Filed with the Securities and Exchange Commission on May 23, 2000
1933 Act Registration File No. 333-30924
1940 Act File No. 811-9821
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No. 1 |X|
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Post-Effective Amendment No. |_|
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and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 1 |X|
ALLIED ASSET ADVISORS FUNDS
(Exact Name of Registrant as Specified in Charter)
745 McClintock Drive, Suite 114
Burr Ridge, IL 60521
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (630) 789-9191
Copies of all communications to:
Elaine E. Richards, Esq.
Firstar Mutual Fund Services, LLC
615 East Michigan Street, 2nd Floor
Milwaukee, WI 53202
David Strumes, Esq.
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Chicago, IL 60601-1103
Approximate Date of Proposed Public Offering: As soon as practical after the
effective date of this Registration Statement.
It is proposed that this filing will become effective (check appropriate box):
immediately upon filing pursuant to paragraph (b)
------
on pursuant to paragraph (b)
------- _____________
60 days after filing pursuant to paragraph (a)(1)
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on ____________ pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
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on pursuant to paragraph (a)(2) of Rule 485.
------- ____________
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
Title of securities being registered: Dow Jones Islamic Index Fund, Classes M
and K.
CLASS M
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
DOW JONES(SM) ISLAMIC INDEX FUND
PROSPECTUS
__________, 2000
INVESTMENT ADVISOR
AAA
ALLIED ASSET ADVISORS, INC.
DOW JONES(SM) ISLAMIC INDEX FUND
PROSPECTUS
__________, 2000
The Dow Jones(SM) Islamic Index Fund (the "Fund") is the first series offered by
Allied Asset Advisors Funds. This prospectus pertains to the Class M share class
and contains pertinent information about investing in the Fund. Please read this
prospectus carefully before investing.
INVESTMENT ADVISOR
AAA
ALLIED ASSET ADVISORS, INC.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
Risk/Return Summary............................................................2
Performance Summary............................................................4
Fees and Expenses..............................................................4
More Information About the Dow Jones Islamic Market USA Index(SM)..............5
Shari`ah Supervisory Board.....................................................7
Management of the Fund.........................................................8
Calculating Share Price........................................................8
How to Purchase Shares.........................................................9
How to Sell Shares............................................................10
Distributions and Taxes.......................................................12
Shareholder Reports and Confirmations.........................................12
Financial Highlights..........................................................12
RISK/RETURN SUMMARY
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WHAT IS THE INVESTMENT OBJECTIVE OF THE DOW JONES(SM) ISLAMIC INDEX FUND?
The Dow Jones Islamic Index Fund ("Fund") seeks to match the total return of the
DOW JONES ISLAMIC MARKET USA INDEX(SM) (the "INDEX").
WHAT ARE THE MAIN INVESTMENT STRATEGIES OF THE FUND?
To achieve its investment objective, the Fund invests in securities included in
the INDEX. The INDEX consists of U.S. common stocks that meet Islamic investment
principles. Islamic principles generally preclude investments in certain
industries (e.g., alcohol, pornography and casinos) and investments in interest
bearing debt obligations or businesses that derive a substantial amount of
impure interest income. Any uninvested cash will be held in non-interest bearing
deposits or invested in a manner following Islamic principles. Under normal
circumstances, the Fund plans to fully invest its assets in securities that are
included in the INDEX. Although the INDEX consists of stocks from many different
economic sectors, it is comprised primarily of companies with larger market
capitalizations. There is no guarantee that the Fund will achieve the same
return as the INDEX.
Due to the large number of stocks in the INDEX, the Fund may, in its initial
stages (i.e., the period during which the Fund's asset size is less than $100
million), purchase a sub-group of equities from those contained in the INDEX
that the investment advisor believes will best track the INDEX. The Fund will
determine the "sub-group" by selecting stocks that are representative of the
INDEX in terms of industry, size and other portfolio characteristics. The Fund
also will consider a security's weighting in the INDEX during its initial stages
emphasizing those securities that are more heavily weighted. . As the assets of
the Fund grow, the investment advisor anticipates the holdings of the Fund will
increase to include more of the components of the INDEX.
In order to track the INDEX as closely as possible, the Fund will invest
substantially all of its assets in roughly the same proportions as the stocks
are represented in the INDEX. As the Fund receives cash from new investors, or
processes redemption requests from shareholders, the Fund will purchase or sell
securities in an effort to approximate the return of the INDEX. Also, the Fund's
investments are reviewed and adjusted periodically to reflect any adjustments in
the INDEX, in an effort to tract the INDEX as closely as possible.
The Fund normally sells portfolio securities in response 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
low. A low portfolio turnover rate usually results in low transaction costs and
provides tax efficiencies for shareholders.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
The main risks of investing in the Fund are listed below. Like any mutual fund,
you may lose money by investing in the Fund.
MARKET RISKS The return on and value of your investment in the Fund will
fluctuate in response to stock market movements. Stocks and other equity
securities are subject to market risks and fluctuations in value due to
earnings, economic conditions and other factors beyond the control of the Fund.
INDEX INVESTING RISKS Unlike other non-index mutual funds, the Fund will not buy
and sell securities based upon economic, financial and market analysis and
investment judgment. Instead, the Fund will invest using an indexed-based
investment approach, which seeks to approximate the investment performance of
the INDEX. You should not expect to achieve the potential greater results of
some actively managed funds that aggressively seek growth or attempt to limit
losses in a market decline. The Fund's initial strategy of investing in a
representative sample of the INDEX may result in some deviation between the
Fund's performance and the INDEX. The Fund's return is likely to be lower than
that of the INDEX because the Fund incurs brokerage commissions, transaction
fees and other expenses that the INDEX does not.
ISLAMIC SHARI`AH INVESTMENT RISKS It is possible that the restrictions placed on
investments may result in the Fund not performing as well as mutual funds with
similar investment objectives but not subject to the Islamic Shari`ah
restrictions.
TEMPORARY INVESTMENTS. In response to severe or unusual adverse market,
economic, political or other conditions, the Fund may make temporary investments
that are not consistent with its investment objective and principal investment
strategies. Such investments may prevent the Fund from achieving its investment
objective. The Fund cannot invest in interest-paying instruments frequently used
by mutual funds for this purpose. Currently anticipated temporary investments
will be held in the form of cash. When the Fund's investments in cash or similar
investments increase, the Fund may not achieve its investment objective.
PERFORMANCE SUMMARY
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There is no performance information available for the Fund at this time because
the Fund has no operating history.
FEES AND EXPENSES
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This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS M Maximum sales charge (load)
imposed on purchases(1) None Maximum deferred sales charge (load) None Maximum
sales charge (load) imposed on reinvested dividends None Exchange fee None
Redemption fee None Maximum account fee(2) None
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) CLASS M
Management Fees 0.75%
Distribution (12b-1) Fees 0.75%
Other Expenses(3) 0.87%
Shareholder Servicing Fee 0.25%
Other Operating Expenses 0.62%
Total Annual Fund Operating Expenses 2.37%
-----------
Less Expense Reimbursement -0.72%
Net Annual Fund Operating Expenses(4) 1.65%
===========
(1) Although no sales loads or transaction fees are charged, you will be
assessed a fee of $12 for outgoing wire transfers and $25 for returned checks.
(2) IRA accounts are assessed a $12.50 annual fee.
(3) The percentage for "Other Expenses" totaling 0.87% is comprised of two parts
(1) an annual shareholder servicing fee of 0.25% of average daily net assets,
and (2) administration fees, transfer agency fees and all other ordinary
operating expenses of the fund estimated for the initial fiscal year at 0.62% of
average daily net assets.
(4) The Fund has an Investment Advisory and Management Agreement with the Allied
Asset Advisors, Inc., the investment advisor for the Fund, dated __________,
2000. The Agreement provides that the annual management fee shall be 0.75% of
the first $500 million in assets, 0.65% of the next $5 billion in assets and
0.50% on the amount of assets over $5.5 billion. The investment advisor has also
entered into an Expense Waiver and Reimbursement Contract dated _________, 2000
with the Fund under which the investment advisor has agreed to waive its fees
and absorb expenses to the extent that total annual fund operating expenses
exceed 1.65% for Class M shares. The investment advisor can recapture any
expenses or fees it has waived or reimbursed within a three year period. The
Contract is in effect for one year and expires ________, 2001.
EXAMPLE
This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. It assumes that you invest
$10,000 in a 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, your dividends and distributions have been
reinvested, and that the Fund's operating expenses remain the same. Although
your actual cost may be higher or lower, based on these assumptions (including
one year of capped expenses in each period) your costs would be:
1 YEAR 3 YEARS
------ -------
$168 $658
MORE INFORMATION ABOUT THE DOW JONES ISLAMIC MARKET USA INDEX(SM)
- --------------------------------------------------------------------------------
WHAT IS THE DOW JONES ISLAMIC MARKET USA INDEX(SM)?
The INDEX is a diverse compilation of U.S. equity securities considered by the
Shari`ah Supervisory Board of Dow Jones to be in compliance with Islamic
principles. The INDEX is constructed from the 2,700 stocks in the Dow Jones
Global Indexes (DJGI) family. Dow Jones believes that these stocks are
accessible to investors and are well traded. The DJGI methodology removes issues
that are not suitable for global investing. The INDEX includes the most liquid
U.S. securities meeting the Shari`ah investment criteria in the market, and
reflects the industry breakdown of the U.S. market.
Certain businesses are incompatible with Shari`ah Laws. Thus, stocks of
companies whose primary business is in areas not suitable for Islamic investment
purposes are excluded from the INDEX. Excluded businesses include: alcohol, pork
related products, conventional financial services (banking, insurance, etc.),
entertainment (casinos/gambling, cinema, pornography, music, hotels, etc.),
tobacco and defense.
1.Financial filters are also applied to exclude, among other things, companies
that derive more than 5% of income from impure sources including interest and
companies that have total debt exceeding certain ratios. The filters are
described fully in the Statement of Additional Information.
Companies that pass Shari`ah screens are included in the INDEX'S investable
universe from which INDEX components are selected. The steps taken to select the
components of the INDEX are as follows:
1.Rank companies both by market cap and by the daily average dollar turnover
for the preceding quarter.
2.Calculate combination score for each stock by combining market value rank and
turnover rank with equal weight on both factors.
3.Sort stocks into their respective industry groups by country.
4.Based on the combined score in descending order, select those companies of
each industry group in each country whose cumulative market capitalization is
closest to 95% of the total market capitalization of the industry group.
5.Select all U.S. companies from the above global companies (currently 241
companies).
As of March 15, 2000, the U.S. companies whose issues comprised the INDEX had an
average market capitalization of $15.4 billion dollars (U.S.) and a median
market capitalization of $3.0 billion (U.S.). SECURITIES ARE SELECTED FOR THE
INDEX SO AS TO REPRESENT THE MOST LIQUID SECURITIES MEETING THE SHARI`AH
INVESTMENT CRITERIA IN THE MARKET, AND TO REFLECT THE INDUSTRY BREAKDOWN OF THE
U.S. MARKET. ADDITIONAL FACTORS CONSIDERED WHEN APPLYING THE PROCESS DESCRIBED
ABOVE INCLUDE RELATIVE SIZE AND TURNOVER, ECONOMIC WEIGHTINGS, AND THE RELATIVE
HEALTH OF THE COMPANIES.
Dow Jones' Shari`ah Supervisory Board has approved the above criteria and any
changes in the Shari`ah Supervisory Board or the selection criteria are at the
sole discretion of Dow Jones. Changes by Dow Jones in the selection criteria or
the composition of the INDEX will be reflected in the composition of the Fund in
a reasonable period of time.
HOW HAS THE INDEX PERFORMED?
The following table shows the performance of the INDEX for the past four years
ended December 31, 1999 compared to other indexes. PLEASE NOTE THAT THE
PERFORMANCE SHOWN IS NOT THE PERFORMANCE OF THE FUND AND IS NOT INTENDED TO
PREDICT OR SUGGEST THE RETURN THAT MIGHT BE EXPERIENCED IF YOU INVEST IN THE
FUND. The Fund will seek to track the INDEX as closely as possible, but the
performance of the Fund will be less than the performance of the INDEX because
the Fund is subject to operational and transaction costs, while the INDEX is
not. Also, the Fund may not be fully invested in INDEX securities at all times
and stocks in the Fund may not be weighted the same as stocks in the INDEX at
all times. This will especially be true while the Fund's assets are under $100
million in its initial stages.
<TABLE>
<CAPTION>
Average Annual
Benchmark Return for the Calendar Years Total Return *
- -------------------------- ------------ ------------ ------------ ----------------- ---------------------------
1999 1998 1997 1996
- -------------------------- ------------ ------------ ------------ ----------------- ---------------------------
<S> <C> <C> <C> <C> <C>
DJIM US 21.68% 34.14% 30.16% 23.03% 27.25%
S&P 500 19.53% 26.67% 31.01% 20.26% 24.22%
Russell 2000 19.62% -3.45% 20.52% 14.76% 12.40%
- -------------------------- ------------ ------------ ------------ ----------------- ---------------------------
</TABLE>
* RETURN FROM 12/31/95 TO 12/31/99.
The base date for the INDEX is December 31, 1995 and the base value is set at
1000. The INDEX is reviewed quarterly, with component changes implemented on the
third Friday of March, June, September and December. This frequency assures that
the INDEX reflects the latest trends and developments in the stock market and
the companies' adherence to Islamic principles.
The INDEX is capitalization-weighted. It is calculated in real time, posted and
disseminated every 5 seconds to major market-data vendors. Calculation of the
index is based on Laspeyres' formula. It does not include reinvested dividends.
"Dow Jones" and "Dow Jones Islamic Market Index(SM)" are service marks of Dow
Jones & Company, Inc. and have been licensed for use by Allied Asset Advisors,
Inc. in connection with the Fund. The Fund is not sponsored, endorsed, sold or
promoted by Dow Jones, and Dow Jones makes no representation regarding the
advisability of investing in the Fund. Dow Jones does not consider the needs of
the Fund or its shareholders in determining, composing or calculating the index
or have any obligation to do so. See the Statement of Additional Information for
more information about Dow Jones.
SHARI`AH SUPERVISORY BOARD
- --------------------------------------------------------------------------------
The INDEX is reviewed quarterly and annually by the Shari`ah Supervisory Board
(Shari`ah Board) and by Dow Jones for consideration of exclusion or inclusion of
components. In addition, the INDEX is reviewed on an on-going basis to
contemplate changes as a result of extraordinary events (e.g., de-listing,
bankruptcy, merger or takeover). The Shari`ah Board is not affiliated with the
Fund or the investment advisor and does not serve as a consultant to or
otherwise have any relationship with the Fund or the investment advisor. The
Shari`ah Board does not consider the objectives or needs of the Fund or its
shareholders in determining, composing or calculating the INDEX. The Shari`ah
Board is retained by Dow Jones & Company, Inc., to provide counsel on matters
relating to the Shari`ah compliance of the INDEX's eligible components. At the
Fund's inception, the Shari`ah Board consisted of the following individuals:
<TABLE>
<CAPTION>
- -------------------------------------------------- --------------------------------------------------------------------------------
SHARI`AH SUPERVISORY BOARD MEMBER BIOGRAPHY
- COUNTRY
- -------------------------------------------------- --------------------------------------------------------------------------------
<S> <C>
SHAYKH DR. ABDUL SATTAR ABU GHUDDAH Dr. Abu Ghuddah is a senior Shari`ah Advisor to Albaraka
- SYRIA Investment Co. of Saudi Arabia. He holds a PhD in Islamic Law. Dr. Abu Ghuddah
has published many books on Islamic Financial transactions. He was an advisor
for Islamic Law Encyclopaedia (Kuwait Awqaf Ministry). Dr. Abu Ghuddah is a
member and chairman of several reputed Islamic Shari`ah Boards.
- -------------------------------------------------- --------------------------------------------------------------------------------
SHAYKH JUSTICE MUHAMMAD TAQI USMANI Mr. Usmani has been a member of the Supreme Court of Pakistan
- PAKISTAN since 1982. He is also the vice president of Darul Uloom Karachi
and the vice chair and deputy chairman of the Islamic Fiqh Academy (OIC), Jeddah.
Mr. Usmani edits the monthly magazines Albalagh and Albalagh International. He
is a chairman or member of the Shari`ah supervisory boards of a dozen Islamic
banks and financial institutions worldwide.
- -------------------------------------------------- --------------------------------------------------------------------------------
SHAYKH NIZAM YAQUBY Mr. Yaquby is a member of the Islamic supervisory boards for
- BAHRAIN several Islamic institutions, including the Arab Islamic Bank and the Abu Dhabi
Islamic Bank. His work has appeared in the following publications: Risalah Fi
al-Tawbah, Qurrat al-`Ainayn fi Fada il Birr al-Walidayn, Irshad al-`Uqala`ila
Hukun al-Qira`h min al-Mushaf fi al-Salah, Tahqia al-Amal fi Ikhraj Zakat
al-Fitr bi al-Mal.
- -------------------------------------------------- --------------------------------------------------------------------------------
SHAYKH DR. MOHAMED A. ELGARI Dr. Elgari is an associate professor of Islamic Economics and the
- SAUDI ARABIA director of the Center for Research in Islamic Economics at King Abdulaziz
University in Saudi Arabia. He is an expert at the Islamic Jurisprudence Academy
(OIC), Jeddah. Dr. Elgari is the editor of the Review of Islamic Economics. He
is also an advisor to several Islamic financial institutions worldwide and the
author of many books on Islamic banking.
- -------------------------------------------------- --------------------------------------------------------------------------------
SHAYKH YUSUF TALAL DELORENZO Mr. DeLorenzo is considered a leading Islamic scholar in the
- UNITED STATES United States. He has translated over twenty books from Arabic, Persian, and
Urdu for publication in English and has been commissioned to prepare a new
translation of the Qur`an. Mr. DeLorenzo compiled the first English translation
of legal rulings issued by Shari`ah supervisory boards on the operations of
Islamic banks. He is also a Shari`ah consultant to several Islamic financial
institutions and was an advisor on Islamic education to the government
of Pakistan.
- -------------------------------------------------- --------------------------------------------------------------------------------
</TABLE>
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
INVESTMENT ADVISOR
The Fund's investment advisor is Allied Asset Advisors, Inc. (AAA) located at
745 McClintock Drive, Suite 114, Burr Ridge, Illinois 60521. Subject to the
general supervision of the Fund's Board of Trustees, AAA is responsible for the
day-to-day investment decisions of the Fund in accordance with the Fund's
investment objective and policies. In exchange for these services, AAA receives
an annual management fee, which is calculated daily and paid monthly, according
to the average daily net assets of the Fund. AAA is a newly formed subsidiary of
the North American Islamic Trust (NAIT). Whereas, AAA, as a new entity, has no
track record in investment management or other assets under management besides
the Fund, NAIT has managed the investment of endowment assets for over 20 years.
Currently, these assets are valued in excess of $35,000,000. For more
information about NAIT, see the Statement of Additional Information.
The Investment Advisory Agreement between the Fund and AAA provides that the
annual management fee for the investment advisor will be 0.75% on the first $500
million in assets, 0.65% on the next $5 billion in assets and 0.50% on the
amount of assets over $5.5 billion. However, AAA has entered into an Expense
Waiver and Reimbursement Contract with the Fund whereby it has agreed to waive
its fees and absorb expenses to the extent that the Fund's total annual
operating expenses for Class M shares exceed 1.65% of net assets. AAA can
recapture any expenses or fees it has waived or reimbursed within a three year
period, however, the Fund is not obligated to pay any such deferred fees more
than three years after the end of the fiscal year in which the fee was deferred.
The Expense Waiver and Reimbursement Contract expires on ________, 2001.
CUSTODIAN, TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND FUND ACCOUNTANT
Firstar Bank, N.A. serves as custodian for the Fund's cash and securities.
Firstar Mutual Fund Services, LLC provides administrative, transfer agent,
dividend disbursing, and fund accounting services to the Fund.
DISTRIBUTOR
Rafferty Capital Markets, Inc., serves as principal underwriter for the Fund and
as such, is the exclusive agent for the distribution of shares of the Fund.
Class M shares have a 12b-1 plan, under which a distribution fee of 0.75% is
deducted from Fund assets each year. Over time these fees will increase the cost
of your investment and may cost more than paying other types of sales charges.
CALCULATING SHARE PRICE
- --------------------------------------------------------------------------------
Shares of the Fund are sold at their net asset value (NAV). The NAV for all
shares of the Fund is determined as of the close of regular trading on the New
York Stock Exchange (NYSE) (normally 4:00 p.m., Eastern time) on every business
day. The NAV for Class M shares of the Fund is calculated by dividing the sum of
the value of the securities held plus cash or other assets minus all liabilities
by the total number of Class M shares outstanding of the Fund.
The Fund's investments are valued according to market value. When a market quote
is not readily available, the security's value is based on "fair value" as
determined by the investment advisor under supervision of the Fund's Board of
Trustees.
If you place a good order (see "How to Purchase Shares") that is delivered to
the Fund before the close of the regular trading session of the NYSE on any
business day, your order will receive the share price determined for the Fund as
of that day. If your order is received after the close of the regular trading
session of the NYSE, it will receive the price determined on the next business
day.
HOW TO PURCHASE SHARES
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To open an account, you must invest at least the minimum amount.
MINIMUM INVESTMENTS TO OPEN TO ADD TO
YOUR ACCOUNT YOUR ACCOUNT
Regular accounts $500 $50
IRA accounts $250 $50
GOOD ORDER PURCHASE REQUESTS
When making a purchase request, make sure your request is in good order. "Good
order" means your purchase request includes:
|X| the NAME of the Fund
|X| the DOLLAR amount of shares to be purchased
|X| account application form or investment stub
|X| check payable to the "Dow Jones Islamic Index Fund"
<TABLE>
<CAPTION>
METHODS OF BUYING
<S> <C>
THROUGH A You can purchase shares of the Fund through any broker-dealer organization that has a sales
BROKER/DEALER agreement with the Fund's distributor. The broker-dealer organization is responsible for
ORGANIZATION sending your purchase order to the Fund. Please keep in mind that your broker-dealer may charge additional fees
for its services.
BY MAIL To open an account, complete an account application form and send it together with your check to the address
below. To make additional investments once you have opened your account, send your check together with the
detachable form that's included with your Fund account statement or confirmation. You may also send a letter
stating the amount of your investment with your name, the name of the Fund and your account number together with
a check to the address below. Checks should be made payable to "Dow Jones Islamic Index
Fund." No third party checks will be accepted. If your check is returned for any reason,
a $25 fee will be assessed against your account.
REGULAR MAIL OVERNIGHT DELIVERY OVERNIGHT DELIVERY
Dow Jones Islamic Index Fund Dow Jones Islamic Index Fund
c/o Firstar Mutual Fund Services, LLC c/o Firstar Mutual FundServices, LLC
P.O. Box 701 615 E. Michigan Street, Third Floor
Milwaukee, Wisconsin 53201-0701 Milwaukee, Wisconsin 53202
NOTE: The Fund does not consider the U.S. Postal Service or other independent delivery services to be its
agents. Therefore, when you deposit your account application form, additional purchase request, or redemption
request in the mail or use other delivery services, or if your documents are simply in the transfer agent's post
office box, that does not mean that the transfer agent or the Fund actually RECEIVED those documents.
BY TELEPHONE To make additional investments by telephone, you must check the appropriate box on your account application form
authorizing telephone purchases. If you have given authorization for telephone transactions and your account has
been open for at least 15 days, call the Fund toll free at 1-888-FUNDS-85 and you will be allowed to move money
from your bank account to your Fund account upon request. Only bank accounts held at U.S. institutions that are
Automated Clearing House (ACH) members may be used for telephone transactions. For security reasons, requests by
telephone will be recorded.
BY WIRE To open an account or to make additional investments by wire, call 1-888-FUNDS-85 to notify the Fund of the
incoming wire using the wiring instructions below:
Firstar Bank, N.A.
Milwaukee, WI 53202
ABA #: 075000022
Credit: Firstar Mutual Fund Services, LLC
Account #: 112-952-137
Further Credit: Dow Jones Islamic Index Fund, Class M
(your name or the title on the account)
(your account #)
THROUGH AN Once your account has been opened, you may purchase shares of the Fund through an Automatic
AUTOMATIC Investment Plan ("AIP"). You can have money automatically transferred from your checking
INVESTMENT or savings account on a weekly, bi-weekly, monthly, bi-monthly or quarterly basis. To be
PLAN eligible for this plan, your bank must be a U.S. institution that is an ACH member. The Fund may modify or
terminate the AIP at any time. The first AIP purchase will take place no earlier than 15 days after the Transfer
Agent has received your request.
</TABLE>
HOW TO SELL SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
METHODS OF SELLING
<S> <C>
THROUGH A If you purchased your shares through a broker-dealer or other financial organization, your
BROKER/DEALER redemption order may be placed through the same organization. The organization is responsible
ORGANIZATION for sending your redemption order to the Fund on a timely basis. Please keep in mind that your broker-dealer may
charge additional fees for its services.
BY MAIL Send your written redemption request to the address below. Your request should contain the
Fund's name, your account number and the dollar amount or the number of shares to be redeemed.
Be sure to have all shareholders sign the letter. Additional documents are required for certain
types of shareholders, such as corporations, partnerships, executors, trustees, administrators,
or guardians (i.e., corporate resolutions, or trust documents indicating proper authorization).
Please see the Statement of Additional Information for more information.
REGULAR MAIL OVERNIGHT DELIVERY
Dow Jones Islamic Index Fund Dow Jones Islamic Index Fund
c/o Firstar Mutual Fund Services, LLC c/o Firstar Mutual Fund Services, LLC
P.O. Box 701 615 E. Michigan Street, Third Floor
Milwaukee, Wisconsin 53201-0701 Milwaukee, Wisconsin 53202
The Fund's transfer agent may require a SIGNATURE GUARANTEE for certain redemption requests such as redemption
requests from IRA accounts, or redemption requests made payable to a person or an address not on record with the
Fund. A signature guarantee assures that your signature is genuine and protects you from unauthorized account
redemptions. You may obtain signature guarantees from most trust companies, commercial banks or other eligible
guarantor INSTITUTIONS. A NOTARY PUBLIC CANNOT GUARANTEE SIGNATURES.
BY TELEPHONE If you are authorized to perform telephone transactions (either through your account application form or by
subsequent arrangement in writing with the Fund) you may redeem shares in any amount, but not less than $100, by
calling 1-888-FUNDS-85. A signature guarantee is required of all shareholders to change or add telephone
redemption privileges. For security reasons, requests by telephone will be recorded.
BY WIRE To redeem shares by wire, call the Fund at 1-888-FUNDS-85 and specify the amount of money you wish to be wired.
Your bank may charge a fee to receive wired funds. The transfer agent charges a $12 outgoing wire fee.
WRITING A CHECK On your account application form, you may select the option to receive a checkbook so that you can
redeem shares by writing checks against your Fund account. Checks may be made payable in the amount of $250 or
more. Any checks drawn on a joint account will only require one signature. There is a $25 charge for stopping
payment of a check upon your request, or if the transfer agent cannot honor a check due to insufficient funds or
other valid reason. There will be a charge of $5 for issuing each checkbook.
THROUGH A If you own shares with a value of $10,000 or more, you may participate in the systematic
SYSTEMATIC withdrawal plan. The systematic withdrawal plan allows you to make automatic withdrawals from
WITHDRAWAL PLAN your Fund account at regular intervals. Money will be transferred from your Fund account to the checking or
savings account you choose on your account application form. If you expect to purchase additional shares of the
Fund, it may not be to your advantage to participate in the systematic withdrawal plan because of the possible
adverse tax consequences of making contemporaneous purchases and redemptions.
</TABLE>
WHEN REDEMPTION PROCEEDS ARE SENT TO YOU
Your shares will be redeemed at the NAV determined after the Fund receives your
redemption request in good order. Your redemption request cannot be processed on
days the NYSE is closed.
When making a redemption request, make sure your request is in good order. "Good
order" means your letter of instruction includes:
|X|the NAME of the Fund
|X|the DOLLAR AMOUNT or the NUMBER of shares to be redeemed
|X|SIGNATURES of all registered shareholders exactly as the shares are
registered
|X|the ACCOUNT number
All requests received in good order by the Fund before the close of the regular
trading session of the NYSE (normally 4:00 p.m. Eastern time) will usually be
wired to the bank you indicate or mailed on the following day to the address of
record. In no event will proceeds be wired or a check mailed more than 7
calendar days after the Fund receives your redemption request.
If you purchase shares using a check and soon after request a redemption, the
Fund will honor the redemption request, but will not mail or wire the proceeds
until your purchase check has cleared (usually within 12 days).
REDEMPTION IN-KIND
If the amount you are redeeming is over the lesser of $250,000 or 1% of the
Fund's net asset value, the Fund has the right to redeem your shares by giving
you the amount that exceeds $250,000 or 1% of the Fund's net asset value in
securities instead of cash.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
mail you a notice if your account falls below $500 ($250 for IRA accounts)
requesting that you bring the account back up to $500 or close it out. If you do
not respond to the request within 30 days, the Fund may close the account on
your behalf and send you the proceeds.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and net
capital gains that it has realized on the sale of securities. These income and
gains distributions will generally be paid once each year, on or before December
31. Distributions will automatically be reinvested in additional shares of the
Fund, unless you elect to have the distributions paid to you in cash. If you
choose to have distribution checks mailed to you and either the U.S. Postal
service is unable to deliver the check to you or the check remains outstanding
for at least 6 months, the Fund reserves the right to reinvest the check at the
then current net asset value until you notify us with different instructions.
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 long-term capital gains the
Fund distributes are taxable to you as long-term capital gains no matter how
long you have owned your shares. If the Fund distributes realized gains soon
after you purchase shares, a portion of your investment may be treated as a
taxable distribution.
If you do not provide your social security or taxpayer identification number, or
if the IRS instructs the Fund to do so, the Fund, by law, must withhold 31% of
your taxable distributions and proceeds.
When you sell your shares of the Fund, you may have a capital gain or loss. The
individual tax rate on any gain from the sale of your shares depends on your
marginal tax rate and on how long you have held your shares.
Fund distributions and gains from the sale of your 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.
SHAREHOLDER REPORTS AND CONFIRMATIONS
- --------------------------------------------------------------------------------
As a shareholder, you will be provided annual and semi-annual reports showing
the Fund's portfolio investments and financial information. Account and tax
statements will be mailed to you on an annual basis. You will also receive
confirmations of your purchases into, and redemptions out of, the Fund.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Thee are no financial highlights available for the Fund since the Fund is
commencing operations in 2000.
INVESTMENT ADVISOR
AAA
ALLIED ASSET ADVISORS, INC.
BURR RIDGE, ILLINOIS
DISTRIBUTOR
RAFFERTY CAPITAL MARKETS, INC.
WHITE PLAINS, NEW YORK
INDEPENDENT AUDITORS
DELOITTE & TOUCHE LLP
CHICAGO, ILLINOIS
LEGAL COUNSEL
VEDDER, PRICE, KAUFMAN, & KAMMHOLZ
CHICAGO, ILLINOIS
ADMINISTRATOR, TRANSFER AGENT,
AND FUND ACCOUNTANT
FIRSTAR MUTUAL FUND SERVICES, LLC
MILWAUKEE, WISCONSIN
CUSTODIAN
FIRSTAR BANK, N.A.
CINCINNATI, OHIO
WHERE TO FIND MORE INFORMATION:
You can find more information about the Fund in the following documents:
STATEMENT OF ADDITIONAL INFORMATION (SAI) DATED __________, 2000
The SAI for Class M of the Fund provides more details about the Fund's policies
and management. The Fund's SAI is incorporated by reference into this
Prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
After the Fund has been operating for the appropriate time, annual and
semi-annual reports will be made available. The Fund's annual and semi-annual
reports provide the most recent financial reports and portfolio listings. The
annual report contains a discussion of the market conditions and investment
climate that affected the Fund's performance during the last fiscal year.
You can obtain a free copy of these documents or request other information about
the Fund by calling the Fund at 1-888-FUNDS-85 or by writing to:
DOW JONES ISLAMIC INDEX FUND
C/O FIRSTAR MUTUAL FUND SERVICES, LLC
P.O. BOX 701
MILWAUKEE, WI 53201-0701
You may write to the Securities and Exchange Commission (SEC) Public Reference
Room at the regular mailing address or the e-mail address below and ask them to
mail you information about the Fund, including the SAI. They will charge you a
fee for this duplicating service. You can also visit the SEC Public Reference
Room and copy documents while you are there. For more information about the
operation of the Public Reference Room, call the SEC at the telephone number
below.
PUBLIC REFERENCE SECTION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0102
[email protected]
1-202-942-8090
Reports and other information about the Fund are available on the EDGAR Database
on the SEC's Internet site at HTTP://WWW.SEC.GOV.
1940 Act File No. 811-9821
CLASS K
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
DOW JONES(SM) ISLAMIC INDEX FUND
PROSPECTUS
__________, 2000
INVESTMENT ADVISOR
AAA
ALLIED ASSET ADVISORS, INC.
DOW JONES(SM) ISLAMIC INDEX FUND
PROSPECTUS
__________, 2000
The Dow Jones(SM) Islamic Index Fund (the "Fund") is the first series offered by
Allied Asset Advisors Funds. This prospectus pertains to the Class K share class
and contains pertinent information about investing in the Fund. Class K shares
are not subject to any sales charges or 12b-1 fees. Please read this prospectus
carefully before investing.
INVESTMENT ADVISOR
AAA
ALLIED ASSET ADVISORS, INC.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
RISK/RETURN SUMMARY............................................................2
PERFORMANCE SUMMARY............................................................4
FEES AND EXPENSES..............................................................4
MORE INFORMATION ABOUT THE DOW JONES ISLAMIC MARKET USA INDEX(SM)..............5
SHARI`AH SUPERVISORY BOARD.....................................................7
MANAGEMENT OF THE FUND.........................................................8
CALCULATING SHARE PRICE........................................................8
HOW TO PURCHASE SHARES.........................................................9
HOW TO SELL SHARES............................................................10
DISTRIBUTIONS AND TAXES.......................................................12
SHAREHOLDER REPORTS AND CONFIRMATIONS.........................................12
FINANCIAL HIGHLIGHTS..........................................................12
RISK/RETURN SUMMARY
- --------------------------------------------------------------------------------
WHAT IS THE INVESTMENT OBJECTIVE OF THE DOW JONES(SM) ISLAMIC INDEX FUND?
The Dow Jones Islamic Index Fund ("Fund") seeks to match the total return of the
DOW JONES ISLAMIC MARKET USA INDEX(SM) (the "INDEX").
WHAT ARE THE MAIN INVESTMENT STRATEGIES OF THE FUND?
To achieve its investment objective, the Fund invests in securities included in
the INDEX. The INDEX consists of U.S. common stocks that meet Islamic investment
principles. Islamic principles generally preclude investments in certain
industries (e.g., alcohol, pornography and casinos) and investments in interest
bearing debt obligations or businesses that derive a substantial amount of
impure interest income. Any uninvested cash will be held in non-interest bearing
deposits or invested in a manner following Islamic principles. Under normal
circumstances, the Fund plans to fully invest its assets in securities that are
included in the INDEX. Although the INDEX consists of stocks from many different
economic sectors, it is comprised primarily of companies with larger market
capitalizations. There is no guarantee that the Fund will achieve the same
return as the INDEX.
Due to the large number of stocks in the INDEX, the Fund may, in its initial
stages (i.e., the period during which the Fund's asset size is less than $100
million), purchase a sub-group of equities from those contained in the INDEX
that the investment advisor believes will best track the INDEX. The Fund will
determine the "sub-group" by selecting stocks that are representative of the
INDEX in terms of industry, size and other portfolio characteristics. The Fund
also will consider a security's weighting in the INDEX during its initial stages
emphasizing those securities that are more heavily weighted. As the assets of
the Fund grow, the investment advisor anticipates the holdings of the Fund will
increase to include more of the components of the INDEX.
In order to track the INDEX as closely as possible, the Fund will invest
substantially all of its assets in roughly the same proportions as the stocks
are represented in the INDEX. As the Fund receives cash from new investors, or
processes redemption requests from shareholders, the Fund will purchase or sell
securities in an effort to approximate the return of the INDEX. Also, the Fund's
investments are reviewed and adjusted periodically to reflect any adjustments in
the INDEX, in an effort to tract the INDEX as closely as possible.
The Fund normally sells portfolio securities in response 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 low. A low portfolio turnover rate usually results in low
transaction costs and provides tax efficiencies for shareholders.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
The main risks of investing in the Fund are listed below. Like any mutual fund,
you may lose money by investing in the Fund.
MARKET RISKS The return on and value of your investment in the Fund will
fluctuate in response to stock market movements. Stocks and other equity
securities are subject to market risks and fluctuations in value due to
earnings, economic conditions and other factors beyond the control of the Fund.
INDEX INVESTING RISKS Unlike other non-index mutual funds, the Fund will not buy
and sell securities based upon economic, financial and market analysis and
investment judgment. Instead, the Fund will invest using an indexed-based
investment approach, which seeks to approximate the investment performance of
the INDEX. You should not expect to achieve the potential greater results of
some actively managed funds that aggressively seek growth or attempt to limit
losses in a market decline. The Fund's initial strategy of investing in a
representative sample of the INDEX may result in some deviation between the
Fund's performance and the INDEX. The Fund's return is likely to be lower than
that of the INDEX because the Fund incurs brokerage commissions, transaction
fees and other expenses that the INDEX does not.
ISLAMIC SHARI`AH INVESTMENT RISKS It is possible that the restrictions placed on
investments may result in the Fund not performing as well as mutual funds with
similar investment objectives but not subject to the Islamic Shari`ah
restrictions.
TEMPORARY INVESTMENTS. In response to severe or unusual adverse market,
economic, political or other conditions, the Fund may make temporary investments
that are not consistent with its investment objective and principal investment
strategies. Such investments may prevent the Fund from achieving its investment
objective. The Fund cannot invest in interest-paying instruments frequently used
by mutual funds for this purpose. Currently anticipated temporary investments
will be held in the form of cash. When the Fund's investments in cash or similar
investments increase, the Fund may not achieve its investment objective.
PERFORMANCE SUMMARY
- --------------------------------------------------------------------------------
There is no performance information available for the Fund at this time because
the Fund has no operating history.
FEES AND EXPENSES
- --------------------------------------------------------------------------------
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS K Maximum sales charge (load)
imposed on purchases(1) None Maximum deferred sales charge (load) None Maximum
sales charge (load) imposed on reinvested dividends None Exchange fee None
Redemption fee None Maximum account fee(2) None
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) CLASS K
Management Fees 0.75%
Distribution (12b-1) Fees None
Other Expenses 0.62%
Total Annual Fund Operating Expenses 1.37%
------------
Less Expense Reimbursement -0.47%
Net Annual Fund Operating Expenses(3) 0.90%
============
(1) Although no sales loads or transaction fees are charged, you will be
assessed a fee for $12 outgoing wire transfers and $25 for returned checks.
(2) IRA accounts are assessed a $12.50 annual fee.
(3) The Fund has an Investment Advisory and Management Agreement with the Allied
Asset Advisors, Inc., the investment advisor for the Fund, dated __________,
2000. The Agreement provides that the annual management fee shall be 0.75% of
the first $500 million in assets 0.65% of the next $5 billion in assets and
0.50% on the amount of assets over $5.5 billion. The investment advisor has a
also entered into an Expense Waiver and Reimbursement Contract dated _________,
2000 with the Fund under which the investment advisor has agreed to waive its
fees and absorb expenses to the extent that total annual fund operating expenses
exceed 0.90% for Class K shares. The investment advisor can recapture any
expenses or fees it has waived or reimbursed within a three year period. The
Contract is in effect for one year and expires ________, 2001.
EXAMPLE
This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. It assumes that you invest
$10,000 in a 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, your dividends and distributions have been
reinvested, and that the Fund's operating expenses remain the same. Although
your actual cost may be higher or lower, based on these assumptions (including
one year of capped expenses in each period) your costs would be:
1 YEAR 3 YEARS
------ -------
$92 $375
MORE INFORMATION ABOUT THE DOW JONES ISLAMIC MARKET USA INDEX(SM)
- --------------------------------------------------------------------------------
WHAT IS THE DOW JONES ISLAMIC MARKET USA INDEX(SM)?
The INDEX is a diverse compilation of U.S. equity securities considered by the
Shari`ah Supervisory Board of Dow Jones to be in compliance with Islamic
principles. The INDEX is constructed from the 2,700 stocks in the Dow Jones
Global Indexes (DJGI) family. Dow Jones believes that these stocks are
accessible to investors and are well traded. The DJGI methodology removes issues
that are not suitable for global investing. The INDEX includes the most liquid
U.S. securities meeting the Shari`ah investment criteria in the market, and
reflects the industry breakdown of the U.S. market.
Certain businesses are incompatible with Shari`ah Laws. Thus, stocks of
companies whose primary business is in areas not suitable for Islamic investment
purposes are excluded from the INDEX. Excluded businesses include: alcohol, pork
related products, conventional financial services (banking, insurance, etc.),
entertainment (casinos/gambling, cinema, pornography, music, hotels, etc.),
tobacco and defense.
Financial filters are also applied to exclude, among other things, companies
that derive more than 5% of income from impure sources including interest and
companies that have total debt exceeding certain ratios. The filters are
described fully in the Statement of Additional Information. Companies that pass
Shari`ah screens are included in the INDEX'S investable universe from which
INDEX components are selected. The steps taken to select the components of the
INDEX are as follows:
1.Rank companies both by market cap and by the daily average dollar turnover for
the preceding quarter.
2.Calculate combination score for each stock by combining market value rank and
turnover rank with equal weight on both factors.
3.Sort stocks into their respective industry groups by country.
4.Based on the combined score in descending order, select those companies of
each industry group in each country whose cumulative market capitalization is
closest to 95% of the total market capitalization of the industry group.
5.Select all U.S. companies from the above global companies (currently 241
companies).
As of March 15, 2000, the U.S. companies whose issues comprised the INDEX had an
average market capitalization of $15.4 billion dollars (U.S.) and a median
market capitalization of $3.0 billion (U.S.). SECURITIES ARE SELECTED FOR THE
INDEX SO AS TO REPRESENT THE MOST LIQUID SECURITIES MEETING THE SHARI`AH
INVESTMENT CRITERIA IN THE MARKET, AND TO REFLECT THE INDUSTRY BREAKDOWN OF THE
U.S. MARKET. ADDITIONAL FACTORS CONSIDERED WHEN APPLYING THE PROCESS DESCRIBED
ABOVE INCLUDE RELATIVE SIZE AND TURNOVER, ECONOMIC WEIGHTINGS, AND THE RELATIVE
HEALTH OF THE COMPANIES.
Dow Jones' Shari`ah Supervisory Board has approved the above criteria and any
changes in the Shari`ah Supervisory Board or the selection criteria are at the
sole discretion of Dow Jones. Changes by Dow Jones in the selection criteria or
the composition of the INDEX will be reflected in the composition of the Fund in
a reasonable period of time.
