File No. 333-
File No. 811-09813
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. ____ /_/
Post Effective Amendment No. / /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 /X/
Amendment No.
(Check appropriate box or boxes.)
UMB SCOUT FUNDS
(Exact name of Registrant as Specified in Charter)
BMA Tower, 700 Karnes Blvd., Kansas City, MO 64108-3306
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (816) 751-5900
Steven S. Soden, BMA Tower, 700 Karnes Blvd., Kansas City, MO
64108-3306
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering
It is proposed that this filing become effective (check
appropriate box)
/_/ immediately upon filing pursuant to paragraph (b)
/_/ on (date) pursuant to paragraph (b)
/-/ 60 days after filing pursuant to paragraph (a)(1)
/_/ on March 31, 1999 pursuant to paragraph (a)(1)
/_/ 75 days after filing pursuant to paragraph (a)(2)
/_/ on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
/_/ This post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
The Registrant hereby amends this Registration Statement on
such 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>
UMB Scout Funds
Prospectus May 1, 2000
TECHNOLOGY fund
A no-load mutual fund that invests principally in securities of companies
that develop, produce or distribute products and services related to
technology.
Shares of the Fund have not been approved or disapproved by the Securities
and Exchange Commission nor has the Commission passed on the adequacy of
this Prospectus. Any representation to the contrary is a criminal offense.
Opportunity
Beyond
Tomorrow
PROSPECTUS
MAY 1, 2000
Toll-Free 800-996-2862
UMB Scout Technology Fund
Investment Advisor and Manager:
UMB BANK, N.A.
Kansas City, Missouri
Distributor:
JONES & BABSON, INC.
Kansas City, Missouri
TABLE OF CONTENTS
Page
Information About the Fund
Investment Objective and Principal Investment Strategies 2
Principal Risk Factors 3
Fees and Expenses 4
Investment Advisor and Manager 4
Information About Investing
How to Purchase Shares 5
How to Redeem Shares 5
Additional Policies about Transactions 5
Shareholder Services 6
How Share Price is Determined 7
Dividends, Distributions and their Taxation 7
Conducting Business with the UMB Scout Funds 8
The shares offered by this prospectus are not deposits or obligations of,
nor guaranteed or endorsed by, UMB Bank, n.a., or any of its affiliate
banks. They are not federally insured by the Federal Deposit Insurance
Corporation (F.D.I.C.), or any other U.S. Government agency. These shares
involve investment risks, including the possible loss of the principal
invested.
Investment Objective and Principal Investment Strategies
The Fund seeks to provide long-term capital appreciation. To pursue its
objective, the Fund will invest principally (at least 65% of total assets)
in securities of companies that develop, produce or distribute products and
services related to technology.
In considering whether an issuer is principally engaged in technology
business activities, the Investment Advisor may consider, among other
things, whether it is listed on the Morgan Stanley High-Technology 35 Index
(the "Morgan Stanley Index"), the Hambrecht and Quist Technology Index (the
"H&Q Index"), the SoundView Technology Index (the "SoundView Index"), the
Technology grouping of the S&P 500r Index or any other comparable
technology index.
Using fundamental research and quantitative analysis, the investment
management team selects securities of technology companies believed to have
the potential to outperform the technology sector over the long-term. In
doing so, the investment management team selects investments based on
factors such as:
Financial condition;
Market share;
Product leadership, innovative concepts or market niches;
Earnings growth rates compared with relevant competitors;
Market valuation compared to securities of other technology-
related companies and the stock's own historical norms;
Product and industry trends; and
Price trends.
The investment management team intends to sell securities it believes are
no longer suitable for achieving the Fund's objective of long-term capital
appreciation.
Companies in which the Fund may invest include businesses related to the
following products and services: computers, software and peripheral
products; industrial and business machines; communications,
telecommunications and information products and services; electronics,
semiconductors and minicomputers; electronic media; environmental services;
internet; office equipment and supplies; television and video equipment and
services; satellite technology and equipment; chemicals and synthetic
materials; and biotechnology, health care and medical supplies. It is
expected that more than 25% of the Fund's total assets will normally be
invested in technology companies that develop or sell computers, software
and peripheral products. The Fund may invest in both small and large
technology companies, without regard to their size and, at times, may have
a significant amount of its assets invested in small companies.
Although the Fund primarily invests in the securities of U.S. companies, it
may invest a portion of its assets in the securities of foreign issuers.
The Fund does not expect normally to invest more than 35% of its assets in
the securities of foreign issuers.
Although the Fund normally will invest in equity securities, which include
common stocks, preferred stocks and convertible securities, there may be
times when the Investment Advisor will use a higher percentage of high-
grade bonds or other investments that may provide income. In such cases,
the Fund will resume investing primarily in equity securities when
conditions warrant.
The Fund intends to hold some cash, short-term debt obligations, government
securities or other high-quality investments for reserves to cover
redemptions and unanticipated expenses. There may be times, however, when
the Fund attempts to respond to adverse market, economic, political or
other conditions by investing up to 100% of its assets in those types of
investments for temporary, defensive purposes. During those times, the Fund
will not be able to pursue long-term capital appreciation and, instead,
will focus on preserving your investment.
Principal Risk Factors
As with any mutual fund, there is a risk that you could lose money by
investing in the Fund.
Market Risks - Equity securities are subject to market, economic and
business risks that will cause their prices to fluctuate over time. Since
the Fund is normally invested in equity securities, the value of the Fund
may go down. Different types of investments shift in and out of favor
depending on market and economic conditions. For example, at various times
equity securities will be more or less favorable than bonds. Because of
this, the Fund will perform better or worse than other types of funds
depending on what is in favor.
Concentration Risks - The Fund will be highly concentrated in companies
engaged in technology business activities, particularly the computer and
software industry. Therefore, the Fund may be especially sensitive to
changes in the general stock market and other economic conditions that
affect those industries. Companies in the rapidly changing fields of
science and technology often face special risks. For example, their
products may prove commercially unsuccessful, become obsolete or become
adversely impacted by a government regulation. Technology securities may
experience significant price movements caused by disproportionate investor
optimism or pessimism and earnings disappointments can result in sharp
price declines. The Fund is therefore likely to be much more volatile than
a Fund that is exposed to a greater variety of industries, especially over
the short term.
Small Company Risks - The Fund may have a significant amount of its assets
invested in small companies. Generally, smaller and less seasoned companies
have more potential for rapid growth. However, they often involve greater
risk than larger companies and these risks are passed on to the Fund. These
companies may not have the management experience, financial resources,
product diversification and competitive strengths of larger companies.
Therefore, the securities of smaller companies are generally more volatile
than the securities of larger, more established companies. An investment in
the Fund may be more suitable for long-term investors who can bear the risk
of these fluctuations.
Smaller company stocks tend to be bought and sold less often and in smaller
amounts than larger company stocks. Because of this, if the Fund wants to
sell a large quantity of a small company stock it may have to sell at a
lower price than the Investment Advisor might prefer, or it may have to
sell in small quantities over a period of time. The Fund tries to minimize
this risk by investing in stocks that are readily bought and sold.
International Risks - International investing by the Fund poses additional
risks such as currency fluctuations. If a security owned by the Fund is
denominated in a foreign currency, the price of that security may go up in
the local currency but cause a loss to the Fund when priced in U.S.
dollars. International markets, especially in developing countries, are
subject to political and economic instability and are not always as liquid
as in the U.S., sometimes making it harder to sell a security. In addition,
foreign companies may not be subject to comparable securities regulation
and accounting, auditing and financial reporting standards as U.S.
companies. These risks are inherently passed on to the company's
shareholders, including the Fund, and in turn, to the Fund's shareholders.
FEES & EXPENSES
The following tables describe the fees and expenses that you may pay if you
buy and hold shares of the Fund. The Fund is new as of May 1, 2000, so the
amount of "Other Expenses," "Total Annual Fund Operating Expenses" and the
dollar amounts in the "Example" are based on estimates for the first year
of operations.
Shareholder Fees
(Fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases None
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None
Redemption Fee None
Exchange Fee None
Annual Fund Operating Expenses
(Expenses deducted from Fund assets)
Management Fees 1.50%*
Distribution (12b-1) Fees None
Other Expenses 0.03%
Total Annual Fund Operating Expenses 1.53%
Less Manager's Fee Waiver/Payments* (0.43%)
Revised Total Annual Fund Operating Expenses 1.10%
* The Manager has entered into an agreement to waive its fees
and/or to make expense payments through the fiscal year ending June 30,
2001 so that actual total annual fund operating expenses do not exceed
1.10% of average daily net assets.
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. Please note that only the first
year in each example reflects the effect of the Manager's fee
waiver/expense reimbursement. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
1 Year 3 Years
$112 $305
INVESTMENT ADVISOR AND MANAGER
UMB Bank, n.a., is the Fund's Investment Advisor and Manager on a day to
day basis. A management team led by William Greiner is responsible for
investment decisions for the Fund. Mr. Greiner has been the chief
investment officer at UMB Bank since 1999. Prior to that, he managed
investments at Northern Trust Company, Chicago, IL. Mr. Greiner has over 16
years of investment management experience.
As Manager, UMB Bank, n.a., provides or pays the cost of all management,
supervisory and administrative services required in the normal operation of
the Fund. This includes investment management and supervision; fees of the
custodian, independent auditors and legal counsel; officers, directors and
other personnel; rent; shareholder services; and other items incidental to
corporate administration. Operating expenses not required in the normal
operation of the Fund are payable by the Fund. These expenses include
taxes, interest, governmental charges and fees, including registration of
the Fund with the Securities and Exchange Commission and fees payable to
the various states. The Fund also pays its own brokerage costs, dues, and
all extraordinary costs including expenses arising out of anticipated or
actual litigation or administrative proceedings.
For its services, the Fund pays UMB Bank, n.a., a fee at the annual rate of
one and one-half percent (1.50%) of average daily net assets. Through the
fiscal year ending June 30, 2001, the manager has entered into a
contractual agreement with the Fund to limit annual fund operating expenses
to 1.10% of average daily net assets. The Management Agreement limits the
liability of UMB Bank, n.a., as well as its officers, directors and
personnel, to acts or omissions involving willful malfeasance, bad faith,
gross negligence or reckless disregard of their duties. UMB Bank, n.a., is
located at 700 Karnes Boulevard, Kansas City, MO 64108-3306. It maintains an
experienced investment analysis and research staff that serves a broad
variety of individual, corporate and institutional clients.
Jones & Babson, Inc., serves as transfer agent and principal underwriter
for the Fund. Jones & Babson, Inc., was founded in 1959 and is located at
BMA Tower, 700 Karnes Boulevard, Kansas City, MO 64108-3306.
UMB Bank, n.a., from its own resources, may compensate its affiliates for
marketing, shareholder servicing, recordkeeping and/or other services
performed with respect to the Fund's shares. This includes a fee paid by
UMB Bank, n.a., to UMB Scout Brokerage Services, Inc. on UMB Scout Fund
shares held in customer accounts at UMB Scout Brokerage Services.
HOW TO PURCHASE SHARES
No-Load Fund
There are no sales commissions, redemption fees or Rule 12b-1 distribution
fees
How to Buy Shares (see chart on page 8 for details)
By phone, mail or wire
Through Automatic Monthly Investments
Through exchanges from other UMB Scout Funds
Minimum Initial Investment
$1,000 for most accounts
$250 for IRA and Uniform Transfer (Gift) to Minors accounts
$100 with Automatic Monthly Investments
$1,000 for exchanges from another UMB Scout Fund
Minimum Additional Investments
$100 for purchases by phone or mail ($500 for wire purchases)
$50 for Automatic Monthly Investments
$1,000 for exchanges from another UMB Scout Fund
Minimum Account Size
You must maintain a minimum account size equal to the current minimum
initial investment (usually $1,000). If your account falls below this
amount due to redemptions (not market action) we may notify you and ask you
to increase the account to the minimum. We will close the account and send
your money if you do not bring the account up to the minimum within 60 days
after we mail you the notice.
HOW TO REDEEM SHARES
You may withdraw from your Fund account at any time in the following
amounts:
any amount for redemptions requested by mail or phone
$500 or more for redemptions wired to your account (there may be a fee)
$50 or more for redemptions by a systematic redemption plan (there may be
a fee)
$1,000 or more for exchanges to another Fund
$100 or more for redemptions by automatic monthly exchange to another
Fund
ADDITIONAL POLICIES ABOUT TRANSACTIONS
We cannot process transaction requests that are not complete and in good
order as described in this section. We may cancel or change our transaction
policies without notice. To avoid delays, please call us if you have any
questions about these policies.
If you wish to purchase (or redeem) shares of a UMB Scout Fund through a
broker, a fee may be charged by that broker. In addition, you may be
subject to other policies or restrictions of the broker such as higher
minimum account value, etc.
Purchases - We may reject orders when not accompanied by payment or when in
the best interest of the Fund and its shareholders.
Redemptions - We try to send proceeds as soon as practical. In any event,
we send proceeds by the third business day after we receive a request in
good order. We cannot accept requests that contain special conditions or
effective dates. We may request additional documentation to ensure that a
request is genuine. Under certain circumstances, we may pay you proceeds in
the form of portfolio securities owned by the Fund. If you receive
securities instead of cash, you may incur brokerage costs when converting
them into cash.
The Manager believes that certain investors who try to "time the market" by
purchasing and redeeming shares from the Fund on a regular basis may
disrupt the investment process and pose additional transaction costs to the
Fund. Therefore in those cases the Fund Manager may delay redemption
proceeds up to seven days or take other actions it deems necessary to
discourage such activity.
If you request a redemption within 15 days of purchase, we will delay
sending your proceeds until we have collected unconditional payment, which
may take up to 15 days from the date of purchase. For your protection, if
your account address has been changed within the last 30 days, your
redemption request must be in writing and signed by each account owner,
with signature guarantees. The right to redeem shares may be temporarily
suspended in emergency situations, only as permitted under federal law.
Signature Guarantees - You can get a signature guarantee from most banks or
securities dealers and certain other financial institutions, but not a
notary public. For your protection, we require a guaranteed signature if
you request:
A redemption check sent to a different payee, bank or address than we
have on file.
A redemption check mailed to an address that has been changed within the
last 30 days.
A redemption for $50,000 or more in writing.
A change in account registration or redemption instructions.
Corporations, Trusts and Other Entities - Additional documentation is
normally required for corporations, fiduciaries and others who hold shares
in a representative or nominee capacity. We cannot process your request
until we have all documents in the form required. Please call us first to
avoid delays.
Exchanges to Another Fund - You must meet the minimum investment
requirement of the Fund into which you are exchanging. The names and
registrations on the two accounts must be identical. Your shares must have
been held in an open account for 15 days or more and we must have received
good payment before we will exchange shares. You should review the
Prospectus of the Fund being purchased. Call us for a free copy.
Telephone Services - During periods of increased market activity, you may
have difficulty reaching us by telephone. If this happens, contact us by
mail. We may refuse a telephone request, including a telephone redemption
request. We will use reasonable procedures to confirm that telephone
instructions are genuine. If such procedures are followed, the Fund will
not be liable for losses due to unauthorized or fraudulent instructions. At
our option, we may limit the frequency or the amount of telephone
redemption requests. Neither the Fund nor Jones & Babson, Inc. assumes
responsibility for the authenticity of telephone redemption requests.
SHAREHOLDER SERVICES
The following services are also available to shareholders. Please call 800-
996-2862 for more information:
Traditional IRA accounts
Roth IRA accounts
Education IRA accounts
Simplified Employee Pensions (SEPs)
Uniform Transfers (Gifts) to Minors accounts
Accounts for corporations or partnerships
Sub-Accounting Services for Keogh, tax qualified retirement plans, and
others
Prototype Retirement Plans for the self-employed, partnerships and
corporations.
HOW SHARE PRICE IS DETERMINED
Shares of the Fund are purchased or redeemed at the net asset value per
share next calculated after your purchase order and payment or redemption
order is received by us in good order. In the case of certain institutions
which have made satisfactory payment or redemption arrangements with the
Fund and have received your purchase order and payment or redemption order,
we may process the order at the net asset value per share next effective
after receipt of the order by the institution.
The per share calculation is made by subtracting from the Fund's total
assets any liabilities and then dividing into this amount the Fund's total
outstanding shares as of the date of the calculation. The net asset value
per share is computed once daily, Monday through Friday, at 4:00 p.m.
(Eastern Time) on days when the Fund is open for business. These generally
are the same days that the New York Stock Exchange is open for trading. The
New York Stock Exchange is closed on weekends, national holidays and Good
Friday.
Each security owned by the Fund that is listed on an Exchange is valued at
its last sale price on that Exchange on the date when assets are valued.
Where the security is listed on more than one Exchange, the Fund will use
the price of that Exchange which it generally considers to be the principal
Exchange on which the stock is traded. Lacking sales, the security is
valued at the mean between the last current closing bid and asked prices.
An unlisted security for which over-the-counter market quotations are
readily available is valued at the mean between the last current bid and
asked prices. When market quotations are not readily available, any
security or other asset is valued at its fair value as determined in good
faith by the Fund's Board of Trustees or by the Investment Advisor in
accordance with procedures approved by the Board of Trustees. Short-term
instruments maturing within 60 days may be valued at amortized cost.
DIVIDENDS, DISTRIBUTIONS AND THEIR TAXATION
Distributions - Your distributions will be reinvested automatically in
additional shares of the Fund unless you have elected on your original
application, or by written instructions filed with the Fund, to have them
paid in cash ($10 minimum check amount). There are no fees or sales charges
on reinvestments.
The Fund will pay substantially all of its net investment income
semiannually, usually in June and December. It is contemplated that
substantially all of any net capital gains realized during a fiscal year
will be distributed with the fiscal year-end dividend, with any remaining
balance paid in December.
If you buy shares of the Fund shortly before the record date, please keep
in mind that any distribution will lower the value of the Fund's shares by
the amount of the distribution and you will then receive a portion of the
price back in the form of a taxable distribution.
Tax Considerations - In general, Fund distributions are taxable to you as
either ordinary income or capital gains. This is true whether you reinvest
your distributions in additional Fund shares or receive them in cash. Any
capital gains the Fund distributes are taxable to you as long-term capital
gains no matter how long you have owned your shares.
By law, the Fund must withhold 31% of your taxable distributions and
redemption proceeds if you do not provide your correct Social Security or
Taxpayer Identification Number and certify that you are not subject to
backup withholding, or if the IRS instructs the Fund to do so.
Every January, you will receive a statement that shows the tax status of
distributions you received for the previous year. Distributions declared in
December but paid in January are taxable as if they were paid in December.
In general, when you sell your shares of the Fund, you may have a capital
gain or loss. For tax purposes, an exchange of your Fund shares for shares
of a different UMB Scout Fund is the same as a sale. The individual tax
rate on any gain from the sale or exchange of your Fund shares depends on
your marginal tax bracket and on how long the shares have been held.
Many states grant tax-free status to dividends paid from interest earned on
direct obligations of the U.S. government, subject to certain restrictions.
Fund distributions and gains from the sale or exchange of your Fund shares
generally will be subject to state and local income tax. Non-U.S. investors
may be subject to U.S. withholding and estate tax. You should consult your
tax advisor about the federal, state, local or foreign tax consequences of
your investment in the Fund.
Conducting Business with the UMB Scout Funds by Mail
UMB Scout Funds
P.O. Box 219757
Kansas City, MO 64121-9757
How to Open an Account
Complete and sign the application included with this Prospectus. Your
initial investment must meet the minimum amount and you must indicate the
name of the Fund. Make your check payable to UMB Bank, n.a.
How to Add to an Account
Make your check ($100 minimum) payable to UMB Bank, n.a., and mail it to
us. Always identify your account number or include the detachable coupon
(from your confirmation statement).
How to Sell Shares
In a letter, include the genuine signature of each registered owner
(exactly as registered), the name of each account owner, the account number
and the number of shares or the dollar amount to be redeemed. We will send
funds only to the address of record.
How to Exchange Shares
n a letter, include the genuine signature of each registered owner, the
Fund name and your account number, the number of shares or dollar amount to
be exchanged ($1,000 minimum) and the UMB Scout Fund into which the amount
is being transferred.
Conducting Business with the UMB Scout Funds by Wire
UMB Bank, n.a.,
Kansas City, Missouri, ABA #101000695
For UMB Scout Funds/AC=98 01186957
Please provide your fund number, account number and name on account.
How to Open an Account
Call us first to get an account number. We will require information such as
your Social Security or Taxpayer Identification Number, the amount being
wired ($1,000 minimum), and the name and telephone number of the wiring
bank. Then tell your bank to wire the amount. You must send us a completed
application as soon as possible or payment of your redemption proceeds may
be delayed.
How to Add to an Account
Wire share purchases ($500 minimum) should include the names of each
account owner, your account number and the full name of the Fund. You
should notify us by telephone that you have sent a wire purchase order to
UMB Bank, n.a.
How to Sell Shares
Redemption proceeds ($500 minimum) may be wired to your pre-identified bank
account. A minimal fee may be deducted. If we receive your request before
4:00 p.m. (Eastern Time) we will normally wire funds the following business
day. If we receive your request later in the day, we will normally wire
funds on the second business day. Contact your bank about the time of
receipt and availability.
How to Exchange Shares
Not applicable.
Conducting Business with the UMB Scout Funds through Automatic Transaction
Plans
You must authorize each type of automatic transaction on your account
application or complete an authorization form, available from us upon
request. All registered owners must sign.
How to Open an Account
Not applicable.
How to Add to an Account
Automatic Monthly Investment:
You may authorize automatic monthly investments in a constant dollar amount
($50 minimum) from your checking account. We will draft your checking
account on the same day each month in the amount you authorize.
How to Sell Shares
Systematic Redemption Plan:
You may specify a dollar amount ($50 minimum) to be withdrawn monthly or
quarterly or have your shares redeemed at a rate calculated to exhaust the
account at the end of a specified period. A fee of $1.50 or less may be
charged for each withdrawal. You must own shares in an open account valued
at $10,000 when you first authorize the systematic redemption plan. You may
cancel or change your plan or redeem all your shares at any time. We will
continue withdrawals until your shares are gone or until the Fund or you
cancel the plan.
How to Exchange Shares
Monthly Exchanges:
You may authorize monthly exchanges from your account ($100 minimum) to
another UMB Scout Fund. Exchanges will be continued until all shares have
been exchanged or until you terminate the service. You must own shares in
an open account valued at $2,500 or more when you first authorize monthly
exchanges.
UMB Scout Funds
100% No-Load Mutual Funds
Stock Fund
Stock Select Fund
Regional Fund
WorldWide Fund
WorldWide Select Fund
Capital Preservation Fund
Balanced Fund
Equity Index Fund
Technology Fund
Bond Fund
Kansas Tax-Exempt Bond Fund*
Money Market Fund
Federal Portfolio
Prime Portfolio
Tax-Free Money Market Fund
*Available in Kansas and Missouri only.
Investment Advisor and MANAGER
UMB Bank, n.a.,
Kansas City, Missouri
Auditors
Baird, Kurtz & Dobson,
Kansas City, Missouri
Legal Counsel
Stradley, Ronon, Stevens & Young, LLP
Philadelphia, Pennsylvania
Custodian
UMB Bank, n.a.,
Kansas City, Missouri
Underwriter, Distributor and transfer agent
Jones & Babson, Inc.
Kansas City, Missouri
Additional Information
The Statement of Additional Information (SAI) contains additional
information about the Fund 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. Because the
Fund is new, it has not yet published an annual or semi-annual report to
shareholders.
You may obtain a free copy of these documents by contacting the Fund by
telephone, mail or e-mail as shown below. You also may call the toll-free
number given below to request other information about the Fund and to make
shareholder inquiries.
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 (1-800-SEC-0330) or by visiting the Commission's Internet
site at http://www.sec.gov. Copies of this information also may be
obtained, upon payment of a duplicating fee, by writing to the Public
Reference Section of the Commission, Washington, DC 20549.
UMB Scout Funds
P.O. Box 219757
Kansas City, MO 64121-9757
Toll Free 800-996-2862
www.umb.com
"UMB", "Scout" and the "Scout" design are registered
service marks of UMB Financial Corporation.
<PAGE>
UMB Scout Funds
Prospectus May 1, 2000
EQUITY INDEX fund
A no-load mutual fund that seeks to provide investment results that track,
as closely as possible, the performance of the Standard & Poor's 500
composite stock price index.
Shares of the Fund have not been approved or disapproved by the Securities
and Exchange Commission nor has the Commission passed on the adequacy of
this Prospectus. Any representation to the contrary is a criminal offense.
Opportunity
Beyond
Tomorrow
PROSPECTUS
MAY 1, 2000
Toll-Free 800-996-2862
UMB Scout Equity Index Fund
Investment Advisor and Manager:
UMB BANK, N.A.
Kansas City, Missouri
Investment Sub-Advisor:
Northern Trust Quantitative Advisors, Inc.
Chicago, Illinois
Distributor:
JONES & BABSON, INC.
Kansas City, Missouri
TABLE OF CONTENTS
Page
Information About the Fund
Investment Objective and Principal Investment Strategies 2
Principal Risk Factors 2
Fees and Expenses 3
Investment Advisor and Manager 4
Investment Sub-Advisor 4
Information About Investing
How to Purchase Shares 5
How to Redeem Shares 5
Additional Policies about Transactions 5
Shareholder Services 6
How Share Price is Determined 7
Dividends, Distributions and their Taxation 7
Conducting Business with the UMB Scout Funds 8
The shares offered by this prospectus are not deposits or obligations of,
nor guaranteed or endorsed by, UMB Bank, n.a., or any of its affiliate
banks. They are not federally insured by the Federal Deposit Insurance
Corporation (F.D.I.C.), or any other U.S. Government agency. These shares
involve investment risks, including the possible loss of the principal
invested.
INVESTMENT OBJECTIVE AND Principal investment strategies
The Fund seeks to provide investment results that track, as closely as
possible, the performance of the Standard & Poor's Composite Stock Price
Index ("S&P 500r Index").
The S&P 500r Index is an unmanaged stock market index which includes the
stocks of 500 companies operating across a broad spectrum of the U.S.
economy. The Index is dominated by large U.S. companies and its performance
is widely considered representative of the U.S. stock market as a whole.
Standard & Poor's Corporation (S&Pr) does not endorse any stock in the
Index. It is not a sponsor of the UMB Scout Equity Index Fund and is not
affiliated with the Fund in any way.
The Fund is passively managed, which means it tries to duplicate the
investment composition and performance of the S&P 500r Index using
sophisticated computer programs and statistical procedures. As a result,
the investment management team does not use traditional methods of active
investment management, such as buying and selling securities on the basis
of economic, financial and market analysis. Instead, the Fund tries to
match the Index, for better or worse. The Fund has operating expenses and
transaction costs, while the Index has none. Therefore, the performance of
the Fund will generally be less than that of the Index.
In order to track the S&P 500r Index as closely as possible, the Fund
normally invests substantially all (at least 80%) of its total assets in
the stocks that make up the Index, in approximately the same proportions as
they are represented in the Index. Under normal market conditions, it is
expected that the quarterly performance of the Fund will be within a 0.90
correlation with the S&P 500r Index before deduction of Fund expenses. A
correlation of 1.00 would mean a perfect correlation between the
performance of the Fund and the Index.
Because the Fund is an 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 provides tax
efficiencies for shareholders.
To maintain exposure to the Index and manage cash flows, the Fund may
invest in Standard & Poor's Depository Receipts, which are types of
derivatives. These investments allow the Fund to quickly and efficiently
gain market exposure, to keep cash on hand to meet shareholder redemption
requests while simulating full investment in stocks.
PRINCIPAL RISK FACTORS
As with any mutual fund, there is a risk that you could lose money by
investing in the Fund.
Market Risks - Equity securities are subject to market, economic and
business risks that will cause their prices to fluctuate over time. Since
the Fund invests in equity securities, the value of the Fund may go up and
down. Different types of investments shift in and out of favor depending on
market and economic conditions. At various times stocks will be more or
less favorable than bonds, and small company stocks will be more or less
favorable than large company stocks. Because of this, the Fund will perform
better or worse than other types of funds depending on what is in favor.
Tracking Variance Risk - The Fund is subject to the risk that its
performance may not precisely track the performance of the S&P 500r Index.
Tracking variance may result from purchases and redemptions, transaction
costs, Fund expenses, changes in the composition of the Index and other
factors. If securities the Fund owns underperform those in the Index, the
Fund's performance will be lower than the Index. Under normal market
conditions, the Fund expects the quarterly performance of the Fund to be
within a .90 correlation with the Index, before expenses.
The Fund is not sponsored, endorsed, sold or promoted by S&P,r nor does
S&Pr guarantee the accuracy and/or completeness of the S&P 500r Index or
data included therein. S&Pr makes no warranty, express or implied, as to
the results obtained by the Fund, owners of the Fund, any person or any
entity from the use of the S&P 500r Index or any data included therein.
FEES & EXPENSES
The following tables describe the fees and expenses that you may pay if you
buy and hold shares of the Fund. The Fund is new as of May 1, 2000, so the
amount of "Other Expenses," "Total Annual Fund Operating Expenses" and the
dollar amount in the "Example" are based on estimates for the first year of
operations.
Shareholder Fees
(Fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases None
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None
Redemption Fee None
Exchange Fee None
Annual Fund Operating Expenses
(Expenses deducted from Fund assets)
Management Fees 0.40%*
Distribution (12b-1) Fees None
Other Expenses 0.02%
Total Annual Fund Operating Expenses 0.42%
Less Manager's Fee Waiver/Payments* (0.12%)
Revised Total Annual Fund Operating Expenses 0.30%
* The Manager has entered into an agreement to waive its fees
and/or make expense payments through the fiscal year ending June 30, 2001
so that actual total annual fund operating expenses do not exceed 0.30% of
average daily net assets.
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. Please note that the first year
in each example reflects the effect of the manager's fee waiver/expense
payments. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
1 Year 3 Years
$31 $123
INVESTMENT ADVISOR AND MANAGER
UMB Bank, n.a., is the Fund's Investment Advisor and Manager. As manager,
UMB Bank, n.a., provides or pays the cost of all management, supervisory
and administrative services required in the normal operation of the Fund.
This includes investment management and supervision; fees of the custodian,
independent auditors and legal counsel; officers, directors and other
personnel; rent; shareholder services; and other items incidental to
corporate administration. Operating expenses not required in the normal
operation of the Fund are payable by the Fund. These expenses include
taxes, interest, governmental charges and fees, including registration of
the Fund with the Securities and Exchange Commission and fees payable to
the various states. The Fund also pays its own brokerage costs, dues, and
all extraordinary costs including expenses arising out of anticipated or
actual litigation or administrative proceedings.
For its services, the Fund pays UMB Bank, n.a., a fee at the annual rate of
40/100 of one percent (0.40%) of average daily net assets. Through the
fiscal year ending June 30, 2001 the manager has entered into a contractual
agreement with the Fund to limit annual fund operating expenses to 30/100
of one percent (0.30%) of average daily net assets. The Management
Agreement limits the liability of UMB Bank, n.a., as well as its officers,
directors and personnel, to acts or omissions involving willful
malfeasance, bad faith, gross negligence or reckless disregard of their
duties. UMB Bank, n.a., is located at 1010 Grand Boulevard, Kansas City, MO
64106. It maintains an experienced investment analysis and research staff
that serves a broad variety of individual, corporate and institutional
clients.
Jones & Babson, Inc., serves as transfer agent and principal underwriter
for the Fund. Jones & Babson, Inc., was founded in 1959 and is located at
BMA Tower, 700 Karnes Boulevard, Kansas City, MO 64108-3306.
UMB Bank, n.a., from its own resources, may compensate its affiliates for
marketing, shareholder servicing, recordkeeping and/or other services
performed with respect to the Fund's shares. This includes a fee paid by
UMB Bank, n.a., to UMB Scout Brokerage Services, Inc. on UMB Scout Fund
shares held in customer accounts at UMB Scout Brokerage Services.
INVESTMENT SUB-ADVISOR
UMB Bank, n.a., employs at its own expense Northern Trust Quantitative
Advisors, Inc. (the "Sub-Advisor"), an Illinois state-chartered trust
company, to assist in the day-to-day management function of the UMB Scout
Equity Index Fund. The Sub-Advisor and its affiliates administer in various
capacities (including as master trustee, investment manager and custodian)
over $1 trillion of assets as of December 31, 1999. The Sub-Advisor is
located at 50 S. LaSalle Street, Chicago, IL 60675.
HOW TO PURCHASE SHARES
No-Load Fund
There are no sales commissions, redemption fees or Rule 12b-1 distribution
fees
How to Buy Shares (see chart on page 8 for details)
By phone, mail or wire
Through Automatic Monthly Investments
Through exchanges from other UMB Scout Funds
Minimum Initial Investment
$1,000 for most accounts
$250 for IRA and Uniform Transfer (Gift) to Minors accounts
$100 with Automatic Monthly Investments
$1,000 for exchanges from another UMB Scout Fund
Minimum Additional Investments
$100 for purchases by phone or mail ($500 for wire purchases)
$50 for Automatic Monthly Investments
$1,000 for exchanges from another UMB Scout Fund
Minimum Account Size
You must maintain a minimum account size equal to the current minimum
initial investment (usually $1,000). If your account falls below this
amount due to redemptions (not market action) we may notify you and ask you
to increase the account to the minimum. We will close the account and send
your money if you do not bring the account up to the minimum within 60 days
after we mail you the notice.
