustees without the requirement of Shareholder approval. If no separate Series
or classes shall be established, the Shares shall have the rights and
preferences provided for herein and in Article III, Section 6 hereof to the
extent relevant and not otherwise provided for herein, and all references to
Series and classes shall be construed (as the context may require) to refer to
the Trust. The fact that a Series shall have initially been established and
designated without any specific establishment or designation of classes (i.e.,
that all Shares of such Series are initially of a single class) shall not limit
the authority of the Board of Trustees to establish and designate separate
classes of said Series. The fact that a Series shall have more than one
established and designated class, shall not limit the authority of the Board of
Trustees to establish and designate additional classes of said Series, or to
establish and designate separate classes of the previously established and
designated classes.
The Board of Trustees shall have the power to issue Shares of the Trust,
or any Series or class thereof, from time to time for such consideration (but
not less than the net asset value thereof) and in such form as may be fixed from
time to time pursuant to the direction of the Board of Trustees.
The Board of Trustees may hold as treasury shares, reissue for such
consideration and on such terms as they may determine, or cancel, at their
discretion from time to time, any Shares of any Series reacquired by the Trust.
The Board of Trustees may classify or reclassify any unissued Shares or any
Shares previously issued and reacquired of any Series or class into one or more
Series or classes that may be established and designated from time to time.
Notwithstanding the foregoing, the Trust and any Series thereof may acquire,
hold, sell and otherwise deal in, for purposes of investment or otherwise, the
Shares of any other Series of the Trust or Shares of the Trust, and such Shares
shall not be deemed treasury shares or cancelled.
Subject to the provisions of Section 6 of this Article III, each Share
shall have voting rights as provided in Article V hereof, and the Shareholders
of any Series shall be entitled to receive dividends and distributions, when, if
and as declared with respect thereto in the manner provided in Article IV,
Section 3 hereof. No Share shall have any priority or preference over any other
Share of the same Series or class with respect to dividends or distributions
paid in the ordinary course of business or distributions upon dissolution of the
Trust or of such Series or class made pursuant to Article VIII, Section 2
hereof. All dividends and distributions shall be made ratably among all
Shareholders of a particular class of Series from the Trust Property held with
respect to such Series according to the number of Shares of such class of such
Series held of record by such Shareholders on the record date for any dividend
or distribution. Shareholders shall have no preemptive or other right to
subscribe to new or additional Shares or other securities issued by the Trust or
any Series. The Trustees may from time to time divide or combine the Shares of
any particular Series into a greater or lesser number of Shares of that Series.
Such division or combination may not materially change the proportionate
beneficial interests of the Shares of that Series in the Trust Property held
with respect to that Series or materially affect the rights of Shares of any
other Series.
Any Trustee, officer or other agent of the Trust, and any organization in
which any such Person is interested, may acquire, own, hold and dispose of
Shares of the Trust to the same extent as if such Person were not a Trustee,
officer or other agent of the Trust; and the Trust may issue and sell or cause
to be issued and sold and may purchase Shares from any such Person or any such
organization subject only to the general limitations, restrictions or other
provisions applicable to the sale or purchase of such Shares generally.
Section 2. Ownership of Shares.
The ownership of Shares shall be recorded on the books of the Trust kept by
the Trust or by a transfer or similar agent for the Trust, which books shall be
maintained separately for the Shares of each Series and class thereof that has
been established and designated. No certificates certifying the ownership of
Shares shall be issued except as the Board of Trustees may otherwise determine
from time to time. The Board of Trustees may make such rules not inconsistent
with the provisions of the 1940 Act as they consider appropriate for the
issuance of Share certificates, the transfer of Shares of each Series or class
and similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent, as the case may be, shall be conclusive as to who are
the Shareholders of each Series or class thereof and as to the number of Shares
of each Series or class thereof held from time to time by each such Shareholder.
Section 3. Investments in the Trust.
Investments may be accepted by the Trust from such Persons, at such times,
on such terms, and for such consideration as the Board of Trustees may, from
time to time, authorize. Each investment shall be credited to the individual
Shareholder's account in the form of full and fractional Shares of the Trust, in
such Series or class as the purchaser may select, at the net asset value per
Share next determined for such Series or class after receipt of the investment;
provided, however, that the Principal Underwriter may, in its sole discretion,
impose a sales charge upon investments in the Trust.
Section 4. Status of Shares and Limitation of Personal Liability.
Shares shall be deemed to be personal property giving to Shareholders only
the rights provided in this Declaration of Trust and under applicable law. Every
Shareholder by virtue of having become a Shareholder shall be held to have
expressly assented and agreed to the terms hereof and to have become a party
hereto. The death of a Shareholder during the existence of the Trust shall not
operate to dissolve the Trust or any Series, nor entitle the representative of
any deceased Shareholder to an accounting or to take any action in court or
elsewhere against the Trust or the Trustees or any Series, but entitles such
representative only to the rights of said deceased Shareholder under this
Declaration of Trust. Ownership of Shares shall not entitle the Shareholder to
any title in or to the whole or any part of the Trust Property or right to call
for a partition or division of the same or for an accounting, nor shall the
ownership of Shares constitute the Shareholders as partners. Neither the Trust
nor the Trustees, nor any officer, employee or agent of the Trust, shall have
any power to bind personally any Shareholder, nor, except as specifically
provided herein, to call upon any Shareholder for the payment of any sum of
money or assessment whatsoever other than such as the Shareholder may at any
time personally agree to pay. All Shares when issued on the terms determined by
the Board of Trustees, shall be fully paid and nonassessable. As provided in the
DBTA, Shareholders of the Trust shall be entitled to the same limitation of
personal liability extended to stockholders of a private corporation organized
for profit under the general corporation law of the State of Delaware.
Section 5. Power of Board of Trustees to Change Provisions Relating to
Shares.
Notwithstanding any other provisions of this Declaration of Trust and
without limiting the power of the Board of Trustees to amend this Declaration of
Trust or the Certificate of Trust as provided elsewhere herein, the Board of
Trustees shall have the power to amend this Declaration of Trust, or the
Certificate of Trust, at any time and from time to time, in such manner as the
Board of Trustees may determine in its sole discretion, without the need for
Shareholder action, so as to add to, delete, replace or otherwise modify any
provisions relating to the Shares contained in this Declaration of Trust,
provided that before adopting any such amendment without Shareholder approval,
the Board of Trustees shall determine that it is consistent with the fair and
equitable treatment of all Shareholders and that Shareholder approval is not
otherwise required by the 1940 Act or other applicable law. If Shares have been
issued, Shareholder approval shall be required to adopt any amendments to this
Declaration of Trust which would adversely affect to a material degree the
rights and preferences of the Shares of any Series or class already issued;
provided, however, that in the event that the Board of Trustees determines that
the Trust shall no longer be operated as an investment company in accordance
with the provisions of the 1940 Act, the Board of Trustees may adopt such
amendments to this Declaration of Trust to delete those terms the Board of
Trustees identifies as being required by the 1940 Act.
Subject to the foregoing Paragraph, the Board of Trustees may amend the
Declaration of Trust to amend any of the provisions set forth in paragraphs (a)
through (i) of Section 6 of this Article III.
The Board of Trustees shall have the power, in its discretion, to make
such elections as to the tax status of the Trust as may be permitted or required
under the Code as presently in effect or as amended, without the vote of any
Shareholder.
Section 6. Establishment and Designation of Series.
The establishment and designation of any Series or class of Shares shall be
effective upon the resolution by a majority of the then Board of Trustees,
adopting a resolution which sets forth such establishment and designation and
the relative rights and preferences of such Series or class. Each such
resolution shall be incorporated herein by reference upon adoption.
Each Series shall be separate and distinct from any other Series and shall
maintain separate and distinct records on the books of the Trust, and the assets
and liabilities belonging to any such Series shall be held and accounted for
separately from the assets and liabilities of the Trust or any other Series.
Shares of each Series or class established pursuant to this Section 6,
unless otherwise provided in the resolution establishing such Series, shall have
the following relative rights and preferences:
(a) Assets Held with Respect to a Particular Series. All consideration
received by the Trust for the issue or sale of Shares of a particular Series,
together with all assets in which such consideration is invested or reinvested,
all income, earnings, profits, and proceeds thereof from whatever source
derived, including, without limitation, any proceeds derived from the sale,
exchange or liquidation of such assets, and any funds or payments derived from
any reinvestment of such proceeds in whatever form the same may be, shall
irrevocably be held with respect to that Series for all purposes, subject only
to the rights of creditors with respect to that Series, and shall be so recorded
upon the books of account of the Trust. Such consideration, assets, income,
earnings, profits and proceeds thereof, from whatever source derived, including,
without limitation, any proceeds derived from the sale, exchange or liquidation
of such assets, and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, are herein referred to as "assets
held with respect to" that Series. In the event that there are any assets,
income, earnings, profits and proceeds thereof, funds or payments which are not
readily identifiable as assets held with respect to any particular Series
(collectively "General Assets"), the Board of Trustees shall allocate such
General Assets to, between or among any one or more of the Series in such manner
and on such basis as the Board of Trustees, in its sole discretion, deems fair
and equitable, and any General Asset so allocated to a particular Series shall
be held with respect to that Series. Each such allocation by the Board of
Trustees shall be conclusive and binding upon the Shareholders of all Series for
all purposes.
(b) Liabilities Held with Respect to a Particular Series. The assets of
the Trust held with respect to each particular Series shall be charged against
the liabilities of the Trust held with respect to that Series and all expenses,
costs, charges and reserves attributable to that Series, and any liabilities,
expenses, costs, charges and reserves of the Trust which are not readily
identifiable as being held with respect to any particular Series (collectively
"General Liabilities") shall be allocated and charged by the Board of Trustees
to and among any one or more of the Series in such manner and on such basis as
the Board of Trustees in its sole discretion deems fair and equitable. The
liabilities, expenses, costs, charges, and reserves so charged to a Series are
herein referred to as "liabilities held with respect to" that Series. Each
allocation of liabilities, expenses, costs, charges and reserves by the Board of
Trustees shall be conclusive and binding upon the Shareholders of all Series for
all purposes. All Persons who have extended credit which has been allocated to a
particular Series, or who have a claim or contract which has been allocated to
any particular Series, shall look, and shall be required by contract to look
exclusively, to the assets of that particular Series for payment of such credit,
claim, or contract. In the absence of an express contractual agreement so
limiting the claims of such creditors, claimants and contract providers, each
creditor, claimant and contract provider will be deemed nevertheless to have
impliedly agreed to such limitation unless an express provision to the contrary
has been incorporated in the written contract or other document establishing the
claimant relationship.
Subject to the right of the Board of Trustees in its discretion to
allocate General Liabilities as provided herein, the debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing with
respect to a particular Series, whether such Series is now authorized and
existing pursuant to this Declaration of Trust or is hereafter authorized and
existing pursuant to this Declaration of Trust, shall be enforceable against the
assets held with respect to that Series only, and not against the assets of any
other Series or the Trust generally and none of the debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing with
respect to the Trust generally or any other Series thereof shall be enforceable
against the assets held with respect to such Series. Notice of this limitation
on liabilities between and among Series shall be set forth in the Certificate of
Trust of the Trust (whether originally or by amendment) as filed or to be filed
in the Office of the Secretary of State of the State of Delaware pursuant to the
DBTA, and upon the giving of such notice in the Certificate of Trust, the
statutory provisions of Section 3804 of the DBTA relating to limitations on
liabilities between and among Series (and the statutory effect under Section
3804 of setting forth such notice in the Certificate of Trust) shall become
applicable to the Trust and each Series.
(c) Dividends, Distributions, Redemptions and Repurchases.
Notwithstanding any other provisions of this Declaration of Trust, including,
without limitation, Article VI, no dividend or distribution including, without
limitation, any distribution paid upon dissolution of the Trust or of any Series
with respect to, nor any redemption or repurchase of, the Shares of any Series
or class shall be effected by the Trust other than from the assets held with
respect to such Series, nor, except as specifically provided in Section 7 of
this Article III, shall any Shareholder of any particular Series otherwise have
any right or claim against the assets held with respect to any other Series or
the Trust generally except to the extent that such Shareholder has such a right
or claim hereunder as a Shareholder of such other Series. The Board of Trustees
shall have full discretion, to the extent not inconsistent with the 1940 Act, to
determine which items shall be treated as income and which items as capital; and
each such determination and allocation shall be conclusive and binding upon the
Shareholders.
(d) Voting. All Shares of the Trust entitled to vote on a matter shall
vote on the matter, separately by Series and, if applicable, by class, subject
to: (1) where the 1940 Act requires all Shares of the Trust to be voted in the
aggregate without differentiation between the separate Series or classes, then
all of the Trust's Shares shall vote in the aggregate; and (2) if any matter
affects only the interests of some but not all Series or classes, then only the
Shareholders of such affected Series or classes shall be entitled to vote on the
matter.
(e) Equality. All Shares of each particular Series shall represent an
equal proportionate undivided beneficial interest in the assets held with
respect to that Series (subject to the liabilities held with respect to that
Series and such rights and preferences as may have been established and
designated with respect to classes of Shares within such Series), and each Share
of any particular Series shall be equal to each other Share of that Series
(subject to the rights and preferences with respect to separate classes of such
Series).
(f) Fractions. Any fractional Share of a Series shall carry
proportionately all the rights and obligations of a whole Share of that Series,
including rights with respect to voting, receipt of dividends and distributions,
redemption of Shares and dissolution of the Trust or that Series.
(g) Exchange Privilege. The Board of Trustees shall have the authority to
provide that the holders of Shares of any Series shall have the right to
exchange said Shares for Shares of one or more other Series in accordance with
such requirements and procedures as may be established by the Board of Trustees,
and in accordance with the 1940 Act and the rules and regulations thereunder.