HOW HAS THE INDEX PERFORMED?
The following table shows the performance of the INDEX for the past four years
ended December 31, 1999 compared to other indexes. PLEASE NOTE THAT THE
PERFORMANCE SHOWN IS NOT THE PERFORMANCE OF THE FUND AND IS NOT INTENDED TO
PREDICT OR SUGGEST THE RETURN THAT MIGHT BE EXPERIENCED IF YOU INVEST IN THE
FUND. The Fund will seek to track the INDEX as closely as possible, but the
performance of the Fund will be less than the performance of the INDEX because
the Fund is subject to operational and transaction costs, while the INDEX is
not. Also, the Fund may not be fully invested in INDEX securities at all times
and stocks in the Fund may not be weighted the same as stocks in the INDEX at
all times. This will especially be true while the Fund's assets are under $100
million in its initial stages.
<TABLE>
<CAPTION>
Average Annual
Benchmark Return for the Calendar Years Total Return *
- -------------------------- ------------ ------------ ------------ ----------------- ---------------------------
1999 1998 1997 1996
- -------------------------- ------------ ------------ ------------ ----------------- ---------------------------
<S> <C> <C> <C> <C> <C>
DJIM US 21.68% 34.14% 30.16% 23.03% 27.25%
S&P 500 19.53% 26.67% 31.01% 20.26% 24.22%
Russell 2000 19.62% -3.45% 20.52% 14.76% 12.40%
- -------------------------- ------------ ------------ ------------ ----------------- ---------------------------
</TABLE>
* RETURN FROM 12/31/95 TO 12/31/99
The base date for the INDEX is December 31, 1995 and the base value is set at
1000. The INDEX is reviewed quarterly, with component changes implemented on the
third Friday of March, June, September and December. This frequency assures that
the INDEX reflects the latest trends and developments in the stock market and
the companies' adherence to Islamic principles.
The INDEX is capitalization-weighted. It is calculated in real time, posted and
disseminated every 5 seconds to major market-data vendors. Calculation of the
index is based on Laspeyres' formula. It does not include reinvested dividends.
"Dow Jones" and "Dow Jones Islamic Market Index(SM)" are service marks of Dow
Jones & Company, Inc. and have been licensed for use by Allied Asset Advisors,
Inc. in connection with the Fund. The Fund is not sponsored, endorsed, sold or
promoted by Dow Jones, and Dow Jones makes no representation regarding the
advisability of investing in the Fund. Dow Jones does not consider the needs of
the Fund or its shareholders in determining, composing or calculating the index
or have any obligation to do so. See the Statement of Additional Information for
more information about Dow Jones.
SHARI`AH SUPERVISORY BOARD
- --------------------------------------------------------------------------------
The INDEX is reviewed quarterly and annually by the Shari`ah Supervisory Board
(Shari`ah Board) and by Dow Jones for consideration of exclusion or inclusion of
components. In addition, the INDEX is reviewed on an on-going basis to
contemplate changes as a result of extraordinary events (e.g., de-listing,
bankruptcy, merger or takeover). The Shari`ah Board is not affiliated with the
Fund or the investment advisor and does not serve as a consultant to or
otherwise have any relationship with the Fund or the investment advisor. The
Shari`ah Board does not consider the objectives or needs of the Fund or its
shareholders in determining, composing or calculating the INDEX. The Shari`ah
Board is retained by Dow Jones & Company, Inc., to provide counsel on matters
relating to the Shari`ah compliance of the INDEX's eligible components. At the
Fund's inception, the Shari`ah Board consisted of the following individuals:
<TABLE>
<CAPTION>
- -------------------------------------------------- -------------------------------------------------------------------
SHARI`AH SUPERVISORY BOARD MEMBER BIOGRAPHY
- COUNTRY
- -------------------------------------------------- -------------------------------------------------------------------
<S> <C>
SHAYKH DR. ABDUL SATTAR ABU GHUDDAH Dr. Abu Ghuddah is a senior Shari`ah Advisor to Albaraka
- SYRIA Investment Co. of Saudi Arabia. He holds a PhD in Islamic Law.
Dr. Abu Ghuddah has published many books on Islamic Financial
transactions. He was an advisor for Islamic Law Encyclopaedia
(Kuwait Awqaf Ministry). Dr. Abu Ghuddah is a member and
chairman of several reputed Islamic Shari`ah Boards.
- -------------------------------------------------- -------------------------------------------------------------------
SHAYKH JUSTICE MUHAMMAD TAQI USMANI Mr. Usmani has been a member of the Supreme Court of Pakistan
- PAKISTAN since 1982. He is also the vice president of Darul Uloom Karachi
and the vice chair and deputy chairman of the Islamic Fiqh
Academy (OIC), Jeddah. Mr. Usmani edits the monthly magazines
Albalagh and Albalagh International. He is a chairman or member
of the Shari`ah supervisory boards of a dozen Islamic banks and
financial institutions worldwide.
- -------------------------------------------------- -------------------------------------------------------------------
SHAYKH NIZAM YAQUBY Mr. Yaquby is a member of the Islamic supervisory boards for
- BAHRAIN several Islamic institutions, including the Arab Islamic Bank and
the Abu Dhabi Islamic Bank. His work has appeared in the following publications:
Risalah Fi al-Tawbah, Qurrat al-'Ainayn fi Fada il Birr al-Walidayn,
Irshad al-'Uqala'ila Hukun al-Qira'h min al-Mushaf fi al-Salah,
Tahqia al-Amal fi Ikhraj Zakat al-Fitr bi al-Mal.
- -------------------------------------------------- -------------------------------------------------------------------
SHAYKH DR. MOHAMED A. ELGARI Dr. Elgari is an associate professor of Islamic Economics and the
- SAUDI ARABIA director of the Center for Research in Islamic Economics at King
Abdulaziz University in Saudi Arabia. He is an expert at the
Islamic Jurisprudence Academy (OIC), Jeddah. Dr. Elgari is the
editor of the Review of Islamic Economics. He is also an advisor
to several Islamic financial institutions worldwide and the
author of many books on Islamic banking.
- -------------------------------------------------- -------------------------------------------------------------------
SHAYKH YUSUF TALAL DELORENZO Mr. DeLorenzo is considered a leading Islamic scholar in the
- - UNITED STATES United States. He has translated over twenty books from Arabic,
Persian, and Urdu for publication in English and has been commissioned to prepare
a new translation of the Qur`an. Mr. DeLorenzo compiled the first English
translation of legal rulings issued by Shari`ah supervisory boards on the
operations of Islamic banks.He is also a Shari`ah consultant to several Islamic
financial institutions and was an advisor on Islamic education to the government
of Pakistan.
- -------------------------------------------------- -------------------------------------------------------------------
</TABLE>
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
INVESTMENT ADVISOR
The Fund's investment advisor is Allied Asset Advisors, Inc. (AAA) located at
745 McClintock Drive, Suite 114, Burr Ridge, Illinois 60521. Subject to the
general supervision of the Fund's Board of Trustees, AAA is responsible for the
day-to-day investment decisions of the Fund in accordance with the Fund's
investment objective and policies. In exchange for these services, AAA receives
an annual management fee, which is calculated daily and paid monthly, according
to the average daily net assets of the Fund. AAA is a newly formed subsidiary of
the North American Islamic Trust (NAIT). Whereas, AAA, as a new entity, has no
track record in investment management or other assets under management besides
the Fund, NAIT has managed the investment of endowment assets for over 20 years.
Currently, these assets are valued in excess of $35,000,000. For more
information about NAIT, see the Statement of Additional Information.
The Investment Advisory Agreement between the Fund and AAA provides that the
annual management fee for the investment advisor will be 0.75% on the first $500
million in assets, 0.65% on the next $5 billion in assets and 0.50% on the
amount of assets over $5.5 billion. However, AAA has entered into an Expense
Waiver and Reimbursement Contract with the Fund whereby it has agreed to waive
its fees and absorb expenses to the extent that the Fund's total annual
operating expenses for Class K shares exceed 0.90% of net assets. AAA can
recapture any expenses or fees it has waived or reimbursed within a three year
period, however, the Fund is not obligated to pay any such deferred fees more
than three years after the end of the fiscal year in which the fee was deferred.
The Expense Waiver and Reimbursement Contract expires on ________, 2001.
CUSTODIAN, TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND FUND ACCOUNTANT
Firstar Bank, N.A. serves as custodian for the Fund's cash and securities.
Firstar Mutual Fund Services, LLC provides administrative, transfer agent,
dividend disbursing, and fund accounting services to the Fund.
DISTRIBUTOR
Rafferty Capital Markets, Inc., serves as principal underwriter for the Fund and
as such, is the exclusive agent for the distribution of shares of the Fund.
CALCULATING SHARE PRICE
- --------------------------------------------------------------------------------
Shares of the Fund are sold at their net asset value (NAV). The NAV for all
shares of the Fund is determined as of the close of regular trading on the New
York Stock Exchange (NYSE) (normally 4:00 p.m., Eastern time) on every business
day. The NAV for Class K shares of the Fund is calculated by dividing the sum of
the value of the securities held plus cash or other assets minus all liabilities
by the total number of Class K shares outstanding of the Fund.
The Fund's investments are valued according to market value. When a market quote
is not readily available, the security's value is based on "fair value" as
determined by the investment advisor under supervision of the Fund's Board of
Trustees.
If you place a good order (see "How to Purchase Shares") that is delivered to
the Fund before the close of the regular trading session of the NYSE on any
business day, your order will receive the share price determined for the Fund as
of that day. If your order is received after the close of the regular trading
session of the NYSE, it will receive the price determined on the next business
day.
HOW TO PURCHASE SHARES
- --------------------------------------------------------------------------------
To open an account, you must invest at least the minimum amount.
MINIMUM INVESTMENTS TO OPEN TO ADD TO
YOUR ACCOUNT YOUR ACCOUNT
Regular accounts $500 $50
IRA accounts $250 $50
GOOD ORDER PURCHASE REQUESTS
When making a purchase request, make sure your request is in good order. "Good
order" means your purchase request includes:
|X| the NAME of the Fund
|X| the DOLLAR amount of shares to be purchased
|X| account application form or investment stub
|X| check payable to the "Dow Jones Islamic Index Fund"
<TABLE>
<CAPTION>
METHODS OF BUYING
<S> <C>
THROUGH A You can purchase shares of the Fund through any broker-dealer organization that has a sales agreement with the
BROKER/DEALER Fund's distributor. The broker-dealer organization is responsible for sending your purchase order to the Fund.
ORGANIZATION Please keep in mind that your broker-dealer may charge additional fees for its services.
BY MAIL To open an account, complete an account application form and send it together with your check to the address
below. To make additional investments once you have opened your account, send your check together with the
detachable form that's included with your Fund account statement or confirmation. You may also send a letter
stating the amount of your investment with your name, the name of the Fund and your account number together with
a check to the address below. Checks should be made payable to "Dow Jones Islamic Index Fund." No third party
checks will be accepted. If your check is returned for any reason, a $25 fee will be assessed against your
account.
REGULAR MAIL OVERNIGHT DELIVERY
Dow Jones Islamic Index Fund Dow Jones Islamic Index Fund
c/o Firstar Mutual Fund Services, LLC c/o Firstar Mutual Fund Services, LLC
P.O. Box 701 615 E. Michigan Street, Third Floor
Milwaukee, Wisconsin 53201-0701 Milwaukee, Wisconsin 53202
NOTE: The Fund does not consider the U.S. Postal Service or other independent delivery services to be its
agents. Therefore, when you deposit your account application form, additional purchase request, or redemption
request in the mail or use other delivery services, or if your documents are simply in the transfer agent's post
office box, that does not mean that the transfer agent or the Fund actually RECEIVED those documents.
BY TELEPHONE To make additional investments by telephone, you must check the appropriate box on your account application
form authorizing telephone purchases. If you have given authorization for telephone transactions and your
account has been open for at least 15 days, call the Fund toll free at 1-888-FUNDS-85 and you will be allowed to
move money from your bank account to your Fund account upon request. Only bank accounts held at U.S.
institutions that are Automated Clearing House (ACH) members may be used for telephone transactions. For
security reasons, requests by telephone will be recorded.
BY WIRE To open an account or to make additional investments by wire, call 1-888-FUNDS-85 to notify the Fund of the
incoming wire using the wiring instructions below:
Firstar Bank, N.A.
Milwaukee, WI 53202
ABA #: 075000022
Credit: Firstar Mutual Fund Services, LLC
Account #: 112-952-137
Further Credit: Dow Jones Islamic Index Fund, Class K
(your name or the title on the account)
(your account #)
THROUGH AN Once your account has been opened, you may purchase shares of the Fund through an Automatic
AUTOMATIC Investment Plan ("AIP"). You can have money automatically transferred from your checking
INVESTMENT or savings account on a weekly, bi-weekly, monthly, bi-monthly or quarterly basis. To be
PLAN eligible for this plan, your bank must be a U.S. institution that is an ACH member. The
Fund may modify or terminate the AIP at any time. The first AIP purchase will take place no earlier than 15
days after the Transfer Agent has received your request.
</TABLE>
HOW TO SELL SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
METHODS OF SELLING
<S> <C>
THROUGH A If you purchased your shares through a broker-dealer or other financial organization, your
BROKER/DEALER redemption order may be placed through the same organization. The organization is responsible
ORGANIZATION for sending your redemption order to the Fund on a timely basis. Please keep in mind that your
broker-dealer may charge additional fees for its services.
BY MAIL Send your written redemption request to the address below. Your request should contain the
Fund's name, your account number and the dollar amount or the number of shares to be redeemed.
Be sure to have all shareholders sign the letter. Additional documents are required for certain
types of shareholders, such as corporations, partnerships, executors, trustees, administrators,
or guardians (i.e., corporate resolutions, or trust documents indicating proper authorization).
Please see the Statement of Additional Information for more information.
REGULAR MAIL OVERNIGHT DELIVERY
Dow Jones Islamic Index Fund Dow Jones Islamic Index Fund
c/o Firstar Mutual Fund Services, LLC c/o Firstar Mutual Fund Services, LLC
P.O. Box 701 615 E. Michigan Street, Third Floor
Milwaukee, Wisconsin 53201-0701 Milwaukee, Wisconsin 53202
The Fund's transfer agent may require a SIGNATURE GUARANTEE for certain redemption requests such
as redemption requests from IRA accounts, or redemption requests made payable to a person or an
address not on record with the Fund. A signature guarantee assures that your signature is
genuine and protects you from unauthorized account redemptions. You may obtain signature
guarantees from most trust companies, commercial banks or other eligible guarantor
INSTITUTIONS. A NOTARY PUBLIC CANNOT GUARANTEE SIGNATURES.
BY TELEPHONE If you are authorized to perform telephone transactions (either through your account application form
or by subsequent arrangement in writing with the Fund) you may redeem shares in any amount, but not less
than $100, by calling 1-888-FUNDS-85. A signature guarantee is required of all shareholders to change or add
telephone redemption privileges. For security reasons, requests by telephone will be recorded.
BY WIRE To redeem shares by wire, call the Fund at 1-888-FUNDS-85 and specify the amount of money you wish to
be wired. Your bank may charge a fee to receive wired funds. The transfer agent charges a $12 outgoing wire fee.
BY WRITING A CHECK On your account application form, you may select the option to receive a checkbook so that you can
redeem shares by writing checks against your Fund account.Checks may be made payable in the amount of $250 or
more. Any checks drawn on a joint account will only require one signature. There is a $25 charge for stopping
payment of a check upon your request, or if the transfer agent cannot honor a check due to insufficient funds or
other valid reason. There will be a charge of $5 for issuing each checkbook.
THROUGH A If you own shares with a value of $10,000 or more, you may participate in the systematic
SYSTEMATIC withdrawal plan. The systematic withdrawal plan allows you to make automatic withdrawals from
WITHDRAWAL PLAN your Fund account at regular intervals. Money will be transferred from your Fund account to the
checking or savings account you choose on your account application form. If you expect to purchase additional
shares of the Fund, it may not be to your advantage to participate in the systematic withdrawal plan because of
the possible adverse tax consequences of making contemporaneous purchases and redemptions.
</TABLE>
WHEN REDEMPTION PROCEEDS ARE SENT TO YOU
Your shares will be redeemed at the NAV determined after the Fund receives your
redemption request in good order. Your redemption request cannot be processed on
days the NYSE is closed.
When making a redemption request, make sure your request is in good order. "Good
order" means your letter of instruction includes:
|X|the NAME of the Fund
|X|the DOLLAR AMOUNT or the NUMBER of shares to be redeemed
|X|SIGNATURES of all registered shareholders exactly as the shares are
registered
|X|the ACCOUNT number
All requests received in good order by the Fund before the close of the regular
trading session of the NYSE (normally 4:00 p.m. Eastern time) will normally be
wired to the bank you indicate or mailed on the following day to the address of
record. In no event will proceeds be wired or a check mailed more than 7
calendar days after the Fund receives your redemption request.
If you purchase shares using a check and soon after request a redemption, the
Fund will honor the redemption request, but will not mail or wire the proceeds
until your purchase check has cleared (usually within 12 days).
REDEMPTION IN-KIND
If the amount you are redeeming is over the lesser of $250,000 or 1% of the
Fund's net asset value, the Fund has the right to redeem your shares by giving
you the amount that exceeds $250,000 or 1% of the Fund's net asset value in
securities instead of cash.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
mail you a notice if your account falls below $500 ($250 for IRA accounts)
requesting that you bring the account back up to $500 or close it out. If you do
not respond to the request within 30 days, the Fund may close the account on
your behalf and send you the proceeds.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and net
capital gains that it has realized on the sale of securities. These income and
gains distributions will generally be paid once each year, on or before December
31. Distributions will automatically be reinvested in additional shares of the
Fund, unless you elect to have the distributions paid to you in cash. If you
choose to have distribution checks mailed to you and either the U.S. Postal
service is unable to deliver the check to you or the check remains outstanding
for at least 6 months, the Fund reserves the right to reinvest the check at the
then current net asset value until you notify us with different instructions.
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 long-term capital gains the
Fund distributes are taxable to you as long-term capital gains no matter how
long you have owned your shares. If the Fund distributes realized gains soon
after you purchase shares, a portion of your investment may be treated as a
taxable distribution.
If you do not provide your correct social security or taxpayer identification
number, or if the IRS instructs the Fund to do so, the Fund, by law, must
withhold 31% of your taxable distributions and proceeds.
When you sell your shares of the Fund, you may have a capital gain or loss. The
individual tax rate on any gain from the sale of your shares depends on your
marginal tax rate and on how long you have held your shares.
Fund distributions and gains from the sale of your 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.
SHAREHOLDER REPORTS AND CONFIRMATIONS
- --------------------------------------------------------------------------------
As a shareholder, you will be provided annual and semi-annual reports showing
the Fund's portfolio investments and financial information. Account and tax
statements will be mailed to you on an annual basis. You will also receive
confirmations of your purchases into, and redemptions out of, the Fund.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Thee are no financial highlights available for the Fund since the Fund is
commencing operations in 2000.
INVESTMENT ADVISOR
AAA
ALLIED ASSET ADVISORS, INC.
BURR RIDGE, ILLINOIS
DISTRIBUTOR
RAFFERTY CAPITAL MARKETS, INC.
WHITE PLAINS, NEW YORK
INDEPENDENT AUDITORS
DELOITTE & TOUCHE LLP
CHICAGO, ILLINOIS
LEGAL COUNSEL
VEDDER, PRICE, KAUFMAN, & KAMMHOLZ
CHICAGO, ILLINOIS
ADMINISTRATOR, TRANSFER AGENT,
AND FUND ACCOUNTANT
FIRSTAR MUTUAL FUND SERVICES, LLC
MILWAUKEE, WISCONSIN
CUSTODIAN
FIRSTAR BANK, N.A.
CINCINNATI, OHIO
WHERE TO FIND MORE INFORMATION:
You can find more information about the Fund in the following documents:
STATEMENT OF ADDITIONAL INFORMATION (SAI) DATED __________, 2000
The SAI for Class K of the Fund provides more details about the Fund's policies
and management. The Fund's SAI is incorporated by reference into this
Prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
After the Fund has been operating for the appropriate time, annual and
semi-annual reports will be made available. The Fund's annual and semi-annual
reports provide the most recent financial reports and portfolio listings. The
annual report contains a discussion of the market conditions and investment
climate that affected the Fund's performance during the last fiscal year.
You can obtain a free copy of these documents or request other information about
the Fund by calling the Fund at 1-888-FUNDS-85 or by writing to:
DOW JONES ISLAMIC INDEX FUND
C/O FIRSTAR MUTUAL FUND SERVICES, LLC
P.O. BOX 701
MILWAUKEE, WI 53201-0701
You may write to the Securities and Exchange Commission (SEC) Public Reference
Room at the regular mailing address or the e-mail address below and ask them to
mail you information about the Fund, including the SAI. They will charge you a
fee for this duplicating service. You can also visit the SEC Public Reference
Room and copy documents while you are there. For more information about the
operation of the Public Reference Room, call the SEC at the telephone number
below.
PUBLIC REFERENCE SECTION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0102
[email protected]
1-202-942-8090
Reports and other information about the Fund are available on the EDGAR Database
on the SEC's Internet site at HTTP://WWW.SEC.GOV.
1940 Act File No. 811-9821
THE INFORMATION IN THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT COMPLETE AND
MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
STATEMENT OF ADDITIONAL INFORMATION IS NOT AN OFFER TO SELL THESE SECURITIES AND
IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
DOW JONES(SM) ISLAMIC INDEX FUND
A SERIES OF ALLIED ASSET ADVISORS FUNDS
STATEMENT OF ADDITIONAL INFORMATION
__________, 2000
INVESTMENT ADVISOR
AAA
ALLIED ASSET ADVISORS, INC.
745 MCCLINTOCK DRIVE, SUITE 114
BURR RIDGE, IL 60521
(630) 789-9191
This Statement of Additional Information relates to the Dow Jones(SM) Islamic
Index Fund, which is the first mutual fund within the Allied Asset Advisors
Funds family. The SAI is not a prospectus but should be read in conjunction with
the Fund's current Prospectus dated __________, 2000. To obtain the Prospectus,
please visit the Fund's web-site, call 1-888-FUNDS-85 or write to the Fund as
shown below:
REGULAR MAIL OVERNIGHT OR EXPRESS MAIL
- ------------ -------------------------
Dow Jones Islamic Index Fund Dow Jones Islamic Index Fund
c/o Firstar Mutual Fund Services, LLC c/o Firstar Mutual Fund Services, LLC
P.O. Box 701 615 East Michigan Street, 3rd Floor
Milwaukee, WI 53201-0701 Milwaukee, WI 53202
TABLE OF CONTENTS
INVESTMENT RESTRICTIONS........................................................3
INVESTMENT OBJECTIVE AND STRATEGIES............................................4
MORE ABOUT DOW JONES(SM).......................................................4
THE TRUST......................................................................5
MANAGEMENT OF THE FUND.........................................................6
INVESTMENT ADVISOR.............................................................8
CODE OF ETHICS.................................................................9
ADMINISTRATIVE SERVICES........................................................9
DISTRIBUTOR....................................................................9
DISTRIBUTION PLAN..............................................................9
SHAREHOLDER SERVICES AGREEMENT................................................10
PRICING OF SHARES.............................................................10
PURCHASING SHARES.............................................................11
REDEMPTION OF SHARES..........................................................11
BROKERAGE ALLOCATION AND OTHER PRACTICES......................................12
ADDITIONAL INFORMATION ON DISTRIBUTIONS AND TAXES.............................13
PERFORMANCE INFORMATION.......................................................14
AUDITORS......................................................................15
COUNSEL.......................................................................15
FINANCIAL STATEMENTS..........................................................15
INVESTMENT RESTRICTIONS
- --------------------------------------------------------------------------------
FUNDAMENTAL RESTRICTIONS
The Fund has 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:
(1) more than 50% of the outstanding voting securities of the fund; or
(2) 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.
The Fund may not:
1. Make loans except as permitted under the 1940 Act, as amended, and as
interpreted or modified by regulatory authority having jurisdiction, from
time to time.
2. Borrow money, except as permitted under the 1940 Act, as amended, and as
interpreted or modified by regulatory authority having jurisdiction, from
time to time.
3. Concentrate its investments in a particular industry, as that term is used
in the 1940 Act, as amended, and as interpreted or modified by regulatory
authority having jurisdiction, from time to time.
4. Purchase or sell real estate, which term does not include securities of
companies which deal in real estate and or mortgages or investments secured
by real estate, or interests therein, except that the Fund reserves freedom
of action to hold and to sell real estate acquired as a result of the
Fund's ownership of securities.
5. Engage in the business of underwriting securities, except to the extent
that the Fund may be deemed to be an underwriter in connection with the
disposition of portfolio securities.
6. Issue senior securities, except as permitted under the 1940 Act, as
amended, and as interpreted or modified by regulatory authority having
jurisdiction, from time to time.
7. Purchase physical commodities or contracts relating to physical
commodities.
NON-FUNDAMENTAL RESTRICTIONS
As a matter of non-fundamental policy, the Fund currently does not intend to :
1. Borrow money in an amount greater than 5% of its total assets, except for
temporary or emergency purposes;
2. Purchase securities on margin or make short sales;
3. Enter into futures contracts or purchase options thereon ; and
4. Invest more than 15% of its net assets in illiquid securities.
INVESTMENT OBJECTIVE AND STRATEGIES
- --------------------------------------------------------------------------------
The Fund seeks to match the total return of the Dow Jones Islamic Market USA
Index(SM) (the "INDEX"), a diversified compilation of equity securities
considered by Dow Jones' Shari`ah Supervisory Board to be in compliance with
Islamic Shari`ah principles. Because the Fund is a diversified Fund, there is a
possibility that the Fund may be unable to track the composition of the INDEX if
the INDEX becomes non-diversified.
The following discussion supplements the information regarding the investment
objective of the Fund and the policies to be employed to achieve this objective
as set forth above and in the Fund's Prospectus.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase securities
on a when-issued or delayed delivery basis. These transactions are arrangements
in which a fund purchases securities with payment and delivery scheduled for a
future time. The seller's failure to complete these transactions may cause a
fund to miss a price or yield considered advantageous. Settlement dates may be a
month or more after entering into these transactions and the market values of
the securities purchased may vary from the purchase prices. The Fund may dispose
of a commitment prior to settlement if the investment advisor deems it
appropriate to do so. In addition, the Fund may enter into transactions to sell
its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Fund may realize short-term profits or losses upon the sale of such
commitments. These transactions are made to secure what is considered to be an
advantageous price or yield for the Fund. No fees or other expenses, other than
normal transaction costs, are incurred. However, liquid assets of the Fund
sufficient to make payment for the securities to be purchased are segregated on
the Fund's records at the trade date. These assets are marked to market daily
and are maintained until the transaction is settled.
RESTRICTED SECURITIES. Securities that have legal or contractual restrictions on
their resale may be acquired by the Fund. The price paid for these securities,
or received upon resale, may be lower than the price paid or received for
similar securities with a more liquid market. Accordingly, the valuation of
these securities reflects any limitation on their liquidity.
OTHER INVESTMENT COMPANIES. Subject to applicable statutory and regulatory
limitations, the assets of the Fund may be invested in shares of other
investment companies.
PERCENTAGE RESTRICTIONS. If a percentage restriction on investment or
utilization of assets set forth in this Statement of Additional Information or
referred to in the Prospectus is adhered to at the time an investment is made or
assets are so utilized, a later change in percentage resulting from changes in
the value of the portfolio securities is not considered a violation of the
policy.
MORE ABOUT DOW JONES(SM)
- --------------------------------------------------------------------------------
The filters applied in constituting the Dow Jones Islamic Market USA Index(SM)
are:
1. Total debt divided by total assets is equal to or greater than 33%. (Note:
total debt = short term debt + current portion of long-term debt +
long-term debt).
2. Accounts receivables divided by total assets is equal to or greater than
45%. (Note: accounts receivables = current receivables + long-term
receivables).
3. (Non-operating interest income plus impure income) all divided by revenue
is equal to or greater than 5%.
"Dow Jones," "Dow Jones Islamic Market USA Index(SM)" and "DJIM" are service
marks of Dow Jones & Company, Inc. Dow Jones has no relationship to the Fund or
its investment advisor, other than the licensing of the Dow Jones Islamic Market
Index(SM) and its service marks for use in connection with the Fund.
Dow Jones does not sponsor, endorse, sell or promote the Fund; recommend that
any person invest in the Fund or any other securities; have any responsibility
or liability for or make any decisions about the timing, amount or pricing of
the Fund; have any responsibility or liability for the administration,
management or marketing of the Fund; consider the needs of the Fund or the
owners of the Fund in determining, composing or calculating the INDEX or have
any obligation to do so.
Dow Jones will not have any liability in connection with the Fund. Specifically,
Dow Jones does not make any warranty, express or implied, and Dow Jones
disclaims any warranty about (1) the results to be obtained by the Fund, the
owners of the Fund or any other person in connection with the use of the Dow
Jones Islamic Market Index and the data included in the INDEX; (2) the accuracy
or completeness of the INDEX and its data; and (3) the merchantability and the
fitness for a particular purpose or use of the INDEX and its data.
Although Dow Jones uses reasonable efforts to comply with its guidelines
regarding the selection of components in the INDEX, Dow Jones disclaims any
warranty of compliance with Shari`ah Law or other Islamic principles. Dow Jones
will have no liability for any errors, omissions or interruptions in the INDEX
or its data. Under no circumstances will Dow Jones be liable for any lost
profits or indirect, punitive, special or consequential damages or losses, even
if Dow Jones knows that they might occur. The licensing agreement between the
Fund's investment advisor and Dow Jones is solely for their benefit and not for
the benefit of the owners of the Fund or any other third parties.
THE TRUST
- --------------------------------------------------------------------------------
Allied Asset Advisors Funds (the "Trust"), an open-end management
investment company, was organized as a Delaware business trust on January 14,
2000. The Trust currently offers one series of shares to investors, Dow Jones
(SM) Islamic Index Fund (the "Fund") which consists of two classes: Classes K
and M. The Fund is a diversified series and has its own investment objective and
policies. The Trust may start another series and offer shares of a new fund
under the Trust at any time. The Fund's registered office in Delaware is The
Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801 and
its principal office is at 745 McClintock Drive, Suite 114, Burr Ridge, Illinois
60521.
Shares, when issued, will be fully paid and nonassessable. Shares of
the Fund have equal dividend, voting, liquidation and redemption rights, and are
voted in the aggregate and not by class except in matters where a separate vote
is required or permitted by the Investment Company Act of 1940 (the "1940 Act")
or when the matter affects only the interest of a particular class. The
beneficial interest of the Trust is divided into an unlimited number of shares,
with no par value. When matters are submitted to shareholders for a vote, each
shareholder is entitled to one vote for each full share owned and fractional
votes for fractional shares owned. The Trust does not normally hold annual
meetings of shareholders. The Trustees shall promptly call and give notice of a
meeting of shareholders for the purpose of voting upon removal of any Trustee
when requested to do so in writing by shareholders holding 10% or more of the
Trust's outstanding shares. The Trust will comply with the provisions of
Section 16(c) of the 1940 Act in order to facilitate communications among
shareholders. Shares will be maintained in open accounts on the books of the
Transfer Agent, and certificates for shares will generally not be issued, except
for special requests.
Each share of the Fund represents an equal proportionate interest in
the assets and liabilities belonging to that Fund with every other share of that
Fund and is entitled to such dividends and distributions out of the income
belonging to the Fund as are declared by the Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any Fund into a greater or lesser number of shares of that Fund so long as the
proportionate beneficial interests in the assets belonging to that Fund and the
rights of shares of any other Fund are in no way affected. In case of any
liquidation of a Fund, the holders of shares of the Fund being liquidated will
be entitled to receive as a class a distribution out of the assets, net of the
liabilities, belonging to that Fund. Expenses attributable to any Fund are borne
by that Fund. Likewise, expenses attributable to any class are borne
specifically by that class. Class M shares of the Fund are subject to
Distribution (Rule 12b-1) and Shareholder Servicing expenses, which are further
discussed in the Class M Prospectus and later in this SAI. Class K shares of the
Fund are not subject to such Distribution and Shareholder Servicing expenses.
Class K shares are discussed in the Class K Prospectus and Statement of
Additional Information.
Any general expenses of the Trust not readily identifiable as belonging
to a particular Fund are allocated by or under the direction of the Trustees in
such manner as the Trustees allocate such expenses on the basis of relative net
assets or number of shareholders. No shareholder is liable to further calls or
to assessment by the Trust without his or her express consent.
The assets of the Fund received for the issue or sale of its shares,
and all income, earnings, profits and proceeds thereof, subject only to the
rights of creditors, shall constitute the underlying assets of the Fund. In the
event of the dissolution or liquidation of the Fund, the holders of shares of
the Fund are entitled to share pro rata in the net assets of the Fund available
for distribution to shareholders.
If they deem it advisable and in the best interests of shareholders,
the Trustees may create additional series of shares, each of which represents
interests in a separate portfolio of investments and is subject to separate
liabilities, and may create multiple classes of shares of such series, which may
differ from each other as to expenses and dividends. If additional series or
classes of shares are created, shares of each series or class are entitled to
vote as a series or class only to the extent required or permitted by the 1940
Act as permitted by the Trustees. Upon the Trust's liquidation, all shareholders
of a series would share pro-rata in the net assets of such series available for
distribution to shareholders of the series, but, as shareholders of such series,
would not be entitled to share in the distribution of assets belonging to any
other series.
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
The Trust's Board of Trustees governs the Trust. The Board of Trustees consists
of six individuals, three of whom are not "interested persons" of the Trust as
that term is defined in Section 2(a)(19) of the 1940 Act. The Trustees meet
throughout the year to oversee the Trust's activities, review contractual
arrangements with companies that provide services to the Fund, and decide upon
matters of general policy with respect to the Fund. The names and business
addresses of the Trustees and officers of the Trust, together with information
as to their principal occupations during the past five years, are listed below:
<TABLE>
<CAPTION>
- --------------------------------------- ---------- -------------------- ----------------------------------------------
NAME AND ADDRESS AGE POSITION/OFFICE PRINCIPAL OCCUPATIONS DURING THE PAST FIVE
WITH THE TRUST YEARS
- --------------------------------------- ---------- -------------------- ----------------------------------------------
<S> <C> <C> <C>
*Bassam Osman 50 Trustee, 1980 - present Bassam Osman, M.D., SC LTD,
745 Mcclintock Drive, Suite 114 Chairperson and Doctor
Burr Ridge, IL 60521 President
- --------------------------------------- ---------- -------------------- ----------------------------------------------
*Muzamil Siddiqi 63 Trustee 3/84 - present North American Islamic Trust,
745 Mcclintock Drive, Suite 114 Inc., General Manager
Burr Ridge, IL 60521
- --------------------------------------- ---------- -------------------- ----------------------------------------------
Abdalla Idris Ali 51 Disinterested 8/98-present - Director, the Center of
745 Mcclintock Drive, Suite 114 Trustee Islamic Studies, Kansas City, MO; 1992 - 1998
Burr Ridge, IL 60521 Principal, ISNA Islamic School, Toronto,
Ontario, Canada
- --------------------------------------- ---------- -------------------- ----------------------------------------------
Jamal Said 43 Disinterested 1990 - present Religious Director, Mosque
745 Mcclintock Drive, Suite 114 Trustee Foundation, Bridgeview, IL
Burr Ridge, IL 60521
- --------------------------------------- ---------- -------------------- ----------------------------------------------
Mohammed Kaiseruddin 56 Disinterested Nuclear Engineer, Sargent & Lundy (1973 -
745 Mcclintock Drive, Suite 114 Trustee present)
Burr Ridge, IL 60521
- --------------------------------------- ---------- -------------------- ----------------------------------------------
Mazen Asbahi 26 Disinterested Student - Summer `98, Summer Associate,
745 Mcclintock Drive, Suite 114 Trustee Chicago Corporation Counsel; Summer '99,
Burr Ridge, IL 60521 Summer Associate, Kirkland & Ellis
- --------------------------------------- ---------- -------------------- ----------------------------------------------
Omar Haydar 26 Secretary and 4/2000 - present Mutual Fund Coordinator,
745 Mcclintock Drive, Suite 114 Treasurer Allied Asset Advisors
Burr Ridge, IL 60521 6/99 - 4/2000 Information Technology
Consultant, Teksystems/Skidmore Owings &
Merrill LLP 5/98 - 7/98 - Law Clerk, Goodman
& Witanen 6/96 - 8/96 - Program Director,
English Language Service Summer ISNA
Program 8/95 - present - Law Student,
Chicago Kent College of Law
- --------------------------------------- ---------- -------------------- ----------------------------------------------
Mujeeb Cheema 53 Vice President 1/98 - present Managing Director at Hawkins
745 Mcclintock Drive, Suite 114 International, Inc.; 2/80 - 12/97 President
Burr Ridge, IL 60521 of International at Hawkins Oil & Gas, Inc.
- --------------------------------------- ---------- -------------------- ----------------------------------------------
</TABLE>
* This trustee is deemed to be an "interested person" of the Trust as that term
is defined in Section 2(a)(19) of the 1940 Act.
TRUSTEE COMPENSATION. The trustees serve without compensation, but will be
reimbursed for expenses incurred in connection with attendance at Board
meetings. The table below details the amount of compensation estimated to be
received by the Trustees from the Trust for the fiscal year ending ________,
2000. Presently, none of the executive officers receive compensation from the
Trust.
<TABLE>
<CAPTION>
- ---------------------------- ----------------- ----------------------- ---------------------- ------------------------
NAME AND POSITION AGGREGATE PENSION OR RETIREMENT ESTIMATED ANNUAL TOTAL COMPENSATION
COMPENSATION BENEFITS ACCRUED AS BENEFITS UPON FROM TRUST AND FUND
FROM TRUST PART OF TRUST EXPENSES RETIREMENT COMPLEX PAID TO
TRUSTEES
- ---------------------------- ----------------- ----------------------- ---------------------- ------------------------
<S> <C> <C> <C> <C>
*Bassam Osman None None None None
*Muzamil Siddiqi None None None None
Abdalla Idris Ali None None None None
Jamal Said None None None None
Mohammed Kaiseruddin None None None None
Mazen Asbahi None None None None
Omar Haydar None None None None
Mujeeb Cheema None None None None
- ---------------------------- ----------------- ----------------------- ---------------------- ------------------------
</TABLE>
CONTROL PERSONS, PRINCIPAL HOLDERS OF SECURITIES AND MANAGEMENT OWNERSHIP. As of
May 16, 2000, which was prior to the public offering of the Fund's shares, North
American Islamic Trust was the holder of 100% of the Fund's shares, and there
were otherwise no control persons or principal holders of securities of the
Fund. Control persons are persons deemed to control the Fund because they own
beneficially over 25% of the outstanding equity securities. Principal holders
are persons that own beneficially 5% or more of the Fund's outstanding equity
securities.
INVESTMENT ADVISOR
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Allied Asset Advisors, Inc. (defined as "AAA" or "Investment Advisor") is a
Delaware corporation that serves as an investment manager to the Fund pursuant
to an Investment Advisory Agreement dated as of [DATE]. AAA is a wholly owned
subsidiary of The North American Islamic Trust ("NAIT"). NAIT is a non-profit
entity that qualifies as a tax-exempt organization under Section 501(c)(3) of
the Internal Revenue Code. The purpose of NAIT is to serve Islams and Muslims.
This Investment Management Agreement is effective for an initial term of two
years and will continue on a year-to-year basis thereafter, provided that
specific approval is voted at least annually by the Board of Trustees of the
Trust or by the vote of the holders of a majority of the outstanding voting
securities of the Fund. In either event, it must also be approved by a majority
of the Trustees of the Trust who are neither parties to the Agreement nor
interested persons of any such party as defined in the 1940 Act at a meeting
called for the purpose of voting on such approval. The Agreement may be
terminated upon 60 days notice, without the payment of any penalty, by vote of a
majority of the outstanding voting securities of the Fund.
For the services provided by AAA under the Agreement, the Trust, on behalf of
the Fund, has agreed to pay to AAA an annual fee of 0.75% on the first $500
million in assets, 0.65% on the next $5 billion in assets and 0.50% on the
amount of assets over $5.5 billion. All fees are computed on the average daily
closing net asset value of the Fund and are payable monthly. The fee is higher
than the fee paid by most other index mutual funds.
CODE OF ETHICS
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The Trust, the Investment Advisor and the Distributor have adopted a written
Code of Ethics that governs the personal securities transactions of their board
members, officers and employees who may have access to current trading
information of the Trust. The Code permits such persons to invest in securities
for their personal accounts including securities that may be purchased or held
by the Trust. The Code restricts and limits, absent prior approval, certain
types of transactions and includes reporting and other obligations to monitor
personal transactions.
ADMINISTRATIVE SERVICES
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ADMINISTRATOR, FUND ACCOUNTANT, TRANSFER AGENT
Firstar Mutual Fund Services, LLC, a subsidiary of Firstar Bank, N.A., provides
administrative personnel and services (including blue-sky services) to the Fund.
Administrative services include, but are not limited to, providing office space,
equipment, telephone facilities, various personnel, including clerical and
supervisory, and computers, as is necessary or beneficial to provide compliance
services to the Fund. Firstar Mutual Fund Services, LLC also will serve as fund
accountant and transfer agent under separate agreements.
CUSTODIAN
Firstar Bank, N.A. is custodian for the securities and cash of the Fund. Under
the Custodian Agreement, Firstar Bank, N.A. holds the Fund's portfolio
securities in safekeeping and keeps all necessary records and documents relating
to its duties.
DISTRIBUTOR
- --------------------------------------------------------------------------------
Rafferty Capital Markets, Inc. (the "Distributor") serves as the principal
underwriter and national distributor for the shares of the Fund pursuant to a
Distribution Agreement with the Trust dated as of ____________, 2000 (the
"Distribution Agreement"). The Distributor is registered as a broker-dealer
under the Securities Exchange Act of 1934 and each state's securities laws and
is a member of the NASD. The offering of the Fund's shares is continuous. The
Distribution Agreement provides that the Distributor, as agent in connection
with the distribution of Fund shares, will use its best efforts to distribute
the Fund's shares.
DISTRIBUTION PLAN
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The Board of Trustees has adopted a Distribution Plan for Class M shares of the
Fund, in accordance with Rule 12b-1 (the "Plan") under the 1940 Act. The Fund is
authorized under the Plan to use the assets of the Fund to compensate the
Distributor or others for certain activities relating to the distribution of
shares of the Fund to investors and the provision of shareholder services. The
maximum amount payable under the Plan is 0.75% of the Fund's average net assets
on an annual basis.
The NASD's maximum sales charge rule relating to mutual fund shares establishes
limits on all types of sales charges, whether front-end, deferred or
asset-based. This rule may operate to limit the aggregate distribution fees to
which shareholders may be subject to under the terms of the Plan.