HOW TO REDEEM SHARES
You may withdraw from your Fund account at any time in the following
amounts:
any amount for redemptions requested by mail or phone
$500 or more for redemptions wired to your account (there may be a fee)
$50 or more for redemptions by a systematic redemption plan (there may be
a fee)
$1,000 or more for exchanges to another Fund
$100 or more for redemptions by automatic monthly exchange to another
Fund
ADDITIONAL POLICIES ABOUT TRANSACTIONS
We cannot process transaction requests that are not complete and in good
order as described in this section. We may cancel or change our transaction
policies without notice. To avoid delays, please call us if you have any
questions about these policies.
If you wish to purchase (or redeem) shares of a UMB Scout Fund through a
broker, a fee may be charged by that broker. In addition, you may be
subject to other policies or restrictions of the broker such as higher
minimum account value, etc.
Purchases - We may reject orders when not accompanied by payment or when in
the best interest of the Fund and its shareholders.
Redemptions - We try to send proceeds as soon as practical. In any event,
we send proceeds by the third business day after we receive a request in
good order. We cannot accept requests that contain special conditions or
effective dates. We may request additional documentation to ensure that a
request is genuine. Under certain circumstances, we may pay you proceeds in
the form of portfolio securities owned by the Fund. If you receive
securities instead of cash, you may incur brokerage costs when converting
them into cash.
The Manager believes that certain investors who try to "time the market" by
purchasing and redeeming shares from the Fund on a regular basis may
disrupt the investment process and pose additional transaction costs to the
Fund. Therefore in those cases the Fund Manager may delay redemption
proceeds up to seven days or take other actions it deems necessary to
discourage such activity.
If you request a redemption within 15 days of purchase, we will delay
sending your proceeds until we have collected unconditional payment, which
may take up to 15 days from the date of purchase. For your protection, if
your account address has been changed within the last 30 days, your
redemption request must be in writing and signed by each account owner,
with signature guarantees. The right to redeem shares may be temporarily
suspended in emergency situations, only as permitted under federal law.
Signature Guarantees - You can get a signature guarantee from most banks or
securities dealers and certain other financial institutions, but not a
notary public. For your protection, we require a guaranteed signature if
you request:
A redemption check sent to a different payee, bank or address than we
have on file.
A redemption check mailed to an address that has been changed within the
last 30 days.
A redemption for $50,000 or more in writing.
A change in account registration or redemption instructions.
Corporations, Trusts and Other Entities - Additional documentation is
normally required for corporations, fiduciaries and others who hold shares
in a representative or nominee capacity. We cannot process your request
until we have all documents in the form required. Please call us first to
avoid delays.
Exchanges to Another Fund - You must meet the minimum investment
requirement of the Fund into which you are exchanging. The names and
registrations on the two accounts must be identical. Your shares must have
been held in an open account for 15 days or more and we must have received
good payment before we will exchange shares. You should review the
Prospectus of the Fund being purchased. Call us for a free copy.
Telephone Services - During periods of increased market activity, you may
have difficulty reaching us by telephone. If this happens, contact us by
mail. We may refuse a telephone request, including a telephone redemption
request. We will use reasonable procedures to confirm that telephone
instructions are genuine. If such procedures are followed, the Fund will
not be liable for losses due to unauthorized or fraudulent instructions. At
our option, we may limit the frequency or the amount of telephone
redemption requests. Neither the Fund nor Jones & Babson, Inc. assumes
responsibility for the authenticity of telephone redemption requests.
SHAREHOLDER SERVICES
The following services are also available to shareholders. Please call 800-
996-2862 for more information:
Traditional IRA accounts
Roth IRA accounts
Education IRA accounts
Simplified Employee Pensions (SEPs)
Uniform Transfers (Gifts) to Minors accounts
Accounts for corporations or partnerships
Sub-Accounting Services for Keogh, tax qualified retirement plans, and
others
Prototype Retirement Plans for the self-employed, partnerships and
corporations.
HOW SHARE PRICE IS DETERMINED
Shares of the Fund are purchased or redeemed at the net asset value per
share next calculated after your purchase order and payment or redemption
order is received by us in good order. In the case of certain institutions
which have made satisfactory payment or redemption arrangements with the
Fund and have received your
purchase order and payment or redemption order, we may process the order at
the net asset value per share next effective after receipt of the order by
the institution.
The per share calculation is made by subtracting from the Fund's total
assets any liabilities and then dividing into this amount the Fund's total
outstanding shares as of the date of the calculation. The net asset value
per share is computed once daily, Monday through Friday, at 4:00 p.m.
(Eastern Time) on days when the Fund is open for business. These generally
are the same days that the New York Stock Exchange is open for trading. The
New York Stock Exchange is closed on weekends, national holidays and Good
Friday.
Each security owned by the Fund that is listed on an Exchange is valued at
its last sale price on that Exchange on the date when assets are valued.
Where the security is listed on more than one Exchange, the Fund will use
the price of that Exchange which it generally considers to be the principal
Exchange on which the stock is traded. Lacking sales, the security is
valued at the mean between the last current closing bid and asked prices.
An unlisted security for which over-the-counter market quotations are
readily available is valued at the mean between the last current bid and
asked prices. When market quotations are not readily available, any
security or other asset is valued at its fair value as determined in good
faith by the Fund's Board of Trustees or by the Investment Advisor in
accordance with procedures approved by the Board of Trustees. Short-term
instruments maturing within 60 days may be valued at amortized cost.
DIVIDENDS, DISTRIBUTIONS AND THEIR TAXATION
Distributions - Your distributions will be reinvested automatically in
additional shares of the Fund unless you have elected on your original
application, or by written instructions filed with the Fund, to have them
paid in cash ($10 minimum check amount). There are no fees or sales charges
on reinvestments.
The Fund will pay substantially all of its net investment income
semiannually, usually in June and December. It is contemplated that
substantially all of any net capital gains realized during a fiscal year
will be distributed with the fiscal year-end dividend, with any remaining
balance paid in December.
If you buy shares of the Fund shortly before the record date, please keep
in mind that any distribution will lower the value of the Fund's shares by
the amount of the distribution and you will then receive a portion of the
price back in the form of a taxable distribution.
Tax Considerations - In general, Fund distributions are taxable to you as
either ordinary income or capital gains. This is true whether you reinvest
your distributions in additional Fund shares or receive them in cash. Any
capital gains the Fund distributes are taxable to you as long-term capital
gains no matter how long you have owned your shares.
By law, the Fund must withhold 31% of your taxable distributions and
redemption proceeds if you do not provide your correct Social Security or
Taxpayer Identification Number and certify that you are not subject to
backup withholding, or if the IRS instructs the Fund to do so.
Every January, you will receive a statement that shows the tax status of
distributions you received for the previous year. Distributions declared in
December but paid in January are taxable as if they were paid in December.
In general, when you sell your shares of the Fund, you may have a capital
gain or loss. For tax purposes, an exchange of your Fund shares for shares
of a different UMB Scout Fund is the same as a sale. The individual tax
rate on any gain from the sale or exchange of your Fund shares depends on
your marginal tax bracket and on how long the shares have been held.
Many states grant tax-free status to dividends paid from interest earned on
direct obligations of the U.S. government, subject to certain restrictions.
Fund distributions and gains from the sale or exchange of your Fund shares
generally will be subject to state and local income tax. Non-U.S. investors
may be subject to U.S. withholding and estate tax. You should consult your
tax advisor about the federal, state, local or foreign tax consequences of
your investment in the Fund.
Conducting Business with the UMB Scout Funds by Phone
800-996-2862, in the Kansas City area 816-751-5900
You must authorize each type of telephone transaction on your account
application or the appropriate form, available from us. All account owners
must sign. When you call, we may request personal identification and tape
record the call.
How to Open an Account
If you already have an account with us and you have authorized telephone
exchanges, you may call to open an account in another UMB Scout Fund by
exchange ($1,000 minimum). The names and registrations on the accounts must
be identical.
How to Add to an Account
You may invest by telephone ($100 minimum). After we receive your telephone
call, we will deduct from your checking account the cost of the shares.
Availability of this service is subject to approval by the Fund and
participating banks.
How to Sell Shares
You may withdraw any amount by telephone ($500 minimum if wired). We will
send funds only to the address or bank account on file with us. Provide the
Fund's name, your account number, the names of each account owner (exactly
as registered), and the number of shares or dollar amount to be redeemed.
For wires, also provide the bank name and bank account number.
How to Exchange Shares
You may exchange shares ($1,000 minimum or the initial minimum fund
requirement) for shares in another UMB Scout Fund. The shares being
exchanged must have been held in open account for 15 days or more.
Conducting Business with the UMB Scout Funds by Mail
UMB Scout Funds
P.O. Box 219757
Kansas City, MO 64121-9757
How to Open an Account
Complete and sign the application included with this Prospectus. Your
initial investment must meet the minimum amount and you must indicate the
name of the Fund. Make your check payable to UMB Bank, n.a.
How to Add to an Account
Make your check ($100 minimum) payable to UMB Bank, n.a., and mail it to
us. Always identify your account number or include the detachable coupon
(from your confirmation statement).
How to Sell Shares
In a letter, include the genuine signature of each registered owner
(exactly as registered), the name of each account owner, the account number
and the number of shares or the dollar amount to be redeemed. We will send
funds only to the address of record.
How to Exchange Shares
n a letter, include the genuine signature of each registered owner, the
Fund name and your account number, the number of shares or dollar amount to
be exchanged ($1,000 minimum) and the UMB Scout Fund into which the amount
is being transferred.
Conducting Business with the UMB Scout Funds by Wire
UMB Bank, n.a.,
Kansas City, Missouri, ABA #101000695
For UMB Scout Funds/AC=98 01186957
Please provide your fund number, account number and name on account.
How to Open an Account
Call us first to get an account number. We will require information such as
your Social Security or Taxpayer Identification Number, the amount being
wired ($1,000 minimum), and the name and telephone number of the wiring
bank. Then tell your bank to wire the amount. You must send us a completed
application as soon as possible or payment of your redemption proceeds may
be delayed.
How to Add to an Account
Wire share purchases ($500 minimum) should include the names of each
account owner, your account number and the full name of the Fund. You
should notify us by telephone that you have sent a wire purchase order to
UMB Bank, n.a.
How to Sell Shares
Redemption proceeds ($500 minimum) may be wired to your pre-identified bank
account. A minimal fee may be deducted. If we receive your request before
4:00 p.m. (Eastern Time) we will normally wire funds the following business
day. If we receive your request later in the day, we will normally wire
funds on the second business day. Contact your bank about the time of
receipt and availability.
How to Exchange Shares
Not applicable.
Conducting Business with the UMB Scout Funds through Automatic Transaction
Plans
You must authorize each type of automatic transaction on your account
application or complete an authorization form, available from us upon
request. All registered owners must sign.
How to Open an Account
Not applicable.
How to Add to an Account
Automatic Monthly Investment:
You may authorize automatic monthly investments in a constant dollar amount
($50 minimum) from your checking account. We will draft your checking
account on the same day each month in the amount you authorize.
How to Sell Shares
Systematic Redemption Plan:
You may specify a dollar amount ($50 minimum) to be withdrawn monthly or
quarterly or have your shares redeemed at a rate calculated to exhaust the
account at the end of a specified period. A fee of $1.50 or less may be
charged for each withdrawal. You must own shares in an open account valued
at $10,000 when you first authorize the systematic redemption plan. You may
cancel or change your plan or redeem all your shares at any time. We will
continue withdrawals until your shares are gone or until the Fund or you
cancel the plan.
How to Exchange Shares
Monthly Exchanges:
You may authorize monthly exchanges from your account ($100 minimum) to
another UMB Scout Fund. Exchanges will be continued until all shares have
been exchanged or until you terminate the service. You must own shares in
an open account valued at $2,500 or more when you first authorize monthly
exchanges.
UMB Scout Funds
100% No-Load Mutual Funds
Stock Fund
Stock Select Fund
Regional Fund
WorldWide Fund
WorldWide Select Fund
Capital Preservation Fund
Balanced Fund
Equity Index Fund
Technology Fund
Bond Fund
Kansas Tax-Exempt Bond Fund*
Money Market Fund
Federal Portfolio
Prime Portfolio
Tax-Free Money Market Fund
*Available in Kansas and Missouri only.
Investment Advisor and MANAGER
UMB Bank, n.a.,
Kansas City, Missouri
Auditors
Baird, Kurtz & Dobson,
Kansas City, Missouri
Legal Counsel
Stradley, Ronon, Stevens & Young, LLP
Philadelphia, Pennsylvania
Custodian
UMB Bank, n.a.,
Kansas City, Missouri
Underwriter, Distributor and transfer agent
Jones & Babson, Inc.
Kansas City, Missouri
Additional Information
The Statement of Additional Information (SAI) contains additional
information about the Fund 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. Because the
Fund is new, it has not yet published an annual or semi-annual report to
shareholders.
You may obtain a free copy of these documents by contacting the Fund by
telephone, mail or e-mail as shown below. You also may call the toll-free
number given below to request other information about the Fund and to make
shareholder inquiries.
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 (1-800-SEC-0330) or by visiting the Commission's Internet
site at http://www.sec.gov. Copies of this information also may be
obtained, upon payment of a duplicating fee, by writing to the Public
Reference Section of the Commission, Washington, DC 20549.
UMB Scout Funds
P.O. Box 219757
Kansas City, MO 64121-9757
Toll Free 800-996-2862
www.umb.com
"UMB", "Scout" and the "Scout" design are registered
service marks of UMB Financial Corporation.
<PAGE>
PART B
UMB SCOUT EQUITY INDEX FUND
UMB SCOUT TECHNOLOGY FUND
STATEMENT OF ADDITIONAL INFORMATION
May 1, 2000
This Statement of Additional Information is not a Prospectus but
should be read in conjunction with each current Fund's Prospectus
dated May 1, 2000. To obtain the Prospectus or any available
Annual or Semi-Annual Report to shareholders, please call the
Funds toll-free at 1-800-996-2862, or in the Kansas City area 816-
751-5900. The Funds are series of the UMB Scout Funds.
JB181
TABLE OF CONTENTS
Page
Introduction 3
Investment Objective, Strategies and Risks 3
UMB Scout Equity Index Fund 3
UMB Scout Technology Fund 4
Investment Policy Related to Both Funds 5
Short-Term Debt Obligations 5
Repurchase Agreements 5
Risk Factors 6
Risk Factors Applicable to Foreign Investments 6
Risk Factors Applicable to Repurchase Agreements 6
Investment Restrictions 7
Portfolio Transactions 8
Portfolio Turnover 9
Performance Measures 9
Total Return 9
Performance Comparisons 10
How the Funds' Shares are Distributed 11
How Share Purchases are Handled 11
Redemption of Shares 12
Signature Guarantees 12
Additional Purchase and Redemption Policies 13
Holidays 13
Dividends, Distributions and Taxes 13
Management and Investment Advisor 15
Investment Sub-Advisor 16
Officers and Trustees 16
Compensation Table 17
Underwriter and Distributor 17
Transfer Agent 18
Custodian 18
Independent Auditors 18
General Information and History 18
"UMB", "Scout" and the Scout design are registered service marks of UMB
Financial Corporation.
INTRODUCTION
The UMB Scout Equity Index Fund and the UMB Scout Technology Fund are
classified as open-end, diversified management investment companies under the
Investment Company Act of 1940, as amended (the "1940 Act"). This
classification means that the assets of the Funds are invested in a
diversified portfolio of securities and that the Funds operate as mutual
funds, allowing shareholders to buy and sell shares at any time (as described
in the Prospectus).
This Statement of Additional Information (SAI) supplements the information
contained in the Prospectuses for the Funds. The Prospectuses outline the
principal investment strategies and risks of the Funds, and this SAI contains
some of the same information, as well as information about additional
strategies and risks.
INVESTMENT OBJECTIVE, STRATEGIES AND RISKS
UMB Scout Equity Index Fund
The UMB Scout Equity Index Fund seeks to provide investment results that
track, as closely as possible, the performance of the Standard & Poor's 500 r
Composite Stock Price Index (the "S&P 500 Index").
The S&P 500 Index is a market value-weighted index consisting of 500 common
stocks which are traded on the New York Stock Exchange, American Stock
Exchange and the Nasdaq National Market System and selected by Standard &
Poor's Corporation ("Standard & Poor's") through a detailed screening process
starting on a macro-economic level and working toward a micro-economic level
dealing with company-specific information such as market value, industry group
classification, capitalization and trading activity. Standard & Poor's
primary objective for the S&P 500 Index is to be the performance benchmark for
the U.S. equity markets. The companies chosen for inclusion in the S&P 500
Index tend to be leaders in important industries within the U.S. economy.
However, companies are not selected by Standard & Poor's for inclusion because
they are expected to have superior stock price performance relative to the
market in general or other stocks in particular. Standard & Poor's makes no
representation or warranty, implied or express, to purchasers of UMB Scout
Equity Index Fund shares or any member of the public regarding the
advisability of investing in the Fund or the ability of the S&P 500 Index to
track general stock market performance.
"Standard & Poor's," "S&P," "Standard & Poor's 500," and "500" are trademarks
of Standard & Poor's and have been licensed for use by the Fund. The Fund is
not sponsored, endorsed, sold or promoted by Standard & Poor's. Standard &
Poor's makes no representation or warranty, express or implied, to the
shareholders of the Fund regarding the advisability of investing in securities
generally or in the Fund particularly or the ability of the S&P 500 Index to
track general stock market performance. Standard & Poor's only relationship
to the Fund is the licensing of the trademarks and trade names of Standard &
Poor's including the S&P 500 Index, which is determined, composed and
calculated by Standard & Poor's without regard to the Fund. Standard &
Poor's has no obligation to take the needs of the shareholders of the Fund
into consideration in determining, composing or calculating this Index.
Standard & Poor's is not responsible for and has not participated in the
determination of the prices of the Fund or the timing of the issuance or sale
of the shares or in the determination or calculation of the equation by which
the shares of the Fund are to be redeemed. Standard & Poor's has no
obligation or liability in connection with the administration, marketing or
trading of the Fund.
STANDARD & POOR'S DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF
THE INDEX OR ANY DATA INCLUDED THEREIN, AND STANDARD & POOR'S SHALL HAVE NO
LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. STANDARD &
POOR'S MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY
THE FUND OR THE SHAREHOLDERS OF THE FUND OR ANY OTHER PERSON OR ENTITY FROM
THE USE OF THE INDEX OR ANY DATA INCLUDED THEREIN. STANDARD & POOR'S MAKES NO
EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN
NO EVENT SHALL STANDARD & POOR'S HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED
OF THE POSSIBILITY OF SUCH DAMAGES.
Tracking Variance. As discussed in the Prospectus, the UMB Scout Equity Index
Fund is subject to the risk of tracking variance. Tracking variance may
result from share purchases and redemptions, transaction costs, expenses and
other factors. Share purchases and redemptions may necessitate the purchase
and sale of securities by the Fund and the resulting transaction costs which
may be substantial because of the number and the characteristics of the
securities held. In addition, transaction costs are incurred because sales of
securities received in connection with spin-offs and other corporate
organizations are made to conform the Fund's holdings with its investment
objective. Tracking variance may also occur due to factors such as the size
of the Fund, the maintenance of a cash reserve pending investment or to meet
expected redemptions, changes made in the S&P 500 Index or the manner in which
the Index is calculated or because the indexing and investment approach of the
Investment Advisor does not produce the intended goal of the Fund. In the
event the performance of the Fund is not comparable to the performance of the
S&P 500 Index, the Board of Trustees will evaluate the reasons for the
deviation and the availability of corrective measures. If substantial
deviation in the Fund's performance were to continue for extended periods, it
is expected that the Board of Trustees would consider recommending to
shareholders possible changes to the Fund's investment objective.
UMB Scout Technology Fund
The Fund will, under normal market conditions, invest at least 65% of the
value of its total assets in securities of companies principally engaged in
technology business activities. An issuer is considered principally engaged
in technology business activities if such issuer is listed on the Morgan
Stanley High-Technology 35 Index (the "Morgan Stanley Index"), the Hambrecht
and Quist Technology Index (the "H&Q Index"), the SoundView Technology Index,
the technology groupings of the S&P 500 Index or any other comparable index.
The Morgan Stanley Index is an equal dollar weighted index of 35 stocks drawn
from nine technology subsectors: computer services, design software, server
software, PC software and new media, networking and telecom equipment, server
hardware, PC hardware and peripherals, specialized systems and semi-
conductors. The SoundView Technology Index is an equal dollar weighted index
designed to measure the performance of the technology industry. It is
comprised of 100 major technology companies chosen by SoundView Financial
Group. The H&Q Index is comprised of publicly traded stocks of approximately
250 technology companies. The H&Q Index includes companies in the electronics
services and related technologies industries and is a market capitalization
weighted index. Changes in the indices may occur when Morgan Stanley,
SoundView or H&Q choose to modify their indices or as mergers, acquisitions
and failures dictate. Such changes may happen with fair regularity owing to
the fast-changing nature of the technology industries.
Warrants. The UMB Scout Technology Fund may purchase warrants and similar
rights, which are privileges issued by corporations enabling the owners to
subscribe to and purchase a specified number of shares of the corporation at a
specified price during a specified period of time. The prices of warrants do
not necessarily correlate with the prices of the underlying shares. The
purchase of warrants involves the risk that the Fund could lose the purchase
value of a warrant if the right to subscribe to additional shares is not
exercised prior to the warrant's expiration. Also, the purchase of warrants
involves the risk that the effective price paid for the warrant added to the
subscription price of the related security may exceed the value of the
subscribed security's market price such as when there is no movement in the
level of the underlying security.
Convertible Securities. Convertible securities entitle the holder to receive
interest paid or accrued on debt or the dividend paid on preferred stock until
the convertible securities mature or are redeemed, converted or exchanged.
Prior to conversion, convertible securities have characteristics similar to
ordinary debt securities in that they normally provide a stable stream of
income with generally higher yields than those of common stock of the same or
similar issuers. Convertible securities rank senior to common stock in a
corporation's capital structure and therefore generally entail less risk than
the corporation's common stock, although the extent to which such risk is
reduced depends in large measure upon the degree to which the convertible
security sells above its value as a fixed-income security. In selecting
convertible securities, the Investment Advisor will consider, among other
factors: an evaluation of the creditworthiness of the issuers of the
securities; the interest or dividend income generated by the securities; the
potential for capital appreciation of the securities and the underlying common
stocks; the prices of the securities relative to other comparable securities
and to the underlying common stocks; whether the securities are entitled to
the benefits of sinking funds or other protective conditions; diversification
of the Fund's portfolio as to issuers; and whether the securities are rated by
a rating agency and, if so, the ratings assigned.
INVESTMENT POLICY RELATED TO BOTH FUNDS
Short-Term Debt Obligations. For purposes including, but not limited to,
meeting redemptions and unanticipated expenses, each Fund may invest a portion
of its assets in cash or high-quality, short-term debt obligations readily
changeable into cash such as:
(1) certificates of deposit, bankers' acceptances and other short-
term obligations issued domestically by United States
commercial banks having assets of at least $1 billion and
which are members of the Federal Deposit Insurance Corporation
or holding companies of such banks;
(2) commercial paper of companies rated P-2 or higher by Moody's
or A-2 or higher by S&P, or if not rated by either Moody's or
S&P, a company's commercial paper may be purchased by the Fund
if the company has an outstanding bond issue rated Aa or
higher by Moody's or AA or higher by S&P;
(3) short-term debt securities which are non-convertible and
which have one year or less remaining to maturity at the date
of purchase and which are rated Aa or higher by Moody's or AA
or higher by S&P; and
(4) negotiable certificates of deposit and other short-term debt
obligations of savings and loan associations having assets of
at least $1 billion and which are members of the Federal Home
Loan Banks Association and insured by the Federal Savings and
Loan Insurance Corporation.
There may be times, however, when the UMB Scout Technology Fund attempts to
respond to adverse market, economic, political or other conditions by
investing up to 100% of its assets in those types of investments for
temporary, defensive purposes. During those times, the Technology Fund will
not be able to pursue its investment objective and, instead, will focus on
preserving your investment.
Repurchase Agreements. The Funds may invest in issues of the United States
Treasury or a United States government agency subject to repurchase
agreements. A repurchase agreement involves the sale of securities to the
Fund with the concurrent agreement by the seller to repurchase the securities
at the Funds' cost plus interest at an agreed rate upon demand or within a
specified time, thereby determining the yield during the Funds' period of
ownership. The result is a fixed rate of return insulated from market
fluctuations during such period. Under the 1940 Act, repurchase agreements are
considered loans by the Funds.
The Funds will enter into repurchase agreements only with United States banks
having assets in excess of $1 billion which are members of the Federal Deposit
Insurance Corporation, and with certain securities dealers who meet the
qualifications set from time to time by the Investment Advisor. The term to
maturity of a repurchase agreement normally will be no longer than a few days.
With respect to the UMB Scout Equity Index Fund and the UMB Scout Technology
Fund, repurchase agreements maturing in more than seven days and other
illiquid securities will not exceed 15% of each Fund's net assets.
RISK FACTORS
Risk Factors Applicable to Foreign Investments. From time to time, the UMB
Scout Technology Fund may invest in companies located in developing countries.
A developing country is generally considered to be a country that is in the
initial stages of its industrialization cycle with a low per capita gross
national product. Compared to investment in the United States and other
developed countries, investing in the equity and fixed-income markets of
developing countries involves exposure to relatively unstable governments,
economic structures that are generally less mature and based on only a few
industries and securities markets which trade a small number of securities.
Prices on securities exchanges in developing countries generally will be more
volatile than those in developed countries. The UMB Scout Technology Fund
will not invest more than 20% of its total assets in companies located in
developing countries.
The risks to which the UMB Scout Technology Fund is exposed, as a result of
investing in companies located outside the United States include: currency
risks such as fluctuations in the value of foreign currencies and the
performance of foreign currencies relative to the U.S. dollar; exchange
control regulations; and costs incurred in connection with conversions between
various currencies (fees may also be incurred when converting foreign
investments to U.S. dollars). As a result, the relative strength of the U.S.
dollar may be an important factor in the performance of the Fund.
As non-U.S. companies are not generally subject to uniform accounting,
auditing and financial reporting standards and practices comparable to those
applicable to U.S. companies, comparable information may not be readily
available about certain foreign companies. Securities of some non-U.S.
companies may be less liquid and more volatile than securities of comparable
U.S. companies. In addition, in certain foreign countries, there is the
possibility of expropriation or confiscatory taxation, political or social
instability or diplomatic developments which could affect U.S. investments in
those countries.
Risk Factors Applicable to Repurchase Agreements. The use of repurchase
agreements involves certain risks. For example, if the seller of the agreement
defaults on its obligation to repurchase the underlying securities at a time
when the value of these securities has declined, the Funds may incur a loss
upon disposition of them. If the seller of the agreement becomes insolvent and
subject to liquidation or reorganization under the Bankruptcy Code or other
laws, disposition of the underlying securities may be delayed pending court
proceedings. Finally, it is possible that the Funds may not be able to
perfect their interest in the underlying securities. While the Funds'
management acknowledges these risks, it is expected that they can be
controlled through stringent security selection criteria and careful
monitoring procedures.
Risk Factors Applicable to Illiquid and Restricted Securities. Illiquid
securities include repurchase agreements and time deposits with
notice/termination dates of more than seven days, certain variable-amount
master demand notes that cannot be called within seven days, certain insurance
funding agreements (see below), certain unlisted over-the-counter options and
other securities that are traded in the U.S. but are subject to trading
restrictions because they are not registered under the Securities Act of 1933,
as amended (the "1933 Act").
Each Fund may invest up to 15% of its net assets in securities that are
illiquid. If otherwise consistent with their investment objectives and
policies, the Funds may purchase commercial paper issued pursuant to Section
4(2) of the 1933 Act and domestically traded securities that are not
registered under the 1933 Act but can be sold to "qualified institutional
buyers" in accordance with Rule 144A under the 1933 Act ("Rule 144A
Securities"). These securities will not be considered illiquid so long as the
investment advisor determines, under guidelines approved by the Board of
Trustees, that an adequate trading market exists.
Because illiquid and restricted securities may be difficult to sell at an
acceptable price, they may be subject to greater volatility and may result in
a loss to a Fund. The practice of investing in Rule 144A Securities could
increase the level of a Fund's illiquidity during any period that qualified
institutional buyers become uninterested in purchasing these securities.
Risk Factors Applicable to Investment Companies. To the extent consistent
with its investment objective and policies, the UMB Scout Equity Index Fund
may invest in securities issued by other investment companies, particularly
S&P's Depository Receipts ("SPDRs") and similar securities of other issuers.
Investments by a Fund in other investment companies will be subject to the
limitations of the 1940 Act.
As a shareholder of another investment company, the Fund would be subject to
the same risks as any other investor in that company. In addition, it would
bear a proportionate share of any fees and expenses paid by that company.
These would be in addition to the advisory and other fees paid directly by the
Fund.
Risk Factors Applicable to Securities Lending. In order to generate
additional income, the Funds may lend securities on a short-term basis to
banks, broker-dealers or other qualified institutions. In exchange, the Funds
will receive collateral equal to at least 100% of the value of the securities
loaned. Securities lending may represent no more than one-third the value of
a Fund's total assets (including the loan collateral). Any cash collateral
received by a Fund in connection with these loans may be invested in U.S.
government securities and other liquid high-grade debt obligations.
The main risk when lending portfolio securities is that the borrower might
become insolvent or refuse to honor its obligation to return the securities.
In this event, a Fund could experience delays in recovering its securities and
may incur a capital loss. In addition, a Fund may incur a loss in reinvesting
the cash collateral it receives.
INVESTMENT RESTRICTIONS
The Funds have adopted the following fundamental investment policies and
restrictions that 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. In cases where the current legal or regulatory
limitations are explained, such explanations are not part of the fundamental
restriction and may be modified without shareholder approval to reflect
changes in the legal and regulatory requirements.
UMB Scout Equity Index Fund will not make investments that will 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. UMB Scout Technology Fund will not
make investments that will result in the concentration (as that term may be
defined in the 1940 Act, any rules or orders thereunder, or SEC staff
interpretation thereof) of its total assets, except that it will normally
invest more than 25% of its total assets in technology companies which develop
or sell computers, software and peripheral products. The SEC staff currently
takes the position that a mutual fund concentrates its investments in a
particular industry if 25% or more of its total assets are invested in issuers
within the industry. These restrictions do not limit either Fund from
investing in obligations issued or guaranteed by the U.S. government, or its
agencies or instrumentalities. In applying each Fund's fundamental policy
concerning industry concentration, 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. In particular, 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. Also, 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) asset-backed
securities will be classified according to the underlying assets securing such
securities; and (iii) utility companies will be divided according to their
services, for example, gas, gas transmission, electric and telephone will each
be considered a separate industry.
UMB Scout Equity Index Fund and UMB Scout Technology Fund will not: (1) borrow
money or issue senior securities, except as the 1940 Act, any rule thereunder,
or SEC staff interpretation thereof, may permit. The following information is
intended to describe the current regulatory limits relating to senior
securities and borrowing activities that apply to mutual funds. This
description may be changed without shareholder approval to reflect legal or
regulatory changes. A fund may borrow up to 5% of its total assets for
temporary purposes and may also borrow from banks, provided that if borrowings
exceed 5%, the fund must have assets totaling at least 300% of the borrowing
when the amount of the borrowing is added to the fund's other assets. The
effect of this provision is to allow a fund to borrow from banks amounts up to
one-third (33 1/3%) of its total assets (including those assets represented by
the borrowing); (2) 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; (3) 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; (4) 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; (5) 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.
In addition to the fundamental policies and investment restrictions described
above, and the various general investment policies described in the
Prospectus, the UMB Scout Equity Index Fund and the UMB Scout Technology 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.
(1) each Fund is diversified, which generally means that each Fund may not,
with respect to 75% of its total assets, invest more than 5% of its total
assets in securities of any one issuer (except obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities and
securities issued by investment companies), or purchase more than 10% of the
voting securities of any one issuer. The Funds may not change their
classification from diversified to non-diversified without shareholder
approval; (2) each 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, neither Fund may 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. Under current legal and
regulatory requirements, each Fund may invest up to 5% of its total assets in
the securities of any one investment company, but may not own more than 3% of
any investment company or invest more than 10% of its total assets in the
securities of other investment companies; (3) with respect to the UMB Scout
Technology Fund, it may invest in American Depository Receipts (ADR's), which
represent foreign securities and are traded on U.S. Exchanges or in the over-
the-counter market. However, the Fund reserves the right to invest directly
in foreign securities or to purchase European Deposit Receipts (EDR's) and
International Depository Receipts (IDR's), in bearer form, which are designed
for use in European and other securities markets; (4) each Fund may not invest
more than 15% of its net assets in securities which they 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; and (5)
each Fund will not borrow for the purpose of leveraging its investments.