(h) Combination of Series. The Board of Trustees shall have the
authority, without the approval of the Shareholders of any Series unless
otherwise required by applicable law, to combine the assets and liabilities held
with respect to any two or more Series into assets and liabilities held with
respect to a single Series.
(i) Elimination of Series. At any time that there are no Shares
outstanding of any particular Series or class previously established and
designated, the Board of Trustees may by resolution of a majority of the then
Board of Trustees abolish that Series or class and rescind the establishment and
designation thereof.
Section 7. Indemnification of Shareholders.
If any Shareholder or former Shareholder shall be exposed to liability by
reason of a claim or demand relating solely to his or her being or having been a
Shareholder of the Trust (or by having been a Shareholder of a particular
Series), and not because of such Person's acts or omissions, the Shareholder or
former Shareholder (or, in the case of a natural person, his or her heirs,
executors, administrators, or other legal representatives or, in the case of a
corporation or other entity, its corporate or other general successor) shall be
entitled to be held harmless from and indemnified out of the assets of the Trust
or out of the assets of the applicable Series (as the case may be) against all
loss and expense arising from such claim or demand; provided, however, there
shall be no liability or obligation of the Trust (or any particular Series)
arising hereunder to reimburse any Shareholder for taxes paid by reason of such
Shareholder's ownership of any Shares.
ARTICLE IV.
The Board of Trustees
Section 1. Number, Election and Tenure.
The number of Trustees constituting the Board of Trustees may be fixed from
time to time by a written instrument signed, or by resolution approved at a duly
constituted meeting, by a majority of the Board of Trustees, provided, however,
that the number of Trustees shall in no event be less than one (1) nor more than
fifteen (15). The Board of Trustees, by action of a majority of the then
Trustees at a duly constituted meeting, may fill vacancies in the Board of
Trustees or remove any Trustee with or without cause. The Shareholders may elect
Trustees, including filling any vacancies in the Board of Trustees, at any
meeting of Shareholders called by the Board of Trustees for that purpose. A
meeting of Shareholders for the purpose of electing one or more Trustees may be
called by the Board of Trustees or, to the extent provided by the 1940 Act and
the rules and regulations thereunder, by the Shareholders. Shareholders shall
have the power to remove a Trustee only to the extent provided by the 1940 Act
and the rules and regulations thereunder.
Each Trustee shall serve during the continued lifetime of the Trust until
he or she dies, resigns, is declared bankrupt or incompetent by a court of
appropriate jurisdiction, or is removed, or, if sooner than any of such events,
until the next meeting of Shareholders called for the purpose of electing
Trustees and until the election and qualification of his or her successor. Any
Trustee may resign at any time by written instrument signed by him or her and
delivered to any officer of the Trust or to a meeting of the Board of Trustees.
Such resignation shall be effective upon receipt unless specified to be
effective at some later time. Except to the extent expressly provided in a
written agreement with the Trust, no Trustee resigning and no Trustee removed
shall have any right to any compensation for any period following any such event
or any right to damages on account of such events or any actions taken in
connection therewith following his or her resignation or removal.
Section 2. Effect of Death, Resignation, Removal, etc. of a Trustee.
The death, declination, resignation, retirement, removal, declaration as
bankrupt or incapacity of one or more Trustees, or of all of them, shall not
operate to dissolve the Trust or any Series or to revoke any existing agency
created pursuant to the terms of this Declaration of Trust. Whenever a vacancy
in the Board of Trustees shall occur, until such vacancy is filled as provided
in this Article IV, Section 1, the Trustee(s) in office, regardless of the
number, shall have all the powers granted to the Board of Trustees and shall
discharge all the duties imposed upon the Board of Trustees by this Declaration
of Trust. In the event of the death, declination, resignation, retirement,
removal, declaration as bankrupt or incapacity of all of the then Trustees, the
Trust's Investment Adviser(s) is (are) empowered to appoint new Trustees subject
to the provisions of Section 16(a) of the 1940 Act.
Section 3. Powers.
Subject to the provisions of this Declaration of Trust, the business of the
Trust shall be managed by the Board of Trustees, and such Board of Trustees
shall have all powers necessary or convenient to carry out that responsibility,
including, without limitation, the power to engage in securities or other
transactions of all kinds on behalf of the Trust. The Board of Trustees shall
have full power and authority to do any and all acts and to make and execute any
and all contracts and instruments that it may consider necessary or appropriate
in connection with the administration of the Trust. The Trustees shall not be
bound or limited by present or future laws or customs with regard to investment
by trustees or fiduciaries, but shall have full authority and absolute power and
control over the assets of the Trust and the business of the Trust to the same
extent as if the Trustees were the sole owners of the assets of the Trust and
the business in their own right, including such authority, power and control to
do all acts and things as they, in their sole discretion, shall deem proper to
accomplish the purposes of this Trust. Without limiting the foregoing, the
Trustees may: (1) adopt, amend and repeal By-Laws not inconsistent with this
Declaration of Trust providing for the regulation and management of the affairs
of the Trust; (2) fill vacancies in or remove from their number in accordance
with this Declaration of Trust or the By-Laws, and may elect and remove such
officers and appoint and terminate such agents as they consider appropriate; (3)
appoint from their own number and establish and terminate one or more committees
consisting of two or more Trustees which may exercise the powers and authority
of the Board of Trustees to the extent that the Board of Trustees determine; (4)
employ one or more custodians of the Trust Property and may authorize such
custodians to employ subcustodians and to deposit all or any part of such Trust
Property in a system or systems for the central handling of securities or with a
Federal Reserve Bank; (5) retain a transfer agent, dividend disbursing agent, a
shareholder servicing agent or administrative services agent, or all of them;
(6) provide for the issuance and distribution of Shares by the Trust directly or
through one or more Principal Underwriters or otherwise; (7) retain one or more
Investment Adviser(s); (8) redeem, repurchase and transfer Shares pursuant to
applicable law; (9) set record dates for the determination of Shareholders with
respect to various matters, in the manner provided in Article V, Section 5 of
this Declaration of Trust; (10) declare and pay dividends and distributions to
Shareholders from the Trust Property; (11) establish from time to time, in
accordance with the provisions of Article III, Section 6 hereof, any Series or
class of Shares, each such Series to operate as a separate and distinct
investment medium and with separately defined investment objectives and policies
and distinct investment purposes; and (12) in general delegate such authority as
they consider desirable to any officer of the Trust, to any committee of the
Board of Trustees and to any agent or employee of the Trust or to any such
custodian, transfer, dividend disbursing or shareholder servicing agent,
Principal Underwriter or Investment Adviser. Any determination as to what is in
the best interests of the Trust made by the Board of Trustees in good faith
shall be conclusive.
In construing the provisions of this Declaration of Trust, the presumption
shall be in favor of a grant of power to the Trustees. Unless otherwise
specified herein or required by law, any action by the Board of Trustees shall
be deemed effective if approved or taken by a majority of the Trustees then in
office.
Any action required or permitted to be taken by the Board of Trustees, or
a committee thereof, may be taken without a meeting if a majority of the members
of the Board of Trustees, or committee thereof, as the case may be, shall
individually or collectively consent in writing to that action. Such action by
written consent shall have the same force and effect as a majority vote of the
Board of Trustees, or committee thereof, as the case may be. Such written
consent or consents shall be filed with the minutes of the proceedings of the
Board of Trustees, or committee thereof, as the case may be.
The Trustees shall devote to the affairs of the Trust such time as may be
necessary for the proper performance of their duties hereunder, but neither the
Trustees nor the officers, directors, shareholders or partners of the Trustees,
shall be expected to devote their full time to the performance of such duties.
The Trustees, or any Affiliate shareholder, officer, director, partner or
employee thereof, or any Person owning a legal or beneficial interest therein,
may engage in or possess an interest in any other business or venture of any
nature and description, independently or with or for the account of others.
Section 4. Payment of Expenses by the Trust.
The Board of Trustees is authorized to pay or cause to be paid out of the
principal or income of the Trust or any particular Series or class, or partly
out of the principal and partly out of the income of the Trust or any particular
Series or class, and to charge or allocate the same to, between or among such
one or more of the Series or classes that may be established or designated
pursuant to Article III, Section 6, as it deems fair, all expenses, fees,
charges, taxes and liabilities incurred by or arising in connection with the
maintenance or operation of the Trust or a particular Series or class, or in
connection with the management thereof, including, but not limited to, the
Trustees' compensation and such expenses, fees, charges, taxes and liabilities
for the services of the Trust's officers, employees, Investment Adviser,
Principal Underwriter, auditors, counsel, custodian, sub-custodian (if any),
transfer agent, dividend disbursing agent, shareholder servicing agent, and such
other agents or independent contractors and such other expenses, fees, charges,
taxes and liabilities as the Board of Trustees may deem necessary or proper to
incur.
Section 5. Payment of Expenses by Shareholders.
The Board of Trustees shall have the power, as frequently as it may
determine, to cause each Shareholder of the Trust, or each Shareholder of any
particular Series, to pay directly, in advance or arrears, for charges of the
Trust's custodian or transfer, dividend disbursing, shareholder servicing or
similar agent, an amount fixed from time to time by the Board of Trustees, by
setting off such charges due from such Shareholder from declared but unpaid
dividends or distributions owed such Shareholder and/or by reducing the number
of Shares in the account of such Shareholder by that number of full and/or
fractional Shares which represents the outstanding amount of such charges due
from such Shareholder.
Section 6. Ownership of Trust Property.
Legal title to all of the Trust Property shall at all times be considered
to be vested in the Trust, except that the Board of Trustees shall have the
power to cause legal title to any Trust Property to be held by or in the name of
any Person as nominee, on such terms as the Board of Trustees may determine, in
accordance with applicable law.
Section 7. Service Contracts.
(a) Subject to such requirements and restrictions as may be set forth
in the By-Laws and/or the 1940 Act, the Board of Trustees may, at any time
and from time to time, contract for exclusive or nonexclusive advisory,
management and/or administrative services for the Trust or for any Series
with any corporation, trust, association or other organization, including
any Affiliate; and any such contract may contain such other terms as the
Board of Trustees may determine, including without limitation, authority
for the Investment Adviser or administrator to determine from time to time
without prior consultation with the Board of Trustees what securities and
other instruments or property shall be purchased or otherwise acquired,
owned, held, invested or reinvested in, sold, exchanged, transferred,
mortgaged, pledged, assigned, negotiated, or otherwise dealt with or
disposed of, and what portion, if any, of the Trust Property shall be held
uninvested and to make changes in the Trust's or a particular Series'
investments, or such other activities as may specifically be delegated to
such party.
(b) The Board of Trustees may also, at any time and from time to time,
contract with any corporation, trust, association or other organization,
including any Affiliate, appointing it or them as the exclusive or
nonexclusive distributor or Principal Underwriter for the Shares of the
Trust or one or more of the Series or classes thereof or for other
securities to be issued by the Trust, or appointing it or them to act as
the custodian, transfer agent, dividend disbursing agent and/or shareholder
servicing agent for the Trust or one or more of the Series or classes
thereof.
(c) The Board of Trustees is further empowered, at any time and from
time to time, to contract with any Persons to provide such other services
to the Trust or one or more of its Series, as the Board of Trustees
determines to be in the best interests of the Trust or one or more of its
Series.
(d) The fact that:
(i) any of the Shareholders, Trustees, employees or officers of
the Trust is a shareholder, director, officer, partner, trustee,
employee, manager, Adviser, Principal Underwriter, distributor, or
Affiliate or agent of or for any corporation, trust, association, or
other organization, or for any parent or Affiliate of any organization
with which an Adviser's, management or administration contract, or
Principal Underwriter's or distributor's contract, or custodian,
transfer, dividend disbursing, shareholder servicing or other type of
service contract may have been or may hereafter be made, or that any
such organization, or any parent or Affiliate thereof, is a
Shareholder or has an interest in the Trust, or that
(ii) any corporation, trust, association or other organization
with which an Adviser's, management or administration contract or
Principal Underwriter's or distributor's contract, or custodian,
transfer, dividend disbursing, shareholder servicing or other type of
service contract may have been or may hereafter be made also has an
Adviser's, management or administration contract, or Principal
Underwriter's or distributor's contract, or custodian, transfer,
dividend disbursing, shareholder servicing or other service contract
with one or more other corporations, trusts, associations, or other
organizations, or has other business or interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee, employee or officer of the Trust from voting upon or
executing the same, or create any liability or accountability to the Trust
or its Shareholders, provided that the establishment of and performance
under each such contract is permissible under the provisions of the 1940
Act.
(e) Every contract referred to in this Section 7 shall comply with
such requirements and restrictions as may be set forth in the By-Laws, the
1940 Act or stipulated by resolution of the Board of Trustees; and any such
contract may contain such other terms as the Board of Trustees may
determine.
ARTICLE V.
Shareholders' Voting Powers and Meetings
Section 1. Voting Powers.
Subject to the provisions of Article III, Section 6(d), the Shareholders
shall have power to vote only (i) for the election of Trustees, including the
filling of any vacancies in the Board of Trustees, as provided in Article IV,
Section 1; (ii) with respect to such additional matters relating to the Trust as
may be required by this Declaration of Trust, the By-Laws, the 1940 Act or any
registration statement of the Trust filed with the Commission; and (iii) on such
other matters as the Board of Trustees may consider necessary or desirable. The
Shareholder of record (as of the record date established pursuant to Section 5
of this Article V) of each Share shall be entitled to one vote for each full
Share, and a fractional vote for each fractional Share. Shareholders shall not
be entitled to cumulative voting in the election of Trustees or on any other
matter. Shares may be voted in person or by proxy.