The Plan authorizes the use of Fund assets to pay the Distributor, banks,
broker/dealers and other institutions that provide distribution assistance
and/or shareholder services such as:
|X| printing and distributing prospectuses to persons other than Fund
shareholders,
|X| printing and distributing advertising and sales literature and reports to
shareholders used in connection with selling shares of the Fund, and
|X| furnishing personnel and communications equipment to service shareholder
accounts and prospective shareholder inquiries.
The Plan requires the Fund to prepare and furnish to the Trustees for their
review, at least quarterly, written reports complying with the requirements of
the Rule and setting out the amounts expended under the Plan and the purposes
for which those expenditures were made. The Plan provides that so long as it is
in effect the selection and nomination of Trustees who are not interested
persons of the Trust will be committed to the discretion of the Trustees then in
office who are not interested persons of the Trust.
The Plan will continue in effect only so long as its continuance is specifically
approved at least annually by a majority vote of both all the Trustees and those
Trustees who are not interested persons of the Trust and who have no direct or
indirect financial interest in the operation of the Plan or in any agreements
related to the Plan, cast in person at a meeting called for the purpose of
voting on the Plan. The Plan for the Fund may be terminated at any time by a
majority vote of the Trustees who are not interested persons of the Trust and
who have no direct or indirect financial interest in the operations of the Plan
or in any agreement related to the Plan or by vote of a majority of the
outstanding voting securities of the Fund.
The Plan may not be amended so as to materially increase the amount of the
distribution fees for the Fund unless the amendment is approved by a vote of at
least a majority of the outstanding voting securities of the Fund. In addition,
no material amendment may be made unless approved by the Trustees in the manner
described above for Trustee approval of the Plan.
SHAREHOLDER SERVICES AGREEMENT
- --------------------------------------------------------------------------------
The Board of Trustees has approved a Shareholder Servicing Agreement between the
Fund (on behalf of Class M shares) and the Distributor. Under the Shareholder
Servicing Agreement, the Distributor will provide information and administrative
services for the benefit of Class M shares. The Distributor will appoint various
broker-dealer firms and other service or administrative firms to provide related
services and facilities for Class M shareholders. The Shareholder Services
Agreement provides that the Trust will pay the Distributor a fee at a rate
sufficient to reimburse the Distributor for service fee payments made by the
Distributor to broker-dealer firms and other financial services firms retained
by the Distributor. The Distributor will pay the firms a service fee at an
annual rate of up to 0.25% of net assets of Class M shares.
PRICING OF SHARES
- --------------------------------------------------------------------------------
Shares of the Fund are sold on a continual basis at the net asset value per
share next computed following acceptance of an order by the Fund. The Fund's net
asset value per share for the purpose of pricing purchase and redemption orders
is determined at the close of normal trading (normally 4:00 p.m. Eastern Time)
on each day the New York Stock Exchange is open for trading. The NYSE is closed
on the following holidays: New Year's Day, Martin Luther King, Jr.'s Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
Securities listed on a U.S. securities exchange or NASDAQ for which market
quotations are readily available are valued at the last quoted sale price on the
day the valuation is made. Price information on listed securities is taken from
the exchange where the security is primarily traded. Options, futures, unlisted
U.S. securities and listed U.S. securities not traded on the valuation date for
which market quotations are readily available are valued at the most recent
quoted bid price.
PURCHASING SHARES
- --------------------------------------------------------------------------------
Shares of the Fund are sold in a continuous offering and may be purchased on any
business day through authorized investment dealers or directly from the Fund.
STOCK CERTIFICATES AND CONFIRMATIONS. The Fund does not generally issue stock
certificates representing shares purchased. Confirmations of the opening of an
account and of all subsequent transactions in the account are forwarded by the
Fund to the shareholder's address of record. If a shareholder needs stock
certificates, the Fund can issue them under special requests.
SPECIAL INCENTIVE PROGRAMS. At various times the Fund may implement programs
under which a dealer's sales force may be eligible to win nominal awards for
certain sales efforts or recognition program conforming to criteria established
by the Fund, or participate in sales programs sponsored by the Fund. In
addition, AAA or Distributor, in their discretion may from time to time,
pursuant to objective criteria, sponsor programs designed to reward selected
dealers for certain services or activities that are primarily intended to result
in the sale of shares of the Fund. These programs will not change the price you
pay for your shares or the amount that the Fund will receive from the sale.
REDEMPTION OF SHARES
- --------------------------------------------------------------------------------
SIGNATURE GUARANTEES. If a shareholder requests that redemption proceeds be sent
to an address other than that on record with the Fund or proceeds be made
payable to someone other than to the shareholder(s) of record, the written
request must have signatures guaranteed by:
o a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund, which is administered by the Federal Deposit Insurance Company
("FDIC");
o a member of the New York, Boston, American, Midwest, or Pacific Stock
Exchange;
o a savings bank or savings association whose deposits are insured by the
Savings Association Insurance Fund, which is administered by the FDIC; or
o any other "eligible guarantor institution" as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantor program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
ADDITIONAL DOCUMENTATION. Additional documents are required for certain types of
shareholders, such as corporations, partnerships, executors, trustees,
administrators, or guardians. The Fund's Transfer Agent requires documents from
entities to identify individuals possessing authority to redeem shares from the
Fund. The documentation may include corporate resolutions, partnership
agreements, trust instruments or plans that give such authority to the
individual.
BROKERAGE ALLOCATION AND OTHER PRACTICES
- --------------------------------------------------------------------------------
AAA places the Fund's portfolio securities transactions, taking into account the
costs, promptness of executions and other qualitative considerations. There is
no pre-existing commitment to place orders with any broker, dealer or member of
an exchange. AAA evaluates a wide range of criteria in placing the Fund's
portfolio securities transactions, including the broker's commission rate,
execution capability, positioning and distribution capabilities, information in
regard to the availability of securities, trading patterns, statistical or
factual information, opinions pertaining to trading strategy, back office
efficiency, ability to handle difficult trades, financial stability, and prior
performance in servicing AAA and its clients. In transactions on securities
executed in the over-the-counter market, purchases and sales are transacted
directly with dealers on a principal basis.
AAA, when effecting purchases and sales of portfolio securities for the account
of the Fund, will seek execution of trades either (1) at the most favorable and
competitive rate of commission charged by any broker, dealer or member of an
exchange, or (2) at a higher rate of commission charges, if reasonable, in
relation to brokerage and research services provided to the Fund or AAA by such
member, broker, or dealer. Such services may include, but are not limited to,
any one or more of the following: information as to the availability of
securities for purchase or sale, statistical or factual information, or opinions
pertaining to investments. AAA may use research and services provided by brokers
and dealers in servicing all its clients, including the Fund, and AAA will not
necessarily use all such services in connection with the Fund. In accordance
with the provisions of Section 28(e) of the 1934 Act, AAA may from time-to-time
receive services and products which serve both research and non-research
functions. In such event, AAA makes a good faith determination of the
anticipated research and non-research use of the product or service and
allocates brokerage only with respect to the research component. Brokerage may
also be allocated to dealers in consideration of the Fund's share distribution
but only when execution and price are comparable to that offered by other
brokers.
If AAA provides investment advisory services to individuals and other
institutional clients, there may be occasions on which other investment advisory
clients advised by AAA may also invest in the same securities as the Fund. When
these clients buy or sell the same securities at substantially the same time,
the AAA may average the transactions as to price and allocate the amount of
available investments in a manner, which it believes to be equitable to each
client, including the Fund. On the other hand, to the extent permitted by law,
AAA may aggregate the securities to be sold or purchased for the Fund with those
to be sold or purchased for other clients managed by it in order to obtain lower
brokerage commissions, if any.
Because of the Fund's indexing investment strategy, it generally only sells
securities to generate cash to satisfy redemption requests, or to rebalance its
portfolio to track the target index. As a result, the Fund's portfolio turnover
rate is expected to be low. The portfolio turnover rate is calculated by
dividing the lesser of the Fund's annual sales or purchases of portfolio
securities (exclusive of purchases or sales of securities whose maturities at
the time of acquisition were one year or less) by the monthly average value of
the securities in the portfolio during the year.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. and subject to seeking the most favorable combination
of net price and execution available, the Advisor may consider sales of shares
of the Fund as a factor in the selection of broker-dealers to execute portfolio
transactions for the Fund.
ADDITIONAL INFORMATION ON DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
DISTRIBUTIONS
A shareholder will automatically receive all income dividends and capital gain
distributions in additional full and fractional shares of the Fund at their net
asset value as of the date of payment unless the shareholder elects to receive
such dividends or distributions in cash. The reinvestment date normally precedes
the payment date by about seven days although the exact timing is subject to
change. Shareholders will receive a confirmation of each new transaction in
their account. The Trust will confirm all account activity, including the
payment of dividend and capital gain distributions and transactions made as a
result of a Systematic Withdrawal Plan or an Automatic Investment Plan.
Shareholders may rely on these statements in lieu of stock certificates.
TAXES
DISTRIBUTIONS OF NET INVESTMENT INCOME. The Fund receives income generally in
the form of dividends on its investments. This income, less expenses incurred in
the operation of the Fund, constitutes the Fund's net investment income from
which dividends may be paid to you. Any distributions by the Fund from such
income will be taxable to you as ordinary income, whether you take them in cash
or in additional shares.
DISTRIBUTIONS OF CAPITAL GAINS. The Fund may derive capital gains and losses in
connection with sales or other dispositions of its portfolio securities.
Distributions from net short-term capital gains will be taxable to you as
ordinary income. Distributions from net long-term capital gains will be taxable
to you as long-term capital gain, regardless of how long you have held your
shares in the Fund. Any net capital gains realized by the 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.
INFORMATION ON THE TAX CHARACTER OF DISTRIBUTIONS. The Fund 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, the 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. The Fund intends to
elect 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 a regulated investment company, the Fund generally pays no federal income tax
on the income and gains it distributes to you. The Board reserves the right not
to maintain the qualification of the Fund as a regulated investment company if
it determines such course of action to be beneficial to 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 the Fund's earnings and profits.
EXCISE TAX DISTRIBUTION REQUIREMENTS. To avoid federal excise taxes, the
Internal Revenue Code requires the 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. The 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. By law, redemptions and exchanges of Fund shares are
taxable transactions for federal and state income tax purposes. If you redeem
your Fund shares, the IRS will require that you report a gain or loss on your
redemption or exchange. If you hold your shares as a capital asset, the 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. 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.
By law, 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
the Fund (through reinvestment of dividends or otherwise) within 30 days before
or after your share redemption. Any loss disallowed under these rules will be
added to your tax basis in the new shares you buy.
DIVIDENDS-RECEIVED DEDUCTION FOR CORPORATIONS. If you are a corporate
shareholder, you should note that it is expected that a portion of the dividends
paid by the Fund will qualify for the dividends-received deduction. In some
circumstances, you will 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 the Fund as eligible for such treatment. All dividends
(including the deducted portion) must be included in your alternative minimum
taxable income calculation.
INVESTMENT IN COMPLEX SECURITIES. The Fund may invest in complex securities.
These investments may be subject to numerous special and complex tax rules.
These rules could affect whether gains and losses recognized by the Fund are
treated as ordinary income or capital gain, accelerate the recognition of income
to the Fund and/or defer the Fund's ability to recognize losses. In turn, these
rules may affect the amount, timing or character of the income distributed to
you by the Fund.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
TOTAL RETURN. Average annual total return quotations used in the Fund's
advertising and promotional materials are calculated according to the following
formula:
P(1 +T)n = ERV
where P equals a hypothetical initial payment of $1,000; T equals average annual
total return; n equals the number of years; and ERV equals the ending redeemable
value at the end of the period of a hypothetical $1,000 payment made at the
beginning of the period.
Under the foregoing formula, the time periods used in advertising will be based
on rolling calendar quarters, updated to the last day of the most recent quarter
prior to submission of the advertising for publication. Average annual total
return, or "T" in the above formula, is computed by finding the average annual
compounded rates of return over the period that would equate the initial amount
invested to the ending redeemable value. Average annual total return assumes the
reinvestment of all dividends and distributions.
CUMULATIVE TOTAL RETURN. Cumulative total return represents the simple change in
value of an investment over a stated period and may be quoted as a percentage or
as a dollar amount. Total returns may be broken down into their components of
income and capital (including capital gains and changes in share price) in order
to illustrate the relationship between these factors and their contributions to
total return.
OTHER INFORMATION. The Fund's performance data quoted in advertising and other
promotional materials represents past performance and is not intended to predict
or indicate future results. The return and principal value of an investment in a
Fund will fluctuate, and an investor's redemption proceeds may be more or less
than the original investment amount.
If permitted by applicable law, the Fund may be compared to data prepared by
Lipper Analytical Services, Inc., CDA Investment Technologies, Inc.,
Morningstar, Inc., the Donoghue Organization, Inc. or other independent services
which monitor the performance of investment companies, and may be quoted in
advertising in terms of its ranking in each applicable universe. In addition,
the Fund may use performance data reported in financial and industry
publications, including Barron's, Business Week, Forbes, Fortune, Investor's
Daily, IBC/Donoghue's Money Fund Report, Money Magazine, The Wall Street
Journal, USA Today and others.
In addition to the INDEX, the Fund may from time to time use the following
unmanaged indices for performance comparison purposes:
o S&P 500 - The S&P 500 is an index of 500 stocks designed to track the
overall equity market's industry weightings. Most, but not all, large
capitalization stocks are in the index. There are also some small
capitalization names in the index. The list is maintained by Standard &
Poor's Corporation. It is market capitalization weighted. There are
always 500 issuers in the S&P 500. Changes are made by Standard &
Poor's as needed.
o Russell 2000 - The Russell 2000 is composed of the 2,000 smallest stocks in
the Russell 3000, a market value weighted index of the 3,000 largest U. S.
publicly traded companies.
o The NASDAQ Composite Index - The NASDAQ Composite Index is a broad-based
market capitalization-weighted index of all NASDAQ stocks.
AUDITORS
- --------------------------------------------------------------------------------
Deloitte & Touche LLP, Two Prudential Plaza, 180 North Stetson Avenue, Chicago,
Illinois, 60601-6779, serves as the Fund's independent auditors, whose services
include auditing the Fund's financial statements and the performance of
related tax services.
COUNSEL
- --------------------------------------------------------------------------------
Vedder, Price, Kaufman, & Kammholz, 222 North LaSalle Street, Chicago, Illinois
60601-1003, is counsel for the Fund.
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The Fund has not commenced operations to date therefore no financial highlights
are available for the Fund.
THE INFORMATION IN THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT COMPLETE AND
MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
STATEMENT OF ADDITIONAL INFORMATION IS NOT AN OFFER TO SELL THESE SECURITIES AND
IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
DOW JONES(SM) ISLAMIC INDEX FUND
A SERIES OF ALLIED ASSET ADVISORS FUNDS
STATEMENT OF ADDITIONAL INFORMATION
__________, 2000
INVESTMENT ADVISOR
AAA
ALLIED ASSET ADVISORS, INC.
745 MCCLINTOCK DRIVE, SUITE 114
BURR RIDGE, IL 60521
(630) 789-9191
This Statement of Additional Information relates to the Dow Jones(SM) Islamic
Index Fund, which is the first mutual fund within the Allied Asset Advisors
Funds family. The SAI is not a prospectus but should be read in conjunction with
the Fund's current Prospectus dated __________, 2000. To obtain the Prospectus,
please visit the Fund's web-site, call 1-888-FUNDS-85 or write to the Fund as
shown below:
REGULAR MAIL OVERNIGHT OR EXPRESS MAIL
- ------------ -------------------------
Dow Jones Islamic Index Fund Dow Jones Islamic Index Fund
c/o Firstar Mutual Fund Services, LLC c/o Firstar Mutual Fund Services, LLC
P.O. Box 701 615 East Michigan Street, 3rd Floor
Milwaukee, WI 53201-0701 Milwaukee, WI 53202
TABLE OF CONTENTS
INVESTMENT RESTRICTIONS........................................................3
INVESTMENT OBJECTIVE AND STRATEGIES............................................4
MORE ABOUT DOW JONES(SM).......................................................4
THE TRUST......................................................................5
MANAGEMENT OF THE FUND.........................................................6
INVESTMENT ADVISOR.............................................................8
CODE OF ETHICS.................................................................8
ADMINISTRATIVE SERVICES........................................................8
DISTRIBUTOR....................................................................9
PRICING OF SHARES..............................................................9
PURCHASING SHARES..............................................................9
REDEMPTION OF SHARES..........................................................10
BROKERAGE ALLOCATION AND OTHER PRACTICES......................................10
ADDITIONAL INFORMATION ON DISTRIBUTIONS AND TAXES.............................11
PERFORMANCE INFORMATION.......................................................13
AUDITORS......................................................................14
COUNSEL.......................................................................14
FINANCIAL STATEMENTS..........................................................14
INVESTMENT RESTRICTIONS
- --------------------------------------------------------------------------------
FUNDAMENTAL RESTRICTIONS
The Fund has 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:
(1) more than 50% of the outstanding voting securities of the fund; or
(2) 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.
The Fund may not:
1. Make loans except as permitted under the 1940 Act, as amended, and as
interpreted or modified by regulatory authority having jurisdiction, from
time to time.
2. Borrow money, except as permitted under the 1940 Act, as amended, and as
interpreted or modified by regulatory authority having jurisdiction, from
time to time.
3. Concentrate its investments in a particular industry, as that term is used
in the 1940 Act, as amended, and as interpreted or modified by regulatory
authority having jurisdiction, from time to time.
4. Purchase or sell real estate, which term does not include securities of
companies which deal in real estate and or mortgages or investments secured
by real estate, or interests therein, except that the Fund reserves freedom
of action to hold and to sell real estate acquired as a result of the
Fund's ownership of securities.
5. Engage in the business of underwriting securities, except to the extent
that the Fund may be deemed to be an underwriter in connection with the
disposition of portfolio securities.
6. Issue senior securities, except as permitted under the 1940 Act, as
amended, and as interpreted or modified by regulatory authority having
jurisdiction, from time to time.
7. Purchase physical commodities or contracts relating to physical
commodities.
NON-FUNDAMENTAL RESTRICTIONS
As a matter of non-fundamental policy, the Fund currently does not intend to :
1. Borrow money in an amount greater than 5% of its total assets, except for
temporary or emergency purposes;
2. Purchase securities on margin or make short sales;
3. Enter into futures contracts or purchase options thereon; and
4. Invest more than 15% of its net assets in illiquid securities.
INVESTMENT OBJECTIVE AND STRATEGIES
- --------------------------------------------------------------------------------
The Fund seeks to match the total return of the Dow Jones Islamic Market USA
Index(SM) (the "INDEX"), a diversified compilation of equity securities
considered by Dow Jones' Shari'ah Supervisory Board to be in compliance with
Islamic Shari'ah principles. Because the Fund is a diversified Fund, there is a
possibility that the Fund may be unable to track the composition of the INDEX if
the INDEX becomes non-diversified.
The following discussion supplements the information regarding the investment
objective of the Fund and the policies to be employed to achieve this objective
as set forth above and in the Fund's Prospectus.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase securities
on a when-issued or delayed delivery basis. These transactions are arrangements
in which a fund purchases securities with payment and delivery scheduled for a
future time. The seller's failure to complete these transactions may cause a
fund to miss a price or yield considered advantageous. Settlement dates may be a
month or more after entering into these transactions and the market values of
the securities purchased may vary from the purchase prices. The Fund may dispose
of a commitment prior to settlement if the investment advisor deems it
appropriate to do so. In addition, the Fund may enter into transactions to sell
its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Fund may realize short-term profits or losses upon the sale of such
commitments. These transactions are made to secure what is considered to be an
advantageous price or yield for the Fund. No fees or other expenses, other than
normal transaction costs, are incurred. However, liquid assets of the Fund
sufficient to make payment for the securities to be purchased are segregated on
the Fund's records at the trade date. These assets are marked to market daily
and are maintained until the transaction is settled.
RESTRICTED SECURITIES. Securities that have legal or contractual restrictions on
their resale may be acquired by the Fund. The price paid for these securities,
or received upon resale, may be lower than the price paid or received for
similar securities with a more liquid market. Accordingly, the valuation of
these securities reflects any limitation on their liquidity.
OTHER INVESTMENT COMPANIES. Subject to applicable statutory and regulatory
limitations, the assets of the Fund may be invested in shares of other
investment companies.
PERCENTAGE RESTRICTIONS. If a percentage restriction on investment or
utilization of assets set forth in this Statement of Additional Information or
referred to in the Prospectus is adhered to at the time an investment is made or
assets are so utilized, a later change in percentage resulting from changes in
the value of the portfolio securities is not considered a violation of the
policy.
MORE ABOUT DOW JONES(SM)
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The filters applied in constituting the Dow Jones Islamic Market USA Index(SM)
are:
1. Total debt divided by total assets is equal to or greater than 33%. (Note:
total debt = short term debt + current portion of long-term debt +
long-term debt).
2. Accounts receivables divided by total assets is equal to or greater than
45%. (Note: accounts receivables = current receivables + long-term
receivables).
3. (Non-operating interest income plus impure income) all divided by revenue
is equal to or greater than 5%.
"Dow Jones," "Dow Jones Islamic Market USA Index(SM)" and "DJIM" are service
marks of Dow Jones & Company, Inc. Dow Jones has no relationship to the Fund or
its investment advisor, other than the licensing of the Dow Jones Islamic Market
Index(SM) and its service marks for use in connection with the Fund.
Dow Jones does not sponsor, endorse, sell or promote the Fund; recommend that
any person invest in the Fund or any other securities; have any responsibility
or liability for or make any decisions about the timing, amount or pricing of
the Fund; have any responsibility or liability for the administration,
management or marketing of the Fund; consider the needs of the Fund or the
owners of the Fund in determining, composing or calculating the INDEX or have
any obligation to do so.
Dow Jones will not have any liability in connection with the Fund. Specifically,
Dow Jones does not make any warranty, express or implied, and Dow Jones
disclaims any warranty about: (1) the results to be obtained by the Fund, the
owners of the Fund or any other person in connection with the use of the Dow
Jones Islamic Market Index and the data included in the INDEX; (2) the accuracy
or completeness of the INDEX and its data; and (3) the merchantability and the
fitness for a particular purpose or use of the INDEX and its data.
Although Dow Jones uses reasonable efforts to comply with its guidelines
regarding the selection of components in the INDEX, Dow Jones disclaims any
warranty of compliance with Shari'ah Law or other Islamic principles. Dow Jones
will have no liability for any errors, omissions or interruptions in the INDEX
or its data. Under no circumstances will Dow Jones be liable for any lost
profits or indirect, punitive, special or consequential damages or losses, even
if Dow Jones knows that they might occur. The licensing agreement between the
Fund's investment advisor and Dow Jones is solely for their benefit and not for
the benefit of the owners of the Fund or any other third parties.
THE TRUST
- --------------------------------------------------------------------------------
Allied Asset Advisors Funds (the "Trust"), an open-end management
investment company, was organized as a Delaware business trust on January 14,
2000. The Trust currently offers one series of shares to investors, Dow
Jones(SM) Islamic Index Fund (the "Fund") which consists of two classes: Classes
K and M. The Fund is a diversified series and has its own investment objective
and policies. The Trust may start another series and offer shares of a new fund
under the Trust at any time. The Fund's registered office in Delaware is The
Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801 and
its principal office is at 745 McClintock Drive, Suite 114, Burr Ridge, Illinois
60521.
Shares, when issued, will be fully paid and nonassessable. Shares of
the Fund have equal dividend, voting, liquidation and redemption rights, and are
voted in the aggregate and not by class except in matters where a separate vote
is required by the Investment Company Act of 1940 (the "1940 Act") or when the
matter affects only the interest of a particular class. The beneficial interest
of the Trust is divided into an unlimited number of shares, with no par value.
When matters are submitted to shareholders for a vote, each shareholder is
entitled to one vote for each full share owned and fractional votes for
fractional shares owned. The Trust does not normally hold annual meetings of
shareholders. The Trustees shall promptly call and give notice of a meeting of
shareholders for the purpose of voting upon removal of any Trustee when
requested to do so in writing by shareholders holding 10% or more of the Trust's
outstanding shares. The Trust will comply with the provisions of Section 16(c)
of the 1940 Act in order to facilitate communications among shareholders. Shares
will be maintained in open accounts on the books of the Transfer Agent, and
certificates for shares will generally not be issued, except for special
requests.
Each share of the Fund represents an equal proportionate interest in
the assets and liabilities belonging to that Fund with every other share of that
Fund and is entitled to such dividends and distributions out of the income
belonging to the Fund as are declared by the Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any Fund into a greater or lesser number of shares of that Fund so long as the
proportionate beneficial interests in the assets belonging to that Fund and the
rights of shares of any other Fund are in no way affected. In case of any
liquidation of a Fund, the holders of shares of the Fund being liquidated will
be entitled to receive as a class a distribution out of the assets, net of the
liabilities, belonging to that Fund. Expenses attributable to any Fund are borne
by that Fund. Likewise, expenses attributable to any class are borne
specifically by that class. Class K shares of the Fund are not subject to a
Distribution and Shareholder Servicing Plan. Class M shares of the Fund are
subject to Distribution (Rule 12b-1) and Shareholder Servicing expenses and are
discussed in the Class M Prospectus and Statement of Additional Information.
Any general expenses of the Trust not readily identifiable as belonging
to a particular Fund are allocated by or under the direction of the Trustees in
such manner as the Trustees allocate such expenses on the basis of relative net
assets or number of shareholders. No shareholder is liable to further calls or
to assessment by the Trust without his or her express consent.
The assets of the Fund received for the issue or sale of its shares, and all
income, earnings, profits and proceeds thereof, subject only to the rights of
creditors, shall constitute the underlying assets of the Fund. In the event of
the dissolution or liquidation of the Fund, the holders of shares of the Fund
are entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
If they deem it advisable and in the best interests of shareholders, the
Trustees may create additional series of shares, each of which represents
interests in a separate portfolio of investments and is subject to separate
liabilities, and may create multiple classes of shares of such series, which may
differ from each other as to expenses and dividends. If additional series or
classes of shares are created, shares of each series or class are entitled to
vote as a series or class only to the extent required by the 1940 Act as
permitted by the Trustees. Upon the Trust's liquidation, all shareholders of a
series would share pro-rata in the net assets of such series available for
distribution to shareholders of the series, but, as shareholders of such series,
would not be entitled to share in the distribution of assets belonging to any
other series.
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
The Trust's Board of Trustees governs the Trust. The Board of Trustees consists
of six individuals, three of whom are not "interested persons" of the Trust as
that term is defined in Section 2(a)(19) of the 1940 Act. The Trustees meet
throughout the year to oversee the Trust's activities, review contractual
arrangements with companies that provide services to the Fund, and decide upon
matters of general policy with respect to the Fund. The names and business
addresses of the Trustees and officers of the Trust, together with information
as to their principal occupations during the past five years, are listed below:
<TABLE>
<CAPTION>
- --------------------------------------- ---------- -------------------- ----------------------------------------------
NAME AND ADDRESS AGE POSITION/OFFICE PRINCIPAL OCCUPATIONS DURING THE PAST FIVE
WITH THE TRUST YEARS
- --------------------------------------- ---------- -------------------- ----------------------------------------------
<S> <C> <C> <C>
*Bassam Osman 50 Trustee, 1980 - present Bassam Osman, M.D., SC LTD,
745 Mcclintock Drive, Suite 114 Chairperson and Doctor
Burr Ridge, IL 60521 President
- --------------------------------------- ---------- -------------------- ----------------------------------------------
*Muzamil Siddiqi 63 Trustee 3/84 - present North American Islamic Trust,
745 Mcclintock Drive, Suite 114 Inc., General Manager
Burr Ridge, IL 60521
- --------------------------------------- ---------- -------------------- ----------------------------------------------
Abdalla Idris Ali 51 Disinterested 8/98-present - Director, the Center of
745 Mcclintock Drive, Suite 114 Trustee Islamic Studies, Kansas City, MO; 1992 - 1998
Burr Ridge, IL 60521 Principal, ISNA Islamic School, Toronto,
Ontario, Canada
- --------------------------------------- ---------- -------------------- ----------------------------------------------
Jamal Said 43 Disinterested 1990 - presentReligious Director, Mosque
745 Mcclintock Drive, Suite 114 Trustee Foundation, Bridgeview, IL
Burr Ridge, IL 60521
- --------------------------------------- ---------- -------------------- ----------------------------------------------
Mohammed Kaiseruddin 56 Disinterested Nuclear Engineer, Sargent & Lundy (1973 -
745 Mcclintock Drive, Suite 114 Trustee present)
Burr Ridge, IL 60521
- --------------------------------------- ---------- -------------------- ----------------------------------------------
Mazen Asbahi 26 Disinterested Student - Summer `98, Summer Associate,
745 Mcclintock Drive, Suite 114 Trustee Chicago Corporation Counsel; Summer '99,
Burr Ridge, IL 60521 Summer Associate, Kirkland & Ellis
- --------------------------------------- ---------- -------------------- ----------------------------------------------
Omar Haydar 26 Secretary and 4/2000 - present Mutual Fund Coordinator,
745 Mcclintock Drive, Suite 114 Treasurer Allied Asset Advisors
Burr Ridge, IL 60521 6/99 - 4/2000 Information Technology
Consultant, Teksystems/Skidmore Owings &
Merrill LLP 5/98 - 7/98 - Law Clerk, Goodman
& Witanen 6/96 - 8/96 - Program Director,
English Language Service Summer ISNA
Program 8/95 - present - Law Student,
Chicago Kent College of Law
- --------------------------------------- ---------- -------------------- ----------------------------------------------
Mujeeb Cheema 53 Vice President 1/98 - present Managing Director at Hawkins
745 Mcclintock Drive, Suite 114 International, Inc.; 2/80 - 12/97 President
Burr Ridge, IL 60521 of International at Hawkins Oil & Gas, Inc.
- --------------------------------------- ---------- -------------------- ----------------------------------------------
</TABLE>
* This trustee is deemed to be an "interested person" of the Trust as that term
is defined in Section 2(a)(19) of the 1940 Act.
TRUSTEE COMPENSATION. The trustees serve without compensation, but will be
reimbursed for expenses incurred in connection with attendance at Board
meetings. The table below details the amount of compensation estimated to be
received by the Trustees from the Trust for the fiscal year ending ________,
2000. Presently, none of the executive officers receive compensation from the
Trust.
<TABLE>
<CAPTION>
- ---------------------------- ----------------- ----------------------- ---------------------- ------------------------
NAME AND POSITION AGGREGATE PENSION OR RETIREMENT ESTIMATED ANNUAL TOTAL COMPENSATION
COMPENSATION BENEFITS ACCRUED AS BENEFITS UPON FROM TRUST AND FUND
FROM TRUST PART OF TRUST EXPENSES RETIREMENT COMPLEX PAID TO
TRUSTEES
- ---------------------------- ----------------- ----------------------- ---------------------- ------------------------
<S> <C> <C> <C> <C>
* Bassam Osman None None None None
*Muzamil Siddiqi None None None None
Abdalla Idris Ali $0.00 None None $0.00
Jamal Said $0.00 None None $0.00
Mohammead Kaiseruddin $0.00 None None $0.00
Mazen Asbahi $0.00 None None $0.00
Omar Haydar None None None None
Mujeeb Cheema None None None None
- ---------------------------- ----------------- ----------------------- ---------------------- ------------------------
</TABLE>
CONTROL PERSONS, PRINCIPAL HOLDERS OF SECURITIES AND MANAGEMENT OWNERSHIP. As of
May 16, 2000, which was prior to the public offering of the Fund's shares, North
American Islamic Trust was the holder of 100% of the Fund's shares, and there
were otherwise no control persons or principal holders of securities of the
Fund. Control persons are persons deemed to control the Fund because they own
beneficially over 25% of the outstanding equity securities. Principal holders
are persons that own beneficially 5% or more of the Fund's outstanding equity
securities.
INVESTMENT ADVISOR
- --------------------------------------------------------------------------------
Allied Asset Advisors, Inc. (defined as "AAA" or "Investment Advisor") is a
Delaware corporation that serves as an investment manager to the Fund pursuant
to an Investment Management Agreement dated as of [DATE]. AAA is a wholly owned
subsidiary of The North American Islamic Trust ("NAIT"). NAIT is a non-profit
entity that qualifies as a tax-exempt organization under Section 501(c)(3) of
the Internal Revenue Code. The purpose of NAIT is to serve Islams and Muslims.
This Investment Management Agreement is effective for an initial term of two
years and will continue on a year-to-year basis thereafter, provided that
specific approval is voted at least annually by the Board of Trustees of the
Trust or by the vote of the holders of a majority of the outstanding voting
securities of the Fund. In either event, it must also be approved by a majority
of the Trustees of the Trust who are neither parties to the Agreement nor
interested persons of any such party as defined in the 1940 Act at a meeting
called for the purpose of voting on such approval. The Agreement may be
terminated upon 60 days notice, without the payment of any penalty, by vote of a
majority of the outstanding voting securities of the Fund.
For the services provided by AAA under the Agreement, the Trust, on behalf of
the Fund, has agreed to pay to AAA an annual fee of 0.75% on the first $500
million in assets, 0.65% on the next $5 billion in assets and 0.50% on the
amount of assets over $5.5 billion. All fees are computed on the average daily
closing net asset value of the Fund and are payable monthly. The fee is higher
than the fee paid by most other index mutual funds.
CODE OF ETHICS
- --------------------------------------------------------------------------------
The Trust, the Investment Advisor and the Distributor have adopted a written
Code of Ethics that governs the personal securities transactions of their board
members, officers and employees who may have access to current trading
information of the Trust. The Code permits such persons to invest in securities
for their personal accounts including securities that may be purchased or held
by the Trust. The Code restricts and limits, absent prior approval, certain
types of transactions and includes reporting and other obligations to monitor
personal transactions.
ADMINISTRATIVE SERVICES
- --------------------------------------------------------------------------------
ADMINISTRATOR, FUND ACCOUNTANT, TRANSFER AGENT
Firstar Mutual Fund Services, LLC, a subsidiary of Firstar Bank, N.A., provides
administrative personnel and services (including blue-sky services) to the Fund.
Administrative services include, but are not limited to, providing office space,
equipment, telephone facilities, various personnel, including clerical and
supervisory, and computers, as is necessary or beneficial to provide compliance
services to the Fund. Firstar Mutual Fund Services, LLC also will serve as fund
accountant and transfer agent under separate agreements.
CUSTODIAN
Firstar Bank, N.A. is custodian for the securities and cash of the Fund. Under
the Custodian Agreement, Firstar Bank, N.A. holds the Fund's portfolio
securities in safekeeping and keeps all necessary records and documents
relating to its duties.
DISTRIBUTOR
- --------------------------------------------------------------------------------
Rafferty Capital Markets, Inc. serves as the principal underwriter and national
distributor for the shares of the Fund pursuant to a Distribution Agreement with
the Trust dated as of ____________, 2000 (the "Distribution Agreement"). The
Distributor is registered as a broker-dealer under the Securities Exchange Act
of 1934 and each state's securities laws and is a member of the NASD. The
offering of the Fund's shares is continuous. The Distribution Agreement provides
that the Distributor, as agent in connection with the distribution of Fund
shares, will use its best efforts to distribute the Fund's shares.
PRICING OF SHARES
- --------------------------------------------------------------------------------
Shares of the Fund are sold on a continual basis at the net asset value per
share next computed following acceptance of an order by the Fund. The Fund's net
asset value per share for the purpose of pricing purchase and redemption orders
is determined at the close of normal trading (normally 4:00 p.m. Eastern Time)
on each day the New York Stock Exchange is open for trading. The NYSE is closed
on the following holidays: New Year's Day, Martin Luther King, Jr.'s Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
Securities listed on a U.S. securities exchange or NASDAQ for which market
quotations are readily available are valued at the last quoted sale price on the
day the valuation is made. Price information on listed securities is taken from
the exchange where the security is primarily traded. Options, futures, unlisted
U.S. securities and listed U.S. securities not traded on the valuation date for
which market quotations are readily available are valued at the most recent
quoted bid price.
PURCHASING SHARES
- --------------------------------------------------------------------------------
Shares of the Fund are sold in a continuous offering and may be purchased on any
business day through authorized investment dealers or directly from the Fund.
STOCK CERTIFICATES AND CONFIRMATIONS. The Fund does not generally issue stock
certificates representing shares purchased. Confirmations of the opening of an
account and of all subsequent transactions in the account are forwarded by the
Fund to the shareholder's address of record. If a shareholder needs stock
certificates, the Fund can issue them under special requests.
SPECIAL INCENTIVE PROGRAMS. At various times the Fund may implement programs
under which a dealer's sales force may be eligible to win nominal awards for
certain sales efforts or recognition program conforming to criteria established
by the Fund, or participate in sales programs sponsored by the Fund. In
addition, AAA or Distributor, in their discretion may from time to time,
pursuant to objective criteria, sponsor programs designed to reward selected
dealers for certain services or activities that are primarily intended to result
in the sale of shares of the Fund. These programs will not change the price you
pay for your shares or the amount that the Fund will receive from the sale.
REDEMPTION OF SHARES
- --------------------------------------------------------------------------------
SIGNATURE GUARANTEES. If a shareholder requests that redemption proceeds be sent
to an address other than that on record with the Fund or proceeds be made
payable to someone other than to the shareholder(s) of record, the written
request must have signatures guaranteed by:
o a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund, which is administered by the Federal Deposit Insurance Company
("FDIC");
o a member of the New York, Boston, American, Midwest, or Pacific Stock
Exchange;
o a savings bank or savings association whose deposits are insured by the
Savings Association Insurance Fund, which is administered by the FDIC; or
o any other "eligible guarantor institution" as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantor program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
ADDITIONAL DOCUMENTATION. Additional documents are required for certain types of
shareholders, such as corporations, partnerships, executors, trustees,
administrators, or guardians. The Fund's Transfer Agent requires documents from
entities to identify individuals possessing authority to redeem shares from the
Fund. The documentation may include corporate resolutions, partnership
agreements, trust instruments or plans that give such authority to the
individual.
BROKERAGE ALLOCATION AND OTHER PRACTICES
- --------------------------------------------------------------------------------
AAA places the Fund's portfolio securities transactions, taking into account the
costs, promptness of executions and other qualitative considerations. There is
no pre-existing commitment to place orders with any broker, dealer or member of
an exchange. AAA evaluates a wide range of criteria in placing the Fund's
portfolio securities transactions, including the broker's commission rate,
execution capability, positioning and distribution capabilities, information in
regard to the availability of securities, trading patterns, statistical or
factual information, opinions pertaining to trading strategy, back office
efficiency, ability to handle difficult trades, financial stability, and prior
performance in servicing AAA and its clients. In transactions on securities
executed in the over-the-counter market, purchases and sales are transacted
directly with dealers on a principal basis.
AAA, when effecting purchases and sales of portfolio securities for the account
of the Fund, will seek execution of trades either (1) at the most favorable and
competitive rate of commission charged by any broker, dealer or member of an
exchange, or (2) at a higher rate of commission charges, if reasonable, in
relation to brokerage and research services provided to the Fund or AAA by such
member, broker, or dealer. Such services may include, but are not limited to,
any one or more of the following: information as to the availability of
securities for purchase or sale, statistical or factual information, or opinions
pertaining to investments. AAA may use research and services provided by brokers
and dealers in servicing all its clients, including the Fund, and AAA will not
necessarily use all such services in connection with the Fund. In accordance
with the provisions of Section 28(e) of the 1934 Act, AAA may from time-to-time
receive services and products which serve both research and non-research
functions. In such event, AAA makes a good faith determination of the
anticipated research and non-research use of the product or service and
allocates brokerage only with respect to the research component. Brokerage may
also be allocated to dealers in consideration of the Fund's share distribution
but only when execution and price are comparable to that offered by other
brokers.
If AAA provides investment advisory services to individuals and other
institutional clients, there may be occasions on which other investment advisory
clients advised by AAA may also invest in the same securities as the Fund. When
these clients buy or sell the same securities at substantially the same time,
the AAA may average the transactions as to price and allocate the amount of
available investments in a manner, which it believes to be equitable to each
client, including the Fund. On the other hand, to the extent permitted by law,
AAA may aggregate the securities to be sold or purchased for the Fund with those
to be sold or purchased for other clients managed by it in order to obtain lower
brokerage commissions, if any.
Because of the Fund's indexing investment strategy, it generally only sells
securities to generate cash to satisfy redemption requests, or to rebalance its
portfolio to track the target index. As a result, the Fund's portfolio turnover
rate is expected to be low. The portfolio turnover rate is calculated by
dividing the lesser of the Fund's annual sales or purchases of portfolio
securities (exclusive of purchases or sales of securities whose maturities at
the time of acquisition were one year or less) by the monthly average value of
the securities in the portfolio during the year.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. and subject to seeking the most favorable combination
of net price and execution available, the Advisor may consider sales of shares
of the Fund as a factor in the selection of broker-dealers to execute portfolio
transactions for the Fund.
ADDITIONAL INFORMATION ON DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
DISTRIBUTIONS
A shareholder will automatically receive all income dividends and capital gain
distributions in additional full and fractional shares of the Fund at their net
asset value as of the date of payment unless the shareholder elects to receive
such dividends or distributions in cash. The reinvestment date normally precedes
the payment date by about seven days although the exact timing is subject to
change. Shareholders will receive a confirmation of each new transaction in
their account. The Trust will confirm all account activity, including the
payment of dividend and capital gain distributions and transactions made as a
result of a Systematic Withdrawal Plan or an Automatic Investment Plan.
Shareholders may rely on these statements in lieu of stock certificates.
TAXES
DISTRIBUTIONS OF NET INVESTMENT INCOME. The Fund receives income generally in
the form of dividends on its investments. This income, less expenses incurred in
the operation of the Fund, constitutes the Fund's net investment income from
which dividends may be paid to you. Any distributions by the Fund from such
income will be taxable to you as ordinary income, whether you take them in cash
or in additional shares.
DISTRIBUTIONS OF CAPITAL GAINS. The Fund may derive capital gains and losses in
connection with sales or other dispositions of its portfolio securities.
Distributions from net short-term capital gains will be taxable to you as
ordinary income. Distributions from net long-term capital gains will be taxable
to you as long-term capital gain, regardless of how long you have held your
shares in the Fund. Any net capital gains realized by the 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.
INFORMATION ON THE TAX CHARACTER OF DISTRIBUTIONS. The Fund 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, the 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. The Fund intends to
elect 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 a regulated investment company, the Fund generally pays no federal income tax
on the income and gains it distributes to you. The Board reserves the right not
to maintain the qualification of the Fund as a regulated investment company if
it determines such course of action to be beneficial to 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 the Fund's earnings and profits.