PORTFOLIO TRANSACTIONS
Decisions to buy and sell securities for the UMB Scout Technology Fund are
made by UMB Bank, n.a. Decisions to buy and sell securities for the UMB Scout
Equity Index Fund are made by Northern Trust Quantitative Advisors, Inc.
Officers of the Funds and Jones & Babson, Inc. are generally responsible for
implementing or supervising these decisions, including allocation of portfolio
brokerage and principal business and the negotiation of commissions and/or the
price of the securities.
The Funds, in purchasing and selling portfolio securities, will seek the best
available combination of execution and overall price (which shall include the
cost of the transaction) consistent with the circumstances which exist at the
time. The Funds do not intend to solicit competitive bids on each
transaction.
The Funds believe it is in their best interest, and that of their
shareholders, to have a stable and continuous relationship with a diverse
group of financially strong and technically qualified broker-dealers who will
provide quality executions at competitive rates. Broker-dealers meeting these
qualifications also will be selected for their demonstrated loyalty to the
Funds, when acting on their behalf, as well as for any research or other
services provided to the Funds. The Funds normally will not pay a higher
commission rate to broker-dealers providing benefits or services to them than
they would pay to broker-dealers who do not provide such benefits or services.
However, the Funds reserve the right to do so within the principles set out in
Section 28(e) of the Securities Exchange Act of 1934 when it appears that this
would be in the best interests of the shareholders.
No commitment is made to any broker or dealer with regard to placing of orders
for the purchase or sale of Fund portfolio securities, and no specific formula
is used in placing such business. Allocation is reviewed regularly by both
the Boards of Trustees of the Funds and by UMB Bank, n.a.
Since the Funds do not currently market their shares through intermediary
brokers or dealers, it is not their practice to allocate brokerage or
principal business on the basis of sales of their shares which may be made
through such firms. However, they may place portfolio orders with qualified
broker-dealers who recommend a Fund to other clients, or who act as agent in
the purchase of Fund shares for their clients.
Research services furnished by broker-dealers may be useful to a Fund's
investment advisor or sub-advisor in serving other clients, as well as a Fund.
Conversely, a Fund may benefit from research services obtained by a Fund's
investment advisor or sub-advisor from the placement of portfolio brokerage of
other clients.
When the investment advisor or sub-advisor in its fiduciary duty believes it
to be in the best interests of its shareholders, a Fund may join with other
clients of the investment advisor or sub-advisor in acquiring or disposing of
a portfolio holding. Securities acquired or proceeds obtained will be
equitably distributed between the Fund and other clients participating in the
transaction. In some instances, this investment procedure may affect the
price paid or received by the Fund or the size of the position obtained by the
Fund.
Portfolio Turnover. The Funds do not intend to purchase securities solely for
short-term trading; nor will securities be sold for the sole purpose of
realizing gains. However, with regard to UMB Scout Technology Fund, a
security may be sold and another of comparable quality purchased at
approximately the same time to take advantage of what the Funds' investment
advisor believes to be a disparity in the normal yield relationship between
the two securities. In addition, a security may be sold and another purchased
when, in the opinion of management, a favorable yield spread exists between
specific issues or different market sectors. With regard to UMB Scout Equity
Index Fund, securities will be bought and sold in response to changes in the
S&P 500 Index and cash flows. Short-term debt instruments with maturities of
less than one year are excluded from the calculation of portfolio turnover.
There are no fixed limitations regarding portfolio turnover for either Fund.
Although the Funds do not trade for short-term profits, securities may be sold
without regard to the time they have been held in the Fund when, in the
opinion of the Fund's management, investment considerations warrant such
action. As a result, while it is anticipated that the turnover rates will not
exceed 100%, under certain market conditions, these portfolio turnover rates
may exceed 100%. Increased portfolio turnover rates would cause the Fund to
incur greater brokerage costs than would otherwise be the case and may result
in the acceleration of capital gains which are taxable when distributed to
shareholders.
PERFORMANCE MEASURES
From time to time, each of the Funds may advertise its performance in various
ways, as summarized below.
Total Return
The UMB Scout Equity Index Fund and the UMB Scout Technology Fund may
advertise "average annual total return" over various periods of time. Such
total return figures show the average percentage change in value of an
investment in a Fund from the beginning date of the measuring period to the
end of the measuring period. These figures reflect changes in the price of
the Fund's shares and assume that any income dividends and/or capital gains
distributions made by the Funds during the period were reinvested in shares of
the Fund. Figures will be given for recent one-, five- and ten-year periods
(if applicable), and may be given for other periods as well (such as from
commencement of a Fund's operations, or on a year-by-year basis).
The Funds' "average annual total return" figures described and shown below are
computed according to a formula prescribed by the Securities and Exchange
Commission. The formula can be expressed as follows:
P(1+T)n = ERV
Where: P = a hypothetical initial payment of $1000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of a hypothetical $1000
payment made at the beginning of the 1, 5 or 10
years (or other) periods at the end of the 1, 5 or
10 years (or other) periods (or fractional portions
thereof).
Performance Comparisons. In advertisements or in reports to shareholders, the
Funds may compare their performance to that of other mutual funds with similar
investment objectives and to stock or other relevant indices. Performance
information, rankings, ratings, published editorial comments and listings as
reported in national financial publications such as Kiplinger's Personal
Finance Magazine, Business Week, Morningstar Mutual Funds, Investor's Business
Daily, Smart Money, Money Central Investors, Institutional Investor, The Wall
Street Journal, Mutual Fund Forecaster, No-Load Investor, Money, Forbes,
Fortune, Barron's Financial World, U.S. News & World Report, USA Today,
Bloomberg's Personal Finance, Income & Safety, The Mutual Fund Letter, United
Mutual Fund Selector, No-Load Fund Analyst, No-Load Fund X, Louis Rukeyser's
Wall Street newsletter, Donoghue's Money Letter, CDA Investment Technologies,
Inc., Wiesenberger Investment Companies Service, Donoghue's Mutual Fund
Almanac, Bank Rate Monitor and Donoghue's Money Fund Report may also be used
in comparing performance of the Funds. Performance comparisons should not be
considered as representative of the future performance of the Funds.
HOW THE FUNDS' SHARES ARE DISTRIBUTED
Jones & Babson, Inc., as agent of the UMB Scout Funds, agrees to supply its
best efforts as sole distributor of the Funds' shares and, at its own expense,
pay all sales and distribution expenses in connection with their offering
other than registration fees and other government charges. Jones & Babson,
Inc. can be reached by calling 800-996-2862 and is located at BMA Tower, 700
Karnes Blvd., Kansas City, MO 64108-3306.
Jones & Babson, Inc. does not receive any fee or other compensation under its
distribution agreements with the Funds which continue in effect initially for
two years and then automatically for successive annual periods ending each
October 31, if continued at least annually by the Funds' Board of Trustees,
including a majority of those Trustees who are not parties to such Agreements
or interested persons of any such party. They terminate automatically if
assigned by either party or upon 60 days written notice by either party to the
other.
HOW SHARE PURCHASES ARE HANDLED
We will not be responsible for the consequences of delays, including delays in
the banking or Federal Reserve wire systems. We cannot process transaction
requests that are not complete and in good order as described in the
prospectus. If you use the services of any other broker to purchase or redeem
shares of the Funds, that broker may charge you a fee. Each order accepted
will be fully invested in whole and fractional shares, unless the purchase of
a certain number of whole shares is specified, at the net asset value per
share next effective after the order is accepted by the Funds.
Each investment is confirmed by a year-to-date statement which provides the
details of the immediate transaction, plus all prior transactions in your
account during the current year. This includes the dollar amount invested,
the number of shares purchased or redeemed, the price per share, and the
aggregate shares owned. A transcript of all activity in your account during
the previous year will be furnished each January. By retaining each annual
summary and the last year-to-date statement, you have a complete detailed
history of your account which provides necessary tax information. A duplicate
copy of a past annual statement is available from Jones & Babson, Inc. at its
cost, subject to a minimum charge of $5 per account, per year requested.
Each statement and transaction confirmation will request that you inform the
Fund in writing of any questions about the information presented. If you do
not notify the Fund in writing of any questions within the specified time
period, it will indicate that you have approved the information.
The shares you purchase are held by the Funds in an open account, thereby
relieving you of the responsibility of providing for the safekeeping of a
negotiable share certificate. Jones & Babson does not intend to issue new
certificated shares for any accounts.
If an order to purchase shares must be canceled due to non-payment, the
purchaser will be responsible for any loss incurred by the Funds arising out
of such cancellation. To recover any such loss, the Funds reserve the right
to redeem shares owned by any purchaser whose order is canceled, and such
purchaser may be prohibited or restricted in the manner of placing further
orders.
The Funds reserve the right in their sole discretion to withdraw all or any
part of the offering made by the prospectus or to reject purchase orders when,
in the judgment of management, such withdrawal or rejection is in the best
interest of the Funds and its shareholders. The Funds also reserve the right
at any time to waive or increase the minimum requirements applicable to
initial or subsequent investments with respect to any person or class of
persons, which includes shareholders of the Funds' special investment
programs.
The Funds reserve the right to refuse to accept orders for Fund shares unless
accompanied by payment, except when a responsible person has indemnified the
Fund against losses resulting from the failure of investors to make payment.
In the event that the Funds sustains a loss as the result of failure by a
purchaser to make payment, the Funds' underwriter, Jones & Babson, Inc., will
cover the loss.
REDEMPTION OF SHARES
The Funds will transmit redemption proceeds to the proper party, as
instructed, as soon as practicable after a redemption request has been
received in "good order" and accepted, but in no event later than the third
business day thereafter. Transmissions are made by mail unless an expedited
method has been authorized and specified in the redemption request. The Funds
will not be responsible for the consequences of delays including delays in the
banking or Federal Reserve wire systems. In the case of redemption requests
made within 15 days of the date of purchase, the Funds may delay transmission
of proceeds until such time as it is certain that unconditional payment in
federal funds has been collected for the purchase of shares being redeemed or
15 days from the date of purchase, whichever occurs first.
Due to the high cost of maintaining smaller accounts, the Trustees have
authorized the Funds to close shareholder accounts where their value falls
below the current minimum initial investment requirement at the time of
initial purchase as a result of redemptions and not as the result of market
action, and remains below this level for 60 days after each such shareholder
account is mailed a notice of: (1) the Fund's intention to close the account,
(2) the minimum account size requirement, and (3) the date on which the
account will be closed if the minimum size requirement is not met. Since the
minimum investment amount and the minimum account size are the same, any
redemption from an account containing only the minimum investment amount may
result in redemption of that account.
We will not be responsible for the consequences of delays, including delays in
the banking or Federal Reserve wire systems. We cannot process transaction
requests that are not complete and in good order. We must receive an endorsed
share certificate with a signature guarantee, where a certificate has been
issued.
The right of redemption may be suspended, or the date of payment postponed
beyond the normal three-day period by the Board of Trustees under the
following conditions authorized by the 1940 Act: (1) for any period (a)
during which the New York Stock Exchange is closed, other than customary
weekend and holiday closing, or (b) during which trading on the New York Stock
Exchange is restricted; (2) for any period during which an emergency exists as
a result of which (a) disposal by the Funds of securities owned by it is not
reasonably practicable, or (b) it is not reasonably practicable for the Funds
to determine the fair value of its net assets; or (3) for such other periods
as the Securities and Exchange Commission may by order permit for the
protection of the Funds' shareholders.
UMB Scout Equity Index Fund and UMB Scout Technology Fund have elected to be
governed by Rule 18f-1 under the 1940 Act, pursuant to which these Funds are
obligated to redeem shares solely in cash up to the lesser of $250,000 or 1%
of a Fund's net asset value during any 90-day period for any one shareholder.
Should redemptions by any shareholder exceed such limitation, a Fund may
redeem the excess in kind. If shares are redeemed in kind, the redeeming
shareholder may incur brokerage costs in converting the assets to cash. The
method of valuing securities used to make redemptions in kind will be the same
as the method of valuing portfolio securities described under "How Share Price
is Determined" in the Prospectus, and such valuation will be made as of the
same time the redemption price is determined.
SIGNATURE GUARANTEES
Signature guarantees normally reduce the possibility of forgery and are
required in connection with certain redemptions. Signature guarantees are
required in connection with all redemptions of $50,000 or more by mail, or
changes in share registration, except as hereinafter provided. These
requirements may be waived by the Fund in certain instances where it appears
reasonable to do so and will not unduly affect the interest of other
shareholders. Signature(s) must be guaranteed by an "eligible guarantor
institution" as defined in Rule 17Ad-15 under the Securities Exchange Act of
1934. Eligible guarantor institutions include: (1) national or state banks,
savings associations, savings and loan associations, trust companies, savings
banks, industrial loan companies and credit unions; (2) national securities
exchanges, registered securities associations and clearing agencies; or (3)
securities broker/dealers which are members of a national securities exchange
or clearing agency or which have a minimum net capital of $100,000. A
notarized signature will not be sufficient for the request to be in proper
form.
Signature guarantees will be waived for mail redemptions of $50,000 or less,
but they will be required regardless of the size of the redemption if the
checks are to be payable to someone other than the registered owner(s), or are
to be mailed to an address different from the registered address of the
shareholder(s). Signatures guarantees are also required for a change in
account registration or redemption instructions.
Signature guarantees must appear together with the signature(s) of the
registered owner(s) on: (1) a separate instrument of assignment, which should
specify the total number of shares to be redeemed (this "stock power" may be
obtained from the Fund or from most banks or stock brokers); or (2) all stock
certificates tendered for redemption.
ADDITIONAL PURCHASE AND REDEMPTION POLICIES
We reserve the right to:
- - Waive or increase the minimum investment requirements with
respect to any person or class of persons, which include
shareholders of the Funds' special investment programs.
- - Cancel or change the telephone investment service, the
telephone exchange service and the automatic monthly investment
plan without prior notice to you where in the best interest of
the Funds and their investors.
- - Cancel or change the telephone redemption service at any time
without notice.
- - Begin charging a fee for the telephone investment service or
the automatic monthly investment plan and to cancel or change
these services upon 15 days written notice to you.
- - Begin charging a fee for the systematic redemption plan upon 30
days written notice to you.
- - Waive signature guarantee requirements in certain instances
where it appears reasonable to do so and will not unduly affect
the interests of other shareholders. We may waive the
signature guarantee requirement if you authorize the telephone
redemption method at the same time you submit the initial
application to purchase shares.
- - Require signature guarantees if there appears to be a pattern
of redemptions designed to avoid the signature guarantee
requirement, or if we have other reason to believe that this
requirement would be in the best interests of the Funds and
their shareholders.
HOLIDAYS
The net asset value per share of each Fund's portfolio is computed once daily,
as described in the prospectus, Monday through Friday, at the specific time
during the day that the Board of Trustees sets at least annually, except on
days on which changes in the value of a Fund's portfolio securities will not
materially affect the net asset value, or days during which no security is
tendered for redemption and no order to purchase or sell such security is
received by the Fund, or the following holidays:
New Year's Day January 1
Martin Luther King, Jr. Day Third Monday in January
Presidents' Holiday Third Monday in February
Good Friday Friday before Easter
Memorial Day Last Monday in May
Independence Day July 4
Labor Day First Monday in September
Thanksgiving Day Fourth Thursday in November
Christmas Day December 25
DIVIDENDS, DISTRIBUTIONS AND TAXES
Distributions and Taxes
Distributions of net investment income In general, the Funds receive income
in the form of dividends or interest on their investments. This income, less
expenses incurred in the operation of a Fund, constitutes a Fund's net
investment income from which dividends may be paid to investors. Any
distributions by a Fund from such income will be taxable to investors as
ordinary income, whether the investors take them in cash or in additional
shares.
Distributions of capital gains In general, the Funds may derive capital gains
and losses in connection with sales or other dispositions of their portfolio
securities. Distributions from net short-term capital gains will be
distributed and taxed as ordinary income. Distributions from net long-term
capital gains will be taxable as long-term capital gain, regardless of how
long the Fund shares have been held. Any net capital gains realized by a Fund
generally will be distributed once each year, and may be distributed more
frequently, if necessary, in order to reduce or eliminate excise or income
taxes on the Fund.
Effect of foreign investments on distributions Most foreign exchange gains
realized on the sale of debt securities by the UMB Scout Technology Fund are
treated as ordinary income by the Fund. Similarly, foreign exchange losses
realized by the Fund on the sale of debt securities are generally treated as
ordinary losses by the Fund. These gains when distributed will be taxable as
ordinary dividends, and any losses will reduce the Fund's ordinary income
otherwise available for distribution. This treatment could increase or reduce
the Fund's ordinary income distributions, and may cause some or all of the
Fund's previously distributed income to be classified as a return of capital.
The UMB Scout Technology Fund may be subject to foreign withholding taxes on
income from certain of its foreign securities. This, in turn, could reduce
ordinary income distributions to the shareholders.
Information on the tax character of distributions The Funds will inform you
of the amount of your ordinary income dividends and capital gains
distributions at the time they are paid, and will advise you of their tax
status for federal income tax purposes shortly after the close of each
calendar year. If you have not held Fund shares for a full year, a Fund may
designate and distribute 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.
Election to be taxed as a regulated investment company Each Fund has elected
to be treated as a regulated investment company under Subchapter M of the
Internal Revenue Code and intends to so qualify during the current fiscal
year. As regulated investment companies, the Funds generally pay no federal
income tax on the income and gains they distribute to you. The Board of
Trustees reserves the right not to maintain the qualification of a Fund as a
regulated investment company if it determines such course of action to be
beneficial to shareholders. 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 such Fund's earnings and profits.
Excise tax distribution requirements To avoid federal excise taxes, the
Internal Revenue Code requires each Fund to distribute to you by December 31
of each year, at a minimum, the following amounts: 98% of its taxable ordinary
income earned during the calendar year; 98% of its capital gain net income
earned during the twelve month period ending October 31; and 100% of any
undistributed amounts from the prior year. Each Fund intends to declare and
pay these amounts in December (or in January that are treated by you as
received in December) to avoid these excise taxes, but can give no assurances
that its distributions will be sufficient to eliminate all taxes.
Redemption of fund shares Redemptions (including redemptions in-kind) and
exchanges of Fund shares are taxable transactions for federal and state income
tax purposes. If you redeem your Fund shares, or exchange your Fund shares
for shares of a different UMB Scout Fund, the IRS will require that you report
any gain or loss on your redemption or exchange. If you hold your shares as a
capital asset, any gain or loss that you realize will be capital gain or loss
and will be long-term or short-term, generally depending on how long you hold
your shares.
Beginning after the year 2005 (2000 for certain shareholders), gain in a sale
or redemption of Fund shares held for more than five years may be subject to a
reduced rate of tax. 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 buy
other shares in such 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 buy.
Dividends-received deduction for corporations If you are a corporate
shareholder, you should note that only a small percentage of the dividends
paid by the Funds for this fiscal year are expected to qualify for the
dividends-received deduction. In some circumstances, you may be allowed to
deduct these qualified dividends, thereby reducing the tax that you would
otherwise be required to pay on these dividends. The dividends-received
deduction will be available only with respect to dividends designated by such
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 funds may invest in complex securities.
These investments may be subject to numerous special and complex tax rules.
These rules could affect whether gains and losses recognized by a fund are
treated as ordinary income or capital gain, accelerate the recognition of
income to a fund and/or defer a fund's ability to recognize losses, and, in
limited cases, subject a fund to U.S. federal income tax on income from
certain of its foreign securities. In turn, these rules may affect the
amount, timing or character of the income distributed to you by a fund.
MANAGEMENT AND INVESTMENT ADVISOR
Pursuant to Management Agreements, each Fund employs, at its own expense, UMB
Bank, n.a. as its manager and investment advisor. As manager and investment
advisor, UMB Bank, n.a. makes available professional portfolio managers who
make all decisions concerning the investment and reinvestment of the assets of
the Funds in accordance with the Funds' stated investment objective and
policies. As investment advisor, UMB Bank, n.a. either provides or pays the
cost of all management, supervisory and administrative services required in
the normal operations of the Funds.
The annual fee charged by UMB Bank, n.a. covers all normal operating costs of
the Funds. The annual fee is equal to the following percentage of each Fund's
average net assets:
Average Net Assets
UMB Scout Equity Index Fund
.40%*
UMB Scout Technology Fund
1.50%*
* UMB Bank, n.a. intends to contractually waive fees for the fiscal year
ending June 30, 2001 so that total annual fund expenses of the Equity
Index Fund do not exceed 0.30% and the annual fund expenses of the
Technology Fund do not exceed 1.10%.
INVESTMENT SUB-ADVISOR
As a part of the Management Agreement, UMB Bank, n.a., employs at its own
expense Northern Trust Quantitative Advisors, Inc., an Illinois state-
chartered trust company, to provide the day-to-day investment advisory
services for the UMB Scout Equity Index Fund. UMB Bank, n.a. has agreed to
pay Northern Trust Quantitative Advisors, Inc., a fee of 8/100 of one percent
(0.08%) of the average daily net assets, for their services. NTQA agrees to
provide UMB Scout Equity Index Fund investment management services on a daily
basis.
OFFICERS AND TRUSTEES
The officers of the Funds manage their day-to-day operations. The Funds'
officers, as well as the Funds' investment advisor and manager are subject to
the direct supervision and control of the Board of Trustees. Under the
Delaware Business Trust Act, all of the Trustees owe a fiduciary duty to the
shareholders of the Funds.
The following is a list of the senior officers and Trustees of the Funds and
their ages and business experience for the past five years. Unless noted
otherwise, the address of each officer and Trustee is BMA Tower, 700 Karnes
Blvd., Kansas City, Missouri 64108-3306. An asterisk (*) by a Trustee's name
denotes a Trustee who is an interested person as that term is defined in the
1940 Act.
*Stephen Soden (55), President and Trustee. President and Director or Trustee,
as the case may be, Jones & Babson, Inc. and each of the Babson Funds, UMB
Scout Funds, Buffalo Funds and the Investors Mark Series Fund, Inc.; President
and Trustee, D.L. Babson Bond Trust; Director, AFBA Five Star Fund, Inc.
William E. Hoffman, D.D.S. (62), Trustee. Director or Trustee, as the case
may be, of each of the investment companies within the UMB Scout Funds group;
Orthodontist, 3700 West 83rd Street, Suite 206, Prairie Village, Kansas 66208.
Eric T. Jager (57), Trustee. Director or Trustee, as the case may be, of each
of the investment companies within the UMB Scout Funds group; President,
Windcrest Investment Management, Inc.; Director, Bartlett Futures, Inc.,
Nygaard Corporation, 4800 Main Street, Suite 600, Kansas City, Missouri 64112.
Stephen F. Rose (52), Trustee. Director or Trustee, as the case may be, of
each of the investment companies within the UMB Scout Funds group; President,
Sun Publications, Inc., 7373 W. 107th Street, Overland Park, Kansas 66212.
Stuart Wien (76), Trustee. Director or Trustee, as the case may be, of each
of the investment companies within the UMB Scout Funds group; Retired, 4589
West 124th Place, Leawood, Kansas 66209, formerly Chairman of the Board,
Milgram Food Stores, Inc.
P. Bradley Adams (39), Vice President and Treasurer. Vice President and
Treasurer, Jones & Babson, Inc. and each of the Babson Funds, UMB Scout Funds
and Buffalo Funds; Vice President and Chief Financial Officer, AFBA Five Star
Fund, Inc.; Principal Financial Officer, Investors Mark Series Fund, Inc.
W. Guy Cooke (38), Vice President. Chief Compliance Officer, Jones & Babson,
Inc.; Vice President and Chief Compliance Officer of each of the Babson Funds,
UMB Scout Funds, Buffalo Funds and AFBA Five Star Fund, Inc. Cooke joined
Jones & Babson in March 1998 and previously was Director of Compliance at
American Century Companies.
Martin A. Cramer (49), Vice President and Secretary. Vice President and
Secretary, Jones & Babson, Inc. and each of the Babson Funds, UMB Scout Funds
and Buffalo Funds; Secretary and Assistant Vice President, AFBA Five Star
Fund, Inc.; Secretary, Investors Mark Series Fund, Inc.
Constance E. Martin (38), Vice President. Shareholder Operations Vice
President and Director, Jones & Babson, Inc.; Vice President of each of the
Babson Funds, UMB Scout Funds, Buffalo Funds and AFBA Five Star Fund, Inc.
Compensation of Officers and Trustees. None of the officers or Trustees will
be compensated by the Funds for their normal duties and services. Their
compensation and expenses arising out of normal operations will be paid by UMB
Bank, n.a. under the provisions of the Management Agreement. As an "interested
person," Mr. Armel receives no compensation for his service as a Trustee.
Messrs. Hoffman, Jager, Rose and Wien have no financial interest in, nor are
they affiliated with, either UMB Bank, n.a. or Jones & Babson, Inc. The Audit
Committee of the Board of Trustees is composed of Messrs. Hoffman, Jager, Rose
and Wien.
The officers and Trustees as a group own less than 1% of the Funds.
Compensation Table
Name ofTrustee Aggregate Pension or Estimated Total
Compensation Retirement Annual Compensation
From the Benefits Benefits From All UMB
Funds** Accrued As Upon Scout Funds
Part of Fund Retirement Paid to
Expenses Trustees***
Steve
Soden* -- -- -- --
William E.
Hoffman $6,375 -- -- $6,375
Eric T. Jager $7,500 -- -- $7,500
Stephen F.
Rose $7,500 -- -- $7,500
Stuart Wien $7,500 -- -- $7,500
* As an "interested person," Mr. Armel received no compensation for his
services as a Trustee.
** The amounts reported in this column reflect the amounts expected to be
paid for services as a Trustee of the Funds during the current fiscal
year. Such amounts are paid by the Funds' manager and not by the Funds
themselves.
*** The amounts reported in this column reflect the total compensation paid
to each Trustee for his services as a director of each of the other
twelve UMB Scout Funds during the fiscal year ended June 30, 1999.
Directors' fees are paid by the manager and not by the UMB Scout Funds
themselves.
UNDERWRITER AND DISTRIBUTOR
Jones and Babson, Inc., BMA Tower, 700 Karnes Boulevard, Kansas City, Missouri
64108-3306, serves as the principal underwriter and distributor of the Funds'
shares. The shares are continuously offered by Jones & Babson, who has
agreed, as agent of the Funds, to use its best efforts to distribute shares of
the Funds. Jones and Babson pays all sales and distribution expenses, other
than registration fees and other governmental charges.
Jones and Babson does not receive compensation or reimbursement for its
distribution and underwriting activities from the Funds. Instead, it is
compensated by UMB Bank, n.a. for other services provided to the company and
Fund. As indicated in the "Trustees and Officers" section of this Statement
of Additional Information, the following officers of Jones and Babson are
Trustees or officers of the Funds: Stephen S. Soden, P. Bradley Adams, Martin
A. Cramer and Constance E. Martin.
TRANSFER AGENT
As manager, UMB Bank, n.a. employs Jones and Babson, Inc., at its own expense,
to provide services to the Funds, including the maintenance of a shareholder
accounting and transfer agency system, and such other items as are incidental
to corporate administration. Jones and Babson, Inc. is located at BMA Tower,
700 Karnes Boulevard, Kansas City, Missouri 64108-3306.
CUSTODIAN
The Funds' assets are held for safekeeping by an independent custodian, UMB
Bank, n.a. This means the bank, rather than the Funds, has possession of the
Funds' cash and securities. As directed by the Funds' officers and portfolio
managers, the bank delivers cash to those who have sold securities to the
Funds in return for such securities, and to those who have purchased portfolio
securities from the Funds, it delivers such securities in return for their
cash purchase price. It also collects income directly from issuers of
securities owned by the Funds and holds this for payment to shareholders after
deduction of the Funds' expenses. UMB Bank, n.a. also serves as investment
advisor and manager, and receives compensation for all of its services through
receipt of management fees. UMB Bank, n.a. is located at 1010 Grand
Boulevard, Kansas City, Missouri, 64141.
INDEPENDENT AUDITORS
The Funds' financial statements are audited annually by independent auditors
approved by the Trustees each year, and in years in which an annual meeting is
held the Trustees may submit their selection of independent auditors to the
shareholders for ratification. Baird, Kurtz & Dobson, City Center Square,
Suite 2700, 1100 Main Street, Kansas City, Missouri 64105, is the Funds'
present independent auditor.
GENERAL INFORMATION AND HISTORY
UMB Scout Funds (the "Trust") which consists of two separate series -- the UMB
Scout Equity Index Fund series and the UMB Scout Technology Fund series - was
organized as a business trust in Delaware on January 27, 2000.
Each series represents interests in a separate portfolio of investments and is
subject to separate liabilities. Shares of each series are entitled to vote
as a series only to the extent required by the 1940 Act or as permitted by the
Trustees. The beneficial interest of each series is divided into an unlimited
number of shares, with no par value. 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 will be maintained
in open accounts on the books of the transfer agent, and certificates for
shares will generally not be issued. The Trust does not intend to hold
regular annual shareholder meetings. 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.
If they deem it advisable and in the best interests of shareholders, the
Trustees may create additional series of shares and may create multiple
classes of shares of each series, which may differ from each other as to
expenses and dividends.
Each of the Funds has agreed that it may use the words "UMB" and "Scout" in
its name, and may use the Scout design, so long as UMB Bank, n.a. is continued
as its manager.
Non-Cumulative Voting. All of the Trust's shares have non-cumulative voting
rights, which means that the holders of more than 50% of the shares voting for
the election of Trustees can elect 100% of the Trustees, if they choose to do
so, and in such event, the holders of the remaining less than 50% of the
shares voting will not be able to elect any Trustees.
Control Persons and Principal Holders of Shares. As of April 28, 2000, which
was prior to the public offering of the Funds' shares, UMB Bank, n.a. was the
holder of 100% of each Fund's shares and there were no other control persons
or principal holders of shares of either Fund. Control persons are persons
deemed to control a Fund because they own beneficially over 25% of the
outstanding equity securities. Principal holders are persons that own
beneficially 5% or more of a Fund's outstanding equity securities.
Financial Statements will be filed by pre-effective amendment prior to the
effective date.
UM
<PAGE>
UMB SCOUT FUNDS
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS.
(a) Agreement and Declaration of Trust.
(1) Registrant's Agreement and Declaration of Trust dated 01/26/2000
is filed herewith as Exhibit No. EX-99.a.1.
(2) Registrant's Certificate of Trust dated 01/26/2000 is filed
herewith as Exhibit No. EX-99.a.2.
(b) By-Laws.
Registrant's By-Laws are filed herewith as Exhibit No. EX-99.b.
(c) Instrument Defining Rights of Security Holders.
Not Applicable.
(d) Investment Advisory Contracts.
(1) Form of Management Agreement between UMB Bank, n.a. and
Registrant on behalf of the UMB Scout Technology Fund is filed
herewith as Exhibit No. EX-99.d.1.
(2) Form of Management Agreement between UMB Bank, n.a. and
Registrant on behalf of the UMB Scout Equity Income Fund is
filed herewith as Exhibit No. EX-99.d.2.
(3) Form of Sub-Advisory Agreement between UMB Bank, n.a. and
Northern Trust Quantitative Advisors, Inc. for the UMB Scout
Equity Index Fund is filed herewith as Exhibit No. EX-99.d.3.
(e) Underwriting Contracts.
Form of Underwriting Agreement between Jones & Babson, Inc. and
Registrant is filed herewith as Exhibit No. EX-99.e.
(f) Bonus or Profit Sharing Contracts.
Not Applicable.
(g) Custodian Agreement.
Form of Custodian Servicing Agreement between the Registrant and UMB
Bank, n.a. is filed herewith as Exhibit No. EX-99.g.
(h) Other Material Contracts.
Form of Transfer Agency Agreement between, UMB Bank, n.a. and Jones &
Babson, Inc. is filed herewith as Exhibit No. EX-99.h.
(i) Legal Opinion.
Opinion and Consent of Counsel as to the legality of the securities
issued by the Registrant will be filed by pre-effective amendment
prior to the effective date.
(j) Other Opinions.
Power of Attorney is filed herewith as Exhibit No. EX-99.j.
(k) Omitted Financial Statements.
Not Applicable.
(l) Initial Capital Agreements.
Not Applicable.
(m) Rule 12b-1 Plan.
Not Applicable.
(n) Rule 18f-3 Plan.
Not Applicable.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE
REGISTRANT.
None.
ITEM 25. INDEMNIFICATION.
Article VI of the By-Laws as filed herewith as Exhibit No. EX-99.b.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER.
The principal business of UMB Bank, n.a. is the provision of banking and
investment management services to individuals and businesses.
ITEM 27. PRINCIPAL UNDERWRITER.
(a) Jones & Babson, Inc., the only principal underwriter of the
Registrant, also acts as principal underwriter for the following:
UMB Scout Stock Fund, Inc.
UMB Scout WorldWide Fund, Inc.
UMB Scout Regional Fund, Inc.
UMB Scout Balanced Fund, Inc.
UMB Scout Bond Fund, Inc.
UMB Scout Capital Preservation Fund, Inc.
UMB Scout Kansas Tax-Exempt Bond Fund, Inc.
UMB Scout Money Market Fund, Inc.