Section 2. Meetings.
Meetings of the Shareholders may be called by the Board of Trustees for the
purpose of electing Trustees as provided in Article IV, Section 1 and for such
other purposes as may be prescribed by law, by this Declaration of Trust or by
the By-Laws. Meetings of the Shareholders may also be called by the Board of
Trustees from time to time for the purpose of taking action upon any other
matter deemed by the Board of Trustees to be necessary or desirable.
Section 3. Quorum and Required Vote.
Except when a larger quorum is required by applicable law, by the By-Laws
or by this Declaration of Trust, thirty-three and one-third percent (33-1/3%) of
the Shares present in person or represented by proxy and entitled to vote at a
Shareholders' meeting shall constitute a quorum at such meeting. When a separate
vote by one or more Series or classes is required, thirty-three and one-third
percent (33-1/3%) of the Shares of each such Series or class present in person
or represented by proxy and entitled to vote shall constitute a quorum at a
Shareholders' meeting of such Series or class. Subject to the provisions of
Article III, Section 6(d), Article VIII, Section 4 and any other provision of
this Declaration of Trust, the By-Laws or applicable law which requires a
different vote: (1) in all matters other than the election of Trustees, the
affirmative vote of the majority of votes cast at a Shareholders' meeting at
which a quorum is present shall be the act of the Shareholders; (2) Trustees
shall be elected by a plurality of the votes cast at a Shareholders' meeting at
which a quorum is present.
Section 4. Shareholder Action by Written Consent without a Meeting.
Any action which may be taken at any meeting of Shareholders may be taken
without a meeting and without prior notice if a consent in writing setting forth
the action so taken is signed by the holders of Shares having not less than the
minimum number of votes that would be necessary to authorize or take that action
at a meeting at which all Shares entitled to vote on that action were present
and voted. All such consents shall be filed with the secretary of the Trust and
shall be maintained in the Trust's records. Any Shareholder giving a written
consent or the Shareholder's proxy holders or a transferee of the Shares or a
personal representative of the Shareholder or its respective proxy-holder may
revoke the consent by a writing received by the secretary of the Trust before
written consents of the number of Shares required to authorize the proposed
action have been filed with the secretary.
If the consents of all Shareholders entitled to vote have not been
solicited in writing and if the unanimous written consent of all such
Shareholders shall not have been received, the secretary shall give prompt
notice of the action taken without a meeting to such Shareholders. This notice
shall be given in the manner specified in the By-Laws.
Section 5. Record Dates.
For purposes of determining the Shareholders entitled to notice of any
meeting or to vote or entitled to give consent to action without a meeting, the
Board of Trustees may fix in advance a record date which shall not be more than
one hundred eighty (180) days nor less than seven (7) days before the date of
any such meeting.
If the Board of Trustees does not so fix a record date:
(a) The record date for determining Shareholders entitled to notice of or
to vote at a meeting of Shareholders shall be at the close of business on the
business day next preceding the day on which notice is given or, if notice is
waived, at the close of business on the business day which is five (5) business
days next preceding to the day on which the meeting is held.
(b) The record date for determining Shareholders entitled to give consent
to action in writing without a meeting, (i) when no prior action by the Board of
Trustees has been taken, shall be the day on which the first written consent is
given, or (ii) when prior action of the Board of Trustees has been taken, shall
be at the close of business on the day on which the Board of Trustees adopts the
resolution taking such prior action or the seventy-fifth (75th) day before the
date of such other action, whichever is later.
For the purpose of determining the Shareholders of any Series or class who
are entitled to receive payment of any dividend or of any other distribution,
the Board of Trustees may from time to time fix a date, which shall be before
the date for the payment of such dividend or such other distribution, as the
record date for determining the Shareholders of such Series or class having the
right to receive such dividend or distribution. Nothing in this Section shall be
construed as precluding the Board of Trustees from setting different record
dates for different Series or classes.
Section 6. Additional Provisions.
The By-Laws may include further provisions for Shareholders' votes,
meetings and related matters.
ARTICLE VI.
Net Asset Value, Distributions and Redemptions
Section 1. Determination of Net Asset Value, Net Income and Distributions.
Subject to Article III, Section 6 hereof, the Board of Trustees shall have
the power to fix an initial offering price for the Shares of any Series or class
thereof which shall yield to such Series or class not less than the net asset
value thereof, at which price the Shares of such Series or class shall be
offered initially for sale, and to determine from time to time thereafter the
offering price which shall yield to such Series or class not less than the net
asset value thereof from sales of the Shares of such Series or class; provided,
however, that no Shares of a Series or class thereof shall be issued or sold for
consideration which shall yield to such Series or class less than the net asset
value of the Shares of such Series or class next determined after the receipt of
the order (or at such other times set by the Board of Trustees), except in the
case of Shares of such Series or class issued in payment of a dividend properly
declared and payable.
Subject to Article III, Section 6 hereof, the Board of Trustees, in their
absolute discretion, may prescribe and shall set forth in the By-laws or in a
duly adopted vote of the Board of Trustees such bases and time for determining
the per Share or net asset value of the Shares of any Series or net income
attributable to the Shares of any Series, or the declaration and payment of
dividends and distributions on the Shares of any Series, as they may deem
necessary or desirable.
Section 2. Redemptions at the Option of a Shareholder.
Unless otherwise provided in the prospectus of the Trust relating to the
Shares, as such prospectus may be amended from time to time ("Prospectus"):
(a) The Trust shall purchase such Shares as are offered by any
Shareholder for redemption, upon the presentation of a proper instrument of
transfer together with a request directed to the Trust or a Person
designated by the Trust that the Trust purchase such Shares or in
accordance with such other procedures for redemption as the Board of
Trustees may from time to time authorize; and the Trust will pay therefor
the net asset value thereof, in accordance with the By-Laws and applicable
law. Payment for said Shares shall be made by the Trust to the Shareholder
within seven days after the date on which the request is received in proper
form. The obligation set forth in this Section 2 is subject to the
provision that in the event that any time the New York Stock Exchange (the
"Exchange") is closed for other than weekends or holidays, or if permitted
by the Rules of the Commission during periods when trading on the Exchange
is restricted or during any National Financial Emergency which makes it
impracticable for the Trust to dispose of the investments of the applicable
Series or to determine fairly the value of the net assets held with respect
to such Series or during any other period permitted by order of the
Commission for the protection of investors, such obligations may be
suspended or postponed by the Board of Trustees. If certificates have been
issued to a Shareholder, any such request by such Shareholder must be
accompanied by surrender of any outstanding certificate or certificates for
such Shares in form for transfer, together with such proof of the
authenticity of signatures as may reasonably be required on such Shares and
accompanied by proper stock transfer stamps, if applicable.
(b) Payments for Shares so redeemed by the Trust shall be made in
cash, except payment for such Shares may, at the option of the Board of
Trustees, or such officer or officers as it may duly authorize in its
complete discretion, be made in kind or partially in cash and partially in
kind. In case of any payment in kind, the Board of Trustees, or its
delegate, shall have absolute discretion as to what security or securities
of the Trust shall be distributed in kind and the amount of the same; and
the securities shall be valued for purposes of distribution at the value at
which they were appraised in computing the then current net asset value of
the Shares, provided that any Shareholder who cannot legally acquire
securities so distributed in kind by reason of the prohibitions of the 1940
Act or the provisions of the Employee Retirement Income Security Act
("ERISA") shall receive cash. Shareholders shall bear the expenses of
in-kind transactions, including, but not limited to, transfer agency fees,
custodian fees and costs of disposition of such securities.
(c) Payment for Shares so redeemed by the Trust shall be made by the
Trust as provided above within seven days after the date on which the
redemption request is received in good order; provided, however, that if
payment shall be made other than exclusively in cash, any securities to be
delivered as part of such payment shall be delivered as promptly as any
necessary transfers of such securities on the books of the several
corporations whose securities are to be delivered practicably can be made,
which may not necessarily occur within such seven day period. Moreover,
redemptions may be suspended in the event of a National Financial
Emergency. In no case shall the Trust be liable for any delay of any
corporation or other Person in transferring securities selected for
delivery as all or part of any payment in kind.
(d) The right of Shareholders to receive dividends or other
distributions on Shares may be set forth in a Plan adopted by the Board of
Trustees and amended from time to time pursuant to Rule 18f-3 of the 1940
Act. The right of any Shareholder of the Trust to receive dividends or
other distributions on Shares redeemed and all other rights of such
Shareholder with respect to the Shares so redeemed by the Trust, except the
right of such Shareholder to receive payment for such Shares, shall cease
at the time as of which the purchase price of such Shares shall have been
fixed, as provided above.
Section 3. Redemptions at the Option of the Trust.
The Board of Trustees may, from time to time, without the vote or consent
of the Shareholders, and subject to the 1940 Act, redeem Shares or authorize the
closing of any Shareholder account, subject to such conditions as may be
established by the Board of Trustees.
ARTICLE VII.
Compensation and Limitation of Liability of
Officers and Trustees
Section 1. Compensation.
Except as set forth in the last sentence of this Section 1, the Board of
Trustees may, from time to time, fix a reasonable amount of compensation to be
paid by the Trust to the Trustees and officers of the Trust. Nothing herein
shall in any way prevent the employment of any Trustee for advisory, management,
legal, accounting, investment banking or other services and payment for the same
by the Trust.
Section 2. Indemnification and Limitation of Liability.
(a) To the fullest extent that limitations on the liability of
Trustees and officers are permitted by the DBTA, the officers and Trustees
shall not be responsible or liable in any event for any act or omission of:
any agent or employee of the Trust; any Investment Adviser or Principal
Underwriter of the Trust; or with respect to each Trustee and officer, the
act or omission of any other Trustee or officer, respectively. The Trust,
out of the Trust Property, shall indemnify and hold harmless each and every
officer and Trustee from and against any and all claims and demands
whatsoever arising out of or related to such officer's or Trustee's
performance of his or her duties as an officer or Trustee of the Trust.
This limitation on liability applies to events occurring at the time a
Person serves as a Trustee or officer of the Trust whether or not such
Person is a Trustee or officer at the time of any proceeding in which
liability is asserted. Nothing herein contained shall indemnify, hold
harmless or protect any officer or Trustee from or against any liability to
the Trust or any Shareholder to which such Person would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Person's
office.
(b) Every note, bond, contract, instrument, certificate or undertaking
and every other act or document whatsoever issued, executed or done by or
on behalf of the Trust, the officers or the Trustees or any of them in
connection with the Trust shall be conclusively deemed to have been issued,
executed or done only in such Person's capacity as Trustee and/or as
officer, and such Trustee or officer, as applicable, shall not be
personally liable therefore, except as described in the last sentence of
the first paragraph of this Section 2 of this Article VII.
Section 3. Officers and Trustees' Good Faith Action, Expert Advice, No
Bond or Surety.
The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. An officer or Trustee shall be liable
to the Trust and to any Shareholder solely for such officer's or Trustee's own
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of such officer or Trustee, and for
nothing else, and shall not be liable for errors of judgment or mistakes of fact
or law. The officers and Trustees may obtain the advice of counsel or other
experts with respect to the meaning and operation of this Declaration of Trust
and their duties as officers or Trustees. No such officer or Trustee shall be
liable for any act or omission in accordance with such advice and no inference
concerning liability shall arise from a failure to follow such advice. The
officers and Trustees shall not be required to give any bond as such, nor any
surety if a bond is required.
Section 4. Insurance.
To the fullest extent permitted by applicable law, the officers and
Trustees shall be entitled and have the authority to purchase with Trust
Property, insurance for liability and for all expenses reasonably incurred or
paid or expected to be paid by a Trustee or officer in connection with any
claim, action, suit or proceeding in which such Person becomes involved by
virtue of such Person's capacity or former capacity with the Trust, whether or
not the Trust would have the power to indemnify such Person against such
liability under the provisions of this Article.
ARTICLE VIII.
Miscellaneous
Section 1. Liability of Third Persons Dealing with Trustees.
No person dealing with the Trustees shall be bound to make any inquiry
concerning the validity of any actions made or to be made by the Trustees.
Section 2. Dissolution of Trust or Series.
Unless dissolved as provided herein, the Trust shall have perpetual
existence. The Trust may be dissolved at any time by vote of a majority of the
Shares of the Trust entitled to vote or by the Board of Trustees by written
notice to the Shareholders. Any Series may be dissolved at any time by vote of a
majority of the Shares of that Series or by the Board of Trustees by written
notice to the Shareholders of that Series.
Upon dissolution of the Trust (or a particular Series, as the case may
be), the Trustees shall (in accordance with ss. 3808 of the DBTA) pay or make
reasonable provision to pay all claims and obligations of each Series (or the
particular Series, as the case may be), including all contingent, conditional or
unmatured claims and obligations known to the Trust, and all claims and
obligations which are known to the Trust but for which the identity of the
claimant is unknown. If there are sufficient assets held with respect to each
Series of the Trust (or the particular Series, as the case may be), such claims
and obligations shall be paid in full and any such provisions for payment shall
be made in full. If there are insufficient assets held with respect to each
Series of the Trust (or the particular Series, as the case may be), such claims
and obligations shall be paid or provided for according to their priority and,
among claims and obligations of equal priority, ratably to the extent of assets
available therefor. Any remaining assets (including without limitation, cash,
securities or any combination thereof) held with respect to each Series of the
Trust (or the particular Series, as the case may be) shall be distributed to the
Shareholders of such Series, ratably according to the number of Shares of such
Series held by the several Shareholders on the record date for such dissolution
distribution.
Section 3. Merger and Consolidation; Conversion.