EXCISE TAX DISTRIBUTION REQUIREMENTS. To avoid federal excise taxes, the
Internal Revenue Code requires the 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. The 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. By law, redemptions and exchanges of Fund shares are
taxable transactions for federal and state income tax purposes. If you redeem
your Fund shares, the IRS will require that you report a gain or loss on your
redemption or exchange. If you hold your shares as a capital asset, the 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. 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.
By law, 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
the Fund (through reinvestment of dividends or otherwise) within 30 days before
or after your share redemption. Any loss disallowed under these rules will be
added to your tax basis in the new shares you buy.
DIVIDENDS-RECEIVED DEDUCTION FOR CORPORATIONS. If you are a corporate
shareholder, you should note that it is expected that a portion of the dividends
paid by the Fund will qualify for the dividends-received deduction. In some
circumstances, you will 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 the Fund as eligible for such treatment. All dividends
(including the deducted portion) must be included in your alternative minimum
taxable income calculation.
INVESTMENT IN COMPLEX SECURITIES. The Fund may invest in complex securities.
These investments may be subject to numerous special and complex tax rules.
These rules could affect whether gains and losses recognized by the Fund are
treated as ordinary income or capital gain, accelerate the recognition of income
to the Fund and/or defer the Fund's ability to recognize losses. In turn, these
rules may affect the amount, timing or character of the income distributed to
you by the Fund.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
TOTAL RETURN. Average annual total return quotations used in the Fund's
advertising and promotional materials are calculated according to the following
formula:
P(1 +T)n = ERV
where P equals a hypothetical initial payment of $1,000; T equals average annual
total return; n equals the number of years; and ERV equals the ending redeemable
value at the end of the period of a hypothetical $1,000 payment made at the
beginning of the period.
Under the foregoing formula, the time periods used in advertising will be based
on rolling calendar quarters, updated to the last day of the most recent quarter
prior to submission of the advertising for publication. Average annual total
return, or "T" in the above formula, is computed by finding the average annual
compounded rates of return over the period that would equate the initial amount
invested to the ending redeemable value. Average annual total return assumes the
reinvestment of all dividends and distributions.
CUMULATIVE TOTAL RETURN. Cumulative total return represents the simple change in
value of an investment over a stated period and may be quoted as a percentage or
as a dollar amount. Total returns may be broken down into their components of
income and capital (including capital gains and changes in share price) in order
to illustrate the relationship between these factors and their contributions to
total return.
OTHER INFORMATION. The Fund's performance data quoted in advertising and other
promotional materials represents past performance and is not intended to predict
or indicate future results. The return and principal value of an investment in a
Fund will fluctuate, and an investor's redemption proceeds may be more or less
than the original investment amount.
If permitted by applicable law, the Fund may be compared to data prepared by
Lipper Analytical Services, Inc., CDA Investment Technologies, Inc.,
Morningstar, Inc., the Donoghue Organization, Inc. or other independent services
which monitor the performance of investment companies, and may be quoted in
advertising in terms of its ranking in each applicable universe. In addition,
the Fund may use performance data reported in financial and industry
publications, including Barron's, Business Week, Forbes, Fortune, Investor's
Daily, IBC/Donoghue's Money Fund Report, Money Magazine, The Wall Street
Journal, USA Today and others.
In addition to the INDEX, the Fund may from time to time use the following
unmanaged indices for performance comparison purposes:
o S&P 500 - The S&P 500 is an index of 500 stocks designed to track the
overall equity market's industry weightings. Most, but not all, large
capitalization stocks are in the index. There are also some small
capitalization names in the index. The list is maintained by Standard &
Poor's Corporation. It is market capitalization weighted. There are
always 500 issuers in the S&P 500. Changes are made by Standard &
Poor's as needed.
o Russell 2000 - The Russell 2000 is composed of the 2,000 smallest stocks in
the Russell 3000, a market value weighted index of the 3,000 largest U. S.
publicly traded companies.
o The NASDAQ Composite Index - The NASDAQ Composite Index is a broad-based
market capitalization-weighted index of all NASDAQ stocks.
AUDITORS
- --------------------------------------------------------------------------------
Deloitte & Touche LLP, Two Prudential Plaza, 180 North Stetson Avenue, Chicago,
Illinois, 60601-6779, serves as the Fund's independent auditors, whose services
include auditing the Fund's financial statements and the performance of
related tax services.
COUNSEL
- --------------------------------------------------------------------------------
Vedder, Price, Kaufman, & Kammholz, 222 North LaSalle Street, Chicago, Illinois
60601-1003, is counsel for the Fund.
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The Fund has not commenced operations to date therefore no financial highlights
are available for the Fund.
ALLIED ASSET ADVISORS FUNDS
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS
(a) DECLARATION OF TRUST
(i) Certificate of Trust1
(ii) Declaration of Trust1
(iii) Written Instrument Fixing the Number of Trustees - Filed herewith
(iv) Written Instrument Establishing and Designating Classes of Interest
- Filed herewith.
(b) BYLAWS1
(i) Amendment to Bylaws - Filed herewith.
(d) INSTRUMENTS DEFINING RIGHTS OF SECURITY HOLDERS-- Incorporated by reference
to the Declaration of Trust and Bylaws
(d) ADVISORY AGREEMENT-- Filed herewith.
(i) Expense Waiver and Reimbursement Agreement - Filed herewith.
(e) DISTRIBUTION AGREEMENT-- Filed herewith.
(f) BONUS OR PROFIT SHARING CONTRACTS - Not applicable
(g) CUSTODY AGREEMENT-- Filed herewith.
(h) OTHER MATERIAL CONTRACTS
(i) Administration Agreement-- Filed herewith.
(ii) Transfer Agent Servicing Agreement-- Filed herewith.
(iii) Fund Accounting Services Agreement-- Filed herewith.
(iv) Shareholder Services Agreement - Filed herewith.
(v) Fulfillment Agreement - Filed herewith.
(i) OPINION AND CONSENT OF COUNSEL-- Filed herewith.
(j) CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS-- Not applicable.
(k) OMITTED FINANCIAL STATEMENTS - Not applicable.
(l) AGREEMENT RELATING TO INITIAL CAPITAL-- Filed herewith.
(m) RULE 12B-1 PLAN - Filed herewith.
(n) RULE 18F-3 PLAN - Filed herewith.
(o) RESERVED.
(p) CODE OF ETHICS - Filed herewith.
1 Incorporated by reference to Registrant's Initial Filing of the Registration
Statement filed February 23, 2000.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
No person is directly or indirectly controlled by or under common
control with the Registrant.
ITEM 25. INDEMNIFICATION.
Reference is made to Article V of the Registrant's Agreement and
Declaration of Trust.
Pursuant to Rule 484 under the Securities Act of 1933, as amended, the
Registrant furnishes the following undertaking: "Insofar as indemnification for
liability arising under the Securities Act of 1933 (the "Act") may be permitted
to trustees, officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised that, in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a trustee,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such trustee, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue."
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISOR
Allied Asset Advisors, Inc. ("AAA"), investment adviser to all of the series of
the Registrant, is a registered investment adviser under the Investment Advisers
Act of 1940. Besides serving as investment adviser to the Fund, AAA is not
currently (and has not during the past two years) engaged in any other business,
profession, vocation or employment of a substantial nature. Information
regarding the business, vocation or employment of a substantial nature of the
AAA and its officers is incorporated by reference to the information contained
in Part B of this Registration Statement.
To Registrant's knowledge, none of the directors or senior executive officers of
AAA except those set forth below, is, or has been at any time during the past
two years, engaged in any other business, profession, vocation or employment of
a substantial nature, except that certain directors and officers of AAA also
hold various positions with, and engage in business for, AAA affiliates:
<TABLE>
<CAPTION>
- -------------------------------- ------------------------ ------------------------------------ --------------------
NAME POSITION WITH ALLIED OTHER BUSINESS CONNECTIONS TYPE OF BUSINESS
ASSET ADVISORS, INC.
- -------------------------------- ------------------------ ------------------------------------ --------------------
<S> <C> <C> <C>
Bassam Osman Director, President Chairman Religious,
The North American Islamic Trust Financial,
(Shareholder of AAA) Education
M.D. (Neurologist) Medicine
Director Finance
Amana Mutual Funds
Mohammad Naziruddin Ali Secretary General Manager Religious,
The North American Islamic Trust Financial,
(Shareholder of AAA) Education
Muzamil Siddiqi Director Director Religious,
The Islamic Society of Orange Educational
County
Adjunct Professor Educational
California State University
Gaddoor Saidi Director Partner Travel
Dar El-Eiman for Hajj
Partner Real Estate
Mecca Investment Int.
Mujeeb-ur-Rehman Cheema Director Managing Director Energy
Hawkins International, Inc.
- -------------------------------- ------------------------ ------------------------------------ --------------------
</TABLE>
ITEM 27. PRINCIPAL UNDERWRITERS.
(a) Rafferty Capital Markets, Inc., 1311 Mamaroneck Avenue, White Plains,
New York 10605, serves as principal underwriter for the Allied Asset Advisors
Funds, Ingenuity Capital Trust, Potomac Funds, Badgley Funds, Homestate Group,
Texas Capital Value Funds, Brazos Mutual Funds, Bremer Investment Funds, Inc.,
Bearguard Funds, Inc., Kirr Marbauch Partners Funds, Inc., Golf Associated Fund
and Leuthold Funds.
(b) The director and officers of Rafferty Capital Markets, Inc. are:
<TABLE>
<CAPTION>
- -------------------------- ------------------------------------------- -----------------------------------------
NAME POSITIONS AND OFFICES WITH UNDERWRITER POSITIONS AND OFFICES WITH REGISTRANT
- -------------------------- ------------------------------------------- -----------------------------------------
<S> <C> <C>
Thomas A. Mulrooney President None
Lawrence C. Rafferty Director None
Stephen P. Sprague CFO/FINOP None
- -------------------------- ------------------------------------------- -----------------------------------------
</TABLE>
The principal business address of each of the persons listed above is 1311
Mamaroneck Avenue, White Plains, New York 10605.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
The books and records required to be maintained by Section 31(a) of
the Investment Company Act of 1940 are maintained in the following locations:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------- --------------------------------------
RECORDS RELATING TO: ARE LOCATED AT:
- --------------------------------------------------------------------- --------------------------------------
<S> <C>
Registrant's Fund Accounting, Administrator and Transfer Agent Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
Registrant's Investment Advisor Allied Asset Advisors, Inc.
745 McClintock Drive, Suite 114
Burr Ridge, IL 60521
Registrant's Custodian Firstar Bank, N.A.
425 Walnut Street
Cincinnati, OH 54202
- --------------------------------------------------------------------- --------------------------------------
</TABLE>
ITEM 29. MANAGEMENT SERVICES NOT DISCUSSED IN PARTS A AND B.
Inapplicable
ITEM 30. UNDERTAKINGS.
The Registrant hereby undertakes to furnish each person to whom a
Prospectus for one or more of the series of the Registrant is delivered with a
copy of the relevant latest annual report to shareholders, upon request and
without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this Registration Statement to be signed below on its behalf by the undersigned,
thereunto duly authorized, in the Village of Burr Ridge and the State of
Illinois on the 23 day of May, 2000.
ALLIED ASSET ADVISORS FUNDS
BY: /S/ BASSAM OSMAN
--------------------
Bassam Osman
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 May 23, 2000.
SIGNATURE TITLE
/S/ BASSAM OSMAN Trustee, Chairperson and President
Bassam Osman
*/S/ MUZAMIL SIDDIQI Trustee
Muzamil Siddiqi
*/S/ ABDALLA IDRIS ALI Trustee
Abdalla Idris Ali
*/S/ JAMAL SAID Trustee
Jamal Said
*/S/ MOHAMMED KAISERUDDIN Trustee
Mohammed Kaiseruddin
/S/ MAZEN ASBAHI Trustee
Mazen Asbahi
*Signed by
/S/ BASSAM OSMAN
Bassam Osman
as Attorney in Fact pursuant to the Power of Attorney dated May 4, 2000 filed
herewith.
POWER OF ATTORNEY
The undersigned officers and Trustees of the Allied Asset Advisors
Funds (the "Trust") hereby appoint Dr. Bassam Osman, and Omar Haydar, as
attorneys-in-fact and agents, with the power, to execute, and to file any of the
documents referred to below relating to the initial registration of the Trust as
an investment company under the Investment Company Act of 1940, as amended (the
"Act") and the registration of the Trust's securities under the Securities Act
of 1933, as amended (the "Securities Act") including the Trust's Registration
Statement on Form N-1A, any and all amendments thereto, including all exhibits
and any documents required to be filed with respect thereto with any regulatory
authority, including applications for exemptive order rulings. Each of the
undersigned grants to the said attorneys full authority to do every act
necessary to be done in order to effectuate the same as fully, to all intents
and purposes, as he could do if personally present, thereby ratifying all that
said attorneys-in-fact and agents may lawfully do or cause to be done by virtue
hereof.
The undersigned officers and Trustees hereby execute this Power of
Attorney as of this 4th day of May, 2000.
NAME TITLE
- ---- -----
/S/ DR.BASSAM OSMAN President
- --------------------------------------------
Dr.Bassam Osman
/S/ JAMAL SAID Trustee
- --------------------------------------------
Jamal Said
/S/ ABDALLA IDRIS ALI Trustee
- --------------------------------------------
Abdalla Idris Ali
/S/ MUZAMIL SIDDIQI Trustee
- --------------------------------------------
Muzamil Siddiqi
/S/ MOHAMMED KAISERUDDIN Trustee
- --------------------------------------------
Mohammed Kaiseruddin
/S/ MAZEN ASBAHI Trustee
- --------------------------------------------
Mazen Asbahi
/S/ MUJEEB-UR-REHMAN CHEEMA Vice President
- --------------------------------------------
Mujeeb-Ur-Rehman Cheema
/S/ OMAR HAYDAR Secretary and Treasurer
- --------------------------------------------
Omar Haydar
ALLIED ASSET ADVISORS FUNDS
WRITTEN INSTRUMENT FIXING NUMBER OF TRUSTEES
THE UNDERSIGNED, being the sole Trustee of the ALLIED ASSET
ADVISORS FUNDS, a Delaware business trust (the "Trust"), does hereby state in
writing in accordance with the laws of the State of Delaware and Section 2.1 of
Article II of the Declaration of Trust of the Trust that as of May 4, 2000, the
number of Trustees of the Trust shall be six.
IN WITNESS WHEREOF, the undersigned has executed this Written
Instrument Fixing the Number of Trustees effective the 4th the day of May 2000.
___________________________ ________________________
Dr. Bassam Osman Date
Trustee
ALLIED ASSET ADVISORS FUNDS
DOW JONES ISLAMIC INDEX FUND
WRITTEN INSTRUMENT ESTABLISHING
AND DESIGNATING CLASSES OF INTERESTS
MAY 4, 2000
The undersigned constitute all the Trustees of the Allied Asset
Advisors Funds (the "Trust"), a Delaware business trust governed by a
Declaration of Trust dated January 10, 2000 (the "Declaration of Trust"). This
instrument is executed pursuant to Section 6.3 of Article VI of the Declaration
of Trust in order to establish and designate separate classes of Interests of
the Dow Jones Islamic Index Fund series of the Trust (the "Fund").
WHEREAS, Under the Declaration of Trust, the Board of Trustees has the
authority, in its discretion and without shareholder approval, to divide the
Interests of the Fund into separate classes; and
WHEREAS, This Board of Trustees deems it desirable and in the best
interests of the Trust to designate separate classes of Interests of the Fund to
be named "Class K Interests" and "Class M Interests."
NOW, THEREFORE, the establishment and designation of separate classes
of Interests of the Fund is approved in accordance with the following
provisions:
1. Subject to the conditions hereinafter set forth, the Interests of
each series shall be divided into two classes to be known respectively as the
"Class K Interests," and the "Class M Interests," which classes shall have such
preferences and special or relative rights and privileges as may be determined
from time to time by this Board of Trustees, subject always to the Declaration
of Trust and the Investment Company Act of 1940 ("1940 Act") and the rules and
regulations thereunder.
2. Subject to the terms of the Declaration of Trust, Class K Interests
and Class M Interests shall be identical in all respects except that: (1) each
class shall bear the distribution expenses allocable to sales of Interests of
such class, as determined by the Trustees; (2) each class shall bear other
expenses of the series that are related to services provided only to the holders
of Interests of such class, as determined by the Trustees; (3) Class K and Class
M Interests may be exchanged for Class K and Class M Interests, respectively, of
any other series, or any similar class of any investment company (or series)
managed, administered or distributed by Allied Asset Advisors, Inc., on such
terms as are determined by the Trustees; and (4) the Holders of Class M
Interests of a series shall have exclusive voting rights with respect to certain
matters as set forth in Section 6.7. Determinations of such differences between
classes shall be set forth in a written plan adopted by a majority of the
Trustees.
IN WITNESS WHEREOF, the undersigned have this 4th day of May, 2000,
signed these presents.
/S/ BASSAM OSMAN
Bassam Osman, Trustee
/S/ MUZAMIL SIDDIQI
Muzamil Siddiqi
/S/ ABDALLA IDRIS ALI
Abdalla Idris Ali
/S/ JAMAL SAID
Jamal Said
/S/ MOHAMMED KAISERUDDIN
Mohammed Kaiseruddin
/S/ MAZEN ASBAHI
Mazen Asbahi
ALLIED ASSET ADVISORS FUNDS
AMENDMENT TO THE BY-LAWS
Effective May 4, 2000 at a Meeting of the Board of Trustees of the
Allied Asset Advisors Funds, the Trustees, pursuant to Section 7.1 amended the
Trust's By-Laws by deleting Section 2.8 in its entirety and replacing it with
the following:
"Section 2.8 OTHER COMMITTEES. The Board of Trustees may
appoint from among its members other committees composed of one or more
of its Trustees which shall have such powers as may be delegated or
authorized by the resolution appointing them."
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made as of this ____ day of May, 2000 by and between
ALLLIED ASSET ADVISORS FUNDS, a Delaware Business Trust (the "Trust") and ALLIED
ASSET ADVISORS, INC., a Delaware Corporation (the "Advisor"), with respect to
the following recital of fact:
RECITAL
WHEREAS, the Trust is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act") and is authorized to issue shares in separate series with each such
series representing interests in a separate portfolio of securities and other
assets; and
WHEREAS, the Advisor is registered as an investment advisor under the
Investment Advisers Act of 1940, as amended, and is engaged in the business of
acting as an investment advisor; and
WHEREAS, the Trust desires to retain the Advisor to render advice and
services to the Fund (as defined below) pursuant to the terms and provisions of
this Agreement, and the Advisor desires to furnish said advice and services
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. APPOINTMENT OF ADVISOR. The Trust hereby appoints the Advisor to act as
investment advisor for the Dow Jones Islamic Index Fund, a series of the Trust
(the "Fund"). Subject to the direction and control of the Trust's Board of
Trustees, the Advisor shall act as investment advisor for the Fund and shall, in
such capacity, supervise the investment and reinvestment of the cash, securities
or other properties comprising the Fund's assets. The Advisor shall give the
Fund the benefit of its best judgment, efforts and facilities in rendering its
services as investment advisor.
2. DUTIES OF INVESTMENT ADVISOR. In carrying out its obligation under paragraph
1 hereof, the Advisor shall:
(a) act as investment adviser for and supervise and manage the
investment and reinvestment of the Fund's assets and in connection
therewith have complete discretion in purchasing and selling securities
and other assets for the Fund and in voting, exercising consents and
exercising all other rights appertaining to such securities and other
assets on behalf of the Fund;
(b) supervise continuously the investment
program of the Fund and the composition of its investment portfolio;
(c) arrange, subject to the provisions of paragraph 3 hereof, for the
purchase and sale of securities and other assets held in the investment
portfolio of the Fund; and (d) maintain books and records with respect
to the Fund's securities transactions and will render to the Trust's
Board of Trustees such periodic and special reports as they may
request.
3. BROKERAGE. The Advisor shall place all orders for the purchase and sale of
portfolio securities for the account of the Fund with brokers or dealers
selected by the Advisor, although the Fund will pay the actual brokerage
commissions on portfolio transactions in accordance with paragraph 5 hereof.
The Advisor shall consider all factors it deems relevant, including the breadth
of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any (for the specific transaction and on a
continuing basis).
To the extent contemplated by the Trust's registration statement under the 1933
Act, in evaluating the overall terms available, and in selecting the broker or
dealer to execute a particular transaction, the Advisor may also consider the
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) provided to the Fund and/or other accounts
over which the Advisor (or an affiliate of the Advisor) exercises investment
discretion. The Advisor is authorized to pay to a broker or dealer who provides
such brokerage and research services a commission for executing a portfolio
transaction for the Fund which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if, but only
if, the Advisor determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of that particular transaction or in terms of
all of the accounts over which investment discretion is so exercised. Consistent
with the Rules of Fair Practice of the National Association of Securities
Dealers, Inc. and subject to seeking the most favorable combination of net price
and execution available, the Advisor may consider sales of shares of the Fund as
a factor in the selection of broker-dealers to execute portfolio transactions
for the Fund.
4. COMPLIANCE WITH APPLICABLE REQUIREMENTS. In carrying out its obligations
under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and any rules and
regulations adopted thereunder;
(b) the provisions of the Registration Statements of the Trust under
the Securities Act of 1933 and the 1940 Act;
(c) the provisions of the Declaration of Trust of the Trust, as
amended;
(d) the provisions of the By-Laws of the Trust, as amended; and
(e) any other applicable provisions of state and Federal law.
5. EXPENSES. The expenses connected with the Fund shall be allocable between
the Fund and the Advisor as follows:
(a) The Advisor shall furnish, at its expense and without cost to the
Fund, the services of a President, Secretary and one or more Vice
Presidents of the Trust, to the extent that such additional officers
may be required by the Trust for the proper conduct of its affairs.
(b) The Advisor shall further maintain, at its expense and without cost
to the Fund, a trading function in order to carry out its obligations
under subparagraph (d) of paragraph 2 hereof to place orders for the
purchase and sale of portfolio securities for the Fund.
(c) Nothing in subparagraph (a) hereof shall be construed to require
the Advisor to bear:
(i)any of the costs (including applicable office space,
facilities and equipment) of the services of a principal
financial officer of the Trust whose normal duties consist of
maintaining the financial accounts and books and records of
the Fund; including the reviewing of calculations of daily
net asset value and preparing tax returns; or
(ii) any of the costs (including applicable office space,
facilities and equipment) of the services of any of the
personnel operating under the direction of such principal
financial officer. Notwithstanding the obligation of the
Fund to bear the expense of the functions referred to in
clauses (i) and (ii) of this subparagraph (c), the Advisor
may pay the salaries, including any applicable employment or
payroll taxes and other salary costs, of the principal
financial officer and other personnel carrying out such
functions and the Fund shall reimburse the Advisor therefor
upon proper accounting.
(d) All of the ordinary business expenses incurred in the operations of
the Fund and the offering of its shares shall be borne by the Fund
unless specifically provided otherwise in this paragraph 6. These
expenses include but are not limited to brokerage commissions, legal,
auditing, taxes or governmental fees, the cost of preparing share
certificates, custodian, transfer and shareholder service agent costs,
expenses of issue, sale, redemption and repurchase of shares, expenses
of registering and qualifying shares for sale, expenses relating to
trustee and shareholder meetings, the cost of preparing and
distributing reports and notices to shareholders, the fees and other
expenses incurred by the Fund in connection with membership in
investment company organizations and the cost of printing copies of
prospectuses and statements of additional information distributed to
shareholders.
(e) The Advisor may voluntarily absorb certain Fund expenses or waive
the Adviser's own advisory fee. To the extent the Advisor incurs any
costs by assuming expenses, which are obligations of the Fund as set
forth herein, the Fund shall promptly reimburse the Advisor for such
costs and expenses, except to the extent the Advisor has otherwise
agreed to bear such expenses. Subject to approval by the Trust's Board
of Trustees, to the extent the services for which the Fund is obligated
to pay are performed by the Advisor, the Advisor shall be entitled to
recover from the Fund to the extent of the Advisor's actual costs for
providing such services. In determining the Advisor's actual costs,
the Advisor may take into account an allocated portion of the salaries
and overhead of personnel performing such services.
6. COMPENSATION.
(a) For all services rendered by Advisor hereunder, the Fund shall pay
to Advisor and Advisor agrees to accept as full compensation for all
services rendered hereunder, an annual investment advisory fee equal to
0.75 of 1% of the average daily net assets of the Fund. The portion of
the fee based upon the average daily net assets of the Fund shall be
accrued daily at the rate of 1/365th of 0.75 of 1% applied to the daily
net assets of the Fund.
(b) The investment advisory fee shall be accrued daily by the Fund and
paid to the Advisor on the first business day of the succeeding month.
(c) The initial fee under this Agreement shall be payable on the first
business day of the first month following the effective date of this
Agreement and shall be prorated as set forth below. If this Agreement
is terminated prior to the end of any month, the fee to the Advisor
shall be prorated for the portion of any month in which this Agreement
is in effect which is not a complete month according to the proportion
which the number of calendar days in the month during which the
Agreement is in effect bears to the number of calendar days in the
month, and shall be payable within ten days after the date of
termination.
(d) The fee payable to the Advisor under this Agreement will be reduced
to the extent of any receivable owed by the Advisor to the Fund and as
required under any expense limitation applicable to the Fund.
(e) The Advisor voluntarily may reduce any portion of the compensation
or reimbursement of expenses due to it pursuant to this Agreement and
may agree to make payments to limit the expenses that are the
responsibility of the Fund under this Agreement. Any such reduction or
payment shall be applicable only to such specific reduction or payment
and shall not constitute an agreement to reduce any future compensation
or reimbursement due to the Advisor hereunder or to continue future
payments. Any such reduction will be agreed to prior to accrual of
the related expense or fee and will be estimated daily and reconciled
and paid on a monthly basis.
(f) The Advisor may agree not to require payment of any portion of the
compensation or reimbursement of expenses otherwise due to it pursuant
to this Agreement. Any such agreement shall be applicable only with
respect to the specific items covered thereby and shall not constitute
an agreement not to require payment of any future compensation or
reimbursement due to the Advisor hereunder.
7. INDEPENDENT CONTRACTOR/NON-EXCLUSIVITY. The Advisor shall for all purposes
herein be deemed to be an independent contractor and shall, unless otherwise
expressly provided or authorized, have no authority to act for or represent the
Fund or the Trust in any way or otherwise be deemed an agent of the Fund or the
Trust. However, it is understood and agreed that officers or directors of the
Advisor may serve as officers or trustees of the Trust, and that officers and
trustees of the Trust may serve as officers or directors of the Advisor to the
extent permitted by law; and that the officers and directors of the Advisor are
not prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers or directors
of any other firm or corporation, including other investment companies. The
services of the Advisor to the Fund are not to be deemed to be exclusive, and
the Advisor shall be free to render investment advisory and corporate
administrative or other services to others (including other investment
companies) and to engage in other activities.
8. TERM AND APPROVAL. This Agreement shall become effective at the close of
business on the date set forth above (the "Effective Date") and shall, unless
terminated as hereinafter provided, continue in force and effect for two years
from the Effective Date and from year to year thereafter, provided that such
continuance is specifically approved at least annually:
(a) (i) by the Trustees or (ii) by the vote of a majority of the
outstanding voting securities of the Fund (as defined in Section 2 (a)
(42) of the 1940 Act), and
(b) by the affirmative vote of a majority of the Trustees who are not
parties to this Agreement or interested persons of a party to this
Agreement (other than as Trustees), by votes cast in person at a
meeting specifically called for such purpose.
9. TERMINATION. This Agreement may be terminated at any time, without the
payment of any penalty, by vote of the Trustees or by vote of a majority of the
Fund's outstanding voting securities, or by the Advisor on sixty days' written
notice to the other party. The notice provided for herein may be waived by
either party. This Agreement shall automatically terminate in the event of its
assignment, the term "assignment" for this purpose having the meaning defined
in Section 2(a)(4) of the 1940 Act.
10. LIABILITY OF ADVISOR AND INDEMNIFICATION. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Advisor or any of its officers, directors or
employees, it shall not be subject to liability to the Fund or to any
shareholder of the Fund for any act or omission in the course of, or connected
with, rendering services hereunder or for any losses that may, from time to
time, be sustained in the purchase, holding or sale of any security.
11. LIABILITY OF TRUST. The obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust, personally, but shall bind only the assets and property
of the Trust as provided in the Declaration of Trust of the Trust.
12. NOTICES. Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party at such address as such
other party may designate for the receipt of such notice. Until further notice
to the other party, it is agreed that the address of the Trust and that of the
Advisor shall be 745 McClintock Drive, Suite 114, Burr Ridge, Illinois, 60521.
13. QUESTIONS OF INTERPRETATION. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from a
term or provision of the 1940 Act shall be resolved by reference to such term or
provision of the Act and to interpretations thereof, if any, by the United
States Courts or in the absence of any controlling decision of any such court,
by rules, regulations or orders of the Securities and Exchange Commission issued
pursuant to said Act. In addition, where the effect of a requirement of the
1940 Act reflected in any provision of this Agreement is released by rules,
regulation or order of the Securities and Exchange Commission, such provision
shall be deemed to incorporate the effect of such rule, regulation and order.
14. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Advisor hereby agrees that all records which it maintains for
the Trust are the property of the Trust and further agrees to surrender promptly
to the Trust any such records upon the Trust's request. The Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records required to be maintained by Rule 31a-1 under the 1940 Act.
15. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought. Any amendment of this Agreement shall by subject to
the 1940 Act.
16. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Illinois for contracts to be performed entirely therein
without reference to choice of law principles thereof and in accordance with the
applicable provisions of the 1940 Act.
17. MISCELLANEOUS. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding on, and shall inure to the benefit of the parities
hereto and their respective successors.
18. COUNTERPARTS. This Agreement may be executed in counterparts by the parties
hereto, each of which shall constitute an original counterpart, and all of
which, together, shall constitute one Agreement.
IT WITNESS WEHREOF, the parties have caused this Agreement to be executed by
their respective officers on the day and the year first above written.
ALLIED ASSET ADVISORS FUNDS ALLIED ASSET ADVISORS, INC.
By: ____________________________ By:_____________________________
Name: __________________________ Name: __________________________
Title:__________________________ Title: _________________________
Attest:_________________________ Attest: ________________________
EXPENSE WAIVER AND
REIMBURSEMENT AGREEMENT
AGREEMENT made this __ day of May 2000, between Allied Asset Advisors
Funds, a Delaware Trust (a "Trust"), and Allied Asset Advisors, Inc., a Delaware
Trust (hereinafter called "AAA").
W I T N E S S E T H
WHEREAS, AAA has entered into an Investment Advisory Agreement with the Trust,
pursuant to which AAA agrees to provide, or arrange for the provision of,
investment advisory and management services to the Trust; and
WHEREAS, the Trust and AAA believe that capping the total expenses of each class
of shares of the Dow Jones Islamic Index Fund (the "Fund") of the Trust will
enable the Fund to target niches within the load and no-load product market and
will benefit the Fund;
NOW, THEREFORE, the parties hereto do hereby agree as follows:
1. EXPENSE WAIVER AND REIMBURSEMENT BY AAA. AAA agrees to reduce all or a
portion of its management fee and, if necessary, to bear certain other expenses
(including all expenses allocated pro-rata among the various classes of shares
of the Fund, and other expenses to the extent permitted by the Internal Revenue
Code of 1986, as amended) associated with operating the Fund to the extent
necessary to limit the Fund's annualized expenses to the annual rate of 1.65% of
average daily net assets for Class M shares and 0.90% of average daily net
assets for Class K shares for the period from _________, 2000 to _________,
2001.
2. DUTY OF FUND TO REIMBURSE. Subject to approval by the Fund's Board of
Trustees, the Fund agrees to reimburse AAA such deferred fees (but not expenses
borne) in later periods provided, however, that the Fund is not obligated to pay
any such deferred fees more than three years after the end of the fiscal year in
which the fee was deferred.
3. ASSIGNMENT. No assignment of this Agreement shall be made by AAA without
the prior consent of the Trust.
4. DURATION AND TERMINATION. This Agreement shall be effective for the period
from ________, 2000 to __________, 2001, and shall continue in effect thereafter
unless terminated by either of the parties hereto upon written notice to the
other of not less than five days. This Agreement shall automatically terminate
upon the termination of the Investment Advisory Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
ALLIED ASSET ADVISORS FUNDS
By___________________________________________
Name: Dr. Bassam Osman
Title: President
ALLIED ASSET ADVISORS, INC.
By___________________________________________
Name:
Title:
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of _____________, 2000, between Allied Asset
Advisors Funds, a Delaware business trust (hereinafter referred to as the
"Trust") and Rafferty Capital Markets, Inc. ("RCM"), a corporation organized and
existing under the laws of the State of New York.
WHEREAS the Trust is registered under the Investment Act of 1940, as
amended ("1940 Act"), as an open-end management investment company, and has
registered one or more distinct series of shares of beneficial interest
("Shares") for sale to the public under the Securities Act of 1933, as amended
("1933 Act"), and has qualified its shares for sale to the public under various
state securities laws; and
WHEREAS the Trust desires to retain RCM as principal underwriter in
connection with the offering and sale of the Shares of each series listed on
Schedule A (as amended from time to time) to this Agreement; and
WHEREAS, the Distributor is registered as a broker/dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a member of
the National Association of Securities Dealers, Inc. (the "NASD");
WHEREAS RCM is willing to act as principal underwriter for the Trust on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows;
1. APPOINTMENT. The Trust hereby appoints RCM as an agent to be the principal
underwriter so as to hold itself out as available to receive and accept orders
for the purchase and redemption of the Shares and redemption of Shares on behalf
of the Trust, subject to the terms and for the period set forth in this
Agreement. RCM hereby accepts such appointment and agrees to act hereunder. The
Trust understands that any solicitation activities conducted on behalf of the
Trust will be conducted primarily, if not exclusively, by employees of the
Trust's sponsor who shall become registered representatives of RCM.
2. SERVICES AND DUTIES OF RCM.
(a) RCM agrees to sell Shares on a best efforts basis from
time to time during the term of this Agreement as agent for the Trust and upon
the terms described in the Registration Statement. As used in this Agreement,
the term "Registration Statement" shall mean the currently effective
registration statement of the Trust, and any supplements thereto, under the 1933
Act and the 1940 Act.
(1) RCM will hold itself available to receive purchase and redemption orders
satisfactory to RCM for Shares and will accept such orders on behalf of the
Trust. Such purchase orders shall be deemed effective at the time and in the
manner set forth in the Registration Statement.
(2) If requested by the Trust, RCM, with the operational assistance of the
Trust's transfer agent, shall make Shares available through the National
Securities Clearing Corporation's Fund/SERV System.
(3) RCM shall provide to investors and potential investors only such information
regarding the Trust as the Trust shall provide or approve. RCM shall review
and file all proposed advertisements and sales literature with appropriate
regulators and consult with the Trust regarding any comments provided by
regulators with respect to such materials.
(4) The offering price of the Shares shall be the price determined in accordance
with, and in the manner set forth in, the most-current Prospectus. The Trust
shall make available to RCM a statement of each computation of net asset value.
(5) RCM at its sole discretion may repurchase Shares offered for sale by the
shareholders. Repurchase of Shares by RCM shall be at the price determined in
accordance with, and in the manner set forth in, the most-current Prospectus. At
the end of each business day, RCM shall notify, by any appropriate means, the
Trust and its transfer agent of the orders for repurchase of Shares received by
RCM since the last report, the amount to be paid for such Shares, and the
identity of the shareholders offering Shares for repurchase. The Trust reserves
the right to suspend such repurchase right upon written notice to RCM. RCM
further agrees to act as agent for the Trust to receive and transmit promptly to
the Trust's transfer agent shareholder requests for redemption of Shares.
(6) RCM shall not be obligated to sell any certain number of Shares.
(7) RCM shall prepare reports for the Board regarding its activities under this
Agreement as from time to time shall be reasonably requested by the Board.
3. DUTIES OF THE TRUST.
(1) The Trust shall keep RCM fully informed of its affairs and shall provide to
RCM from time to time copies of all information, financial statements, and other
papers that RCM may reasonably request for use in connection with the
distribution of Shares, including, without limitation, certified copies of any
financial statements prepared for the Trust by its independent public accountant
and such reasonable number of copies of the most current Prospectus, Statement
of Additional Information ("SAI"), and annual and interim reports as RCM may
request, and the Trust shall fully cooperate in the efforts of RCM to sell and
arrange for the sale of Shares.
(2) The Trust shall maintain a currently effective Registration Statement on
Form N-1A with the Securities and Exchange Commission (the "SEC"), maintain
qualification with applicable states and file such reports and other documents
as may be required under applicable federal and state laws. The Trust shall
notify RCM in writing of the states in which the Shares may be sold and shall
notify RCM in writing of any changes to such information. The Trust shall bear
all expenses related to preparing and typesetting such Prospectuses, SAI and
other materials required by law and such other expenses, including printing and
mailing expenses, related to the Trust's communication with persons who are
shareholders.
(3) The Trust shall not use any advertisements or other sales materials that
have not been (i) submitted to RCM for its review and approval, and (ii) filed
with the appropriate regulators.
(4) The Trust represents and warrants that its Registration Statement and any
advertisements and sales literature (excluding statements relating to RCM and
the services it provides that are based upon written information furnished by
RCM expressly for inclusion therein) of the Trust shall not contain any untrue
statement of material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that all statements or information furnished to RCM, pursuant to Section 3(a)
hereof, shall be true and correct in all material respects.
4. OTHER BROKER-DEALERS. RCM in its discretion may enter into agreements to sell
Shares to such registered and qualified retail dealers, as reasonably requested
by the Trust. In making agreements with such dealers, RCM shall not act only as
principal and not as agent for the Trust. The form of any such dealer agreement
shall be mutually agreed upon and approved by the Trust and RCM.
5. WITHDRAWAL OF OFFERING. The Trust reserves the right at any time to withdraw
all offerings of any or all Shares by written notice to RCM at its principal
office. No Shares shall be offered by either RCM or the Trust under any
provisions of this Agreement and no orders for the purchase or Sale of Shares
hereunder shall be accepted by the Trust if and so long as effectiveness of the
Registration Statement then in effect or any necessary amendments thereto shall
be suspended under any of the provisions of the 1933 Act, or if and so long as a
current prospectus as required by Section 5(b)(2) of the 1933 Act is not on file
with the SEC.
6. SERVICES NOT EXCLUSIVE. The services furnished by RCM hereunder are not to be
deemed exclusive and RCM shall be free to furnish similar services to others so
long as its services under this Agreement are not impaired thereby.
7. EXPENSES OF THE TRUST. The Trust shall bear all costs and expenses of
registering the Shares with the SEC and state and other regulatory bodies, and
shall assume expenses related to communications with shareholders of the Trust
including, but not limited to, (i) fees and disbursements of its counsel and
independent public accountant; (ii) the preparation, filing, and printing of
Registration Statements and/or Prospectuses or SAIs; (iii) the preparation and
mailing of annual and interim reports, Prospectuses, SAIs, and proxy materials
to shareholders; (iv) such other expenses related to the communications with
persons who are shareholders of the Trust; and (v)the qualifications of Shares
for sale under the securities laws of such jurisdictions as shall be selected by
the Trust pursuant to Paragraph 3(b) hereof, and the costs and expenses payable
to each such jurisdiction for continuing qualification therein. In addition, the
Trust shall bear all costs of preparing, printing, mailing and filing any
advertisements and sales literature subject to the terms of the any Rule 12b-1
Plan. RCM does not assume responsibility for any expenses not assumed hereunder.
8. EXPENSES OF THE DISTRIBUTOR. The Distributor shall bear the expenses of
registration or qualification of the Distributor as a dealer or broker under
federal or state laws and the expenses of continuing such registration or
qualification. The Distributor does not assume responsibility for any expenses
not expressly assumed hereunder.
9. COMPENSATION. As compensation for the services performed and the expenses
assumed by RCM under this Agreement including, but not limited to, any
commissions paid to third parties for sales of Shares, the Trust shall pay RCM,
as promptly as possible after receipt of a quarterly invoice, a fee for services
as set forth in Schedule B to this Agreement. Such fees shall be paid to
Distributor by the Trust only with respect to a series (or class thereof) of the
Trust that has adopted a, and pursuant to its Rule 12b-1 plan or, if Rule 12b-1
payments are not sufficient to pay such fees and expenses, or if the Rule 12b-1
plan is discontinued, or if the Fund's sponsor, the Adviser, otherwise
determines that Rule 12b-1 fees shall not, in whole or in part, be used to pay
Distributor, the Adviser shall be responsible for the payment of the amount of
such fees not covered by Rule 12b-1 payments.
10. SHARE CERTIFICATES. The Trust shall not issue certificates representing
Shares unless requested to do so by a shareholder. If such request is
transmitted through RCM, the Trust will cause certificates evidencing the Shares
owned to be issued in such names and denominations as RCM shall from time to
time direct.
11. STATUS OF RCM. RCM is an independent contractor and shall be agent of the
Trust only with respect to the sale and redemption of Shares.
12. INDEMNIFICATION.
(a) The Trust agrees to indemnify, defend, and hold RCM, its
officers and directors, and any person who controls RCM within the meaning of
Section 15 of the 1933 Act, free and harmless from and against any and all
claims, demands, liabilities and expenses (including the cost of investigating
or defending such claims, demands, or liabilities and any counsel fees incurred
in connection therewith) that RCM, its officers, directors, or any such
controlling person may incur under the 1933 Act, or under common law or
otherwise, arising out of or based upon any (i) alleged untrue statement of a
material fact contained in the Registration Statement, Prospectus, SAI or sales
literature, (ii) alleged omission to state a material fact required to be stated
in the either thereof or necessary to make the statements therein not
misleading, or (iii) failure by the Trust to comply with the terms of the
Agreement; provided, that in no event shall anything contained herein be so
construed as to protect RCM against any liability to the Trust or its
shareholders to which RCM would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations under this Agreement.
(b) The Trust shall not be liable to RCM under this Agreement
with respect to any claim made against RCM on any person indemnified unless RCM
or other such person shall have notified the Trust in writing of the claim
within a reasonable time after the summons or other first written notification
giving information of the nature of the claim shall have been served upon RCM or
such other person (or after RCM or the person shall have received notice of
service on any designated agent). However, failure to notify the Trust of any
claim shall not relieve the Trust from any liability that it may have to RCM or
any other person against whom such action is brought otherwise than on account
of this Agreement.
(c) The Trust shall be entitled to participate at its own
expense in the defense or, if it so elects, to assume the defense of any suit
brought to enforce any claims subject to this Agreement. If the Trust elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Trust and satisfactory to indemnified defendants in the suit whose
approval shall not be unreasonably withheld. In the event that the Trust elects
to assume the defense of any suit and retain counsel, the indemnified defendants
shall bear the fees and expenses of any additional counsel retained by them. If
the Trust does not elect to assume the defense of a suit, it will reimburse the
indemnified defendants for the reasonable fees and expenses of any counsel
retained by the indemnified defendants. The Trust agrees to promptly notify RCM
of the commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of any of its
Shares.