UMB Scout Tax-Free Money Market Fund, Inc.
David L. Babson Growth Fund, Inc.
Babson Enterprise Fund, Inc.
Babson Enterprise Fund II, Inc.
D.L. Babson Money Market Fund, Inc.
D.L. Babson Tax-Free Income Fund, Inc.
D.L. Babson Bond Trust
Babson Value Fund, Inc.
Shadow Stock Fund, Inc.
Babson-Stewart Ivory International Fund, Inc.
Buffalo Balanced Fund, Inc.
Buffalo Equity Fund, Inc.
Buffalo USA Global Fund, Inc.
Buffalo High Yield Fund, Inc.
Buffalo Small Cap Fund, Inc.
AFBA Five Star Fund, Inc.
Investors Mark Series Fund, Inc.
(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 Positions and
Business Address with Underwriter Offices
with Registrant
Stephen S. Soden President and President and
700 Karnes Blvd. Director Trustee
Kansas City, MO
64108-3306
Giorgio Balzer Director None
700 Karnes Blvd.
Kansas City, MO
64108-3306
Robert T. Rakich Director None
700 Karnes Blvd.
Kansas City, MO
64108-3306
Edward S. Ritter Director None
700 Karnes Blvd.
Kansas City, MO
64108-3306
Robert N. Sawyer Director None
700 Karnes Blvd.
Kansas City, MO
64108-3306
Vernon W. Voorhees Director None
700 Karnes Blvd.
Kansas City, MO
64108-3306
P. Bradley Adams Vice President and Vice President and
700 Karnes Blvd. Treasurer Treasurer
Kansas City, MO
64108-3306
Martin A. Cramer Vice President and Vice President and
700 Karnes Blvd. Secretary Secretary
Kansas City, MO
64108-3306
(c) The principal underwriter does not receive any remuneration or
compensation for the duties or services rendered to the Registrant
pursuant to the principal Transfer Agency Agreement.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
Each account, book or other document required to be maintained by Section
31(a) of the Investment Company Act of 1940, as amended and Rules (17 CFR
270-31a-1 to 31a-3) promulgated thereunder, is in the physical possession
of Jones and Babson, Inc., at BMA Tower, 700 Karnes Blvd., Kansas City,
Missouri 64108-3306, or UMB Bank, n.a., 1010 Grand Blvd., Kansas City,
Missouri 64141.
ITEM 29. MANAGEMENT SERVICES.
There are no management related service contracts not discussed in Part A
or Part B.
ITEM 30. UNDERTAKINGS.
Not Applicable.
<PAGE>
EXHIBIT INDEX
Exhibit Exhibit No.
Agreement and Declaration of Trust EX-99.a.1
Certificate of Trust EX-99.a.2
By-Laws EX-99.b
Form of Management Agreement EX-99.d.1
Form of Management Agreement EX-99.d.2
Form of Sub Advisory Agreement EX-99.d.3
Form of Underwriting Agreement EX-99.e
Form of Custodian Agreement EX-99.g
Form of Transfer Agency Agreement EX-99.h
Power of Attorney EX-99.j
Doc. #284022 v.4 02/08/00 1:04 PM
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, each as amended, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Kansas City, and State of
Missouri, on the 8th day of February, 2000.
UMB SCOUT FUNDS
By /s/ Stephen S. Soden
Stephen S. Soden, President, Principal Executive Officer
and Director
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/ Stephen S. Soden President, Principal Executive February 8, 2000
Stephen S. Soden Officer and Director
/s/ Eric T. Jager Director February 8, 2000
Eric T. Jager*
/s/ William E. Hoffman Director February 8, 2000
William E. Hoffman*
/s/ Stephen F. Rose Director February 8, 2000
Stephen F. Rose*
/s/ Stewart Wien* Director February 8, 2000
Stewart Wien*
/s/ P. Bradley Adams Vice President and Principal February 8, 2000
P. Bradley Adams Financial and Accounting Officer
*Signed pursuant to Power of Attorney
By: /s/ Stephen S. Soden
Stephen S. Soden, Attorney-in-Fact
EX-99.a.1.
AGREEMENT AND DECLARATION OF TRUST
of
UMB Scout Funds
a Delaware Business Trust
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" 2
(g) "Commission" 2
(h) "DBTA" 2
(i) "Declaration of Trust" 2
(j) "General Liabilities" 2
(k) "Interested Person" 3
(l) "Investment Adviser" or "Adviser" 3
(m) "National Financial Emergency" 3
(n) "Person" 3
(o) "Principal Underwriter" 3
(p) "Series" 3
(q) "Shares" 3
(r) "Shareholder" 3
(s) "Trust" 3
(t) "Trust Property" 3
(u) "Trustee" or "Trustees" 3
ARTICLE II. Purpose of Trust 4
ARTICLE III. Shares 7
Section 1. Division of Beneficial Interest 7
Section 2. Ownership of Shares 8
Section 3. Investments in the Trust 9
Section 4. Status of Shares and Limitation of
Personal Liability 9
Section 5. Power of Board of Trustees to Change
Provisions Relating to Shares 9
Section 6. Establishment and Designation of
Series 10
(a) Assets Held with Respect to a Particular
Series 11
(b) Liabilities Held with Respect to a
Particular Series 11
(c) Dividends, Distributions, Redemptions
and Repurchases 12
(d) Voting 12
(e) Equality 12
(f) Fractions 13
(g) Exchange Privilege 13
(h) Combination of Series 13
(i) Elimination of Series 13
Section 7. Indemnification of Shareholders 13
ARTICLE IV. 14
The Board of Trustees 14
Section 1. Number, Election and Tenure 14
Section 2. Effect of Death, Resignation, Removal,
etc. of a Trustee 14
Section 3. Powers 14
Section 4. Payment of Expenses by the Trust 16
Section 5. Payment of Expenses by Shareholders 16
Section 6. Ownership of Trust Property 17
Section 7. Service Contracts 17
ARTICLE V. Shareholders' Voting Powers and Meetings 18
Section 1. Voting Powers 18
Section 2. Meetings 19
Section 3. Quorum and Required Vote 19
Section 4. Shareholder Action by Written Consent
without a Meeting 19
Section 5. Record Dates 20
Section 6. Additional Provisions 20
ARTICLE VI. Net Asset Value, Distributions and
Redemptions 21
Section 1. Determination of Net Asset Value, Net
Income and Distributions 21
Section 2. Redemptions at the Option of a
Shareholder 21
Section 3. Redemptions at the Option of the Trust 22
ARTICLE VII. Compensation and Limitation of Liability
of Officers and Trustees 23
Section 1. Compensation 23
Section 2. Indemnification and Limitation of
Liability 23
Section 3. Officers and Trustees' Good Faith
Action, Expert Advice, No Bond or Surety 23
Section 4. Insurance 24
ARTICLE VIII. Miscellaneous 24
Section 1. Liability of Third Persons Dealing
with Trustees 24
Section 2. Dissolution of Trust or Series 24
Section 3. Merger and Consolidation; Conversion 25
(a) Merger and Consolidation. 25
(b) Conversion 25
Section 4. Reorganization 26
Section 5. Amendments 26
Section 6. Filing of Copies, References, Headings 27
Section 7. Applicable Law 27
Section 8. Provisions in Conflict with Law or
Regulations 27
Section 9. Business Trust Only 28
Section 10. Use of the Names "Scout" 28
AGREEMENT AND DECLARATION OF TRUST
OF
UMB SCOUT FUNDS
AGREEMENT AND DECLARATION OF TRUST made this 26th day
of January, 2000, by the Trustees hereunder, and by the
holders of shares of beneficial interest to be issued
hereunder as hereinafter provided.
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. 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 "UMB
Scout 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 1010 Grand Boulevard, Kansas
City, Missouri, 64141 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. 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
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 "UMB" and "Scout". The
Trust expressly agrees and acknowledges that the names "UMB"
and "Scout" are the sole property of UMB Bank, n.a. ("UMB
Bank"). UMB Bank has consented to the use by the Trust of
the identifying words "UMB" and "Scout" and has granted to
the Trust a nonexclusive license to use such names as part
of the name of the Trust and the name of any Series of
Shares. The Trust further expressly agrees and acknowledges
that the non-exclusive license granted herein may be
terminated by UMB Bank if the Trust ceases to use an
Affiliate of UMB Bank as Investment Adviser or Principal
Underwriter (or to use other Affiliates or successors of UMB
Bank for such purposes). In such event, the non-exclusive
license granted herein may be revoked by UMB Bank and the
Trust shall cease using the names "UMB" and "Scout" and as
part of its name or the name of any Series of Shares, unless
otherwise consented to by UMB Bank or any successor to its
interests in such names.
The Trust further understands and agrees that so long
as UMB Bank and/or its advisory Affiliates shall continue to
serve as the Trust's Investment Adviser, other mutual funds
as may be sponsored or advised by UMB Bank or its Affiliates
shall have the right permanently to adopt and to use the
words "UMB" and "Scout" 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 26th
day of January, 2000.
/s/ Stephen A. Soden
Stephen S. Soden
President and Chairman of the
Board
/s/ Eric T. Jager
Eric T. Jager
Trustee
/s/ William E. Hoffman
William E. Hoffman
Trustee
/s/ Stephen F. Rose
Stephen F. Rose
Trustee
/s/ Stuart L. Wien
Stuart L. Wien
Trustee
280303.01
EX-99.a.2.
CERTIFICATE OF TRUST
of
UMB Scout Funds
a Delaware Business Trust
This Certificate of Trust of UMB Scout Funds (the
"Trust"), 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, 3801-3819.
1. NAME. The name of the business trust formed hereby
is "UMB Scout 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 SR Services, Inc., 919 North
Market Street, Suite 600, P.O. Box 2170, New Castle
County, Wilmington, Delaware 19801.
(b) REGISTERED AGENT. The registered agent for
service of process on the Trust in Delaware is SR
Services, Inc., 919 North Market Street, Suite 600,
P.O. Box 2170, New Castle County, 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 on this 26th day of January, 2000.
/s/ Stephen A. Soden
Stephen S. Soden
President and Chairman of the
Board
/s/ Eric T. Jager
Eric T. Jager
Trustee
/s/ William E. Hoffman
William E. Hoffman
Trustee
/s/ Stephen F. Rose
Stephen F. Rose
Trustee
/s/ Stuart L. Wien
Stuart L. Wien
Trustee
280106.02
EX-99.b.
BY-LAWS
OF
UMB SCOUT FUNDS
A Delaware Business Trust
ARTICLE I.
OFFICES
.1. PRINCIPAL OFFICE. The Board of Trustees shall fix and, from
time to time, may change the location of the principal executive
office of the Trust at any place within or outside the State of
Delaware.
.2. OTHER OFFICES. The Board of Trustees may at any time
establish branch or subordinate offices at any place or places
where the Trust intends to do business.
ARTICLE II.
MEETINGS OF SHAREHOLDERS
.1. PLACE OF MEETINGS. Meetings of shareholders shall be held
at any place within or outside the State of Delaware designated
by the Board of Trustees. In the absence of any such
designation, shareholders' meetings shall be held at the
principal executive office of the Trust.
.2. CALL OF MEETING. A meeting of the shareholders may be
called at any time by the Board of Trustees or by the Chairman of
the Board or by the president.
.3. NOTICE OF SHAREHOLDERS' MEETING. All notices of meetings of
shareholders shall be sent or otherwise given in accordance with
Section 4 of this Article II not less than seven (7) nor more
than seventy-five (75) days before the date of the meeting. The
notice shall specify (i) the place, date and hour of the meeting,
and (ii) the general nature of the business to be transacted.
The notice of any meeting at which trustees are to be elected
also shall include the name of any nominee or nominees whom at
the time of the notice are intended to be presented for election.
If action is proposed to be taken at any meeting for approval
of (i) a contract or transaction in which a trustee has a direct
or indirect financial interest, (ii) an amendment of the
Declaration of Trust, (iii) a reorganization of the Trust, or
(iv) a voluntary dissolution of the Trust, the notice shall also
state the general nature of that proposal.
.4. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice of any
meeting of shareholders shall be given either personally or by
first-class mail or telegraphic or other written communication,
charges prepaid, addressed to the shareholder at the address of
that shareholder appearing on the books of the Trust or its
transfer agent or given by the shareholder to the Trust for the
purpose of notice. If no such address appears on the Trust's
books or is given, notice shall be deemed to have been given if
sent to that shareholder by first-class mail or telegraphic or
other written communication to the Trust's principal executive
office, or if published at least once in a newspaper of general
circulation in the county where that office is located. Notice
shall be deemed to have been given at the time when delivered
personally or deposited in the mail or sent by telegram or other
means of written communication.
If any notice addressed to a shareholder at the address of that
shareholder appearing on the books of the Trust is returned to
the Trust by the United States Postal Service marked to indicate
that the Postal Service is unable to deliver the notice to the
shareholder at that address, all future notices or reports shall
be deemed to have been duly given without further mailing if
these shall be available to the shareholder on written demand of
the shareholder at the principal executive office of the Trust
for a period of one year from the date of the giving of the
notice. An affidavit of the mailing or other means of giving any notice
of any shareholder's meeting shall be executed by the secretary,
assistant secretary or any transfer agent of the Trust giving the
notice and shall be filed and maintained in the minute book of
the Trust.
.5. ADJOURNED MEETING; NOTICE. Any shareholder's meeting,
whether or not a quorum is present, may be adjourned from time to
time by the vote of the majority of the shares represented at
that meeting, either in person or by proxy.
When any meeting of shareholders is adjourned to another time
or place, notice need not be given of the adjourned meeting at
which the adjournment is taken, unless a new record date of the
adjourned meeting is fixed or unless the adjournment is for more
than sixty (60) days from the date set for the original meeting,
in which case the Board of Trustees shall set a new record date.
Notice of any such adjourned meeting shall be given to each
shareholder of record entitled to vote at the adjourned meeting
in accordance with the provisions of Sections 3 and 4 of this
Article II. At any adjourned meeting, the Trust may transact any
business which might have been transacted at the original
meeting.
.6. VOTING. The shareholders entitled to vote at any meeting of
shareholders shall be determined in accordance with the
provisions of the Declaration of Trust, as in effect at such
time. The shareholders, vote may be by voice vote or by ballot,
provided, however, that any election for trustees must be by
ballot if demanded by any shareholder before the voting has
begun. on any matter other than elections of trustees, any
shareholder may vote part of the shares in favor of the proposal
and refrain from voting the remaining shares or vote them against
the proposal, but if the shareholder fails to specify the number
of shares which the shareholder is voting affirmatively, it will
be conclusively presumed that the shareholder's approving vote is
with respect to the total shares that the shareholder is entitled
to vote on such proposal.
.7. WAIVER OF NOTICE BY CONSENT OF ABSENT SHAREHOLDERS. The
transactions of the meeting of shareholders, however called and
noticed and wherever held, shall be as valid as though had at a
meeting duly held after regular call and notice if a quorum be
present either in person or by proxy and if either before or
after the meeting, each person entitled to vote who was not
present in person or by proxy signs a written waiver of notice or
a consent to a holding of the meeting or an approval of the
minutes. The waiver of notice or consent need not specify either
the business to be transacted or the purpose of any meeting of
shareholders.
Attendance by a person at a meeting shall also constitute a
waiver of notice of that meeting, except when the person objects
at the beginning of the meeting to the transaction of any
business because the meeting is not lawfully called or convened
and except that attendance at a meeting is not a waiver of any
right to object to the consideration of matters not included in
the notice of the meeting if that objection is expressly made at
the beginning of the meeting.
.8. 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 outstanding 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 their respective-
proxy-holders 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 approved by the
shareholders without a meeting. This notice shall be given in
the manner specified in Section 4 of this Article II. In the
case of approval of (i) contracts or transactions in which a
trustee has a direct or indirect financial interest, (ii)
indemnification of agents of the Trust, and (iii) a
reorganization of the Trust, the notice shall be given at least
ten (10) days before the consummation of any action authorized by
that approval.
.9. RECORD DATE FOR SHAREHOLDER NOTICE; VOTING AND GIVING
CONSENTS. 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 ninety (90)
days nor less than seven (7) days before the date of any such
meeting as provided in the Declaration of Trust.
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 next preceding 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
adopt the resolution relating to that action or the seventy-fifth
day before the date of such other action, whichever is later.
.10. PROXIES. Every person entitled to vote for trustees or on
any other matter shall have the right to do so either in person
or by one or more agents authorized by a written proxy signed by
the person and filed with the Secretary of the Trust. A proxy
shall be deemed signed if the shareholder's name is placed on the
proxy (whether by manual signature, typewriting, telegraphic
transmission or otherwise) by the shareholder or the
shareholder's attorney-in-fact. A validly executed proxy which
does not state that it is irrevocable shall continue in full
force and effect unless (i) revoked by the person executing it
before the vote pursuant to that proxy by a writing delivered to
the Trust stating that the proxy is revoked or by a subsequent
proxy executed by or attendance at the meeting and voting in
person by the person executing that proxy; or (ii) written notice
of the death or incapacity of the maker of that proxy is received
by the Trust before the vote pursuant to that proxy is counted;
provided however, that no proxy shall be valid after the
expiration of eleven (11) months from the date of the proxy
unless otherwise provided in the proxy. The revocability of a
proxy that states on its face that it is irrevocable shall be
governed by the provisions of the General Corporation Law of the
State of California.
.11. INSPECTORS OF ELECTION. Before any meeting of shareholders,
the Board of Trustees may appoint any persons other than nominees
for office to act as inspectors of election at the meeting or its
adjournment. If no inspectors of election are so appointed, the
chairman of the meeting may and on the request of any shareholder
or a shareholder's proxy shall, appoint inspectors of election at
the meeting. The number of inspectors shall be either one (1) or
three (3). If inspectors are appointed at a meeting on the
request of one or more shareholders or proxies, the holders of a
majority of shares or their proxies present at the meeting shall
determine whether one (1) or three (3) inspectors are to be
appointed. If any person appointed as inspector fails to appear
or fails or refuses to act, the chairman of the meeting may and
on the request of any shareholder or a shareholder's proxy, shall
appoint a person to fill the vacancy.
These inspectors shall:
(a) Determine the number of shares outstanding and the voting
power of each, the shares represented at the meeting, the
existence of a quorum and the authenticity, validity and effect
of proxies;
(b) Receive votes, ballots or consents;
(c) Hear and determine all challenges and questions in any way
arising in connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct the election
or vote with fairness to all shareholders.
ARTICLE III.
TRUSTEES
.1. POWERS. Subject to the applicable provisions of the
Declaration of Trust and these By-Laws relating to action
required to be approved by the shareholders or by the outstanding
shares, the business and affairs of the Trust shall be managed
and all powers shall be exercised by or under the direction of
the Board of Trustees.
.2. NUMBER AND QUALIFICATION OF TRUSTEES. The exact number of
trustees shall be set as provided in the Agreement and
Declaration of Trust.
.3. VACANCIES. Vacancies in the Board of Trustees may be filled
by a majority of the remaining trustees, though less than a
quorum, or by a sole remaining trustee, unless the Board of
Trustees calls a meeting of shareholders for the purposes of
electing trustees. In the event that at any time less than a
majority of the trustees holding office at that time were so
elected by the holders of the outstanding voting securities of
the Trust, the Board of Trustees shall forthwith cause to be held
as promptly as possible, and in any event within sixty (60) days,
a meeting of such holders for the purpose of electing trustees to
fill any existing vacancies in the Board of Trustees, unless such
period is extended by order of the United States Securities and
Exchange Commission.
Notwithstanding the above, whenever and for so long as the
Trust is a participant in or otherwise has in effect a Plan under
which the Trust may be deemed to bear expenses of distributing
its shares as that practice is described in Rule 12b-i under the
Investment Company Act of 1940, then the selection and nomination
of the trustees who are not interested persons of the Trust (as
that term is defined in the Investment Company Act of 1940) shall
be, and is, committed to the discretion of such disinterested
trustees.
.4. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE. All meetings
of the Board of Trustees may be held at any place within or
outside the State of Delaware that has been designated from time
to time by resolution of the Board. In the absence of such a
designation, regular meetings shall be held at the principal
executive office of the Trust. Any meeting, regular or special,
may be held by conference telephone or similar communication
equipment, so long as all trustees participating in the meeting
can hear one another and all such trustees shall be deemed to be
present in person at the meeting.
.5. REGULAR MEETINGS. Regular meetings of the Board of Trustees
shall be held without call at such tine as shall from time to
time be fixed by the Board of Trustees. Such regular meetings
may be held without notice.
.6. SPECIAL MEETINGS. Special meetings of the Board of Trustees
for any purpose or purposes may be called at any time by the
chairman of the board or the president or any vice president or
the secretary or any two (2) trustees.
Notice of the time and place of special meetings shall be
delivered personally or by telephone to each trustee or sent by
first-class mail or telegram, charges prepaid, addressed to each
trustee at that trustee's address as it is shown on the records
of the Trust. In case the notice is mailed, it shall be
deposited in the United States mail at least seven (7) days
before the tine of the holding of the meeting. In case the
notice is delivered personally, by telephone, to the telegraph
company, or by express mail or similar service, it shall be given
at least forty-eight (48) hours before the time of the holding of
the meeting. Any oral notice given personally or by telephone
may be communicated either to the trustee or to a person at the
office of the trustee who the person giving the notice has reason
to believe will promptly communicate it to the trustee. The
notice need not specify the purpose of the meeting or the place
if the meeting is to be held at the principal executive office of
the Trust.
.7. QUORUM. A majority of the authorized number of trustees
shall constitute a quorum for the transaction of business, except
to adjourn as provided in Section 10 of this Article III. Every
act or decision done or made by a majority of the trustees
present at a meeting duly held at which a quorum is present shall
be regarded as the act of the Board of Trustees, subject to the
provisions of the Declaration of Trust. A meeting at which a
quorum is initially present may continue to transact business
notwithstanding the withdrawal of trustees if any action taken is
approved by a least a majority of the required quorum for that
meeting.
.8. WAIVER OF NOTICE. Notice of any meeting need not be given
to any trustee who either before or after the meeting signs a
written waiver of notice, a consent to holding the meeting, or an
approval of the minutes. The waiver of notice or consent need
not specify the purpose of the meeting. All such waivers,
consents, and approvals shall be filed with the records of the
Trust or made a part of the minutes of the meeting. Notice of a
meeting shall also be deemed given to any trustee who attends the
meeting without protesting before or at its commencement the lack
of notice to that trustee.
.9. ADJOURNMENT. A majority of the trustees present, whether or
not constituting a quorum, may adjourn any meeting to another
time and place.
.10. NOTICE OF ADJOURNMENT. Notice of the time and place of
holding an adjourned meeting need not be given unless the meeting
is adjourned for more than forty-eight (48) hours, in which case
notice of the time and place shall be given before the time of
the adjourned meeting in the manner specified in Section 7 of
this Article III to the trustees who were present at the time of
the adjournment.
.11. ACTION WITHOUT A MEETING. Any action required or permitted
to be taken by the Board of Trustees may be taken without a
meeting if a majority of the members of the Board of Trustees
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. Such
written consent or consents shall be filed with the minutes of
the proceedings of the Board of Trustees.
.12. FEES AND COMPENSATION OF TRUSTEES. Trustees and members of
committees may receive such compensation, if any, for their
services and such reimbursement of expenses as may be fixed or
determined by resolution of the Board of Trustees. This Section
12 shall not be construed to preclude any trustee from serving
the Trust in any other capacity as an officer, agent, employee,
or otherwise and receiving compensation for those services.
.13. DELEGATION OF POWER TO OTHER TRUSTEES. Any Trustee may, by
power of attorney, delegate his power for a period not exceeding
six (6) months at any one time to any other Trustee or Trustees;
provided that in no case shall fewer than two (2) Trustees
personally exercise the powers granted to the Trustees under this
Declaration of Trust except as otherwise expressly provided
herein or by resolution of the Board of Trustees.
ARTICLE IV.
COMMITTEES
.1. COMMITTEES OF TRUSTEES. The Board of Trustees may by
resolution adopted by a majority of the authorized number of
trustees designate one or more committees, each consisting of two
(2) or more trustees, to serve at the pleasure of the Board. The
Board may designate one or more trustees as alternate members of
any committee who may replace any absent member at any meeting of
the committee. Any committee to the extent provided in the
resolution of the Board, shall have the authority of the Board,
except with respect to:
(a) the approval of any action which under applicable law also
requires shareholders' approval or approval of the outstanding
shares, or requires approval by a majority of the entire Board or
certain members of said Board;
(b) the filling of vacancies on the Board of Trustees or in any
committee;
(c) the fixing of compensation of the trustees for serving on
the Board of Trustees or on any committee;
(d) the amendment or repeal of the Declaration of Trust or of
the By-Laws or the adoption of new By-Laws;
(e) the amendment or repeal of any resolution of the Board of
Trustees which by its express terms is not so amendable or
repealable;
(f) a distribution to the shareholders of the Trust, except at a
rate or in a periodic amount or within a designated range
determined by the Board of Trustees; or
(g) the appointment of any other committees of the Board of
Trustees or the members of these committees.
.2. MEETINGS AND ACTION OF COMMITTEES. Meetings and action of
committees shall be governed by and held and taken in accordance
with the provisions of Article III of these By-Laws, with such
changes in the context thereof as are necessary to substitute the
committee and its members for the Board of Trustees and its
members, except that the time of regular meetings of committees
may be determined either by resolution of the Board of Trustees
or by resolution of the committee. Special meetings of
committees may also be called by resolution of the Board of
Trustees, and notice of special meetings of committees shall also
be given to all alternate members who shall have the right to
attend all meetings of the committee. The Board of Trustees may
adopt rules for the government of any committee not inconsistent
with the provisions of these By-Laws.
ARTICLE V.
OFFICERS
.1. OFFICERS. The officers of the Trust shall be a president, a
secretary, and a treasurer. The Trust may also have, at the
discretion of the Board of Trustees, a chairman of the board, one
or more vice presidents, one or more assistant secretaries, one
or more assistant treasurers, and such other officers as may be
appointed in accordance with the provisions of Section 3 of this
Article V. Any number of offices may be held by the same person.
.2. ELECTION OF OFFICERS. The officers of the Trust, except
such officers as may appointed in accordance with the provisions
of Section 3 or Section 5 of this Article V, shall be chosen by
the Board of Trustees, and each shall serve at the pleasure of
the Board of Trustees, subject to the rights, if any, of an
officer under any contract of employment.
.3. SUBORDINATE OFFICERS. The Board of Trustees may appoint and
may empower the president to appoint such other officers as the
business of the Trust may require, each of whom shall hold office
for such period, have such authority and perform such duties as
are provided in these By-Laws or as the Board of Trustees may
from time to time determine.
.4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights,
if any, of an officer under any contract of employment, any
officer may be removed, either with or without cause, by the
Board of Trustees at any regular or special meeting of the Board
of Trustees or except in the case of an officer upon whom such
power of removal may be conferred by the Board of Trustees.
Any officer may resign at any time by giving written notice to
the Trust. Any resignation shall take effect at the date of the
receipt of that notice or at any later time specified in that
notice; and unless otherwise specified in that notice, the
acceptance of the resignation shall not be necessary to make it
effective. Any resignation is without prejudice to the rights,
if any, of the Trust under any contract to which the officer is a
party.
.5. VACANCIES IN OFFICES. A vacancy in any office because of
death, resignation, removal, disqualification or other cause
shall be filled in the manner prescribed in these By-Laws for
regular appointment to that office.
.6. CHAIRMAN OF THE BOARD. The chairman of the board, if such
an officer is elected, shall if present preside at meetings of
the Board of Trustees and exercise and perform such other powers
and duties as may be from time to time assigned to him by the
Board of Trustees or prescribed by the By-Laws.
.7. PRESIDENT. Subject to such supervisory powers, if any, as
may be given by the Board of Trustees to the chairman of the
board, if there be such an officer, the president shall be the
chief executive officer of the Trust and shall, subject to the
control of the Board of Trustees, have general supervision,
direction and control of the business and the officers of the
Trust. He shall preside at all meetings of the shareholders and
in the absence of the chairman of the board or if there be none,
at all meetings of the Board of Trustees. He shall have the
general powers and duties of management usually vested in the
office of president of a corporation and shall have such other
powers and duties as may be prescribed by the Board of Trustees
or these By-Laws.
.8. VICE PRESIDENTS. In the absence or disability of the
president, the vice presidents, if any, in order of their rank as
fixed by the Board of Trustees or if not ranked, a vice president
designated by the Board of Trustees, shall perform all the duties
of the president and when so acting shall have all powers of and
be subject to all the restrictions upon the president. The vice
presidents shall have such other powers and perform such other
duties as from time to time may be prescribed for them
respectively by the Board of Trustees or by these By-Laws and the
president or the chairman of the board.
.9. SECRETARY. The secretary shall keep or cause to be kept at
the principal executive office of the Trust or such other place
as the Board of Trustees may direct a book of minutes of all
meetings and actions of trustees, committees of trustees and
shareholders with the time and place of holding, whether regular
or special, and if special, how authorized, the notice given, the
names of those present at trustees' meetings or committee
meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings.
The secretary shall keep or cause to be kept at the principal
executive office of the Trust or at the office of the Trust's
transfer agent or registrar, as determined by resolution of the
Board of Trustees, a share register or a duplicate share register
showing the names of all shareholders and their addresses, the
number and classes of shares held by each, the number and date of
certificates issued for the same and the number and date of
cancellation of every certificate surrendered for cancellation.
The secretary shall give or cause to be given notice of all
meetings of the shareholders and of the Board of Trustees
required by these By-Laws or by applicable law to be given and
shall have such other powers and perform such other duties as may
be prescribed by the Board of Trustees or by these By-Laws.
.10. TREASURER. The treasurer shall be the chief financial
officer of the Trust and shall keep and maintain or cause to be
kept and maintained adequate and correct books and records of
accounts of the properties and business transactions of the
Trust, including accounts of its assets, liabilities, receipts,
disbursements, gains, losses, capital, retained earnings and
shares. The books of account shall at all reasonable times be
open to inspection by-any trustee.
The treasurer shall deposit all monies and other valuables in
the name and to the credit of the Trust with such depositories as
may be designated by the Board of Trustees. He shall disburse
the funds of the Trust as may be ordered by the Board of
Trustees, shall render to the president and trustees, whenever
they request it, an account of all of his transactions as chief
financial officer and of the financial condition of the Trust and
shall have other powers and perform such other duties as may be
prescribed by the Board of Trustees or these By-Laws.
ARTICLE VI.
INDEMNIFICATION OF TRUSTEES, OFFICERS,
EMPLOYEES AND OTHER AGENTS
.1. AGENTS, PROCEEDINGS AND EXPENSES. For the purpose of this
Article, "agent" means any person who is or was a trustee,
officer, employee or other agent of this Trust or is or was
serving at the request of this Trust as a trustee, director,
officer, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other
enterprise or was a trustee, director, officer, employee or agent
of a foreign or domestic corporation which was a predecessor of
another enterprise at the request of such predecessor entity;
"proceeding" means any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or
investigative; and "expenses" includes without limitation
attorney's fees and any expenses of establishing a right to
indemnification under this Article.
.2. ACTIONS OTHER THAN BY TRUST. This 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
this Trust) by reason of the fact that such person is or was an
agent of this Trust, against expenses, judgments, fines,
settlements and other amounts actually and reasonably incurred in
connection with such proceeding if that person acted in good
faith and in a manner that person reasonably believed to be in
the best interests of this Trust and in the case of a criminal
proceeding, had no reasonable cause to believe the conduct of
that person was unlawful. The termination of any proceeding by
judgment, order, settlement, conviction or upon a plea of nolo
contenders or its equivalent shall not of itself create a
presumption that the person did not act in good faith and in a
manner which the person reasonably believed to be in the best
interests of this Trust or that the person had reasonable cause
to believe that the person's conduct was unlawful.
.3. ACTIONS OTHER THAN BY TRUST. This 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 this Trust to procure a judgment in its favor by reason of the
fact that the person is or was an agent of this 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 this Trust and with such care,
including reasonable inquiry, as an ordinarily prudent person in
a like position would use under similar circumstances.
.4. EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision
to the contrary contained herein, there shall be no right to
indemnification for any liability arising by reason of willful
misfeasance, bad faith, gross negligence, or the reckless
disregard of the duties involved in the conduct of the agent's
office with this Trust.
No indemnification shall be made under Sections 2 or 3 of this
Article:
(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 this 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.
.5. SUCCESSFUL DEFENSE BY AGENT. To the extent that an agent of
this Trust has been successful on the merits in defense of any
proceeding referred to in Sections 2 or 3 of this Article or in
defense of any claim, issue or matter therein, before the court
or other body before whom the proceeding was brought, the agent
shall be indemnified against expenses actually and reasonably
incurred by the agent in connection therewith, provided that the
Board of Trustees, including a majority who are disinterested,
non-party trustees, also determines that based upon a review of
the facts, the agent was not liable by reason of the disabling
conduct referred to in Section 4 of this Article.