(a) Merger and Consolidation. Pursuant to an agreement of merger or
consolidation, the Trust, or any one or more Series, may, by act of a
majority of the Board of Trustees, merge or consolidate with or into one or
more business trusts or other business entities formed or organized or
existing under the laws of the State of Delaware or any other state or the
United States or any foreign country or other foreign jurisdiction. Any
such merger or consolidation shall not require the vote of the Shareholders
affected thereby, unless such vote is required by the 1940 Act, or unless
such merger or consolidation would result in an amendment of this
Declaration of Trust which would otherwise require the approval of such
Shareholders. In accordance with Section 3815(f) of the DBTA, an agreement
of merger or consolidation may effect any amendment to this Declaration of
Trust or the By-Laws or effect the adoption of a new declaration of trust
or by-laws of the Trust if the Trust is the surviving or resulting business
trust. Upon completion of the merger or consolidation, the Trustees shall
file a certificate of merger or consolidation in accordance with Section
3810 of the DBTA.
(b) Conversion. A majority of the Board of Trustees may, without the
vote or consent of the Shareholders, cause (i) the Trust to convert to a
common-law trust, a general partnership, limited partnership or a limited
liability company organized, formed or created under the laws of the State
of Delaware as permitted pursuant to Section 3821 of the DBTA; (ii) the
Shares of the Trust or any Series to be converted into beneficial interests
in another business trust (or series thereof) created pursuant to this
Section 3 of this Article VIII, or (iii) the Shares to be exchanged under
or pursuant to any state or federal statute to the extent permitted by law;
provided, however, that if required by the 1940 Act, no such statutory
conversion, Share conversion or Share exchange shall be effective unless
the terms of such transaction shall first have been approved at a meeting
called for that purpose by the "vote of a majority of the outstanding
voting securities," as such phrase is defined in the 1940 Act, of the Trust
or Series, as applicable; provided, further, that in all respects not
governed by statute or applicable law, the Board of Trustees shall have the
power to prescribe the procedure necessary or appropriate to accomplish a
sale of assets, merger or consolidation including the power to create one
or more separate business trusts to which all or any part of the assets,
liabilities, profits or losses of the Trust may be transferred and to
provide for the conversion of Shares of the Trust or any Series into
beneficial interests in such separate business trust or trusts (or series
thereof).
Section 4. Reorganization.
A majority of the Board of Trustees may cause the Trust to sell, convey and
transfer all or substantially all of the assets of the Trust, or all or
substantially all of the assets associated with any one or more Series, to
another trust, business trust, partnership, limited partnership, limited
liability company, association or corporation organized under the laws of any
state, or to one or more separate series thereof, or to the Trust to be held as
assets associated with one or more other Series of the Trust, in exchange for
cash, shares or other securities (including, without limitation, in the case of
a transfer to another Series of the Trust, Shares of such other Series) with
such transfer either (a) being made subject to, or with the assumption by the
transferee of, the liabilities associated with each Series the assets of which
are so transferred, or (b) not being made subject to, or not with the assumption
of, such liabilities; provided, however, that, if required by the 1940 Act, no
assets associated with any particular Series shall be so sold, conveyed or
transferred unless the terms of such transaction shall first have been approved
at a meeting called for that purpose by the "vote of a majority of the
outstanding voting securities," as such phrase is defined in the 1940 Act, of
that Series. Following such sale, conveyance and transfer, the Board of Trustees
shall distribute such cash, shares or other securities (giving due effect to the
assets and liabilities associated with and any other differences among the
various Series the assets associated with which have so been sold, conveyed and
transferred) ratably among the Shareholders of the Series the assets associated
with which have been so sold, conveyed and transferred (giving due effect to the
differences among the various classes within each such Series); and if all of
the assets of the Trust have been so sold, conveyed and transferred, the Trust
shall be dissolved.
Section 5. Amendments.
Subject to the provisions of the second paragraph of this Section 5 of this
Article VIII, this Declaration of Trust may be restated and/or amended at any
time by an instrument in writing signed by a majority of the then Board of
Trustees and, if required, by approval of such amendment by Shareholders in
accordance with Article V, Section 3 hereof. Any such restatement and/or
amendment hereto shall be effective immediately upon execution and approval or
upon such future date and time as may be stated therein. The Certificate of
Trust of the Trust may be restated and/or amended by a similar procedure, and
any such restatement and/or amendment shall be effective immediately upon filing
with the Office of the Secretary of State of the State of Delaware or upon such
future date as may be stated therein.
Notwithstanding the above, the Board of Trustees expressly reserves the
right to amend or repeal any provisions contained in this Declaration of Trust
or the Certificate of Trust, in accordance with the provisions of Section 5 of
Article III hereof, and all rights, contractual and otherwise, conferred upon
Shareholders are granted subject to such reservation. The Board of Trustees
further expressly reserves the right to amend or repeal any provision of the
By-Laws pursuant to Article X of the By-Laws.
Section 6. Filing of Copies, References, Headings.
The original or a copy of this Declaration of Trust and of each restatement
and/or amendment hereto shall be kept at the principal executive office of the
Trust where it may be inspected by any Shareholder. Anyone dealing with the
Trust may rely on a certificate by an officer of the Trust as to whether or not
any such restatements and/or amendments have been made and as to any matters in
connection with the Trust hereunder; and, with the same effect as if it were the
original, may rely on a copy certified by an officer of the Trust to be a copy
of this instrument or of any such restatements and/or amendments. In this
Declaration of Trust and in any such restatements and/or amendments, references
to this instrument, and all expressions of similar effect to "herein," "hereof"
and "hereunder," shall be deemed to refer to this instrument as amended or
affected by any such restatements and/or amendments. Headings are placed herein
for convenience of reference only and shall not be taken as a part hereof or
control or affect the meaning, construction or effect of this instrument.
Whenever the singular number is used herein, the same shall include the plural;
and the neuter, masculine and feminine genders shall include each other, as
applicable. This instrument may be executed in any number of counterparts, each
of which shall be deemed an original.
Section 7. Applicable Law.
This Declaration of Trust is created under and is to be governed by and
construed and administered according to the laws of the State of Delaware and
the applicable provisions of the 1940 Act and the Code. The Trust shall be a
Delaware business trust pursuant to the DBTA, and without limiting the
provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a business trust.
Section 8. Provisions in Conflict with Law or Regulations.
(a) The provisions of this Declaration of Trust are severable, and if the
Board of Trustees shall determine, with the advice of counsel, that any of such
provisions is in conflict with the 1940 Act, the Code, the DBTA, or with other
applicable laws and regulations, the conflicting provision shall be deemed not
to have constituted a part of this Declaration of Trust from the time when such
provisions became inconsistent with such laws or regulations; provided, however,
that such determination shall not affect any of the remaining provisions of this
Declaration of Trust or render invalid or improper any action taken or omitted
prior to such determination.
(b) If any provision of this Declaration of Trust shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration of Trust in any jurisdiction.
Section 9. Business Trust Only.
It is the intention of the Trustees to create a business trust pursuant to
the DBTA, and thereby to create the relationship of trustee and beneficial
owners within the meaning of the DBTA between the Trustees and each Shareholder.
It is not the intention of the Trustees to create a general or limited
partnership, limited liability company, joint stock association, corporation,
bailment, or any form of legal relationship other than a business trust pursuant
to the DBTA. Nothing in this Declaration of Trust shall be construed to make the
Shareholders, either by themselves or with the Trustees, partners or members of
a joint stock association.
Section 10. Use of the Names "IGAM Group" and "Integrity Global Asset
Management".
The Trust expressly agrees and acknowledges that the names "IGAM," "IGAM
Group" and "Integrity Global Asset Management" are the sole property of
Integrity Global Asset Management, Inc. ("IGAM"). IGAM has consented to the use
by the Trust of the identifying words "IGAM," "IGAM Group" and "Integrity Global
Asset Management" and has granted to the Trust a non-exclusive license to use
such names as part of the name of the Trust and the name of any Series of its
Shares. The Trust further expressly agrees and acknowledges that the
non-exclusive license granted herein may be terminated by IGAM if the Trust
ceases to use IGAM or one of its Affiliates as Investment Adviser or to use
other Affiliates or successors of IGAM for such purposes. In such event, the
non-exclusive license granted herein may be revoked by IGAM and the Trust shall
cease using the names "IGAM," "IGAM Group" and "Integrity Global Asset
Management" as part of its name or the name of any Series of Shares, unless
otherwise consented to by IGAM or any successor to its interests in such names.
The Trust further understands and agrees that so long as IGAM and/or any
future advisory Affiliate of IGAM shall continue to serve as the Trust's
Investment Adviser, other mutual funds as may be sponsored or advised by IGAM or
its Affiliates shall have the right permanently to adopt and to use the words
"IGAM," "IGAM Group" or "Integrity Global Asset Management" in their names and
in the names of any Series or class of Shares of such funds.
IN WITNESS WHEREOF, the Trustees named below do hereby make and enter into
this Declaration of Trust as of the 15th day of July, 1999.
/S/ EUGENE Y. W. LEE
Eugene Y. W. Lee, Ph.D.
Trustee
/S/ GEORGE HADFIELD III
George Hadfield III
Trustee
/S/ JONG HO HWANG
Jong Ho Hwang
Trustee
CERTIFICATE OF TRUST
OF
IGAM GROUP FUNDS
a Delaware Business Trust
This Certificate of Trust of IGAM Group Funds (the "Trust"), dated as
of this 15th day of July, 1999, is being duly executed and filed, in order to
form a business trust pursuant to the Delaware Business Trust Act (the "Act"),
Del. Code Ann. tit.
12, ss.ss.3801-3819.
1. NAME. The name of the business trust formed hereby
is "IGAM Group Funds."
2. REGISTERED OFFICE AND REGISTERED AGENT. The Trust will become,
prior to the issuance of shares of beneficial interest, a registered investment
company under the Investment Company Act of 1940, as amended. Therefore, in
accordance with section 3807(b) of the Act, the Trust has and shall maintain in
the State of Delaware a registered office and a registered agent for service of
process.
(a) REGISTERED OFFICE. The registered office of
the Trust in Delaware is The Corporation Trust Company,
1209 Orange Street, Wilmington, Delaware 19801.
(b) REGISTERED AGENT. The registered agent for service of
process on the Trust in Delaware is The Corporation Trust Company,
1209 Orange Street, Wilmington, Delaware 19801.
3. LIMITATION OF LIABILITY. Pursuant to Section 3804 of the Act, the
debts, liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to a particular series, whether such series is
now authorized and existing pursuant to the governing instrument of the Trust or
is hereafter authorized and existing pursuant to said governing instrument,
shall be enforceable against the assets associated with such series only, and
not against the assets of the Trust generally or any other series thereof, and,
except as otherwise provided in the governing instrument of the Trust, none of
the debts, liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to the Trust generally or any other series
thereof shall be enforceable against the assets of such series.
IN WITNESS WHEREOF, the Trustees named below do hereby execute this
Certificate of Trust as of the 15th day of July, 1999.
/s/ Eugene Y.W. Lee, Ph.D.
Eugene Y.W. Lee, Ph.D.
Trustee
/s/ George Hadfield III
George Hadfield III
Trustee
/s/ Jong Ho Hwang
Jong Ho Hwang
Trustee
CUSTODIAN SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of the ___ day of _________, 1999
between IGAM Group Funds, a Delaware business trust (hereinafter called the
"Trust"), on behalf of its separate series of shares ("Series"), and Firstar
Bank Milwaukee, N.A., a corporation organized under the laws of the State of
Wisconsin (hereinafter called "Custodian").
WHEREAS, the Trust is an open-ended management investment company which is
registered under the Investment Company Act of 1940, as amended (the "1940Act");
and
WHEREAS, Custodian is a federally regulated banking institution; and
WHEREAS, the Trust desires that its securities and cash shall be hereafter held
and administered by Custodian pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein made, the Trust
and Custodian agree as follows:
1. Definitions
The word "securities" as used herein includes stocks, shares, bonds,
debentures, notes, mortgages or other obligations, and any certificates,
receipts, warrants or other instruments representing rights to receive,
purchase or subscribe for the same, or evidencing or representing any other
rights or interests therein, or in any property or assets.
The words "officers' certificate" shall mean a request or direction or
certification in writing signed in the name of the Trust by any two of the
President, a Vice President, the Secretary and the Treasurer of the Trust,
or any other persons duly authorized to sign by the Board of Trustees of
the Trust.
The word "Board" shall mean the Board of Trustees of the Trust.
2. Names, Titles, and Signatures of the Trust's Officers
An officer of the Trust will certify to Custodian the names and
signatures of those persons authorized to sign the officers' certificates
described in Section I hereof, and the names of the members of the Board of
Trustees, together with any changes which may occur from time to time.
3. Additional Series
The Trust is authorized to issue separate Series of shares of
beneficial interest representing interests in separate investment
portfolios ("Series"). The parties intend that each Series established by
the Trust, now or in the future, be covered by the terms and conditions of
this agreement.
4. Receipt and Disbursement of Money
A. Custodian shall open and maintain a separate account or accounts in
the name of each Series of the Trust, subject only to draft or order by
Custodian acting pursuant to the terms of this Agreement. Custodian shall
hold in such account or accounts, subject to the provisions hereof, all
cash received by it from or for the account of the relevant Series.
Custodian shall make payments of cash to, or for the account of, the
relevant Series from such cash only:
(a) for the purchase of securities for the portfolio of the Series
upon the delivery of such securities to Custodian, registered in
the name of the Series or of the nominee of Custodian referred
to in Section 8 or in proper form for transfer;
(b) for the purchase or redemption of shares of beneficial interest
of the Series upon delivery thereof to Custodian, or upon proper
instructions from the Trust;
(c) for the payment of interest, dividends, taxes, investment
adviser's fees or operating expenses (including, without
limitation thereto, fees for legal, accounting, auditing and
custodian services and expenses for printing and postage);
(d) for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the Series
held by or to be delivered to Custodian; or
(e) for other proper corporate purposes certified by resolution of
the Board of Trustees of the Trust.