(d) RCM agrees to indemnify, defend, and hold the Trust, its
officers and trustees, and any person who controls the Trust within the meaning
of Section 15 of the 1933 Act, free and harmless from and against any and all
claims, demands, liabilities, and expenses (including the cost of investigating
or defending against such claims, demands, or liabilities and any counsel fees
incurred in connection therewith) that the Trust, its trustees or officers, or
any such controlling person may incur under the 1933 Act, or under common law or
otherwise, resulting from RCM's willful misfeasance, bad faith or gross
negligence in the performance of its obligations and duties under this
Agreement, or arising out of or based upon any alleged untrue statement of a
material fact contained in information furnished in writing by RCM to the Trust
for use in the Registration Statement, Prospectus or SAI arising out of or based
upon any alleged omission to state a material fact in connection with such
information required to be stated in either thereof or necessary to make such
information not misleading.
(e) RCM shall be entitled to participate, at its own expense,
in the defense or, if it so elects, to assume the defense of any suit brought to
enforce the claim, but if RCM elects to assume the defense, the defense shall be
conducted by counsel chosen by RCM and satisfactory to the indemnified
defendants whose approval shall not be unreasonably withheld. In the event that
RCM elects to assume the defense of any suit and retain counsel, the defendants
in the suit shall bear the fees and expenses of any additional counsel retained
by them. If RCM does not elect to assume the defense of any suit, it will
reimburse the indemnified defendants in the suit for the reasonable fees and
expenses of any counsel retained by them.
13. DURATION AND TERMINATION.
(a) This Agreement shall become effective on the date first
written above or such later date as indicated in Schedule A and, unless sooner
terminated as provided herein, will continue in effect for two years from the
above written date. Thereafter, if not terminated this Agreement shall continue
in effect for successive annual periods, provided that such continuance is
specifically approved at least annually (i) by a vote of a majority of the
Trust's Board who are neither interested persons (as defined in the 1940 Act) of
the Trust ("Independent trustees") or RCM, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by the Board or by vote of
a majority of the outstanding voting securities of the Trust.
(b) Notwithstanding the foregoing, this Agreement may be
terminated in its entirety at any time, without the payment of any penalty, by
vote of the Board, by vote of a majority of the Independent trustees, or by vote
of a majority of the outstanding voting securities of the Trust on sixty days'
written notice to RCM or by RCM at any time, without the payment of any penalty,
on sixty days' written notice to the Trust. This Agreement will automatically
terminate in the event of its assignment.
14. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be changed,
waived, discharged, or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge,
or termination is sought. This Agreement may be amended with the approval of the
Board or of a majority of the outstanding voting securities of the Trust;
provided, that in either case, such amendment also shall be approved by a
majority of the Independent trustees.
15. LIMITATION OF LIABILITY. The Board and shareholders of the Trust shall not
be personally liable for obligations of the Trust in connection with any matter
arising from or in connection with this Agreement. This Agreement is not binding
upon any trustees, officer or shareholder of the Trust individually, and no such
person shall be individually liable with respect to any action or inaction
resulting from this Agreement.
16. NOTICE. Any notice required or permitted to be given by either party to the
other shall be deemed sufficient upon receipt in writing at the other party's
principal offices.
17. MISCELLANEOUS. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule, or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors. As used in this Agreement, the terms "majority
of the outstanding voting securities," "interested person," and "assignment"
shall have the same meaning as such terms have in the 1940 Act.
18. GOVERNING LAW. This Agreement shall be construed in accordance with the laws
of the State of New York and the 1940 Act. To the extent that the applicable
laws of the State of New York conflict with the applicable provisions of the
1940 Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers designated as of the day and year
first above written.
ATTEST: ALLIED ASSET ADVISORS FUNDS
___________________________ By:______________________________
Title:_____________________________
ATTEST: RAFFERTY CAPITAL MARKETS, INC.
___________________________ By:_______________________________
Title:______________________________
SCHEDULE A
TO THE
DISTRIBUTION AGREEMENT
BETWEEN
ALLIED ASSET ADVISORS FUNDS
AND
RAFFERTY CAPITAL MARKETS, INC.
Pursuant to Section 1 of the Distribution Agreement between Allied
Asset Advisors Funds (the "Trust"), and Rafferty Capital Markets, Inc. ("RCM"),
the Trust hereby appoints RCM as its agent to be the principal underwriter of
the Trust with respect to its following series:
Dow Jones Islamic Index Fund
Dated___________________,2000
SCHEDULE B
DISTRIBUTION SERVICES FEE SCHEDULE
|X| Greater of the annual minimum of $15,000 for the initial fund or 1
basis point on assets of the funds (apportioned on a relative net asset
basis amongst shares and classes).
|X| 15% discount year 1 on annual fees only.
|X| Licensing of Investment Advisor's Staff @ an annual fee of $900 per person.
|X| Advertising Compliance Review and NASD Filing @ $150 per filing of up
to 10 pages and $20 per additional page. NASD filing fees will apply
for Fund/Serv activities on a pass thru basis, if applicable.
SERVICES INCLUDE:
|X| Providing access to Fund/Serv as an NSCC member
|X| Filing marketing material with the NASD
|X| Providing principal review of marketing materials
|X| Executing broker dealer selling agreements
|X| Underwriting mutual fund shares
CUSTODY AGREEMENT
This AGREEMENT, dated as of ________,2000, by and between Allied Asset
Advisors Funds (the "Trust"), a business trust organized under the laws of
Delaware, and FIRSTAR BANK, N.A., a national banking association (the
"Custodian").
W I T N E S S E T H:
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Trust is authorized to create separate series, each with
its own separate investment portfolio; and
WHEREAS, the Trust initially intends to offer shares in one series, the
Dow Jones Islamic Index Fund (such series, together with all other series
subsequently established by the Trust and made subject to this Agreement in
accordance with Section 14.9 herein, being herein referred to as the "Fund").
WHEREAS, the Trust desires that the Fund's Securities and cash be held
and administered by the Custodian pursuant to this Agreement; and
WHEREAS, the Custodian represents that it is a bank having the
qualifications prescribed in Section 26(a)(i) of the 1940 Act;
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Trust and the Custodian hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1.1 "AUTHORIZED PERSON" means any Officer or other person duly
authorized by resolution of the Board of Trustees to give Oral
Instructions and Written Instructions on behalf of the Fund and
named in Exhibit A hereto or in such resolutions of the Board Of
Trustees, certified by an Officer, as may be received by the
Custodian from time to time.
1.2 "BOARD OF TRUSTEES" shall mean the Trustees from time to time
serving under the Trust's Declaration of Trust, as from time to
time amended.
1.3 "BOOK-ENTRY SYSTEM" shall mean a federal book-entry system as
provided in Subpart O of Treasury Circular No. 300, 31 CFR 306, in
Subpart B of 31 CFR Part 350, or in such book-entry regulations of
federal agencies as are substantially in the form of such Subpart
O.
1.4 "BUSINESS DAY" shall mean any day recognized as a settlement day
by The New York Stock Exchange, Inc. and any other day for which
the Trust computes the net asset value of Shares of the Fund.
1.5 "FUND CUSTODY ACCOUNT" shall mean any of the accounts in the name
of the Trust, which is provided for in Section 3.2 below.
1.6 "NASD" shall mean The National Association of Securities
Dealers, Inc.
1.7 "OFFICER" shall mean the Chairman, President, any Vice President,
any Assistant Vice President, the Secretary, any Assistant
Secretary, the Treasurer, or any Assistant Treasurer of the Trust.
1.8 "ORAL INSTRUCTIONS" shall mean instructions orally transmitted to
and accepted by the Custodian because such instructions are:
(i) reasonably believed by the Custodian to have been given
by an Authorized Person,
(ii) recorded and kept among the records of the Custodian made
in the ordinary course of business and
(iii) orally confirmed by the Custodian. The Trust shall
cause all Oral Instructions to be confirmed by Written
Instructions prior to the end of the next Business Day. If
such Written Instructions confirming Oral Instructions are
not received by the Custodian prior to a transaction, it
shall in no way affect the validity of the transaction or the
authorization thereof by the Trust. If Oral Instructions vary
from the Written Instructions which purport to confirm them,
the Custodian shall notify the trust of such variance but such
Oral Instructions will govern unless the Custodian has not yet
acted.
1.9 "PROPER INSTRUCTIONS" shall mean Oral Instructions or Written
Instructions. Proper Instructions may be continuing Written
Instructions when deemed appropriate by both parties.
1.10 "SECURITIES DEPOSITORY" shall mean The Depository Trust Company
and (provided that Custodian shall have received a copy of a
resolution of the Board Of Trustees, certified by an Officer,
specifically approving the use of such clearing agency as a
depository for the Fund) any other clearing agency registered with
the Securities and Exchange Commission under Section 17A of the
Securities and Exchange Act of 1934 as amended (the "1934 Act"),
which acts as a system for the central handling of Securities
where all Securities of any particular class or series of an
issuer deposited within the system are treated as fungible and may
be transferred or pledged by bookkeeping entry without physical
delivery of the Securities.
1.11 "SECURITIES" shall include, without limitation, common and
preferred stocks, bonds, call options, put options, debentures,
notes, bank cerificates of deposit, bankers' acceptances,
mortgage-backed securities or other obligations, and any
certificates, receipts, warrants or other instruments or documents
representing rights to receive, purchase or subscribe for the
same, or evidencing or representing any other rights or interests
therein, or any similar property or assets that the Custodian has
the facilities to clear and to service.
1.12 "SHARES" shall mean, with respect to a Fund, the units of
beneficial interest issued by the Trust on account of the Fund.
1.13 "SUB-CUSTODIAN" shall mean and include (i) any branch of a "U.S.
Bank," as that term is defined in Rule 17f-5 under the 1940 Act,
(ii) any "Eligible Foreign Custodian," as that term is defined in
Rule 17f-5 under the 1940 Act, having a contract with the
Custodian which the Custodian has determined will provide
reasonable care of assets of the Fund based on the standards
specified in Section 3.3 below. Such contract shall include
provisions that provide: (i) for indemnification or insurance
arrangements (or any combination of the foregoing) such that the
Fund will be adequately protected against the risk of loss of
assets held in accordance with such contract; (ii) that the Fund'
assets will not be subject to any right, charge,security interest,
lien or claim of any kind in favor of the Sub-Custodian or its
creditors except a claim of payment for their safe custody or
administration, in the case of cash deposits, liens or rights in
favor of creditors of the Sub-Custodian arising under bankruptcy,
insolvency, or similar laws; (iii) that beneficial ownership for
the Fund' assets will be freely transferable without the payment
of money or value other than for safe custody or administration;
(iv) that adequate records will be maintained identifying the
assets as belonging to the Fund or as being held by a third party
for the benefit of the Fund; (v) that the Fund' independent public
accountants will be given access to those records or confirmation
of the contents of those records; and (vi) that the Fund will
receive periodic reports with respect to the safekeeping of the
Fund' assets, including, but not limited to, notification of any
transfer to or from a Fund's account or a third party account
containing assets held for the benefit of the Fund. Such contract
may contain, in lieu of any or all of the provisions specified
above, such other provisions that the Custodian determines will
provide, in their entirety, the same or a greater level of care
and protection for Fund assets as the specified provisions, in
their entirety.
1.14 "WRITTEN INSTRUCTIONS" shall mean (i) written communications
actually received by the Custodian and signed by an Authorized
Person, or (ii) communications by telex or any other such system
from one or more persons reasonably believed by the Custodian to
be Authorized Persons, or (iii) communications between
electro-mechanical or electronic devices provided that the use of
such devices and the procedures for the use thereof shall have
been approved by resolutions of the Board Of Trustees, a copy of
which, certified by an Officer, shall have been delivered to the
Custodian.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 APPOINTMENT. The Trust hereby constitutes and appoints the
Custodian as custodian of all Securities and cash owned by or in
the possession of the Fund at any time during the period of this
Agreement.
2.2 ACCEPTANCE. The Custodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as hereinafter
set forth.
2.3 DOCUMENTS TO BE FURNISHED. The following documents, including any
amendments thereto, will be provided contemporaneously with the
execution of the Agreement to the Custodian by the Trust:
a. A copy of the Declaration of Trust certified by
the Secretary;
b. A copy of the Bylaws of the Trust certified by th
Secretary;
c. A copy of the resolution of the Board Of Trustees
of the Trust appointing the Custodian, certified
by the Secretary;
d. A copy of the then current Prospectus of the Fund;
and
e. A certification of the Chairman and Secretary of
the Trust setting forth the names and signatures
of the current Officers of the Trust and other
Authorized Persons.
2.4 NOTICE OF APPOINTMENT OF DIVIDEND AND TRANSFER AGENT. The Trust
agrees to notify the Custodian in writing of the appointment,
termination or change in appointment of any Dividend and Transfer
Agent of the Fund.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
3.1 SEGREGATION. All Securities and non-cash property held by the
Custodian for the account of the Fund (other than Securities
maintained in a Securities Depository or Book-Entry System) shall
be physically segregated from other Securities and non-cash
property in the possession of the Custodian (including the
Securities and non-cash property of the other series of the Trust)
and shall be identified as subject to this Agreement.
3.2 FUND CUSTODY ACCOUNTS. As to each Fund, the Custodian shall open
and maintain in its trust department a custody account in the name
of the Trust coupled with the name of the Fund, subject only to
draft or order of the Custodian, in which the Custodian shall
enter and carry all Securities, cash and other assets of such Fund
which are delivered to it.
3.3 APPOINTMENT OF AGENTS.
(a) In its discretion, the Custodian may appoint one or more
Sub-Custodians to act as Securities Depositories or as
sub-custodians to hold Securities and cash of the Fund and to
carry out such other provisions of this Agreement as it may
determine, provided, however, that the appointment of any such
agents and maintenance of any Securities and cash of the Fund
shall be at the Custodian's expense and shall not relieve the
Custodian of any of its obligations or liabilities under this
Agreement.
(b) If, after the initial approval of Sub-Custodians by the Board
of Trustees in connection with this Agreement, the Custodian
wishes to appoint other Sub-Custodians to hold property of the
Fund, it will so notify the Trust and provide it with
information reasonably necessary to determine any such new
Sub-Custodian's eligibility under Rule 17f-5 under the 1940
Act, including a copy of the proposed agreement with such
Sub-Custodian. The Trust shall at the meeting of the Board of
Trustees next following receipt of such notice and information
give a written approval or disapproval of the proposed action.
(c) The Agreement between the Custodian and each Sub-Custodian
acting hereunder shall contain the required provisions set
forth in Rule 17f-5(c) (2)(i).
(d) At the end of each calendar quarter, the Custodian shall
provide written reports notifying the Board of Trustees of the
placement of the Securities and cash of the Fund with a
particular Sub-Custodian and of any material changes in the
Fund' arrangements. The Custodian shall promptly take such
steps as may be required to withdraw assets of the Fund from
any Sub-Custodian that has ceased to meet the requirements of
Rule 17f-5 under the 1940 Act.
(e) With respect to its responsibilities under this Section 3.3,
the Custodian hereby warrants to the Trust that it agrees to
exercise reasonable care, prudence and diligence such as a
person having responsibility for the safekeeping of property
of the Fund. The Custodian further warrants that a Fund's
assets will be subject to reasonable care, based on the
standards applicable to custodians in the relevant market, if
maintained with each Sub-Custodian, after considering all
factors relevant to the safekeeping of such assets, including,
without limitation: (i) the Sub-Custodian's practices,
procedures, and internal controls, for certificated securities
(if applicable), the method of keeping custodial records, and
the security and data protection practices; (ii) whether the
Sub-Custodian has the requisite financial strength to provide
reasonable care for Fund assets; (iii) the Sub-Custodian's
general reputation and standing and, in the case of a
Securities Depository, the Securities Depository's operating
history and number of participants; and (iv) whether the Fund
will have jurisdiction over and be able to enforce judgments
against the Sub-Custodian, such as by virtue of the existence
of any offices of the Sub-Custodian in the United States or
the Sub-Custodian's consent to service of process in the
United States.
(f) The Custodian shall establish a system to monitor the
appropriateness of maintaining the Fund's assets with a
particular Sub-Custodian and the contract governing the Fund'
arrangements with such Sub-Custodian.
3.4 DELIVERY OF ASSETS TO CUSTODIAN.
The Trust shall deliver, or cause to be delivered, to the
Custodian all of the Fund' Securities, cash and other assets,
including (a) all payments of income, payments of principal and
capital distributions received by the Fund with respect to such
Securities, cash or other assets owned by the Fund at any time
during the period of this Agreement, and (b) all cash received by
the Fund for the issuance, at any time during such period, of
Shares. The Custodian shall not be responsible for such
Securities, cash or other assets until actually received by it.
3.5 SECURITIES DEPOSITORIES AND BOOK-ENTRY SYSTEMS. The Custodian
may deposit and/or maintain Securities of the Fund in a Securities
Depository or in a Book-Entry System, subject to the following
provisions:
(a) Prior to a deposit of Securities of the Fund in any Securities
Depository or Book-Entry System, the Trust shall deliver to
the Custodian a resolution of the Board Of Trustees, certified
by an Officer, authorizing and instructing the Custodian on an
on-going basis to deposit in such Securities Depository or
Book-Entry System all Securities eligible for deposit therein
and to make use of such Securities Depository or Book-Entry
System to the extent possible and practical in connection with
its performance hereunder, including, without limitation, in
connection with settlements of purchases and sales of
Securities, loans of Securities, and deliveries and returns of
collateral consisting of Securities.
(b) Securities of the Fund kept in a Book-Entry System or
Securities Depository shall be kept in an account ("Depository
Account") of the Custodian in such Book-Entry System or
Securities Depository which includes only assets held by the
Custodian as a fiduciary, custodian or otherwise for
customers.
(c) The records of the Custodian with respect to Securities of the
Fund maintained in a Book-Entry System or Securities
Depository shall, by book-entry, identify such Securities as
belonging to the Fund.
(d) If Securities purchased by the Fund are to be held in a
Book-Entry System or Securities Depository, the Custodian
shall pay for such Securities upon (i) receipt of advice from
the Book-Entry System or Securities Depository that such
Securities have been transferred to the Depository Account,
and (ii) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the account
of the Fund. If Securities sold by the Fund are held in a
Book-Entry System or Securities Depository, the Custodian
shall transfer such Securities upon (i) receipt of advice from
the Book-Entry System or Securities Depository that payment
for such Securities has been transferred to the Depository
Account, and (ii) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account
of the Fund.
(e) The Custodian shall provide the Trust with copies of any
report (obtained by the Custodian from a Book-Entry System or
Securities Depository in which Securities of the Fund are
kept) on the internal accounting controls and procedures for
safeguarding Securities deposited in such Book-Entry System or
Securities Depository.
(f) Anything to the contrary in this Agreement notwithstanding,
the Custodian shall be liable to the Trust for any loss or
damage to the Fund resulting (i) from the use of a Book-Entry
System or Securities Depository by reason of any negligence or
willful misconduct on the part of Custodian or any
Sub-Custodian appointed pursuant to Section 3.3 above or any
of its or their employees, or (ii) from failure of Custodian
or any such Sub-Custodian to enforce effectively such rights
as it may have against a Book-Entry System or Securities
Depository. At its election, the Trust shall be subrogated to
the rights of the Custodian with respect to any claim against
a Book-Entry System or Securities Depository or any other
person from any loss or damage to the Fund arising from the
use of such Book-Entry System or Securities Depository, if and
to the extent that the Fund has not been made whole for any
such loss or damage.
3.6 DISBURSEMENT OF MONEYS FROM FUND CUSTODY ACCOUNT. Upon receipt of
Proper Instructions, the Custodian shall disburse moneys from the
Fund Custody Account but only in the following cases:
(a) For the purchase of Securities for the Fund but only in
accordance with Section 4.1 of this Agreement and only (i)
in the case of Securities (other than options on Securities,
futures contracts and options on futures contracts), against
the delivery to the Custodian (or any Sub-Custodian appointed
pursuant to Section 3.3 above) of such Securities registered
as provided in Section 3.9 below or in proper form for
transfer, or if the purchase of such Securities is effected
through a Book-Entry System or Securities Depository, in
accordance with the conditions set forth in Section 3.5 above;
(ii) in the case of options on Securities, against delivery to
the Custodian (or such Sub-Custodian) of such receipts as are
required by the customs prevailing among dealers in such
options; (iii) in the case of futures contracts and options on
futures contracts, against delivery to the Custodian (or such
Sub-Custodian) of evidence of title thereto in favor of the
Fund or any nominee referred to in Section 3.9 below; and (iv)
in the case of repurchase or reverse repurchase agreements
entered into between the Trust and a bank which is a member of
the Federal Reserve System or between the Trust and a primary
dealer in U.S. Government securities, against delivery of the
purchased Securities either in certificate form or through an
entry crediting the Custodian's account at a Book-Entry System
or Securities Depository with such Securities;
(b) In connection with the conversion, exchange or surrender, as
set forth in Section 3.7(f) below, of Securities owned by the
Fund;
(c) For the payment of any dividends or capital gain distributions
declared by the Fund;
(d) In payment of the redemption price of Shares as provided in
Section 5.1 below;
(e) For the payment of any expense or liability incurred by the
Fund, including but not limited to the following payments for
the account of the Fund: interest; taxes; administration,
investment advisory, accounting, auditing, transfer agent,
custodian, trustee and legal fees; and other operating
expenses of the Fund; in all cases, whether or not such
expenses are to be in whole or in part capitalized or treated
as deferred expenses;
(f) For transfer in accordance with the provisions of any
agreement among the Trust, the Custodian and a broker-dealer
registered under the 1934 Act and a member of the NASD,
relating to compliance with rules of The Options Clearing
Corporation and of any registered national securities exchange
(or of any similar organization or organizations) regarding
escrow or other arrangements in connection with transactions
by the Fund;
(g) For transfer in accordance with the provision of any agreement
among the Trust, the Custodian, and a futures commission
merchant registered under the Commodity Exchange Act, relating
to compliance with the rules of the Commodity Futures Trading
Commission and/or any contract market (or any similar
organization or organizations) regarding account deposits in
connection with transactions by the Fund;
(h) For the funding of any uncertificated time deposit or other
interest-bearing account with any banking institution
(including the Custodian), which deposit or account has a term
of one year or less; and
(i) For any other proper purpose, but only upon receipt, in
addition to Proper Instructions, of a copy of a resolution of
the Board of Trustees, certified by an Officer, specifying the
amount and purpose of such payment, declaring such purpose to
be a proper corporate purpose, and naming the person or
persons to whom such payment is to be made.
3.7 DELIVERY OF SECURITIES FROM FUND CUSTODY ACCOUNT. Upon receipt of
Proper Instructions, the Custodian shall release and deliver
Securities from the Fund Custody Account but only in the following
cases:
(a) Upon the sale of Securities for the account of the Fund but
only against receipt of payment therefor in cash, by certified
or cashiers check or bank credit;
(b) In the case of a sale effected through a Book-Entry System or
Securities Depository, in accordance with the provisions of
Section 3.5 above;
(c) To an offeror's depository agent in connection with tender or
other similar offers for Securities of the Fund; provided
that, in any such case, the cash or other consideration is to
be delivered to the Custodian;
(d) To the issuer thereof or its agent (i) for transfer into the
name of the Fund, the Custodian or any Sub-Custodian appointed
pursuant to Section 3.3 above, or of any nominee or nominees
of any of the foregoing, or (ii) for exchange for a different
number of certificates or other evidence representing the same
aggregate face amount or number of units; provided that, in
any such case, the new Securities are to be delivered to the
Custodian;
(e) To the broker selling Securities, for examination in
accordance with the "street delivery" custom;
(f) For exchange or conversion pursuant to any plan or merger,
consolidation, recapitalization, reorganization or
readjustment of the issuer of such Securities, or pursuant to
provisions for conversion contained in such Securities, or
pursuant to any deposit agreement, including surrender or
receipt of underlying Securities in connection with the
issuance or cancellation of depository receipts; provided
that, in any such case, the new Securities and cash, if any,
are to be delivered to the Custodian;
(g) Upon receipt of payment therefor pursuant to any repurchase or
reverse repurchase agreement entered into by the Fund;
(h) In the case of warrants, rights or similar Securities, upon
the exercise thereof, provided that, in any such case, the new
Securities and cash, if any, are to be delivered to the
Custodian;
(i) For delivery in connection with any loans of Securities of the
Fund, but only against receipt of such collateral as the Trust
shall have specified to the Custodian in Proper Instructions;
(j) For delivery as security in connection with any borrowings by
the Fund requiring a pledge of assets by the Trust, but only
against receipt by the Custodian of the amounts borrowed;
(k) Pursuant to any authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of
the Trust;
(l) For delivery in accordance with the provisions of any
agreement among the Trust, the Custodian and a broker-dealer
registered under the 1934 Act and a member of the NASD,
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange
(or of any similar organization or organizations) regarding
escrow or other arrangements in connection with transactions
by the Fund;
(m) For delivery in accordance with the provisions of any
agreement among the Trust, the Custodian, and a futures
commission merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any contract market (or any
similar organization or organizations) regarding account
deposits in connection with transactions by the Fund; or
(n) For any other proper corporate purpose, but only upon receipt,
in addition to Proper Instructions, of a copy of a resolution
of the Board of Trustees, certified by an Officer, specifying
the Securities to be delivered, setting forth the purpose for
which such delivery is to be made, declaring such purpose to
be a proper corporate purpose, and naming the person or
persons to whom delivery of such Securities shall be made.
3.8 ACTIONS NOT REQUIRING PROPER INSTRUCTIONS. Unless otherwise
instructed by the Trust, the Custodian shall with respect to
all Securities held for the Fund:
(a) Subject to Section 7.4 below, collect on a timely basis all
income and other payments to which the Fund is entitled either
by law or pursuant to custom in the securities business;
(b) Present for payment and, subject to Section 7.4 below, collect
on a timely basis the amount payable upon all Securities which
may mature or be called, redeemed, or retired, or otherwise
become payable;
(c) Endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments;
(d) Surrender interim receipts or Securities in temporary form for
Securities in definitive form;
(e) Execute, as custodian, any necessary declarations or
certificates of ownership under the federal income tax laws or
the laws or regulations of any other taxing authority now or
hereafter in effect, and prepare and submit reports to the
Internal Revenue Service ("IRS") and to the Trust at such
time, in such manner and containing such information as is
prescribed by the IRS;
(f) Hold for the Fund, either directly or, with respect to
Securities held therein, through a Book-Entry System or
Securities Depository, all rights and similar securities
issued with respect to Securities of the Fund; and
(g) In general, and except as otherwise directed in Proper
Instructions, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with Securities and assets of the
Fund.
3.9 REGISTRATION AND TRANSFER OF SECURITIES. All Securities held
for the Fund that are issued or issuable only in bearer form
shall be held by the Custodian in that form, provided that any
such Securities shall be held in a Book-Entry System if
eligible therefor. All other Securities held for the Fund may
be registered in the name of the Fund, the Custodian, or any
Sub-Custodian appointed pursuant to Section 3.3 above, or in
the name of any nominee of any of them, or in the name of a
Book-Entry System, Securities Depository or any nominee of
either thereof. The Trust shall furnish to the Custodian
appropriate instruments to enable the Custodian to hold or
deliver in proper form for transfer, or to register in the
name of any of the nominees hereinabove referred to or in the
name of a Book-Entry System or Securities Depository, any
Securities registered in the name of the Fund.
3.10 RECORDS.
(a) The Custodian shall maintain, for the Fund, complete and
accurate records with respect to Securities, cash or other
property held for the Fund, including (i) journals or other
records of original entry containing an itemized daily record
in detail of all receipts and deliveries of Securities and all
receipts and disbursements of cash; (ii) ledgers (or other
records) reflecting (A) Securities in transfer, (B) Securities
in physical possession, (C) monies and Securities borrowed and
monies and Securities loaned (together with a record of the
collateral therefor and substitutions of such collateral),
(D) dividends and interest received, and (E) dividends
receivable and interest receivable; and (iii) canceled checks
and bank records related thereto. The Custodian shall keep
such other books and records of the Fund as the Trust shall
reasonably request, or as may be required by the 1940 Act,
including, but not limited to, Section 31 of the 1940 Act and
Rule 31a-2 promulgated thereunder.
(b) All such books and records maintained by the Custodian shall
(i) be maintained in a form acceptable to the Trust and in
compliance with rules and regulations of the Securities and
Exchange Commission, (ii) be the property of the Trust and at
all times during the regular business hours of the Custodian
be made available upon request for inspection by duly
authorized officers, employees or agents of the Trust and
employees or agents of the Securities and Exchange Commission,
and (iii) if required to be maintained by Rule 31a-1 under the
1940 Act, be preserved for the periods prescribed in Rule
31a-2 under the 1940 Act.
3.11 FUND REPORTS BY CUSTODIAN. The Custodian shall furnish the
Trust with a daily activity statement and a summary of all
transfers to or from each Fund Custody Account on the day
following such transfers. At least monthly and from time to
time, the Custodian shall furnish the Trust with a detailed
statement of the Securities and moneys held by the Custodian
and the Sub-Custodians for the Fund under this Agreement.
3.12 OTHER REPORTS BY CUSTODIAN. The Custodian shall provide the
Trust with such reports, as the Trust may reasonably request
from time to time, on the internal accounting controls and
procedures for safeguarding Securities, which are employed by
the Custodian or any Sub-Custodian appointed pursuant to
Section 3.3 above.
3.13 PROXIES AND OTHER MATERIALS. The Custodian shall cause all
proxies relating to Securities which are not registered in the
name of the Fund, to be promptly executed by the registered
holder of such Securities, without indication of the manner in
which such proxies are to be voted, and shall promptly deliver
to the Trust such proxies, all proxy soliciting materials and
all notices relating to such Securities.
3.14 INFORMATION ON CORPORATE ACTIONS. The Custodian shall promptly
deliver to the Trust all information received by the Custodian
and pertaining to Securities being held by the Fund with
respect to optional tender or exchange offers, calls for
redemption or purchase, or expiration of rights as described
in the Standards of Service Guide attached as Exhibit B. If
the Trust desires to take action with respect to any tender
offer, exchange offer or other similar transaction, the Trust
shall notify the Custodian at least five Business Days prior
to the date on which the Custodian is to take such action. The
Trust will provide or cause to be provided to the Custodian
all relevant information for any Security which has unique
put/option provisions at least five Business Days prior to the
beginning date of the tender period.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
4.1 PURCHASE OF SECURITIES. Promptly upon each purchase of
Securities for the Fund, Written Instructions shall be
delivered to the Custodian, specifying (a) the name of the
issuer or writer of such Securities, and the title or other
description thereof, (b) the number of shares, principal
amount (and accrued interest, if any) or other units
purchased, (c) the date of purchase and settlement, (d) the
purchase price per unit, (e) the total amount payable upon
such purchase, and (f) the name of the person to whom such
amount is payable. The Custodian shall upon receipt of such
Securities purchased by the Fund pay out of the moneys held
for the account of the Fund the total amount specified in such
Written Instructions to the person named therein. The
Custodian shall not be under any obligation to pay out moneys
to cover the cost of a purchase of Securities for the Fund, if
in the Fund Custody Account there is insufficient cash
available to the Fund for which such purchase was made.
4.2 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES
PURCHASED. In any and every case where payment for the
purchase of Securities for the Fund is made by the Custodian
in advance of receipt of the Securities purchased but in the
absence of specified Written Instructions to so pay in
advance, the Custodian shall be liable to the Fund for such
Securities to the same extent as if the Securities had been
received by the Custodian.
4.3 SALE OF SECURITIES. Promptly upon each sale of Securities by
the Fund, Written Instructions shall be delivered to the
Custodian, specifying (a) the name of the issuer or writer of
such Securities, and the title or other description thereof,
(b) the number of shares, principal amount (and accrued
interest, if any), or other units sold, (c) the date of sale
and settlement, (d) the sale price per unit, (e) the total
amount payable upon such sale, and (f) the person to whom
such Securities are to be delivered. Upon receipt of the
total amount payable to the Fund as specified in such Written
Instructions, the Custodian shall deliver such Securities to
the person specified in such Written Instructions. Subject to
the foregoing, the Custodian may accept payment in such form
as shall be satisfactory to it, and may deliver Securities and
arrange for payment in accordance with the customs prevailing
among dealers in Securities.
4.4 DELIVERY OF SECURITIES SOLD. Notwithstanding Section 4.3
above or any other provision of this Agreement, the Custodian,
when instructed to deliver Securities against payment, shall
be entitled, if in accordance with generally accepted market
practice, to deliver such Securities prior to actual receipt
of final payment therefor. In any such case, the Fund shall
bear the risk that final payment for such Securities may not
be made or that such Securities may be returned or otherwise
held or disposed of by or through the person to whom they were
delivered, and the Custodian shall have no liability for any
for the foregoing, provided that the Custodian shall have
taken reasonable steps to ensure prompt collection of the
payment for, or the return of, such securities by the broker
or its clearing agent and (ii) in the case of the sale of
securities or other assets the settlement of which occurs
outside the United States of America, such securities shall be
delivered and paid for in accordance with local custom and
practice generally accepted by institutional clients in the
country in which settlement occurs, provided that in every
case the Custodian shall be subject to the standard of care
set forth in section 17.1 and to any Written Instructions.
Except in the cases provided for in the immediately preceding
sentence, in any case where delivery of securities or other
assets for the account of the Fund is made by the Custodian in
advance of receipt of payment for the securities or other
assets so sold in the absence of Proper Instructions to so
deliver in advance, the Custodian shall be absolutely liable
to the Fund for such payment to the same extent as if such
payment had been received by the Custodian.
4.5 PAYMENT FOR SECURITIES SOLD, ETC. In its sole discretion and
from time to time, the Custodian may credit the Fund Custody
Account, prior to actual receipt of final payment thereof,
with (i) proceeds from the sale of Securities which it has
been instructed to deliver against payment, (ii) proceeds from
the redemption of Securities or other assets of the Fund, and
(iii) income from cash, Securities or other assets of the
Fund. Any such credit shall be conditional upon actual
receipt by Custodian of final payment and may be reversed if
final payment is not actually received in full. The Custodian
may, in its sole discretion and from time to time, permit the
Fund to use Fund so credited to the Fund Custody Account in
anticipation of actual receipt of final payment. Any such
Fund shall be repayable immediately upon demand made by the
Custodian at any time prior to the actual receipt of all final
payments in anticipation of which Fund were credited to the
Fund Custody Account.
4.6 ADVANCES BY CUSTODIAN FOR SETTLEMENT. The Custodian may, in
its sole discretion and from time to time, advance Fund to the
Trust to facilitate the settlement of a Fund's transactions in
the Fund Custody Account. Any such advance shall be repayable
immediately upon demand made by Custodian.
ARTICLE V
REDEMPTION OF FUND SHARES
5.1 TRANSFER OF FUND. From such Fund as may be available for the
purpose in the relevant Fund Custody Account, and upon receipt
of Proper Instructions specifying that the Fund are required
to redeem Shares of the Fund, the Custodian shall wire each
amount specified in such Proper Instructions to or through
such bank as the Trust may designate with respect to such
amount in such Proper Instructions.
5.2 NO DUTY REGARDING PAYING BANKS. The Custodian shall not be
under any obligation to effect payment or distribution by any
bank designated in Proper Instructions given pursuant to
Section 5.1 above of any amount paid by the Custodian to such
bank in accordance with such Proper Instructions.
ARTICLE VI
SEGREGATED ACCOUNTS
Upon receipt of Proper Instructions, the Custodian shall establish and
maintain a segregated account or accounts for and on behalf of the Fund, into
which account or accounts may be transferred cash and/or Securities, including
Securities maintained in a Depository Account,
(a) in accordance with the provisions of any agreement among the
Trust, the Custodian and a broker-dealer registered under the
1934 Act and a member of the NASD (or any futures commission
merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing
Trust and of any registered national securities exchange
(or the Commodity Futures Trading Commission or any registered
contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in
connection with transactions by the Fund,
(b) for purposes of segregating cash or Securities in connection
with securities options purchased or written by the Fund or in
connection with financial futures contracts (or options
thereon) purchased or sold by the Fund,
(c) which constitute collateral for loans of Securities made by
the Fund,
(d) for purposes of compliance by the Fund with requirements under
the 1940 Act for the maintenance of segregated accounts by
registered investment companies in connection with reverse
repurchase agreements and when-issued, delayed delivery and
firm commitment transactions, and
(e) for other proper corporate purposes, but only upon receipt of,
in addition to Proper Instructions, a certified copy of a
resolution of the Board of Trustees, certified by an Officer,
setting forth the purpose or purposes of such segregated
account and declaring such purposes to be proper corporate
purposes.
Each segregated account established under this Article VI shall be
established and maintained for a the Fund only. All Proper Instructions relating
to a segregated account shall specify the Fund.
ARTICLE VII
CONCERNING THE CUSTODIAN
7.1 STANDARD OF CARE. The Custodian shall be held to the exercise
of reasonable care in carrying out its obligations under this
Agreement, and shall be without liability to the Trust or any Fund
for any loss, damage, cost, expense (including attorneys' fees and
disbursements), liability or claim unless such loss, damage, cost,
expense, liability or claim arises from negligence, bad faith or
willful misconduct on its part or on the part of any Sub-Custodian
appointed pursuant to Section 3.3 above. The Custodian shall be
entitled to receive and act upon advice of counsel on all matters.
The Custodian shall be without liability for any action reasonably
taken or omitted in good faith pursuant to the advice of (i)
counsel for the Trust, or (ii) at the expense of the Custodian,
such other counsel as the Trust may agree to, such agreement not
to be unreasonably withheld or delayed; provided that with respect
to the performance of any action or ommission of any action upon
such advice, the Custodian shall be required to conform to the
standard of care set forth in this section 7.1. The Custodian
shall promptly notify the Trust of any action taken or omitted by
the Custodian pursuant to advice of counsel. The Custodian shall
not be under any obligation at any time to ascertain whether the
Trust or the Fund is in compliance with the 1940 Act, the
regulations thereunder, the provisions of the Trust's charter
documents or by-laws, or its investment objectives and policies
as then in effect.
7.2 ACTUAL COLLECTION REQUIRED. The Custodian shall not be liable
for, or considered to be the custodian of, any cash belonging to
the Fund or any money represented by a check, draft or other
instrument for the payment of money, until the Custodian or its
agents actually receive such cash or collect on such instrument.
7.3 NO RESPONSIBILITY FOR TITLE, ETC. So long as and to the extent
that it is in the exercise of reasonable care, the Custodian
shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received or delivered by
it pursuant to this Agreement.
7.4 LIMITATION ON DUTY TO COLLECT. Custodian shall not be required
to enforce collection, by legal means or otherwise, of any money
or property due and payable with respect to Securities held for
the Fund if such Securities are in default or payment is not made
after due demand or presentation.
7.5 RELIANCE UPON DOCUMENTS AND INSTRUCTIONS. The Custodian shall
be entitled to rely upon any certificate, notice or other
instrument in writing received by it and reasonably believed by it
to be genuine. The Custodian shall be entitled to rely upon any
Oral Instructions and any Written Instructions actually received
by it pursuant to this Agreement.
7.6 EXPRESS DUTIES ONLY. The Custodian shall have no duties or
obligations whatsoever except such duties and obligations as are
specifically set forth in this Agreement, and no covenant or
obligation shall be implied in this Agreement against the
Custodian.
7.7 CO-OPERATION. The Custodian shall cooperate with and supply
necessary information to the entity or entities appointed by the
Trust to keep the books of account of the Fund and/or compute the
value of the assets of the Fund. The Custodian shall take all such
reasonable actions as the Trust may from time to time request to
enable the Trust to obtain, from year to year, favorable opinions
from the Trust's independent accountants with respect to the
Custodian's activities hereunder in connection with (a) the
preparation of the Trust's reports on Form N-1A and Form N-SAR and
any other reports required by the Securities and Exchange
Commission, and (b) the fulfillment by the Trust of any other
requirements of the Securities and Exchange Commission.
ARTICLE VIII
INDEMNIFICATION
8.1 INDEMNIFICATION BY TRUST. The Trust shall indemnify and hold
harmless the Custodian and any Sub-Custodian appointed pursuant to
Section 3.3 above, and any nominee of the Custodian or of such
Sub-Custodian, from and against any loss, damage, cost, expense
(including attorneys' fees and disbursements), liability
(including, without limitation, liability arising under the
Securities Act of 1933, the 1934 Act, the 1940 Act, and any state
or foreign securities and/or banking laws) or claim arising
directly or indirectly (a) from the fact that Securities are
registered in the name of any such nominee, or (b) from any action
or inaction by the Custodian or such Sub-Custodian (i) at the
request or direction of or in reliance on the advice of the Trust,
or (ii) upon Proper Instructions, or (c) generally, from the
performance of its obligations under this Agreement or any
sub-custody agreement with a Sub-Custodian appointed pursuant
to Section 3.3 above, provided that neither the Custodian nor any
such Sub-Custodian shall be indemnified and held harmless from and
against any such loss, damage, cost, expense, liability or claim
arising from the Custodian's or such Sub-Custodian's negligence,
bad faith or willful misconduct.
8.2 INDEMNIFICATION BY CUSTODIAN. The Custodian shall indemnify and
hold harmless the Trust from and against any loss, damage, cost,
expense (including attorneys' fees and disbursements), liability
(including without limitation, liability arising under the
Securities Act of 1933, the 1934 Act, the 1940 Act, and any state
or foreign securities and/or banking laws) or claim arising from
the negligence, bad faith or willful misconduct of the Custodian
or any Sub-Custodian appointed pursuant to Section 3.3 above, or
any nominee of the Custodian or of such Sub-Custodian.
8.3 INDEMNITY TO BE PROVIDED. If the Trust requests the Custodian to
take any action with respect to Securities, which may, in the
opinion of the Custodian, result in the Custodian or its nominee
becoming liable for the payment of money or incurring liability of
some other form, the Custodian shall not be required to take such
action until the Trust shall have provided indemnity therefor to
the Custodian in an amount and form satisfactory to the Custodian.