.6. REQUIRED APPROVAL. Except as provided in Section 5 of this
Article, any indemnification under this Article shall be made by
this Trust only if authorized in the specific case on a
determination that indemnification of the agent is proper in the
circumstances because the agent has met the applicable standard
of conduct set forth in Sections 2 or 3 of this Article and is
not prohibited from indemnification because of the disabling
conduct set forth in Section 4 of this Article, by:
(a) A majority vote of a quorum consisting of trustees who are
not parties to the proceeding and are not interested persons of
the Trust (as defined in the Investment Company Act of 1940); or
(b) A written opinion by an independent legal counsel.
.7. ADVANCE OF EXPENSES. Expenses incurred in defending any
proceeding may be advanced by this Trust before the final
disposition of the proceeding on receipt of an undertaking by or
on behalf of the agent to repay the amount of the advance unless
it shall be determined ultimately that the agent is entitled to
be indemnified as authorized in this Article, provided the agent
provides a security for his undertaking, or a majority of a
quorum of the disinterested, non-party trustees, or an
independent legal counsel in a written opinion, determine that
based on a review of readily available facts, there is reason to
believe that said agent ultimately will be found entitled to
indemnification.
.8. OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article
shall affect any right to indemnification to which persons other
than trustees and officers of this Trust or any subsidiary hereof
may be entitled by contract or otherwise.
.9. LIMITATIONS. No indemnification or advance shall be made
under this Article, except as provided in Sections 5 or 6 in any
circumstances where it appears:
(a) That it would be inconsistent with a provision of the
Agreement and Declaration of Trust, a resolution of the
shareholders, or an agreement in effect at the time of accrual of
the alleged cause of action asserted in the proceeding in which
the expenses were incurred or other amounts were paid which
prohibits or otherwise limits indemnification; or
(b) That it would be inconsistent with any condition expressly
imposed by a court in approving a settlement.
.10. INSURANCE. Upon and in the event of a determination by the
Board of Trustees of this Trust to purchase such insurance, this
Trust shall purchase and maintain insurance on behalf of any
agent of this Trust against any liability asserted against or
incurred by the agent in such capacity or arising out of the
agent's status as such, but only to the extent that this Trust
would have the power to indemnify the agent against that
liability under the provisions of this Article.
.11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article does not
apply to any proceeding against any trustee, investment manager
or other fiduciary of an employee benefit plan in that person' s
capacity as such, even though that person may also be an agent of
this Trust as defined in Section 1 of this Article. Nothing
contained in this Article shall limit any right to
indemnification to which such a trustee, investment manager, or
other fiduciary may be entitled by contract or otherwise which
shall be enforceable to the extent permitted by applicable law
other than this Article.
ARTICLE VII.
RECORDS AND REPORTS
.1. MAINTENANCE AND INSPECTION OF SHARE REGISTER. This Trust
shall keep at its principal executive office or at the office of
its transfer agent or registrar, if either be appointed and as
determined by resolution of the Board of Trustees, a record of
its shareholders, giving the names and addresses of all
shareholders and the number and series of shares held by each
shareholder.
.2. MAINTENANCE AND INSPECTION OF BY-LAWS. The Trust shall keep
at its principal executive office the original or a copy of these
By-Laws as amended to date, which shall be open to inspection by
the shareholders at all reasonable times during office hours.
.3. MAINTENANCE AND INSPECTION OF OTHER RECORDS. The accounting
books and records and minutes of proceedings of the shareholders
and the Board of Trustees and any committee or committees of the
Board of Trustees shall be kept at such place or places
designated by the Board of Trustees or in the absence of such
designation, at the principal executive office of the Trust. The
minutes shall be kept in written form and the accounting books
and records shall be kept either in written form or in any other
form capable of being converted into written form. The minutes
and accounting books and records shall be open to inspection upon
the written demand of any shareholder or holder of a voting trust
certificate at any reasonable time during usual business hours
for a purpose reasonably related to the holder's interests as a
shareholder or as the holder of a voting trust certificate. The
inspection may be made in person or by an agent or attorney and
shall include the right to copy and make extracts.
.4. INSPECTION BY TRUSTEES. Every trustee shall have the
absolute right at any reasonable time to inspect all books,
records, and documents of every kind and the physical properties
of the Trust. This inspection by a trustee may be made in person
or by an agent or attorney and the right of inspection includes
the right to copy and make extracts of documents.
.5. FINANCIAL STATEMENTS. A copy of any financial statements
and any income statement of the Trust for each quarterly period
of each fiscal year and accompanying balance sheet of the Trust
as of the end of each such period that has been prepared by the
Trust shall be kept on file in the principal executive office of
the Trust for at least twelve (12) months and each such statement
shall be exhibited at all reasonable times to any shareholder
demanding an examination of any such statement or a copy shall be
mailed to any such shareholder.
The quarterly income statements and balance sheets referred to
in this section shall be accompanied by the report, if any, of
any independent accountants engaged by the Trust or the
certificate of an authorized officer of the Trust that the
financial statements were prepared without audit from the books
and records of the Trust.
ARTICLE VIII.
GENERAL MATTERS
.1. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS. All checks,
drafts, or other orders for payment of money, notes or other
evidences of indebtedness issued in the name of or payable to the
Trust shall be signed or endorsed by such person or persons and
in such manner as from time to time shall be determined by
resolution of the Board of Trustees.
.2. CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The Board of
Trustees, except as otherwise provided in these By-Laws, may
authorize any officer or officers, agent or agents, to enter into
any contract or execute any instrument in the name of and on
behalf of the Trust and this authority may be general or confined
to specific instances; and unless so authorized or ratified by
the Board of Trustees or within the agency power of an officer,
no officer, agent, or employee shall have any power or authority
to bind the Trust by any contract or engagement or to pledge its
credit or to render it liable for any purpose or for any amount.
.3. CERTIFICATES FOR SHARES. A certificate or certificates for
shares of beneficial interest in any series of the Trust may be
issued to a shareholder upon his request when such shares are
fully paid. The Trust may impose a nominal change for issuing
certificates to cover expenses related thereto. All certificates
shall be signed in the name of the Trust by the chairman of the
board or the president or vice president and by the treasurer or
an assistant treasurer or the secretary or any assistant
secretary, certifying the number of shares and the series of
shares owned by the shareholders. Any or all of the signatures
on the certificate may be facsimile. In case any officer,
transfer agent, or registrar who has signed or whose facsimile
signature has been placed on a certificate shall have ceased to
be that officer, transfer agent, or registrar before that
certificate is issued, it may be issued by the Trust with the
same effect as if that person were an officer, transfer agent or
registrar at the date of issue. Notwithstanding the foregoing,
the Trust may adopt and use a system of issuance, recordation and
transfer of its shares by electronic or other means; and in fact,
as a matter of policy, does not presently issue certified shares.
.4. LOST CERTIFICATES. Except as provided in this Section 4, no
new certificates for shares shall be issued to replace an old
certificate unless the latter is surrendered to the Trust and
cancelled at the same time. The Board of Trustees may in case
any share certificate or certificate for any other security is
lost, stolen, or destroyed, authorize the issuance of a
replacement certificate on such terms and conditions as the Board
of Trustees may require, including a provision for
indemnification of the Trust secured by a bond or other adequate
security sufficient to protect the Trust against any claim that
may be made against it, including any expense or liability on
account of the alleged loss, theft, or destruction of the
certificate or the issuance of the replacement certificate.
.5. REPRESENTATION OF SHARES OF OTHER ENTITIES HELD BY TRUST.
The chairman of the board, the president or any vice president or
any other person authorized by resolution of the Board of
Trustees or by any of the foregoing designated officers, is
authorized to vote or represent on behalf of the Trust any and
all shares of any corporation, partnership, trusts, or other
entities, foreign or domestic, standing in the name of the Trust.
The authority granted may be exercised in person or by a proxy
duly executed by such designated person.
.6. FISCAL YEAR. The fiscal year of the Trust shall be fixed
and refixed or changed from time to time by resolution of the
Trustees. The fiscal year of the Trust shall be the taxable year
of each Series of the Trust.
ARTICLE IX.
AMENDMENTS
.1. AMENDMENT BY SHAREHOLDERS. These By-Laws may be amended or
repealed by the affirmative vote or written consent of a majority
of the outstanding shares entitled to vote, except as otherwise
provided by applicable law or by the Declaration of Trust or
these By-Laws.
.2. AMENDMENT BY TRUSTEES. Subject to the right of shareholders
as provided in Section 1 of this Article to adopt, amend or
repeal By-Laws, and except as otherwise provided by law or by the
Declaration of Trust, these By-Laws may be adopted, amended, or
repealed by the Board of Trustees.
Doc. #279988 v.02
EX-99.d.1.
MANAGEMENT AGREEMENT
between
UMB BANK, n.a.
and
UMB SCOUT FUNDS
(on behalf of the UMB Scout Technology Fund)
THIS AGREEMENT, made and entered into as of the ______
day of January, 2000, by and between UMB Scout Funds, a Delaware
business trust (the "Trust") on behalf of its UMB Scout
Technology Fund series (the "Fund"), and UMB Bank, n.a., a
national bank (the "Manager"), and which Agreement may be
executed in any number of counterparts, each of which shall be
deemed to be an original, but all of which together shall
constitute but one instrument.
WHEREAS the Fund was founded for the purpose of
engaging in the business of investing and reinvesting its
property and assets and to operate as an open-end, diversified,
management investment company, as defined in the Investment
Company Act of 1940, as amended (the "Act"), under which it is
registered with the Securities and Exchange Commission, and
WHEREAS the Manager is engaged in the business of
supplying investment advice and management services to registered
investment companies, as an independent contractor, and
WHEREAS the Trust and the Manager desire to enter into
a contractual arrangement whereby the Manager provides investment
advice and management services to the Trust, on behalf of the
Fund, for a fee,
NOW THEREFORE, in consideration of the mutual promises
herein contained, and other good and valuable consideration,
receipt of which is hereby acknowledged, it is mutually agreed
and contracted by and between the parties hereto that:
1. The Trust hereby employs the Manager, for the
period set forth in Paragraph 5 hereof, and on the terms set
forth herein, to render investment advice and management service
to the Fund, subject to the supervision and direction of the
Board of Trustees of the Trust. The Manager hereby accepts such
employment and agrees, during such period, to render the services
and assume the obligations herein set forth, for the compensation
herein provided. The Manager shall, for all purposes herein, be
deemed to be an independent contractor, and shall, unless
otherwise expressly provided and authorized, have no authority to
act for or represent the Trust in any way, or in any other way be
deemed an agent of the Trust.
The Manager shall furnish the Fund investment
management and administrative services. Investment management
shall include analysis, research and portfolio recommendations
consistent with the Fund's objectives and policies.
Administrative services shall include the services and
compensation of such members of the Manager's organization as
shall be duly elected officers and/or Trustees of the Trust and
such other personnel as shall be necessary to carry out its
normal operations; fees of the independent Trustees, the
custodian, the independent public accountant and legal counsel
(but not legal and audit fees and other costs in contemplation of
or arising out of litigation or administrative actions to which
the Trust, its officers or Trustees are a party or incurred in
anticipation of becoming a party); rent; the cost of a transfer
and dividend disbursing agent or similar in-house services;
bookkeeping; accounting; and all other clerical and
administrative functions as may be reasonable and necessary to
maintain the Trust's records and for it to operate as an open-end
management investment company. Exclusive of the management fee,
the Trust shall bear the cost of any interest, taxes, dues, fees
and other charges of governments and their agencies, including
the cost of qualifying its shares for sale in any jurisdiction,
brokerage commissions or any other expenses incurred by it which
are not assumed herein by the Manager.
All property, equipment and information used by the
Manager in the management and administration of the Trust, on
behalf of the Fund, shall belong to the Manager. Should the
management and administrative relationship between the Trust and
the Manager terminate, the Trust shall be entitled to, and the
Manager shall provide the Trust, a copy of all information and
records in the Manager's file necessary for the Trust to continue
its functions, which shall include computer systems and programs
in use as of the date of such termination; but nothing herein
shall prohibit thereafter the use of such information, systems or
programs by the Manager, so long as such does not unfairly
interfere with the continued operation of the Trust.
Subject to compliance with the requirements of the Act,
the Manager may retain as a sub-adviser to the Fund, at the
Manager's own expense, any investment adviser registered under
the Advisers Act.
2. a. The Manager (or its delegate) shall place and
execute Fund orders for the purchase and sale of portfolio
securities with broker-dealers. Subject to the obtaining
the best available prices and execution, the Manager is
authorized to place orders for the purchase and sale of
portfolio securities for the Fund with such broker-dealers
as it may select from time to time. Subject to subparagraph
(b) below, the Manager is also authorized to place
transactions with brokers who provide research or
statistical information or analyses to the Fund, to the
Manager, or to any other client for which the Manager
provides investment advisory services. Subject to obtaining
the best available prices and execution, the Manager may
also place brokerage transactions with broker-dealers who
sell shares of the Fund. Broker-dealers who sell shares of
the Fund shall only receive orders for the purchase or sale
of portfolio securities to the extent that the placing of
such orders is in compliance with the Rules of the U.S.
Securities and Exchange Commission and the National
Association of Securities Dealers, Inc. The Manager also
agrees that it will cooperate with the Trust to execute
instructions that brokerage transactions be allocated to
brokers or dealers who provide benefits directly to the
Trust or the Fund.
b. Notwithstanding the provisions of subparagraph (a)
above and subject to such policies and procedures as may be
adopted by the Board of Trustees and officers of the Trust,
the Manager is authorized to pay a member of an exchange,
broker or dealer an amount of commission for effecting a
securities transaction in excess of the amount of commission
another member of an exchange, broker or dealer would have
charged for effecting that transaction, in such instances
where the Manager has determined in good faith that such
amount of commission was reasonable in relation to the value
of the brokerage and research services provided by such
member, broker or dealer, viewed in terms of either that
particular transaction or the Manager's overall
responsibilities with respect to the Fund and to other funds
for which the Manager exercises investment discretion.
c. The Manager is authorized to direct portfolio
transactions to a broker which is an affiliated person of
the Manager or the Trust in accordance with such standards
and procedures as may be approved by the Board in accordance
with Rule 17e-1 under the Act, or other rules promulgated by
the Securities and Exchange Commission. Any transaction
placed with an affiliated broker must (i) be placed at best
price and execution, and (ii) may not be a principal
transaction.
3. As compensation for the services to be rendered to
the Trust and Fund by the Manager under the provisions of this
Agreement, the Trust agrees to pay from the assets of the Fund
semimonthly to the Manager an annual fee based on the average
total net assets of the Fund computed daily in accordance with
its Agreement and Declaration of Trust and By-Laws as follows:
a. 1.50% of the average total net assets of the Fund.
b. Should the Fund's normal operating expenses
exclusive of taxes, interest, brokerage commission and
extraordinary costs exceed limits established by any law,
rule or regulation of any jurisdiction in which the Fund's
shares are registered for sale, the Manager shall reimburse
the Fund in the amount of the excess.
4. It is understood and agreed that the services to
be rendered by the Manager to the Trust under the provisions of
the Agreement are not to be deemed exclusive, and the Manager
shall be free to render similar or different services to others
so long as its ability to render the services provided for in
this Agreement shall not be impaired thereby.
5. It is understood and agreed that the Trustees,
officers, agents, employees and shareholders of the Trust may be
interested in the Manager as owners, employees, agents or
otherwise, and that owners, employees and agents of the Manager
may be interested in the Trust as shareholders or otherwise. It
is understood and agreed that shareholders, officers, Trustees
and other personnel of the Manager are and may continue to be
officers and Trustees of the Trust, but that they receive no
remuneration from the Trust solely for acting in those
capacities.
6. This Agreement shall become effective pursuant to
its approval by the Board of Trustees of the Trust and by the
vote of a majority of the outstanding shares of the Fund as
prescribed by the Act. It shall remain in force for an initial
period of two years, and thereafter may be renewed for successive
periods not exceeding one year only so long as such renewal and
continuance is specifically approved at least annually by the
Board of Trustees or by vote of a majority of the outstanding
shares of the Fund as prescribed by the Act, and only if the
terms and the renewal of this Agreement have been approved by a
vote of a majority of the Trustees of the Trust including a
majority of the Trustees who are not parties to the Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval. No amendment
to this Agreement shall be effective unless the terms thereof
have been approved by the vote of a majority of outstanding
shares of the Fund as prescribed by the Act (unless shareholder
approval of the amendment would not be required to be consistent
with SEC interpretations of Section 15 of the 1940 Act), and by
vote of a majority of the Trustees of the Trust who are not
parties to the Agreement or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on
such approval. It shall be the duty of the Board of Trustees of
the Trust to request and evaluate, and the duty of the Manager to
furnish, such information as may reasonably be necessary to
evaluate the terms of this Agreement and any amendment thereto.
7. This Agreement may be terminated at any time,
without the payment of any penalty, by the Board of Trustees of
the Trust, or by the vote of a majority of the outstanding voting
shares of the Trust as prescribed by the Act on not more than
sixty (60) days written notice to the Manager, and it may be
terminated by the Manager upon not less than sixty (60) days
written notice to the Trust. It shall terminate automatically in
the event of its assignment by either party unless the parties
hereby, by agreement, obtain an exemption from the Securities and
Exchange Commission from the provisions of the Act pertaining to
the subject matter of this paragraph. Any notice, request or
instruction provided for herein, or for the giving of which, the
occasion may arise hereunder, shall be deemed duly given, if in
writing and mailed by registered mail, postage prepaid, addressed
to the regular executive office of the Trust or the Manager, as
the case may be. As used in this Agreement, the terms
"assignment," "a majority of the outstanding voting shares" and
"interested persons" shall have the same meaning as similar terms
contained in the Act.
8. The Manager shall not be liable for any error in
judgment or mistake at law for any loss suffered by the Trust or
Fund in connection with any matters to which this Agreement
relates, except that nothing herein contained shall be construed
to protect the Manager against any liability by reason of willful
misfeasance, bad faith or gross negligence in the performance of
duties or by reckless disregard of its obligations or duties
under this Agreement.
9. This Agreement may not be amended, transferred,
assigned, sold or in any manner hypothecated or pledged nor may
any new agreement become effective without the affirmative vote
or written consent of the holders of a majority of the shares of
the Fund.
UMB SCOUT FUNDS
By:
Stephen S. Soden
President
ATTEST:
Martin A. Cramer
Vice President and Secretary
[SEAL]
UMB BANK, n.a.
By:
Name:
Title:
ATTEST:
Name:
Title:
[SEAL]
Doc. #280404 v.01 02/07/00 2:02 PM
EX-99.d.2.
MANAGEMENT AGREEMENT
between
UMB BANK, n.a.
and
UMB SCOUT FUNDS
(on behalf of the UMB Scout Equity Index Fund)
THIS AGREEMENT, made and entered into as of the ______
day of January, 2000, by and between UMB Scout Funds, a Delaware
business trust (the "Trust") on behalf of its UMB Scout Equity
Index Fund series (the "Fund"), and UMB Bank, n.a., a national
bank (the "Manager"), and which Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute but one
instrument.
WHEREAS the Fund was founded for the purpose of
engaging in the business of investing and reinvesting its
property and assets and to operate as an open-end, diversified,
management investment company, as defined in the Investment
Company Act of 1940, as amended (the "Act"), under which it is
registered with the Securities and Exchange Commission, and
WHEREAS the Manager is engaged in the business of
supplying investment advice and management services to registered
investment companies, as an independent contractor, and
WHEREAS the Trust and the Manager desire to enter into
a contractual arrangement whereby the Manager provides investment
advice and management services to the Trust, on behalf of the
Fund, for a fee,
NOW THEREFORE, in consideration of the mutual promises
herein contained, and other good and valuable consideration,
receipt of which is hereby acknowledged, it is mutually agreed
and contracted by and between the parties hereto that:
1. The Trust hereby employs the Manager, for the
period set forth in Paragraph 5 hereof, and on the terms set
forth herein, to render investment advice and management service
to the Fund, subject to the supervision and direction of the
Board of Trustees of the Trust. The Manager hereby accepts such
employment and agrees, during such period, to render the services
and assume the obligations herein set forth, for the compensation
herein provided. The Manager shall, for all purposes herein, be
deemed to be an independent contractor, and shall, unless
otherwise expressly provided and authorized, have no authority to
act for or represent the Trust in any way, or in any other way be
deemed an agent of the Trust.
The Manager shall furnish the Fund investment
management and administrative services. Investment management
shall include analysis, research and portfolio recommendations
consistent with the Fund's objectives and policies.
Administrative services shall include the services and
compensation of such members of the Manager's organization as
shall be duly elected officers and/or Trustees of the Trust and
such other personnel as shall be necessary to carry out its
normal operations; fees of the independent Trustees, the
custodian, the independent public accountant and legal counsel
(but not legal and audit fees and other costs in contemplation of
or arising out of litigation or administrative actions to which
the Trust, its officers or Trustees are a party or incurred in
anticipation of becoming a party); rent; the cost of a transfer
and dividend disbursing agent or similar in-house services;
bookkeeping; accounting; and all other clerical and
administrative functions as may be reasonable and necessary to
maintain the Trust's records and for it to operate as an open-end
management investment company. Exclusive of the management fee,
the Trust shall bear the cost of any interest, taxes, dues, fees
and other charges of governments and their agencies, including
the cost of qualifying its shares for sale in any jurisdiction,
brokerage commissions or any other expenses incurred by it which
are not assumed herein by the Manager.
All property, equipment and information used by the
Manager in the management and administration of the Trust, on
behalf of the Fund, shall belong to the Manager. Should the
management and administrative relationship between the Trust and
the Manager terminate, the Trust shall be entitled to, and the
Manager shall provide the Trust, a copy of all information and
records in the Manager's file necessary for the Trust to continue
its functions, which shall include computer systems and programs
in use as of the date of such termination; but nothing herein
shall prohibit thereafter the use of such information, systems or
programs by the Manager, so long as such does not unfairly
interfere with the continued operation of the Trust.
Subject to compliance with the requirements of the Act,
the Manager may retain as a sub-adviser to the Fund, at the
Manager's own expense, any investment adviser registered under
the Advisers Act.
2. a. The Manager shall place and execute Fund
orders for the purchase and sale of portfolio securities
with broker-dealers. Subject to the obtaining the best
available prices and execution, the Manager is authorized to
place orders for the purchase and sale of portfolio
securities for the Fund with such broker-dealers as it may
select from time to time. Subject to subparagraph (b)
below, the Manager is also authorized to place transactions
with brokers who provide research or statistical information
or analyses to the Fund, to the Manager, or to any other
client for which the Manager provides investment advisory
services. Subject to obtaining the best available prices
and execution, the Manager may also place brokerage
transactions with broker-dealers who sell shares of the
Fund. Broker-dealers who sell shares of the Fund shall only
receive orders for the purchase or sale of portfolio
securities to the extent that the placing of such orders is
in compliance with the Rules of the U.S. Securities and
Exchange Commission and the National Association of
Securities Dealers, Inc. The Manager also agrees that it
will cooperate with the Trust to execute instructions that
brokerage transactions be allocated to brokers or dealers
who provide benefits directly to the Trust or the Fund.
b. Notwithstanding the provisions of subparagraph (a)
above and subject to such policies and procedures as may be
adopted by the Board of Trustees and officers of the Trust,
the Manager is authorized to pay a member of an exchange,
broker or dealer an amount of commission for effecting a
securities transaction in excess of the amount of commission
another member of an exchange, broker or dealer would have
charged for effecting that transaction, in such instances
where the Manager has determined in good faith that such
amount of commission was reasonable in relation to the value
of the brokerage and research services provided by such
member, broker or dealer, viewed in terms of either that
particular transaction or the Manager's overall
responsibilities with respect to the Fund and to other funds
for which the Manager exercises investment discretion.
c. The Manager is authorized to direct portfolio
transactions to a broker which is an affiliated person of
the Manager or the Trust in accordance with such standards
and procedures as may be approved by the Board in accordance
with Rule 17e-1 under the Act, or other rules promulgated by
the Securities and Exchange Commission. Any transaction
placed with an affiliated broker must (i) be placed at best
price and execution, and (ii) may not be a principal
transaction.
3. As compensation for the services to be rendered to
the Trust and Fund by the Manager under the provisions of this
Agreement, the Trust agrees to pay from the assets of the Fund
semimonthly to the Manager an annual fee based on the average
total net assets of the Fund computed daily in accordance with
its Agreement and Declaration of Trust and By-Laws as follows:
a. Forty one-hundredths of one percent (0.40%) of the
average total net assets of the Fund.
b. Should the Fund's normal operating expenses
exclusive of taxes, interest, brokerage commission and
extraordinary costs exceed limits established by any law,
rule or regulation of any jurisdiction in which the Fund's
shares are registered for sale, the Manager shall reimburse
the Fund in the amount of the excess.
4. It is understood and agreed that the services to
be rendered by the Manager to the Trust under the provisions of
the Agreement are not to be deemed exclusive, and the Manager
shall be free to render similar or different services to others
so long as its ability to render the services provided for in
this Agreement shall not be impaired thereby.
5. It is understood and agreed that the Trustees,
officers, agents, employees and shareholders of the Trust may be
interested in the Manager as owners, employees, agents or
otherwise, and that owners, employees and agents of the Manager
may be interested in the Trust as shareholders or otherwise. It
is understood and agreed that shareholders, officers, Trustees
and other personnel of the Manager are and may continue to be
officers and Trustees of the Trust, but that they receive no
remuneration from the Trust solely for acting in those
capacities.
6. This Agreement shall become effective pursuant to
its approval by the Board of Trustees of the Trust and by the
vote of a majority of the outstanding shares of the Fund as
prescribed by the Act. It shall remain in force for an initial
period of two years, and thereafter may be renewed for successive
periods not exceeding one year only so long as such renewal and
continuance is specifically approved at least annually by the
Board of Trustees or by vote of a majority of the outstanding
shares of the Fund as prescribed by the Act, and only if the
terms and the renewal of this Agreement have been approved by a
vote of a majority of the Trustees of the Trust including a
majority of the Trustees who are not parties to the Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval. No amendment
to this Agreement shall be effective unless the terms thereof
have been approved by the vote of a majority of outstanding
shares of the Fund as prescribed by the Act (unless shareholder
approval of the amendment would not be required to be consistent
with SEC interpretations of Section 15 of the 1940 Act), and by
vote of a majority of the Trustees of the Trust who are not
parties to the Agreement or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on
such approval. It shall be the duty of the Board of Trustees of
the Trust to request and evaluate, and the duty of the Manager to
furnish, such information as may reasonably be necessary to
evaluate the terms of this Agreement and any amendment thereto.
7. This Agreement may be terminated at any time,
without the payment of any penalty, by the Board of Trustees of
the Trust, or by the vote of a majority of the outstanding voting
shares of the Trust as prescribed by the Act on not more than
sixty (60) days written notice to the Manager, and it may be
terminated by the Manager upon not less than sixty (60) days
written notice to the Trust. It shall terminate automatically in
the event of its assignment by either party unless the parties
hereby, by agreement, obtain an exemption from the Securities and
Exchange Commission from the provisions of the Act pertaining to
the subject matter of this paragraph. Any notice, request or
instruction provided for herein, or for the giving of which, the
occasion may arise hereunder, shall be deemed duly given, if in
writing and mailed by registered mail, postage prepaid, addressed
to the regular executive office of the Trust or the Manager, as
the case may be. As used in this Agreement, the terms
"assignment," "a majority of the outstanding voting shares" and
"interested persons" shall have the same meaning as similar terms
contained in the Act.
8. The Manager shall not be liable for any error in
judgment or mistake at law for any loss suffered by the Trust or
Fund in connection with any matters to which this Agreement
relates, except that nothing herein contained shall be construed
to protect the Manager against any liability by reason of willful
misfeasance, bad faith or gross negligence in the performance of
duties or by reckless disregard of its obligations or duties
under this Agreement.
9. This Agreement may not be amended, transferred,
assigned, sold or in any manner hypothecated or pledged nor may
any new agreement become effective without the affirmative vote
or written consent of the holders of a majority of the shares of
the Fund.
UMB SCOUT FUNDS
By:
Stephen S. Soden
President
ATTEST:
Martin A. Cramer
Vice President and Secretary
[SEAL]
UMB BANK, n.a.
By:
Name:
Title:
ATTEST:
Name:
Title:
[SEAL]
Doc. #279812 v.02 02/07/00 1:52 PM
EX-99.d.3.
SUB-ADVISORY AGREEMENT
between
UMB BANK, N.A.
and
NORTHERN TRUST QUANTITATIVE ADVISORS, INC.
for the UMB Scout Equity Index Fund
THIS AGREEMENT by and between UMB BANK, N.A., a national
bank with its principal office at 1010 Grand Boulevard, Kansas
City, Missouri, 64141 (hereinafter referred to as the "Manager")
and NORTHERN TRUST QUANTITATIVE ADVISORS, INC., a corporation
with its principal office at 50 S. LaSalle Street, Chicago,
Illinois 60675 (hereinafter referred to as the "Sub-Adviser"),
which Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which
together shall constitute but one instrument.
WITNESSETH:
WHEREAS the Manager has entered into a Management Agreement
with UMB Scout Funds, a Delaware business trust (the "Trust"), on
behalf of the UMB Scout Equity Index Fund series (the "Fund") of
concurrent date to provide management services, including
investment advisory services, the Manager desires the assistance
of the Sub-Adviser which can supply the following services:
Research, analysis, advice and recommendations with respect
to the purchase and sale of securities and the making of
investment commitments; statistical information and reports as
may reasonably be required, and general assistance in the
supervision of the investments of the Fund, subject to the
control of the Manager and the Trustees of the Trust.
NOW THEREFORE, in consideration of the mutual agreements
herein contained, the parties agree as follows:
1. During the term of this Agreement, or any extension or
extensions thereof, the Sub-Adviser will, to the best of its
ability, furnish the foregoing services.
2. As compensation, the Manager will pay the Sub-Adviser
for its services the following annual fee computed daily as
determined by the Fund's price make-up sheet and which shall be
payable monthly or at such other intervals as agreed by the
parties.
a. ___% of the average daily total net assets of the Fund.
3. This Agreement shall become effective and run
concurrently with the Management Agreement of the same date
between the Manager and the Trust, an executed copy of which
shall be supplied to the Sub-Adviser.
4. a. The last day of the initial period of this
Agreement shall coincide with the last day of the Management
Agreement which shall be ____________. Thereafter this Agreement
may be renewed in conjunction with the Management Agreement for
successive periods not exceeding one year only so long as such
renewal and continuance is specifically approved at least
annually by the Board of Trustees of the Trust or by a vote of
the majority of the outstanding voting securities of the Fund as
prescribed by the Investment Company Act of 1940 ("Act") and
provided further that such continuance is approved at least
annually thereafter by a vote of a majority of the Trustees who
are not parties to such Agreement or interested persons (as
defined by the Act) of such party, cast in person at a meeting
called for the purpose of voting on such approval. The Sub-
Adviser shall provide the Manager such information as may be
reasonably necessary to assist the Trustees of the Trust to
evaluate the terms of the Management Agreement.
b. This Agreement will terminate without the payment
of any penalty:
(i) upon sixty days written notice by the Manager to
the Sub-Adviser; or
(ii) automatically with the Management Agreement
following sixty days written notice (unless
waived) by the Trust to the Manager that the Board
of Trustees or the shareholders by vote of a
majority of the outstanding voting securities of
the Fund, as provided by the Act, has terminated
the Management Agreement.
This Agreement shall automatically terminate in the event of
its assignment or assignment of the Management Agreement unless
such assignment is approved by the Trustees and the shareholders
of the Fund as hereinbefore provided or unless an exemption is
obtained from the Securities and Exchange Commission from the
provisions of the Act pertaining to the subject matter of this
paragraph. The Manager shall promptly notify the Sub-Adviser of
any notice of termination or of any circumstances which are
likely to result in a termination of the Management Agreement.
The term "assignment" used in this paragraph is as defined in the
Act. No amendment to this Agreement shall be effective unless
the terms thereof have been approved by the vote of a majority of
outstanding shares of the Fund as prescribed by the Act (unless
shareholder approval of the amendment would not be required to be
consistent with SEC interpretations of Section 15 of the 1940
Act), and by vote of a majority of the Trustees of the Trust who
are not parties to the Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of
voting on such approval.
5. It is understood and agreed that the services to be
rendered by the Sub-Adviser to the Manager under the provisions
of this Agreement are not to be deemed to be exclusive, and the
Sub-Adviser shall be free to render similar or different services
to others so long as its ability to render the services provided
for in this Agreement shall not be impaired thereby, and provided
further that the services to be rendered by the Sub-Adviser to
the Manager under this Agreement and the compensation provided
for in Paragraph 2 here of shall be limited solely to services
with reference to the Fund.
6. The Manager agrees that it will furnish currently to
Sub-Adviser all information reasonably necessary to permit Sub-
Adviser to give the advice called for under this Agreement and
such information with reference to the Fund that is reasonably
necessary to permit Sub-Adviser to carry out its responsibilities
under this Agreement, and the parties agree that they will from
time to time consult and make appropriate arrangements as to
specific information that it is required under this paragraph and
the frequency and manner with which it shall be supplied.
7. The Sub-Adviser shall not be liable for any error of
judgment or mistake at law or for any loss suffered by Manager or
the Fund in connection with any matters to which this Agreement
relates except that nothing herein contained shall be construed
to protect the Sub-Adviser against any liability by reason of
willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reckless disregard of its
obligations or duties under this agreement.