Before making any such payment, Custodian shall receive (and may rely
upon) an officers' certificate requesting such payment and stating that it
is for a purpose permitted under the terms of items (a), (b), (c), or (d)
of this Subsection A, and also, in respect of item (e), upon receipt of an
officers' certificate specifying the amount of such payment, setting forth
the purpose for which such payment is to be made, declaring such purpose to
be a proper business purpose, and naming the person or persons to whom such
payment is to be made, provided, however, that an officers' certificate
need not precede the disbursement of cash for the purpose of purchasing a
money market instrument, or any other security with same or next-day
settlement, if the President, a Vice President, the Secretary or the
Treasurer of the Trust issues appropriate oral or facsimile instructions to
Custodian and an appropriate officers' certificate is received by Custodian
within two business days thereafter.
B. Custodian is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received by Custodian for
the account of the Series of the Trust.
C. Custodian shall, upon receipt of proper instructions, make federal
funds available to the Trust as of specified times agreed upon from time to
time by the Trust and the Custodian in the amount of checks received in
payment for shares of the Series which are deposited into the relevant
Series' account.
5. Segregated Accounts
Upon receipt of proper instructions, the Custodian shall establish and
maintain a segregated account(s) for and on behalf of each Series, into
which account(s) may be transferred cash and/or securities.
6. Transfer, Exchange, Redelivery, etc. of Securities
Custodian shall have sole power to release or deliver any portfolio
securities of the Series of the Trust held by it pursuant to this
Agreement. Custodian agrees to transfer, exchange or deliver portfolio
securities held by it hereunder only:
(a) for sales of such securities for the account of the Series of
the Trust upon receipt by Custodian of payment therefore;
(b) when such securities are called, redeemed or retired or
otherwise become payable;
(c) for examination by any broker selling any such securities in
accordance with "street delivery" custom;
(d) in exchange for, or upon conversion into, other securities alone
or other securities and cash whether pursuant to any plan of
merger, consolidation, reorganization, recapitalization or
readjustment, or otherwise;
(e) upon conversion of such securities pursuant to their terms into
other securities;
(f) upon exercise of subscription, purchase or other similar rights
represented by such securities;
(g) for the purpose of exchanging interim receipts or temporary
securities for definitive securities;
(h) for the purpose of redeeming in kind shares of beneficial
interest of the Series of the Trust upon delivery thereof to
Custodian; or
(i) for other proper business purposes.
As to any deliveries made by Custodian pursuant to items (a), (b),
(d), (e), (f), and (g), securities or cash receivable in exchange therefore
shall be deliverable to Custodian.
Before making any such transfer, exchange or delivery, Custodian shall
receive (and may rely upon) an officers' certificate requesting such
transfer, exchange or delivery, and stating that it is for a purpose
permitted under the terms of items (a), (b), (c), (d), (e), (f), (g), or
(h) of this Section and also, in respect of item (i), upon receipt of an
officers' certificate specifying the securities to be delivered, setting
forth the purpose for which such delivery is to be made, declaring such
purpose to be a proper corporate purpose, and naming the person or persons
to whom delivery of such securities shall be made, provided, however, that
an officers' certificate need not precede any such transfer, exchange or
delivery of a money market instrument, or any other security with same or
next-day settlement, if the President, a Vice President, the Secretary or
the Treasurer of the Trust issues appropriate oral or facsimile
instructions to Custodian and an appropriate officers' certificate is
received by Custodian within two business days thereafter.
7. Custodian's Acts Without Instructions
Unless and until Custodian receives an officers' certificate to the
contrary, Custodian shall: (a) present for payment all coupons and other
income items held by it for the account of the relevant Series of the
Trust, which call for payment upon presentation and hold the cash received
by it upon such payment for the account of the Trust; (b) collect interest
and cash dividends received, with notice to the Trust, for the account of
the Trust; (c) hold for the account of the Trust hereunder all stock
dividends, rights and similar securities issued with respect to any
securities held by it hereunder; and (d) execute, as agent on behalf of the
Trust, all necessary ownership certificates required by the Internal
Revenue Code or the Income Tax Regulations of the United States Treasury
Department or under the laws of any state now or hereafter in effect,
inserting the Trust's name on such certificates as the owner of the
securities covered thereby, to the extent it may lawfully do so.
8. Registration of Securities
Except as otherwise directed by an officers' certificate, Custodian
shall register all securities, except such as are in bearer form, in the
name of a registered nominee of Custodian as defined in the Internal
Revenue Code and any Regulations of the Treasury Department issued
hereunder or in any provision of any subsequent federal tax law exempting
such transaction from liability for stock transfer taxes, and shall execute
and deliver all such certificates in connection therewith as may be
required by such laws or regulations or under the laws of any state.
Custodian shall use its best efforts to the end that the specific
securities held by it hereunder shall be at all times identifiable in its
records.
The Trust shall from time to time furnish to Custodian appropriate
instruments to enable Custodian to hold or deliver in proper form for
transfer, or to register in the name of its registered nominee, any
securities which it may hold for the account of the Series of the Trust and
which may from time to time be registered in the name of the Series of the
Trust.
9. Voting and Other Action
Neither Custodian nor any nominee of Custodian shall vote any of the
securities held hereunder by or for the account of the Series of the Trust,
except in accordance with the instructions contained in an officers'
certificate. Custodian shall deliver, or cause to be executed and
delivered, to the Corporation all notices, proxies and proxy soliciting
materials with relation to such securities, such proxies to be executed by
the registered holder of such securities (if registered otherwise than in
the name of the Series of the Trust), but without indicating the manner in
which such proxies are to be voted.
10. Transfer Tax and Other Disbursements
The Series of the Trust shall pay or reimburse Custodian from time to
time for any transfer taxes payable upon transfers of securities made
hereunder, and for all other necessary and proper disbursements and
expenses made or incurred by Custodian in the performance of this
Agreement.
Custodian shall execute and deliver such certificates in connection
with securities delivered to it or by it under this Agreement as may be
required under the provisions of the Internal Revenue Code and any
Regulations of the Treasury Department issued thereunder, or under the laws
of any state, to exempt from taxation any exemptable transfers and/or
deliveries of any such securities.
11. Concerning Custodian
Custodian shall be paid as compensation for its services pursuant to
this Agreement such compensation as may from time to time be agreed upon in
writing between the two parties. Until modified in writing, such
compensation shall be as set forth in Exhibit A attached hereto.
Custodian shall not be liable for any action taken in good faith upon
any certificate herein described or certified copy of any resolution of the
Board, and may rely on the genuineness of any such document which it may in
good faith believe to have been validly executed.
The Trust agrees to indemnify and hold harmless Custodian and its
nominee from all taxes, charges, expenses, assessments, claims and
liabilities (including counsel fees) incurred or assessed against it or by
its nominee in connection with the performance of this Agreement, except
such as may arise from its or its nominee's own negligent action, negligent
failure to act or willful misconduct. Custodian is authorized to charge any
account of the relevant Series of the Trust for such items.
In the event of any advance of cash for any purpose made by Custodian
resulting from orders or instructions of the Trust, or in the event that
Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the
performance of this Agreement, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the Series of
the Trust shall be security therefore.
Custodian agrees to indemnify and hold harmless the Trust from all
charges, expenses, assessments, and claims/liabilities (including counsel
fees) incurred or assessed against it in connection with the performance of
this agreement, except such as may arise from the Trust's own negligent
action, negligent failure to act, or willful misconduct.
12. Subcustodians
Custodian is hereby authorized to engage another bank or trust company
as a Subcustodian for all or any part of the Trust's assets, so long as any
such bank or trust company is a bank or trust company organized under the
laws of any state of the United States, having an aggregate capital,
surplus and undivided profit, as shown by its last published report, of not
less than Two Million Dollars ($2,000,000) and provided further that, if
the Custodian utilizes the services of a Subcustodian, the Custodian shall
obtain preapproval by the Trust and remain fully liable and responsible for
any losses caused to the Trust by the Subcustodian as fully as if the
Custodian was directly responsible for any such losses under the terms of
the Custodian Agreement.
Notwithstanding anything contained herein, if the Trust requires the
Custodian to engage specific Subcustodians for the safekeeping and/or
clearing of assets, the Trust agrees to indemnify and hold harmless
Custodian from all claims, expenses and liabilities incurred or assessed
against it in connection with the use of such Subcustodian in regard to the
Trust's assets, except as may arise from its own negligent action,
negligent failure to act or willful misconduct.
13. Reports by Custodian
Custodian shall furnish the Trust periodically as agreed upon with a
statement summarizing all transactions and entries for the account of
Trust. Custodian shall furnish to the Trust, at the end of every month, a
list of the portfolio securities showing the aggregate cost of each issue.
The books and records of Custodian pertaining to its actions under this
Agreement shall be open to inspection and audit at reasonable times by
officers of, and of auditors employed by, the Trust.
14. Termination or Assignment
This Agreement may be terminated by the Trust, or by Custodian, on
ninety (90) days notice, given in writing and sent by registered mail to
Custodian at Firstar Trust Company, 615 East Michigan Street, Milwaukee,
Wisconsin 53202, or to the Trust at 565 Fifth Avenue, New York, NY 10017,
as the case may be. Upon any termination of this Agreement, pending
appointment of a successor to Custodian or a vote of the shareholders of
the Series of the Trust to dissolve or to function without a custodian of
its cash, securities and other property, Custodian shall not deliver cash,
securities or other property of the Trust to the Trust, but may deliver
them to a bank or trust company of its own selection, having an aggregate
capital, surplus and undivided profits, as shown by its last published
report of not less than Two Million Dollars ($2,000,000) as a Custodian for
the Trust to be held under terms similar to those of this Agreement,
provided, however, that Custodian shall not be required to make any such
delivery or payment until full payment shall have been made by the Trust of
all liabilities constituting a charge on or against the properties then
held by Custodian or on or against Custodian, and until full payment shall
have been made to Custodian of all its fees, compensation, costs and
expenses, subject to the provisions of Section 10 of this Agreement.
This Agreement may not be assigned by Custodian without the consent of
the Trust, authorized or approved by a resolution of its Board of Trustees.
15. Deposits of Securities in Securities Depositories
No provision of this Agreement shall be deemed to prevent the use by
Custodian of a central securities clearing agency or securities depository,
provided, however, that Custodian and the central securities clearing
agency or securities depository meet all applicable federal and state laws
and regulations, and the Board of Trustees of the Trust approves by
resolution the use of such central securities clearing agency or securities
depository.
16. Records
To the extent that Custodian in any capacity prepares or maintains any
records required to be maintained and preserved by the Trust pursuant to
the provisions of the Investment Company Act of 1940, as amended, or the
rules and regulations promulgated thereunder, Custodian agrees to make any
such records available to the Trust upon request and to preserve such
records for the periods prescribed in Rule 3 1 a-2 under the Investment
Company Act of 1940, as amended.
17. Notices
Notices of any kind to be given by either party to the other party
shall be in writing and shall be duly given if mailed or delivered as
follows: Notice to FTC shall be sent to:
Firstar Bank Milwaukee, N.A.
615 East Michigan Street
Milwaukee, WI 53202
and notice to the Trust shall be sent to:
IGAM Group Funds
133 Old Tower Hill Road
Suite 1
Wakefield, RI 02879
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and their respective corporate seals to be affixed hereto as of the date first
above-written by their respective officers thereunto duly authorized.
This agreement may be executed in several counterparts, each of which is an
original.
IGAM Group Funds Firstar Bank Milwaukee, N.A.
Sign: Sign:
Print: Print:
Title: Title:
Attest: Attest:
<PAGE>
Schedule A
Mutual Fund Custodial Agent Service
Domestic Portfolios
Annual Fee Schedule
IGAM Group Funds
o Annual fee based on market value of assets:
o ___ per $1,000 (__ basis points0)
o Minimum annual fee per Fund: $____
o Investment transactions: (purchase, sale, exchange, tender,
redemption, maturity, receipt delivery)
o $____ per book entry security (depository or Federal Reserve
system)
o $____ per definitive security (physical)
o $____ per Euroclear
o $____ per principal reduction on pass-through certificates
o $____ per option/future contracts
o Variable Amount Notes: Used as a short-term investment, variable amount
notes offer safety and prevailing high interest rates. Our charge,
which is______, is deducted from the variable amount note income
at the time is credited to your account.
o Extraordinary expenses: Based on time and complexity involved.
o Out-of-pocket expenses: Charged to the account, including but not limited
to:
o $____ per variation margin transaction
o $____ per Fed wire deposit or withdrawal
o Fees are billed monthly, based on market value at the beginning of the
month.
FUND ACCOUNTING SERVICING AGREEMENT
This Agreement between IGAM Group Funds, a Delaware business trust (hereinafter
called the "Trust"), on behalf of its separate series of shares ("Series") or
classes of such Series ("Classes"), all as described herein (as such part may be
amended from time to time), and Firstar Mutual Fund Services, LLC, a limited
liability company organized under the laws of the State of Wisconsin
(hereinafter called "Firstar"), is effective as of the ___ day of ___________,
1999.
WHEREAS, the Trust, is an open-ended management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, Firstar is in the business of providing mutual fund accounting services
to investment companies.