8.4 Notice of Litigation, Right to Prosecute, etc. The Trust shall
not be liable for indemnification under this Article 8 unless the
person seeking indemnification shall have notified the Trust in
writing (i) within such time after the assertion of any claim as
is sufficient for such person to determine that it will seek
indemnification from the Trust in respect of such claim or (ii)
promptly after the commencement of any litigation or proceeding
brought against such person, in respect of which indemnity may be
sought; provided that in the case of clause (i) of this section
[8.4] the Trust shall not be liable for such indemnification to
the extent the Trust is disadvantaged by any such delay in
notification. With respect to claims in such litigation or
proceedings for which indemnity by the Trust may be sought and
subject to applicable law and the ruling of any court of competent
jurisdiction, the Trust shall be entitled to participate in any
such litigation or proceeding and, after written notice from the
Trust to the person seeking indemnification, the Trust may assume
the defense of such litigation or proceeding with counsel of its
choice at its own expense in respect of that portion of the
litigation for which the Trust may be subject to an
indemnification obligation, provided that such person shall be
entitled to participate in (but not control) at its own cost and
expense, the defense of any such litigation or proceeding if the
Trust has not acknowledged in writing its obligation to indemnify
such person with respect to such litigation or proceeding. If the
Trust is not permitted to participate in or control such
litigation or proceeding under applicable law or by a ruling of a
court of competent jurisdiction, such person shall reasonably
prosecute such litigation or proceeding. A person seeking
indemnification hereunder shall not consent to the entry of any
judgement or enter into any settlement of any such litigation or
proceeding without providing the Trust with adequate notice of any
such settlement or judgement and without the Trust's prior written
consent, which consent shall not be unreasonably withheld or
delayed. All persons seeking indemnification hereunder shall
submit written evidence to the Trust with respect to any cost or
expense for which they are seeking indemnification in such form
and detail as the Trust may reasonably request.
8.5 SECURITY. If the Custodian advances cash or Securities to the
Fund for any purpose, either at the Trust's request or as
otherwise contemplated in this Agreement, then, upon one business
day's prior written notice to the Trust, any property at any time
held for the account of the Fund shall be security therefor, and
should the Fund fail promptly to repay the Custodian, the
Custodian shall be entitled to utilize available cash of such Fund
and to dispose of other assets of such Fund to the extent
necessary to obtain reimbursement. Without limiting the foregoing,
the Custodian hereby waives and relinquishes all contractual and
common law rights of set-off to which it may now or hereafter be
or become entitled with respect to any obligations of the Trust to
the Custodian arising under this Agreement.
ARTICLE IX
FORCE MAJEURE
Neither the Custodian nor the Trust shall be liable for any failure or
delay in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control,
including, without limitation, acts of God; earthquakes; fires; floods; wars;
civil or military disturbances; sabotage; strikes; epidemics; riots; power
failures; computer failure and any such circumstances beyond its reasonable
control as may cause interruption, loss or malfunction of utility,
transportation, computer (hardware or software) or telephone communication
service; accidents; labor disputes; acts of civil or military authority;
governmental actions; or inability to obtain labor, material, equipment or
transportation; provided, however, that the Custodian in the event of a failure
or delay (i) shall not discriminate against the Fund in favor of any other
customer of the Custodian in making computer time and personnel available to
input or process the transactions contemplated by this Agreement and (ii) shall
use its best efforts to ameliorate the effects of any such failure or delay.
ARTICLE X
EFFECTIVE PERIOD; TERMINATION
10.1 EFFECTIVE PERIOD. This Agreement shall become effective as of its
execution and shall continue in full force and effect until
terminated as hereinafter provided.
10.2 TERMINATION. Either party 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 the giving of such notice. If a successor
custodian shall have been appointed by the Board of Trustees, the
Custodian shall, upon receipt of a notice of acceptance by the
successor custodian, on such specified date of termination (a)
deliver directly to the successor custodian all Securities (other
than Securities held in a Book-Entry System or Securities
Depository) and cash then owned by the Fund and held by the
Custodian as custodian, and (b) transfer any Securities held in a
Book-Entry System or Securities Depository to an account of or for
the benefit of the Fund at the successor custodian, provided that
the Trust shall have paid to the Custodian all fees, expenses and
other amounts to the payment or reimbursement of which it shall
then be entitled. Upon such delivery and transfer, the Custodian
shall be relieved of all obligations under this Agreement. The
Trust may at any time immediately terminate this Agreement in the
event of the appointment of a conservator or receiver for the
Custodian by regulatory authorities or upon the happening of a
like event at the direction of an appropriate regulatory agency or
court of competent jurisdiction.
10.3 FAILURE TO APPOINT SUCCESSOR CUSTODIAN. If a successor custodian
is not designated by the Trust on or before the date of
termination specified pursuant to Section 10.1 above, the
Custodian shall not deliver cash, securities or other property of
the Trust to the Trust, but the Custodian shall have the right to
deliver to a bank or corporation company of its own selection,
which (a) is a "bank" as defined in the 1940 Act and (b) has
aggregate capital, surplus and undivided profits as shown on its
then most recent published report of not less than $25 million,
all Securities, cash and other property held by Custodian under
this Agreement and to transfer to an account of or for the Fund at
such bank or trust company all Securities of the Fund held in a
Book-Entry System or Securities Depository. Upon such delivery
and transfer, such bank or trust company shall be the successor
custodian under this Agreement and the Custodian shall be relieved
of all obligations under this Agreement.
ARTICLE XI
COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to compensation as agreed upon from
time to time by the Trust and the Custodian. The fees and other charges in
effect on the date hereof and applicable to the Fund are set forth in Exhibit C
attached hereto.
ARTICLE XII
LIMITATION OF LIABILITY
It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust personally, but shall bind only the property of
the Trust as provided in the Trust's Declaration of Trust, as from time to time
amended. The execution and delivery of this Agreement have been authorized by
the Trustees, and this Agreement has been signed and delivered by an authorized
officer of the Trust, acting as such, and neither such authorization by the
Trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, but shall bind only the property of the Trust as provided in the
above-mentioned Declaration of Trust.
ARTICLE XIII
NOTICES
Unless otherwise specified herein, all demands, notices, instructions,
and other communications to be given hereunder shall be in writing and shall be
sent or delivered to the recipient at the address set forth after its name
hereinbelow:
TO THE TRUST:
Allied Asset Advisors Fund
745 McClintock Drive, Suite 114
Burr Ridge, IL 60521
Telephone: (630) 789-9191
Facsimile: (630) 789-9455
WITH A COPY TO:
David Sturms
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Chicago, IL 60601-1003
Phone: (312) 609-7500
Fax: (312) 609-5005
TO CUSTODIAN:
Firstar Bank, N.A.
425 Walnut Street, M.L. CN-WN-06TC
Cincinnati, Ohio 45202
Attention: Mutual Fund Custody Services
Telephone: (513) 632_____
Facsimile: (513) 632-3299
or at such other address as either party shall have provided to the other by
notice given in accordance with this Article XIII. Writing shall include
transmissions by or through teletype, facsimile, central processing unit
connection, on-line terminal and magnetic tape.
ARTICLE XIV
MISCELLANEOUS
14.1 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Ohio.
14.2 REFERENCES TO CUSTODIAN. The Trust shall not circulate any printed
matter which contains any reference to Custodian without the prior
written approval of Custodian, excepting printed matter contained
in the prospectus or statement of additional information for the
Fund and such other printed matter as merely identifies Custodian
as custodian for the Fund. The Trust shall submit printed matter
requiring approval to Custodian in draft form, allowing sufficient
time for review by Custodian and its counsel prior to any deadline
for printing.
14.3 NO WAIVER. No failure by either party hereto to exercise, and no
delay by such party in exercising, any right hereunder shall
operate as a waiver thereof. The exercise by either party hereto
of any right hereunder shall not preclude the exercise of any
other right, and the remedies provided herein are cumulative and
not exclusive of any remedies provided at law or in equity.
14.4 AMENDMENTS. This Agreement cannot be changed orally and no
amendment to this Agreement shall be effective unless evidenced by
an instrument in writing executed by the parties hereto.
14.5 COUNTERPARTS. This Agreement may be executed in one or mor
counterparts, and by the parties hereto on separate counterparts,
each of which shall be deemed an original but all of which
together shall constitute but one and the same instrument.
14.6 SEVERABILITY. If any provision of this Agreement shall be invalid,
illegal or unenforceable in any respect under any applicable law,
the validity, legality and enforceability of the remaining
provisions shall not be affected or impaired thereby.
14.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that this
Agreement shall not be assignable by either party hereto without
the written consent of the other party hereto.
14.8 HEADINGS. The headings of sections in this Agreement are for
convenience of reference only and shall not affect the meaning
or construction of any provision of this Agreement.
14.9 Additional Funds. IN THE EVENT THAT THE TRUST ESTABLISHES ONE OR
MORE SERIES IN ADDITION TO THE DOW JONES ISLAMIC FUND WITH RESPECT
TO WHICH IT DESIRES TO HAVE THE CUSTODIAN RENDER SERVICES AS
CUSTODIAN UNDER THIS AGREEMENT, IT SHALL SO NOTIFY THE CUSTODIAN
IN WRITING, AND IF THE CUSTODIAN AGREES IN WRITING TO PROVIDE SUCH
SERVICES, SUCH SERIES SHALL BECOME A FUND HEREUNDER. THEREAFTER,
THE CUSTODIAN SHALL TREAT THE ASSETS OF EACH SUCH SERIES AS A
SEPARATE FUND AND A REFERENCES TO THE "FUND" SHALL REFER TO THE
APPLICABLE SERIES OF THE TRUST AS THE CONTEXT SHALL REQUIRE.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered in its name and on its behalf by its
representatives thereunto duly authorized, all as of the day and year first
above written.
ATTEST: ALLIED ASSET ADVISORS FUND
______________________________ By:_____________________________
ATTEST: FIRSTAR BANK, N.A.
______________________________ By:____________________________
EXHIBIT A
AUTHORIZED PERSONS
Set forth below are the names and specimen signatures of the persons
authorized by the Trust to administer the Fund Custody Accounts.
AUTHORIZED PERSONS SPECIMEN SIGNATURES
President: ___________________
Secretary: ___________________
Treasurer: ___________________
Vice President: __________________
Adviser Employees: ___________________
___________________
Transfer Agent/Fund Accountant
Employees: ___________________
___________________
___________________
___________________
___________________
EXHIBIT B
FIRSTAR BANK, N.A.
STANDARDS OF SERVICE GUIDE
[GRAPHIC OMITTED][GRAPHIC OMITTED]
STANDARD OF SERVICES GUIDE
Firstar Institutional Custody Services
425 Walnut Street, 6th Floor
M.L. 6118
Cincinnati, OH 45202
JULY, 1999
FIRSTAR INSTITUTIONAL CUSTODY SERVICES
STANDARDS OF SERVICE GUIDE
Firstar Bank, N.A. is committed to providing superior quality service
to all customers and their agents at all times. We have compiled this guide as a
tool for our clients to determine our standards for the processing of security
settlements, payment collection, and capital change transactions. Deadlines
recited in this guide represent the times required for Firstar Bank to guarantee
processing. Failure to meet these deadlines will result in settlement at our
client's risk. In all cases, Firstar Bank will make every effort to complete all
processing on a timely basis.
Firstar Bank is a direct participant of the Depository Trust Company, a
direct member of the Federal Reserve Bank of Cleveland, and utilizes the Bankers
Trust Company as its agent for ineligible and foreign securities.
For corporate reorganizations, Firstar Bank utilizes SEI's Reorg
Source, Financial Information, Inc., XCITEK, DTC Important Notices, and the
WALL STREET JOURNAL.
For bond calls and mandatory puts, Firstar Bank utilizes SEI's Bond
Source, Kenny Information Systems, Standard & Poor's Corporation, and DTC
Important Notices. Firstar Bank will not notify clients of optional put
opportunities.
Any securities delivered free to Firstar Bank or its agents must be
received three (3) business days prior to any payment or settlement in order for
the Firstar Bank standards of service to apply.
Should you have any questions regarding the information contained in
this guide, please feel free to contact your account representative.
THE INFORMATION CONTAINED IN THIS STANDARDS OF SERVICE GUIDE
IS SUBJECT TO CHANGE. SHOULD ANY CHANGES BE MADE FIRSTAR BANK
WILL PROVIDE YOU WITH AN UPDATED COPY OF ITS STANDARDS OF
SERVICE GUIDE.
FIRSTAR BANK SECURITY SETTLEMENT STANDARDS
TRANSACTION TYPE INSTRUCTIONS DEADLINES*
DTC 1:30 P.M. on Settlement Date
Federal Reserve Book Entry 12:30 P.M. on Settlement Date
Fed Wireable FNMA & FHLMC 12:30 P.M. on Settlement Date
Federal Reserve Book Entry (Repurchase 1:00 P.M. on Settlement Date
Agreement Collateral Only)
PTC Securities 12:00 P.M. on Settlement Date
(GNMA Book Entry)
Physical Securities 9:30 A.M. EST on Settlement Date
(for Deliveries, by 4:00 P.M. on
Settlement Date minus 1)
CEDEL/EURO-CLEAR 11:00 A..M. on Settlement Date
minus 2
Cash Wire Transfer 3:00 P.M.
DELIVERY INSTRUCTIONS
DTC Participant #2803
Agent Bank ID 27895
Institutional #________________
For Account #____________
Federal Reserve Bank of Cinti/Trust
for Firstar Bank, N.A. ABA# 042000013
For Account #_____________
Bk of NYC/Cust
ABA 021000018
A/C Firstar Bank # 117612
For Account #____________
Federal Reserve Bank of Cinti/Spec
for Firstar Bank, N.A. ABA# 042000013
For Account #_____________
PTC For Account BYORK
Firstar Bank / 117612
Bank of New York
One Wall Street- 3rd Floor - Window A
New York, NY 10286
For account of Firstar Bank/Cust #117612
Attn: Donald Hoover
Cedel a/c 55021
FFC: a/c 387000
Firstar Bank / Global Omnibus
Firstar Bank,N.A. Cinti/Trust ABA# 042000013
Credit Account #9901877
Further Credit to ___________
Account # _______________
* All times listed are Eastern Standard Time.
<TABLE>
<CAPTION>
FIRSTAR BANK PAYMENT STANDARDS
SECURITY TYPE INCOME PRINCIPAL
<S> <C> <C>
Equities Payable Date
Municipal Bonds* Payable Date Payable Date
Corporate Bonds* Payable Date Payable Date
Federal Reserve Bank Book Entry* Payable Date Payable Date
PTC GNMA's (P&I) Payable Date + 1 Payable Date + 1
CMOs *
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
SBA Loan Certificates When Received When Received
Unit Investment Trust Certificates* Payable Date Payable Date
Certificates of Deposit* Payable Date + 1 Payable Date + 1
Limited Partnerships When Received When Received
Foreign Securities When Received When Received
*Variable Rate Securities
Federal Reserve Bank Book Entry Payable Date Payable Date
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
</TABLE>
NOTE: If a payable date falls on a weekend or bank holiday, payment
will be made on the immediately following business day.
FIRSTAR BANK CORPORATE REORGANIZATION STANDARDS
TYPE OF ACTION NOTIFICATION TO CLIENT
Rights, Warrants, Later of 10 business days prior to
and Optional Mergers expiration or receipt of notice
Mandatory Puts with Later of 10 business days prior to
Option to Retain expiration or receipt of notice
Class Actions 10 business days prior to expiration date
Voluntary Tenders, Later of 10 business days prior to
Exchanges, expiration or receipt of notice
and Conversions
Mandatory Puts, Defaults, At posting of Fund or securities received
Liquidations, Bankruptcies, Stock
Splits, Mandatory Exchanges
Full and Partial Calls Later of 10 business days prior to
expiration or receipt of notice
DEADLINE FOR CLIENT INSTRUCTIONS TRANSACTION
TO FIRSTAR BANK POSTING
5 business days prior to expiration Upon receipt
5 business days prior to expiration Upon receipt
5 business days prior to expiration Upon receipt
5 business days prior to expiration Upon receipt
None Upon receipt
None Upon receipt
NOTE: Fractional shares/par amounts resulting from any of the above will
be sold.
FUND ADMINISTRATION SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this ___ day of ____,
2000, by and between Allied Asset Advisors Funds, a Delaware business trust
(hereinafter referred to as the "Trust") and Firstar Mutual Fund Services, LLC,
a limited liability company organized under the laws of the State of Wisconsin
(hereinafter referred to as "FMFS").
WHEREAS, the Trust is an open-end management investment company which
is registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Trust is authorized to create separate series, each
with its own separate investment portfolio;
WHEREAS, FMFS is a limited liability corporation and, among other
things, is in the business of providing fund administration services for the
benefit of its customers; and
WHEREAS, the Trust desires to retain FMFS to act as Administrator for
each series of the Trust listed on Exhibit A attached hereto, (each hereinafter
referred to as a "Fund"), as may be amended from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Trust and FMFS agree as follows:
1. APPOINTMENT OF ADMINISTRATOR
The Trust hereby appoints FMFS as Administrator of the Trust on the
terms and conditions set forth in this Agreement, and FMFS hereby
accepts such appointment and agrees to perform the services and duties
set forth in this Agreement in consideration of the compensation
provided for herein.
2. DUTIES AND RESPONSIBILITIES OF FMFS
A. General Fund Management
1. Act as liaison among all Fund service providers
2. Supply:
a. Corporate secretarial services
b. Office facilities (which may be in FMFS's or its
affiliate's own offices)
c. Non-investment-related statistical and research data
as needed
3. Coordinate board communication by:
a. Establishing meeting agendas
b. Preparing board reports based on financial and
administrative data
c. Evaluating independent auditor
d. Securing and monitoring fidelity bond and director
and officer liability coverage, and making the
necessary SEC filings relating thereto
e. Preparing minutes of meetings of the board and
shareholders
f. Recommend dividend declarations to the Board, prepare
and distribute to appropriate parties notices
announcing declaration of dividends and other
distributions to shareholders
g. Provide personnel to serve as officers of the Trust if
so elected by the Board and attend Board meetings to
present materials for Board review
4. Audits
a. Prepare appropriate schedules and assist independent
auditors
b. Provide information to SEC and facilitate audit
process
c. Provide office facilities
5. Assist in overall operations of the Fund
6. Pay Fund expenses upon written authorization from the Trust
7. Monitor arrangements under shareholder services or similar
plan
B. Compliance
1. Regulatory Compliance
a. Monitor compliance with 1940 Act requirements,
including: 1) Asset diversification tests 2) Total
return and SEC yield calculations 3) Maintenance of
books and records under Rule 31a-3 4) Fund's Code of
Ethics
b. Monitor Fund's compliance with the policies and
investment limitations of the Trust as set forth in
its Prospectus and Statement of Additional Information
c. Maintain awareness of applicable regulatory and
operational service issues and recommend dispositions
2. Blue Sky Compliance
a. Prepare and file with the appropriate state securities
authorities any and all required compliance filings
relating to the registration of the securities of the
Trust so as to enable the Trust to make a continuous
offering of its shares in all states
b. Monitor status and maintain registrations in each
state
c. Provide information regarding material developments in
state securities regulation
3. SEC Registration and Reporting
a. Prepare and update Prospectus and Statement of
Additional Information and prepare proxy statements
b. Prepare annual and semiannual reports, Form N-SAR
filings and Rule 24f-2 notices
c. Coordinate the printing, filing and mailing of
publicly disseminated Prospectuses and reports
d. File fidelity bond under Rule 17g-1
e. File shareholder reports under Rule 30b2-1
f. Monitor sales of each Fund's shares and ensure that
such shares are properly registered with the SEC and
the appropriate state authorities
g. File Rule 24f-2 notices
4. IRS Compliance
a. Monitor Company's status as a regulated
investment company under Subchapter M, including
without limitation, review of the following:
1) Asset diversification requirements
2) Qualifying income requirements
3) Distribution requirements
b. Calculate required distributions (including excise tax
distributions)
C. Financial Reporting
1. Provide financial data required by Fund's Prospectus and
Statement of Additional Information;
2. Prepare financial reports for officers, shareholders, tax
authorities, performance reporting companies, the board,
the SEC, and independent auditors;
3. Supervise the Trust's Custodian and Fund Accountants in the
maintenance of the Trust's general ledger and in the
preparation of the Fund's financial statements, including
oversight of expense accruals and payments, of the
determination of net asset value of the Trust's net assets
and of the Trust's shares, and of the declaration and
payment of dividends and other distributions to
shareholders;
4. Compute the yield, total return and expense ratio of each
class of each Fund, and each Fund's portfolio turnover
rate; and
5. Monitor the expense accruals and notify Trust management of
any proposed adjustments.
6. Prepare monthly financial statements, which will include
without limitation the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses
7. Prepare quarterly broker security transaction summaries.
D. Tax Reporting
1. Prepare and file on a timely basis appropriate federal
and state tax returns including, without limitation,
Forms 1120/8610 with any necessary schedules
2. Prepare state income breakdowns where relevant
3. File Form 1099 Miscellaneous for payments to trustees and
other service providers
4. Monitor wash losses
5. Calculate eligible dividend income for corporate
shareholders
3. COMPENSATION
The Trust, on behalf of the Fund, agrees to pay FMFS for the
performance of the duties listed in this Agreement, the fees and
out-of-pocket expenses as set forth in the attached Exhibit A.
Notwithstanding anything to the contrary, amounts owed by the Trust to
FMFS shall only be paid out of the assets and property of the
particular Fund involved.
These fees may be changed from time to time, subject to mutual written
Agreement between the Trust and FMFS.
The Trust agrees to pay all fees and reimbursable expenses within ten
(10) business days following the receipt of the billing notice.
4. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
A. FMFS shall exercise reasonable care in the performance of its
duties under this Agreement. FMFS shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in
connection with matters to which this Agreement relates, including
losses resulting from mechanical breakdowns or the failure of
communication or power supplies beyond FMFS's control, except a loss
arising out of or relating to FMFS's refusal or failure to comply with
the terms of this Agreement or from bad faith, negligence, or willful
misconduct on its part in the performance of its duties under this
Agreement. Notwithstanding any other provision of this Agreement, if
FMFS has exercised reasonable care in the performance of its duties
under this Agreement, the Trust shall indemnify and hold harmless FMFS
from and against any and all claims, demands, losses, expenses, and
liabilities (whether with or without basis in fact or law) of any and
every nature (including reasonable attorneys' fees) which FMFS may
sustain or incur or which may be asserted against FMFS by any person
arising out of any action taken or omitted to be taken by it in
performing the services hereunder, except for any and all claims,
demands, losses, expenses, and liabilities arising out of or relating
to FMFS's refusal or failure to comply with the terms of this Agreement
or from bad faith, negligence or from willful misconduct on its part in
performance of its duties under this Agreement, (i) in accordance with
the foregoing standards, or (ii) in reliance upon any written or oral
instruction provided to FMFS by any duly authorized officer of the
Trust (other than FMFS employees), such duly authorized officer to be
included in a list of authorized officers furnished to FMFS and as
amended from time to time in writing by resolution of the Board of
Trustees of the Trust.
FMFS shall indemnify and hold the Trust harmless from and
against any and all claims, demands, losses, expenses, and liabilities
(whether with or without basis in fact or law) of any and every nature
(including reasonable attorneys' fees) which the Trust may sustain or
incur or which may be asserted against the Trust by any person arising
out of any action taken or omitted to be taken by FMFS as a result of
FMFS's refusal or failure to comply with the terms of this Agreement,
its bad faith, negligence, or willful misconduct.
In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, FMFS shall take all
reasonable steps to minimize service interruptions for any period that
such interruption continues beyond FMFS's control. FMFS will make every
reasonable effort to restore any lost or damaged data and correct any
errors resulting from such a breakdown at the expense of FMFS. FMFS
agrees that it shall, at all times, have reasonable contingency plans
with appropriate parties, making reasonable provision for emergency use
of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Trust shall be entitled
to inspect FMFS's premises and operating capabilities at any time
during regular business hours of FMFS, upon reasonable notice to FMFS.
Regardless of the above, FMFS reserves the right to
reprocess and correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the
indemnitor may be asked to indemnify or hold the indemnitee harmless,
the indemnitor shall be fully and promptly advised of all pertinent
facts concerning the situation in question, and it is further
understood that the indemnitee will use all reasonable care to notify
the indemnitor promptly concerning any situation which presents or
appears likely to present the probability of a claim for
indemnification. The indemnitor shall have the option to defend the
indemnitee against any claim which may be the subject of this
indemnification. In the event that the indemnitor so elects, it will so
notify the indemnitee and thereupon the indemnitor shall take over
complete defense of the claim, and the indemnitee shall in such
situation initiate no further legal or other expenses for which it
shall seek indemnification under this section. The indemnitee shall in
no case confess any claim or make any compromise in any case in which
the indemnitor will be asked to indemnify the indemnitee except with
the indemnitor's prior written consent.
C. FMFS is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust's Declaration of Trust
and agrees that obligations assumed by the Trust pursuant to this
Agreement shall be limited in all cases to the Trust and its assets,
and if the liability relates to one or more series, the obligations
hereunder shall be limited to the respective assets of such series.
FMFS further agrees that it shall not seek satisfaction of any such
obligation from the shareholder or any individual shareholder of a
series of the Trust, nor from the Trustees or any individual Trustee of
the Trust.
5. PROPRIETARY AND CONFIDENTIAL INFORMATION
FMFS agrees on behalf of itself and its directors, officers, and
employees to treat confidentially and as proprietary information of the
Trust all records and other information relative to the Trust and
prior, present, or potential shareholders of the Trust (and clients of
said shareholders), and not to use such records and information for any
purpose other than the performance of its responsibilities and duties
hereunder, except after prior notification to and approval in writing
by the Trust, which approval may not be withheld where FMFS may be
exposed to civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Trust.
6. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and will
continue in effect for a period of three years. This Agreement may be
terminated by either party upon giving ninety (90) days prior written
notice to the other party or such shorter period as is mutually agreed
upon by the parties. If the Trust terminates services before the end of
the third year of this Agreement, the Trust agrees to reimburse FMFS
for all concessions and discounted fees identified in Exhibit A.
Notwithstanding anything to the contrary above, this Agreement may be
terminated by the Trust's Board of Trustees, without penalty,
(i) immediately if FMFS becomes statutorily disqualified from
performing it duties under this Agreement or otherwise is legally
prohibited from performing its duties under this Agreement and (ii) on
not less than sixty (60) days written notice for cause (as defined
below).
Termination for "cause" shall mean:
(i) willful misfeasance, bad faith, gross negligence, abandonment,
or reckless disregard on the part of FMFS with respect to its
obligations and duties hereunder;
(ii) regulatory, administrative or judicial proceedings against FMFS
that result in a determination that it has violated any rule,
regulation, order or law and that, in the reasonable judgement of
the Trust's Board of Trustees, substantially impairs the
performance of FMFS' obligations and duties hereunder;
(iii) financial difficulties on the part of FMFS that are evidenced by
the authorization or commencement of, or involvement by way of
pleading, answer, consent, or acquiescence in, a voluntary or
involuntary case under Title 11 of the United States Code, as
from time to time in effect, or any applicable law other than
said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of
the rights of creditors;
(iv) any other circumstance that, in the reasonable judgement of the
Trust's Board of Trustees, substantially impairs the performance
of FMFS' obligations and duties hereunder.
7. AMENDMENT
This Agreement may be amended by mutual written consent of the parties.
8. RECORDS
FMFS shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem
advisable and is agreeable to the Trust but not inconsistent with the
rules and regulations of appropriate government authorities, in
particular, Section 31 of the 1940 Act and the rules thereunder. FMFS
agrees that all such records prepared or maintained by FMFS relating to
the services to be performed by FMFS hereunder are the property of the
Trust and will be preserved, maintained, and made available in
accordance with such section and rules of the 1940 Act and will be
promptly surrendered to the Trust on and in accordance with its
request.
9. GOVERNING LAW
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of
Wisconsin. However, nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or regulation promulgated by
the Securities and Exchange Commission thereunder.
10. DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor to any
of FMFS's duties or responsibilities hereunder is designated by the
Trust by written notice to FMFS, FMFS will promptly, upon such
termination and at the expense of the Trust, transfer to such successor
all relevant books, records, correspondence, and other data established
or maintained by FMFS under this Agreement in a form reasonably
acceptable to the Trust (if such form differs from the form in which
FMFS has maintained, the Trust shall pay any expenses associated with
transferring the data to such form), and will cooperate in the transfer
of such duties and responsibilities, including provision for assistance
from FMFS's personnel in the establishment of books, records, and other
data by such successor.
11. NO AGENCY RELATIONSHIP
Nothing herein contained shall be deemed to authorize or empower FMFS
to act as agent for the other party to this Agreement, or to conduct
business in the name of, or for the account of the other party to this
Agreement.
12. DATA NECESSARY TO PERFORM SERVICES
The Trust or its agent, shall furnish to FMFS the data necessary to
perform the services described herein at times and in such form as
mutually agreed upon if FMFS is also acting in another capacity for the
Trust, nothing herein shall be deemed to relieve FMFS of any of its
obligations in such capacity.
13. NOTICES
Notices of any kind to be given by either party to the other party
shall be in writing and shall be duly given if mailed or delivered as
follows:
Notice to FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
Phone: (414) 287-3689
Fax: (414) 287-3838
and notice to the Trust shall be sent to: with copy to:
Allied Asset Advisors Funds David Sturms
745 McClintock Drive, Suite 114 Vedder, Price, Kaufman & Kammholz
Burr Ridge, IL 60521 222 North LaSalle Street
Phone: (630) 789-9191 Chicago, IL 60601-1003
Fax: (630) 789-9455 Phone: (312) 609-7500
Fax: (312) 609-5005
14. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by either party hereto
without the written consent of the other party hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by a duly authorized officer or one or more counterparts as of the day and year
first written above.
ALLIED ASSET ADVISORS FUNDS FIRSTAR MUTUAL FUND SERVICES, LLC
By:______________________________ By: ________________________________
Attest: __________________________ Attest:______________________________
TRANSFER AGENT SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this ____ day of ____,
2000, by and between Allied Assets Advisors Funds, a Delaware business trust
(hereinafter referred to as the "Trust") and Firstar Mutual Fund Services, LLC,
a limited liability company organized under the laws of the State of Wisconsin
(hereinafter referred to as the "FMFS").
WHEREAS, the Trust is an open-end management investment company which is
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Trust is authorized to create separate series, each
with its own separate investment portfolio;
WHEREAS, FMFS is a limited liability corporation and, among other
things, is in the business of administering transfer and dividend disbursing
agent functions for the benefit of its customers; and
WHEREAS, the Trust desires to retain FMFS to provide transfer and
dividend disbursing agent services to each series of the Trust listed on Exhibit
A attached hereto, (each hereinafter referred to as a "Fund") as may be amended
from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Trust and FMFS agree as follows:
1. APPOINTMENT OF TRANSFER AGENT
The Trust hereby appoints FMFS as Transfer Agent of the Trust on the
terms and conditions set forth in this Agreement, and FMFS hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement in consideration of the compensation provided for herein
2. DUTIES AND RESPONSIBILITIES OF FMFS
FMFS shall perform all of the customary services of a transfer agent and
dividend disbursing agent, and as relevant, agent in connection with
accumulation, open account or similar plans (including without limitation any
periodic investment plan or periodic withdrawal program), including but not
limited to:
A. Receive orders for the purchase of shares;
B. Process purchase orders with prompt delivery, where appropriate,
of payment and supporting documentation to the Trust's custodian,
and issue the appropriate number of (i) uncertificated shares
with such uncertificated shares being held in the appropriate
shareholder account or, (ii) certificated shares, if requested by
the shareholder;
C. Arrange for issuance of shares obtained through transfers of
funds from shareholders' accounts at financial institutions and
arrange for the exchange of shares for shares of other eligible
investment companies, when permitted by Prospectus.
D. Process redemption requests received in good order and,
where relevant, deliver appropriate documentation to the
Trust's custodian;
E. Pay monies upon receipt from the Trust's custodian, where
relevant, in accordance with the instructions of redeeming
shareholders;
F. Process transfers of shares in accordance with the shareholder's
instructions;
G. Process exchanges between funds and/or classes of shares of
funds both within the same family of funds and with the Firstar
Money Market Fund, if applicable;
H. Prepare and transmit payments for dividends and distributions
declared by the Trust with respect to the Fund, after deducting
any amount required to be withheld by any applicable laws,
rules and regulations and in accordance with shareholder
instructions;
I. Make changes to shareholder records, including, but not
limited to, address changes in plans (i.e., systematic
withdrawal, automatic investment, dividend reinvestment, etc.);
J. Record the issuance of shares of the Fund and maintain,
pursuant to Rule 17ad-10(e) promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), a record
of the total number of shares of the Fund which are authorized,
issued and outstanding;
K. Prepare shareholder meeting lists and, if applicable, mail,
receive and tabulate proxies;
L. Mail shareholder reports and prospectuses to current
shareholders;
M. Prepare and file U.S. Treasury Department Forms 1099 and other
appropriate information returns required with respect to
dividends and distributions for all shareholders;
N. Provide shareholder account information upon request and
prepare and mail confirmations and statements of account to
shareholders for all purchases, redemptions and other
confirmable transactions as agreed upon with the Trust;
O. Mail requests for shareholders' certifications under
penalties of perjury and pay on a timely basis to the
appropriate Federal authorities any taxes to be withheld
on dividends and distributions paid by the Trust, all as
required by applicable Federal tax laws and regulations;
P. Provide a Blue Sky System which will enable the Trust to monitor
the total number of shares of the Fund sold in each state. In
addition, the Trust or its agent, including FMFS, shall identify
to FMFS in writing those transactions and assets to be treated as
exempt from the Blue Sky reporting for each state.
Q. Answer correspondence from shareholders, securities brokers and
others relating to FMFS's duties hereunder and such other
correspondence as may from time to time be mutually agreed upon
between FMFS and the Trust.
3. COMPENSATION
The Trust agrees to pay FMFS for the performance of the duties listed in
this agreement as set forth on Exhibit A attached hereto; the fees and
out-of-pocket expenses include, but are not limited to the following: printing,
postage, forms, stationery, record retention (if requested by the Trust),
mailing, insertion, programming (if requested by the Trust), labels, shareholder
lists and proxy expenses.
These fees and reimbursable expenses may be changed from time to time
subject to mutual written agreement between the Trust and FMFS.
The Trust agrees to pay all fees and reimbursable expenses within ten
(10) business days following the receipt of the billing notice.
Notwithstanding anything to the contrary, amounts owed by the Trust to
FMFS shall only be paid out of assets and property of the particular Fund
involved.
4. REPRESENTATIONS OF FMFS
FMFS represents and warrants to the Trust that:
A. It is a limited liability corporation duly organized, existing
and in good standing under the laws of Wisconsin;
B. It is a registered transfer agent under the Exchange Act;
C. It is duly qualified to carry on its business in the State of
Wisconsin;
D. It is empowered under applicable laws and by its charter and
bylaws to enter into and perform this Agreement;
E. All requisite corporate proceedings have been taken to
authorize it to enter and perform this Agreement;
F. It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement; and
G. It will comply with all applicable requirements of the Securities
Act of 1933, as amended, the Exchange Act, the 1940 Act, and any
laws, rules, and regulations of governmental authorities having
jurisdiction.
5. REPRESENTATIONS OF THE TRUST
The Trust represents and warrants to FMFS that:
A. The Trust is an open-ended non diversified investment company
under the 1940 Act;
B. The Trust is a business trust organized, existing, and in good
standing under the laws of Delaware;
C. The Trust is empowered under applicable laws and by its
Declaration of Trust and Bylaws to enter into and perform this
Agreement;
D. All necessary proceedings required by the Declaration of Trust
have been taken to authorize it to enter into and perform this
Agreement;
E. The Trust will comply with all applicable requirements of the
Securities Act, the Exchange Act, the 1940 Act, and any laws,
rules and regulations of governmental authorities having
jurisdiction; and
F. A registration statement under the Securities Act will be made
effective and will remain effective, and appropriate state
securities law filings have been made and will continue to be
made, with respect to all shares of the Trust being offered for
sale.
6. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
FMFS shall exercise reasonable care in the performance of its duties
under this Agreement. FMFS shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Trust in connection with matters
to which this Agreement relates, including losses resulting from mechanical
breakdowns or the failure of communication or power supplies beyond FMFS's
control, except a loss arising out of or relating to the Agent's refusal or
failure to comply with the terms of this Agreement or from bad faith,
negligence, or willful misconduct on its part in the performance of its duties
under this Agreement. Notwithstanding any other provision of this Agreement, if
FMFS has exercised reasonable care in the performance of its duties under this
Agreement, the Trust shall indemnify and hold harmless FMFS from and against any
and all claims, demands, losses, expenses, and liabilities (whether with or
without basis in fact or law) of any and every nature (including reasonable
attorneys' fees) which FMFS may sustain or incur or which may be asserted
against FMFS by any person arising out of any action taken or omitted to be
taken by it in performing the services hereunder, except for any and all claims,
demands, losses expenses, and liabilities arising out of or relating to FMFS's
refusal or failure to comply with the terms of this Agreement or from bad faith,
negligence or from willful misconduct on its part in performance of its duties
under this Agreement, (i) in accordance with the foregoing standards, or (ii) in
reliance upon any written or oral instruction provided to FMFS by any duly
authorized officer of the Trust (other than FMFS employees), such duly
authorized officer to be included in a list of authorized officers furnished to
FMFS and as amended from time to time in writing by resolution of the Board of
Trustees of the Trust.
FMFS shall indemnify and hold the Trust harmless from and against any
and all claims, demands, losses, expenses, and liabilities (whether with or
without basis in fact or law) of any and every nature (including reasonable
attorneys' fees) which the Trust may sustain or incur or which may be asserted
against the Trust by any person arising out of any action taken or omitted to be
taken by FMFS as a result of FMFS's refusal or failure to comply with the terms
of this Agreement, its bad faith, negligence, or willful misconduct.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, FMFS shall take all reasonable steps to
minimize service interruptions for any period that such interruption continues
beyond FMFS's control. FMFS will make every reasonable effort to restore any
lost or damaged data and correct any errors resulting from such a breakdown at
the expense of FMFS. FMFS agrees that it shall, at all times, have reasonable
contingency plans with appropriate parties, making reasonable provision for
emergency use of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Trust shall be entitled to
inspect FMFS's premises and operating capabilities at any time during regular
business hours of FMFS, upon reasonable notice to FMFS.
Regardless of the above, FMFS reserves the right to reprocess and
correct administrative errors at its own expense.
In order that the indemnification provisions contained in this section
shall apply, it is understood that if in any case the indemnitor may be asked to
indemnify or hold the indemnitee harmless, the indemnitor shall be fully and
promptly advised of all pertinent facts concerning the situation in question,
and it is further understood that the indemnitee will use all reasonable care to
notify the indemnitor promptly concerning any situation which presents or
appears likely to present the probability of a claim for indemnification. The
indemnitor shall have the option to defend the indemnitee against any claim
which may be the subject of this indemnification. In the event that the
indemnitor so elects, it will so notify the indemnitee and thereupon the
indemnitor shall take over complete defense of the claim, and the indemnitee
shall in such situation initiate no further legal or other expenses for which it
shall seek indemnification under this section. The indemnitee shall in no case
confess any claim or make any compromise in any case in which the indemnitor
will be asked to indemnify the indemnitee except with the indemnitor's prior
written consent.
FMFS is hereby expressly put on notice of the limitation of shareholder
liability as set forth in the Trust's Declaration of Trust and agrees that
obligations assumed by the Trust pursuant to this Agreement shall be limited in
all cases to the Trust and its assets, and if the liability relates to one or
more series, the obligations hereunder shall be limited to the respective assets
of such series. FMFS further agrees that it shall not seek satisfaction of any
such obligation from the shareholder or any individual shareholder of a series
of the Trust, nor from the Trustees or any individual Trustee of the Trust.
7. PROPRIETARY AND CONFIDENTIAL INFORMATION
FMFS agrees on behalf of itself and its directors, officers, and
employees to treat confidentially and as proprietary information of the Trust
all records and other information relative to the Trust and prior, present, or
potential shareholders (and clients of said shareholders) and not to use such
records and information for any purpose other than the performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Trust, which approval may not be withheld where FMFS
may be exposed to civil or criminal contempt proceedings for failure to comply
after being requested to divulge such information by duly constituted
authorities, or when so requested by the Trust.
8. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and will
continue in effect for a period of three years. This Agreement may be terminated
by either party upon giving ninety (90) days prior written notice to the other
party or such shorter period as is mutually agreed upon by the parties. If the
Trust terminates services before the end of the third year of this Agreement,
the Trust agrees to reimburse FMFS for all concessions and discounted fees
identified in Exhibit A. Notwithstanding anything to the contrary above, this
Agreement may be terminated by the Trust's Board of Trustees, without penalty,
(i) immediately if FMFS becomes statutorily disqualified from performing it
duties under this Agreement or otherwise is legally prohibited from performing
its duties under this Agreement and (ii) on not less than sixty (60) days
written notice for cause (as defined below).
Termination for "cause" shall mean:
(i) willful misfeasance, bad faith, gross negligence, abandonment, or
reckless disregard on the part of FMFS with respect to its obligations
and duties hereunder;
(ii) regulatory, administrative or judicial proceedings against
FMFS that result in a determination that it has violated any
rule, regulation, order or law and that, in the reasonable
judgement of the Trust's Board of Trustees, substantially
impairs the performance of FMFS' obligations and duties
hereunder;
(iii) financial difficulties on the part of FMFS that are evidenced
by the authorization or commencement of, or involvement by way
of pleading, answer, consent, or acquiescence in, a voluntary
or involuntary case under Title 11 of the United States Code,
as from time to time in effect, or any applicable law other
than said Title 11, of any jurisdiction relating to the
liquidation or reorganization of debtors or to the
modification or alteration of the rights of creditors;
(iv) any other circumstance that, in the reasonable judgement of
the Trust's Board of Trustees, substantially impairs the
performance of FMFS' obligations and duties hereunder.
9. AMENDMENT
This Agreement may be amended by mutual written consent of the parties.
10. RECORDS
FMFS shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem advisable
and is agreeable to the Trust but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section 31 of
the Investment Company Act of 1940 as amended (the "Investment Company Act"),
and the rules thereunder. FMFS agrees that all such records prepared or
maintained by FMFS relating to the services to be performed by FMFS hereunder
are the property of the Trust and will be preserved, maintained, and made
available with such section and rules of the Investment Company Act and will be
promptly surrendered to the Trust on and in accordance with its request.
11. GOVERNING LAW
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the State of Wisconsin. However,
nothing herein shall be construed in a manner inconsistent with the 1940 Act or
any rule or regulation promulgated by the Securities and Exchange Commission
thereunder.
12. DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor to any
of FMFS's duties or responsibilities hereunder is designated by the Trust by
written notice to FMFS, FMFS will promptly, upon such termination and at the
expense of the Trust, transfer to such successor all relevant books, records,
correspondence, and other data established or maintained by FMFS under this
Agreement in a form reasonably acceptable to the Trust (if such form differs
from the form in which FMFS has maintained, the Trust shall pay any expenses
associated with transferring the data to such form), and will cooperate in the
transfer of such duties and responsibilities, including provision for assistance
from FMFS's personnel in the establishment of books, records, and other data by
such successor.
13. NOTICES
Notices of any kind to be given by either party to the other party
shall be in writing and shall be duly given if mailed or delivered as follows:
Notice to FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
Phone: (414) 287-3689
Fax: (414) 287-3838
and notice to the Trust shall be sent to: with copy to:
Allied Asset Advisors Funds David Sturms
745 McClintock Drive, Suite 114 Vedder, Price, Kaufman & Kammholz
Burr Ridge, IL 60521 222 North LaSalle Street
Phone: (630) 789-9191 Chicago, IL 60601-1003
Fax: (630) 789-9455 Phone: (312) 609-7500
Fax: (312) 609-5005
14. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by either party hereto
without the written consent of the other party hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by a duly authorized officer or one or more counterparts as of the day and year
first written above.