Each party hereby executes this Agreement as of the _____
day of January, 2000, pursuant to the authority granted by its
governing Board.
NORTHERN TRUST QUANTITATIVE
ADVISORS, INC.
By:
Name:
Title:
ATTEST:
UMB BANK, N.A.
By:
Name:
Title:
ATTEST:
Doc. #279833 v.01 02/07/00 2:23 PM
EX-99.e.
UNDERWRITING AGREEMENT
between
UMB SCOUT FUNDS
and
JONES & BABSON, INC.
THIS AGREEMENT, made and entered into this ______ day of
January, 2000, by and between UMB SCOUT FUNDS (a Delaware
business trust), hereinafter referred to as the "Fund") and JONES
& BABSON, Inc. (a Missouri corporation, hereinafter referred to
as "Principal Underwriter").
1. Subject to the provisions of its Certificate of
Incorporation and By-Laws, copies of which have been delivered to
and are acknowledged by the Principal Underwriter, the Board of
Directors of the Fund hereby appoint the firm of Jones & Babson,
Inc. as the Principal Underwriter and sole distributor of the
shares of the Fund, except for shares which the Fund may elect
pursuant to authority of its Board of Trustees to issue direct to
registered owners, which shall include by definition but not by
limitation stock issued by virtue of reinvestment of dividends,
or as the result of a splitting of shares, or as the result of
the Fund merging or consolidating with another organization, or
in return for acquisition of assets, or as the result of shares
issued in connection with a contractual plan for which the Fund
is the underlying investment, or for the purpose of complying
with the registration laws of a particular state or jurisdiction.
2. The Fund agrees to prepare and file registration
statements with the Securities and Exchange Commission and the
Securities Departments of the various states and other
jurisdictions in which the shares may be offered, and do such
other things and to take such other actions as may be mutually
agreed upon by and between the parties as shall be reasonably
necessary in order to effect the registration and the sale of the
Fund's shares.
3. The Principal Underwriter agrees to place its full
facilities at the disposal of the Fund and to assist and
cooperate fully with respect to the registration and
qualification of the Fund's shares, as well as perform all
functions required in connection with any offering including, but
not limited to, the creation and preparation of literature,
advertising, and any other promotional material for the purpose
of selling the Fund's shares.
4. Jones & Babson, Inc. will act as agent of the Fund and
not as principal in the solicitation and sale of the shares of
the Fund unless expressly agreed to in writing by the Principal
Underwriter and the Fund.
5. Normally, the Fund shall not exercise any direction or
control over the time and place of solicitation, the persons to
be solicited, or the manner of solicitation; but the Principal
Underwriter agrees that solicitations shall be in a form
acceptable to the Fund and shall be subject to such terms and
conditions as may be prescribed from time to time by the Fund,
the Registration Statement, the Prospectus, the Certificate of
Incorporation, and By-Laws of the Fund, and shall not violate any
provision of the laws of the United States or of any other
jurisdiction to which solicitations are subject, or violate any
rule or regulation promulgated by any lawfully constituted
authority to which the Fund or Principal Underwriter may be
subject.
6. The Fund agrees to issue new shares direct to the
registered owner pursuant to this Agreement and according to
instructions from the Principal Underwriter, subject to the net
asset value of such shares next effective after acceptance of the
order by the Fund and as more fully set out in paragraph 8.
7. The Fund hereby authorizes the Principal Underwriter to
sell its shares in accordance with the following schedule of
prices:
The applicable price will be the net asset value per
share next effective after receipt and acceptance by the
Fund of a proper offer to purchase, determined in accordance
with the Certificate of Incorporation, By-Laws, Registration
Statement and Prospectus of the Fund.
8. The Fund agrees that, as long as this Agreement is in
effect, it will not authorize anyone else to offer or solicit
applications for shares of the Fund and will not accept any such
application if submitted by or through anyone other than the
Principal Underwriter, unless the Principal Underwriter shall
first have agreed in writing to such authorization.
9. This Agreement (i) may be terminated without the
payment of any penalty, either by vote of the Board of Trustees
of the Fund or by vote of a majority of the outstanding voting
securities of the Fund, on sixty (60) days written notice to the
Principal Underwriter; (ii) may be terminated without penalty by
the Principal Underwriter on sixty (60) days written notice to
the Fund; and (iii) shall immediately terminate in the event of
its assignment.
10. The Principal Underwriter agrees that it will not take
either a short or long position with respect to shares of the
Fund; that it will not place orders for more shares than are
required to fill the requests received by it as agent of the
Fund; and that it will expeditiously transmit all such orders to
the Fund.
11. Nothing contained in this Agreement shall be deemed to
protect the Principal Underwriter against any liability to the
Fund or to its securities holders to which the Principal
Underwriter would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of
its duties hereunder, or by reason of its reckless disregard of
its obligations and duties hereunder.
12. This Agreement shall become effective on the date first
above written, and continue in effect for an initial period of
two years, and thereafter shall continue automatically for
successive annual periods provided that such continuance is
specifically approved at least annually by the Board of Trustees
or by vote of a majority of the outstanding voting securities of
the Fund and provided further that this Agreement or any renewal
thereof shall be approved by the vote of a majority of the
Directors who are not parties to the Agreement or interested
persons of any such party, cast in person, at a meeting called
for the purpose of voting on such approval.
UMB SCOUT FUNDS
By:
Name: Stephen S. Soden
Title: President
ATTEST:
Title:
JONES & BABSON, INC.
By:
Name: Stephen S. Soden
Title: President
ATTEST:
Title:
Doc. #279827 v.01 02/07/00 2:07 PM
EX-99.g.
CUSTODY AGREEMENT
Dated ___________, 2000
Between
UMB BANK, n.a.
and
UMB SCOUT FUNDS
Registered Investment Company
Table of Contents
SECTION PAGE
1. Appointment of Custodian 1
2. Definitions
Securities 1
Assets
1
Instructions and Special Instructions 1
3. Delivery of Corporate Documents 2
4. Powers and Duties of Custodian and Domestic
Subcustodian 3
Safekeeping 3
Manner of Holding Securities 3
Free Delivery of Assets 5
Exchange of Securities 5
Purchases of Assets 5
Sales of Assets 6
Options 6
Futures Contracts 7
Segregated Accounts 7
Depositary Receipts 8
Corporate Actions, Put Bonds, Called Bonds, Etc. 8
Interest Bearing Deposits 9
Foreign Exchange Transactions Other than as Principal
9
Pledges or Loans of Securities 9
Stock Dividends, Rights, Etc. 10
Routine Dealings 10
Collections 10
Bank Accounts 11
Dividends, Distributions and Redemptions 11
Proceeds from Shares Sold 11
Proxies and Notices; Compliance with
the Shareholders Communication Act of 1985 11
Books and Records 12
Opinion of Fund's Independent Certified Public
Accountants 12
Reports by Independent Certified Public Accountants
12
Bills and Others Disbursements 12
5. Subcustodians 12
(a) Domestic Subcustodians 13
(b) Foreign Subcustodians 13
(c) Interim Subcustodians 13
(d) Special Subcustodians 14
(e) Termination of a Subcustodian 14
(f) Certification Regarding Foreign Subcustodians 14
6. Standard of Care 14
General Standard of Care 14
Actions Prohibited by Applicable Law, Events
Beyond Custodian's Control, Armed Conflict,
Sovereign Risk, Etc. 15
Liability for Past Records 15
Advice of Counsel 15
Advice of the Fund and Others 15
Instructions Appearing to be Genuine 16
Exceptions from Liability 16
7. Liability of the Custodian for Actions of Others 16
(a) Domestic Subcustodians 16
Liability for Acts and Omissions of Foreign
Subcustodians 16
Securities Systems, Interim Subcustodians,
Special Subcustodians, Securities
Depositories and Clearing Agencies 17
(d) Defaults or Insolvencies of Brokers,
Banks, Etc. 17
(e) Reimbursement of Expenses 17
8. Indemnification 17
(a) Indemnification by Fund 17
(b) Indemnification by Custodian 17
9. Advances 18
10. Liens 18
11. Compensation 19
12. Powers of Attorney 19
13. Termination and Assignment 19
14. Notices 19
15. Miscellaneous 19
CUSTODY AGREEMENT
This agreement made as of this ____ day of ___________, 2000
between UMB SCOUT FUNDS, with its principal place of business
located at BMA Tower, 700 Karnes Boulevard, Kansas City,
Missouri, (hereinafter "Fund"), on behalf of its separate series
of shares representing interests in separate portfolios, as set
forth on Schedule A, as may be amended from time to time
(hereinafter "Series") and UMB Bank, n.a., a national banking
association with its principal place of business located at
Kansas City, Missouri (hereinafter "Custodian").
WITNESSETH:
WHEREAS, the Fund is registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended; and
WHEREAS, the Fund desires to appoint Custodian as its
custodian for the custody of Assets (as hereinafter defined)
owned by the Fund which Assets are to be held in such accounts as
the Fund may establish from time to time; and
WHEREAS, Custodian is willing to accept such appointment on
the terms and conditions hereof.
NOW, THEREFORE, in consideration of the mutual promises
contained herein, the parties hereto, intending to be legally
bound, mutually covenant and agree as follows:
1. APPOINTMENT OF CUSTODIAN.
The Fund hereby constitutes and appoints the Custodian as
custodian of Assets belonging to the Fund which have been or may
be from time to time deposited with the Custodian. Custodian
accepts such appointment as a custodian and agrees to perform the
duties and responsibilities of Custodian as set forth herein on
the conditions set forth herein. The parties hereby agree that
the Custodian shall maintain a separate account on behalf of each
Series of the Fund. The Custodian shall identify to each Series'
account the Assets and liabilities belonging to such Series and
in such actions, records, reports, confirmations, and notices to
the Fund called for under this Agreement, shall identify the
account and Series to which such action, record, account, report,
confirmation or notice pertains, as if the Fund had executed
separate Agreements on behalf of each of its Series. Pursuant to
the Fund's governing instruments, the debts, liabilities,
obligations and expenses incurred, contracted for or otherwise
existing with respect to each particular Series of the Fund shall
be enforceable against the assets of such Series only, and not
against the assets of any other Series of the Fund.
2. DEFINITIONS.
For purposes of this Agreement, the following terms shall
have the meanings so indicated:
(a) "Security" or "Securities" shall mean stocks, bonds,
bills, rights, scrip, warrants, interim certificates and all
negotiable or nonnegotiable paper commonly known as Securities
and other instruments or obligations.
(b) "Assets" shall mean Securities, monies and other
property held by the Custodian for the benefit of the Fund.
(c)(1) "Instructions", as used herein, shall mean: (i) a
tested telex, a written (including, without limitation, facsimile
transmission) request, direction, instruction or certification
signed or initialed by or on behalf of the Fund by an Authorized
Person; (ii) a telephonic or other oral communication from a
person the Custodian reasonably believes to be an Authorized
Person; or (iii) a communication effected directly between an
electro-mechanical or electronic device or system (including,
without limitation, computers) on behalf of the Fund.
Instructions in the form of oral communications shall be
confirmed by the Fund by tested telex or in writing in the manner
set forth in clause (i) above, but the lack of such confirmation
shall in no way affect any action taken by the Custodian in
reliance upon such oral Instructions prior to the Custodian's
receipt of such confirmation. The Fund authorizes the Custodian
to record any and all telephonic or other oral Instructions
communicated to the Custodian.
(c)(2) "Special Instructions", as used herein, shall mean
Instructions countersigned or confirmed in writing by the
Treasurer or any Assistant Treasurer of the Fund or any other
person designated by the Treasurer of the Fund in writing, which
countersignature or confirmation shall be included on the same
instrument containing the Instructions or on a separate
instrument relating thereto.
(c)(3) Instructions and Special Instructions shall be
delivered to the Custodian at the address and/or telephone,
facsimile transmission or telex number agreed upon from time to
time by the Custodian and the Fund.
(c)(4) Where appropriate, Instructions and Special
Instructions shall be continuing instructions.
3. DELIVERY OF CORPORATE DOCUMENTS.
Each of the parties to this Agreement represents that its
execution does not violate any of the provisions of its
respective charter, articles of incorporation, articles of
association or bylaws and all required corporate action to
authorize the execution and delivery of this Agreement has been
taken.
The Fund has furnished the Custodian with copies, properly
certified or authenticated, with all amendments or supplements
thereto, of the following documents:
(a) Certificate of Incorporation (or equivalent document)
of the Fund as in effect on the date hereof;
(b) By-Laws of the Fund as in effect on the date hereof;
(c) Resolutions of the Board of Trustees of the Fund
appointing the Custodian and approving the form of this
Agreement; and
(d) The Fund's current prospectus and statements of
additional information.
The Fund shall promptly furnish the Custodian with copies of any
updates, amendments or supplements to the foregoing documents.
In addition, the Fund has delivered or will promptly deliver
to the Custodian, copies of the Resolution(s) of its Board of
Trustees and all amendments or supplements thereto, properly
certified or authenticated, designating certain officers or
employees of the Fund who will have continuing authority to
certify to the Custodian: (a) the names, titles, signatures and
scope of authority of all persons authorized to give Instructions
or any other notice, request, direction, instruction, certificate
or instrument on behalf of the Fund, and (b) the names, titles
and signatures of those persons authorized to countersign or
confirm Special Instructions on behalf of the Fund (in both cases
collectively, the "Authorized Persons" and individually, an
"Authorized Person"). Such Resolutions and certificates may be
accepted and relied upon by the Custodian as conclusive evidence
of the facts set forth therein and shall be considered to be in
full force and effect until delivery to the Custodian of a
similar Resolution or certificate to the contrary. Upon delivery
of a certificate which deletes or does not include the name(s) of
a person previously authorized to give Instructions or to
countersign or confirm Special Instructions, such persons shall
no longer be considered an Authorized Person authorized to give
Instructions or to countersign or confirm Special Instructions.
Unless the certificate specifically requires that the approval of
anyone else will first have been obtained, the Custodian will be
under no obligation to inquire into the right of the person
giving such Instructions or Special Instructions to do so.
Notwithstanding any of the foregoing, no Instructions or Special
Instructions received by the Custodian from the Fund will be
deemed to authorize or permit any director, trustee, officer,
employee, or agent of the Fund to withdraw any of the Assets of
the Fund upon the mere receipt of such authorization, Special
Instructions or Instructions from such director, trustee,
officer, employee or agent.
4. POWERS AND DUTIES OF CUSTODIAN AND DOMESTIC
SUBCUSTODIAN.
Except for Assets held by any Subcustodian appointed
pursuant to Sections 5(b), (c), or (d) of this Agreement, the
Custodian shall have and perform the powers and duties
hereinafter set forth in this Section 4. For purposes of this
Section 4 all references to powers and duties of the "Custodian"
shall also refer to any Domestic Subcustodian appointed pursuant
to Section 5(a).
(a) Safekeeping.
The Custodian will keep safely the Assets of the Fund which
are delivered to it from time to time. The Custodian shall not
be responsible for any property of the Fund held or received by
the Fund and not delivered to the Custodian.
(b) Manner of Holding Securities.
(1) The Custodian shall at all times hold Securities
of the Fund either: (i) by physical possession of the share
certificates or other instruments representing such Securities in
registered or bearer form; or (ii) in book-entry form by a
Securities System (as hereinafter defined) in accordance with the
provisions of sub-paragraph (3) below.
(2) The Custodian may hold registrable portfolio
Securities which have been delivered to it in physical form, by
registering the same in the name of the Fund or its nominee, or
in the name of the Custodian or its nominee, for whose actions
the Fund and Custodian, respectively, shall be fully responsible.
Upon the receipt of Instructions, the Custodian shall hold such
Securities in street certificate form, so called, with or without
any indication of fiduciary capacity. However, unless it receives
Instructions to the contrary, the Custodian will register all
such portfolio Securities in the name of the Custodian's
authorized nominee. All such Securities shall be held in an
account of the Custodian containing only assets of the Fund or
only assets held by the Custodian as a fiduciary, provided that
the records of the Custodian shall indicate at all times the Fund
or other customer for which such Securities are held in such
accounts and the respective interests therein.
(3) The Custodian may deposit and/or maintain domestic
Securities owned by the Fund in, and the Fund hereby approves use
of: (a) The Depository Trust Company; (b) The Participants Trust
Company; and (c) any book-entry system as provided in (i) Subpart
O of Treasury Circular No. 300, 31 CFR 306.115, (ii) Subpart B of
Treasury Circular Public Debt Series No. 27-76, 31 CFR 350.2, or
(iii) the book-entry regulations of federal agencies
substantially in the form of 31 CFR 306.115. Upon the receipt of
Special Instructions, the Custodian may deposit and/or maintain
domestic Securities owned by the Fund in any other domestic
clearing agency registered with the Securities and Exchange
Commission ("SEC") under Section 17A of the Securities Exchange
Act of 1934 (or as may otherwise be authorized by the SEC to
serve in the capacity of depository or clearing agent for the
Securities or other assets of investment companies) which acts as
a Securities depository. Each of the foregoing shall be referred
to in this Agreement as a "Securities system", and all such
Securities Systems shall be listed on the attached Appendix A.
Use of a Securities System shall be in accordance with applicable
Federal Reserve Board and SEC rules and regulations, if any, and
subject to the following provisions:
(i) The Custodian may deposit the Securities
directly or through one or more agents or Subcustodians
which are also qualified to act as custodians for
investment companies.
(ii) The Custodian shall deposit and/or maintain
the Securities in a Securities System, provided that
such Securities are represented in an account
("Account") of the Custodian in the Securities System
that includes only assets held by the Custodian as a
fiduciary, custodian or otherwise for customers.
(iii) The books and records of the Custodian
shall at all times identify those Securities belonging
to the Fund which are maintained in a Securities
System.
(iv) The Custodian shall pay for Securities
purchased for the account of the Fund only upon (a)
receipt of advice from the Securities System that such
Securities have been transferred to the Account of the
Custodian in accordance with the rules of the
Securities System, and (b) the making of an entry on
the records of the Custodian to reflect such payment
and transfer for the account of the Fund. The Custodian
shall transfer Securities sold for the account of the
Fund only upon (a) receipt of advice from the
Securities System that payment for such Securities has
been transferred to the Account of the Custodian in
accordance with the rules of the Securities System, and
(b) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the
account of the Fund. Copies of all advices from the
Securities System relating to transfers of Securities
for the account of the Fund shall be maintained for the
Fund by the Custodian. The Custodian shall deliver to
the Fund on the next succeeding business day daily
transaction reports which shall include each day's
transactions in the Securities System for the account
of the Fund. Such transaction reports shall be
delivered to the Fund or any agent designated by the
Fund pursuant to Instructions, by computer or in such
other manner as the Fund and Custodian may agree.
(v) The Custodian shall, if requested by the Fund
pursuant to Instructions, provide the Fund with reports
obtained by the Custodian or any Subcustodian with
respect to a Securities System's accounting system,
internal accounting control and procedures for
safeguarding Securities deposited in the Securities
System.
(vi) Upon receipt of Special Instructions, the
Custodian shall terminate the use of any Securities
System on behalf of the Fund as promptly as practicable
and shall take all actions reasonably practicable to
safeguard the Securities of the Fund maintained with
such Securities System.
(c) Free Delivers of Assets.
Notwithstanding any other provision of this Agreement and
except as provided in Section 3 hereof, the Custodian, upon
receipt of Special Instructions, will undertake to make free
delivery of Assets, provided such Assets are on hand and
available, in connection with the Fund's transactions and to
transfer such Assets to such broker, dealer, Subcustodian, bank,
agent, Securities System or otherwise as specified in such
Special Instructions.
(d) Exchange of Securities.
Upon receipt of Instructions, the Custodian will exchange
portfolio Securities held by it for the Fund for other Securities
or cash paid in connection with any reorganization,
recapitalization, merger, consolidation, or conversion of
convertible Securities, and will deposit any such Securities in
accordance with the terms of any reorganization or protective
plan.
Without Instructions, the Custodian is authorized to
exchange Securities held by it in temporary form for Securities
in definitive form, to surrender Securities for transfer into a
name or nominee name as permitted in Section 4(b)(2), to effect
an exchange of shares in a stock split or when the par value of
the stock is changed, to sell any fractional shares, and, upon
receiving payment therefor, to surrender bonds or other
Securities held by it at maturity or call.
(e) Purchases of Assets.
(1) Securities Purchases. In accordance with
Instructions, the Custodian shall, with respect to a purchase of
Securities, pay for such Securities out of monies held for the
Fund's account for which the purchase was made, but only insofar
as monies are available therein for such purpose, and receive the
portfolio Securities so purchased. Unless the Custodian has
received Special Instructions to the contrary, such payment will
be made only upon receipt of Securities by the Custodian, a
clearing corporation of a national Securities exchange of which
the Custodian is a member, or a Securities System in accordance
with the provisions of Section 4(b)(3) hereof. Notwithstanding
the foregoing, upon receipt of Instructions: (i) in connection
with a repurchase agreement, the Custodian may release funds to a
Securities System prior to the receipt of advice from the
Securities System that the Securities underlying such repurchase
agreement have been transferred by book-entry into the Account
maintained with such Securities System by the Custodian, provided
that the Custodian's instructions to the Securities System
require that the Securities System may make payment of such funds
to the other party to the repurchase agreement only upon transfer
by book-entry of the Securities underlying the repurchase
agreement into such Account; (ii) in the case of Interest Bearing
Deposits, currency deposits, and other deposits, foreign exchange
transactions, futures contracts or options, pursuant to Sections
4(g), 4(h), 4(1), and 4(m) hereof, the Custodian may make payment
therefor before receipt of an advice of transaction; and (iii) in
the case of Securities as to which payment for the Security and
receipt of the instrument evidencing the Security are under
generally accepted trade practice or the terms of the instrument
representing the Security expected to take place in different
locations or through separate parties, such as commercial paper
which is indexed to foreign currency exchange rates, derivatives
and similar Securities, the Custodian may make payment for such
Securities prior to delivery thereof in accordance with such
generally accepted trade practice or the terms of the instrument
representing such Security.
(2) Other Assets Purchased. Upon receipt of
Instructions and except as otherwise provided herein, the
Custodian shall pay for and receive other Assets for the account
of the Fund as provided in Instructions.
(f) Sales of Assets.
(1) Securities Sold. In accordance with Instructions,
the Custodian will, with respect to a sale, deliver or cause to
be delivered the Securities thus designated as sold to the broker
or other person specified in the Instructions relating to such
sale. Unless the Custodian has received Special Instructions to
the contrary, such delivery shall be made only upon receipt of
payment therefor in the form of: (a) cash, certified check, bank
cashier's check, bank credit, or bank wire transfer; (b) credit
to the account of the Custodian with a clearing corporation of a
national Securities exchange of which the Custodian is a member;
or (c) credit to the Account of the Custodian with a Securities
System, in accordance with the provisions of Section 4(b)(3)
hereof. Notwithstanding the foregoing, Securities held in
physical form may be delivered and paid for in accordance with
"street delivery custom" to a broker or its clearing agent,
against delivery to the Custodian of a receipt for such
Securities, provided that the Custodian shall have taken
reasonable steps to ensure prompt collection of the payment for,
or return of, such Securities by the broker or its clearing
agent, and provided further that the Custodian shall not be
responsible for the selection of or the failure or inability to
perform of such broker or its clearing agent or for any related
loss arising from delivery or custody of such Securities prior to
receiving payment therefor.
(2) Other Assets Sold. Upon receipt of Instructions
and except as otherwise provided herein, the Custodian shall
receive payment for and deliver other Assets for the account of
the Fund as provided in Instructions.
(g) Options.
(1) Upon receipt of Instructions relating to the
purchase of an option or sale of a covered call option, the
Custodian shall: (a) receive and retain confirmations or other
documents, if any, evidencing the purchase or writing of the
option by the Fund; (b) if the transaction involves the sale of a
covered call option, deposit and maintain in a segregated account
the Securities (either physically or by book-entry in a
Securities System) subject to the covered call option written on
behalf of the Fund; and (c) pay, release and/or transfer such
Securities, cash or other Assets in accordance with any notices
or other communications evidencing the expiration, termination or
exercise of such options which are furnished to the Custodian by
the Options Clearing Corporation (the "OCC"), the securities or
options exchanges on which such options were traded, or such
other organization as may be responsible for handling such option
transactions.
(2) Upon receipt of Instructions relating to the sale
of a naked option including stock index and commodity options),
the Custodian, the Fund and the broker-dealer shall enter into an
agreement to comply with the rules of the OCC or of any
registered national securities exchange or similar
organizations(s). Pursuant to that agreement and the Fund's
Instructions, the Custodian shall: (a) receive and retain
confirmations or other documents, if any, evidencing the writing
of the option; (b) deposit and maintain in a segregated account,
Securities (either physically or by book-entry in a Securities
System), cash and/or other Assets; and (c) pay, release and/or
transfer such Securities, cash or other Assets in accordance with
any such agreement and with any notices or other communications
evidencing the expiration, termination or exercise of such option
which are furnished to the Custodian by the OCC, the securities
or options exchanges on which such options were traded, or such
other organization as may be responsible for handling such option
transactions. The Fund and the broker-dealer shall be responsible
for determining the quality and quantity of assets held in any
segregated account established in compliance with applicable
margin maintenance requirements and the performance of other
terms of any option contract.
(h) Futures Contracts.
Upon receipt of Instructions, the Custodian shall enter into
a futures margin procedural agreement among the Fund, the
Custodian and the designated futures commission merchant (a
"Procedural Agreement"). Under the Procedural Agreement the
Custodian shall: (a) receive and retain confirmations, if any,
evidencing the purchase or sale of a futures contract or an
option on a futures contract by the Fund; (b) deposit and
maintain in a segregated account cash, Securities and/or other
Assets designated as initial, maintenance or variation "margin"
deposits intended to secure the Fund's performance of its
obligations under any futures contracts purchased or sold, or any
options on futures contracts written by the Fund, in accordance
with the provisions of any Procedural Agreement designed to
comply with the provisions of the Commodity Futures Trading
Commission and/or any commodity exchange or contract market (such
as the Chicago Board of Trade), or any similar organization(s),
regarding such margin deposits; and (c) release Assets from
and/or transfer Assets into such margin accounts only in
accordance with any such Procedural Agreements. The Fund and such
futures commission merchant shall be responsible for determining
the type and amount of Assets held in the segregated account or
paid to the broker-dealer in compliance with applicable margin
maintenance requirements and the performance of any futures
contract or option on a futures contract in accordance with its
terms.
(i) Segregated Accounts.
Upon receipt of Instructions, the Custodian shall establish
and maintain on its books a segregated account or accounts for
and on behalf of the Fund, into which account or accounts may be
transferred Assets of the Fund, including Securities maintained
by the Custodian in a Securities System pursuant to Paragraph
(b)(3) of this Section 4, said account or accounts to be
maintained (i) for the purposes set forth in Sections 4(g), 4(h)
and 4(n) and (ii) for the purpose of compliance by the Fund with
the procedures required by the SEC Investment Company Act Release
Number 10666 or any subsequent release or releases relating to
the maintenance of segregated accounts by registered investment
companies, or (iii) for such other purposes as may be set forth,
from time to time, in Special Instructions. The Custodian shall
not be responsible for the determination of the type or amount of
Assets to be held in any segregated account referred to in this
paragraph, or for compliance by the Fund with required procedures
noted in (ii) above.
(j) Depositary Receipts.
Upon receipt of Instructions, the Custodian shall surrender
or cause to be surrendered Securities to the depositary used for
such Securities by an issuer of American Depositary Receipts or
International Depositary Receipts (hereinafter referred to,
collectively, as "ADRs"), against a written receipt therefor
adequately describing such Securities and written evidence
satisfactory to the organization surrendering the same that the
depositary has acknowledged receipt of instructions to issue ADRs
with respect to such Securities in the name of the Custodian or a
nominee of the Custodian, for delivery in accordance with such
instructions.
Upon receipt of Instructions, the Custodian shall surrender
or cause to be surrendered ADRs to the issuer thereof, against a
written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the organization
surrendering the same that the issuer of the ADRs has
acknowledged receipt of instructions to cause its depository to
deliver the Securities underlying such ADRs in accordance with
such instructions.
(k) Corporate Actions, Put Bonds, Called Bonds, Etc.
Upon receipt of Instructions, the Custodian shall: (a)
deliver warrants, puts, calls, rights or similar Securities to
the issuer or trustee thereof (or to the agent of such issuer or
trustee) for the purpose of exercise or sale, provided that the
new Securities, cash or other Assets, if any, acquired as a
result of such actions are to be delivered to the Custodian; and
(b) deposit Securities upon invitations for tenders thereof,
provided that the consideration for such Securities is to be paid
or delivered to the Custodian, or the tendered Securities are to
be returned to the Custodian.
Notwithstanding any provision of this Agreement to the
contrary, the Custodian shall take all necessary action, unless
otherwise directed to the contrary in Instructions, to comply
with the terms of all mandatory or compulsory exchanges, calls,
tenders, redemptions, or similar rights of security ownership,
and shall notify the Fund of such action in writing by facsimile
transmission or in such other manner as the Fund and Custodian
may agree in writing.
The Fund agrees that if it gives an Instruction for the
performance of an act on the last permissible date of a period
established by any optional offer or on the last permissible date
for the performance of such act, the Fund shall hold the Bank
harmless from any adverse consequences in connection with acting
upon or failing to act upon such Instructions.
(1) Interest Bearing Deposits.
Upon receipt of Instructions directing the Custodian to
purchase interest bearing fixed term and call deposits
(hereinafter referred to, collectively, as "Interest Bearing
Deposits") for the account of the Fund, the Custodian shall
purchase such Interest Bearing Deposits in the name of the Fund
with such banks or trust companies, including the Custodian, any
Subcustodian or any subsidiary or affiliate of the Custodian
(hereinafter referred to as "Banking Institutions"), and in such
amounts as the Fund may direct pursuant to Instructions. Such
Interest Bearing Deposits may be denominated in US Dollars or
other currencies, as the Fund may determine and direct pursuant
to Instructions. The responsibilities of the Custodian to the
Fund for Interest Bearing Deposits issued by the Custodian shall
be that of a US bank for a similar deposit. With respect to
Interest Bearing Deposits other than those issued by the
Custodian, (a) the Custodian shall be responsible for the
collection of income and the transmission of cash to and from
such accounts; and (b) the Custodian shall have no duty with
respect to the selection of the Banking Institution or for the
failure of such Banking Institution to pay upon demand.
(m) Foreign Exchange Transactions Other than as Principal.
(1) Upon receipt of Instructions, the Custodian shall
settle foreign exchange contracts or options to purchase and sell
foreign currencies for spot and future delivery on behalf of and
for the account of the Fund with such currency brokers or Banking
Institutions as the Fund may determine and direct pursuant to
Instructions. The Fund accepts full responsibility for its use of
third party foreign exchange brokers and for execution of said
foreign exchange contracts and understands that the Fund shall be
responsible for any and all costs and interest charges which may
be incurred as a result of the failure or delay of its third
party broker to deliver foreign exchange. The Custodian shall
have no responsibility with respect to the selection of the
currency brokers or Banking Institutions with which the Fund
deals or, so long as the Custodian acts in accordance with
Instructions, for the failure of such brokers or Banking
Institutions to comply with the terms of any contract or option.
(2) Notwithstanding anything to the contrary contained
herein, upon receipt of Instructions the Custodian may, in
connection with a foreign exchange contract, make free outgoing
payments of cash in the form of U.S. Dollars or foreign currency
prior to receipt of confirmation of such foreign exchange
contract or confirmation that the countervalue currency
completing such contract has been delivered or received.
(n) Pledges or Loans of Securities.
(1) Upon receipt of Instructions from the Fund, the
Custodian will release or cause to be released Securities held in
custody to the pledgees designated in such Instructions by way of
pledge or hypothecation to secure loans incurred by the Fund with
various lenders including but not limited to UMB Bank, n.a.;
provided, however, that the Securities shall be released only
upon payment to the Custodian of the monies borrowed, except that
in cases where additional collateral is required to secure
existing borrowings, further Securities may be released or
delivered, or caused to be released or delivered for that purpose
upon receipt of Instructions. Upon receipt of Instructions, the
Custodian will pay, but only from funds available for such
purpose, any such loan upon re-delivery to it of the Securities
pledged or hypothecated therefor and upon surrender of the note
or notes evidencing such loan. In lieu of delivering collateral
to a pledgee, the Custodian, on the receipt of Instructions,
shall transfer the pledged Securities to a segregated account for
the benefit of the pledgee.
(2) Upon receipt of Special Instructions, and
execution of a separate Securities Lending Agreement, the
Custodian will release Securities held in custody to the borrower
designated in such Instructions and may, except as otherwise
provided below, deliver such Securities prior to the receipt of
collateral, if any, for such borrowing, provided that, in case of
loans of Securities held by a Securities System that are secured
by cash collateral, the Custodian's instructions to the
Securities System shall require that the Securities System
deliver the Securities of the Fund to the borrower thereof only
upon receipt of the collateral for such borrowing. The Custodian
shall have no responsibility or liability for any loss arising
from the delivery of Securities prior to the receipt of
collateral. Upon receipt of Instructions and the loaned
Securities, the Custodian will release the collateral to the
borrower.