NOW, THEREFORE, the Trust and Firstar do mutually promise and agree as follows:
1. Services. Firstar agrees to provide the following mutual fund accounting
services to the Trust on a per Series or per Class basis as appropriate:
A. Portfolio Accounting Services:
(1) Maintain portfolio trading records (purchase and sale journals for each
Series) on a trade date +1 basis using security trade information communicated
from the Series' investment manager on a timely basis.
(2) Monitor corporate action to identify and record interest and dividend
income on portfolio securities and maintain accrual balances as of each
valuation date and calculate gross earnings on investments for the accounting
period.
(3) Determine gain/loss on portfolio security sales and identify them as to
short-short, short-or long-term status; account for periodic distributions of
gains or losses to shareholders and maintain undistributed gain or loss balances
as of each valuation date.
(4) Maintain appropriate records of brokerage activity for transactions in
portfolio securities to enable Firstar to provide monthly brokerage reports
showing brokers and commission amounts.
(5) Maintain a daily listing of portfolio holdings by Series showing cost,
market value, and the percentage of portfolio comprised of each security.
(6) Reconcile accounting asset listings against custodian's asset listings
on at least a monthly basis and report any securities balance discrepancies
promptly to the Trust and Custodian.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense accrual amounts as
directed by the Trust as to methodology, rate or dollar amount.
(2) Upon receipt of written authorization from the Trust, make and record
payments for Trust expenses.
(3) Account for Trust and Series expenditures and maintain expense accrual
balances at the level of accounting detail, as agreed upon by Firstar and the
Trust.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Calculate and maintain daily records of the net asset value (and
offering price if appropriate) of each Series (or class of such Series if
appropriate), at such times (each a "valuation date") as directed and authorized
by the Trust through Firstar's questionnaire and in accordance with: (i)
relevant regulatory requirements; (ii) the Trust's Declaration of Trust and
By-Laws; (iii) the Trust's registration statement or Form N-IA; and (iv) any
procedures approved by the Board of Trustees of the Trust and supplied to
Firstar in writing.
(2) In connection with the calculation of relevant net asset values,
Firstar shall obtain prices for portfolio securities from pricing services
approved by the Trust, and will apply those prices to the portfolio securities.
For those securities where market quotations are not readily available, the
Board of Trustees shall approve, in good faith, the method for determining the
fair value for such securities. If the Trust desires to provide a price which
varies from the pricing source, the Trust shall promptly notify and supply
Firstar with the valuation of any such security on each valuation date. All
pricing changes made by the Trust will be in writing and must specifically
identify the securities to be changed by CUSIP, name of security, new price or
rate to be applied, and, if applicable, the time period for which the new
price(s) is/are effective.
(3) On trade date +1, account for and record purchases, sales, exchanges,
transfers, dividend reinvestments, and other transactions in shares of the
Trust, its Series as reported by the transfer agent on a timely basis.
(4) Apply equalization accounting as directed by the Trust.
(5) Determine net investment income (earnings) for each Series of the Trust
as of each valuation date. Account for periodic distributions of earnings to
shareholders and maintain undistributed net investment income balances as of
each valuation date.
(6) Maintain a general ledger for the Trust and each of its Series in the
form as agreed upon.
(7) Communicate, at an agreed upon time, the per share price for each
valuation date to the Trust and its investment advisers as agreed upon from time
to time.
D. Tax Accounting Services:
(1) Maintain accounting records for each Series' investment portfolio to
support the tax reporting required for IRS-defined regulated investment
companies.
(2) Maintain tax lot detail for each Series' investment portfolio.
(3) Calculate taxable gain/loss on security sales using the tax lot relief
method designated by the Trust.
(4) Provide the necessary financial information to support the taxable
components of income and capital gains distributions to the transfer agent to
support tax reporting to the shareholders.
(5) Maintain schedules of dividends paid and payable.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support financial statement
preparation by making the Trust's accounting records available to the Trust and
its investment manager, the Securities and Exchange Commission, and the outside
auditors.
(2) Maintain accounting records according to the 1940 Act and regulations
provided thereunder.
2. Changes in Accounting Procedures. Any resolution passed by the Board of
Trustees of the Trust that affects accounting practices and procedures under
this agreement shall be effective upon written receipt and acceptance by the
Firstar.
3. Changes in Equipment, Systems, Service, Etc. Firstar reserves the right to
make changes from time to time, as it deems advisable, relating to its services,
systems, programs, rules, operating schedules and equipment, so long as such
changes do not adversely affect the service provided to the Trust under this
Agreement.
4. Compensation. Firstar shall be compensated for providing the services set
forth in this Agreement in accordance with the Fee Schedule attached hereto as
Exhibit A and as mutually agreed upon and amended from time to time.
<PAGE>
5. Performance of Service.
A. Firstar shall exercise reasonable care in the performance of its duties
under this Agreement. Firstar shall not be liable for any loss suffered by the
Fund in connection with matters to which this Agreement relates, including
losses resulting from mechanical breakdowns or the failure of communication or
power supplies beyond Firstar's control, except a loss resulting from Firstar's
refusal or failure to comply with the terms of this Agreement or from bad faith,
negligence, or willful misconduct on its part in the performance of its duties
under this Agreement. Notwithstanding any other provision of this Agreement, the
Fund shall indemnify and hold harmless Firstar from and against any and all
claims, demands, losses, expenses, and liabilities (whether with or without
basis in fact or law) of any and every nature (including reasonable attorneys'
fees) which Firstar may sustain or incur or which may be asserted against
Firstar by any person arising out of any action taken or omitted to be taken by
it in performing the services hereunder (i) in accordance with the foregoing
standards, or (ii) in reliance upon any written or oral instruction provided to
Firstar by any duly authorized officer of the Fund, such duly authorized officer
to be included in a list of authorized officers furnished to Firstar and as
amended from time to time in writing by resolution of the Board of Directors of
the Fund.
In the event of a mechanical breakdown or failure of communication or power
supplies beyond its control, Firstar shall take all reasonable steps to minimize
service interruptions for any period that such interruption continues beyond
Firstar's control. Firstar will make every reasonable effort to restore any lost
or damaged data and correct any errors resulting from such a breakdown at the
expense of Firstar. Firstar agrees that it shall, at all times, have reasonable
contingency plans with appropriate parties, making reasonable provision for
emergency use of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Fund shall be entitled to inspect
Firstar's premises and operating capabilities at any time during regular
business hours of Firstar, upon reasonable notice to Firstar.
Regardless of the above, Firstar reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this section
shall apply, it is understood that if in any case the Trust may be asked to
indemnify or hold Firstar harmless, the Trust shall be fully and promptly
advised of all pertinent facts concerning the situation in question, and it is
further understood that Firstar will use all reasonable care to notify the Trust
promptly concerning any situation which presents or appears likely to present
the probability of such a claim for indemnification against the Trust. The Trust
shall have the option to defend Firstar against any claim which may be the
subject of this indemnification. In the event that the Fund so elects, it will
so notify Firstar and thereupon the Trust shall take over complete defense of
the claim, and Firstar shall in such situation initiate no further legal or
other expenses for which it shall seek indemnification under this section.
Firstar shall in no case confess any claim or make any compromise in any case in
which the Trust will be asked to indemnify Firstar except with the Trust's prior
written consent.
C. Firstar shall indemnify and hold the Trust harmless from and against any
and all claims, demands, losses, expenses, and liabilities (whether with or
without basis in fact or law) of any and every nature (including reasonable
attorneys' fees) which may be asserted against the Trust by any person arising
out of any action taken or omitted to be taken by Firstar as a result of
Firstar's refusal or failure to comply with the terms of this Agreement, its bad
faith, negligence, or willful misconduct.
6. Records.
Firstar shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem advisable
and is agreeable to the Trust and as required by the rules and regulations of
appropriate government authorities, in particular, Section 31 of the 1940 Act
and the rules thereunder. Firstar agrees that all such records prepared or
maintained by Firstar relating to the services to be performed by Firstar
hereunder are the property of the Trust and will be preserved, maintained, and
made available with such section and rules of the 1940 Act and will be promptly
surrendered to the Trust on and in accordance with its request.
7. Confidentiality.
Firstar shall handle in confidence all information relating to the Trust's
or its investment manager's business, which is received by Firstar during the
course of rendering any service hereunder.
8. Data Necessary to Perform Services.
The Trust or its agent, which may be Firstar, shall furnish to Firstar the
data necessary to perform the services described herein at times and in such
form as mutually agreed upon.
9. Notification of Error.
The Trust will notify Firstar of any balancing or control error caused by
Firstar within three (3) business days after receipt of any reports rendered by
Firstar to the Trust, or within three (3) business days after discovery of any
error or omission not covered in the balancing or control procedure, or within
three (3) business days of receiving notice from any shareholder.
10. Additional Series.
In the event that the Trust establishes one or more Series or Classes of
shares with respect to which it desires to have Firstar render accounting
services, under the terms hereof, it shall so notify Firstar in writing, and if
Firstar agrees in writing to provide such services, such series will be subject
to the terms and conditions of this Agreement, and shall be maintained and
accounted for by Firstar on a discrete basis. The series and classes currently
covered by this Agreement are: "The Internet Index Fund."
11. Term of Agreement.
This Agreement shall become effective on December 18, 1998 and, unless
sooner terminated as provided herein, shall continue automatically in effect for
successive annual periods, provided that the continuance of the Agreement is
approved by a majority of the Trustees of the Trust. The Agreement may also be
terminated by either party upon giving ninety (90) days prior written notice to
the other party or such shorter period as is mutually agreed upon by the parties
and will terminate automatically upon its assignment unless the parties offer
consent in writing. However, this Agreement may be replaced or modified by a
subsequent agreement between the parties.
12. Duties in the Event of Termination.
In the event that in connection with termination a Successor to any of
Firstar's duties or responsibilities hereunder is designated by Trust by written
notice to Firstar, Firstar will promptly, upon such termination and at the
expense of Trust, transfer to such Successor all relevant books, records,
correspondence and other data established or maintained by Firstar under this
Agreement in a form reasonably acceptable to Trust (if such form differs from
the form in which Firstar has maintained the same, Trust shall pay any expenses
associated with transferring the same to such form), and will cooperate in the
transfer of such duties and responsibilities, including provision for assistance
from Firstar's personnel in the establishment of books, records and other data
by such successor.
13. Notices.
Notices of any kind to be given by either party to the other party shall be
in writing and shall be duly given if mailed or delivered as follows: Notice to
Firstar shall be sent to:
Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
and notice to the Trust shall be sent to:
IGAM Group Funds
133 Old Tower Hill Road
Suite 1
Wakefield, RI 02879
14. Choice of Law.
This Agreement shall be construed in accordance with the laws of the State
of Wisconsin.
IN WITNESS WHEREOF, the due execution hereof on the date first above written.
IGAM GROUP FUNDS FIRSTAR MUTUAL FUND SERVICES, LLC
By: By:
Title: Title:
Attest: Attest:
<PAGE>
Schedule A
Fund Valuation and Accounting
Domestic Portfolios
Annual Fee Schedule
<PAGE>
Schedule B
Fund Valuation and Accounting Asset Pricing Cost
Charge per Item per Valuation
Asset Type (daily, weekly, etc.)
Domestic and Canadian Equities $___
Options $___
Corporate/Government/Agency Bonds $___
CMOs $___
International Equities and Bonds $___
Municipal Bonds $___
Money Market Instruments $___
Pricing costs are billed monthly.
FUND ADMINISTRATION SERVICING AGREEMENT
This Agreement is made and entered into as of this ___ day of ________, 1999, by
and between IGAM Group Funds, a business trust organized under the laws of the
State of Delaware (hereinafter referred to as the "Trust") on behalf of any of
its series as described in Part IV of this Agreement (each such series is
hereafter referred to as a "Fund" and, collectively as the "Funds"), and Firstar
Mutual Fund Services, LLC, a limited liability company organized under the laws
of the State of Wisconsin (hereinafter referred to as "Firstar").
WHEREAS, The Trust is a open-ended management investment company which is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, Firstar is in the business of providing fund administration services
for the benefit of its customers.
NOW, THEREFORE, the Trust and Firstar do mutually promise and agree as follows:
I. Appointment of Administrator
The Trust hereby appoints Firstar as Administrator of the Funds on the
terms and conditions set forth in this Agreement, and Firstar hereby
accepts such appointment and agrees to perform the services and duties set
forth in this Agreement in consideration of the compensation provided for
herein.
II. Duties and Responsibilities of Firstar
A. General Fund Management
1. Act as liaison among all fund service providers.
2. Coordinate corporate formalities and Board communication by:
a. preparing and distributing meeting agendas and board materials
including board resolutions and various financial,
administrative and regulatory reports;
b. attending all regular or special board meetings,
preparing and distributing minutes of such meetings and
maintaining the corporate records and minute book for the
Trust;
c. updating trustees' and officers' biographical information
and questionnaires; and
d. evaluating independent auditor.
3. Audits
a. Prepare appropriate schedules and assist independent
auditors.
b. Provide information to SEC and facilitate audit process.
c. Provide office facilities for auditors and SEC staff as
appropriate.
4. Assist in overall operations of the Trust, including the
provision of office facilities, executive and administrative
services and Firstar personnel to serve as officers of the
Trust to facilitate Trust operations, all at Firstar's expense
with the exception of the costs incurred when attending Board of
Trustee meetings; and to provide stationary and office supplies
at the Trust's expense.
5. Create and maintain operations and compliance calendars and/or a
compliance manual for the Trust, detailing schedules for the
various responsibilities of Firstar.
6. Shareholder Communications. Coordinate printing and distribution
of prospectuses, statements of additional information, stickers
(supplements) to prospectuses or statements of additional
information, annual and semi-annual shareholder reports and
proxy statements.