ALLIED ASSET ADVISORS FUNDS FIRSTAR MUTUAL FUND SERVICES, LLC
By:______________________________ By: ________________________________
Attest: __________________________ Attest:______________________________
FUND ACCOUNTING SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this ___ day of ___, 2000,
by and between Allied Asset Advisors Funds, a Delaware business trust
(hereinafter referred to as the "Trust") and Firstar Mutual Fund Services, LLC,
a limited liability company organized under the laws of the State of Wisconsin
(hereinafter referred to as "FMFS").
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Trust is authorized to create separate series, each
with its own separate investment portfolio;
WHEREAS, FMFS is a limited liability corporation and, among other
things, is in the business of providing mutual fund accounting services to
investment companies; and
WHEREAS, the Trust desires to retain FMFS to provide accounting services
to each series of the Trust listed on Exhibit A attached hereto, (each
hereinafter referred to as a "Fund"), as it may be amended from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Trust and FMFS agree as follows:
1. APPOINTMENT OF FUND ACCOUNTANT
The Trust hereby appoints FMFS as Fund Accountant of the Trust on the
terms and conditions set forth in this Agreement, and FMFS hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement in consideration of the compensation provided for herein.
2. DUTIES AND RESPONSIBILITIES OF FMFS
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date+1 basis
using security trade information communicated from the Advisor.
(2) For each valuation date, obtain prices from a pricing
source approved by the Board of Trustees of the Trust and apply
those prices to the portfolio positions. For those securities
where market quotations are not readily available, the Board of
Trustees of the Trust shall approve, in good faith, the method
for determining the fair value for such securities.
(3) Identify interest and dividend accrual balances as of
each valuation date and calculate gross earnings on investments
for the accounting period.
(4) Determine gain/loss on security sales and identify
them as short-term or long-term; account for periodic
distributions of gains or losses to shareholders and maintain
undistributed gain or loss balances as of each valuation date.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense accrual
amounts as directed by the Trust as to methodology, rate or
dollar amount.
(2) Record payments for Fund expenses upon receipt of
written authorization from the Trust.
(3) Account for Fund expenditures and maintain expense
accrual balances at the level of accounting detail as directed by
the Trust.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Account for Fund share purchases, sales, exchanges,
transfers, dividend reinvestments, and other Fund share activity
as reported by the transfer agent on a timely basis.
(2) Apply equalization accounting as directed by the
Trust.
(3) Determine net investment income (earnings) for the
Fund as of each valuation date. Account for periodic
distributions of earnings to shareholders and maintain
undistributed net investment income balances as of each valuation
date.
(4) Maintain a general ledger and other accounts, books,
and financial records for the Fund in the form as agreed upon.
(5) Determine the net asset value of the Fund according to
the accounting policies and procedures as directed by the Trust.
(6) Calculate per share net asset value, per share net
earnings, and other per share amounts reflective of Fund
operations at such time as required by the nature and
characteristics of the Fund.
(7) Communicate, at an agreed upon time, the per share
price for each valuation date to parties as agreed upon from time
to time.
(8) Prepare monthly reports which document the adequacy of
accounting detail to support month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain accounting records for the investment
portfolio of the Fund to support the tax reporting required for
IRS-defined regulated investment companies.
(2) Maintain tax lot detail for the investment
portfolio.
(3) Calculate taxable gain/loss on security sales
using the tax lot relief method designated by the Trust.
(4) Provide the necessary financial information to support
the taxable components of income and capital gains distributions
to the transfer agent to support tax reporting to the
shareholders.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support
financial statement preparation by making the Fund's accounting
records available to the Trust, the Securities and Exchange
Commission, and the outside auditors.
(2) Maintain accounting records according to the
1940 Act and regulations provided thereunder
F. FMFS will perform the following accounting functions on a
daily basis:
(1) Reconcile cash and investment balances of each Fund
with the Custodian, and provide the Advisor with the beginning
cash balance available for investment purposes;
(2) Transmit or mail a copy of the portfolio valuation to
the Advisor;
(3) Review the impact of current day's activity on a per
share basis, review changes in market value.
G. In addition, FMFS will:
(1) Prepare monthly security transactions listings;
(2) Supply various Trust, Fund and class statistical data
as requested by the Trust on an ongoing basis.
3. PRICING OF SECURITIES
For each valuation date, obtain prices from a pricing source selected by FMFS
but approved by the Board of Trustees and apply those prices to the portfolio
positions of the Fund. For those securities where market quotations are not
readily available, the Board of Trustees of the Trust shall approve, in good
faith, the method for determining the fair value for such securities.
If the Trust desires to provide a price which varies from the pricing source,
the Trust shall promptly notify and supply FMFS with the valuation of any such
security on each valuation date. All pricing changes made by the Trust will be
in writing and must specifically identify the securities to be changed by CUSIP,
name of security, new price or rate to be applied, and, if applicable, the time
period for which the new price(s) is/are effective.
4. CHANGES IN ACCOUNTING PROCEDURES
Any resolution passed by the Board of Trustees of the Trust that affects
accounting practices and procedures under this Agreement shall be effective upon
written receipt and acceptance by FMFS, which acceptance will not be
unreasonably withheld.
5. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC.
FMFS reserves the right to make changes from time to time, as it deems
advisable, relating to its services, systems, programs, rules, operating
schedules and equipment, so long as such changes do not adversely affect the
service provided to the Trust under this Agreement.
6. COMPENSATION
FMFS shall be compensated for providing the services set forth in this Agreement
in accordance with the Fee Schedule attached hereto as Exhibit A and as mutually
agreed upon and amended from time to time. The Trust agrees to pay all fees and
reimbursable expenses within ten (10) business days following the receipt of the
billing notice. Notwithstanding anything to the contrary, amounts owed by the
Trust to FMFS shall only be paid out of the assets and property of the
particular Fund involved.
7. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
A. FMFS shall exercise reasonable care in the performance of its
duties under this Agreement. FMFS shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in
connection with matters to which this Agreement relates, including
losses resulting from mechanical breakdowns or the failure of
communication or power supplies beyond FMFS's control, except a loss
arising out of or relating to FMFS's refusal or failure to comply with
the terms of this Agreement or from bad faith, negligence, or willful
misconduct on its part in the performance of its duties under this
Agreement. Notwithstanding any other provision of this Agreement, if
FMFS has exercised reasonable care in the performance of its duties
under this Agreement, the Trust shall indemnify and hold harmless FMFS
from and against any and all claims, demands, losses, expenses, and
liabilities (whether with or without basis in fact or law) of any and
every nature (including reasonable attorneys' fees) which FMFS may
sustain or incur or which may be asserted against FMFS by any person
arising out of any action taken or omitted to be taken by it in
performing the services hereunder, except for any and all claims,
demands, losses, expenses, and liabilities arising out of or relating
to FMFS's refusal or failure to comply with the terms of this Agreement
or from bad faith, negligence or from willful misconduct on its part in
performance of its duties under this Agreement, (i) in accordance with
the foregoing standards, or (ii) in reliance upon any written or oral
instruction provided to FMFS by any duly authorized officer of the
Trust (other than FMFS employees), such duly authorized officer to be
included in a list of authorized officers furnished to FMFS and as
amended from time to time in writing by resolution of the Board of
Trustees of the Trust.
FMFS shall indemnify and hold the Trust harmless from and against
any and all claims, demands, losses, expenses, and liabilities (whether
with or without basis in fact or law) of any and every nature
(including reasonable attorneys' fees) which the Trust may sustain or
incur or which may be asserted against the Trust by any person arising
out of any action taken or omitted to be taken by FMFS as a result of
FMFS's refusal or failure to comply with the terms of this Agreement,
its bad faith, negligence, or willful misconduct.
In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, FMFS shall take all
reasonable steps to minimize service interruptions for any period that
such interruption continues beyond FMFS's control. FMFS will make every
reasonable effort to restore any lost or damaged data and correct any
errors resulting from such a breakdown at the expense of FMFS. FMFS
agrees that it shall, at all times, have reasonable contingency plans
with appropriate parties, making reasonable provision for emergency use
of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Trust shall be entitled
to inspect FMFS's premises and operating capabilities at any time
during regular business hours of FMFS, upon reasonable notice to FMFS.
Regardless of the above, FMFS reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the
indemnitor may be asked to indemnify or hold the indemnitee harmless,
the indemnitor shall be fully and promptly advised of all pertinent
facts concerning the situation in question, and it is further
understood that the indemnitee will use all reasonable care to notify
the indemnitor promptly concerning any situation which presents or
appears likely to present the probability of a claim for
indemnification. The indemnitor shall have the option to defend the
indemnitee against any claim which may be the subject of this
indemnification. In the event that the indemnitor so elects, it will so
notify the indemnitee and thereupon the indemnitor shall take over
complete defense of the claim, and the indemnitee shall in such
situation initiate no further legal or other expenses for which it
shall seek indemnification under this section. Indemnitee shall in no
case confess any claim or make any compromise in any case in which the
indemnitor will be asked to indemnify the indemnitee except with the
indemnitor's prior written consent.
C. FMFS is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust's Declaration of Trust
and agrees that obligations assumed by the Trust pursuant to this
Agreement shall be limited in all cases to the Trust and its assets,
and if the liability relates to one or more series, the obligations
hereunder shall be limited to the respective assets of such series.
FMFS further agrees that it shall not seek satisfaction of any such
obligation from the shareholder or any individual shareholder of a
series of the Trust, nor from the Trustees or any individual Trustee of
the Trust.
8. PROPRIETARY AND CONFIDENTIAL INFORMATION
FMFS agrees on behalf of itself and its directors, officers, and employees to
treat confidentially and as proprietary information of the Trust all records and
other information relative to the Trust and prior, present, or potential
shareholders of the Trust (and clients of said shareholders), and not to use
such records and information for any purpose other than the performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Trust, which approval may not be withheld where FMFS
may be exposed to civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly constituted authorities, or
when so requested by the Trust.
9. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and will continue in
effect for a period of three years. This Agreement may be terminated by either
party upon giving ninety (90) days prior written notice to the other party or
such shorter period as is mutually agreed upon by the parties. If the Trust
terminates services before the end of the third year of this Agreement, the
Trust agrees to reimburse FMFS for all concessions and discounted fees
identified in Exhibit A. Notwithstanding anything to the contrary above, this
Agreement may be terminated by the Trust's Board of Trustees, without penalty,
(i) immediately if FMFS becomes statutorily disqualified from performing it
duties under this Agreement or otherwise is legally prohibited from performing
its duties under this Agreement and (ii) on not less than sixty (60) days
written notice for cause (as defined below).
Termination for "cause" shall mean:
(i) willful misfeasance, bad faith, gross negligence, abandonment, or
reckless disregard on the part of FMFS with respect to its obligations
and duties hereunder;
(ii) regulatory, administrative or judicial proceedings against FMFS
that result in a determination that it has violated any rule,
regulation, order or law and that, in the reasonable judgement of
the Trust's Board of Trustees, substantially impairs the
performance of FMFS' obligations and duties hereunder;
(iii) financial difficulties on the part of FMFS that are evidenced by
the authorization or commencement of, or involvement by way of
pleading, answer, consent, or acquiescence in, a voluntary or
involuntary case under Title 11 of the United States Code, as
from time to time in effect, or any applicable law other than
said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of
the rights of creditors;
(iv) any other circumstance that, in the reasonable judgement of the
Trust's Board of Trustees, substantially impairs the performance
of FMFS' obligations and duties hereunder.
10. AMENDMENT
This Agreement may be amended by mutual written consent of the parties.
11. RECORDS
FMFS shall keep records relating to the services to be performed hereunder, in
the form and manner, and for such period as it may deem advisable and is
agreeable to the Trust but not inconsistent with the rules and regulations of
appropriate government authorities, in particular, Section 31 of the 1940 Act,
and the rules thereunder. FMFS agrees that all such records prepared or
maintained by FMFS relating to the services to be performed by FMFS hereunder
are the property of the Trust and will be preserved, maintained, and made
available in accordance with such section and rules of the 1940 Act and will be
promptly surrendered to the Trust on and in accordance with its request.
12. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State of
Wisconsin. However, nothing herein shall be construed in a manner inconsistent
with the 1940 Act or any rule or regulation promulgated by the SEC thereunder.
13. DUTIES IN THE EVENT OF TERMINATION
In the event that in connection with termination, a successor to any of FMFS's
duties or responsibilities hereunder is designated by the Trust by written
notice to FMFS, FMFS will promptly, upon such termination and at the expense of
the Trust transfer to such successor all relevant books, records, correspondence
and other data established or maintained by FMFS under this Agreement in a form
reasonably acceptable to the Trust (if such form differs from the form in which
FMFS has maintained the same, the Trust shall pay any expenses associated with
transferring the same to such form), and will cooperate in the transfer of such
duties and responsibilities, including provision for assistance from FMFS's
personnel in the establishment of books, records and other data by such
successor.
14. NO AGENCY RELATIONSHIP
Nothing herein contained shall be deemed to authorize or empower FMFS to act as
agent for the other party to this Agreement, or to conduct business in the name
of, or for the account of the other party to this Agreement.
15. DATA NECESSARY TO PERFORM SERVICES
The Trust or its agent, which may be FMFS, shall furnish to FMFS the data
necessary to perform the services described herein at such times and in such
form as mutually agreed upon. If FMFS is also acting in another capacity for the
Trust, nothing herein shall be deemed to relieve FMFS of any of its obligations
in such capacity.
16. NOTIFICATION OF ERROR
The Trust will notify FMFS of any balancing or control error caused by FMFS the
later of: within three (3) business days after receipt of any reports rendered
by FMFS to the Trust; within three (3) business days after discovery of any
error or omission not covered in the balancing or control procedure, or within
three (3) business days of receiving notice from any shareholder.
17. NOTICES
Notices of any kind to be given by either party to the other party shall be in
writing and shall be duly given if mailed or delivered as follows:
Notice to FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
Phone: (414) 287-3689
Fax: (414) 287-3838
and notice to the Trust shall be sent to: with copy to:
Allied Asset Advisors Funds David Sturms
745 McClintock Drive, Suite 114 Vedder, Price, Kaufman & Kammholz
Burr Ridge, IL 60521 222 North LaSalle Street
Phone: (630) 789-9191 Chicago, IL 60601-1003
Fax: (630) 789-9455 Phone: (312) 609-7500
Fax: (312) 609-5005
18. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by either party hereto
without the written consent of the other party hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the day
and year first written above.
ALLIED ASSET ADVISORS FUNDS FIRSTAR MUTUAL FUND SERVICES, LLC
By:______________________________ By: ________________________________
Attest: __________________________ Attest:______________________________
SHAREHOLDER SERVICES AGREEMENT
THIS AGREEMENT is made and entered into as of this 4th day of May,
2000, by and between Allied Asset Advisors Funds, a Delaware business trust
(hereinafter referred to as the "Trust") and Rafferty Capital Markets, Inc.
("RCM"), a corporation organized and existing under the laws of the State of New
York.
WHEREAS, the Trust is an open-end management investment company which
is registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Trust is authorized to create separate series, each with
its own separate investment portfolio, along with separate classes of such
series;
WHEREAS, RCM is a corporation and, among other things, is in the
business of providing or arranging for shareholder services; and
WHEREAS, the Trust desires to retain RCM to act as shareholder
servicing agent for each class of each series of the Trust listed on Exhibit A
attached hereto, (each such class and each such series hereinafter referred to
as a "class" and a "Fund", respectively), as may be amended from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Trust and RCM agree as follows:
1. The Trust hereby appoints RCM to provide information and administrative
services for the benefit of the Fund and its shareholders attributable to the
class. In this regard, RCM shall appoint various broker-dealer firms and other
service or administrative firms ("Firms") to provide related services and
facilities for persons who are investors in the class of the Fund ("investors").
The Firms shall provide such office space and equipment, telephone facilities,
personnel or other services as may be necessary or beneficial for providing
information and services to investors. Such services and assistance may include,
but are not limited to, establishing and maintaining accounts and records,
processing purchase and redemption transactions, answering routine inquiries
regarding the Fund and its special features, assistance to investors in changing
dividend and investment options, account designations and addresses, and such
other administrative services as the Trust or RCM may reasonably request. Firms
may include affiliates of RCM. RCM may also provide some of the above services
for the Fund directly.
RCM accepts such appointment and agrees during such period to render
such services and to assume the obligations herein set forth for the
compensation herein provided. RCM shall for all purposes herein provided be
deemed to be an independent contractor and, unless otherwise expressly provided
or authorized, shall have no authority to act for or represent the Trust in any
way or otherwise be deemed an agent of the Trust. RCM, by separate agreement
with the Trust, may also serve the Trust in other capacities. In carrying out
its duties and responsibilities hereunder, RCM will appoint various Firms to
provide administrative and other services described herein directly to or for
the benefit of investors. Such Firms shall at all times be deemed to be
independent contractors retained by RCM and not the Trust. RCM and not the Trust
will be responsible for the payment of compensation to such Firms for such
services.
2. For the administrative services described in Section 1, the Trust will pay to
RCM at the end of each calendar month a shareholder service fee computed at an
annual rate of up to 0.25 of 1% of the average daily net assets of the Fund
attributable to the class. The current fee schedule is set forth as Exhibit B
hereto. For the month and year in which this Agreement becomes effective or
terminates, there shall be an appropriate proration on the basis of the number
of days that the Agreement is in effect during such month and year,
respectively. The services of RCM to the Trust under this Agreement are not to
be deemed exclusive, and RCM shall be free to render similar services or other
services to others.
3. The Trust shall assume and pay all charges and expenses of its operations not
specifically assumed or otherwise to be provided by RCM under this Agreement.
4. This Agreement may be terminated at any time without the payment of any
penalty by the Trust or by RCM on sixty (60) days written notice to the other
party. Termination of this Agreement shall not affect the right of RCM to
receive payments on any unpaid balance of the compensation described in Section
2 hereof earned prior to such termination. This Agreement may not be amended,
modified or effected except by written instrument executed by all parties
effected thereby.
5. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder shall not be thereby
affected.
6. RCM is hereby expressly put on notice of the limitation of shareholder
liability as set forth in the Trust's Declaration of Trust and agrees that
obligations assumed by the Trust pursuant to this Agreement shall be limited in
all cases to the Trust and its assets, and if the liability relates to one or
more series, the obligations hereunder shall be limited to the respective assets
of such series. RCM further agrees that it shall not seek satisfaction of any
such obligation from the shareholder or any individual shareholder of a series
of the Trust, nor from the Trustees or any individual Trustee of the Trust.
7. This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the State of Wisconsin. However,
nothing herein shall be construed in a manner inconsistent with the 1940 Act or
any rule or regulation promulgated by the Securities and Exchange Commission
thereunder.
8. Notices of any kind to be given by either party to the other party shall be
in writing and shall be duly given if mailed or delivered as follows:
Notice to RCM shall be sent to:
Rafferty Capital Markets, Inc.
1130 Mamaroneck Avenue
White Plains, NY 10605
Telephone: (914) 614-6330
Facsimile: (914) 614-6322
and notice to the Trust shall be sent to:
Allied Asset Advisors Funds
745 McClintock Drive, Suite 114
Burr Ridge, IL 60521
Telephone: (630) 789-9191
Facsimile: (630) 789-9455
with a copy to:
David A. Sturms
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Chicago, IL 60601
Telephone: 312-609-7500
Facsimile: 312-609-5005
[SIGNATURES APPEAR ON THE NEXT PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer or one or more counterparts as of the day
and year first written above.
ALLIED ASSET ADVISORS FUNDS
By:___________________
Name:_________________
Title:________________
Attest:______________________
FIRSTAR MUTUAL FUND SERVICES, LLC
By:___________________
Name:_________________
Title:________________
Attest:______________________
EXHIBIT A
ALLIED ASSET ADVISORS FUNDS
- ----------------------------------------------------------- --------------------
FUND CLASS
- ----------------------------------------------------------- --------------------
Dow Jones Islamic Index Fund M Shares
- ----------------------------------------------------------- --------------------
EXHIBIT B
ALLIED ASSET ADVISORS FUNDS
DOW JONES ISLAMIC INDEX FUND
FEE SCHEDULE FOR
SHAREHOLDER SERVICES AGREEMENT
Pursuant to Section 2 of the Shareholder Services Agreement to which this
Exhibit is attached, the Trust and RCM agree that the initial administrative
service fee will be computed as described hereinafter. The Trust will pay RCM a
fee at a rate sufficient to reimburse RCM for service fee payments made by RCM
to broker-dealer firms and other financial services firms ("Firms") that are
retained by RCM to provide information and administrative services for their
clients as contemplated by Section 1 of the Agreement. RCM will pay Firms a
service fee at an annual rate of up to .25% of net assets of the Fund
attributable to the class of those accounts in the class of the Fund that they
maintain and service. For this purpose, Firms shall only include broker-dealers
and other financial services firms listed on the records of the Trust as "dealer
of record," and shall not include RCM. In no event shall the fee paid to RCM
exceed the limitations set forth in Section 2 of the Agreement.
Dated: May 4, 2000
ALLIED ASSET ADVISORS FUNDS
By:______________________
Name:____________________
Title:___________________
Attest:______________________________
RAFFERTY CAPITAL MARKETS, INC.
By:_____________________
Name:___________________
Title:__________________
Attest:_______________________________
FULFILLMENT SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this ___ day of _____,
2000, by and between Allied Asset Advisors Funds, a business trust organized
under the laws of the State of Delaware (hereinafter referred to as the
"Trust"), Allied Asset Advisors, Inc., a corporation organized under the laws of
the state of Delaware (hereinafter referred to as the "Advisor"), Firstar Mutual
Fund Services, LLC, a limited liability company organized under the laws of the
State of Wisconsin (hereinafter referred to as "FMFS"), and Rafferty Capital
Markets, Inc., corporation organized under the laws of the State of New York
(hereinafter referred to as the "Distributor").
WHEREAS, the Advisor is a registered investment adviser under the
Investment Advisers Act of 1940, as amended;
WHEREAS, the Advisor serves as investment adviser to the Trust, a
registered investment company under the Investment Company Act of 1940, as
amended, which is authorized to create separate series of funds;
WHEREAS, the Distributor is a registered broker-dealer under the
Securities Exchange Act of 1934, as amended, and serves as principal distributor
of Trust shares;
WHEREAS, FMFS provides fulfillment services to mutual funds;
WHEREAS, the Trust desires to retain FMFS to provide fulfillment
services to all portfolio's of the Trust (each a "Fund") and each additional
series of the Trust listed on Exhibit A attached hereto, as it may be amended
from time to time.
NOW, THEREFORE, the parties agree as follows:
1. DUTIES AND RESPONSIBILITIES OF FMFS
1. Answer all prospective shareholder calls concerning the Fund.
2. Send all available Fund material requested by the prospect within
24 hours from time of call.
3. Receive and update all Fund fulfillment literature so that the most
current information is sent and quoted.
4. Provide 24 hour answering service to record prospect calls made
after hours (7 p.m. to 8 a.m. CT).
5. Maintain and store Fund fulfillment inventory.
6. Send periodic fulfillment reports to the Trust as agreed upon
between the parties.
2. DUTIES AND RESPONSIBILITIES OF THE TRUST
1. Provide Fund fulfillment literature updates to FMFS as necessary.
2. File (or cause to be filed (i.e., through the Distributor) with the
NASD, SEC and State Regulatory Agencies, as appropriate, all
fulfillment literature that the Fund requests FMFS send to prospective
shareholders.
3. Supply FMFS with sufficient inventory of fulfillment materials as
requested from time to time by FMFS.
4. Provide FMFS with any sundry information about the Fund in order to
answer prospect questions.
3. COMPENSATION
The Advisor or the Distributor (the Distributor only through the collection of
sufficient distribution expenses from the Fund, if applicable) agrees to
compensate FMFS for the services performed under this Agreement in accordance
with the attached Exhibit A. All invoices shall be paid within ten days of
receipt.
4. PROPRIETARY AND CONFIDENTIAL INFORMATION
FMFS agrees on behalf of itself and its directors, officers, and employees to
treat confidentially and as proprietary information of the Trust all records and
other information relative to the Trust and prior, present, or potential
shareholders of the Trust (and clients of said shareholders), and not to use
such records and information for any purpose other than the performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Trust, which approval may not be withheld where FMFS
may be exposed to civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly constituted authorities, or
when so requested by the Trust.
5. INDEMNIFICATION
The Trust agrees to indemnify FMFS from any liability arising out of the
distribution of fulfillment literature which has not been filed with the
appropriate Federal and State Regulatory Agencies as required by applicable law.
FMFS agrees to indemnify the Trust from any liability arising from the improper
use of fulfillment literature during the performance of duties and
responsibilities identified in this agreement. FMFS will be liable for bad
faith, negligence or willful misconduct on its part in its duties under this
Agreement.
6. TERMINATION
This Agreement may be terminated by either party upon 90 days written notice.
Notwithstanding anything to the contrary above, this Agreement may be terminated
by the Trust's Board of Trustees, without penalty, (i) immediately if FMFS
becomes statutorily disqualified from performing it duties under this Agreement
or otherwise is legally prohibited from performing its duties under this
Agreement and (ii) on not less than sixty (60) days written notice for cause (as
defined below).
Termination for "cause" shall mean:
(i) willful misfeasance, bad faith, gross negligence, abandonment, or
reckless disregard on the part of FMFS with respect to its obligations and
duties hereunder;
(ii) regulatory, administrative or judicial proceedings against FMFS that
result in a determination that it has violated any rule, regulation, order or
law and that, in the reasonable judgement of the Trust's Board of Trustees,
substantially impairs the performance of FMFS' obligations and duties
hereunder;
(iii) financial difficulties on the part of FMFS that are evidenced by the
authorization or commencement of, or involvement by way of pleading, answer,
consent, or acquiescence in, a voluntary or involuntary case under Title 11 of
the United States Code, as from time to time in effect, or any applicable law
other than said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the rights of
creditors;
(iv) any other circumstance that, in the reasonable judgement of the
Trust's Board of Trustees, substantially impairs the performance of FMFS'
obligations and duties hereunder.
FMFS is hereby expressly put on notice of the limitation of shareholder
liability as set forth in the Trust's Declaration of Trust and agrees that
obligations assumed by the Trust pursuant to this Agreement shall be limited in
all cases to the Trust and its assets, and if the liability relates to one or
more series, the obligations hereunder shall be limited to the respective assets
of such series. FMFS further agrees that it shall not seek satisfaction of any
such obligation from the shareholder or any individual shareholder of a series
of the Trust, nor from the Trustees or any individual Trustee of the Trust.
7. NO AGENCY RELATIONSHIP
Nothing herein contained shall be deemed to authorize or empower FMFS to act as
agent for the other party to this Agreement, or to conduct business in the name
of, or for the account of the other party to this Agreement.
8. DATA NECESSARY TO PERFORM SERVICES
The Trust or its agent, which may be FMFS, shall furnish to FMFS the data
necessary to perform the services described herein at such times and in such
form as mutually agreed upon. If FMFS is also acting in another capacity for the
Trust, nothing herein shall be deemed to relieve FMFS of any of its obligations
in such capacity.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by a duly authorized officer or one or more counterparts as of the day and year
first written above.
ALLIED ASSET ADVISORS FUNDS FIRSTAR MUTUAL FUND SERVICES, LLC
By:______________________________ By: ________________________________
Attest: __________________________ Attest:______________________________
RAFFERTY CAPITAL MARKETS, INC. ALLIED ASSET ADVISORS, INC.
By:______________________________ By: ________________________________
Attest: __________________________ Attest:______________________________
May , 2000
Allied Asset Advisors Funds
745 McClintock Drive
Suite 114
Burr Ridge, Illinois 60521
Ladies and Gentlemen:
Reference is made to Pre-Effective Amendment No. 1 to the Registration
Statement on Form N-1A under the Securities Act of 1933 being filed by Allied
Asset Advisors Funds (the "Trust") in connection with the proposed public
offering of an indefinite number of shares of beneficial interest, no par value
("Shares"), in the Dow Jones Islamic Index Fund (the "Fund"), the sole initial
series of the Trust.
We have acted as counsel to the Trust since its inception, and in such
capacity are familiar with the Trust's organization and have counseled the Trust
regarding various legal matters. We have examined such Trust records and other
documents and certificates as we have considered necessary or appropriate for
the purposes of this opinion. In our examination of such materials, we have
assumed the genuineness of all signatures and the conformity to original
documents of all copies submitted to us.
Based upon the foregoing and assuming that the Trust's Declaration of
Trust dated January 10, 2000, the Written Instrument Establishing and
Designating Classes of Interests dated May 4, 2000, and the By-Laws of the Trust
adopted January 10, 2000, as amended on May 4, 2000 are presently in full force
and effect and have not been amended in any respect except as provided in the
above-referenced documents and that the resolutions adopted by the Board of
Trustees of the Trust on May 4, 2000 relating to organizational matters,
securities matters and the issuance of shares are presently in full force and
effect and have not been amended in any respect, we advise you and opine that
(a) the Trust is a duly formed and validly existing business trust under the
laws of the State of Delaware (commonly known as a Delaware business trust) and
is authorized to issue an unlimited number of Shares in the Fund; and (b) upon
issuance of the Shares for cash at net asset value plus any applicable front-end
sales charges and receipt by the Trust of a purchase price not less than the net
asset value thereof, the Shares of the Fund will be legally issued and
outstanding, fully paid and nonassessable.
This opinion is solely for the benefit of the Trust, the Trust's Board
of Trustees and the Trust's officers and may not be relied upon by any other
person without our prior written consent. We hereby consent to the use of this
opinion in connection with said Pre-Effective Amendment.
Very truly yours,
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
May __, 2000
Board of Trustees
Allied Asset Advisors Funds
745 McClintock Drive
Suite 114
Burr Ridge, Illinois 60521
Re: SUBSCRIPTION FOR SHARES OF THE DOW JONES ISLAMIC INDEX FUND
(THE "FUND")
Dear Trustees:
North American Islamic Trust offers to purchase from Allied Asset
Advisors Funds, 10,000 shares of beneficial interest of the Fund at a price of
$10.00 per share for an aggregate purchase price of $100,000 cash, all such
shares to be validly issued, fully paid and non-assessable upon issuance of such
shares and receipt of said payment by the Fund.
These shares are not being purchased with any present intent of
distributing or reselling the same to the public, and will be held for
investment by North American Islamic Trust.
Sincerely,
North American Islamic Trust
By: _______________________
Name: _____________________
Title: ____________________
ACCEPTED AND AGREED to this ____ day of _________, 2000.
ALLIED ASSET ADVISORS FUNDS
By: ___________________
Name: _________________
Title: ________________
ALLIED ASSET ADVISORS FUNDS
DISTRIBUTION PLAN
(12B-1 PLAN)
ADOPTED MAY 4, 2000
The following Distribution Plan (the "Plan") has been adopted pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended (the "Act"), by
Allied Asset Advisors Funds (the "Trust"), a Delaware trust, on behalf of the
portfolios of the Trust (the "Fund") and/or Shares ("Classes") of the Funds set
forth in exhibits hereto. The Plan has been approved by a majority of the
Trust's Board of Trustees, including a majority of the Trustees who are not
interested persons of the Trust and who have no direct or indirect financial
interest in the operation of the Plan or in any Rule 12b-1 Agreement (as defined
below) (the "Disinterested Trustees"), cast in person at a meeting called for
the purpose of voting on such plan.
In approving the Plan, the Board of Trustees determined that adoption of the
Plan would be in the best interests of the Fund and its shareholders. Such
approval by the Board of Trustees included a determination, in the exercise of
its reasonable business judgment and in light of its fiduciary duties, that
there is a reasonable likelihood that the Plan will benefit the Fund and its
shareholders.
The provisions of the Plan are as follows:
1. PAYMENTS BY THE FUND TO PROMOTE THE SALE OF FUND SHARES
(a) The Trust, on behalf of the Fund, will pay Rafferty Capital
Markets, Inc. (the "Distributor"), as a principal underwriter of the Fund's
shares, a distribution fee as set forth in the exhibits in connection with the
promotion and distribution of Fund shares and the provision of personal services
to shareholders, including, but not necessarily limited to, advertising,
compensation to underwriters, dealers and selling personnel, the printing and
mailing of prospectuses to other than current Fund shareholders, and the
printing and mailing of sales literature. The Distributor may pay all or a
portion of these fees to any registered securities dealer, financial institution
or any other person (the "Recipient") who renders assistance in distributing or
promoting the sale of shares, or who provides certain shareholder services,
pursuant to a written agreement (the "Rule 12b-1 Agreement"), a form of which is
attached hereto as Appendix A with respect to the Fund. Payment of these fees
shall be made monthly promptly following the close of the month.
(b) No Rule 12b-1 Agreement shall be entered into with respect to the
Fund and/or Class and no payments shall be made pursuant to any Rule 12b-1
Agreement, unless such Rule 12b-1 Agreement is in writing and the form of which
has first been delivered to and approved by a vote of a majority of the Trust's
Board of Trustees, and of the Disinterested Trustees, cast in person at a
meeting called for the purpose of voting on such Rule 12b-1 Agreement. The form
of Rule 12b-1 Agreement relating to the Fund attached hereto as Appendix A has
been approved by the Trust's Board of Trustees as specified above.
(c) Any Rule 12b-1 Agreement shall describe the services to be
performed by the Recipient and shall specify the amount of, or the method for
determining, the compensation to the Recipient.
2. QUARTERLY REPORTS
The Distributor shall provide to the Board of Trustees, and the
Trustees shall review at least quarterly, a written report of all amounts
expended pursuant to the Plan. This report shall include the identity of the
Recipient of each payment and the purpose for which the amounts were expended
and such other information as the Board of Trustees may reasonably request.
3. DURATION OF THE PLAN
The Plan shall continue in effect for a period of one year from its
effective date unless terminated pursuant to its terms. Thereafter, the Plan
shall continue with respect to the Fund from year to year, provided that such
continuance is approved at least annually by a vote of a majority of the Board
of Trustees, and of the Disinterested Trustees, cast in person at a meeting
called for the purpose of voting on such continuance. The Plan, or any Rule
12b-1 Agreement, may be terminated with respect to the Fund at any time, without
penalty, on not more than sixty days' written notice by a majority vote of
shareholders of such Fund, or by vote of a majority of the Disinterested
Trustees.
4. SELECTION OF DISINTERESTED TRUSTEES
During the period in which the Plan is effective, the selection and
nomination of those Trustees who are Disinterested Trustees of the Trust shall
be committed to the discretion of the Disinterested Trustees.
5. AMENDMENTS
All material amendments of the Plan shall be in writing and shall be
approved by a vote of a majority of the Board of Trustees, and of the
Disinterested Trustees, cast in person at a meeting called for the purpose of
voting on such amendment. In addition, the Plan may not be amended to increase
materially the amount to be expended by the Fund hereunder without the approval
by a majority vote of shareholders of the Fund affected thereby.
6. RECORDKEEPING
The Trust shall preserve copies of the Plan, any Rule 12b-1 Agreement
and all reports made pursuant to Section 2 for a period of not less than six
years from the date of this Plan, any such Rule 12b-1 Agreement or such reports,
as the case may be, the first two years in an easily accessible place.
EXHIBIT A
TO RULE 12B-1 PLAN
ALLIED ASSET ADVISOR FUNDS
This Plan is adopted by Allied Asset Advisor Funds with respect to the
Class of Shares of the portfolios of the Trust set forth below.
In compensation for the services provided pursuant to this Plan, the
Distributor will be paid a monthly fee computed at the annual rate of 0.75 of 1%
of the average aggregate net assets of the Funds held during the month.
FUND CLASS
- ---- -----
Dow Jones Islamic Index Fund M
APPENDIX A
RULE 12B-1 AGREEMENT
RAFFERTY CAPITAL MARKETS, INC.
1311 MAMRONECK AVENUE
WHITE PLAINS, NY 10605
DEALER AGREEMENT
This Agreement made as of ______________________, 2000, between
Rafferty Capital Markets, INC. ("RCM"), a Delaware corporation, and
__________________________________ ("DEALER"), a corporation organized and
existing under the laws of ______________________________.
WHEREAS, ________________ (the "Trust") is registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as an open-end
management investment company and currently offers for public sale shares of
common stock or beneficial interest ("Shares") in the separate series of the
Trust listed on Schedule A (each, a "Fund");
WHEREAS, RCM serves as principal underwriter in connection with the
offering and sale of the Shares of each Fund pursuant to a Distribution
Agreement, and
WHEREAS, DEALER desires to serve as a selected dealer for the Shares of
the Funds.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants contained herein, RCM and DEALER agree as follows:
1. OFFERS AND SALES OF SHARES. The DEALER agrees to offer and sell
Shares only at the public offering price currently in effect, in accordance with
the terms of the then-current prospectus(es), including any supplements or
amendments thereto, of each Fund ("Prospectus"). The DEALER agrees to act only
as agent on behalf of its customers in such transactions and shall not have
authority to act as agent for the Funds, for RCM, or for any other dealer in any
respect. All purchase orders are subject to acceptance by RCM and the relevant
Fund and become effective only upon confirmation by RCM or an agent of the Fund.
In its sole discretion, either the Fund or RCM may reject any purchase order and
may, provided notice is given to the DEALER, suspend sales or withdraw the
offering of Shares entirely.
2. PROCEDURES FOR PURCHASES. The procedures relating to all orders and
the handling of them shall be made in accordance with the procedures set forth
in each Fund's Prospectus, and to the extent consistent with the Prospectus,
written instructions forwarded to DEALER by RCM from time to time.
3. SETTLEMENT AND DELIVERY FOR PURCHASES. Transactions shall be settled
by the DEALER by payment in Federal funds of the full purchase price to the
Fund's transfer agent in accordance with applicable procedures. Payment for
Shares shall be received by the Fund's transfer agent by the later of (a) the
end of the third business day following the Dealer's receipt of the customer's
order to purchase such Shares or (b) the end of one business day following the
Dealer's receipt of the customer's payment for such Shares, but in no event
later than the end of the sixth business day following the Dealer's receipt of
the customer's order. If such payment is not received within the time specified,
the sale may be canceled forthwith without any responsibility or liability on
RCM's part or on the part of the Fund.
4. PROCEDURES FOR REDEMPTION, REPURCHASE AND EXCHANGE. Redemption or
repurchases of Shares as well as exchange requests shall be made in accordance
with the procedures set forth in each Fund's Prospectus, and to the extent
consistent with the Prospectus, written instructions forwarded to DEALER by RCM
from time to time.
5. COMPENSATION.
(a) On each purchase of Shares by the DEALER from RCM, the total sales
charges and discount to dealer, if any, shall be as stated in each Fund's
Prospectus. Such sales charges and discounts to dealers are subject to
reductions under a variety of circumstances as described in each Fund's
Prospectus. To obtain these reductions, RCM must be notified when a sale takes
place that would qualify for the reduced charge. If any Shares sold to the
DEALER under the terms of this Agreement are redeemed by a Fund or tendered for
redemption or repurchased by a Fund or by RCM as agent within seven business
days after the date the DEALER purchased such Shares, the DEALER shall forfeit
its right to any discount or commission received by or allowed to the DEALER
from the original sale.
(b) From time to time during the term of this Agreement, RCM may make
payments to DEALER pursuant to one or more distribution plans adopted by certain
of the Funds pursuant to Rule 12b-1 under the 1940 Act ("Plan of Distribution")
in consideration, with respect to each such Fund, of DEALER'S furnishing
distribution services hereunder. The provisions and terms of a Fund's Plan of
Distribution are described in its Prospectus and statement of additional
information ("SAI"), and the DEALER agrees that RCM has made no representations
to the DEALER with respect to the Plan of Distribution in addition to or
conflicting with the description set forth therein. The DEALER agrees that (i)
DEALER has no right to receive payment of any amounts otherwise payable to it by
RCM under a Fund's Plan of Distribution until such time as RCM is in receipt of
such fee from the Fund and (ii) RCM'S liability to the DEALER for the payment of
any such fees is limited solely to the amount of the applicable Fund's fee sent
to RCM.
6. EXPENSES. The DEALER agrees that it will bear all expenses
incurred in connection with its performance of this Agreement.
7. DEALER REGISTRATION. The DEALER represents and warrants that it is
registered as a broker-dealer under the Securities Exchange Act of 1934 ( the
"1934 Act"), is qualified as a broker-dealer in all states or other
jurisdictions in which it sells Fund Shares, and, if it sells shares in
additional states or jurisdictions in the future, will become qualified to act
as a dealer in each such state or jurisdiction prior to selling any Fund shares.
The DEALER shall maintain any filings and licenses required by federal and state
laws to conduct the business contemplated under this Agreement. The DEALER
further represents and warrants that it is a member in good standing of the
National Association of Securities Dealers, Inc. ("NASD") and that it agrees to
abide by the Conduct Rules of the NASD. The DEALER further represents and
warrants that it is a member of the Securities Investor Protection Corporation
in good standing.
8. COMPLIANCE WITH FEDERAL AND STATE LAWS.
(a) The DEALER will not sell any of the Shares except in compliance
with all applicable federal and state securities laws. In connection with sales
and offers to sell Shares, the DEALER will furnish or cause to be furnished to
each person to whom any such sale or offer is made, at or prior to the time of
offering or sale, a copy of the Prospectus and, if requested, the related SAI.
RCM shall be under no liability to the DEALER except for lack of good faith and
for obligations expressly assumed by RCM herein. Nothing herein contained,
however, shall be deemed to be a condition, stipulation or provision binding any
persons acquiring any security to waive compliance with, or to relieve the
parties hereto from any liability arising under, the federal securities laws.
(b) RCM shall, from time to time, inform the DEALER as to the states
and jurisdictions in which RCM believes the Shares have been qualified for sale
under, or are exempt from the requirements of, the respective securities laws of
such states and jurisdictions. The DEALER agrees that it will not knowingly
offer or sell Shares in any state or jurisdiction in which such Shares are not
qualified, unless any such offer or sale is made in a transaction that qualifies
for an exemption from registration.
(c) RCM assumes no responsibility in connection with the registration
of the DEALER under the laws of the various states or under federal law or the
DEALER'S qualification under any such law to offer or sell Shares.
9. UNAUTHORIZED REPRESENTATIONS. No person is authorized to make any
representations concerning Shares of the Funds except those contained in the
Prospectus, SAI and printed information issued by each Fund or by RCM as
information supplemental to each Prospectus. RCM shall, upon request, supply the
DEALER with reasonable quantities of Prospectuses and SAIs. The DEALER agrees
not to use other advertising or sales material relating to the Funds unless
approved by RCM in advance of such use. Neither party shall use the name of the
other party in any manner without the other party's written consent, except as
required by any applicable federal or state law, rule or regulation, and except
pursuant to any mutually agreed upon promotional programs.