(o) Stock Dividends, Rights Etc.
The Custodian shall receive and collect all stock dividends,
rights, and other items of like nature and, upon receipt of
Instructions, take action with respect to the same as directed in
such Instructions.
(p) Routine Dealings.
The Custodian will, in general, attend to all routine and
mechanical matters in accordance with industry standards in
connection with the sale, exchange, substitution, purchase,
transfer, or other dealings with Securities or other property of
the Fund except as may be otherwise provided in this Agreement or
directed from time to time by Instructions from the Fund. The
Custodian may also make payments to itself or others from the
Assets for disbursements and out-of-pocket expenses incidental to
handling Securities or other similar items relating to its duties
under this Agreement, provided that all such payments shall be
accounted for to the Fund.
(q) Collections.
The Custodian shall (a) collect amounts due and payable to
the Fund with respect to portfolio Securities and other Assets;
(b) promptly credit to the account of the Fund all income and
other payments relating to portfolio Securities and other Assets
held by the Custodian hereunder upon Custodian's receipt of such
income or payments or as otherwise agreed in writing by the
Custodian and the Fund; (c) promptly endorse and deliver any
instruments required to effect such collection; and (d) promptly
execute ownership and other certificates and affidavits for all
federal, state, local and foreign tax purposes in connection with
receipt of income or other payments with respect to portfolio
Securities and other Assets, or in connection with the transfer
of such Securities or other Assets; provided, however, that with
respect to portfolio Securities registered in so-called street
name, or physical Securities with variable interest rates, the
Custodian shall use its best efforts to collect amounts due and
payable to the Fund. The Custodian shall notify the Fund in
writing by facsimile transmission or in such other manner as the
Fund and Custodian may agree in writing if any amount payable
with respect to portfolio Securities or other Assets is not
received by the Custodian when due. The Custodian shall not be
responsible for the collection of amounts due and payable with
respect to portfolio Securities or other Assets that are in
default.
(r) Bank Accounts.
Upon Instructions, the Custodian shall open and operate a
bank account or accounts on the books of the Custodian; provided
that such bank account(s) shall be in the name of the Custodian
or a nominee thereof, for the account of the Fund, and shall be
subject only to draft or order of the Custodian. The
responsibilities of the Custodian to the Fund for deposits
accepted on the Custodian's books shall be that of a U.S. bank
for a similar deposit.
(s) Dividends, Distributions and Redemptions.
To enable the Fund to pay dividends or other distributions
to shareholders of the Fund and to make payment to shareholders
who have requested repurchase or redemption of their shares of
the Fund (collectively, the "Shares"), the Custodian shall
release cash or Securities insofar as available. In the case of
cash, the Custodian shall, upon the receipt of Instructions,
transfer such funds by check or wire transfer to any account at
any bank or trust company designated by the Fund in such
Instructions. In the case of Securities, the Custodian shall,
upon the receipt of Special Instructions, make such transfer to
any entity or account designated by the Fund in such Special
Instructions.
(t) Proceeds from Shares Sold.
The Custodian shall receive funds representing cash payments
received for shares issued or sold from time to time by the Fund,
and shall credit such funds to the account of the Fund. The
Custodian shall notify the Fund of Custodian's receipt of cash in
payment for shares issued by the Fund by facsimile transmission
or in such other manner as the Fund and the Custodian shall
agree. Upon receipt of Instructions, the Custodian shall: (a)
deliver all federal funds received by the Custodian in payment
for shares as may be set forth in such Instructions and at a time
agreed upon between the Custodian and the Fund; and (b) make
federal funds available to the Fund as of specified times agreed
upon from time to time by the Fund and the Custodian, in the
amount of checks received in payment for shares which are
deposited to the accounts of the Fund.
(u) Proxies and Notices: Compliance with the Shareholders
Communication Act of 1985.
The Custodian shall deliver or cause to be delivered to the
Fund all forms of proxies, all notices of meetings, and any other
notices or announcements affecting or relating to Securities
owned by the Fund that are received by the Custodian, any
Subcustodian, or any nominee of either of them, and, upon receipt
c Instructions, the Custodian shall execute and deliver, or cause
such Subcustodian nominee to execute and deliver, such proxies or
other authorizations as may be required. Except as directed
pursuant to Instructions, neither the Custodian nor any
Subcustodian or nominee shall vote upon any such Securities, or
execute any proxy to vote thereon, or give any consent or take
any other action with respect thereto.
The Custodian will not release the identity of the Fund to
an issuer which requests such information pursuant to the
Shareholder Communications Act of 1985 for the specific purpose
of direct communications between such issuer and the Fund unless
the Fund directs the Custodian otherwise in writing.
(v) Books and Records.
The Custodian shall maintain such records relating to its
activities under this Agreement as are required to be maintained
by Rule 31a-1 under the Investment Company Act of 1940 ("the 1940
Act") and to preserve them for the periods prescribed in Rule
31a-2 under the 1940 Act. These records shall be open for
inspection by duly authorized officers, employees or agents
(including independent public accountants) of the Fund during
normal business hours of the Custodian.
The Custodian shall provide accountings relating to its
activities under this Agreement as shall be agreed upon by the
Fund and the Custodian.
(w) Opinion of Fund's Independent Certified Public
Accountants.
The Custodian shall take all reasonable action as the Fund
may request to obtain from year to year favorable opinions from
the Fund's independent certified public accountants with respect
to the Custodian's activities hereunder and in connection with
the preparation of the Fund's periodic reports to the SEC and
with respect to any other requirements of the SEC.
(x) Reports by Independent Certified Public Accountants.
At the request of the Fund, the Custodian shall deliver to
the Fund a written report prepared by the Custodian's independent
certified public accountants with respect to the services
provided by the Custodian under this Agreement, including,
without limitation, the Custodian's accounting system, internal
accounting control and procedures for safeguarding cash,
Securities and other Assets, including cash, Securities and other
Assets deposited and/or maintained in a Securities System or with
a Subcustodian. Such report shall be of sufficient scope and in
sufficient detail as may reasonably be required by the Fund and
as may reasonably be obtained by the Custodian.
(y) Bills and Other Disbursements.
Upon receipt of Instructions, the Custodian shall pay, or
cause to be paid, all bills, statements, or other obligations of
the Fund.
5. SUBCUSTODIANS.
From time to time, in accordance with the relevant
provisions of this Agreement, the Custodian may appoint one or
more Domestic Subcustodians, Foreign Subcustodians, Special
Subcustodians, or Interim Subcustodians (as each are hereinafter
defined) to act on behalf of the Fund. A Domestic Subcustodian,
in accordance with the provisions of this Agreement, may also
appoint a Foreign Subcustodian, Special Subcustodian, or Interim
Subcustodian to act on behalf of the Fund. For purposes of this
Agreement, all Domestic Subcustodians, Foreign Subcustodians,
Special Subcustodians and Interim Subcustodians shall be referred
to collectively as "Subcustodians".
(a) Domestic Subcustodians.
The Custodian may, at any time and from time to time,
appoint any bank as defined in Section 2(a)(5) of the 1940 Act or
any trust company or other entity, any of which meet the
requirements of a custodian under Section 17(f) of the 1940 Act
and the rules and regulations thereunder, to act for the
Custodian on behalf of the Fund as a subcustodian for purposes of
holding Assets of the Fund and performing other functions of the
Custodian within the United States (a "Domestic Subcustodian").
The Fund shall approve in writing the appointment of the proposed
Domestic Subcustodian; and the Custodian's appointment of any
such Domestic Subcustodian shall not be effective without such
prior written approval of the Fund. Each such duly approved
Domestic Subcustodian shall be listed on Appendix A attached
hereto, as it may be amended, from time to time.
(b) Foreign Subcustodians.
The Custodian may at any time appoint, or cause a Domestic
Subcustodian to appoint, any bank, trust company or other entity
meeting the requirements of an "eligible foreign custodian" under
Section 17(f) of the 1940 Act and the rules and regulations
thereunder to act for the Custodian on behalf of the Fund as a
subcustodian or sub-subcustodian (if appointed by a Domestic
Subcustodian) for purposes of holding Assets of the Fund and
performing other functions of the Custodian in countries other
than the United States of America (hereinafter referred to as a
"Foreign Subcustodian" in the context of either a subcustodian or
a sub-subcustodian); provided that the Custodian shall have
obtained written confirmation from the Fund of the approval of
the Board of Trustees or other governing body of the Fund (which
approval may be withheld in the sole discretion of such Board of
Trustees or other governing body or entity) with respect to (i)
the identity of any proposed Foreign Subcustodian (including
branch designation), (ii) the country or countries in which, and
the securities depositories or clearing agencies (hereinafter
"Securities Depositories and Clearing Agencies"), if any, through
which, the Custodian or any proposed Foreign Subcustodian is
authorized to hold Securities and other Assets of the Fund, and
(iii) the form and terms of the subcustodian agreement to be
entered into with such proposed Foreign Subcustodian. Each such
duly approved Foreign Subcustodian and the countries where and
the Securities Depositories and Clearing Agencies through which
they may hold Securities and other Assets of the Fund shall be
listed on Appendix A attached hereto, as it may be amended, from
time to time. The Fund shall be responsible for informing the
Custodian sufficiently in advance of a proposed investment which
is to be held in a country in which no Foreign Subcustodian is
authorized to act, in order that there shall be sufficient time
for the Custodian, or any Domestic Subcustodian, to effect the
appropriate arrangements with a proposed Foreign Subcustodian,
including obtaining approval as provided in this Section 5(b). In
connection with the appointment of any Foreign Subcustodian, the
Custodian shall, or shall cause the Domestic Subcustodian to,
enter into a subcustodian agreement with the Foreign Subcustodian
in form and substance approved by the Fund. The Custodian shall
not consent to the amendment of, and shall cause any Domestic
Subcustodian not to consent to the amendment of, any agreement
entered into with a Foreign Subcustodian, which materially
affects the Fund's rights under such agreement, except upon prior
written approval of the Fund pursuant to Special Instructions.
(c) Interim Subcustodians.
Notwithstanding the foregoing, in the event that the Fund
shall invest in an Asset to be held in a country in which no
Foreign Subcustodian is authorized to act, the Custodian shall
notify the Fund in writing by facsimile transmission or in such
other manner as the Fund and Custodian shall agree in writing of
the unavailability of an approved Foreign Subcustodian in such
country; and upon the receipt of Special Instructions from the
Fund, the Custodian shall, or shall cause its Domestic
Subcustodian to, appoint or approve an entity (referred to herein
as an n Interim Subcustodian") designated in such Special
Instructions to hold such Security or other Asset.
(d) Special Subcustodians.
Upon receipt of Special Instructions, the Custodian shall, on
behalf of the Fund, appoint one or more banks, trust companies or
other entities designated in such Special Instructions to act for
the Custodian on behalf of the Fund as a subcustodian for
purposes of: (i) effecting third-party repurchase transactions
with banks, brokers, dealers or other entities through the use of
a common custodian or subcustodian; (ii) providing depository and
clearing agency services with respect to certain variable rate
demand note Securities, (iii) providing depository and clearing
agency services with respect to dollar denominated Securities,
and (iv) effecting any other transactions designated by the Fund
in such Special Instructions. Each such designated subcustodian
(hereinafter referred to as a "Special Subcustodian") shall be
listed on Appendix A attached hereto, as it may be amended from
time to time. In connection with the appointment of any Special
Subcustodian, the Custodian shall enter into a subcustodian
agreement with the Special Subcustodian in form and substance
approved by the Fund in Special Instructions. The Custodian shall
not amend any subcustodian agreement entered into with a Special
Subcustodian, or waive any rights under such agreement, except
upon prior approval pursuant to Special Instructions.
(e) Termination of a Subcustodian.
The Custodian may, at any time in its discretion upon
notification to the Fund, terminate any Subcustodian of the Fund
in accordance with the termination provisions under the
applicable subcustodian agreement, and upon the receipt of
Special Instructions, the Custodian will terminate any
Subcustodian in accordance with the termination provisions under
the applicable subcustodian agreement.
(f) Certification Regarding Foreign Subcustodians.
Upon request of the Fund, the Custodian shall deliver to the
Fund a certificate stating: (i) the identity of each Foreign
Subcustodian then acting on behalf of the Custodian; (ii) the
countries in which and the Securities Depositories and Clearing
Agencies through which each such Foreign Subcustodian is then
holding cash, Securities and other Assets of the Fund; and (iii)
such other information as may be requested by the Fund, and as
the Custodian shall be reasonably able to obtain, to evidence
compliance with rules and regulations under the 1940 Act.
6. STANDARD OF CARE.
(a) General Standard of Care.
The Custodian shall be liable to the Fund for all losses,
damages and reasonable costs and expenses suffered or incurred by
the Fund resulting from the negligence or willful misfeasance of
the Custodian; provided, however, in no event shall the Custodian
be liable for special, indirect or consequential damages arising
under or in connection with this Agreement.
(b) Actions Prohibited by Applicable Law, Events Beyond
Custodian's Control, Sovereign Risk, Etc.
In no event shall the Custodian or any Domestic Subcustodian
incur liability hereunder if the Custodian or any Subcustodian or
Securities System, or any subcustodian, Securities System,
Securities Depository or Clearing Agency utilized by the
Custodian or any such Subcustodian, or any nominee of the
Custodian or any Subcustodian (individually, a "Person") is
prevented, forbidden or delayed from performing, or omits to
perform, any act or thing which this Agreement provides shall be
performed or omitted to be performed, by reason of: (i) any
provision of any present or future law or regulation or order of
the United States of America, or any state thereof, or of any
foreign country, or political subdivision thereof or of any court
of competent jurisdiction (and neither the Custodian nor any
other Person shall be obligated to take any action contrary
thereto); or (ii) any event beyond the control of the Custodian
or other Person such as armed conflict, riots, strikes, lockouts,
labor disputes, equipment or transmission failures, natural
disasters, or failure of the mails, transportation,
communications or power supply; or (iii) any "Sovereign Risk." A
"Sovereign Risk" shall mean nationalization, expropriation,
devaluation, revaluation, confiscation, seizure, cancellation,
destruction or similar action by any governmental authority, de
facto or de jure; or enactment, promulgation, imposition or
enforcement by any such governmental authority of currency
restrictions, exchange controls, taxes, levies or other charges
affecting the Fund's Assets; or acts of armed conflict,
terrorism, insurrection or revolution; or any other act or event
beyond the Custodian's or such other Person's control.
(c) Liability for Past Records.
Neither the Custodian nor any Domestic Subcustodian shall
have any liability in respect of any loss, damage or expense
suffered by the Fund, insofar as such loss, damage or expense
arises from the performance of the Custodian or any * Domestic
Subcustodian in reliance upon records that were maintained for
the Fund by entities other than the Custodian or any Domestic
Subcustodian prior to the Custodian's employment hereunder.
(d) Advice of Counsel.
On a mutually agreeable basis, the Custodian and all
Domestic Subcustodians shall be entitled to receive and act upon
advice of counsel on all matters. The Custodian and all Domestic
Subcustodians shall be without liability for any actions taken or
omitted in good faith pursuant to the advice of counsel.
(e) Advice of the Fund and Others.
The Custodian and any Domestic Subcustodian may rely upon
the advice of the Fund and upon statements of the Fund's
accountants and other persons believed by it in good faith to be
expert in matters upon which they are consulted, and neither the
Custodian nor any Domestic Subcustodian shall be liable for any
actions taken or omitted, in good faith, pursuant to such advice
or statements.
(f) Instructions Appearing to be Genuine.
The Custodian and all Domestic Subcustodians shall be fully
protected and indemnified in acting as a custodian hereunder upon
any Resolutions of the Board of Trustees, Instructions, Special
Instructions, advice, notice, request, consent, certificate,
instrument or paper appearing to it to be genuine and to have
been properly executed and shall, unless otherwise specifically
provided herein, be entitled to receive as conclusive proof of
any fact or matter required to be ascertained from the Fund
hereunder a certificate signed by any officer of the Fund
authorized to countersign or confirm Special Instructions.
(g) Exceptions from Liabilities. Without limiting the
generality of any other provisions hereof, neither the Custodian
nor any Domestic Subcustodian shall be under any duty or
obligation to inquire into, nor be liable for:
(i) the validity of the issue of any Securities
purchased by or for the Fund, the legality of the purchase
thereof or evidence of ownership required to be received by
the Fund, or the propriety of the decision to purchase or
amount paid therefor;
(ii) the legality of the sale of any Securities by or
for the Fund, or the propriety of the amount for which the
same were sold; or
(iii) any other expenditures, encumbrances of
Securities, borrowings or similar actions with respect to
the Fund's Assets;
and may, until notified to the contrary, presume that all
Instructions or Special Instructions received by it are not in
conflict with or in any way contrary to any provisions of the
Fund's Declaration of Trust, Partnership Agreement, Articles of
Incorporation or By-Laws or votes or proceedings of the
shareholders, trustees, partners or directors of the Fund, or the
Fund's currently effective Registration Statement on file with
the SEC.
7. LIABILITY OF THE CUSTODIAN FOR ACTIONS OF OTHERS.
(a) Domestic Subcustodians
The Custodian shall be liable for the acts or omissions of
any Domestic Subcustodian to the same extent as if such actions
or omissions were performed by the Custodian itself.
(b) Liability for Acts and Omissions of Foreign
Subcustodians.
The Custodian shall be liable to the Fund for any loss or
damage to the Fund caused by or resulting from the acts or
omissions of any Foreign Subcustodian to the extent that, under
the terms set forth in the subcustodian agreement between the
Custodian or a Domestic Subcustodian and such Foreign
Subcustodian, the Foreign Subcustodian has failed to perform in
accordance with the standard of conduct imposed under such
subcustodian agreement and the Custodian or Domestic Subcustodian
recovers from the Foreign Subcustodian under the applicable
subcustodian agreement.
(c) Securities Systems, Interim Subcustodians, Special
Subcustodians, Securities Depositories and clearing Agencies.
The Custodian shall not be liable to the Fund for any loss,
damage or expense suffered or incurred by the Fund resulting from
or occasioned by the actions or omissions of a Securities System,
Interim Subcustodian, Special Subcustodian, or Securities
Depository and Clearing Agency unless such loss, damage or
expense is caused by, or results from, the negligence or willful
misfeasance of the Custodian.
(d) Defaults or Insolvency's of Brokers, Banks, Etc.
The Custodian shall not be liable for any loss, damage or
expense suffered or incurred by the Fund resulting from or
occasioned by the actions, omissions, neglects, defaults or
insolvency of any broker, bank, trust company or any other person
with whom the Custodian may deal (other than any of such entities
acting as a Subcustodian, Securities System or Securities
Depository and Clearing Agency, for whose actions the liability
of the Custodian is set out elsewhere in this Agreement) unless
such loss, damage or expense is caused by, or results from, the
gross negligence or willful misfeasance of the Custodian.
(e) Reimbursement of Expenses.
The Fund agrees to reimburse the Custodian for all
reasonable out-of-pocket expenses incurred by the Custodian in
connection with this Agreement, but excluding salaries and usual
overhead expenses.
8. INDEMNIFICATION.
(a) Indemnification by Fund.
Subject to the limitations set forth in this Agreement, the
Fund agrees to indemnify and hold harmless the Custodian and its
nominees from all losses, damages and expenses (including
attorneys' fees) suffered or incurred by the Custodian or its
nominee caused by or arising from actions taken by the Custodian,
its employees or agents in the performance of its duties and
obligations under this Agreement, including, but not limited to,
any indemnification obligations undertaken by the Custodian under
any relevant subcustodian agreement; provided, however, that such
indemnity shall not apply to the extent the Custodian is liable
under Sections 6 or 7 hereof.
If the Fund requires the Custodian to take any action with
respect to Securities, which action involves the payment of money
or which may, in the opinion of the Custodian, result in the
Custodian or its nominee assigned to the Fund being liable for
the payment of money or incurring liability of some other form,
the Fund, as a prerequisite to requiring the Custodian to take
such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.
(b) Indemnification by Custodian.
Subject to the limitations set forth in this Agreement and
in addition to the obligations provided in Sections 6 and 7, the
Custodian agrees to indemnify and hold harmless the Fund from all
losses, damages and expenses suffered or incurred by the Fund
caused by or resulting from the negligence or willful misfeasance
of the Custodian.
9. ADVANCES.
In the event that, pursuant to Instructions, the Custodian
or any Subcustodian, Securities System, or Securities Depository
or Clearing Agency acting either directly or indirectly under
agreement with the Custodian (each of which for purposes of this
Section 9 shall be referred to as "Custodian"), makes any payment
or transfer of funds on behalf of the Fund as to which there
would be, at the close of business on the date of such payment or
transfer, insufficient funds held by the Custodian on behalf of
the Fund, the Custodian may, in its discretion without further
Instructions, provide an advance ("Advance") to the Fund in an
amount sufficient to allow the completion of the transaction by
reason of which such payment or transfer of funds is to be made.
In addition, in the event the Custodian is directed by
Instructions to make any payment or transfer of funds on behalf
of the Fund as to which it is subsequently determined that the
Fund has overdrawn its cash account with the Custodian as of the
close of business on the date of such payment or transfer, said
overdraft shall constitute an Advance. Any Advance shall be
payable by the Fund on demand by Custodian, unless otherwise
agreed by the Fund and the Custodian, and shall accrue interest
from the date of the Advance to the date of payment by the Fund
to the Custodian at a rate agreed upon in writing from time to
time by the Custodian and the Fund. It is understood that any
transaction in respect of which the Custodian shall have made an
Advance, including but not limited to a foreign exchange contract
or transaction in respect of which the Custodian is not acting as
a principal, is for the account of and at the risk of the Fund,
and not, by reason of such Advance, deemed to be a transaction
undertaken by the Custodian for its own account and risk. The
Custodian and the Fund acknowledge that the purpose of Advances
is to finance temporarily the purchase or sale of Securities for
prompt delivery in accordance with the settlement terms of such
transactions or to meet emergency expenses not reasonably
foreseeable by the Fund. The Custodian shall promptly notify the
Fund of any Advance. Such notification shall be sent by facsimile
transmission or in such other manner as the Fund and the
Custodian may agree.
10. LIENS.
The Bank shall have a lien on the Property in the Custody
Account to secure payment of fees and expenses for the services
rendered under this Agreement. If the Bank advances cash or
securities to the Fund for any purpose or in the event that the
Bank or its nominee shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities in
connection with the performance of its duties hereunder, except
such as may arise from its or its nominee's negligent action,
negligent failure to act or willful misconduct, any Property at
any time held for the Custody Account shall be security therefor
and the Fund hereby grants security interest therein to the Bank.
The Fund shall promptly reimburse the Bank for any such advance
of cash or securities or any such taxes, charges, expenses,
assessments, claims or liabilities upon request for payment, but
should the Fund fail to so reimburse the Bank, the Bank shall be
entitled to dispose of such Property to the extent necessary to
obtain reimbursement. The Bank shall be entitled to debit any
account of the Fund with the Bank including, without limitation,
the Custody Account, in connection with any such advance and any
interest on such advance as the Bank deems reasonable.
11. COMPENSATION.
The Fund will pay to the Custodian such compensation as is
agreed to in writing by the Custodian and the Fund from time to
time. Such compensation, together with all amounts for which the
Custodian is to be reimbursed in accordance with Section 7(e),
shall be billed to the Fund and paid in cash to the Custodian.
12. POWERS OF ATTORNEY.
Upon request, the Fund shall deliver to the Custodian such
proxies, powers of attorney or other instruments as may be
reasonable and necessary or desirable in connection with the
performance by the Custodian or any Subcustodian of their
respective obligations under this Agreement or any applicable
subcustodian agreement.
13. TERMINATION AND ASSIGNMENT.
The Fund or the Custodian may terminate this Agreement by
notice in writing, delivered or mailed, postage prepaid
(certified mail, return receipt requested) to the other not less
than 90 days prior to the date upon which such termination shall
take effect. Upon termination of this Agreement, the Fund shall
pay to the Custodian such fees as may be due the Custodian
hereunder as well as its reimbursable disbursements, costs and
expenses paid or incurred. Upon termination of this Agreement,
the Custodian shall deliver, at the terminating party's expense,
all Assets held by it hereunder to the Fund or as otherwise
designated by the Fund by Special Instructions Upon such
delivery, the Custodian shall have no further obligations or
liabilities under this Agreement except as to the final
resolution of matters relating to activity occurring prior to the
effective date of termination.
This Agreement may not be assigned by the Custodian or the
Fund without the respective consent of the other, duly authorized
by a resolution by its Board of Directors or Trustees.
14. NOTICES.
Notices, requests, instructions and other writings delivered
to the Fund at BMA Tower, 700 Karnes Boulevard, Kansas City,
Missouri 64108, postage prepaid, or to such other address as the
Fund may have designated to the Custodian in writing, shall be
deemed to have been properly delivered or given to the Fund.
Notices, requests, instructions and other writings delivered
to the Securities Administration Department of the Custodian at
its office at 928 Grand Avenue, Kansas City, Missouri, or mailed
postage prepaid, to the Custodian's Securities Administration
Department, Post Office Box 226, Kansas City, Missouri 64141, or
to such other addresses as the Custodian may have designated to
the Fund in writing, shall be deemed to have been properly
delivered or given to the Custodian hereunder; provided, however,
that procedures for the delivery of Instructions and Special
Instructions shall be governed by Section 2(c) hereof.
15. MISCELLANEOUS.
(a) This Agreement is executed and delivered in the
State of Missouri and shall be governed by the laws of such
state.
(b) All of the terms and provisions of this Agreement
shall be binding upon, and inure to the benefit of, and be
enforceable by the respective successors and assigns of the
parties hereto.
(c) No provisions of this Agreement may be amended,
modified or waived, in any manner except in writing, properly
executed by both parties hereto; provided, however, Appendix A
may be amended from time to time as Domestic Subcustodians,
Foreign Subcustodians, Special Subcustodians, and Securities
Depositories and Clearing Agencies are approved or terminated
according to the terms of this Agreement.
(d) The captions in this Agreement are included for
convenience of reference only, and in no way define or delimit
any of the provisions hereof or otherwise affect their
construction or effect.
(e) This Agreement shall be effective as of the date
of execution
(f) This Agreement may be executed simultaneously in
two or more counterparts, each of which will be deemed an
original, but all of which together will constitute one and the
same instrument.
(g) If any part, term or provision of this Agreement
is held to be illegal, in conflict with any law or otherwise
invalid by any court of competent jurisdiction, the remaining
portion or portions shall be considered severable and shall not
be affected, and the rights and obligations of the parties shall
be construed and enforced as if this Agreement did not contain
the particular part, term or provision held to be illegal or
invalid.
(h) This Agreement constitutes the entire
understanding and agreement the parties hereto with respect to
the subject matter hereof, and accordingly supersedes, as of the
effective date of this Agreement, any custodian agreement
heretofore in effect between the Fund and the Custodian.
IN WITNESS WHEREOF, the parties hereto have caused this
Custody Agreement be executed by their duly respective authorized
officers.
UMB SCOUT FUNDS
By:
Name: Stephen S. Soden
Title: President
ATTEST:
UMB BANK, N.A.
By:
Name:
Title:
ATTEST:
Schedule A
Series of UMB Scout Funds As of __ January, 2000:
UMB Scout Equity Index Fund
UMB Scout Technology Fund
Doc. #279852 v.01 02/07/00 3:38 PM
EX-99.h.
TRANSFER AGENCY AGREEMENT
This Agreement made as of the ____ day of __________, 2000
between UMB Bank, n.a. (the "Manager"), a national banking
association with its principal place of business located at
Kansas City, Missouri, UMB Scout Funds, a Delaware business trust
(the "Fund"), on behalf of its separate series of shares
representing interests in separate portfolios, which are listed
on Schedule A, as may be amended from time to time ("Series"),
and Jones & Babson, Inc., a Missouri corporation (the "Transfer
Agent").
WITNESSETH
That in consideration of the mutual promises hereinafter set
forth, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases shall have the following meanings:
1. "Approved Institution" shall mean an entity so named in
a Certificate, as hereinafter defined. From time to time, the
Fund may amend a previously delivered Certificate by delivering
to the Transfer Agent a Certificate naming an additional entity
or deleting any entity named in a previously delivered
Certificate.
2. The "Board of Trustees" shall mean the Board of
Trustees of the Fund.
3. "Certificate" shall mean any notice, instruction or
other instrument in writing, authorized or required by this
Agreement to be given to the Transfer Agent by the Fund which is
signed by any Officer, as hereinafter defined, and actually
received by the Transfer Agent.
4. "Custodian" shall mean the financial institution
appointed as custodian under the terms and conditions of the
Custody Agreement between the financial institution and the Fund,
or its successor(s).
5. "Fund Business Day" shall be determined as set out in
the Fund's prospectuses as shall be effective from time to time.
6. "Officer" shall be deemed to be the Fund's President,
any Vice President, Secretary, Treasurer, Controller, any
Assistant Controller, any Assistant Treasurer and any Assistant
Secretary, and any other person duly authorized by the Board of
Trustees of the Fund to execute any Certificate, instruction,
notice or other instrument on behalf of the Fund, and any person
reasonably believed by the Transfer Agent to be such a person.
7. "Out-of-Pocket Expenses" means amounts reasonably
necessary and actually incurred by Transfer Agent in the
provision of Transfer Agent services or pursuant to this
Agreement for the following purposes: postage (and first class
mail insurance in connection with mailing Share certificates),
envelopes, check forms, continuous forms, forms for reports and
statements, stationery and other similar items, telephone and
telegraph charges incurred in answering inquiries from dealers or
shareholders, microfilm used to record transactions in
shareholder accounts and computer tapes used for permanent
storage of records and cost of insertion of materials in mailing
envelopes by outside firms. Any charges associated with special
or exception processing shall also be considered Out-of-Pocket
Expenses.
8. "Prospectus" shall mean the most recent Fund prospectus
relating to the applicable Series actually received by the
Transfer Agent from the Fund with respect to which the Fund has
indicated a registration statement under the Securities Act of
1933, as amended, has become effective, including the Statement
of Additional Information, incorporated by reference therein.
9. "Shares" shall mean all or any part of each class or
Series of the shares of beneficial interest of the Fund or
portfolio listed in the Certificate as to which the Transfer
Agent acts as transfer agent hereunder, as may be amended from
time to time, which are authorized and/or issued by the Fund.
ARTICLE II
APPOINTMENT OF TRANSFER AGENT
1. Effective as of the date of this Agreement, the
Manager, acting for the benefit of the Fund, hereby constitutes
and appoints the Transfer Agent as transfer agent of all the
Shares of the Series and as dividend disbursing agent during the
period of this Agreement.
2. The Transfer Agent hereby accepts appointment as
transfer agent and dividend disbursing agent and agrees to
perform duties thereof as hereinafter set forth.
3. In connection with such appointment, the Fund upon the
request of the Transfer Agent, shall deliver the following
documents to the Transfer Agent:
(i) A copy of the Agreement and Declaration of Trust
of the Fund and any and all amendments thereto certified by the
Secretary of the Fund;
(ii) A copy of the By-laws of the Fund certified by the
Secretary of the Fund;
(iii) A copy of a resolution of the Board of
Trustees of the Fund certified by the Secretary of the Fund
appointing the Transfer Agent and authorizing the execution of
this Transfer Agency Agreement;
(iv) A Certificate signed by the Secretary of the Fund
specifying: that an unlimited number of Shares are authorized
under the Agreement and Declaration of Trust of the Fund, the
number of such authorized Shares issued, the number of such
authorized Shares issued and currently outstanding, the names and
specimen signatures of the Officers of the Fund and the name and
address of the legal counsel for the Fund;
(v) Specimen Share certificate for each Series or
class of Shares in the form approved by the Board of Trustees of
the Fund (and in a format compatible with the Transfer Agent's
system), together with a Certificate signed by the Secretary of
the Fund as to such approval;
(vi) Copies of the Fund's registration statement, as
amended to date, and the most recently filed Post-Effective
Amendment thereto, filed by the Fund with the Securities and
Exchange Commission under the Securities Act of 1933, as amended,
and under the Investment Company Act of 1940, as amended,
together with any applications filed in connection therewith; and
(vii) Opinion of counsel for the Fund with respect
to the validity of the authorized and outstanding Shares, whether
such Shares are fully paid and nonassessable and the status of
such Shares under the Securities Act of 1933, as amended, and any
other applicable federal law or regulation (i.e., if subject to
registration, that they have been registered and that the
registration statement has become effective or, if exempt, the
specific grounds therefor).
ARTICLE III
AUTHORIZATION AND ISSUANCE OF SHARES
1. An unlimited number of Shares are authorized under the
Agreement and Declaration of Trust of the Fund. The Fund's Board
of Trustees has classified and allocated to each Series of the
Fund an unlimited number of Shares. The Fund shall promptly
notify the Transfer Agent of any action by the Board of Trustees
which decreases the total number of Shares authorized to be
issued by the Fund or any of its Series.