B. Compliance
1. Regulatory Compliance
a. Periodically monitor compliance with 1940 Act requirements,
including:
1) Asset diversification tests;
2) Total return and yield calculations;
3) Code of ethics for independent, disinterested
trustees;
4) Compliance with fidelity bond coverage requirements of
Rule 17g-1 under the 1940 Act; and
5) Compliance with the NASD sales charge rule, including
the calculation and monitoring of the sales charge cap
and remaining amount for asset-based sales charges.
b. Periodically monitor and report at Fund's quarterly board
meeting or more frequently as required, compliance with the
policies investment limitations and reinvestment
restrictions of each Fund as set forth in its prospectus
and statement of additional information.
2. Blue Sky Compliance
a. Prepare and file with the appropriate state securities
authorities any and all required compliance or notice
filings relating to the sales, qualification or registration
of the securities of each Fund so as to enable each Fund to
make a continuous offering of its shares in the fifty
states, Puerto Rico, U.S. Virgin Islands, and Guam ("Blue
Sky Jurisdictions").
b. Monitor sales and qualification status and make appropriate
renewal filings in each Blue Sky Jurisdiction.
c. File prospectuses, statements of additional information or
proxy statements for the Trust in Blue Sky Jurisdictions as
requested by the Trust or such jurisdictions.
3. SEC Registration and Reporting
a. Assist in the preparation and filing of post-effective
amendments to the Trust's Registration Statement on Form
N-1A to reflect the addition or deletion of Funds, general
amendments, or annual updates including the preparation of
Financial Data Schedules; and prepare and file supplements
("stickers") to any prospectus or statement of additional
information for a Fund.
b. Prepare and file annual and semi-annual reports to
shareholders as required under the 1940 Act, along with
annual and semiannual reports on Form N-SAR (which shall be
series and class-specific, as appropriate).
c. Assist in the preparation and filing of proxy statements, as
requested by the Trust (matters to be voted on may be
class-specific), prepare minutes of shareholder meetings,
and record ballot results and interface with proxy
solicitation companies as required.
d. Prepare and file documents required to report and calculate
Federal securities registration fees (such as notices on
Form 24F-2).
e. File fidelity bond and any joint insurance agreements as
required by Rule 17g-1 under the 1940 Act.
f. Provide for the EDGAR-ization or other appropriate
preparation of all documents described above which must be
filed electronically with the SEC.
4. IRS Compliance
a. Periodically monitor the Trust's status as a regulated
investment company under Subchapter M of the Internal
Revenue Code, as amended, through review of the following:
1) Asset diversification requirements;
2) Qualifying income requirements; and
3) Distribution requirements.
b. Monitor short testing as required.
c. Calculate required distributions as required (including
excise tax distributions).
C. Financial Reporting
1. Prepare monthly expense reports (by series and class where
appropriate) including expense figures and accruals, monitoring
of expense caps or reimbursements and calculation of advisory
fees and 12b-1 accruals or payments; and calculate expense
ratios for quarterly, semiannual or annual periods.
2. Prepare unaudited financial statements (by series and class
where appropriate) for use in shareholder reports or
prospectuses and statements of additional information.
3. Prepare other monthly operational reports as required including:
a. Sales figures (including shares sold, redeemed and
reinvested, changes in share price in net sales and numbers
of shareholders);
b. Performance information (including total return or yield for
the month, quarter, year-to-date, fiscal year or average
annual one-, five- or ten-year periods); and
c. Portfolio information (including turnover, top ten holdings,
book gains/losses per share; net income/book income per
share; basis).
4. Provide financial data required by Fund prospectus and
statements of additional information.
5. Prepare financial reports for shareholders, the board, the SEC,
and independent auditors.
6. Supervise the Trust's Custodian and Fund Accountants in the
maintenance of each Funds general ledger and in the preparation
of each Fund's financial statements including oversight of
expense accruals and payments, of the determination of net asset
value of each Fund and of the Fund's shares, and of the
declaration and payment of dividends and other distributions to
shareholders.
D. Tax Reporting
1. Prepare and file on a timely basis appropriate federal and state
tax returns including forms 1120/8613 with any necessary
schedules.
2. Prepare state income breakdowns where relevant.
3. File 1099 Miscellaneous for payments to directors and other
service providers.
4. Monitor wash losses.
5. Calculate eligible dividend income for corporate shareholders.
III. Compensation
The Trust agrees to pay Firstar for performance of the duties listed in
this Agreement and the fees and out-of-pocket expenses as set
forth in the attached Schedule A.
These fees may be changed from time to time, subject to mutual written
Agreement between the Trust and Firstar.
The Trust agrees to pay all fees and reimbursable expenses within ten (10)
business days following the mailing of the billing notice.
IV. Additional Funds
In the event that the Trust establishes one or more Funds with respect to
which it desires to have Firstar render fund administration services,
under the terms hereof, it shall so notify Firstar in writing, and if
Firstar agrees in writing to provide such services, such Funds will be
subject to the terms and conditions of this Agreement, and shall be
maintained and accounted for by Firstar on a discrete basis. The Funds
currently covered by this Agreement are:
The Internet Index Fund.
V. Performance of Services; Limitation of Liability
A. Firstar shall exercise reasonable care in the performance of its
duties under this Agreement. Firstar shall not be liable for any loss
suffered by the Fund in connection with matters to which this
Agreement relates, including losses resulting from mechanical
breakdowns or the failure of communication or power supplies beyond
Firstar's control, except a loss resulting from Firstar's refusal or
failure to comply with the terms of this Agreement or from bad faith,
negligence, or willful misconduct on its part in the performance of
its duties under this Agreement. Notwithstanding any other provision
of this Agreement, the Fund shall indemnify and hold harmless Firstar
from and against any and all claims, demands, losses, expenses, and
liabilities (whether with or without basis in fact or law) of any and
every nature (including reasonable attorneys' fees) which Firstar may
sustain or incur or which may be asserted against Firstar by any
person arising out of any action taken or omitted to be taken by it in
performing the services hereunder (i) in accordance with the foregoing
standards, or (ii) in reliance upon any written or oral instruction
provided to Firstar by any duly authorized officer of the Trust, such
duly authorized officer to be included in a list of authorized
officers furnished to Firstar and as amended from time to time in
writing by resolution of the Board of Trustees of the Trust.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, Firstar shall take all reasonable
steps to minimize service interruptions for any period that such
interruption continues beyond Firstar's control. Firstar will make
every reasonable effort to restore any lost or damaged data and
correct any errors resulting from such a breakdown at the expense of
Firstar. Firstar agrees that it shall, at all times, have contingency
plans, that are comparable to those employed within the financial
services industry, with appropriate parties, making reasonable
provision for emergency use of electrical data processing equipment to
the extent appropriate equipment is available. Representatives of the
Trust shall be entitled to inspect Firstar's premises and operating
capabilities at any time during regular business hours of Firstar,
upon reasonable notice to Firstar.
Regardless of the above, Firstar reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this section
shall apply, it is understood that if in any case the Trust may be
asked to indemnify or hold Firstar harmless, the Trust shall be fully
and promptly advised of all pertinent facts concerning the situation
in question, and it is further understood that Firstar will use all
reasonable care to notify the Trust promptly concerning any situation
which presents or appears likely to present the probability of such a
claim for indemnification against the Trust. The Trust shall have the
option to defend Firstar against any claim which may be the subject of
this indemnification. In the event that the Trust so elects, it will
so notify Firstar and thereupon the Trust shall take over complete
defense of the claim, and Firstar shall in such situation initiate no
further legal or other expenses for which it shall seek
indemnification under this section. Firstar shall in no case confess
any claim or make any compromise in any case in which the Trust will
be asked to indemnify Firstar except with the Trust's prior written
consent.
C. Firstar shall indemnify and hold the Trust harmless from and against
any and all claims, demands, losses, expenses, and liabilities
(whether with or without basis in fact or law) of any and every nature
(including reasonable attorneys' fees) which may be asserted against
the Trust by any person arising out of any action taken or omitted to
be taken by Firstar as a result of Firstar's refusal or failure to
comply with the terms of this Agreement, its bad faith, negligence, or
willful misconduct.
VI. Confidentiality
Firstar shall handle, in confidence, all information relating to the
Trust's business which is received by Firstar during the course of
rendering any service hereunder.
VII. Data Necessary to Perform Service
The Trust or its agent, which may be Firstar, shall furnish to Firstar the
data necessary to perform the services described herein at times and in
such form as mutually agreed upon.
VIII.Terms of Agreement
This Agreement shall become effective on and, unless sooner terminated as
provided herein, shall continue automatically in effect for successive
annual periods, provided that the continuance of the Agreement is approved
by a majority of the Trustees of the Trust. The Agreement may also be
terminated by either party upon giving ninety (90) days prior written
notice to the other party or such shorter period as is mutually agreed
upon by the parties and will terminate automatically on its assignment
unless the parties hereto consent in writing.
IX. Duties in the Event of Termination
In the event that, in connection with termination, a successor to any of
Firstar's duties or responsibilities hereunder is designated by the Trust
by written notice to Firstar, Firstar will promptly, upon such termination
and at the expense of the Trust, transfer to such successor all relevant
books, records, correspondence, and other data established or maintained
by Firstar under this Agreement in a form reasonably acceptable to the
Trust (if such form differs from the form in which Firstar has maintained,
the Trust shall pay any expenses associated with transferring the data to
such form), and will cooperate in the transfer of such duties and
responsibilities, including provision for assistance from Firstar's
personnel in the establishment of books, records, and other data by such
successor.
X. Choice of Law
This Agreement shall be construed in accordance with the laws of the State
of Wisconsin.
XI. Notices
Notices of any kind to be given by either party to the other party shall
be in writing and shall be duly given if mailed or delivered as follows:
Notice to Firstar shall be sent to:
Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
and notice to the Trust shall be sent to:
IGAM Group Funds
133 Old Tower Hill Road
Suite 1
Wakefield, RI 02879
XII. Records
Firstar shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem
advisable and is agreeable to the Trust and as required by the rules and
regulations of appropriate government authorities, in particular, Section
31 of the 1940 Act and the rules thereunder. Firstar agrees that all such
records prepared or maintained by Firstar relating to the services to be
performed by Firstar hereunder are the property of the Trust and will be
preserved, maintained, and made available with such section and rules of
the 1940 Act and will be promptly surrendered to the Trust on and in
accordance with its request.
IGAM GROUP FUNDS FIRSTAR MUTUAL FUND SERVICES,
LLC
By: By:
Title: Title:
Attest: Attest:
<PAGE>
Schedule A
Fund Administration and Compliance
Annual Fee Schedule
o Minimum annual fee per Fund: $_______
o _ basis points (.___) on the first $__________ of
average daily net assets
o _ basis points (.___) on the next $__________ of
average daily net assets
o _ basis points (.___) on the balance
o Out-of-Pocket expenses, including, but not limited to:
o Postage
o Stationary
o Programming
o Proxies
o Retention of Records
o Special reports
o Federal and state regulatory filing fees
o Certain insurance premiums
o All other out-of-pocket expenses
o Expenses from Board of Trustees meetings
o Auditing & legal expenses
o Fees are billed monthly
TRANSFER AGENT SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this ____ day of __________,
1999, by and between IGAM Group Funds, a business trust organized under the laws
of the State of Delaware (hereinafter referred to as the "Trust") on behalf of
any of its separate series as described in Exhibit A to this Agreement (each
such series is hereafter referred to as a "Fund" and collectively as the
"Funds") and Firstar Mutual Fund Services, LLC, a corporation organized under
the laws of the State of Wisconsin (hereinafter referred to as the "Agent").
WHEREAS, the Trust is an open-ended management investment company which is
registered under the Investment Company Act of 1940, as amended (the " 1940
Act"); and
WHEREAS, the Agent is in the business of administering
transfer and dividend disbursing agent functions for the benefit
of its customers;
NOW, THEREFORE, the Trust and the Agent do mutually promise and agree as
follows:
1. Terms of Appointment; Duties of the Agent
Subject to the terms and conditions set forth in this Agreement, the Trust
hereby employs and appoints the Agent to act as transfer agent and dividend
disbursing agent.
The Agent shall perform all of the customary services of a transfer agent
and dividend disbursing agent, and as relevant, agent in connection with
accumulation, open account or similar plans (including without limitation any
periodic investment plan or periodic withdrawal program), including but not
limited to:
A. Receive and process orders for the purchase of shares of the Funds
received in good order and issue and credit shareholder accounts with
the appropriate number of certified or uncertified shares. Receive
payments by check, Fed wire, or through Automated Clearing House
("ACH") processing. Prepare and process daily deposit or delivery of
payment and proper supporting documentation to the Trust's custodian.
B. Establish shareholder accounts with appropriate demographic data,
information regarding participation in plans (i.e., systematic
withdrawal, automatic investment, dividend reinvestment, etc.) and
information regarding tax I.D. certification or non-resident alien
records, including backup withholding. Make changes to shareholder
accounts to reflect changes in demographic data or participation in
plans.
C. Maintain valid and appropriate participation with the National
Securities Clearing Corporation ("NSCC") and provide access to NSCC's
Fund/Serv System for the Funds as agreed from time-to-time with the
Trust.
D. Produce shareholder lists and ad hoc reports for proxy solicitations
or as requested by Trust management, including lists of linked
accounts within Funds or across multiple funds to facilitate combined
statements, or lists of accounts linked by social security number,
last name and/or address to facilitate household mailings.
E. Create and produce mailing labels for regular, periodic or special
mailings to shareholders or households.
F. Receive and process redemption requests received in good order by
mail, telephone or other proper method, including automated processing
of systematic withdrawal transactions on a monthly basis. Deliver
appropriate redemption documentation to the Trust's custodian.