10. CONFIRMATIONS. The DEALER agrees to send confirmations of orders to
its customers as required by Rule 10b-10 of the 1934 Act. In the event the
customers of DEALER place orders directly with the Fund or any of its agents,
confirmations will be sent to such customers, as required, by the Fund's
transfer agent.
11. RECORDS. The DEALER agrees to maintain all records required by
applicable state and federal laws and regulations relating to the offer and sale
of Shares to its customers, and upon the reasonable request of RCM, or of the
Funds, to make these records available to RCM or the Fund's administrator as
reasonably requested. On orders placed directly with the Fund or its agents, the
Fund's transfer agent will maintain all records required by state and federal
laws and regulations relating to the offer and sale of Shares.
12. TAXPAYER IDENTIFICATION NUMBERS. The DEALER agrees to obtain any
taxpayer identification number certification from its customers required under
the Internal Revenue Code and any applicable Treasury regulations, and to
provide RCM or its designee with timely written notice of any failure to obtain
such taxpayer identification number certification in order to enable the
implementation of any required backup withholding.
13. INDEMNIFICATION.
(a) The DEALER shall indemnify and hold harmless RCM, each Fund, the
transfer agent and administrator of the Funds, and their respective affiliates,
officers, directors, agents, employees and controlling persons from all direct
or indirect liabilities, losses or costs (including reasonable attorneys' fees)
arising from, related to or otherwise connected with any breach by the DEALER of
any provision of this Agreement.
(b) RCM shall indemnify and hold harmless the DEALER and its
affiliates, officers, directors, agents, employees and controlling persons from
and against any and all direct or indirect liabilities, losses or costs
(including reasonable attorneys' fees) arising from, related to or otherwise
connected with any breach by RCM of any provision of this Agreement.
(c) The Agreement of the parties in this Paragraph to indemnify each
other is conditioned upon the party entitled to indemnification (Indemnified
Party) notifying the other party (Indemnifying Party) promptly after the summons
or other first legal process for any claim as to which indemnity may be sought
is served on the Indemnified Party. The Indemnified Party shall permit the
Indemnifying Party to assume the defense of any such claim or any litigation
resulting from it, provided that counsel for the Indemnifying Party who shall
conduct the defense of such claim or litigation shall be approved by the
Indemnified Party (which approval shall not unreasonably be withheld), and that
the Indemnified Party may participate in such defense at its expense. The
failure of the Indemnified Party to give notice as provided in this subparagraph
(c) shall not relieve the Indemnifying Party from any liability other than its
indemnity obligation under this Paragraph. No Indemnifying Party, in the defense
of any such claim or litigation, shall, without the consent of the Indemnified
Party, consent to entry of any judgment or enter into any settlement that does
not include as an unconditional term the giving by the claimant or plaintiff to
the Indemnified Party of a release from all liability in respect to such claim
or litigation.
14. NO AGENCY CREATED. Nothing in this Agreement shall be deemed or
construed to make the DEALER an employee, agent, representative or partner of
any of the Funds or of RCM, and the DEALER is not authorized to act for RCM or
for any Fund or to make any representations on RCM's or the Funds' behalf. The
DEALER acknowledges that this Agreement is not exclusive and that RCM may enter
into similar arrangements with other broker-dealers.
15. TERM, TERMINATION, ASSIGNMENT AND AMENDMENT.
(a) This Agreement shall commence on the date first set forth above and
shall continue in effect with respect to a Fund for more than one year only so
long as such continuance is specifically approved at least annually in
conformity with the requirements of the 1940 Act.
(b) Either party to this Agreement may terminate this Agreement by
giving ten days' written notice to the other. This Agreement also may be
terminated with respect to a Fund at any time, without the payment of any
penalty, by vote of a majority of the members of the board of trustees of the
Trust who are not "interested persons" (within the meaning of the 1940 Act) and
have no direct or indirect financial interest in the operation of this Agreement
or by vote of a "majority of the outstanding voting securities" (within the
meaning of the 1940 Act) of the respective Fund on not more than sixty days'
written notice.
(c) This Agreement shall terminate automatically with respect to any
Fund if (i) the DEALER files a petition in bankruptcy, (ii) a trustee or
receiver is appointed for the DEALER or its assets under federal bankruptcy
laws, (iii) the DEALER'S registration as a broker-dealer with the Securities and
Exchange Commission is suspended or revoked, (iv) the DEALER'S NASD membership
is suspended or revoked, (v) an application for a protective decree under the
provisions of the Securities Investor Protection Act of 1970 is filed against
the DEALER, or (vi) the Distribution Agreement between RCM and a Fund is
terminated. This Agreement also shall terminate automatically in the event of
its "assignment," within the meaning of the 1940 Act.
(d) Termination of this Agreement by operation of this Paragraph 15
shall not affect any unpaid obligations under Paragraphs 3, 5 or 6 of this
Agreement or the liability, legal and indemnity obligations set forth under
Paragraphs 7, 8, 9 or 13 of this Agreement.
(e) This Agreement may not be amended by either party without the prior
written consent of the other party.
16. NOTICES. Except as otherwise specifically provided in this
Agreement, any notice required or permitted to be given by either party to the
other shall be in writing and shall be deemed to have been given on the date
delivered personally or by courier service or 3 days after sent by registered or
certified mail, postage prepaid, return receipt requested or on the date sent
and confirmed received by facsimile transmission to the other party's address
set forth below:
Notice to RCM shall be sent to:
Rafferty Capital Markets, Inc.
Attn: Thomas A. Mulrooney
1311 Mamaroneck Avenue
White Plains, NY 10605
notice to the DEALER shall be sent to:
_____________________________
_____________________________
_____________________________
17. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
18. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws (without regard, however, to conflicts of law principles) of the State
of Wisconsin, provided that no provision shall be construed in a manner not
consistent with the 1940 Act or any rule or regulation thereunder.
19. CONFIDENTIALITY. RAFFERTY and the DEALER agree to preserve the
confidentiality of any and all materials and information furnished by either
party in connection with this Agreement. The provisions of this Paragraph shall
not apply to any information which is: (a) independently developed by the
receiving party, provided the receiving party can satisfactorily demonstrate
such independent development with appropriate documentation; (b) known to the
receiving party prior to disclosure by the disclosing party; (c) lawfully
disclosed to the receiving party by a third party not under a separate duty of
confidentiality with respect thereto to the disclosing party; or (d) otherwise
publicly available through no fault or breach by the receiving party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated as of the day and year first written
above.
RAFFERTY CAPITAL MARKETS, INC.
By: _______________________
Type Name: ___________________
DEALER
By: ________________________
Type Name: ___________________
SCHEDULE A
SERIES AND SHARES
ALLIED ASSET ADVISORS FUNDS
FUND SHARE CLASS
- ---- -----------
Dow Jones Islamic Index Fund M
ALLIED ASSET ADVISORS FUNDS
MULTIPLE CLASS PLAN
Adopted May 4, 2000
This Multiple Class Plan ("Plan") is adopted by ALLIED ASSET ADVISORS
FUNDS (the "Trust"), a Delaware Business Trust with respect to the classes of
shares ("Classes") of the portfolio of the Trust (the "Fund") set forth on
Exhibit A hereto.
1. PURPOSE
This Plan is adopted pursuant to Rule 18f-3 under the Investment Company Act of
1940 (the "1940 Act"), as amended (the "Rule"), so as to allow the Trust to
issue more than one class of shares of the Fund ("Classes") in reliance on the
Rule and to make allocated expenses and payments as contemplated herein.
2. SEPARATE ARRANGEMENTS/CLASS DIFFERENCES
A) DESIGNATION OF CLASSES: The Fund set forth on Exhibit A offers two
classes of shares: K Class and M Class.
B) SALES LOAD AND EXPENSES: The Fund's M Class is subject to a Rule 12b-1
fee and a shareholder servicing fee. The Fund's K Class is not subject to a Rule
12b-1 fee or a shareholder servicing fee.
C) DISTRIBUTION OF SHARES: K Class shares are offered primarily to trusts,
fiduciaries and individuals who purchase shares directly through the Fund.
M Class shares are sold primarily to individuals who purchase shares
through broker/dealers.
D) VOTING RIGHTS: Shareholders of each Class are entitled to one vote for
each share held on the record date for any action requiring a vote by the
shareholders and a proportionate fractional vote for each fractional vote held.
Shareholders of the Trust will vote together as a single class; provided,
however, that (a) as to any matter with respect to which a separate vote of one
or more series or classes thereof is permitted or required by the 1940 Act or
the provisions of the instrument establishing and designating the series of
class, such requirements as to a separate vote by such series or class thereof
shall apply in lieu of all shares of all series and classes thereof voting
together; and (b) as to any matter which affects only the interests of one or
more particular series or classes thereof, only the shareholders of the one or
more affected series or classes shall be entitled to vote, and each such series
or class shall vote as a separate series or class.
3. EXPENSE ALLOCATIONS
Each class of shares will represent interests in the same portfolio of
investments of the Fund, and be identical in all respects to each other class,
except as set forth below. The only differences among the various classes of
shares of the Fund will relate solely to: (a) different distribution fee
payments associated with the Rule 12b-1 Plan for class M shares and any other
costs relating to implementing or amending such Rule 12b-1 Plan (including
obtaining shareholder approval of such 12b-1 Plan or any amendment thereto),
which will be borne solely by shareholders of such class; (b) different service
fees; (c) different shareholder servicing fees; (d) different class expenses,
which will be limited to the following expenses determined by the Trust's Board
of Trustees to be attributable to a specific class of shares: (i) printing and
postage expenses related to preparing and distributing materials such as
shareholder reports, prospectuses, and proxy statements to current shareholder
of a specific class; (ii) Securities and Exchange Commission registration fees
incurred by a specific class; (iii) litigation or other legal expenses relating
to a specific class; and (iv) accounting expenses relating to a specific class;
(e) the voting rights related to the Rule 12b-1 Plan for class M shares; (f)
exchange privileges; and (g) class names or designations. Any additional
incremental expenses not specifically identified above that are subsequently
identified and determined to be properly applied to one class of shares of the
Fund shall be so applied upon approval by a majority vote of (i) the Trust's
Board of Trustees and (ii) the members of the Board of the Trust who are not
interested persons of the Trust and have no direct or indirect financial
interest in the operation of the Trust's Plan.
Certain expenses may be attributable to the Trust, but not particularly
to the Fund or a class thereof. All such expenses will be borne by each class on
the basis of the relative aggregate net assets of the classes, except that, if
the Trust has series, expenses will first be allocated among series, based upon
their relative aggregate net assets. Expenses that are attributable to a
particular series, but not to a particular class thereof, will be borne by each
class of that series on the basis of the relative aggregate net assets of the
classes. Notwithstanding the foregoing, the principal underwriter, the
investment advisor or other provider of services to the Trust may waive or
reimburse the expenses of a specific class or classes to the extent permitted
under Rule 18f-3 under the 1940 Act.
4. DIVIDENDS
Dividends paid by the Fund as to each class of its shares, to the
extent any dividends are paid, will be calculated in the same manner, at the
same time, on the same day, and will be in the same amount; except that any
distribution fees, service fees, shareholder servicing fees and class expenses
allocated to a class will be borne exclusively by that class.
5. EFFECTIVENESS
This Plan shall become effective with respect to each Class to the
extent required by the Rule, after approval by a majority vote of: (i) the
Trust's Board of Trustees and (ii) the members of the Board of the Trust who are
not interested persons of the Trust and have no direct or indirect financial
interest in the operation of the Trust's Plan.
6. AMENDMENTS
All material amendments to this Plan must be approved by a majority
vote of: (i) the Trust's Board of Trustees and (ii) the members of the Board of
the Trust who are not interested persons of the Trust and have no direct
financial interest in the operation of the Trust's plan.
EXHIBIT A
to the
Multiple Class Plan
ALLIED ASSET ADVISORS FUNDS
FUND CLASSES
Dow Jones Islamic Index Fund K shares
M shares
ALLIED ASSET ADVISORS FUNDS
ALLED ASSET ADVISORS, INC.
JOINT CODE OF ETHICS
SECTION I STATEMENT OF GENERAL FIDUCIARY PRINCIPLES
This Code of Ethics (the "Code") has been approved by the Board of
Trustees of Allied Asset Advisors Funds (the "Trust"), including a majority of
the Trustees who are not "interested persons" of the Trust ("Independent
Trustees"), as defined by the Investment Company Act of 1940 (the "1940 Act").
The Code has been adopted by the Trust and Allied Asset Advisors, Inc. (the
"Advisor"), the investment advisor of the Trust, in compliance with Rule 17j-1
under the 1940 Act. The purpose of the Code is to establish standards and
procedures for the detection and prevention of activities by which persons
having knowledge of the investments and investment intentions of the Trust may
abuse their fiduciary duties to the Trust and otherwise to deal with the types
of conflict of interest situations to which Rule 17j-1 is addressed.
The Code is based on the principle that the trustees and officers of
the Trust and the personnel of the Advisor who provide services to the Trust,
owe a fiduciary duty to the Trust to conduct their personal securities
transactions in a manner that does not interfere with the Trust's transactions
or otherwise take unfair advantage of their relationship with the Trust. All
such trustees, officers and personnel of the Trust and the Advisor ("Trust
Employees") are expected to adhere to this general principle as well as to
comply with all of the specific provisions of this Code that are applicable to
them.
Technical compliance with the Code will not automatically insulate any
Trust Employee from scrutiny of transactions that show a pattern of compromise
or abuse of the individual's fiduciary duties to the Trust. Accordingly, all
Trust Employees must seek to avoid any actual or potential conflicts between
their personal interests and the interests of the Trust and its shareholders. In
sum, all Trust Employees shall place the interests of the Trust before their own
personal interests.
Every Trust Employee must read and retain this Code of Ethics, and
should recognize that he or she is subject to its provisions.
The Trust and the Advisor shall use reasonable diligence and institute
procedures reasonably necessary to prevent violations of this Code.
SECTION II DEFINITIONS
(A) "Access Person" means any trustee, director, general partner, officer,
or Advisory Person (as defined below) of the Trust or of the Advisor.
(B) An "Advisory Person" of the Trust or of the Advisor means: (i) any
employee of the Trust or the Advisor, or of any company in a control
relationship to the Trust or the Advisor, who in connection with his or her
regular functions or duties makes, participates in, or obtains current
information regarding the purchase or sale of any Security by the Trust, or
whose functions relate to the making of any recommendations with respect to such
purchases or sales; and (ii) any natural person in a control relationship to the
Trust or the Advisor who obtains information concerning current recommendations
made to the Trust with regard to the purchase or sale of any current Security.
(C) "Beneficial Ownership" has the meaning set forth in paragraph (a)(2) of
Rule 16a-1 under the Securities Exchange Act of 1934, except that the
determination shall apply to all securities which an Access Person has or
acquires. For purposes of this Code, Beneficial ownership shall be deemed to
include, but not be limited to, any interest by which an Access Person or any
member of his or her immediate family (i.e., a person who is related by blood or
marriage to, and who is living in the same household as, the Access Person) can
directly or indirectly derive a monetary or other economic benefit from the
purchase, sale (or other acquisition or disposition) or ownership of a Security,
including for this purpose any such interest that arises as a result of: a
general partnership interest in a general or limited partnership; an interest in
a trust; a right to dividends that is separated or separable from the underlying
Security; a right to acquire equity Securities through the exercise or
conversion of any derivative Security (whether or not presently exercisable);
and a performance related advisory fee (other than an asset based fee).1
(D) "Compliance Officer" means the chief compliance officer of the
Advisor.
(E) "Control" shall have the same meaning as that set forth in Section
2(a)(9) of the 1940 Act.
(F) "Covered Security" means any Security (as defined below) other than a
Security that is: (i) a direct obligation of the Government of the United
States; (ii) a banker's acceptance, certificate of deposit, commercial paper, or
high quality short-term debt security, including a repurchase agreement; or
(iii) a share of an open-end investment company registered under the 1940 Act.
(G) "Independent Trustee" means a trustee of the Trust who is not an
"interested person" of the Trust within the meaning of Section 2(a)(19) of the
1940 Act.
(H) "Initial Public Offering" means an offering of securities registered
under the Securities Act of 1933, the issuer of which, immediately before the
registration, was not subject to the reporting requirements of Section 13 or
Section 15(d) of the Securities Exchange Act of 1934.
(I) "Investment Personnel" means: (i) any employee of the Trust or the
Advisor (or of any company controlling, controlled by or under common control
with the Trust or the Advisor) who, in connection with his or her regular
functions or duties, makes or participates in making recommendations regarding
the purchase or sale of Securities by the Trust; and (ii) any natural person who
controls the Trust or the Advisor and who obtains information concerning current
recommendations made regarding the purchase or sale of Securities by the Trust.
(J) "Limited Offering" means an offering of Securities that is exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2) or
Section 4(6) thereof or Rule 504, Rule 505 or Rule 506 thereunder.
(K) "Security" includes all stock, debt obligations and other securities
and similar instruments of whatever kind, including any warrant or option to
acquire or sell a security. References to a Security in this Code (e.g., a
prohibition or requirement applicable to the purchase or sale of a Security)
shall be deemed to refer to and to include any warrant for, option in, or
Security immediately convertible into that Security, and shall also include any
instrument (whether or not such instrument itself is a Security) which has an
investment return or value that is based, in whole or part, on that Security
(collectively, "Derivatives"). Therefore, except as otherwise specifically
provided by this Code: (i) any prohibition or requirement of this Code
applicable to the purchase or sale of a Security shall also be applicable to the
purchase or sale of a Derivative relating to that Security; and (ii) any
prohibition or requirement of this Code applicable to the purchase or sale of a
Derivative shall also be applicable to the purchase or sale of a Security
relating to that Derivative.
(L) A Security is "being considered for purchase or sale" when a
recommendation to purchase or sell that Security has been made or communicated
and, with respect to the person making the recommendation, when such person
seriously considers making such a recommendation.
(M) "Trust Employee" means any person who is a trustee, director, officer
or employee of the Trust or the Advisor.
SECTION III OBJECTIVE AND GENERAL PROHIBITIONS
Although certain provisions of this Code apply only to Access Persons,
all Trust Employees must recognize that they are expected to conduct their
personal activities in accordance with the standards set forth in Sections I,
III and VII of this Code. Therefore, a Trust Employee may not engage in any
investment transaction under circumstances where the Trust Employee benefits
from or interferes with the purchase or sale of investments by the Trust. In
addition, Trust Employees may not use information concerning the investments or
investment intentions of the Trust or their ability to influence such investment
intentions, for personal gain or in a manner detrimental to the interests of the
Trust. Disclosure by a Trust Employee of such information to any person outside
of the course or scope of the responsibilities of the Trust Employee to the
Trust and the Advisor will be deemed to be a violation of this prohibition.
Trust Employees may not engage in conduct which is deceitful,
fraudulent, or manipulative, or which involves false or misleading statements,
in connection with the purchase or sale of investments by the Trust. In this
regard, Trust Employees should recognize that Rule 17j-1 makes it unlawful for
any affiliated person or principal underwriter of the Trust, or any affiliated
person of such a person, directly or indirectly, in connection with the purchase
or sale of a Security held or to be acquired by the investment company to:
(i) employ any device, scheme or artifice to defraud the Trust;
(ii) make any untrue statement of a material fact
to the Trust or omit to state to the Trust a
material fact necessary in order to make the
statements made, in light of the
circumstances under which they are made, not
misleading;
(iii) engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon the Trust; or
(iv) engage in any manipulative practice with respect to the Trust.
Trust Employees should also recognize that a violation of this Code or
of Rule 17j-1 may result in the imposition of: (1) sanctions as provided by
Section IX below; or (2) the imposition of administrative, civil and, in certain
cases, criminal fines, sanctions or penalties.
SECTION IV PROHIBITED TRANSACTIONS2
(A) Investment Personnel may not purchase or otherwise acquire direct or
indirect Beneficial Ownership of any Covered Security in an Initial Public
Offering or a Limited Offering unless he or she obtains pre-clearance pursuant
to Section V and reports to the Trust the information described in Section VI of
this Code.
(B) An Access Person may not purchase or otherwise acquire direct or
indirect Beneficial Ownership of any Covered Security, and may not sell or
otherwise dispose of any Covered Security in which he or she has direct or
indirect Beneficial Ownership, if he or she knows or should know at the time of
entering into the transaction that: (1) the Trust has purchased or sold the
Covered Security within the last 15 calendar days, or is purchasing or selling
or is going to purchase or sell the Covered Security in the next 15 calendar
days; or (2) the Advisor has within the last 15 calendar days considered
purchasing or selling the Covered Security for the Trust or is considering
purchasing or selling the Covered Security for the Trust within the next 15
calendar days, unless such Access Person:
(i) obtains pre-clearance of such transaction pursuant to Section V;
and
(ii) reports to the Trust the information described in Section VI of
this Code.
For purposes of administering this Code, Access Persons who are Advisory
Persons shall be presumed to have the requisite knowledge of the Trust's
transactions so as to require pre-clearance, regardless of whether such persons
actually have such knowledge. Accordingly, all Advisory Persons shall obtain
pre-clearance of all transactions in Covered Securities in accordance with this
Section IV(B) except in the case of a transaction as to which one of the
exceptions from pre-clearance set forth in Section IV(C) below applies.
Because investment recommendations and decisions made for the Trust are
made by persons who are associated with the Advisor, Access Persons who are not
associated with the Advisor will, in the absence of evidence to the contrary, be
presumed not to have the requisite knowledge of the Trust's transactions so as
to generally require pre-clearance of transactions. Accordingly, Access Persons
who are Independent Trustees shall not be required to obtain pre-clearance of a
transaction unless at the time of the transaction they have actual knowledge of
the matters described in (B) above.
(C) The prohibitions of this Section IV and the preclearance requirements
of Section V do not apply to:
(1) Purchases that are made by reinvesting cash dividends pursuant to
an automatic dividend reinvestment program ("DRIP") (however, this
exception does not apply to optional cash purchases pursuant to a
DRIP);
(2) Purchases of rights issued by an issuer pro rata to all holders of
a class of its Securities, if such rights are acquired from such
issuer, and the exercise of such rights;
(3) Involuntary (I.E., non-volitional) purchases, sales and transfers
of Securities;
(4) Transactions in exchange traded futures contracts;
(5) Transactions in common stock of large capitalization companies
(companies that comprise the S&P 500 Index), if the amount of the
transaction or a series of related transactions is less than $ 10,000
or 100 shares;
(6) Transactions in an account over which the Access Person does not
exercise, directly or indirectly, any influence or control; provided,
however, that such influence or control shall be presumed to exist in
the case of the account of an immediate family member of the Access
Person who lives in the same household as the Access Person, absent a
written determination by the Compliance Officer to the contrary; and
(7) Transactions in Securities that are not permissible investments
for the Trust, other than securities purchased or sold in an
Initial Public Offering or Limited Offering.
SECTION V PRE-CLEARANCE PROCEDURES
(A) Obtaining Pre-Clearance.
Pre-clearance of a personal transaction in a Covered Security required to
be approved pursuant to Section IV above must be obtained from the Compliance
Officer or a person who has been authorized by the Compliance Officer to
pre-clear transactions. Each of these persons is referred to in this Code as a
"Clearing Officer." A Clearing Officer seeking pre-clearance with respect to his
or her own transaction shall obtain such pre-clearance from another Clearing
Officer.
(B) TIME OF CLEARANCE.
(1) An Access Person may pre-clear trades only in cases where such
person has a present intention to effect a transaction in the
Security for which pre-clearance is sought. It is not appropriate for
an Access Person to obtain a general or open-ended pre-clearance to
cover the eventuality that he or she may buy or sell a Security at
some future time depending upon market developments. Consistent with
the foregoing, an Access Person may not simultaneously request
pre-clearance to buy and sell the same Security.
(2) Pre-clearance of a trade shall be valid and in effect only for a
period of 72 hours from the time pre-clearance is given; provided,
however, that a pre-clearance expires upon the person becoming aware
of facts or circumstances that would prevent a proposed trade from
being pre-cleared were such facts or circumstances made known to a
Clearing Officer. Accordingly, if an Access Person becomes aware of
new or changed facts or circumstances that give rise to a question
as to whether pre-clearance could be obtained if a Clearing Officer
was aware of such facts or circumstances, the person shall be required
to so advise a Clearing Officer before proceeding with such
transaction.
(C) FORM.
Pre-clearance must be obtained in writing by completing and signing the
form attached as Schedule A, and obtaining the signature of a Clearing Officer.
If an Access Person has responsibility regarding the determination by the
Advisor of Covered Securities to be purchased or sold for the Trust and is
requesting approval to purchase or sell a Covered Security that is owned by the
Trust or is purchasing a Covered Security that is a permissible investment for
the Trust, but has not purchased such Covered Security for the Trust, the Access
Person shall inform the Clearing Officer of that fact at the time pre-clearance
to purchase or sell the Covered Security is sought.
(D) FILING.
Copies of all completed pre-clearance forms, with the required signatures,
shall be retained by the Compliance Officer.
(E) FACTORS CONSIDERED IN PRE-CLEARANCE OF PERSONAL TRANSACTIONS.
A Clearing Officer may refuse to grant pre-clearance of a personal
transaction in his or her sole discretion without being required to specify any
reason for the refusal. Generally, a Clearing Officer will consider the
following factors in determining whether or not to pre-clear a proposed
transaction:
(1) Whether the amount or nature of the transaction or person making
it is likely to affect the price or market for the Security; and
(2) Whether the person making the proposed purchase or sale is likely
to benefit from purchases or sales being made or being considered on
behalf of the Trust; and
(3) Whether the transaction is likely to adversely affect the Trust.
(F) MONITORING OF PERSONAL TRANSACTIONS AFTER PRE-CLEARANCE.
After pre-clearance is given to an Access Person, the Compliance Officer
shall periodically monitor each Access Person's transactions to ascertain
whether pre-cleared transactions have been executed within 72 hours and whether
such transactions were executed in the specified amounts.
SECTION VI CERTIFICATIONS AND REPORTS BY ACCESS PERSONS3
(A) Initial Certifications and Initial Holdings Reports
Within 10 days after a person becomes an Access Person, except as provided
in Section VI (D), such person shall complete and submit to the Compliance
Officer an Initial Certification and Holdings Report on the form attached as
Schedule C.
(B) Quarterly Transaction Reports
(1) Within 10 days after the end of each calendar quarter, each Access
Person shall make a written report to the Compliance Officer of all
transactions in Covered Securities occurring in the quarter in
which he or she had any direct or indirect Beneficial Ownership. Such
report is hereinafter called a "Quarterly Transaction Report."
Such report is hereinafter called a "Quarterly Transaction Report."
(2) Except as provided in Section VI (D), a Quarterly Transaction
Report shall be on the form attached as Schedule B and must contain
the following information with respect to each reportable transaction:
(a) Date and nature of the transaction (purchase, sale or any
other type of acquisition or disposition);
(b) Title, number of shares, interest rate and maturity (if
applicable) or principal amount of each Covered Security and the price
at which the transaction was effected; and
(c) Name of the broker, dealer or bank with or through whom the
transaction was effected.
(3) A Quarterly Transaction Report may contain a statement that the
report is not to be construed as an admission that the person making
it has or had any direct or indirect Beneficial Ownership of any
Security to which the report relates.
(C) Annual Certifications and Annual Holdings Reports
Annually, by January 30 of each year, except as provided in Section VI(D),
each Access Person shall complete and submit to the Compliance Officer an
Annual Certification and Holdings Report on the form attached as Schedule D.
(D) Exceptions from Reporting Requirements
(1) Transactions in an account over which the Access Person does not
exercise, directly or indirectly, any influence or control provided,
however, that such influence or control shall be presumed to exist in
the case of the account of an immediate family member of the Access
Person who lives in the same household as the Access Person, absent a
written determination by the Compliance Officer to the contrary.
(2) Notwithstanding the quarterly reporting requirement set forth in
Section VI(B), an Independent Trustee is not required to file a
Quarterly Transaction Report unless he or she was actually aware of
the Trust's trading activity at any time during the 15 day period
immediately preceding or after such Independent Trustee engaged in a
Securities transaction.
(3) Independent Trustees are not required to file Initial Holdings
Reports or Annual Holdings Reports.
(4) In lieu of submitting a Quarterly Transaction Report, an Access
Person may arrange for the Compliance Officer to be sent duplicate
confirmations and statements for accounts through which transactions
in Covered Securities in which the Access Person has any direct or
indirect Beneficial Ownership are effected. However, a Quarterly
Transaction Report must be submitted for any quarter during which the
Access Person has acquired or disposed of direct or indirect
Beneficial Ownership of any Covered Security if such transaction was
not in an account for which duplicate confirmations and statements are
being sent. Access Persons who are associated persons of the Advisor
and who provide duplicate confirmations and statements for their
accounts to the Advisor will be deemed to satisfy the requirement to
submit a Quarterly Transaction Report if such confirmations and
statements reflect all transactions in Covered Securities required to
be reported by them hereunder. The Advisor shall deliver such
confirmations and statements or analysis thereof to permit the
Compliance Officer to ascertain compliance with this Code. Any Access
Person relying on this Section VI(D)(3) shall be required to certify
as to the identity of all accounts through which Covered Securities in
which they have direct or indirect Beneficial Ownership are purchased,
sold and held.
(5) An Access person need not make a separate transaction report under
this Code where the report would duplicate information recorded by the
Advisor pursuant to Rule 204-2(a)(12) under the Investment Advisers
Act of 1940
(E) It is the responsibility of each Access Person to take the initiative
to comply with the requirements of this Section VI. Any effort by the Trust or
by the Advisor to facilitate the reporting process does not change or alter that
responsibility.
SECTION VII ADDITIONAL PROHIBITIONS
(A) CONFIDENTIALITY OF TRUST TRANSACTIONS.
Until disclosed in a public report to shareholders or to the SEC in the
normal course, all information concerning the Securities "being considered for
purchase or sale" by the Trust shall be kept confidential by all Trust Employees
and disclosed by them only on a "need to know" basis. It shall be the
responsibility of the Compliance Officer to report any inadequacy found in this
regard to the trustees of the Trust.
(B) OUTSIDE BUSINESS ACTIVITIES, RELATIONSHIPS AND DIRECTORSHIPS.
Except for business relationships with not-for profit organizations, access
Persons may not engage in any outside business activities or maintain a business
relationship with any person or company that may give rise to conflicts of
interest or jeopardize the integrity or reputation of the Trust. Similarly, no
such outside business activities or relationship may be inconsistent with the
interests of the Trust. Access Persons who are officers or employees of the
Advisor may not serve as a director of any public or private company, except
with the prior approval of the Compliance Officer, and all directorships held by
such Access Persons shall be reported to the Compliance Officer.
(C) GRATUITIES.
Trust Employees shall not, directly or indirectly, take, accept, receive or
give gifts or other consideration in merchandise, services or otherwise, except:
(i) customary business gratuities such as meals, refreshments, beverages and
entertainment that are associated with a legitimate business purpose, reasonable
in cost, appropriate as to time and place, do not influence or give the
appearance of influencing the recipient and cannot be viewed as a bribe,
kickback or payoff; and (ii) business related gifts of nominal value.
SECTION VIII CERTIFICATION BY ACCESS PERSONS
The certifications of each Access Person required to be made pursuant
to Section VI shall include certifications that the Access Person has read and
understands this Code and recognizes that he or she is subject to it. Access
Persons shall also be required to certify in their annual certifications that
they have complied with the requirements of this Code.
SECTION IX SANCTIONS
Any violation of this Code shall be subject to the imposition of such
sanctions by the Trust as may be deemed appropriate under the circumstances to
achieve the purposes of Rule 17j-1 and this Code. The sanctions to be imposed
shall be determined by the Board of Trustees, including a majority of the
Independent Trustees; provided, however, that with respect to violations by
personnel of the Advisor (or of a company which controls the Advisor, the
sanctions to be imposed shall be determined by the Advisor (or the controlling
person thereof), as applicable. Sanctions may include, but are not limited to,
suspension or termination of employment, a letter of censure and/or restitution
of an amount equal to the difference between the price paid or received by the
Trust and the more advantageous price paid or received by the offending person.
SECTION X ADMINISTRATION AND CONSTRUCTION
(A) The administration of this Code shall be the responsibility of the
Compliance Officer.
(B) The duties of the Compliance Officer are as follows:
(1) Maintaining current lists of the names of all Trust Employees and
Access Persons with an appropriate description of their title or
employment, including a notation of any directorships held by Access
Persons who are partners, officers, or employees of the Advisor or of
any company which controls the Advisor, and the date each such person
became an Access Person;
(2) On an annual basis, providing each Trust Employee with a copy of
this Code and informing such persons of their duties and obligations
hereunder;
(3) Obtaining the certifications and reports required to be submitted
by Access Persons under this Code (except that the Compliance Officer
may presume that Quarterly Transaction Reports need not be filed by
Independent Trustees in the absence of facts indicating that a report
must be filed), and reviewing the reports submitted by Access Persons.
(4) Maintaining or supervising the maintenance of all records and
reports required by this Code;
(5) Reviewing securities transactions and holdings reported by Access
Persons against transactions effected by the Trust;
(6) Issuing, either personally or with the assistance of counsel as
may be appropriate, any interpretation of this Code which may appear
consistent with the objectives of Rule 17j-1 and this Code;
(7) Conducting such inspections or investigations as shall reasonably
be required to detect and report, with recommendations, any apparent
violations of this Code to the Board of Trustees of the Trust; and
(C) The Compliance Officer shall maintain and cause to be maintained in an
easily accessible place, the following records:
(1) A copy of this Code and any other codes of ethics adopted pursuant
to Rule 17j-1 by the Trust and the Advisor for a period of 5 years;
(2) A record of each violation of this Code and any other code
specified in (C)(1) above, and of any action taken as a result of
such violation for a period of not less than 5 years following the end
of the fiscal year of the Trust in which the violation occurred;
(3) A copy of each report made pursuant to this Code and any other
code specified in (C)(1) above, by an Access Person or the Compliance
Officer, for a period of not less than 5 years from the end of the
fiscal year of the Trust in which such report or interpretation was
made or issued, the most recent 2 years of which shall be kept in a
place that is easily accessible;
(4) A list of all persons, currently or within the past 5 years, who
are or were required to make reports pursuant to Rule 17j-1 and this
Code or any other code specified in (C)(1) above, or who are or were
responsible for reviewing such reports;
(5) A record of any decision, and the reasons supporting the decision,
to approve any investment in an Initial Public Offering or a Limited
Offering by Investment Personnel, for at least 5 years after the end
of the fiscal year in which such approval was granted; and
(6) A copy of each report made to the Trustees pursuant to Section
4(D), for at least five years after the end of the fiscal year in
which it was made, the first 2 years in an easily accessible place.
(D) Review of Code by Board of Trustees
(1) On an annual basis, and at such other time as deemed to be
necessary or appropriate by the trustees, the trustees shall review
operation of this Code and shall adopt such amendments thereto as may
be necessary to assure that the provisions of the Code establish
standards and procedures that are reasonably designed to detect and
prevent activities that would constitute violations of Rule 17j-1.
(2) In connection with the annual review of the Code by the Trustees,
the Trust and the Advisor shall each provide to the Board of Trustees,
and the Board of Trustees shall consider, a written report (which may
be a joint report on behalf of the Trust and the Advisor) that:
(a) Describes any issues arising under the Code or related
procedures during the past year, including, but not limited to,
information about material violations of the Code or any procedures
adopted in connection therewith and that describes the sanctions
imposed in response to material violations; and
(b) Certifies that the Trust and the Advisor have each adopted
procedures reasonably necessary to prevent Access Persons from
violating the Code.
(E) This Code may not be amended or modified except in a written form,
which is specifically approved by majority vote of the Independent Trustees
within six months after such amendment or modification. In connection with any
such amendment or modification, the Trust and the Advisor each provide a
certification that procedures reasonably necessary to prevent Access Persons
from violating the Code, as proposed to be amended or modified, have been
adopted.
This Code was approved by the Board of Trustees of the Trust
at a meeting held on May 4, 2000.
/S/ OMAR HAYDAR
---------------
Secretary
SCHEDULE A
ALLIED ASSET ADVISORS FUNDS
ALLIED ASSET ADVISORS, INC.
REQUEST FOR PERMISSION TO ENGAGE IN PERSONAL TRANSACTION
I hereby request permission to effect a transaction in Covered
Securities in which I have or will acquire direct or indirect
Beneficial Ownership.
PURCHASES AND ACQUISITIONS
- ------------------------- ---------------------- -----------------------
Date No. of Shares or Name of Security
Principal Amount
- ------------------------- ---------------------- -----------------------
- ------------------------- ---------------------- -----------------------
- ------------------------- ---------------------- -----------------------
- ------------------------- ---------------------- -----------------------
- ------------------------- ---------------------- -----------------------
- ------------------------- ---------------------- -----------------------
- ------------------------- ---------------------- -----------------------
SALES AND OTHER DISPOSITIONS
- ------------------------- ---------------------- -----------------------
Date No. of Shares or Name of Security
Principal Amount
- ------------------------- ---------------------- -----------------------
- ------------------------- ---------------------- -----------------------
- ------------------------- ---------------------- -----------------------
- ------------------------- ---------------------- -----------------------
- ------------------------- ---------------------- -----------------------
- ------------------------- ---------------------- -----------------------
- ------------------------- ---------------------- -----------------------
|_| (check if applicable) If I have responsibility for the determination by
the Advisor of Securities to be purchased or sold by the Trust, I have
noted (by means of an asterisk) those Securities noted above which are
owned by the Trust. If I am requesting permission to purchase
Securities that are not presently owned by the Trust, I have included a
statement as to why such securities are not being purchased for the
Trust or being considered by the Trust.
Date: ______________________ Signature: ________________________
Print Name: _______________________
Permission Granted ___ Permission Denied _____
Date and Time: __________________ Signature: ________________________
(Clearing Officer)
SCHEDULE B
ALLIED ASSET ADVISORS FUNDS
ALLIED ASSET ADVISORS, INC.
QUARTERLY TRANSACTION REPORT
The following lists all transactions in Covered Securities, in
which I have or had any direct or indirect Beneficial Ownership, that were
effected during the last calendar quarter and are required to be reported by
Section VI(B) of the Code. (If no such transactions took place write "NONE".)
Please sign and date this report and return it to the Compliance Officer no
later than the 10th day of the month following the end of the calendar quarter.
Use reverse side if additional space is needed.
<TABLE>
<CAPTION>
PURCHASES AND ACQUISITIONS
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
No. of Shares Purchase Price
or Principal Per Share or
Date Amount Name of Security Unit Account Executing Broker
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
<S> <C> <C> <C> <C> <C>
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
</TABLE>
<TABLE>
<CAPTION>
SALES AND OTHER DISPOSITIONS
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
No. of Shares Purchase Price
or Principal Per Share or
Date Amount Name of Security Unit Account Executing Broker
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
<S> <C> <C> <C> <C> <C>
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
- ----------------- ----------------- -------------------------- ---------------- ----------------- --------------------
</TABLE>
Date Completed: _______________ Signature:______________________________
Print Name:_____________________________
*Does not apply to Independent Trustees.
SCHEDULE C
ALLIED ASSET ADVISORS FUNDS
ALLIED ASSET ADVISORS, INC.
INITIAL CERTIFICATION OF COMPLIANCE WITH CODE OF ETHICS
AND INITIAL HOLDINGS REPORT
This form must be completed by all Access Persons (other than
Independent Trustees) within 10 calendar days after becoming and Access Person.
I have read and I understand the Joint Code of Ethics of Allied Asset
Advisors Funds and Allied Asset Advisors, Inc. (the "Code"). I recognize that
the provisions of the Code apply to me and agree to comply in all respects with
the procedures described therein.
I certify that I have listed below: (1) the title, number of shares and
principal amount of each Covered Security in which I had any Beneficial
Ownership as of the day I became an Access Person; and (2) the name of each
broker, dealer or bank at which an account is maintained through which any
Covered Securities in which I have any Beneficial Ownership are held, purchased
or sold.
TITLE OF COVERED SECURITY NUMBER OF SHARES PRINCIPAL AMOUNT
- ------------------------- ---------------- ----------------
Name of each broker, dealer or bank:
? Check here if you have attached additional pages of holding in Covered
Securities.
Number of pages attached ______
Date Completed: _______________ Print Name: ___________________
Signature: ____________________
SCHEDULE D
ALLIED ASSET ADVISORS FUNDS
ALLIED ASSET ADVISORS, INC.
ANNUAL CERTIFICATION OF COMPLIANCE WITH CODE
OF ETHICS AND ANNUAL HOLDINGS REPORT
This form must be completed by all Access Person (other than
Independent Trustee) within 10 calendar days after becoming an Access person).
I have read and I understand the Joint Code of Ethics of Allied Asset
Advisors Funds and Allied Asset Advisors, Inc. (the "Code"). I recognize that
the provisions of the Code apply to me and agree to comply in all respects with
the procedures described therein. I certify that I have complied in all respects
with the requirements of the Code as in effect during the past year.
I also certify that all personal holdings, transactions and accounts
that were required to be reported by me pursuant to the Code, during the past
year have been reported in holdings reports that I have submitted to the
Compliance Officer or in confirmations and statements for each account through
which any Covered Securities in which I have any Beneficial Ownership are held,
purchased or sold, that have been sent to the Compliance Officer.
I certify that I have listed below: (1) the title, number of shares and
principal amount of each Covered Security in which I had any Beneficial
Ownership as of December 31 and (2) the name of each broker, dealer or bank at
which an account is maintained through which any Covered Securities in which I
have any Beneficial Ownership are held, purchased or sold.
TITLE OF COVERED SECURITY NUMBER OF SHARES PRINCIPAL AMOUNT
- ------------------------- ---------------- ----------------
Name of each broker, dealer or bank:
? Check here if you have attached additional pages of holding in Covered
Securities.
Number of pages attached ______
Date Completed:__________________ Print Name: ________________________
Signature: _________________________
- --------
1 Beneficial ownership will not be deemed to exist solely as a result of
any indirect interest a person may have in the investment performance
of an account managed by such person, or over which such person has
supervisory responsibility, which arises from such person's
compensation arrangement with the Advisor or any affiliate of the
Advisor under which the performance of the account, or the profits
derived from its management, is a factor in the determination of such
person's compensation.
2 The prohibitions of this Section IV apply to Securities acquired or
disposed of in any type of transaction, including but not limited to
non-brokered transactions, such as purchases and sales of privately
placed Securities and Securities acquired directly from an issuer,
except to the extent that one of the exemptions from the prohibitions
set forth in Section IV(C) is applicable.
3 The reporting requirements of this Section VI apply to Covered
Securities acquired or disposed of in all types of transactions,
including but not limited to non-brokered transactions, such as
purchases and sales of privately placed Securities and Securities
acquired directly from an issuer, except to the extent that one of the
exemptions from the reporting requirements applies.