ARTICLE IV
RECAPITALIZATION OR CAPITAL ADJUSTMENT
1. In the case of any negative stock split,
recapitalization or other capital adjustment requiring a change
in the form of Share certificates, the Transfer Agent will issue
Share certificates in the new form in exchange for, or upon
transfer of, outstanding Share certificates in the old form, upon
receiving:
(a) A Certificate authorizing the issuance of the
Share certificates in the new form;
(b) Specimen Share certificates for each class of
Shares in the new form approved by the Board of Trustees of the
Fund, with a Certificate signed by the Secretary of the Fund as
to such approval; and
(c) An opinion of counsel for the Fund with respect to
the validity of the Shares in the new form and the status of such
Shares under the Securities Act of 1933, as amended, and any
other applicable federal law or regulation (i.e., if subject to
registration, that the Shares have been registered and that the
registration statement has become effective or, if exempt, the
specific grounds therefor).
2. The Fund at its expense shall furnish the Transfer
Agent with a sufficient supply of blank Share certificates in the
new form and from time to time will replenish such supply upon
the request of the Transfer Agent. Such blank Share certificates
shall be compatible with the Transfer Agent's system and shall be
properly signed by facsimile or otherwise by Officers of the Fund
authorized by law or by the By-laws to sign Share certificates
and, if required, shall bear the corporate seal or facsimile
thereof. The Fund agrees to indemnify and exonerate, save and
hold the Transfer Agent harmless from and against any and all
claims or demands that may be asserted against the Transfer Agent
with respect to the genuineness of any Share certificate supplied
to the Transfer Agent pursuant to this Article.
ARTICLE V
ISSUANCE, REDEMPTION AND TRANSFER OF SHARES
1. (a) The Transfer Agent acknowledges that it has
received a copy of the Fund's Prospectus, which Prospectus
describes how sales and redemption of Shares of the Fund shall be
made, and the Transfer Agent agrees to accept purchase orders and
redemption requests with respect to Shares on each Fund Business
Day in accordance with such Prospectus. The Fund agrees to
provide the Transfer Agent with sufficient advance notice to
enable the Transfer Agent to effect any changes in the procedures
set forth in the Prospectus regarding such purchase and
redemption procedure; provided, however, that in no event will
such advance notice be less than thirty (30) days.
(b) The Transfer Agent shall also accept with respect
to each Fund Business Day, at such times as are agreed upon from
time to time by the Transfer Agent and the Fund, a computer tape
or electronic data transmission consistent in all respects with
the Transfer Agent's record format, as amended from time to time,
which is believed by the Transfer Agent to be furnished by or on
behalf of any Approved Institution. The Transfer Agent shall not
be liable for any losses or damages to the Fund or its
shareholders in the event that a computer tape or electronic data
transmission from an Approved Institution is unable to be
processed for any reason beyond the control of the Transfer
Agent, or if any of the information on such tape or transmission
is found to be incorrect.
2. On each Fund Business Day, the Transfer Agent shall, as
of the time at which the Fund computes the net asset value of the
Fund, issue to and redeem from the accounts specified in a
purchase order, redemption request or computer tape or electronic
data transmission, which in accordance with the Prospectus is
effective on such Fund Business Day, the appropriate number of
full and fractional Shares based on the net asset value per Share
of such Fund specified in an advice received on such Fund
Business Day from the Fund. Notwithstanding the foregoing, if a
redemption specified in a computer tape or electronic data
transmission is for a dollar value of Shares in excess of the
dollar value of uncertificated Shares in the specified account,
the Transfer Agent shall not effect such redemption in whole or
in part and shall within twenty-four (24) hours orally advise the
Approved Institution which supplied such tape of the discrepancy.
3. In connection with a reinvestment of a dividend or
distribution of Shares of the Fund, the Transfer Agent shall as
of each Fund Business Day, as specified in a Certificate or
resolution described in paragraph 1 of succeeding Article VI,
issue Shares of the Fund based on the net asset value per Share
of such Fund specified in an advice received from the Fund on
such Fund Business Day.
4. On each Fund Business Day, the Transfer Agent shall
supply the Fund with a statement specifying with respect to the
immediately preceding Fund Business Day: the total number of
Shares of the Fund (including fractional Shares) issued and
outstanding at the opening of business on such day; the total
number of Shares of the Fund sold on such day, pursuant to the
preceding paragraph 2 of this Article; the total number of Shares
of the Fund redeemed from shareholders by the Transfer Agent on
such day; the total number of Shares of the Fund, if any, sold on
such day pursuant to the preceding paragraph 3 of this Article,
and the total number of Shares of the Fund issued and
outstanding.
5. In connection with each purchase and each redemption of
Shares, the Transfer Agent shall send such statements as are
prescribed by the Federal Securities laws applicable to transfer
agents or as described in the Prospectus. If the Prospectus
indicates that certificates for Shares are available and if
specifically requested in writing by any shareholder, or if
otherwise required hereunder, the Transfer Agent will countersign
(if necessary), issue and mail to such shareholder at the address
set forth in the records of the Transfer Agent a Share
certificate for any full Share requested.
6. As of each Fund Business Day, the Transfer Agent shall
furnish the Fund with an advice setting forth the number and
dollar amount of Shares to be redeemed on such Fund Business Day
in accordance with paragraph 2 of this Article.
7. Upon receipt of a proper redemption request and moneys
paid to it by the Custodian in connection with a redemption of
Shares, the Transfer Agent shall cancel the redeemed Shares and
after making appropriate deduction for any withholding of taxes
required of it by applicable law: (a) in the case of a redemption
of Shares pursuant to a redemption described in the preceding
paragraph l(a) of this Article, make payment in accordance with
the Fund's redemption and payment procedures described in the
Prospectus; and (b) in the case of a redemption of Shares
pursuant to a computer tape or electronic data transmission
described in the preceding paragraph l(b) of this Article, make
payment by directing a federal funds wire order to the account
previously designated by the Approved Institution specified in
said computer tape or electronic data transmission.
8. The Transfer Agent shall not be required to issue any
Shares after it has received from an Officer of the Fund or from
an appropriate federal or state authority written notification
that the sale of Shares has been suspended or discontinued, and
the Transfer Agent shall be entitled to rely upon such written
notification.
9. Upon the issuance of any Shares in accordance with this
Agreement, the Transfer Agent shall not be responsible for the
payment of any original issue or other taxes required to be paid
by the Fund in connection with such issuance of any Shares.
10. The Transfer Agent shall accept a computer tape or
electronic data transmission consistent with the Transfer Agent's
record format, as amended from time to time, which is reasonably
believed by the Transfer Agent to be furnished by or on behalf of
any Approved Institution and is represented to be instructions
with respect to the transfer of Shares from one account of such
Approved Institution to another such account, and shall effect
the transfers specified in said computer tape or electronic data
transmission. The Transfer Agent shall not be liable for any
losses to the Fund or its shareholders in the event that a
computer tape or electronic data transmission from an Approved
Institution is unable to be processed for any reason beyond the
control of the Transfer Agent, or if any of the information on
such tape or transmission is found to be incorrect.
11. (a) Except as otherwise provided in subparagraph (b)
of this paragraph and in paragraph 13 of this Article, Shares
will be transferred or redeemed upon presentation to the Transfer
Agent of Share certificates or instructions properly endorsed for
transfer or redemption, accompanied by such documents as the
Transfer Agent deems necessary to evidence the authority of the
person making such transfer or redemption, and bearing
satisfactory evidence of the payment of stock transfer taxes. In
the case of small estates where no administration is
contemplated, the Transfer Agent may, when furnished with an
appropriate surety bond, and without further approval of the
Fund, transfer or redeem Shares registered in the name of a
decedent where the current market value of the Shares being
transferred does not exceed such amount as may from time to time
be prescribed by various states. The Transfer Agent reserves the
right to refuse to transfer or redeem Shares until it is
satisfied that the endorsement on the stock certificate or
instructions is valid and genuine, and for that purpose it will
require, unless otherwise instructed by an authorized Officer of
the Fund, a guarantee of signature by an "Eligible Guarantor
Institution" as that term is defined by SEC Rule 17Ad-15. The
Transfer Agent also reserves the right to refuse to transfer or
redeem Shares until it is satisfied that the requested transfer
or redemption is legally authorized, and it shall incur no
liability for the refusal, in good faith, to make transfers or
redemptions which the Transfer Agent, in its judgment, deems
improper or unauthorized, or until it is satisfied that there is
no basis to any claims adverse to such transfer or redemption.
The Transfer Agent may, in effecting transfers and redemptions of
Shares, rely upon those provisions of the Uniform Act for the
Simplification of Fiduciary Security Transfers or the Uniform
Commercial Code, as the same may be amended from time to time,
applicable to the transfer of securities, and the Fund shall
indemnify the Transfer Agent for any act done or omitted by it in
good faith in reliance upon such laws. In no event will the Fund
indemnify the Transfer Agent for any act done by it as a result
of willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties. The Transfer Agent shall be entitled to
accept, and shall be fully protected by the Fund in accepting,
any request from any entity to carry out any transaction in
Shares received by the Transfer Agent through any of the various
programs offered through the National Securities Clearing
Corporation ("NSCC") (including, but not limited to, Networking
and FundServ). Any such entity shall constitute an Approved
Institution as defined herein.
(b) Notwithstanding the foregoing or any other
provision contained in this Agreement to the contrary, the
Transfer Agent shall be fully protected by the Fund in not
requiring any instruments, documents, assurances, endorsements or
guarantees, including, without limitation, any signature
guarantees, in connection with a redemption or transfer of Shares
whenever the Transfer Agent reasonably believes that requiring
the same would be inconsistent with the transfer and redemption
procedures as described in the Prospectus.
12. Notwithstanding any provision contained in this
Agreement to the contrary, the Transfer Agent shall not be
required or expected to require, as a condition to any transfer
of any Shares pursuant to paragraph 11 of this Article or any
redemption of any Shares pursuant to a computer tape or
electronic data transmission described in this Agreement, any
documents, including, without limitation, any documents of the
kind described in subparagraph (a) of paragraph 11 of this
Article, to evidence the authority of the person requesting the
transfer or redemption and/or the payment of any stock transfer
taxes, and shall be fully protected in acting in accordance with
the applicable provisions of this Article.
13. (a) As used in this Agreement, the terms "computer
tape or electronic data transmission" and "computer tape believed
by the Transfer Agent to be furnished by an Approved
Institution", shall include any tapes generated by the Transfer
Agent to reflect information believed by the Transfer Agent to
have been input by an Approved Institution, via a remote terminal
or other similar link, into a data processing, storage or
collection system, or similar system (the "System"), located on
the Transfer Agent's premises. For purposes of paragraph 1 of
this Article, such a computer tape or electronic data
transmission shall be deemed to have been furnished at such times
as are agreed upon from time to time by the Transfer Agent and
Fund only if the information reflected thereon was input to the
System at such times as are agreed upon from time to time by the
Transfer Agent and the Fund.
(b) Nothing contained in this Agreement shall
constitute any agreement or representation by the Transfer Agent
to permit, or to agree to permit, any Approved Institution to
input information into a System.
(c) The Transfer Agent reserves the right to approve,
in advance, any Approved Institution; such approval not to be
unreasonably withheld. The Transfer Agent also reserves the right
to terminate any and all automated data communications, at its
discretion, upon a reasonable attempt to notify the Fund when in
the opinion of the Transfer Agent continuation of such
communications would jeopardize the accuracy and/or integrity of
the Fund's records on the System.
ARTICLE VI
DIVIDENDS AND DISTRIBUTIONS
1. The Fund shall furnish to the Transfer Agent a copy of
a resolution of its Board of Trustees, certified by the
Secretary or any Assistant Secretary, either: (i) setting forth
the date of the declaration of a dividend or distribution, the
date of accrual or payment, as the case may be, thereof, the
record date as of which shareholders entitled to payment, or
accrual, as the case may be, shall be determined, the amount per
Share of such dividend or distribution, the payment date on which
all previously accrued and unpaid dividends are to be paid and
the total amount, if any, payable to the Transfer Agent on such
payment date; or (ii) authorizing the declaration of dividends
and distributions on a daily or other periodic basis and
authorizing the Transfer Agent to rely on a Certificate setting
forth the information described in subsection (i) of this
paragraph.
2. Upon the mail date specified in such Certificate or
resolution, as the case may be, the Fund shall, in the case of a
cash dividend or distribution, cause the Custodian to deposit in
an account in the name of the Transfer Agent on behalf of the
Fund an amount of cash, if any, sufficient for the Transfer Agent
to make the payment, as of the mail date, specified in such
Certificate or resolution, as the case may be, to the
shareholders who were of record on the record date. The Transfer
Agent will, upon receipt of any such cash, make payment of such
cash dividends or distributions to the shareholders of record as
of the record date by: (i) mailing a check, payable to the
registered shareholder, to the address of record or dividend
mailing address; or (ii) wiring such amounts to the accounts
previously designated by an Approved Institution, as the case may
be. The Transfer Agent shall not be liable for any improper
payments made in good faith and without negligence, in accordance
with a Certificate or resolution described in the preceding
paragraph. If the Transfer Agent shall not receive from the
Custodian sufficient cash to make payments of any cash dividend
or distribution to all shareholders of the Fund as of the record
date, the Transfer Agent shall, upon notifying the Fund, withhold
payment to all shareholders of record as of the record date until
sufficient cash is provided to the Transfer Agent.
3. It is understood that the Transfer Agent shall in no
way be responsible for the determination of the rate or form of
dividends or capital gain distributions due to the shareholders.
It is expressly agreed and understood that the Transfer Agent is
not liable for any loss as a result of processing a distribution
based on information provided in the Certificate that is
incorrect. The Fund agrees to pay the Transfer Agent for any and
all costs, both direct and Out-of-Pocket Expenses, incurred in
such corrective work as necessary to remedy such error.
4. It is understood that the Transfer Agent shall file
such appropriate information returns concerning the payment of
dividend and capital gain distributions with the proper federal,
state and local authorities as are required by law to be filed by
the Fund, but shall in no way be responsible for the collection
or withholding of taxes due on such dividends or distributions
due to shareholders, except and only to the extent required by
applicable law. Anything in this Agreement to the contrary
notwithstanding, the Fund shall be solely responsible for the
accurate, complete and timely filing with the proper federal,
state and local authorities of all tax information with respect
to any Fund account maintained under Matrix Level 3 through any
of the various programs offered through the NSCC (including, but
not limited to, Networking and FundServ).
ARTICLE VII
CONCERNING THE FUND
1. The Fund represents to the Transfer Agent that:
(a) It is a business trust duly organized and existing
under the laws of the State of Delaware.
(b) It is empowered under applicable laws and by its
Agreement and Declaration of Trust and By-laws to enter into and
perform this Agreement.
(c) All requisite corporate proceedings have been
taken to authorize it to enter into and perform this Agreement.
(d) It is an investment company registered under the
Investment Company Act of 1940, as amended.
(e) A registration statement under the Securities Act
of 1933, as amended, with respect to the Shares is effective. The
Fund shall notify the Transfer Agent if such registration
statement or any state securities registrations have been
terminated or a stop order has been entered with respect to the
Shares.
2. Each copy of the Agreement and Declaration of Trust of
the Fund and copies of all amendments thereto shall be certified
by the Secretary of the Fund with a copy submitted to the
Transfer Agent. Each copy of the By-laws and copies of all
amendments thereto, and copies of resolutions of the Board of
Trustees of the Fund shall be certified by the Secretary of the
Fund under seal.
3. The Fund shall promptly deliver to the Transfer Agent
written notice of any change in the Officers authorized to sign
Share certificates, notifications or requests, together with a
specimen signature of each new Officer. In the event any Officer
who shall have signed manually or whose facsimile signature shall
have been affixed to blank Share certificates shall die, resign
or be removed prior to issuance of such Share certificates, the
Transfer Agent may issue such Share certificates of the Fund
notwithstanding such death, resignation or removal, and the Fund
shall promptly deliver to the Transfer Agent such approval,
adoption or ratification as may be required by law.
4. It shall be the sole responsibility of the Fund to
deliver to the Transfer Agent the Fund's currently effective
Prospectus and, for purposes of this Agreement, the Transfer
Agent shall not be deemed to have notice of any information
contained in such Prospectus until a reasonable time after it is
actually received by the Transfer Agent.
ARTICLE VIII
CONCERNING THE TRANSFER AGENT
1. The Transfer Agent represents and warrants to the Fund
that:
(a) It is a corporation duly organized and existing
under the laws of the State of Missouri.
(b) It is empowered under applicable law and by its
Articles of Incorporation and By-laws to enter into and perform
this Agreement.
(c) All requisite corporate proceedings have been
taken to authorize it to enter into and perform this Agreement.
(d) It is duly registered as a transfer agent under
Section 17A of the Securities Exchange Act of 1934, as amended.
2. The Transfer Agent shall not be liable and shall be
indemnified in acting upon any computer tape or electronic data
transmission, writing or document reasonably believed by it to be
genuine and to have been signed or made by an Officer of the Fund
or person designated by the Fund and shall not be held to have
any notice of any change of authority of any person until receipt
of written notice thereof from the Fund or such person. It shall
also be protected in processing Share certificates which bear the
proper countersignature of the Transfer Agent and which it
reasonably believes to bear the proper manual or facsimile
signature of the Officers of the Fund.
3. The Transfer Agent upon notice to the Fund may
establish such additional procedures, rules and regulations
governing the transfer or registration of Share certificates as
it may deem advisable and consistent with such rules and
regulations generally adopted by mutual fund transfer agents.
4. The Transfer Agent shall keep such records as it may
deem advisable and is agreeable to the Fund, but not inconsistent
with the rules and regulations of appropriate government
authorities, in particular Rules 31a-2 and 31a-3 under the
Investment Company Act of 1940, as amended. The Transfer Agent
acknowledges that such records are the property of the Fund. The
Transfer Agent may deliver to the Fund from time to time at its
discretion, for safekeeping or disposition by the Fund in
accordance with law, such records, papers, documents accumulated
in the execution of its duties as such Transfer Agent, as the
Transfer Agent may deem expedient, other than those which the
Transfer Agent is itself required to maintain pursuant to
applicable laws and regulations. The Fund shall assume all
responsibility for any failure thereafter to produce any record,
paper, cancelled Share certificate or other document so returned,
if and when required. Such records maintained by the Transfer
Agent pursuant to this paragraph 4, which have not been
previously delivered to the Fund pursuant to the foregoing
provisions of this paragraph 4, shall be considered to be the
property of the Fund, shall be made available upon request for
inspection by the Officers, employees and auditors of the Fund,
and records shall be delivered to the Fund upon request and in
any event upon the date of termination of this Agreement, as
specified in Article IX of this Agreement, in the form and manner
kept by the Transfer Agent on such date of termination or such
earlier date as may be requested by the Fund.
5. The Transfer Agent shall not be liable for any loss or
damage, including counsel fees, resulting from its actions or
omissions to act or otherwise, except for any loss or damage
arising out of its bad faith, willful misfeasance, gross
negligence or reckless disregard of its duties under this
Agreement.
6. (a) The Fund shall indemnify and exonerate, save and
hold harmless the Transfer Agent from and against any and all
claims (whether with or without basis in fact or law), demands,
expenses (including reasonable attorneys' fees) and liabilities
of any and every nature which the Transfer Agent may sustain or
incur or which may be asserted against the Transfer Agent by any
person by reason of or as a result of any action taken or omitted
to be taken by any prior transfer agent of the Fund or as a
result of any action taken or omitted to be taken by the Transfer
Agent in good faith and without gross negligence or willful
misfeasance or in reliance upon: (i) any provision of this
Agreement; (ii) the Prospectus; (iii) any instruction or order
including, without limitation, any computer tape or electronic
data transmission reasonably believed by the Transfer Agent to
have been received from an Approved Institution; (iv) any
instrument, order or Share certificate reasonably believed by it
to be genuine and to be signed, countersigned or executed by any
duly authorized Officer of the Fund; (v) any Certificate or other
instructions of an Officer; (vi) any opinion of legal counsel for
the Fund or the Transfer Agent; or (vii) any request by any
entity to carry out any transaction in Shares received by the
Transfer Agent through any of the various programs offered
through the NSCC (including, but not limited to, Networking and
FundServ). The Fund shall indemnify and exonerate, save and hold
the Transfer Agent harmless from and against any and all claims
(whether with or without basis in fact or law), demands, expenses
(including reasonable attorneys' fees) and liabilities of any and
every nature which the Transfer Agent may sustain or incur or
which may be asserted against the Transfer Agent by any person by
reason of or as a result of any action taken or omitted to be
taken by the Transfer Agent in good faith in connection with its
appointment or in reliance upon any law, act, regulation or any
interpretation of the same even though such law, act or
regulation may thereafter have been altered, changed, amended or
repealed.
(b) The Transfer Agent shall not settle any claim,
demand, expense or liability to which it may seek indemnity
pursuant to paragraph 6(a) above (each, an "Indemnifiable Claim")
without the express written consent of an Officer of the Fund.
The Transfer Agent shall notify the Fund within fifteen (15) days
of receipt of notification of an Indemnifiable Claim, provided
that the failure by the Transfer Agent to furnish such
notification shall not impair its right to seek indemnification
from the Fund unless the Fund is unable to adequately defend the
Indemnifiable Claim as a result of such failure, and further
provided, that if as a result of the Transfer Agent's failure to
provide the Fund with timely notice of the institution of
litigation a judgment by default is entered, prior to seeking
indemnification from the Fund the Transfer Agent, at its own cost
and expense, shall open such judgment. The Fund shall have the
right to defend any Indemnifiable Claim at its own expense,
provided that such defense shall be conducted by counsel selected
by the Fund and reasonably acceptable to the Transfer Agent. The
Transfer Agent may join in such defense at its own expense, but
to the extent that it shall so desire the Fund shall direct such
defense. The Fund shall not settle any Indemnifiable Claim
without the express written consent of the Transfer Agent if the
Transfer Agent determines that such settlement would have an
adverse effect on the Transfer Agent beyond the scope of this
Agreement. In such event, the Fund and the Transfer Agent shall
each be responsible for their own defense at their own cost and
expense, and such claim shall not be deemed an Indemnifiable
Claim hereunder. If the Fund shall fail or refuse to defend an
Indemnifiable Claim, the Transfer Agent may provide its own
defense at the cost and expense of the Fund. Anything in this
Agreement to the contrary notwithstanding, the Fund shall not
indemnify the Transfer Agent against any liability or expense
arising out of the Transfer Agent's willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties and
obligations under this Agreement. The Transfer Agent shall
indemnify and hold the Fund harmless from and against any and all
losses, damages, costs, charges, counsel fees, payments, expenses
and liability arising out of or attributable to any action or
failure or omission to act by the Transfer Agent as a result of
the Transfer Agent's lack of good faith, gross negligence or
willful misfeasance.
7. The Transfer Agent shall not be liable to the Fund with
respect to any redemption draft on which the signature of the
drawer is forged and which the Fund's Custodian has advised the
Transfer Agent to honor the redemption (but nothing herein is
meant to impose any duties upon the Fund's Custodian); nor shall
the Transfer Agent be liable for any material alteration or
absence or forgery of any endorsement, it being understood that
the Transfer Agent's sole responsibility with respect to
inspecting redemption drafts is to use reasonable care to verify
the drawer's signature against signatures on file.
8. There shall be excluded from the consideration of
whether the Transfer Agent has breached this Agreement in any
way, any period of time, and only such period of time during
which the Transfer Agent's performance is materially affected, by
reason of circumstances beyond its control (collectively,
"Causes"), including, without limitation, mechanical breakdowns
of equipment (including any alternative power supply and
operating systems software), flood or catastrophe, acts of God,
failures of transportation, communication or power supply,
strikes, lockouts, work stoppages or other similar circumstances.
9. At any time the Transfer Agent may apply to an Officer
of the Fund for written instructions with respect to any matter
arising in connection with the Transfer Agent's duties and
obligations under this Agreement, and the Transfer Agent shall
not be liable for any action taken or permitted by it in good
faith in accordance with such written instructions. Such
application by the Transfer Agent for written instructions from
an Officer of the Fund may set forth in writing any action
proposed to be taken or omitted by the Transfer Agent with
respect to its duties or obligations under this Agreement and the
date on and/or after which such action shall be taken. The
Transfer Agent shall not be liable for any action taken or
omitted in accordance with a proposal included in any such
application on or after the date specified therein unless, prior
to taking or omitting any such action, the Transfer Agent has
received written instructions in response to such application
specifying the action to be taken or omitted. The Transfer Agent
may consult counsel of the Fund, or upon notice to the Fund, its
own counsel, at the expense of the Fund and shall be fully
protected with respect to anything done or omitted by it in good
faith in accordance with the advice or opinion of counsel to the
Fund or its own counsel.
10. The Transfer Agent may issue new Share certificates in
place of certificates represented to have been lost, stolen or
destroyed upon receiving written instructions from the
shareholder accompanied by proof of an indemnity or surety bond
issued by a recognized insurance institution specified by the
Fund or the Transfer Agent.
If the Transfer Agent receives written notification from the
shareholder or broker dealer that the certificate issued was
never received, and such notification is made within thirty (30)
days of the date of issuance, the Transfer Agent may reissue the
certificate without requiring a surety bond. The Transfer Agent
may also reissue certificates which are represented as lost,
stolen or destroyed without requiring a surety bond provided that
the notification is in writing and accompanied by an
indemnification signed on behalf of a member firm of the New York
Stock Exchange and signed by an officer of said firm with the
signature guaranteed. Notwithstanding the foregoing, the Transfer
Agent will reissue a certificate upon written authorization from
an Officer of the Fund.
11. In case of any requests or demands for the inspection
of the shareholder records of the Fund, the Transfer Agent will
endeavor to notify the Fund promptly and to secure instructions
from an Officer as to such inspection. The Transfer Agent
reserves the right, however, to exhibit the shareholder records
to any person whenever it receives an opinion from its counsel
that there is a reasonable likelihood that the Transfer Agent
will be held liable for the failure to exhibit the shareholder
records to such person; provided, however, that in connection
with any such disclosure the Transfer Agent shall promptly notify
the Fund that such disclosure has been made or is to be made.
12. At the request of an Officer of the Fund, the Transfer
Agent will address and mail such appropriate notices to
shareholders as the Fund may direct.
13. Notwithstanding any of the foregoing provisions of this
Agreement, the Transfer Agent shall be under no duty or
obligation to inquire into, and shall not be liable for:
(a) The legality of the issue or sale of any Shares,
the sufficiency of the amount to be received therefor, or the
authority of the Approved Institution or of the Fund, as the case
may be, to request such sale or issuance;
(b) The legality of a transfer of Shares, or of a
redemption of any Shares, the propriety of the amount to be paid
therefor, or the authority of the Approved Institution or of the
Fund, as the case may be, to request such transfer or redemption;
(c) The legality of the declaration of any dividend by
the Fund, or the legality of the issue of any Shares in payment
of any stock dividend; or
(d) The legality of any recapitalization or
readjustment of Shares.
14. The Transfer Agent shall have no duties or
responsibilities whatsoever except such duties and
responsibilities as are specifically set forth in this Agreement,
and no covenant or obligation shall be implied in this Agreement
against the Transfer Agent.
15. Purchase and Prices of Services:
(a) The Manager will compensate the Transfer Agent
for, and Transfer Agent will provide, beginning on the execution
date of this Agreement and continuing until the termination of
this Agreement as provided hereinafter, the services set forth in
Schedule I.
(b) The current unit prices for the services are set
forth in Schedule II (the "Schedule II Fees"). Effective as of
_______________, 2000, once in each calendar year, the Transfer
Agent may elect to raise the Schedule II Fees upon ninety (90)
days prior notice to the Fund, all subject to the mutual
agreement of the parties hereto. Notwithstanding the annual right
to raise the Schedule II Fees, the Transfer Agent may increase
prices due to changes in legal or regulatory requirements subject
to the approval of the Fund, which approval shall not be
unreasonably withheld.
16. Billing and Payment:
(a) The Transfer Agent shall bill the Manager monthly
in arrears for accounts maintained and Out-of-Pocket Expenses.
The Transfer Agent may from time to time request that the Fund
advance estimated expenditures of an unusual nature subject to
reconciliation of actual expenses as soon as practicable
thereafter.
(b) The Manager shall pay the Transfer Agent in
immediately available funds at UMB Bank, n.a. in Kansas City,
Missouri within thirty (30) days of the date of the bill. Any
amounts due under this Agreement which are not paid within said
thirty (30) day period shall bear interest at the rate of one and
one-half percent (1 and 1/2%) per month from such date until paid in
full.
ARTICLE IX
TERMINATION
Either of the parties hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date
of such termination, which shall be not less than sixty (60) days
after the date of receipt of such notice. In the event such
notice is given by the Manager, it shall be accompanied by a copy
of a resolution of the Board of Trustees of the Manager,
certified by the Secretary or any Assistant Secretary, electing
to terminate this Agreement and designating the successor
transfer agent or transfer agents. In the event such notice is
given by the Transfer Agent, the Manager shall on or before the
termination date, deliver to the Transfer Agent a copy of a
resolution of its Board of Trustees, certified by the Secretary
or any Assistant Secretary, designating a successor transfer
agent or transfer agents. In the absence of such designation by
the Manager, the Fund shall upon the date specified in the notice
of termination of this Agreement and delivery of the records
maintained hereunder, be deemed to be its own transfer agent and
the Transfer Agent shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement.
In the event this Agreement is terminated as provided
herein, the Transfer Agent, upon the written request of the
Manager or the Fund, shall deliver the records of the Fund on
electromagnetic media to the Fund or its successor transfer
agent. The Fund shall be responsible to the Transfer Agent for
the reasonable costs and expenses associated with the preparation
and delivery of such media.
ARTICLE X
MISCELLANEOUS
1. The Fund agrees that prior to effecting any change in
the Prospectus which would increase or alter the duties and
obligations of the Transfer Agent hereunder, it shall advise the
Transfer Agent of such proposed change at least thirty (30) days
prior to the intended date of the same, and shall proceed with
such change only if it shall have received the written consent of
the Transfer Agent thereto, which shall not be unreasonably
withheld.
2. Any notice or other instrument in writing, authorized
or required by this Agreement to be given to the Fund shall be
sufficiently given if addressed to the Fund and mailed or
delivered to it at:
BMA Tower
700 Karnes Boulevard
Kansas City, MO 64108
or at such other place as the Fund may from time to time
designate in writing.
3. Any notice or other instrument in writing, authorized
or required by this Agreement to be given to the Transfer Agent
shall be sufficiently given if addressed to the Transfer Agent
and mailed or delivered to:
BMA Tower
700 Karnes Boulevard
Kansas City, MO 64108
or at such other place as the Transfer Agent may from time to
time designate in writing.
4. Any notice or other instrument in writing, authorized
or required by this Agreement to be given to the Manager shall be
sufficiently given if addressed to the Manager and mailed or
delivered to:
UMB Bank, n.a.
Kansas City, MO 64108
5. This Agreement may not be amended or modified in any
manner except by a written agreement executed by both parties
with the formality of this Agreement and agreed to by the Fund.
6. This Agreement shall extend to and shall be binding
upon the parties hereto, and their respective successors and
assigns.
7. This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri.
8. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original,
but such counterparts shall, together, constitute only one
instrument.
9. The provisions of this Agreement are intended to
benefit only the Manager, the Transfer Agent and the Fund, and no
rights shall be granted to any other person by virtue of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective corporate officer,
thereunto duly authorized and their respective corporate seals to
be hereunto affixed, as of the day and year first above written.
UMB BANK, n.a.
By:
Name:
Title:
[SEAL]
JONES & BABSON, INC.
By:
Name: Stephen S. Soden
Title: President
[SEAL]
Agreed:
UMB SCOUT FUNDS
By:
Name: Stephen S. Soden
Title: President
Schedule A
Series of UMB Scout Funds
as of ___________, 2000
UMB Scout Equity Index Fund
UMB Scout Technology Fund
Doc. #279876 v.0279876 02/07/00 2:27 PM
EX-99.j.
POWER OF ATTORNEY
WHEREAS the undersigned is a trustee of UMB Scout Funds, a
Delaware business trust which intends to do business as an open-
end diversified investment company (mutual fund), and
WHEREAS the UMB Scout Funds intends to register its shares with
the Securities and Exchange Commission under the Securities Act
of 1933 and the Investment Company Act of 1940 and with the
Securities Departments of the various states and the District of
Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons
hereinafter set out as his attorney each with the power to act
severally in the name of the undersigned and to execute on his
behalf all forms and documents required by the Securities and
Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the
initial registration of the securities of the UMB Scout Funds and
in the maintenance of such registrations.
Martin A. Cramer
P. Bradley Adams
Stephen S. Soden
IN WITNESS WHEREOF, I have hereunto set my hand at this 26th day
of January, 2000.
/s/ Eric T. Jager
Eric T. Jager
/s/ William E. Hoffman
Dr. William E. Hoffman
/s/ Stephen R. Rose
Stephen F. Rose
/s/ Stuart L. Wien
Stuart L. Wien
Sworn to before me this 26th day of January, 2000.
/s/ Sandra A. Vinzant
Sandra A. Vinzant, Notary Public
County of Jackson, State of Missouri
My commission expires April 20, 2001.
280050.01