G. Administer distribution of redemption proceeds, in coordination with
Trust's custodian, by check, Fed Wire or ACH processing.
H. Process transfers of shares in accordance with the shareowner's
instructions;
I. Process exchanges between Funds within the same family of Funds upon
request by mail, telephone, or other proper method;
J. Issue and/or cancel certificates as instructed; replace lost, stolen,
or destroyed certificates upon receipt of satisfactory indemnification
or surety bond;
K. Prepare and transmit payments for dividends and distributions declared
by the Trust by providing automated processing of dividend and capital
gains payments with daily, monthly, quarterly, or annual
distributions. Payment options will include reinvestment, directed
payment to another Fund, or cash via mail, Fed Wire or ACH.
L. Record the issuance of shares of the Trust and maintain, pursuant to
Securities Exchange Act of 1934 Rule 17Ad-10(e), a record of the total
number of shares of the Trust which are authorized, issued, and
outstanding;
M. Prepare shareholder meeting lists and, if applicable, mail, receive,
and tabulate proxies;
N. Provide toll-free telephone lines and sufficient personnel to answer
shareholder calls. Telephone representatives should provide routine
account information; respond to requests for information regarding
transaction details including direct and wire purchases, redemptions,
exchanges, transfers, systematic withdrawals, or purchases, Fund SERV,
or wire order trades; assist in problem solving; and process telephone
transactions.
O. Provide silent monitoring of telephone representatives to ensure
quality of customer service and record and maintain tape recordings of
all shareholder calls for a six-month period.
P. Customer inquiries or problems communicated by mail, telephone, or
other proper method should be researched by Agent personnel in a
reasonably prompt manner and any difficulties should be reported to
the Trust. Such inquiries/problems may include shareholder account
information, historical account information, stop payments on checks,
transaction details or lost certificates.
Q. Prepare and mail laser printed confirmations and/or account statements
for all purchases, redemptions and other confirmable transactions on a
monthly basis, or as requested by the Trust. Shareholder account
statements should show beginning and ending share price and account
value and daily activity including dividends and distributions, with
share price and transaction amounts.
R. Mail prospectuses (with statements or confirmations if requested),
prospectus stickers or supplements, statements of additional
information and shareholder reports to current shareholders, as
requested by the Trust.
S. Provide appropriate transfer agency services to facilitate
Fund-sponsored IRA and SEP-IRA plans using Firstar Trust Company as
custodian, as well as Fund-sponsored qualified retirement plans (such
as 401(k) and 403(b) plans).
T. Prepare and file U.S. Treasury Department forms 1099 and other
appropriate information returns required with respect to dividends and
distributions for all shareholders;
U. Provide a Blue Sky System which will enable the Trust to monitor the
total number of Fund shares sold in each state. In addition, the Trust
shall identify to the Agent in writing those transactions and assets
to be treated as exempt from the Blue Sky reporting to the Trust for
each state. The responsibility of the Agent for the Trust's Blue Sky
state registration status is solely limited to the initial compliance
by the Trust and the reporting of such transactions to the Trust.
2. Compensation
The Trust agrees to pay the Agent for performance of the duties listed in
this Agreement; the fees and out-of-pocket expenses include, but are not limited
to the following: printing, postage, forms, stationery, record retention,
mailing, insertion, programming, labels, shareholder lists and proxy expenses.
These fees and reimbursable expenses may be changed from time to time
subject to mutual written agreement between the Trust and the Agent.
The Trust agrees to pay all fees and reimbursable expenses within ten (10)
business days following the mailing of the billing notice.
3. Representations of Agent
The Agent represents and warrants to the Trust that:
A. It is a trust company duly organized, existing and in
good standing under the laws of Wisconsin;
B. It is a registered transfer agent under the Securities
Exchange Act of 1934 as amended.
C. It is duly qualified to carry on its business in the
state of Wisconsin;
D. It is empowered under applicable laws and by its
charter and bylaws to enter into and perform this
Agreement;
E. All requisite corporate proceedings have been taken to authorize it
to enter and perform this Agreement; and
F. It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement.
G. It will comply with all applicable requirements of the Securities Act
of 1933 and the Securities Exchange Act of 1934, as amended, the
Investment Company Act of 1940, as amended, and any laws, rules, and
regulations of governmental authorities having jurisdiction.
4. Representations of the Trust
The Trust represents and warrants to the Agent that:
A. The Trust is an open-ended diversified investment company registered
under the 1940 Act;
B. The Trust is a business Trust organized, existing, and in good
standing under the laws of the State of Delaware;
C. The Trust is empowered under applicable laws and by its Agreement and
Declaration of Trust and bylaws to enter into and perform this
Agreement;
D. All necessary proceedings required by the Agreement and Declaration of
Trust have been taken to authorize it to enter into and perform this
Agreement;
E. The Trust will comply with all applicable requirements of the
Securities Act of 1933 and the Securities Exchange Act of 1934, as
amended, the 1940 Act, and any laws, rules, and regulations of
governmental authorities having jurisdiction; and
F. A registration statement under the Securities Act of 1933 is currently
effective and will remain effective, and appropriate state securities
law filings have been made and will continue to be made, with respect
to all shares of the Trust being offered for sale.
5. Covenants of the Trust and Agent
The Trust shall furnish the Agent a certified copy of the resolution of
the Board of Trustees of the Trust authorizing the appointment of the Agent and
the execution of this Agreement. The Trust shall provide to the Agent a copy of
the Agreement and Declaration of Trust, bylaws of the Trust and all amendments.
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable and as required by
the 1940 Act and related rules. To the extent required by Section 31 of the 1940
Act and the rules thereunder, the Agent agrees that all such records prepared or
maintained by the Agent relating to the services to be performed by the Agent
hereunder are the property of the Trust and will be preserved, maintained and
made available in accordance with such section and rules and will be surrendered
to the Trust on and in accordance with its request.
6. Indemnification; Remedies Upon Breach
The Agent shall exercise reasonable care in the performance of its duties
under this Agreement. The Agent shall not be liable for any loss suffered by the
Fund in connection with matters to which this Agreement relates, including
losses resulting from mechanical breakdowns or the failure of communication or
power supplies beyond the Agent's control, except a loss resulting from the
Agent's refusal or failure to comply with the terms of this Agreement or from
bad faith, negligence, or willful misconduct on its part in the performance of
its duties under this Agreement. Notwithstanding any other provision of this
Agreement, the Trust shall indemnify and hold harmless the Agent from and
against any and all claims, demands, losses, expenses, and liabilities (whether
with or without basis in fact or law) of any and every nature (including
reasonable attorneys' fees) which the Agent may sustain or incur or which may be
asserted against the Agent by any person arising out of any action taken or
omitted to be taken by it in performing the services hereunder (i) in accordance
with the foregoing standards, or (ii) in reliance upon any written or oral
instruction provided to the Agent by any duly authorized officer of the Trust,
such duly authorized officer to be included in a list of authorized officers
furnished to the Agent attached as Schedule D and as amended from time to time
in writing by resolution of the Board of Trustees of the Trust.
Further, the Trust will indemnify and hold the Agent harmless against any
and all losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action, or suit as
a result of the negligence of the Trust or the principal underwriter (unless
contributed to by the Agent's breach of this Agreement or other Agreements
between the Trust and the Agent, or the Agent's own negligence or bad faith); or
as a result of the Agent acting upon telephone instructions relating to the
exchange or redemption of shares received by the Agent and reasonably believed
by the Agent under a standard of care customarily used in the industry to have
originated from the record owner of the subject shares; or as a result of acting
in reliance upon any genuine instrument or stock certificate signed,
countersigned, or executed by any person or persons authorized to sign,
countersign, or execute the same.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, the Agent shall take all reasonable steps to
minimize service interruptions for any period that such interruption continues
beyond the Agent's control. The Agent will make every reasonable effort to
restore any lost or damaged data and correct any errors resulting from such a
breakdown at the expense of the Agent. The Agent agrees that it shall, at all
times, have reasonable contingency plans that are comparable to those employed
by the financial services industry, with appropriate parties, making reasonable
provision for emergency use of electrical data processing equipment to the
extent appropriate equipment is available. Representatives of the Trust shall be
entitled to inspect the Agent's premises and operating capabilities at any time
during regular business hours of the Agent, upon reasonable notice to the Agent.
Regardless of the above, the Agent reserves the right to reprocess and
correct administrative errors at its own expense.
In order that the indemnification provisions contained in this section
shall apply, it is understood that if in any case the Trust may be asked to
indemnify or hold the Agent harmless, the Trust shall be fully and promptly
advised of all pertinent facts concerning the situation in question, and it is
further understood that the Agent will use all reasonable care to notify the
Trust promptly concerning any situation which presents or appears likely to
present the probability of such a claim for indemnification against the Trust.
The Trust shall have the option to defend the Agent against any claim which may
be the subject of this indemnification. In the event that the Trust so elects,
it will so notify the Agent and thereupon the Trust shall take over complete
defense of the claim, and the Agent shall in such situation initiate no further
legal or other expenses for which it shall seek indemnification under this
section. The Agent shall in no case confess any claim or make any compromise in
any case in which the Trust will be asked to indemnify the Agent except with the
Trust's prior written consent.
The Agent shall indemnify and hold the Trust harmless from and against any
and all claims, demands, losses, expenses, and liabilities (whether with or
without basis in fact or law) of any and every nature (including reasonable
attorneys' fees) which may be asserted against the Trust by any person arising
out of any action taken or omitted to be taken by the Agent as a result of the
Agent's refusal or failure to comply with the terms of this Agreement, its bad
faith, negligence, or willful misconduct.
7. Confidentiality
The Agent agrees on behalf of itself and its employees to treat
confidentially all records and other information relative to the Trust and its
shareholders and shall not be disclosed to any other party, except after prior
notification to and approval in writing by the Trust, which approval shall not
be unreasonably withheld and may not be withheld where the Agent may be exposed
to civil or criminal contempt proceedings for failure to comply after being
requested to divulge such information by duly constituted authorities.
8. Records
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem advisable
and is agreeable to the Trust and as required by the rules and regulations of
appropriate government authorities, in particular, Section 31 of the 1940 Act
and the rules thereunder. The Agent agrees that all such records prepared or
maintained by the Agent relating to the services to be performed by the Agent
hereunder are the property of the Trust and will be preserved, maintained, and
made available with such section and rules of the 1940 Act and will be promptly
surrendered to the Trust upon and in accordance with its request.
9. Wisconsin Law to Apply
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the state of Wisconsin.
10. Term, Amendment, Termination, Assignment, and Notice
A. This Agreement shall become effective on the date above first written
and, unless sooner terminated as provided herein, shall continue
automatically for successive annual periods, provided that the
continuance of the Agreement is approved by a majority of the
Trustees of the Trust.
B. This Agreement may be amended by the mutual written consent of the
parties.
C. This Agreement may be terminated upon ninety (90) day's written
notice given by one party to the other.
D. This Agreement and any right or obligation hereunder may not be
assigned by either party without the signed, written consent of the
other party.
E. Any notice required to be given by the parties to each other under
the terms of this Agreement shall be in writing, addressed and
delivered, or mailed to the principal place of business of the other
party. If to the agent, such notice should to be sent to:
Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
If to the Trust, such notice should be sent to:
IGAM Group Funds
133 Old Tower Hill Road
Suite 1
Wakefield, RI 02879
F. In the event that the Trust gives to the Agent its written intention
to terminate and appoint a successor transfer agent, the Agent agrees
to cooperate in the transfer of its duties and responsibilities to
the successor, including any and all relevant books, records and
other data established or maintained by the Agent under this
Agreement.
G. Should the Trust exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be
paid by the Trust.
IGAM Group Funds Firstar Mutual Fund Services, LLC
By: By:
Attest: Attest:
<PAGE>
Schedule A
Transfer Agent Servicing Agreement
Annual Fee Schedule
o $____per shareholder account
o Minimum annual fee of $________ for the first Fund and
$________ for each additional Fund.
o Plus out-of-pocket expenses, including but not limited to:
o Telephone - toll-free lines
o Postage
o Programming
o Stationery/envelopes
o Mailing
o Insurance
o Proxies
o Retention of records
o Microfilm/fiche of records
o Special reports
o All other out-of-pocket expenses
o ACH fees
o Fees are billed monthly
<PAGE>
Schedule B
Transfer Agent Servicing Agreement
Shareholder Fees
(Charged to Investors)
Defined Contribution
403(b)(7), 401(k)
IRA Accounts Plan Accounts
I. Qualified Plan Fees
Annual maintenance fee per account $_____ $_____
Transfer to successor trustee _____ _____
Distribution to a participant (exclusive
of systematic withdrawal plans) _____ _____
Refund of excess contribution _____
II. Additional Shareholder Fees Amount
Any outgoing wire $__.__/wire
Telephone exchange __.__/telephone exchange
Return check fee __.__/return check
Stop payment fee (liquidation,
dividend draft check) __.__/stop payment
Research fee __.__/research item
(For requested items of the
second calendar year [or previous]
to the request)
These fees are subject to change upon notification by Firstar Mutual
Fund Services, LLC to the mutual fund client
<PAGE>
Schedule C
Transfer Agent Servicing Agreement
Automatic Investment Plan Processing
ACH Service
o Automatic Investment Plan
o Telephone Purchase, Liquidation
o EFT Payments of Dividends, Capital Gains, SWP's
o $____ per month per Fund group
o $____ per account set-up and/or change
o $____ per item for AIP purchases
o $____ per item for EFT payments, purchases
o $____ per correction, reversal, or return item
o Fees are billed monthly
<PAGE>
Schedule D
Transfer Agent Servicing Agreement
Authorized Officers to Give Instructions
